The Northern Daily Times.
Liverpool, Merseyside, England, 1856-02-04 00:00:00

BANKING IN THE UNITED STATES

The following facts concerning the monetary system
of the United States of America, and which will be found
interesting, are from a New York merchant, now in
England :

A FEW FACTS CONCERNING THE MONETARY SYSTEM OF TUB
UNITED STATES, WITH SOME REMARKS UPON THEM.
Ist. Nothing is a legal tender except gold and silver

2nd. Up to the year 1855, or thereabouts, the currency
of the States consisted of coin and of bank notes,
redeemable in coin on presentation, issued by the bank
of the United States, the banks of the individual states'
and other local and independent joint stock banks
throughout the union.

These notes circulated solely on the credit of the bank
which issued them, and there was no legal restriction
on the amount so issued. The Bank of the United
States was located at Philadelphia, then the financial
centre of the country. It had branches, one or more,
in each state. The general government held a portion
of its stock, and appointed two or more of its directors.

Enjoying the whole business of the Federal Government,
its large deposits, and its extensive transfers of funds
from one part of the Union to the other, it could not fail
to exercise.a controlling influence over all other banks of
the country ; hence, it soon acquired the name of the
" Great Regulator," and provoked, as a matter of course,
the jealousy of local institutions. Its notes, passing at
par, in every part of the country, and confidence in them
unbounded, they enjoyed a large circulation to the sup-
pression, in part, of the notes of the local banks.

At the climax of its power, and as its charter was about
to ex: ire, the Directors of the Bank were charged, pro-
bably wil.4 too much truth, with engaging in political
intrigues to bring about its re-charter. Its dangerous
power was then manifested, and General Jackson en-
tered the lists against it. After a violent party contest
Congress dropped the Bank charter, and declared it to be
unconstitutional to reconstruct any other.
At this period the Government deposits were transferred
to certain selected State or local Banks which got the
soubriquet of Pet Banks. This gave rise to complaints of
favouritism, &c., and finally led to the entire severance of
all connexion between the Government and the Banks, by
the adoption in Congress of the system known, and now
existing, as the Sub-Treasury.
Under this Sub-Treasury system, Government officers,
called Treasurers and Sub-Treasurers, are appointed, who
receive all the revenues of the Government (premium
duties, sales of public lands, &c., &c.,) in gold or silv er—
nothing else will do. They lock it up in their vaults, and
pay.it out or: distribute it, in coin:of course, in such man-
ner, and at such points, as the wants of the Government
require:
In this way the divorce of the banks from the govern-
ment, and vice versa, is complete ; but, as you may imagine,
the machinery does not work without producing great
fluctuations, and sometimes distress, among the banking
circles. In times of large or excessive imports, running
up the payment for duties, and of large sales of public
land, the vaults of the government absorb a most inconve-
nient amount of the coin of the country,' until, as has been
more than once the case, the authorities at Washington
had to grant relief, and reduce their own plethora by
buying up the United States bonds in the open market, at
such prices as the holders demanded, about twenty per
cent above par.
This sort of embarrassment is inherent in this system ;
but many begin to believe there is some compensation in
the salutary restriction it imposes upon over-trading, over
issue of notes, and over-imports particularly. At any rate
the people are getting used to the imperfection. and are
adapting their movements to it.
The difficulty could be remedied, if the general govern-
ment would issue some fifty million exchequer bonds—to
circulate as currency, and be receivable as specie in public
revenues—but that, besides being pronounced unconstitu-
tional, the issue of paper circulation by the general govern-
ment is contrary to the genius of the party in power.
3d, The winding up of this great bank, at the expiry of
its charter, and the withdrawal of its immense circulation,
created a necessity for the substitution of an equal amount
of other bank notes, and led not only to the great expan-
sion of the State and other local banks, which had so long
been under the pressure of the Great Regulator, but to the
establishment of hundreds of other banks all over the Union.
These new banks, no doubt, contributed to the admirable
and successful liquidation of the " Monster," as it had come
to he called, but being without proper restraints extended
their accommodations and their circulation too far. Over-
trading ensued, and a general crash among them was soon
the consequence. From 1837 to 1841 there was great dis-
order and consequent ruin : some few of the banks sustained
themselves through all of it, and many more resumed specie
payments, after being sometime suspended.

