Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1818-10-20

De uuuer par. BUTT is unre aSOna BILE not to
say absurd 10 require of the mother bank and
| lilo btanchcs, thai each should pay specie for
The balls OF the others. II mast DC resoilscted
| ihat the Nauonai Bank is organized upon the
| ordinary principles ot banking. Its capital is
principally furnished by Individual stockhold-
efS. IL III tue lime these stockholders became
SUM ctibers, they had Deeu told that the l,Snk
must spread ITS branches all over the Union.
ahe mat each ut these Ui anches and The mo her
nauh must DE aiwa!s ready 10 pay specie Tor
tGe o'iss OF tie others, no man " iio understood
4 iiis interest " ouidhaNe become a subscriber
ihe Dahk could not hay, 5eeae established upon
such principles. To show this, Il is only nece,.
satH 10 adfett TO the obvious fact, that ilu n.an
| "iii employ Ills money ia amy particular
scheme, when he can employ II otherwise anon
p'ehtaDiH. Nov. Is uemUnsti able that the
stoehhOidvrsin Tue National Bank would max T.
less pioiit ,han The stockholders OF ANY other
hsn~ Of good credit, II II We, 10 do as It's enc.
mics r,eune il TO do. Let US suppose there
were 10 branches, but ui.il the mother bank in
int.aae'phia, ha.,1E hspecie capital ct ten
| millions al lis vaults. Upon this capital She
4 cO"iu safely issue bills. payable at phiiadel.
| ph'd' 10 certain amount, will say, merely
| i"i The s4ke ! illustration, thirty millions
assuming ti' To be the proportion which other
"""'-" hS'p "p rel" en- their Capital aud their
| ISSUE. Ia tus 'itGa'ion, the National Bank
"oNiu ue exactly on ioOfiDg oil equality with
other BANKS, un the sccre of profit. Then
| suppose HE National Bank were 10 establish
I've branches, ami 10 deposit one million of its
! specie cstaa; Ia each OF these, and 10 retain
ohiN me remaining fise i'll tile mother bank
making The bills of each payable only at the
| places whence they issue. II is clear tiidt by
othusihS US capital. ana scattering the places
vi issue, IL woaid not increase it's capacity TO
I issue upoU HE same Capital. It's rrutIts there
iore, would still he no greater than the profits
| OF sthei backs. But. IL the mother bank and
Tie branches are comp eiied to provide means
| each 10 redeem the biis OF the others when
! presented, IL - perfectly obvious that their
| profits would be greatly diminished aud would
| consequently be less than the profits oil other
| hauns; tor, each would De compelled to keen
| an Inactive specie capital, not only sufficient
| TO redeem It's own bills, but the bills also of All
F, 'he rest aud The profit which inigla be made
| on ms additional capital is what the bank
"oui" lose, by beng compelled TO keep il in
an unproducive state. iu other words the
Dank would Ge compelled TO pay, in all cases
me expense OF transporting specie ffom the
DaiiA 10 the place where the bills circulate
10 render the tact perfectly PLAIN, we will sup.
pose 'iat an individual in Augusta holds b.Is
! Ia tie amount OF one million of dollars Dayable
al The mother bank in Philadelphia ana thai
! IL "chiu cost one per cent. 10 H. We that imuunt
OF specie transported trcm Philadelphia to
Augusta. These hills would be one per cent
oeio" par al Augusta. Now, il ;he branch
Daik Ia Augusta were bound 10 pay specie or
us OWL bills ior these bills of the mother bank
IL would iEcur loss on tie whole million of
| Ten thousand dollars, precisely what it would
cost TO convey milton OF dollars, IN specie,
ii. Il IL
"hith II habunaiy exposed To such losses be
cohsiuered on foOiins; OF equality, as 10 profit;
"''h other banks when are EoI subjected 10
saGh losses Certainly not and u Is eqnally
certain that m0nied meu would no, d pronriate
Their capital IN business whose profits shonid
| De thus under par.
But, when we consider the inveterate and
ueauiS hostility entertained by the state banks
| towards The National Bank, aad the arcat
| momied power aud influence of those ;tsti,u.
uons, II Is pretty evident that the regulations
so much censured, are essential 10 lie exist
ence OF the National Bank. For, on the bypo-
| thfsis above assumed, the bauk and It's branch.
| cs issue bulls to the amount OF thirty millions
| OF dollars, on specie capital of ten millions
! Row, out for those regulations, one OF the
| branches, with specie capital OF one million
| only, would be bUuud 10 redeem the whole
thirly millions, II presented. How easy would
| III lie Tor tie Stale banks, under these cream.
stances, 10 maze rua upon some ut the
F.! Branches, and compel them TO refuse specie
! payneuis. and thereby forfeit their charter.
thiHk II by thiS time apparent that the
| National ifank was established, and has been
cohduciet, on the Only practicable principles
thni ronid have beeu safely acted on.
| shai! now proceed TO show tie valuable
pnr! oseS II has answered aud will continue To
answer; the only purposes it was d. signed or
/ expected by IFS authors 10 answer, and III rsia-
! ton To which their predictions have been
! strictly aud literally verified. In the first
| place, II has forced the state banks to resume
| ,recIe payme"ts, and will prevent their reius-
! ing To pay specie hereafter. To prove that
suc!i is It's effect and tendency, might safely
| rely on the experience we have already had on
| the subject lthGs compelled the RESUMPTION
| OF specie payments. But To be more sal,stac-
| tory, will explain the manner Ia winch this
result is produced. a bank which issues bills,
| and cannot or will TIC: redeem them when pre-
sen'ed.'s Ike dishonest merchant, in whom
! 40 confluence can be placed. Aud, for the
same reason that an honest and repufai,ie
merchant would engross ali the trade of his
v'rinity at the expense OF his dishonest com.
! retitors, would the National Bank eugros, all
the business within lis reach, at the expense of
the state banks, ifthey refused to pay spece.
| NO man would pledge his property or credit
Tor deprecated bills, OF mere nominal whine
| when tie could obtain. upon the SANG terms.
| Dii's OF substantial value. In addition to
! tils, tie government IS enabled, BY the estab.
| lishment OF tile National Bank, to refuse the
| paper OF any bank that does not pay specie for
ITS bills, in payment of dues to the sovern
| ment: when we consider the amount ofreye.
| hue that passes into the hands Of government
and those who pay il, and that this must all he
paid III the bills OF The National Bank while
| the state banks refuse to pay specie IL yytiI
| appear evident that this single regulation
! woaid be quite efiectull in comprIiinJ specie
payments. It's The importing merchant that
pays most OF lie revenue, In the shane of
| impoSis. 10 hun, therefore. the bills of the
National Bank would be all-iEi portdnt, aud
,ue DiiS oil those refusing to pay specie, scarce.
ly worth any thing. Now, when we consider
the dependencies OF trade, il will readily
| appear hat he money which answers the i'm.
porting merchant, will answer the purpose of
every BODY else, and tile reverse Tor he - the
main spring of trade, aud tue creditor of the
rest OF The community.
Having sbewn that the National Bank has
forced the resumption Of specie payments by
the state banks, will next consider ihe inpof.
tango OF that result. 1t is, I believe, conceded
ny al! respectable siatesmes and political eco
nomlsIs, that lie oUiy mode or renderi,,e M.
per inedi0n OF commercial exchanges sto
c"hPrl the banks winch issue u 10 redeem II
| with specie. While ii possesses this ,cdee,n.,'
bic character, ii is tie true repre,eut,fiye of
sfecie. Specie is the standard with winch !,