Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1838-03-22
From The journal Of Commerce Of this morning.


The Wing Of yesterday morning has statement in
relation certain transactions of the late Bank Of the
United States which be well founded NJ least
TIE eriat of the writer's assertions That statement is
follows. .t.
A Contrast When the Bank of the United States
first established branch in Kentucky large amount
deprecated bank paper particularly the notes Of the
Commonwealth Bank of Kentucky paid in by the
debtors of the United States Tie branch lent out all
Its possible nieane and was much importuned for sil
farther loans which it was unable 10 furnish The rage
for speculation was extreme. Some distinguished and
wealthy individuals were ANXIOUS TO extend their pur
chases Of land and knowing that the of the Com
monweslth Bank would be received in payment in such
purchases applied earnestly for loan of that paper
which had been put by wait till it should regain les
credit They asked for discounts and proessed their
readiness receive those notes par. The proposal
was acceded to-ther speculations made success
fsly and with great profit, and their discounted notes
renewed, reduced, and in time chiefly paid.
Some years afterw ards and after Mr. Biddle be-
President Of the Bank of the United States; ne
complaint having been made dissatisfaction expr
ed, letter received by each of the gentlemen who
had had the discounts above referred to- king for
statement of account charging the bank with the amount
of difference between the actual quoted market value
s the paper which they had received from the branch
and the specie which his discounted could have
entitled him &c there had been special understanding
in the The account accordingly furnished
and each one immediately received the in cash.
with full interest upon from the time of the discount
Sc anxious did Mr. Biddle seem to avoid the posi-
bty of any allegation of usurious dealings, although
the TRANSACTIONS had been one in all its conditions
chosen and urged by the borrowers, the Bank
its officers.
What contrast does this present to the conduct of
the Phoenix Bank Of New York, as disclosed BY the
evidence before the committee Of investigation !
Now. how this statement be reconced with the
case Of The Bas ofthe United States against Haggener
aud otes reported in the 9th VOL Of Peters Reports
pages from 37s i05 wherein it appears that the Uni
ted States Bank the defendants for FIVE thou
sand dellars upon Of these sery loans and that
the time the notes Of the Bank of Kentucky were re-
ceved they at discount Of 80 per and
Although the Bank afterwards found be solvent
The defence interposed, that, which is so
fashionable, viz, UsuRY: And the cause was brought
trial in Nay 1898 under the administration Of Mr.
Bidde and afterwards carried into the Supreme Court
Of the T. s., where il ultimately decided in favor
of the Bank.
Upon the point of usury the Court say" The SUBJ
stance Of the instruction is that il the
fairly made by the parties without any intention -
evade the laws against usury but that the parties max
ing the contract Intended exchange credits for the
commod aten Of Owens that the Bank Of Kentucky
sevent and able pay its debts by coercion then the
contract was void fer usury. contrary the
charter of the bank Notwithstanding the parties knew
that the Rank of Kentucky did not pay specie for its
notes without coercion and that these were in
change adepreciaon Of ,hrtyhree forty per cent
below par. We OF opinion that this instruction
ought have been giver. excludes any intention of
violating the laws aga usury and itputs the
SIDE exchange Of credits for the accommodation Of
Owens. Such an exchange is not per illegal though
be II - mere smut or device 10 cover usu-
ry ff the application be not for loan of money, but
for an exchange Of credits commodities, which the
parties bona 6de estimate atequvalent values seems
difficult find any ground, which 10 legal OBJ
lection the transaction Because article is dpreeia-
red ip The market does foiiop that the
titled dsmasd require higher Price before ne consents
20 part Nih "a.
.He mas possess bank notes which 10 him are Of par
value because he enforce payment thercs and for
many purposes they may pass current at par in pay
Of his debts. or In payment OF pubic taxes
and vel their marketable value may be far less. IL he
uses no Disguise; f he seeks loan OF
ney under the pretence of sale exchange Of them
but the transaction is bona ide what purpors be
the will aside the contract for is viola
ton OF any public policy against usury."
In addition 10 the above. from authority, that
the Bank of the United States nsrer but ia very special
cases returncd the exchange received paper which
came back dishonorcd.
Wherein, then, is the violent contrast between thar
bank and the Phenix Our authority for the above
dence.
PBEsn BAsK, Wall street. !
10Th March, 1895. (
Dear Sir-.-Wil you please the practice of
the United States Bank in relation the settlement Of
bills or notes discounted by that Tnstitutisn payable in
distant places that is did the Bank the par
ties directly or indirectly. the amount OF exchange
charged on such paper the time il was discounted
when 1t received back under protest
Respectfully yoors
J. DELAFrELD, President
To NJ. Robinson. Ess. Agent, &C.
AoEScr BANK L. STATES.
NEw-YoRE. March 10, 1885.
Dear Sir-I never did, either Cashier Of the late
Bank the u States Agent Of this any part
Of the of exchanges on distant Paperwnen returned
and paid here.