- 4th, Trade began now to revive, and property to recover,
from the almost universal prostration that attended such
general bankruptcy. The sound banks that were left, form-
ed the basis of a new creation; but the people were bent
upon some new guarantees, and soon determined to see that
the circulation, at least, should be secured, and kept within
bounds. hence, the example set by the state of New York
in adopting the " Free Banking Law," which opens the
trade of banking to any person or persons that have capital,
requiring them only to deposit with the Comptroller of the
bank department, a sufficient amount of State or Government
stock to secure the people against loss from the notes they
issue. These notes require the signature of the Comptroller
before they can be circulated; but the dividends on the
stocks deposited accrue to the banker who lodged them.
The law requires, further, that each banker shall p :blish,
in certain leading newspapers of the S ate, every Tuesday
morning, a statement exhibiting the average condition of
the bans for the week ending on the Saturday previous : an
average statement of liabilities and asserts, in order to pre-
vent any factitious "or cooked up" statement for a given
day ; al.: the Comptroller can have access to their books if
he thinks it necessary.

.7"
In ad ii.ion to this compulsory weekly publication the
banks of N:,,w York city have adopted a daily settlement of
balances through' a clearing-house. And thus a most
stringent measure on over-issues is always in force. The
publication of the condition of the banks, required by law,
keeps the merchants and general dealers of each institution
well informed of the state of general finances ; and the
daily settlements keep every bank in check.
Should any bank find itself, in the daily settlement,
unable to pay up in coin, the coin must be at once procured
by the sale of some of its " Bills Receivable," &c., or drop
out of line, and to be reckoned among the insolvent. This
has, now and then, occurred among the small country banks,
but never yet among the associated banks in New York.
The proportion of coin which they find it necessary to
keep is surprisingly small, and they often let it run down
below a point that is judicious, and one that requires great
anxiety and watchfulness, hour by hour, over the fluctua-
tions of their accounts.
But, upon the whole, the new law works so well in New
York that other states have begun to adopt it.
Massachusetts and Pennsylvania have not found it neces-
sary so far, but many of the states at the west have done so,
and I believe Virginia will do so as soon as the charters of
her present banks expire ; and,. as this process goes on, the
bank stocks held by the state in the various banks will be
withdrawn, the popular feeling being to dissever all con-
nection between political power and financial movements.

We regret to announce the death, at a very advanced age,
of the Rev. Charles Eustace, of Robertstown, county of
Kildare, in whom the, title of Viscount Baltinglass was
declared to be vested by the report of her Majesty's Attorney
General, provided the attainder,; said to be unlawful, were
removed. Mr. Eustace was the son of the late Lieutenant-
Geuerel Eustace, M.P., and brother of Sir William and Sir
John Enstace, both also general officers.

The Emperor Napoleirin had made some progress in a
large work entitled Du Pzsse et de l' Avenir de l'~rtillerie,
but not having as yet time to complete it, the fourth
volume now published contains copious extracts from his
M.S., and may,in fact, be considered as a copious summary
of the large work. It gives the history of that invention
from 1328 to 1638, and the effect produced by it in the
many battles in which fire-arms were used between those
periods: _ _

We have reason to believe' that an armistice will be
shortly concluded for a limited period. The exact
terms of the armistice have yet to be defined ; it may
very probably be confined to land operations, as there is
no possibility of any collision at sea, and the con-
tinuance of the blockade, supposing peace not to he
concluded by the time the Baltic is free from ice, would
be necessary to our position as negociators, and in
conformity with general precedent.—ifforniny Post.
CIVIL SERVICE DEPARTMENT PETITION TO PARLIAMENT.
—This petition has been signed by 10,353 out of t'le
11,000 persons interested. A few days ago the whole
department of the Board of Trade, from Mr. Booth and
Sir J. Emerson Tennent, the chief s3cretaries, down to
the messengers, testified their earnestness in the common
cause and their approval of the prayerof the petition by
and
Board Captain
of Trade, Ga t
arcon, o
attaching their mimes. Mr. Thomas Hay Farrel% assist-
ant secretary, Rear-Admiral Beechey, Captain Walker,
the
Mr. Bromley and his " widows' insurance scheme," has
of
also tll
e amongmarine
h the department
petitioners.
lMr.
eft
ft
both, Walter
aLarkins,
givens .ho hashi s
adhesion hitherto
tboe eann!a.,:ds associated af t
settling
tl withn g
nd
this question in a way more simple, politic, and conson-
ant with sound English sense and feeling. We are glad
also to understand that the Hon. Mr. Spring Rice and
Goulburn (son of the late Hon. Henry), Commis-
sioners of her Majesty's Customs, have also signed the
petition, and thus testify not only their personal interest
in this question, but their consideration of a grievance
which has been the fruitful cause of much discontent
their department as well as 14 this °them

TO THE PREACHERS ENGAGED IN TO
SABBATH QUESTION.

