The herald. [volume] (New York [N.Y.]) 1835-1837, 1837-05-17
MI. Biddle's Letter 10 Mr.. Adams.


you Of the llth OF November last, / stated what
seemed the real of the embaassments then ex-
sting and the appropriate remedies for thema, adding
that by their adoption confidence would DC restored
in twenty-fom hours and repose at least IN as many
days." Six months further experience has only con-
frmed that opinion. believe now, as believed then,
that the events of this week might have been readily
preventcd-and that the unhappy perseverance IN the
measures then deprecated has reduced the country to
its present condition. But have no leisure now to
discuss the subject, and disposition to indulge in
unavailing regrets. Ii will be profitable to look
distinctly at the present position of the banks and the
country and to suggest their respective duties TO them
selves and to each other
All the deposte banks of the government of the Uni
ted States 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 net connected with the
government say of course because is certain that
when the government banks cease to pay SPECIE all
the other banks must cease and for this clear reason;
The great creditor in the United States is the govern
ment Ii receives for duties the notes of the various
banks which placed for collection in certain gov
eminent banks and are paid to those government
banks in specie If req. ted.
Now if these government banks, the repositories
of the public revenue will not pay specie for the very
warrants drawn upon them by the treasury-the go
vernment of the United States from that moment
ceases 10 pay specie TO the citizens OF the United
States As moreover the government receives for
duties ONLY specie and the notes of specie paying
banks, the instant its own depssite banks cease to
pay specie, the government mast refuse to receive
the notes of its own deposte banks, and receive
no notes except those of banks not depoate banks.
On the hand then the government is bound to pay
its debts in specie and il has means Of procuring
specie except from the banks not connected with The
treasury, that these banks find all their notes col
ected and paid into the treasury for duties converted
Immediately into specie for the use of the govern
ment-while the deposlte banas will not pay their
debts to the other banks in specie pay the trea
sury warrants in specie Take for instance this ex
ample. The claimant under the French indemnity
had certain moneys due TO him IN France. The 60
vernment imported it in gold for him-and when the
day of distribution arrived he obtained order for is
por ton. 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 depose banks
which very notes the would refuse 10
receive from this very claimant for any debt which he
might owe to the government Soong, therefore, as the
and the government banks will not pay
specie 10 other banks it 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 Alternatives to with the government
banks in the general suspension Our Philadelphia
banks saw this: They thought il useless to carry on
so unequal an intercourse in which they to pay
10 New York, while New York refused to pay to
Pennsylvania; for if the Pennsy vania banks paid,
while those of New York did NOT, the whole revcnEe
would have been turned into Pennsylvania notes and
specie demanded.
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 continued its payments with
out reserve. But
LIST. Like all the other Pennsylvania Banks, it owed
duty to the citizens of our own State; and It was
not disposed to stand aloof from general movemeAt
of the other State institutions which however might
regret, il could not censure
I'd. 1t was not inclined, moreover, TO discred by
refusal to receive it, the paper of the other State Banks
which had ceased TO pay specie still less to force It's
Pennsylvania debtors to pay their debts in specie,
.l.An fAnrn yn yhnrS fnf aaI N
pay in less costly medium; thus breaking down for
the benefit of other States, the merchants and manu-
facturers and mechanics of Pennsylvania.
Sd. While the vaults of all the other banks were
closed the Government of the United States would
have TO procure specie but the Bank OF the
United States which ought not TO assume the risk OF
being the only source of supply for bullion 10 the CO.
vernmcnt and the land Offices, as well as for expora-
ton
4th The Deposit Banks OF the Government would
not pay their debts TO the Bank Of the United States
Why then should tae Bank of the United States pay
to these Institutions on account of the Government
specie for their notes, when these very Banks would
not pay their own debtsl There would have been an
equal want Of reciprocity and ofustsce IN such pro-
ceeding
9Th There was another reason against il, final and
decisive. From the moment that the Opposite Banks
of New York failed TO comply with their engage
mcnts, il was manifest that all the other Opposite
Banks must do the same, that there mast be a uni
versal suspension throughout the country, and that
the Treasury itself in the midst of It's nominal abun-
dance must be practically bankrupt
In sach state of things the first consideration IS
how escape from it-hOw TO provide at the earliest
practical moment to change condition which should
not be tolerated beyond the necessity which csm-
handed il. The old associations, the extensive con-
necons the established credit the large capital OIL the
United States Bank render il the natural rnllylng
point of the country for the resumption ofspecc pay
ments Ii seemed wiser, therefore, not to waste It's
strength in struggle which might be doubtful while
the Executive persevered in itspresent policy, but to
husband all its TO profit by the first ia
ton of specie payments. Accordingly the Bank OF
the United States assumes that position From this
moment its efforts will be to keep itself srsng and 10
make itself stronger-aways prepared and always
anxious to assist in recalling the currency and the
have fallen. Ii will cooperate cordially and Jealous
| y with the government, with the government banks
with all the other banks and with any other influ
| ences which aid in that object.
In the meantime two great duties devove on tn,
banks and the country.
The first regards foreign natons-the second ou
| large for our resources, bat disproporoned TO on
| this late measure shall not seem to be effort {,
avoid the payment Of our honest debts TO them W.
| have worn and eaten and drunk the produce of thci
fault not theirs We may take less hereafter, but tn
i the uttermost farthng-
| The second duty IS to ourselves. We should bea
| constantly in mind that the step which has beef
Il Ill Of