The Massachusetts spy, and Worcester County advertiser. [volume] ([Worcester, Mass.]) 1825-1831, 1826-11-08
For the Massachusetts Spy.I
BANKS .4ND BANKING. No, g.
&c onclutled.7

Concluded.
Letthe system upon which The Allied Banks
are acting, he pursued 20 its extent, and the
country banks submit to he their brokers and
agents, and we very much mistake il the cap
itals of those hanks do not soon cease 10 be
at all produciyc-ifl that capital, which often
consists OF the hard earnings Of industry, the
Pittance of the orphan, the mite Of the widow,
and the little substance Of the aged and in
hrm' be not rendered useless, and even worse,
from the impossbliiy of employing il in the
legitimate purposes of banking. We believe
ourselves horne out in this position from fair
analogy. Every one knows that no profit can
be derived TO bank by merely loaning lis
capital stock. Deduct from the six per cent,
received upon that capital, the loss Of interest
of the real estate occupied by the company,
and the salaries paid its officers, together with
Its taxes and necessary losses, and it would
become losing concern. A bank, to become
profitable, must, in addition to its capital loan
enough at least TO pay IFS expenses by the in
come of the excess. And this, if prudently
managed, may be safely done. If loans are
nane only upon good paper, the solvency OF
me bank IS not endangered. But the natural
tendency OF the course pursued by the Allied
Banks is TO curtail this excess in the loans OF
country banks entirely, and, consequently, 10
break down and ruin the institution.
But we are met with the argument, that the
public good requires this curtailment. And
this we deny unless it requires the suppress.
sion OF all banks in the country, We are also
answered that the system has been in opera
uon Tor year or more, and no such conse-
quences have ensued. We do not pretend
that they have, hut it does not disprove the
tendency Of the system. It's operation has al
ready, IN many cases, been extremely hard
upon men of business in the country. The
usual course of business there is to make their
bank payments by instalments, and, while the
bank is unmolcsted such has been the accom-
mediation extended 10 them. But it has often
been the case, that an unexpected run upon
the bank has compelled it TO call in the whole
amount due on its notes, or to raise money by
a sale OF that paper in the market, thus OPP
pressing its debtors and injuring ITSELF The
reason, however, why the injury of the system
OF the alliance upon the country banks has
been no greater than it in fact has been, is
rather the influence Of public opinion, than
any saving merits Of the system itself. There
has been strong disposition in the communi-
~ not>to snccumb to the authority Of that
!" Alliance - and the very amount G. money
Kept in circulation by the country hanks, not
outstanding the constant effort to limit and
curtail their emissions, is strong and undeni-
able proof of the state of public feeling upon
this subject. 1t shows willingness, on tbs
pari of the public, TO aid their own insiitu-
tions, by adopting country bills as their cur
rency instead of exchanging them for those of
the city. But if this feeling can be overcome,
or should for any cause subside, the country
banks may, and, in all probability, will be
crushed. "Divide, and conquer" is an old
maxim in warfare, and IFS policy is illustrated
in the attack on our country banks. II is from
no cordial sympathy that they have become
tributaries Of" the Suffolk Their managers
are mere trustees Of the properly of others, and
dare not put in jeopardy the rights and prop
erty confded 10 them, by engaging singly with
the wealth of the Capital. They had rather
content themselves with barely supporting
their institutions by the aid Of friends and
public opinion, under the present arrangement,
than put their whole income and profits at
hazard by doing otherwise. And they doubt
less act wisely. There is little danger TO APP
prehend of any change in public opinion in ia
vor of such policy as obviously directs the
movements of the allied Banks" and, SO
long as that remains unchanged, their enemies
and not the country banks, have cause OF ap.
prchensioS, The force of public opinion, un