Alexandria gazette & daily advertiser. [volume] (Alexandria [Va.]) 1817-1822, 1819-01-19

funds, and by the payment OF the second
instalment in the notes OF the state banks,
it was in the power of the United States
bank to have coerced the local institutions
into moderate and reasonable reduction OF
their circulating notes. An attempt to do so
was made by the compact, III and, aItho'
the bank of the United States appears to
have been anxious to effect the object, it
did not perseyere in the design. By its sub
sequent acts, it improvidently afforded a
temptation. to the westernsbanks parlicu-
larry, to extend their circulation Of notes, by
insisting on its branches paying out their
own notes, in preference to those OF the state
banks; and on their delivering drafts on the
eastern cities whenever it could be done,
to prevent the remittance oftheir ownnotes.
The branch notes, and the drafts issued in
consequence of those instructions, were
swept away by the facility of rem iitance
thus unwarily given, as well as by the or
binary balance of trade. A vacuum in the
circulation was thus produced, which could
be supplied only By the local notes, which
were readily received by the offices OF the
bank of the United States, and were retain
ed by them as fund upon which interest
was charged to the state banks. The letter
of the president, marked vi. exhibits the
course pursued by the bank in this respect.
The bank of the United States received
from the treasury the notes of the local in
situations, in many cases as special depo-
sits, to be paid out in similar bills. From
April 1917, to this time, the amount 50 re-
ceived appears, from statement VII. to be
2,752, $50 dolls. of which 97,34l continues
on hand, leaving 1865, 400 as the amount,
voluntarily assumed, by the bank OF the U.
States. The committee have not found any
evidence of the bank having attempted to
Cypress the state banks, either by wanion
demands OF specie, or by the rejection Of
their notes. Much complaint has indeed
existed but in the instances which have
come to the knowledge of the committee,
the state banks have been in the wrong, and
some of them at the westward have refused
the most equitable propositions ofthe bank,
and have met its demands for its just dues
with complaints and reproaches. II was
not intended to trouble the house with any
of the various letters which have passed on
that subject, but as the president of the
bank transmitted letter from the office a,
Charleston, exhibiting the conduct of the
local banks in that place, it is presented to
the house marked VIII.
In letter of the President dated June
81, 1917, he observes, I" the directors
considering (amcpg other things mention,
ed) the low state of the specie and indi-
vidual deposites at your Office, and the
magnitude Of your discounts and those at
this bank, as we'll Tor Baltimore as this
place, and the very Inadequate and dis
proportioned amount of discounts to which
the office at N. York has been restricted in
consequence of the daily and excessive
drafts from your office and this bank which
has become the subject of great animadver-
sion," direct that the then amount of dis
counts should not be exceeded. The same
language is held in other letters (Xll. XIV
but il terminated in unavailing remonsfran-
ces the Baltimore oaicepontinued its drafts
and its discounts, and drained the Specie
from the norther. offices. And such was the
want offirmness and foresight in the parent
board, that, after finding its repeated
circumstances disregarded, it never mo-
we'd one of the offending directors, and took
no effectual step to control them, until the
adoption of the general resolutions OF Au-
gust %, 1918, forbidding the Offices TO
draw on each other The effect Of these
excessive drafts on the northern Offices
was to compel the constant remittance OF
specie there, to cripple them in all their
operations, to limit their discounts to tr-
fling amount, to cause the revenue paid
there, and which would itself have been
capital for business, to be drawn southwark,
thus compelling them TO deny to the debt
ors of the government any indulgence or
accommodation in their payments TO.
bring those Offices into debt with the state
banks, to produce general depression of
credit and severe pressure for money
Those places were, in fact, made tributa
~ to Baltimore and all their means and
enerpies were REQUIRED to supply its ex-