The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-08-16

cession, bank after bank has followed the ex-
ample set first in the city Of New York, and
now there is scarcely bank of large capital
and extended operations in any part OF the
union, which redeems its notes in specie.
a II was not TO be expected that the banks of
this weath-those of them at least
whose issues had been largely aad widely
difiused-could long continue 10 pay specie
after the banks Of the northern and eastern
c tiles had resolved to withhold it, Prior even
to the declaration of the northern banks, spe-
Gle was al premium, and had become an
article Of traffic and the demands for it, and
5. the premium il would command, were sure to
be increased and in point of fact, were in
creased, by the determination of those banks
to close their vaults. As consequence,
large and increasing demands would be made
upon our banks, to redeem their notes and
liquidate balances and their ability to meet
such demands were diminished by havingihc
chance of supply from that quarter denied TO
them, 1t was apparent that the banks of this
commonwealth Q refer especially to the two
principal instlulions), would be brought at
last to denial OF specie--a course OF rigorous
collection, whilst it would have aggravated
greatly the public distress, could at most have
but delayed the evil day and the banks were
reduced to'the necessity of choosing between
Il suspension Of payments as n measure OF
pfccauion, and Of losing their supply with
out being able eventually to resist the rum
which would be made upon them The former
alternative was recommended by the exam
pies of other banks--by considerations Of i'm
partial justice towards every credtor--by the
embarrassment in which their debtors were
unexpectedly involved and the fina! security
of their debts-and was the course apparent
ly best calculated to avoid agitation and alarm,
and to enable them to assist in correcting the
arrangement which had occurred in our pc
cunary concerns. :
Whatever differences of opinion there may
he as to the cause, there can be but one OPT
Mon respecting the reality and extent of the
public distress. Failures for unexampled
amounts have occurred confidence, and with
it, the immense credit which it upheld, is
gone: the price of every agricultural product
has declined and in time of peace, and in
the absence Of physical calamity, the whole
country is uneasy and anxious about the flu
turc. Patience, economy and industry-a
reliance upon themselves and the exerlions
of their sturdy virtues, will enable our citizens
to recover speedily from their embarassmen,s
and thus afford the only sure resource against
the evils which are experienced, and the best
defence against their recurrence hereafter.
The time is unpropilious, if it were other
wise desirable, to attempt any radical changes
in the policy of the commonwealth. The
system Of banking has been long since intro
duced, land we find it fixed upon us. The
commonwealth is largely interested in the
stocks of our banking institutions, through the
fund for internal improvement and the literary
fund.- and the stock which is thus held, is a
part of the security which has been pledged
to the holders of the public debt. Bank paper
rency, and by the holders of it, the poor and
the rich, is counted as money. The mer-
chants and traders of our towns have been
accustomed to look to the banks for facilities
and aid and through their instrumentality il
was, they have been enabled to make their
purchases Of the planter and farmer. 1t would
surely be unwise in period of difficulty, and
when private credit is in need of unusual ia
cities, to put down institutions which are so
incorporated with every public and individual
interest, and from which it would result as an
immediate consequence, that the difficulties
ofpaying would be augmented, whilst the deb,
TO be paid would be increased. There are
those who would have no banks, either state
or federal, and are for enforcing an exclusive
metallic circulation. The project, in the &C.
tual condition of the country, | believe to be
wholly impraclicable, and the agitation of il
at this period, could have no other effect than
still further TO derange the business and OPP
press every interest in the community. And
consider it of the highest Importance to main
tain the credit of the state banks, as forming
under proper regulations and reforms, the
only practical substitute for United States
Bank-and their preservation affords the only
defence against the dangerous scheme of a
powerful and overwhelming national institu-
ton.
Bv the provisions introduced into the char.
ter of the Farmers Bank at the renewal in
1924, taken from the charter of the North
Western Bank and the Bank of the Valley
the corporate powers of that bank and of the
Bank of the Valley, except for the purpose
of collecting debts and closing their accounts
were forfeited by the refusal to pay specie.
and they became thereby liable to serious
penalties. The same act on the part of tho
Bank of Virginia and the Merchants and
Mechanics Bank of Wheeling, is not visited
by like heavy condemnation. But willis,
i'll that respect these institutions are favored
by the existing laws, the community, without
Your interference, might be exposed to Sc.
rious Inconvenience by the provision in the
amended charter Of the Bank of Virginia
which declares, that " if the said bank shall
at any time fail or refuse to redeem its notes
In gold or silver coin, its issues shall be no
longer receivable in payments to the State"
If the banks are not relieved, the revenue
amounting on an average to upwards of -four
hundred thousand dollars annually, cannot be
mid aycont IN sperin This amount of oold