became fictitious, their owners could not be found. Shams and
discriminations under all forms, designed to permit speculation without
capital, without exchange of goods, without real transactions between
the drawer and the acceptor of the bill of exchange, were rife.

In his message, President Buchanan ascribed the crisis to the vicious
system of the fiduciary circulation, and to the extravagant credits
granted by the banks, although he was aware that Congress had no power
to curb these excesses. When there is too much paper, when the public
has created an endless chain of bank notes, representing no real value,
it is enough that the first ring break for the whole gear, thus no
longer held together, to fall to pieces. If we mark the situation of the
New York banks before and during the panic--that is to say, in 1852 and
in 1857, we will ascertain as follows:

June, 1851. June, 1856. June, 1857.

Capital ............ $59,700,000 $92,300,000 $107,500,000
Circulation ........ 27,900,000 30,700,000 27,100,000
Deposits ........... 65,600,000 96,200,000 84,500,000
Paper discounted ... 127,000,000 174,100,000 170,800,000
Cash on hand ....... 13,300,000 18,500,000 14,300,000


This table demonstrates that two items show a great increase: capital
increased $47,000,000 and paper discounted $43,000,000; while, in face
of an increase of $1,000,000 of specie on hand, the note circulation
decreased $800,000.

Far from finding a mistake, we find a proof of the Directors' prudence.