The Massachusetts spy, and Worcester County advertiser. [volume] ([Worcester, Mass.]) 1825-1831, 1826-11-01
For the Massachusetts, Spy.1
BANKS AND B.4NKLMG.-No. /.

The subject OF banking having become one
in which great portion of the community are,
at times, directly or indirectly interested, we
have been led to examine, with some more at
tention. the question that has agitated the
minds of many, in relation 10 the conduct Of
the " Allied Banks" than eitherour own inter
est in its decision, or what may at first seem,
IFS intrinsic Importance deserves. We would
not question the utility Of exercising proper
scrutiny and watch over the transactions of
monied Institutions, nor the Importance OF
driving from circulation the notes of insolvent
hanks. But the question of the credit of
bank is not now determined by the rule which
was once adopted. 1t is not whether the in
stitution is solvent-its Directors honest--its
concerns prddently managed, and its bills
promptly paid-but is it in alliance with "Suf
folk ?" has it a deposit there-and will the al
lied banks receive its bills at Lar? If this be
the case ills credit is good: If not, its discounts
are curtailed, and its bills driven as far pos
sible out OF circulation. And all this is done
without testing the actual condition of the
bank. Sunderland bank, for instance, is &C
counted at par merely because it redeems its
bills il Boston, and the bills Of the Pittsfeld
and Stockoridge Banks are entirely refused,
or taken at heavy discount, because they
choose to redeem their bills at their own coun-
tiers. How can this, then, be test of their
actual condition and claims to credit If Sun
derland bank redeem its bills, the question is
not asked how it procures its means? and its
credit is good, and yet, without asking whether
Pttsfeld is or is not able TO redeem its bills &C
cording to their tenor, they are set down r
worthless, or at least far below their nominal
value. How then, we again ask, can this be
any fai. test OF !he comparative or actual SOL
vency OF these banks? While we would APP
prove Of careful and strict scrutiny into the
affairs OF our banks, this may, we think, be
carried on 10 such a manner, and to such an
extent, as to excite useless and groundess
jcalouses, and thereby destroy the confidence
to which they are fairly entitled. For if an
improper jealousy is once excited amongst our
monIed institutions, the benefits and accom-
mediation which the public might otherwise
derive will be defeated and destroyed so long
as it exists, and the public thereby be made to
suffer even more than the stockholders in those
institutions themselves. And such seems to
US to be the natural result Of the course Of
measures recently pursued Is the Allied
Banks" Where one bank is so situated, as to
have its circulation controlled by several 9TH
er similar institutions, il becomes hazardous, of
course, for that bank to extend its business,
when strong motive and inducement is ope-
rating upon all those institutions TO check its
circulation and destroy its business, by sending
home every dollar Of that circulation for imme-
date redemption. II becomes so hazardous,
that tho business of the country is seriously
affected by it.
We are aware that there il a plausibility in
the representations Of the Allied Banks Of their
motives, and tie probable result Of their ope-
rations, which strikes one at first very favora-
bly,. But is the effect Of their system 70 pro-
mote the public good, or to aggrandize and en-
rich the city banks, at the expense of those of
the country, by monopolizing the loaning of
money in the city, at least, and substituting
their own currency in the country in the place
OF that of the country banks If such is not
their object, why do they not carry their theo-
ry and system into effect through all its bear
ings? When they have ascertained, by repeat
ed drafts upon bank, that it is solvent, and
do not hesitate to take its bills at par, holding
out 10 theworld that it is worthy OF credit and
complementary do they not, in fact, treat it
as such? II our currency is TO be brought TO
an uniform value, why do they not make it go
IN practice as we'll as in theory why do they
not discount the bills Of country banks, which
they take in the way of business, to their Gus
TONERS by the way of loans Instead Of doing
this, every inducement is held out for sending
to them the bills of the country banks, which
are at once withdrawn from circulation, and
sent home as unworthy of credit. Let them
treat the bills which they account at par as if
they were such, and it would be carrying the
principles they profess into practice, and no
one could complain. But it is said that no one
has right to complain at being called upon
TO pay his just debts, or perform his promises.
We grant il. But if we should owe A. b. a
certain debt who should call for the payment
Of the demand, and we should promptly COM
ply with his request, while we, at the same
time, should exhibit to him orr goods and el-
tects, our personal and landed securities, and
show him that we are abundantly able to meet
all our payments, we should have reason to
complain, if he should, nevertheless, induce
every creditor we might owe to demand pay
ment at once, by creating disafection amongst
them, or coercing them thus to press an imme-
date payment, especially if our means were to
be raised by sacrifice Of property and to the
ruin of an honest business. And in how much
does the conduct of the Allied Banks differ
from the case We suppose? Not content with
Withdrawing from circulation the bills OF the
country banks that come to their hands in the
way of business, they adopt course of meas
ures to coerce each bank to do the same TO
the others. All this may be lawful and. in
tho minds Of some men, may be honest. Bur
"a - Al L.