The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-12-11

that all the banks In particular DeghboIhoods, cities,
countess and States should unite IN doing this when
ever able, without waiting for weaker institutions, or
more embarrassed regions Of the country
The adoption Of that eourse an some States however
much the measure was questioned at the me and per-
seyerngy opposed by many banks as well as influential
individuals, has proved fortunate, and reflects great
credit on the sagacity, frmness, and intelligence OF
those who adopted t. The encouragement given by the
Department 10 such insutsDs resumed specie pay
ments by taking paper but theirs for public dues and
by preienng them in the transaction OF public business
not without saluaiy influence. Suits against the
banks in default unless apparently nsolyent, were also
forborne and drafts continued with great advantage to
be issued gradually all that disposed to make
satisfactory arrangements with the public creditors and
thus lessen those large immediate Liabilities which stood
in the way Of an early resumption.
Indeed, every facility was promised and extended
which the limited power Of the Department permitted
and, its recommendation, further measures OF
sonabe indulgence to the merchants and banks indebted
to the Government received The prompt attention Of
Congress, and doubtless contributed much 10 shorten
the suspension.
Under the laws granting such indulgence. the sggre
gate Of merchants bonds, the payment Of which was
postponed supposed 10 have reached between four and
five millions Of dollars, The chief benefit of this mea-
felt in the Atlantic section of the country
while similar exten, Of relief experienced princ-
pslly in the West and Southwest, by the allowance
the banks of long delay in paying the balances due
from them
The curtalment OF paper issues which urged BY
this Department in 1886, indispensable to prevent
impending disasters and in 1887 equally indispensa
BILE TO remove them aud restore specie payments, has,
since their suspe nsion, equaled at least thirty millions
Of dollars Another striking fact is, that the curta-
ment most rapid and thorough in those sections OF
the country where the resumption Of specie payments
first took place. and the exchanges first eqnaHed
The difference is believed to be still striking be-
tween May, 1897, and May, 1888, Nor has this event
been accompanied many predicted, by any rulnous
fall IN the prices OF labor, Of great staple COM
modities As further illustration Of some OF the real
and cures of the embarassments in the
cy, IL is computed that within year from the suspon
sion, reduction effected in bank discounts exceed
ing forty millions that there was an increase Of the
whole amount Of specie in the country Of five millions;
and that the aggregate, at this time, must be from
eighty five TO ninety millions OF dollars. The official
returns of the imports and exports Of gold and silver
during the year ending September 80 1885, are given
IN the table annexed and the former IN that time be
found to exceed the latter than fourteen millions
Intimately connected with the currency and the sus-
pension Of specie payments in the condition OF the do.
mesc. exchanges during the past year, compared
with some former periods. Although in 1925 Ma
tona Bank had been in full operation for several years.
and IN 1919 for two years, those exchanges then
quite much deranged between most places, as in
1887. But of late they have improved more rapidly
than in the two former periods without receiving any
oid HoH heW uiuhiAg HhCoTpoIdtioHS ny INC SeHeidi
Government.
The fact demonstrates that the great nominal differ
ence IN exchanges at both periods has been produced by
circumstances which national legislation possesses
but little influence.
When excuses Of Indebtedness, or other CONNER
cal causes, render money more desirable in place
than another then, and till then, the legitimate DIFF
ference in exchanges begins and that difference
never be corrected by banks legislation, but only by
the great laws of trade changing the relative indebted
aud demand.
But when nominal difference in domestic exchanges
occurs, extending beyond three per cent the
small! actual cost OF transporting specie 10 the most
distant cities IN the Union, the consequence not Of
an unequal Indebtedness alone. but Of that and an
equal quality value in the local bank currency and
which event has been produced, and can be removed,
only by measures operating the soundness Of the
currency Each State has in its power effec
tual rememy for any suffering by high exchanges from
this source Independent and true to its vital interests,
it always adopt such eieclua regulations in bank
Ing as viii remove the scourge OF deprecated paper,
and thus avert any ruinous of domestic exchange
From the whole OF these considerations. is manifest
that the recent resumption OF specie payments, and the
equalization Of exchanges have both been facilitated by
The large amount Of specie which has Of late years been
introduced and by the Of policy pursued IN other
respects by the General Government topics con
nected with the circulating medium and the banks.
restoration OF equality IN the foreign exchanges,
also, and perseverance IN extnguishing old debts,
with increased forbeance to contract ones, either
home abroad have revived that foreign confidence
which had been withdrawn with such disastrous pre-
clpltation. These favorable changes, united with a
dmnnton in specua,ions whether in banks, lands,
commerce. and return to srcter imgallty IN individual
expenses, and to industrious energies for veli-
hood, have aided good crops and minor agencies
in bringing about with greater rapldy events the most
desirable, and condition Of the country highly auspl-
cious In many quarters, money has become compa-
ratlyply abundant lower and trade and
features active.
Nothing more seems 10 be necessary TO perpetuate
the present healthy action Of the currency, except q
rigid adherence to the system OF policy which, by honest
resolu,e efforts has produced the improvement IL can
but be respect to the circulating medium LOT
the General Government to pesevere IN course which
prepared the country better to meet aud quickly carried
it through so fearful a crisis 1t would seem prudent,
likewise for the States pro6ng by past experience, to
Insist reform In their banking institutions and par
tcularly greater sedcnal in their business, by i'm
posing additional checks overssues, and stronger
limitations to excessive discounts, The present system,
if unchecked, has inherent defects Of alarming cha
racter ; and, without INDUCING in tmld misgivngs or
unjust suspicious 1t may be said to tend, by It's expan-
sons and inevitable contracuons, to nnsce frequently
the value Of labor well Of the whole property oil
the country.
The General and State Governments might, also,
with manifest advantage, abstain from applying any
stmuants to the overacton Of all kinds, that under
such specous but treacherous hopes, deuded many
into the recent embarrassments.
This would not evince any hostility either to banks OF
to credit, when well secured and properly regulated
but would serve to avert ruin from BOTH
Several Of the banks which under the control Of
real capitalists and ocerc OF prudence and foresight
have become satisfied that the Of the public money
for DISCOUNTS subject to the restrictions OF the present
deposite act and the liabilities refund it suddenly
which mus, exist with small balance in the Treasury
is attended with much Inconvenience, and is likely, IN
the end prove injurious than profitable to the
banks and their borrowers, well as to the Govern
ment So widely impressed has this conviction become
that some OF those institutions have declined
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