e Union has been required by its charter to keep this or any other
proportion of gold and silver compared with the amount of its combined
circulation and deposits. What has been the consequence? In a recent
report made by the Treasury Department on the condition of the banks
throughout the different States, according to returns dated nearest to
January, 1857, the aggregate amount of actual specie in their vaults is
$58,349,838, of their circulation $214,778,822, and of their deposits
$230,351,352. Thus it appears that these banks in the aggregate have
considerably less than one dollar in seven of gold and silver compared
with their circulation and deposits. It was palpable, therefore, that
the very first pressure must drive them to suspension and deprive the
people of a convertible currency, with all its disastrous consequences.
It is truly wonderful that they should have so long continued to
preserve their credit when a demand for the payment of one-seventh of
their immediate liabilities would have driven them into insolvency. And
this is the condition of the banks, notwithstanding that four hundred
millions of gold from California have flowed in upon us within the last
eight years, and the tide still continues to flow. Indeed, such has been
the extravagance of bank credits that the banks now hold a considerably
less amount of specie, either in proportion to their capital or to their
circulation and deposits combined, than they did before the discovery of
gold in California. Whilst in the year 1848 their specie in proportion
to their capital was more than equal to one dollar for four and a half,
in 1857 it does not amount to one dollar for every six dollars and
thirty-three cents of their capital. In the year 1848 the specie was
equal within a very small fraction to one dollar in five of their
circulation and deposits; in 1857 it is not equal to one dollar in
seven and a half of their circulation and deposits.

From this statement it is easy to account for our financial history for
the last forty years. It has been a history of extravagant expansions
in the business of the country, followed by ruinous contractions. At
successive intervals the best and most enterprising men have been
tempted to their ruin by excessive bank loans of mere paper credit,
exciting them to extravagant importations of foreign goods, wild
speculations, and ruinous and demoralizing stock gambling. When the
crisis arrives, as arrive it must, the b