Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1838-01-04

| tns PERMISSION could be made TO depend on an am
PIE iund TO be provided for the redemption of the pa
per wnlch mlght be put IN crculatlonif the issue.
could DE graduated by the amount of this fund ane
| IL could be certainly and Immediately available
whenever required for the purpose of redemption the
ooeclons to an unqualified repeal of the restraining
law would be removed
IT. now more than year since we began 10 feel
'he effects OF peculiarly pressure unprecedented in
| extent and severity. Though timely warnings were
gwen OF us approach, they not needed and the
cdusts mat consplred to produce il we've left 10 ope-
iae WIN undimlnlshed force Its intensity increased
WIN us progress, and II has at length pervaded all
eooAS ol the country and oil interests have felt IT'S
whitening power.
upon TINS STATE, containing the great commercial
emporium OF the nation, the centre of domestic as
Well as foreign trade, and of the monetary transact
tons OF tine Union, II fell with crushing weight
restless spirit of adventure and daring enterprise
IS prominent characteristic Of TIE American people
Under It's impulse, their conduct for some time pre-
vous TO our present difficulties tended TO overaction
IN all branches of business. With scarcely substan-
tidl capital enough the country aided by the pru-
nj use OF credits TO WELD our ordinary business
clncerns greatly increased demand for ii was
created by all kinds of ever trading by extravagant
specula'lons, and enormous investments in unpro-
ductve property. Oar credit system was resorted 10
IN ihls emergency to sustain this action in trade,
ana 10 carry out these enterprises for the sudden ac-
QUESTION OF wealth in this manner IL became burden
I'd oppressed, and was finally overborne
The open credits which it is now known were ex.
,ehueu oy certain houses IN Europe 10 merchants and
bankers IN tsis country, had a powerful and PERM.
clous agency In causing our present embar assnents
Inc iaci'ss mus literally gwen on the side, and
most lrpfovldeny used on the other led 10 an ex-
cesslve Importation Of foreign goods and the conse
quent accumulation of very large foreign debt
which the avalls of our exports did not furnish the
means OF paving. Overtradng at home is the almost
inevitable effect of the excessive importaons from
abroad The same fruitful source Of evils has also
produced what was anticipated as blessing. but has
n he a htiao liar,
tion OF large surplus revenue. From the organiza-
ton OF the federal government down to the present
pecunlary crisis, its funds have been deposited in
banking institutions, and IN this situation have contri
outed TO increase their ability TO accommodate their
customers While the nation owed public debt, and
The surplus OF It's revenues rgidly applied to its
reduction, the mode of using the public money had
out slight effect upon the ordinary currents of bus
ness, but after the debt was exngaished the accumu
atons of the surplus revenue were Immediately and
wholly turned into the channels of trade, and in this
manner new impulse given to the prevailing
.endency TO overtradng and reckless speculation
Ihe public CONAN was seIZed on with the greatest
avldty the immense received at the land offices
were poured INTO the national treasury and fearful
energy was thereby added one of the many causes
which cooperaed TO reduce the business of the
ny TO a deplorabe condition.
Looking back the period Immediately preceding |
he alsion, and carefuy examining il with
Particular reference to the views and feelings that pre-
vailed here and elsewhere it would seem that a strange
pec1 mat ta,s dsiusion wouo ohs eohPihdee
,osd suddenly pass off without producing disastrous
change in our business transactions The pur
sued by the general government 10 arrest the enormous
specuatiens in the public lands doubtless had some
agency in accearatng the anticipated change bst 10
The suddenness and violence with which II was brought
about by other causes be ascribed the calamous
that have attended It. The lavish pecu-
mary accommodations given to our citizens IN Europe,
were une xpecedly withheld the payment of enor-
nous debt due from our merchants, urgently de-
nanded the prices Of staple products having de-
clned and the balance of trade being against US the
precious metals required for expectation This
demand pressed heavily on the banks, and a means
Of relief they compelled reduce the amount OF
their discounts. The commercial community thus de.
prved of their usual accommodations, while yet enice
bed in their by heavy losses at the destruc
live fire in New Ysrk, were unable to sustain them.
selves; and consequently general suspension OF
payments ensued than had hitherto happened in this or
perhaps any other country
Notwithstanding the endorsements OF their GUS
TONER'S il il probable the banks would have sustained
in this trying emergency, had not the di-
cuties in which they involved been greatly agra
waited by the measures rendered necessary 70 execute
the deposte law The revenue collected At the pert oi
New York amounting several millions, had been de-
posted in the banks of that CITY, and by them loaned to
the business community In the midst oil this uaexam
pied pressure, these banks were obliged to Withdraw
for the purpose OF distribution, large amount from the
use 10 which il had been applied. BY this operation,
the crisis greatly accelerated cnnhdence became
daily more and more impaired and was shortly super
seeded by a general distrust panic enssed, and ex-
iepded itsefo bill holders and individual depositors
run was commenced upon the banks IN the city OF New
York and they suspended payments in specie. The
same causes that led this catastrophe IN that city had
been operating elsewhere and produced similar re-
salt throughout The whole country.
This event threw monetary affairs into the Ut
most disorder BY the charters of the banks ct tins
state a suspension Of specie payments worked the for
feiture of their corporate powers IN few instances
Immediately in most cases after suspension OF ten
DAYS and In all after suspension of three months As
the necessity which led 10 the suspension would, IN all
probability have prevented resumption in time TO es
cane the penalty OF forfeiture, the banking institutions Of
this State must have all ceased in the space OF ninety
DAYS 10 exercise their corporate functions without the
timely inerposition &c the Legislature. In case their
charters had become forfeited their affairs would "
The ordinary course Of proceedings have passed a'o
the custody of law officers for the purpose o. oeng
wound up. ... -
shall not detsn you by attempting e eonuas, .ne
present condition Of the people OF this Se, WIN
think Il weuld have been without me suspension Jaw
I avn impressed with the belief hat ue ooJec, ~ wen
as the particular provisions Of his law nave oeeh ana
III ~ ,,.ch derstoo4 IL was not the osly
,he chief design ~ the suspension act 10 subserve
The interest Of the banks. Other interests were deeply
;nvolyea In the measure, and had controlling influence
I'm procuring its ADOPTION
AZ the time payments in specie were suspended by
tho hanks ibis State there was due to them debt OF
.Lont seventy Eve millions Of dollars; and It, by the for.
fure OF their charters il had become necessary sud
denly 10 close their and wiring this enormous
amount by prompt aad in many forced collections,
leh n them would have been