Lynchburg Virginian. [volume] (Lynchburg [Va.]) 1829-185?, 1839-10-21
POLITICAL.
From me National Inteiiiseneer.

Mn. SMIru's LErrrR.--The reader will fisd in
our paper thislmornlng another letter from Mr. DIN
MS A. SMITH, Of Maryland, on the character and
causes Of the pecnniary endorsements which u,
present atct the country to Distressing aud un-
precedenied an extent. Though retired from any
active participation IN mercantile pursuits. MI.
SMITH Is well known for his former extensive relations
with trade. and his intimate knowledge of the sub
jects of Commerce and banking. In the calm of
comparative retirement. he views the fluctuations
and revulsio0s of the business world IN which he
once so prominent an actor, and submits 10 his
suffering fellow -ciizens the counsel and admon
drawn from experience and u sound judgment.
As the coincidence OF the suspension OF specie
payments by the Banks of Philadelphia dscl loses a
striking proof OF the sacaciiy Of his reasoning, 1t is
due TO MIR. s, TO state tha, we happen to know thai
his letter written al the psIod of which bears
date.
TO JOHN BROCKENBRoUGH.E ESQ.
PRESIDENT or TnE RANK or yIasiNia.
BALTIMORE, September 81, 1889
DEAN Sin In my communication OF the 9TH Of
June. | recalled To your mind my two former pub
callons--he one wherein The necessity Of suspen-
sion OF specie payments was urged and the other
deprecaling the evil consequences OF prem re-
sumption, then in contemplation, which fatal mea-
sure soon afterwards forced upon The BarJ,
Convention nj New York, by the co-opera,on
of public clamor and private interests. The
responsibilities and hazardous consequences IN
cident 10 that great national error were clear
y foreseen, aud much dreaded Ivy many gentle
men OF intelligence, who were convetsant with The
subject in question and but short period will
produce the conviction IN the minds Of all who
unbiased by political other prejudices, thai the
commercial aud mOneyed affairs Of this nation were
not then SO cneumsanced as to justify resumption
Of cash payments by tho banks, aud the hope that II
would be upon permanent aud solid basis.
Al the period Of The suspension, the amount of
our Indebtedness TO England was Of the primary
causes which demanded lis adoption and IL is an
hisIn turf nI htrb NM hnaa lint
during its continuance the greater proportion Of that
debt was quidated under circumstances Of extreme
hsea embarrassment, and with degree of punctual
hy and fidelity unparalleled ~ the history OF nations
fhe commerce Of our country was at The same time
rapidly recuperaliDg from the ruinous consequences
oceasDned by excessive imporiaons OF European
fabrics and tho non-payment of bullion was In It's
operation, 10 considerable extent, virtually non
intercourse act, and, II II had been continued u few
years longer II would have limited our foreign trade
To natural and actual means OF men,--the
value Of the surplus products OF our SOIL and indus
Try. But the moment orr resumption was known
in Eng land was there hailed revival OF the com
n,ercia intercourse Of the Two nations and mark
cts were Immediately ovcrstoCked with goods and
have thus remained since, by reason of constant
and extravagaut inporlaiions, a large portion Of
which, II is known, has been for account Of the man
ufacluers and in dirccr ecnnlct with the interests Of
our importing merchants.
The institution Of great number of banks
daiely after the expiration Of the charter oil the
Bank of The United States, and the njudicious sub
st,tution OF credit for capital, upon which many Of
them were then based, contributed largely 10 pro-
duce the subsequent and present embarrassed condi-
ton OF our fiscal and commercial affairs. The Ie
dunJarcy Of bank facilitIes then created supern-
duced corresponding disposition to embark in trade
and speculatIons and such was The avljny with
which foreign goods were purchased IN our cities
and the apparent means OF payment. that the manu-
iacturers Of England put iut0 immediate operation
the necessary machinery TO meet our increased de-
mand and the natural consequence followed that
the raw material became an immediate object of
speculation in En- .land, and the lands in cotton
growing States were bought aud sold ii average
advance Of moie Than FIVE times their present va
lue. II was al that period, when the nation enjoy
ed high degree OF pros, erty aud the measurable
blessings OF Il sound currency, and capital pro-
cured IN this country with ea,e because OF the low
rate of interest sutrenr IN England, that States
and Individuals embarked IN gigantic schemes ol
internal Improvements, which should only have been
undertaken by the General Government, and com.
pleed by the application of lis surplus revenues in
IA long series OF years. The sudden disbursement
Of so much capital on these works caused extrav
agant increase IN the value of labor, aud a great
withdrawal Of labor from agricultural pursuits oc-
cssioning an Immediate curIailment IN the pioduc-
tons oil the soil, and corresponding advance Of
provisions Of every descril ton.
Our Stale Governments have created within a few
years, Tor the construction such works. greater a
mount OF stocks than was issued by The General
Government during the late war and these have alb
s0ibed II very large amount OF capital IN Europe
and in the United STATES, that was previously EN-
pIoyed 10 mercantile transactions and in support OF
the credit OF banks and bankers, m the shape OF de-
posites; but, since its removal and permanent IN
vestment IN Stale aud internal Improvement stocks
has been 10 a considerable extent xed TO the EARTH
there TO await the completion and avabilny OF the
stocks OF the incomplete works upon which II
has been expended. And IL IS a wel-ascenained fact
that owing to defect OF confidence in the stab lily
OF The bank paper discussed IN the interior, large
sums have been changed for specie, now boarded up
IN the cOuntry, where II will also remain dormant
until The rc-estabshnent Of confidence IN our pa
per currency. 1t should not, therefore, be matter oil
surprise that the banking institutions OF America are
unable 10 afford to the merchants their wonted IaeI
tiles nor could it be- when II is also recollected
tat the pressing exigencies OF States force them,
at ihls moment, upon the money markets Of Europe
and at home, az borrowers, At extravsgsnt rates oil
interest, for at least thirty millions ot dollars and
while also The General Government is compelled TO
negotiate IN our own markets for large sums, with
Treasury paper. The stable character Of such Sc
curItIes, particularly at period Of universal distress,
impairs the resources OF our INKS, aud precudes
The possibility Of procuring money 10 supply The
wants OF OUT merchants, upon private securities.
however good and it is a very extraordinary fact
IN the history Of The fiscal concerns of the United
States, that neither credit properly can be made
available ~ the procurement Of CASH al the PIE
sent time although the price Of money upon the
street is raled from "a to SO per cent per aunum,
and the notes Of your banks Of Virginia are seilirg
here al discount Of three per cent twilhstaDdIng
II is well known that in point OF sovency they are as
good any in the Union, independent # the la