Gentlemen,—One of the great subjects at present under
consideration is the Sabbath Question. An exposition of
the principles of the Sabbath was rendered a national
affair on the 20th. You, in conjunction with others sup-
ported the negative-side of the question. Believing you
to be influenced by a spirit of impartiality, I offer for
your investigation a reason or two corroborative of the
affirmative. The grand basis of the exclusive adaptation
of the Sabbath7to the worship of God rests mainly on the
words, "Keep Holy the Sabbath Day." So far we agree.;
but the conclusion which I deduce from that expression is
inconsistent with yours. Preachers themselves abrogate,
the strict meaning of it, when it is expedient to do
so. The definition of it is, that we are7not to
devote ourselves, in however modified a sense, to temporal
affairs. If we, by our acts, necessarily implicate ether
individuals in a' transgression of the Sabbath, we, being
the originators of that evil, are, I conceive, equally as
bad as the transgressor. It is a common occurrence for
preachers, who have to travel a long distance on the
Sunday, to avail themselves of the various appliances of
the present day, to reach their destination. This entails
labour. Interest teaches the proprietors, that it is more
beneficial to themselves, in a pecuniary sense, to
transact ther business on Sundays in addition to the
week-days, than by abstaining from so doing. Who in-
duced this self-interested belief? The question is answered
by pointing to the mass of persons who appropriate to
their use on the Sabbath these appliances. The mass 10
simply the aggregate of the constituents, consequently,
whatever evil the mass is responsible for, each constituent
tending towards the formation of the aggregate, is in a
proportionate degree also responsible. Your palliative
is that it is in the service of God, and is, therefore. no
transgression. But if you examine the sentence, Keep
Holy the Sabbath day," you will find that it is definite :
the meaning allows of no modification. There is a prin-
ciple involved in it. Truth and error are immutable.
YOur argument simply implies that the end justifies the
means ; the means are evil, but I will adopt theme
because they are productive of good— it is simply
expediency, 3ou choose the least of two evils.
By depriving a few persons of the right of
hearing an exposition of ,the Scriptures—you are enabled
to explain it to a greater number. For the sake of doing
good, you violate the word of God. I will meet you upon
a common ground. Would it not be a subject of gratulas
tion, if we could rescue man from his degraded state, as
exemplified by his presence in the dram-shop, and elevate
him in the scale of rationalism, by subjecting him to b
refining process, conducive :to an amelioration of his pre-
sent condition ? The churches and chapels are open—e
Preachers are inside, ready to expound the Scriptures--
wherefore do not the multitude enter ? Are their synr
pathies not enlisted in it, or is the innate depravity of man's
nature oft-times too powerful an antagonism to resist,
arrayed against its consummation? A discrepancy
exists
somewhere ; but, whatever the cause, the effect is apps'
rent. The ale-house is too powerful a temptation, it
irresistably draws him into its vortex: and why ?—?—becausethere is not a sufficiently cogent power existent within
him to counteract its effects. We see that Churches and
Chapels present no effective impediment to this progres
sive development towards demoralization, and it is Our
duty to erect a barrier sufficiently resistive, which will, in
addition to its powers of antagonism, be possessed of
tendency to elevate man in the social scale, afford
means of cultivating his intellent, of storing his mindwith information, and by thus maturing his mental
powers render him a valuable member of society,
instead of allowing him to remain upon a level with, if
not lower than,' the' brute creation. I believe that
the opening of the libraries and museums would be pro-
ductive of tnis anticipated good. The best way to act
would be to lay the axe to the root of the evil at once---
close the alehouses all day on the Sabbath; but if this
cannot be done, it is our duty to humanity to curtail its
wide dissemination, as far as lies in our power, and the
opening of the above would partially, if not wholly, effect
that realization. You may conceive it to be wrong to
violate the sanctity of the Sabbath by devoting ourselveSs
during the hours of temptation,;to secular pursuits of ap
ennobling character. But is it not better to choose the
least of two evils, as proved by your Sabbath travelling,
which has:consequently established a precedence. Surely
we are justified upon the same grounds as you are, the
cases being analogous. Hoping you will favour me by
the insertion of this note—l am, Yours, &c., R. L.