CAUSES OF CRISES AND CYCLES 195
gold exports, contraction of bank credit, falling prices, and commercial
crises. “We thus see, that, were all other causes inactive,
our banking system alone would produce a periodical pressure,
panic, and convulsion in the money market.”! And Amasa
Walker, one of the most severe critics of an elastic note issue,
laid it down as an invariable rule that “the bankruptcies which
take place in any community are just in proportion to the expansibility
and contractibility of its currency. This is a fixed law — it
must be so in the nature of things—facts show it to be so.”’2
Charles H. Carroll, a most stimulating disciple of the currency
school, also hit, unfortunately, upon “an absolute law by which
failure becomes inevitable” where bank currency is used, and
Carroll labored through a series of articles in Hunt's Merchants’
Magazine and the Bankers’ Magazine to lend conviction to his
thesis.* Van Buren and Buchanan were but expressing the opinion
of the majority of the contemporary students of the problem
when they attributed the disastrous crises that marked their
respective administrations to the operations of banks.
It is interesting to note that some of those who held the alternate
expansion and contraction of bank currency responsible
for changes in business conditions recognized the international
aspects of the matter. As early as 1820, we find Oliver Wolcott,
Hamilton’s successor as Secretary of the Treasury, ascribing thé
contemporary depression in the United States to the contraction
of bank credit in England. Different countries must proceed
! Peabody, “The Financial Crisis,” North American Review (1858), Ixxxvi, 177,
178.
* A. Walker, The Nature and Uses of Money and Mixed Currency (1857), p. 33.
This was one of the most vigorous of the American pamphlets in support of the currency
principle. It gained added influence from the fact that the first four chapters
had been published in Hunt's Merchants’ Magazine in the months immediately preceding
the outbreak of the panic of 1857, which now seemed to give it corroboration.
3 “Bankruptcy in the Currency,” Hunt's Merchants’ M agazine (June, 1860),
xl, 679, 680; “Congressional Movement in the Currency Question,” Hunt's Merchants’
Magazine (April, 1860), xlii, 443-447; “Organization of Debt into Currency,”
in Bankers’ Magazine (Aug., 1858), xiii, 137-142; etc.
* Van Buren, Message to the Special Session of Congress (Sept., 1837), in Richardson,
Messages of the Presidents, iii, 325 ff.; Buchanan, First Annual Message
(Dec., 1857), ibid., v, 437 fI.
