Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1837-05-30
From the PHILADELPHIA National Cazetta.

| We present TO our readers a third letter TO
Mr.. dams from the President Of the Bank OF
| the United States, which will &c read with no
less interest End advantage than the preceding
ones. II is perfectly clear and satisfactory
| exposition of Inc existing state OF things, and
| cannot full TO carry conviction TO the r'inds OF
| all. Ii shews that the course adopted by the
| Banks of Philadelphia was imperaiively de-
munded by circumstances beyond their con-
troll, and that it will be most conducive to the
| ultimate bcneiit Of the community and country
| that the Bank Of the United States has been
! actuated in tbs measure by the same spirit OF
| patriotism aui wisdom which has guided all
lta proceeding. and that ii will he ready at a
moments warning 10 do its part in restoring
| matera 10 ther former condition of peace and
prosperity.
Philadelphia, May 18th, 1887.
Ny DEAR SGt: You are good enough to
express wish TO know my own views Of the
present ttate Of lhings, and hasten to give
them without reserve.
You may perhaps remember that in my let
ter 10 you of The 9Th Of November last, / sta
TED v'''at reem. q &c real causes of the embar-
remedies for them, adding that by their adop ,
ton "confidence would be restored in twenty
four hours, and repose at least in as many
days" Six months further experience hae
only confirmed that opinion. | believe now,
as believed then that the events Of this week
might have been readily prevented-nnd that
the unhappy perseverance, in the measures then
deprecated Inns reduced the country 10 ills pres
ent condition. But have no leisure now to
discuss the subject, and no disposition to in
dulge in unayaing regrats. 1t will be more
profitable 10 look distinctly at the present po-
sition Of the banks and the country, and 20
tInir dpfin IN s.I,
and to each other.
Al the deposit banks Of the Government of
the United Statos in the city OF N. 7 ork sue
pended specie payments this week-thc depos.
il banks elsewhere have followed their exam.
pie which was Of course adopted by the state
banks not connected with the Government. |
say OF course, because it is certain that when
the G Government banks cease to pay specie, oil
the other banks must cease, and for this clear
reason: The great creditor in the United
States is the Government. Il receives for du-
Ties the notes Of the various banks, which are
placed for collection in certain Government
banks and are paid 10 those Government
banks in specie if requested.
Now, if these Government banks, the de-
positores of The public revenue, will not pay
specie, for the very warrants drawn upon them
by the Treasurv-the Government Of the Uni
rPccic TO The citizcns Of the United States
As moreover the Government receives Tor du-
ties only specie and the notes of specie-paying
banks, The instant lie own deposit Banks cease
TO pay specie, the Government must refuse TO
receive the notes OF It's own deposit Banks and
can receive no notes except those Of Banks not
deposit Banks On the one hand then the
Government is bound TO pay its debts in spe-
Gle, and il has no means OF procuring specie
except from the Banks moi connected NTH The
Treasury, so that these Banks find all their
notes collected and paid into The Treasury for
duties, converted Immediately into specie for
the use oG the GOvernment-wlhla the deposit
Banks will not pay their debts to the other
Banks 10 specie nor pay the Treasury war
| rants in specie. Take for instance this exam.
pie. The claimant under the french indemDi-
ty had certain moneys due 10 him in France.
The Government imported il in gold for him
and when the day Of distribution arrived he
obtained an order for his portion. But instead
of receiving his own share OF his own proper
identical gold, he has received neither gold nor
silver, but the notes Of the deposit Banks
which very notes the Government kscli would
| refuse 10 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.
Gle TO other Banks, it would be rasbness in
those Banks 10 pay Rpece to them, and as
they caunot 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 Bank saw
this. They thought it useless to carry on 80
unequal an intercourse in which they we're 10
pay TO New Yo,k, while New York refused
to pay 10 Pennsylvania; FOR if the Pennsylva-
MIA Banks paid, while those Of New York did
not, the whole revenue would have been torn
cd into Pennsylvania notes and specie deman-
ded.
In the midst Of these disorders the Bank Of
the United States occupies peculiar position,
and has special duties. Had it consulted
merely its own strength, it would have con-
finnnd lie IN Nmenis u.iihnlf rnErrpe. But