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with the British Government, but will be, as formerly, in the service of the Persian Government.

H.E. Lord Cowley. FEKOKH KHAN.

(lncloswe 2.)—Lord Cowley to Ferokh Khan.

Paris, March 3, 185". The Undersigned, Her Britaiinic Majesty's Ambassador at the Court of the Emperor Napoleon, has had the honour to receive the note which his Excellency Ferokh Khan, Ambassador from the King of Persia at the same Court, addressed to him the 2nd instant.

The object of Ferokh Khan is to induce Her Majesty's Government to desist from certain of the conditions, which had been communicated to him at Constantinople, as those on which Her Majesty's Government would be ready to make peace.

The conditions he mentions are that respecting the dismissal of the Sadr Azim, that concerning an indemnity to be paid by the Persian Government to the Heratees, and that relating to the mediation of Her Majesty's Government for the settlement of the differences which had arisen between the King of Persia and the Imaum of Muscat, respecting the tenure by the latter of Bender Abbas.

The Undersigned comprehends from the note of his Excellency Ferokh Khan, coupled with the verbal explanations which the Undersigned has had the honour to receive from his Excellency, that the King of Persia makes it a personal request of the British Government, that the first of these conditions should not be insisted upon; that with regard to the second, his Excellency has learnt that since the engagement which he contracted at Constantinople, considerable sums of money had already been sent by the King of Persia to Herat, and that consequently more profit than loss has accrued to the inhabitants of that town from its occupation by Persian troops, and he hopes, therefore, that he may be released from the promises which he made on this point at Constantinople. With respect to the mediation of Great Britain in the matter of Bender Abbas, his Excellency Ferokh Khan observes, that the question is already satisfactorily settled between the parties interested, and that consequently no mediation is necessary.

The Undersigned cannot but regret that his Excellency Ferokh Khan should not have repeated in writing that which he has often given the Undersigned to understand, while conversing on these matters, namely, that if these conditions were persisted in by Her Majesty's Government and agreed to by the Persian Government, the King of Persia's dignity and independence would be greatly compromised in the eyes of his subjects, because it is for this reason

that Her Majesty's Government have determined on desisting from them, being most unwilling by insisting on obnoxious stipulations, not absolutely necessary to the attainment of peace, to do aught that would either influence the sentiments of the Persians towards their SoTereign, or injure the power and welfare of the Persian dominions. It is the desire, as it is the policy, of Her Majesty's Gorernment, that Persia should be Btrong, prosperous, and independent, and they cannot give a greater proof of their sincerity in this respect than by the moderation of their demands, while in possession of a valuable portion of the Persian territory.

The Undersigned has, then, the pleasure to inform his Excellency Ferokh Khan that Her Majesty's Government will not insist on his acceptance of the three conditions to which his Excellency's note refers; and with regard to the future position of Meerza Hashem, which is likewise alluded to by his Excellency, the Undersigned has the honour to assure him that if Meerza Hashem has, as is reported, renounced the service of Her Majesty's Mission at Tehran, Her Majesty's Mission, on its return to Tehran, will not attempt to exercise any protection over him. The Undersigned, &c. RnkhKlan. COWLEY.

ATo. 1S9.—The Earl of Clarendon to Lord Cowley. Mtloiid, Foreign Office, March 14, 1857.

Is reply to your Excellency's despatch of the 4th instant, forwarding copies of the correspondence which you had with Ferokh Ban, relative to the withdrawal of certain conditions of peace by Her Majesty's Government, I have to state to your Excellency that Her Majesty's Government entirely approve of your having committed to writing the discussion with the Persian Ambassador upon this subject. I am, Ac.

EX Lard Cowley. CLARENDON.

MESSAGE of the President of The United States, on the
Opening of Congress.Washington, December 8, 1857.

Fluow-clttzens Op Tjie Senate And
Of The House Of Repbesentatives,

I* obedience to the command of the constitution, it has now taome my duty "to give to Congress information of the state of the Union, and recommend to their consideration such measures" as 1 judge to be "necessary and expedient."

But first, and above all, our thanks are due to Almighty God for the numerous benefits which He has bestowed upon this people ; and our united prayers ought to ascend to Him that He would continue to bless our great Bepublic in time to come as He has blessed it in time past. Since the adjournment of the last Congress our constituents have enjoyed an unusual degree of health. The earth has yielded her fruits abundantly, and has bountifully rewarded the toil of the husbandman. Our great staples have commanded high prices, and, up till within a brief period, our manufacturing, mineral, and mechanical occupations have largely partaken of the general prosperity. We have possessed all the elements of material wealth in rich abundance, and yet, notwithstanding all these advantages, our country, in its monetary interests, is at the present moment in a deplorable condition. In the midst of unsurpassed plenty in all the productions of agriculture, and in all the elements of national wealth, we find our manufactures suspended, our public works retarded, our private enterprises of different kinds abandoned, and thousands of useful labourers thrown out of employment and reduced to want. The revenue of the Government, which is chiefly derived from duties on imports from abroad, has been greatly reduced, whilst the appropriations made by Congress at its last session for the current fiscal year are very large in amount.

