The Rhode-Island Republican. [volume] (Newport, R.I.) 1809-1841, 1837-12-13
THE DIVORCE BILL no. 4.
To The Editor ofthe. Pennsylvoaian

TEN, by which The public moneys are made
The basis Of bank discounts. l showed that
iIs direct tendency was to eyersction in all
tha departments Of society, excessive ac-
cumuation of revenue by the Government,
reckless speculation, improvidence and lux
nry among the people, and that the undue
repletion of the treasury, aud The undue ex-
pansion of all ,he transactions of business,
reiprocally stimulated and increased each
other. | an, now to consider the system
III its next singe Of progress, the state Of
Reaction.
1t is principle Of natural philosophy.
first declared, believe, by Sir Isaac New
ton, bat as old in fact MS the constitution of
matter, that reaction and action are equal
and IN contrary directions. Ia politics as
~ niorals, reaction is the greater Of the two.
Il may indeed be said to form a second
"bjection to The Deposit Bank system, that
y exposes the entire property Of The conn
Try 10 sudden md overwhelming deprccia-
tlon, n depreciation as certain as death it,
self, hut of which the time is also rs uncer-
tain.
Things go on well, us long as tho Gov
erninent has no need of its money. Prices
continue on the rise, the needy speculator
OF yesterday is to-day wealthy capitalist,
he ha, carved up his forest or his sand hill
iu,o cities, railroads of intcrmnablc length
coanect them with the sea, and emigrauts
crowd onwards TO increase his prosperity
ly sharing it. Ii is the very irost-u ork Of
winters night.
Bnt the Government asks for its money.
Perhaps The tariff of duties has been reduc-
cd, and the public wants for the time en-
ceed the collections at the Custom House.
Or the country has become involved in war
md while impor;ations are arrested in con-
sequence, so that no moneys come in, the /
national outlay is suddenly and vastly in /
creased. Or the people become uneasy at
the growing surplus of revenue, which re-
mains unappropriated in the general treas
NY, and it is resolved that it shall be de-
posted or distributed amoug the states
No matter what the cause, there is call on
the banks TO reader up the public funds.
The public funds they are lent out to
the merchant, who has invested them in
goods, which he has sold to the Western /
trader who has perhaps retailed them to |
the farmer. The public moneys havc gone
off to Europe, to pay the debts of the mcr-
chant, while their represenive in this coun-
try is 10 be fou1d in our well stocked farm |
yards, our splendid furniture, and costly
wardrobcs. Or the loans were made TO I
specula,ers, who have employed them in
purchases at the land ,,and they are
uow to be seen in thousand iihosra phed
cities Of the wilderness.
How is all this money to be got back
for till it returns to the banks, they cannot
restore 1t TO the government. IL is only by
curtailmcnt of their operations, by col
lcciing IN whatever moneys may be due
them, and by refusing, as their notes come
back, 10 lend them out again. The mrr-
chant thus called on to pay up his bank
discounts Aust draw in his funds from the
trader, and The trader from those he has
trusted in his turn. And thus, so soon as
the Government reeiaIms its funds, scattered /
rs they have been among all classes of the
community, NIL classes mus, be subjected
to pressure. Ii is as if a direct tax were
levied on every one in proportion to his
fesponsibilties-an extraordinary tax. with
out previous notice, to collect back into the
Treasury an amount of moneys ut once,
which Ivy the regular operation Of our
laws il had before taken years to accumu-
late.
Nor is this all the time Mt which the
community is called on to refund, is of all
others that at which il has the leas, ability.
The Banks, it is well known, do not limit
their discounts to The exact amount of their
means. The facility with which their
notes are in times of prosperity accepted
as cash, enables them to lend out much
more lhan they have at any time on hand.
Now To pay back the public moneys, it is
not enough for the banks To draw in their
precise amount; they must draw in all
the discounts which were based on them.
In other words, to pay over forty millions
to the Government, the banks must withdraw
from the uses of the community not merely
those forty millions, hut the additional ten
or twenty millions that have been loaned
out on the faith Of them.
But even this is only branch of the re-
duclion. While the Government banks
were expanding their business, and leading
out ,,heIr credits freely IN the security of
the accumulated public moneys; the other
banks. finding their depos,es from indi-
viduals increased in the general plenty, aud
their customers ,puncfnal, enlarged their
discounts also. Aud now TIA, the Govern
incnt banks are contracting so rapidly To u
meet the Treasury demands, and money
begins TO be scarce, The others find their ,
deposites reduced, and their discou nts ap- I
piled to the payment Of mercantile engage
nents at the Government banks, to whom,
by this process they are becoming debtors /;
and oheying the instinct Of seli-preservn-
ton, they contract in their turn. The "a
mount which they withdraw from the com ,
munhy iu consequence superndds to the
burdens tina. cypress il already; and it be-
comes evident thai many must sink bc- |