Alexandria gazette, commercial and political. [volume] (Alexandria [Va.]) 1812-1817, 1816-11-06

the QutleS are 10 Do
collected in notes of
the state banks. In
these five months, we
will suppose they villa
mount to about S,0O0.0OOI
6,0OO,OOol
Let us suppose this sum to be les
sened BY government drafts 2,ooO,o eol
There will remain 100000
The whole Of this sum may and proba
|bly will be transferred oy the government
Ito the Bank of the United States. whics
will Of course have the State Banks in IL
ldebt to that amouni.t
Let us suppose. that this sum OF fou'
millions is precisely the sum, that tie
city banks fnd it convenient and prope'
to reduce in tseir discounts. And FUR.
ther, that they determine to effect thl'
reduction in 6s days. or nine weeks.
They would, in that case. diminish theip
discounts weekly about S445,O00 amons
the whole.
/ The persons whose discounts would b
reduced at the old banks. would natural
IIy apply to the new one. The latter, i
satisfied of their solvency, would read
lily accommodate them.
| Third point to be proved.
The proceeds of the notes thus dis
counted by the new bank, would pay the
idebt due to that institution by the Ole
ones, amounting to four millions of dol
lars as above stated. IF the discounts
were predicated on the notes of the elf,
banks,t the process would be very SIM
ple.N 1t predicated on these Of the new
bank, it would be little more compll-
Gated. But the result would be the same
! Hence it appears, that in nine weeks
it may discount to the amount of 4,0O0,
900 of dollars, and hardly expose itself
to the demand of specie to the amount of
100000. This would be enough for the
present purpose. But shall in the next
letter go into a consideration OF its abili
" to discount on vastly larger scale.
And thus this mighty difficulty, the APP
of which has prOduced sucl.
extensive and remediless ruin, would be-;
all overcome in nine weeks!
That it will produce injurious effects
on the other banks by the reduction of
their business, | shall prove in the sc
lquel. But this will not arise from any
hostility on the part of the directors, but
the natural effect of its great advantages.
This effect cannot be averted or control
led by any efforts on the part of the state
banks. The struggle against it will on
! ly increase the evil.
t 1t is probable that this arrangement
us not at preseRt contemplated. But as
ut IS the plan best calculated to enab lie
the state banks to diminish their supe An.
|ous eaper-& the citizens to DISCHARGE
their debts to those banks-& as it wouJdl
be perfectly convenient to the U. States
Bank. it can hardly be doubted that il |
will be adopted ID some shape or form
1t would be most extraordinary circum |
stance, if plan calculated to answer the
purposes OF all the parties who have thet
means of carrying it into execution, would
meet with difficulty or obstruction trcml
any of them. 1t is presupposips bst al
moderate portion of good sense to prevail
with the directors of the old banks andl
the new one. to calculate upon this plan
being carried into effect. at all events,
the duties will be collected in state bank
notes, By the United STATES Bank, frcmI
its organization till the 22d of February.
This will put into their possession large
amount of the notes Of the state banks, !
on which discounts may be conveniently
predicated.
t Some gentlemen have expressed asto-
nishment at the idea here held out, of the |
Bank of the United States predicating "a
ny OF its discounts, or arrangements, on
the notes of the other banks, ard scout
it wholly. With due submission to their
superior wisdom, the project is not mere |
ly perfectly eligible, but imperiously me-
cessary in the outset of the new bank
And it is not a novel Measure by any
means. 1t IS nowise different from an o.
peration to which We have been long ac
customed. When one of the city banks
finds itself incumbered with too many
Baltimore or other foreign notes, it pre-
dicates discounts expressly payable in
them. This custom has prevailed here
above twenty years. Ii
Another source whence the Bank off
the United States will have superb. L
bundant supply Of the notes of the city Il
banks, will be the deposits made by thosel
who open accounts with it. The extent