No government, and especially a government of such limited powers as that of the United States, could have prevented the late revulsion.  The whole commercial world seemed for years to have been rushing to this catastrophe.  The same ruinous consequences would have followed in the United States whether the duties upon foreign imports had remained as they were under the tariff of 1846 or had been raised to a much higher standard.  The tariff of 1857 had no agency in the result.  The general causes existing throughout the world could not have been controlled by the legislation of any particular country.

The periodical revulsions which have existed in our past history must continue to return at intervals so long as our present unbounded system of bank credits shall prevail.  They will, however, probably be the less severe in future, because it is not to be expected, at least for many years to come, that the commercial nations of Europe, with whose interests our own are so materially involved, will expose themselves to similar calamities.  But this subject was treated so much at large in my last annual message that I shall not now pursue it further.  Still, I respectfully renew the recommendation in favor of the passage of a uniform bankrupt law applicable to banking institutions.  This is all the direct power over the subject which I believe the Federal Government possesses.  Such a law would mitigate, though it might not prevent, the evil.  The instinct of self-preservation might produce a wholesome restraint upon their banking business if they knew in advance that a suspension of specie payments would inevitably produce their civil death.

But the effects of the revulsion are now slowly but surely passing away.  The energy and enterprise of our citizens, with our unbounded resources, will within the period of another year restore a state of wholesome industry and trade.  Capital has again accumulated in our large cities.  The rate of interest is there very low.  Confidence is gradually reviving, and so soon as it is discovered that this capital can be profitably employed in commercial and manufacturing enterprises and in the construction of railroads and other works of public and private improvement prosperity will again smile throughout the land.  It is vain, however, to disguise the fact from ourselves that a speculative inflation of our currency without a corresponding inflation in other countries whose manufactures come into competition with our own must ever produce disastrous results to our domestic manufactures.  No tariff short of absolute prohibition can prevent these evil consequences.  In connection with this subject it is proper to refer to our financial condition.  The same causes which have produced pecuniary distress throughout the country have so reduced the amount of imports from foreign countries that the revenue has proved inadequate to meet the necessary expenses of the Government.  To supply the deficiency, Congress, by the act of December 23, 1857, authorized the issue of $20,000,000 of Treasury notes; and this proving inadequate, they authorized, by the act of June 14, 1858, a loan of $20,000,000, to be applied to the payment of appropriations made by law.”