Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1838-08-28
Balance in favor Of State banks,


on The lh Of February 1850 where he was urging the
regulation Of the public d"p"sItes in the Stale and
the position Of sdutary restrictions upon The E2"cuH'e
power over them expressed the following strong and de-
cded approhaliun OF their "Ihc County, ;hrn,
has been prosperous but she indebted for that pf":pe
rity neither the Bank OF the u s. nor 10 p0hi' INT
70 the impulses sprnglng out ct the employment OF
Stale banks as fiscal agents OF The Government rms
gentleman was then at the head Of the Committee oil
WAYS and Means.
With these evidences, then, of the utility and sGf"ly
of the Slate banks fiscal agents oi the Government,
and their successful OPERATION with pr"prley IN
0nire why the proposed change?-Why such heavy de
nunc;a,iurs Of the system? ON told, the system has
failed and the suspension of specie Payments IN May,
1897, which has continued ever since with but little rA'
cepun, is relied upon as the proof contend that The
conclusion is not warranted By The iact
Mr. Chairman, so much has been SAID, and Opinions
have been diversified as 10 The causes {" ir suspension
Of specie payments, that would be dhcu even alter
the aase Of year. TO decide ws, were the rea! cacsss
Believing. however, that the CAUSES arr ihosr as
.ignrd by the report OF the delegates of tie New Ioik
banks the Bank Convention, held al n. York on the
tn Of November last, sad To I've from the pen OF that
able and distinguished inanccr, Albert GsIatIn, instead
0 any remark OF my own, will read that II Gays:
The immediate causes which thus compelled the
banks of The city Of New York suspend specie pay.
incnis on the 10Th Of May last, well known. The
simultaneous Withdrawing Of the large public dcposlrs,
and of excessive fore credits combined with The great
and unexpected fall in the price OF the principal articles
of exports with import OF corn anu Ofeau s'n5,
such as had never befus. occurred and with the
oucu inability Of the country particularly VI the South
western States make the usual and expected remit
iances did al aud the same time, idi principally
and necessarily the creates, commercial! emporium OF
the Union. After long md most aiduous struggle,
during which The banks, though not altogether unsuc'
cessully resisting the imperative foreign dmand Tor NE
precious metals, were gradually deprived OF great pnf
their specie; SONY unfortunate incidents {" local
nature operating in with other previous exciting
causes, produced dsrust and panic, ana finally one OF
thusc general runs which, If continued no BANKS mat
issue paper money payable on demand, can ever resist
and which soon put cut OF the power OF those oi Guy
10 sustain specie pa ym2nts The example was followed oy
the banks throughout the country, with a, much rsPdi.
ly az The news oil the suspension 10 New lok rpachro
them without waiting for an actual run, and ptincpay
ii exclusively, the alleged grounds OF the effects
to be appehendrd from that suspension Thus, whilst
the New Yolk city banks were almost drained OF nrir
specie other places preserved The amount which
they held before the final catastrophe.
At The lime of the susprnsion the State banks had IN
,hei, vaults sis 600 Geo; they had deose on pri.
ya,e account, Siio QUO U00 and on Government &C.
count SO UIo UuO there due on foreign account not
less than SGD nU 900 The amount Il" sucd1n spece de-
ma nd which the banks were suddenly SUBJECTED was
S227 UG0 900 Tomerl which, the banks had on hand only
900 UU0 but there due them deb, OF )UU OU0,
GUU Nnw Sir The then condition oil IN" county when
the banks threatened with run tor So ocJVO,
which under ordinary circumstances would not have
been dome the ba nks had 10 choose between tempo
suspension OF specie payments ana the rum p inc
country for doubt the ruInnus effects "hch
the sudden collection Of near S2JUOJOCuO III specie
would have produced This suspension OF payments
saved the country and enabled American merchants 50
to employ their funds meet The foreign debt with
the exhaustion OF The specie currency OF The c"nh'
try and sive their credit This movement on The parl
of The Banks and the p.ompttude with which The Anne.
rican chants their debt, drew from the Chsncci
Tor Of the E1crqurr Eng land the following high com
pmrnt:
"IIe must and he said il the freely because
it related TO another cOunryhat the eXrrons made ny
IN IN pt
had been such TO reflect the highest credit on ter
character commercial people.
Now Sir why should an act which saved the banks,
the people and the credit Of COMMERCIAL men, som
dspeussble the Of commerce. be resardrd
as IF fraud and treachcry OF character 3" hr
destroy oil confidence III them: and why should
the Guvernnlc avail itself Of that act 10 repudaie Their
paper ard withdraw lis confidence, to their utter desrhc
ton: There good patriotic reason Tor It. Du'lt
is said they have been ailh!.ss 10 Tie Gnyrrnmen be-
they have withheld It's funds and obsructed lis
operations. Now. SIR. let examine little nto facts
and how far this charge is well founded On the DAY
| Of suspension, the hanks had drposiie, of Govern
menl funds SD IA i3 ~; Of this they had paid on the
LIST Of January last TO the drafts of the department. IN
specie $40 Poi 40 presentation in funds sitiS'acto
~ to the holders Sic 2SG 90 II leaving bsiance OF
S. 81 13 %, all well secured OF this balance, 1t Is
sad there remains only about 81 100000 now unpaid;
so that will be lost This under the enbar-
easements and difficulties Of the country, has been very
prompt payment, and proves the vigorous exertions
which have been made by the banks 10 redeem their la
blles and resume specie ayments-exerllons lar be-
yond those of indird"a dcp"sii0rs who are IN default
The influence which the specie circular cxered IN pro-
ducng the embarrassment of the banks has been clear
" demonstrated By Others and its prrncous influence
has been evidenced by ills general unPoPuariy and The
almost una nimty with which it has been repeated
There are but few commercial men who do not approve
the suspension by the banks as an act OF indispensable
necessity
Remainder in ne1i.)