Litchfield enquirer., 1837-05-25
From Me National GGsette;


 the Bank of the United States, which Will be read with not less interest and advantage than the preceding ones. It is perfectly clear and satisfactory exposition of the exist ing state of things, and cannot fail to carry conviction to the minds of all. It shows that the course adopted by the banks of Philadel- phia, was imperatively demanded by cir cumstances beyond their control, and that it will be most conducive to the ultimate bene- fit of the community and country-that the Bank of the U. States has been actuated Ill this measure by the same spirit of patriot ism and wisdom which has guided all its pro- ceedings, and that it will be ready at no- ment's warning to do its part ill restoring matters to their former condition ot peace and prosperity.
 PHILADELPHIA, May 13, 1887.
 Nv Dear Sir-You were good enough lo express wish to know my own views ol the m present state of things, and hasten 10 give them without reserve.
 You may perhaps remember tila' III my letter to you of the llth November last, | stated what seemed the real causes ol lno endorsements then eXlstlhg' ana @ tue @p- nronriate remedies for them, adding that by fhe}r adoption confidence would be restor- ed in twentv-four hours, and repose at least in as many days.' Six months farther eXpe- rience has only confirmed that opinion. believe now, as 1 believed then, that the events of this week might have been readily prevented-and that the unhappy persever- ence in the measures then deprecated, has reduced the country to its present condition. Bit have no leisure now to discuss the sub feet, and no disposition to indulge in unaVall- ing regrets. It will be more profitable to look distinctly at the present condition or the banks and the country, and to suggest thelr respectiye duties to themselves and to each other.
 All the deposite banks of the Government of the United States in the city of New York suspended specie payments this week; the .deposte banks elsewhere have followed their example: which was of course adopted by the State banks not connected with the Gov ernment. say of course, because 1t Is cer- tain that when the Government banks cease to pay specie, all the other banks must cease, and for this clear reason. The great credit or of the United States is the Govefnment.- It receives for duties the notes of the various banks, which are placed for collection III certain Government banks, and are pald to those Government banks in specie if request ed.
 Now if these government banks, the de- postories of the public revenue, will not pay specie, for the very warrants drawn upon them by the Treasury-the government ot the U. States from that moment ceases to pay specie to the citizens of the United States As moreover the government receives for du- ties only specie and the notes of specie-pay- ing banks, the instant its own deposite banks cease to pay specie, the government must re- fuse to receive the notes of its own deposite banks, and can receive no notes except those of banks not deposite banks. On the one hand then, the government is bound to pay its debts in specie, and it has no means ot procuring specie except from the banks not connected with the treasury, so that those banks find all their notes collected and paid into the treasury for duties, converted imme- diately into specie for the use of the govern ment-while the deposite banks will not pay their debts to the other banks in specie, nor pay the treasury warrants in specie. Take for instance this example. The claimant un- der the French indemnity had certain mon- ies due him in France. The government imported it in gold for him-and when the day of distribution arrived, he obtained an order for his portion. But instead ofreceiv- ing his own share of his own proper identi- cal gold, he has received neither gold nor silver, but the notes of the deposite banks which very notes the government itself would refuse to receive from this very claimant, for any debt which he might owe to the govern ment. So long, therefore, as the government and the government banks will not pay spe- cie to other banks, 1t would be rashness in those banks to pay specie to them, and as they cannot make discrimination in those whom they will pay, the only alternative is to concur with the government banks in the gen. eral suspension. Our Philadelphia banks saw this. They thought it useless to carry | on so unequal an intercourse, in which they were to pay to New York, while New York refused to pay to Pennsylvania, for if the Pennsylvania banks paid while those of New York did not, the whole revenue would have been turned into Pennsylvania notes and specie demanded.
 In the midst of these disorders, the Bank of the United States occupies peculiar posi- tion, and has special duties. Had it consult ed merely its own strength, it would have continued its payments without reserve But,
 lst. Like all the other Pennsylvania banks, 1t owed duty to the citizens of our own state; and 1t was not disposed 10 stand aloof from general movement of the other state institutions, which however it might regret, it l could not censure.
 2d. It was not inclined, moreover, to dis credit, by a refusal to receive it, the paper of the other state banks which had ceased to pay specie, still less to force its Pennsylvania debtors to pay their debts in specie, when oth- CT cltlZens in other states were allowed to pay in less costly medium; thus breaking down for the benefit of other states the mer- chants and manufacturers and mechanics of Pennsylvania.
 Sd. While the vaults of all the other banks were closed, the government of the United States would have no resource to procure specie, but the Bank of the United States, which ought not to assume the risk of beinp