The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-04-12

established the Bank Of the United States with capt.
al Of thirty-hye millions That bank called conyon-
lion Of State banks and agreed that II They would re-
sumo specie payments y would
Assume all Their debts To- the Governments Of the
United States,
q Discount to those who had payments 10 make TO
the Government, the whole Of their bonds and
in addition
Discount to those not indebted to the Government,
two millions IN New York, two millions 10 PhlIadclphla'
one and half million IN BALTIMORE aud halt million
ia Richmond-aud
4 Would sustain the resuming banks in case the re-
sumption brought them into difficulty.
The banks al the time imported, a, an expense
Of more than half million, the sum OF seven millions
Of specie and two months after The resumption It's
DISCOUNTS reached twenty millions Compare with this
statement our condition now.
Then the Government agreed TO receive Tor all dues
the OF the Bank OF the United Staies-now all bank
notes are refused and dscredted Thenthc Government
yored 10 sustain the banksnow It is STRIVING 10
destroy them. Then il established new and vigorous
bank cspital-now it refuses TO create new bank and
seeks To cripple those existence. Then we had Two
hundred and sixty bauks-now we have nearly hne
hundred.
In short what reliance have the banks now with the
Executive hostile to theml What protection like that
Of the late bank Of the United States have hey 10 sus-
tain them None whatever.
The only circumstance not wholly unisyorabe IN the
comparison the low rate OF exchange with EnSiand
But nothing general orpcmanen canbe mlenedirom tins
circumstance which frcquenty occurs and on the pre-
sent occasion is wholly accidental III New iork, from
the unnatural condition into which her measures OF ez-
IRENE rigor have driven every thing III under ordinary
circumstances while other things underwent no depres'
son. exchange on England should decline, u might DO
inferred that England 10 the United states more
than we have vet drawn from her. But Is not ex:
change alone that has fallen, Exchange on England
has not fallen in New York much as the internal ex-
changes or stocks real estate, or house rent have
fallen This fact decisive as to the cause but
can this depression continue! Certainly not these
rigorous understood 10 be only preliminary
only preparations for expansion by the Banks OF
New York, which is restore case and confidence
Well the this and confidence returns, all
things viii and exchange OF course among the mum
Der Besides this unnatural condition will work Its own
remedy as all irregularities are cured By their
cesses To sell every thing and 10 buy nothing IS I'M
practicable, and when the English have bought all the
produce have to spare must Of course buy from
them what manufactures they have 10 spare AS soon
as the proceeds of industry realized IN England
while have gradually exhausted our supply Of Eng
lsh goods-our own merchants will convert their pro-
perry to fresh supply to be brought over or II this
process be slow, the English manufacturers them.
selves viii send their own goods for sale In either
case the exchange viii recover its equilibrium, and OF
will here for between two such countries as
America aud England, permanent inequality OF ex-
change basis of the metallic currency Of either, Is
impossible.
V. Perceving nothing IN the conduct OF the govern
ment TO Justify early resumption, let US see there
be any thing the State OF the country which recon-
mends il. Now what is the condition of our affairs
The suspension found with heavy debt to the banks
mot less probably than five hundred mllllons-wnh
large balances from the Southern and Western
States to the Atlantic cities aud with very consdera-
BILE debt TO Europe. All parties were willing TO pay
almost all able TO pay bu great orbearance and
great indulgence were necessary from the creditor, and
above all, after such conyulson the great resorer
was time time to settle time to ADJUST accounts
time TO send the debtors crops 10 market time to dis
pose Of his property with the least sacrifice; time to
bring out his resources to paw his debts. In all the
large movements Of human affairs, as in the operations
Of nature, the great law is Is the
last OF weakness the disc Of the country
ovcrstraned and dstempercd energy. The
remedy was repose The question of the currency,
though important, was only secondary. The first
Germ was to pay our debts and especially MOTTO depre-
ciate the value of means OF paying them Accord
ngy it seemed 10 me that after the suspenson the true
Of this country to begin gentle and gra-
dual dimnution Of loans sufficient prevent the hazards
of expansion while the restraint OF specie payments was
removed and 10 prepare for the resumption but with no
rash competition the amount which the several
banks could cnrall-to make violent changes IN the
standard of value, and give time for settlement with
foreigners, and among ourselves, on the same or nearly
the same basis upon which these mutual engagements
markets without depreca,ing their price. After this,
the resumption, with the aid of Congress, would have
been easy and spontaneous. 1t was IN this spirit that
the Bank of the United States has not diminished ten
per cent Of its loanswhle 1t added about three mil
lions to its spece-and will have given the necessary
facilities for shipping the crops Of the South and the
Wos to tho amount probably Of fifteen twenty mil
lions of dollars placing its own confidential agent IN
England to protect the great commercial and pecunIay
interests of the country This seemed be Its proper
haiti hpnpl 10 al Its
TO the whole Union Ii thus, too 1t could show its
fidelity to Pennsylvania, by aiding its public improve
mentsby keeping its business and It's people III COM
paraye esse and by not suffering the prosperity Of its
commercial capital to be prostracd-obccs these, far
more important than whether specie payments be
suned few months or later.
The injurious effects Of contrary course in
all the relations of business. Take for instance the
debts TO banks and individuals. The debts
mainly contracted when the currency was abundant
They must now be paid very altered state OF the
currency-and 1t is necessary TO proceed with extreme
caution when the relation Of the debtor 10 his creditor IS
changed by which neither could CONTROL because
if this change be not made very gradually SO as to bring
at the time all the other relations OF life TO the
standard, you iniict injustice perhaps rum
tho debtor 1t was thus that England continued her
suspension for twenty five years, and 10y act OF PaIa-
ment gave several years notice OF the progressive re-
sumption in order that all the, business OF the country
should adjust itself to the approaching change. Of the
effect OF any sudden movement, we have before us
striking instance. 1t appears by the published state
of the banks Of the city Of New York. that since
the suspension to March /, 1889, they have reduced
their loans and discounts from orty-sS millions to thIr-
" millions, and their circulation from nine millions to
two mIllions-an aggregate dlmnu,lon from fi,y-hvc
millions to thirty-hree millions, If. this, any thing
near this be the reduction, what is the consequence
| 4 man who contracted debt to the banks IN New
York. before the suspension, finds his ability to provide
means for the payment OF that debt reduced third
nearly one-half-hat is to say the dollar he now pays