Martinsburg gazette. [volume] (Martinsburg, Va. [W. Va.]) 1833-1855, 1837-01-04

iand on credit became inconvenien
from the complication of accounts, til,
lands we're sold for what is termed cash
But this was only another form ofcre.
dit. for the Banks, by lending to those
who purchased lands, took the place
OF the Government as creditors-anc
the Government received their notes as
equivalent to specie, because always
convertible into specie. This was the
u~sage--this may be regarded as the
law of the country. BY the resolution
OF Congress passed on the 30th April,
1916, it was declared that emo duties,
taxes, debts, or sums of money, accru.
ing or becoming payable to the United
States as aforesaid, ought to be collect
ed or received otherwise than in the
legal currency ofthe United States, or
Treasury notes, or in notes of the
Banks which are payable and paid on
demand in the said legal currency OF
the United States"
This resolution presents various al.
ternatlves-the Legal Currency-or
Treasury Dotes-or notes of the Bank
of h United States-or notes ofspecie
paying hanks. A citizen had a right
to choose any one of these modes of
payment. He had as much right 10
pay for land with the note of a specie
paying Bank, as to pay it for duties at
the Custom House. If this be denied,
certainly any one ofthem might be &C.
cepted by the Treasury--but to pros
scribe all but one-to refuse every
thing but the most difficult ihing-to
do this without notice Of the approach.
ing change in the fundamental system
of our dealings-is an an &c. Of gratu.
itous oppression.
Under the operation Of this resolu-
ton, the Banks had gone on, fearing
nothing, as they had only to provide
for the usual specie calls upon them
and saw the country full of specie,
with no foreign demand to drainit from
them-when on a sudden, without any
lntimation Of the coming shock, an or.
der was issued by the Secretary, de.
claring that their notes were no longer
receivable, and of course inviting all
who held notes or had deposites in these
banks to convert them into specie. 1t
in fact made at once the whole amount
oftheir circulation and private depos-
ties q specie demand upon them. The
first consequence was, that the banks
nearest the land offices ceased making
loans. The mex was, thet they strove
to fortify themselves by accommodating
specie. 1t was Just at this
that the warrants for transfers were
put into their hands. The combination
of the two measures produced u double
result-first, to require the banks ge.
morally to increase their specie, and
next, to give them the means Of doing
it, by drafts on the deposite BANKS
The commercial community were thus
taken by surprise. The interior banks
making no loans and converting their
Atlantic funds into specie, the debtors
in the interior could make no remit
tances 10 the merchants in the Atlantic
cities, who are thus thrown for support
on the Banks of those cities at a mo-
ment when they are unable 10 afford
relief on account of the abstraction OF
their specie to the West. The credit
or States, not only receive no money,
but their money is carried away to the
debtor States, who, in turn, cannot use
it, either to pay old engagements or to
contract new. By this unusual pro-
cess the specie of New York and other
commercial cities is piled up in the
Western States-not circulated, not u
sed, but held as a defence against the
Treasury-and while the West cannot
use it the East is suffering for the went
of il. The result is that the CONNER
cial intercourse between the West and
the Atlantic, is almost wholly suspend
ed, and the few operations which are
made are burdened with the most extra
VACANT expense. In November 1886,
the interest Of money had risen t. "a
per cent-mercbants are struggling TO
preserve their credit by r~uinous sacri-
fices-and it costs five or six times as
much to transmit funds from the West
and Southwest, as it did in November,
1885, or ga, or '32. Thus while the
exchanges with all the world are in
our favor-whife Europe is alarmed,
and the Bank Of England itself is un-
easy at the quantity of specie we pos
sess-we are suffering because, from
mere mismanagement, the whole bal
last ofthe currency is shifted from one
side ofthe vessel to the other.
In the absence Of good reasons for
these measures, and as a pretext for
them, it is said that the country has o.
vertraded--that the banks have over
issued, and that the purchasers Of pub
lie lands have been very e~xtravagant.
| am not struck by the truth or the pro.
priety of these complaints. The phrase
Of overtrading is very convenient, but
not very Ineligible. If it means any
thing, it means that our trading with
other countries has brought Us in debt
4 49, IL - Il