The Massachusetts spy, and Worcester County advertiser. [volume] ([Worcester, Mass.]) 1825-1831, 1829-01-21
WORCESTER
WEDNESDAY. JAN. FL, 1929.
THE BANK QUESTION

THE BANK QUESTION.
The editor of the Boston Courier, in his pa.
per of the 18th inst has seen fit to bestow two
broad columns of remarks on the articles which
have appeared in this paper, relative to bank
charters, and to what the editor of the Courier
! calls the par system" of the Suffolk Bank
The limits of a weekly paper do not admit of
such reply to that article as either Justice TO
ourselves and the subject, or the unfeigned res
pect which we entertain towards the author.
would seem to require. A regard to the obi.
cations we owe to our patrons compels us to
confne our remarks to the narrowest possible
J limits.
The kind offers of the editor of the Courier
TO inform us in relation to the subject under
discussion, are duly appreciated, and, whenever
we shall have been instructed in any new cir
! cumstance, essential to the character of the
controversy, it will be frankly acknowledged.
/ Asyet we are not aware of any such reveIa-
| ton. The fact, so triumphantly asserted, that
! there is now " no alliance between the Suffolk,
and State, and Globe, and Eagle Banks" that
" the Suffolk Bank is potential and alone" that
1t bargains both with town and country
banks, aye, and hires its own clerks" too
all, all, in our poor estimation, as connected
with other circumstances. do not alter the case
essentially, from what it would be if the
Alliance" still continued on its original ba-
sis. 1t is admitted that such combination did
exist, and that, too, till the rebellious spirit of
most OF the country banks was subdued. Them
when the machinery was all adjusted, when the
! tremendous power was concentrated in the
Suffolk bank by which any one, who would not
bow to the yoke, might be crushed, and the
profits of the system were more than euuiva-
lent to the expenses of the warfare, as a matter
of convenience between those banks, the Suf
folk took upon itself the punishment of the re-
iractory, son its own responsibility instead
OF its being done by the joint efforts of the as
ISOLATION, as before. The facts stated in the
Courier Justify us in the belief that this is the
only alteration which has been made in the
original conditions of the compact The sys-
TEN is, then, the result of combination, of
which the original members are still virtually
parties else why is it that, if either Of them
choose to withdraw, they are bound to give
fifteen days notice p At any rate, the system
was planned and carried into effect by com
bination it has been steadily pursued to the
present day, with the assent of all the original
parties thereto, and it matters not whether the
present enforcement of it is the business of one
of them, or of all
We do not believe that the editor of the Cou-
rier himself, will argue that the tendency of
this combination has not been to produce an
artificial scarcity of the circulating medium
although he says the amount of discounts of
the banks of the State are greater than hereto
fore, position to which we shall presently ad-
vert Whether any banks have, or have not,
taken advantage of this artificial scarcity for
the purposes of speculation, we have not assert
ed; we only put the case alphabetically, as
subject worthy of inquiry That some have
done it, however, rests on strong evidence
as do the facts on which the editor of the Cou-
rier grounded his charge of insolvency against
certain country banks" public notoriety." The
editor of the Courier has the opportunity to as
certain whether the banks have, or have not
! CHdIgtu HlRI0I ldlO VI lHl6ieSL. OF discount,
on acceptances, than they did when money was
plenty, and if it shall prove that they have not,
we will engage to do them all the justice to
which they arc entitled.
! In the Courier of the Cd inst the charge is
made by implication, against "some Of the
banks in the vicinity of Worcester" of being
! indebted to the spar SYSTEM" for their
] present existence in the catalogue or soLeent
b0nks;;" and it is strongly intrnatod that they
had been upheld by assistance from the allied
banks The remarks-somewhat warm, we ad-
mit-which this charge elected from us, the
editor of the Courier has attempted to turn up
on ourselves We do not feel their applicable
! ty. However they might affect the directors
Of any bank they were not calculated to create
n distrust in the solvency of any of our monied
institutions, while the charge in the Courier
went directly to that point, and if credited.
could not but produce such an effect But let
us hear the editors present explanation of the
matter;
" Of our own free motion, and not influenced
by the spleen of any GO offcious intermeddler, -
we stated what matter of notoriety-that
! curing " the recent tornado IN State-Street,
some of the country banks were indebted to
their city correspondents for assistance From
this you infer that we impute to those who
manage these country banks either ignorance
or wckedness, But does this follow as a nee
essary infe renee? In easy times, banks dis
count freely, and this, of course, increases the
circulation of their bills. When money grows
scarce, discounts are curtailed and the circula-
ton dminishes If the scarcity be of sudden
and unexpected occurrence, and continue for
>, any length of time, this diminuton will cores
pond in extent and DURATION and will he felt
more severely, perhaps, by country banks, be-
cause their circulation is greater in proportion
to their capital than that of the banks in town