Under these circumstances a loan may be required before the close of your present session; but this, although deeply to be regretted, would prove to be only a slight misfortune when compared with the suffering and distress prevailing among the people. With this the Government cannot fail deeply to sympathize, though it tnay be without the power to extend relief.

It is our duty to inquire what has produced such unfortunate results, and whether their recurrence can be prevented. In all former revulsions the blame might have been fairly attributed to a variety of co-operating causes; but not so upon the present occasion. It is apparent that our existing misfortunes have proceeded solely from our extravagant and vicious system of paper currency and bank credits, exciting the people to wild speculations and gambling in stocks. These revulsions must continue to recur at successive intervals so long as the amount of the paper currency and bank loans and discounts of the country shall be left to the discretion of 1,400 irresponsible banking institutions, which, from the very law of their nature, will consult the interest of their stockholders rather than the public welfare.

The framers of the Constitution, when they gave to Congress the power "to coin money and to regulate the value thereof," and prohibited the States from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts, supposed they had protected the people against the evils of avn excessive and irredeemable paper currency. They are not responsible for the existing anomaly that a Government endowed with- the •overeign attribute of coining money and regulating the value thereof should have no power to prevent others from driving this coin oat of the country and filling up the channels of circulation with piper which does not represent gold and silver.

It is one of the highest and most responsible duties of Government to insure to the people a sound circulating medium, the amount of which ought to be adapted with the utmost possible wisdom and •kill to the wants of internal trade and foreign exchanges. If this ke either greatly above or greatly below the proper standard, the marketable value of every man's property is increased or diminished m the same proportion, and injustice to individuals as well as incalculable evils to the community are the consequence.

Unfortunately, under the construction of the Federal Constitution, which has now prevailed too long to be changed, this important tod delicate duty has been dissevered from the coining power, and virtually transferred to more than 1,400 State banks, acting independently of each other, and regulating their paper issues almost exclusively by a regard to the present interest of their stockholders. Exercising the sovereign power of providing a paper currency instead of coin for the country, the first duty which these biab owe to the public is to keep in their vaults a sufficient amount of gold and silver to insure the convertibility of their notes into coin at all times and under all circumstances. No bank ought ever to be chartered without such restrictions on its business as to secure this Raolt. All other restrictions are comparatively vain. This is tho only true touchstone, the only efficient regulator of a paper currency, —the only one which can guard the public against over issues and hank suspensions. As a collateral and eventual security it is doubtless wise, and in all cases ought to be required, that banks shall hold an amount of United States or State securities equal to their Botes in circulation and pledged for their redemption. This, however, furnishes no adequate security against over issues. On the contrary, it may be perverted to inflate the currency. Indeed, it is possible by this means to convert all the debts of the United States and state Governments into bank notes, without reference to the specie required to redeem them. However valuable these securities ■uy be in themselves, they cannot bo converted into gold and silver at the moment of pressure, as our experience teaches, in sufficient time to prevent bank suspensions and the depreciation of bank notes. In England, which is to a considerable extent a paper-money errantry, though vastly behind our own in this respect, it was deemed advisable, anterior to the Act of Parliament of 1844, which wisely panted the issue of notes from the banking department, for the Bank of England always to keep on hand gold and silver equal to [1856-57. XXTn.] Y

one-third of its combined circulation and deposits. If this proportion was no more than sufficient to secure the convertibility of its notes, with the whole of Great Britain, and to some extent the continent of Europe, as a field for its circulation, rendering it almost impossible that a sudden and immediate run to a dangerous amount should be made upon it, the same proportion would certainly be insufficient under our banking system. Each of our 1,400 banks has but a limited circumference for its circulation, and in the course of a very few days the depositors and note-holders might demand from such a bank a sufficient amount in specie to compel it to suspend, even although it had coin in its vaults equal to one-third of its immediate liabilities. And yet I am not aware, with the exception of the banks of Louisiana, that any State bank throughout the 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 dollars, of their circulation 214,778,822 dollars, and of their deposits 280,351,352 dollars. Thus it appears that these banks, in the aggregate, have considerably less than one dollar in 7 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 400,000,000 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, waB more than equal to one dollar for 4J, in 1857 it does not amount to one dollar for every 6 dollars and 33 cents of their capital. In the year 1848 the specie was equal within a very small fraction to one dollar in 5 of their circulation and deposits; in 1857 it is not equal to one dollar in 7£ of their circulation and deposits.

Prom this statement it is easy to account for our financial history for the last 40 years. It has been a history of extravagant expansions in the business of the country, followed bj ruinous

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