Madison Whig advocate. [volume] (Canton, Miss.) 1839-1841, 1839-05-11


Government, was in a worse condition
than the people of Mississippi at the pre-
sent day. What has led to this state of
affairs we will endeavor to trace as suc-
clnctly as possible in this article-and
we will not go back farther in endeayor-
ing to trace the causes than to the reno
val Of the dePosites by President Jack
son.
1t will be recollected by all, that when
Gen. jackson removed the deposites of
the General Government from the vaults
OF the Bank of the United States. that
| the most distinguished men of the Whip
party proclaimed that embarrasments
and ruin would follow that exchanges
would advance in price-or could not be
had, that commerce would be Frustrated,
and the country filed with irredeemable
paper. ToPrevent such a state of affairs
and make the people discredit all that
was told them, the various State Banks
that received the public funds on deposit
were requested by the Secretary of the
Treasury of the United States, to dis
count upon the faith or credit of the pub
lie funds in their vaults, and thereby
prevent the scarcity of money that was
aPprehended would follow the contrac-
ton Of the circulation of the Bank of
the United States, and the withdrawal of
the capital of that Bank by the expira-
ton of It's Charter. To prevent a pres
sure, and to prove those men-who pre-
dicted all that would follow-were false
prophets, was the object Of the Govern
ment in requesting and encouraging the
State Banks to discount upon the faith Of
the public treasure.
The State Banks acting upon these
suggestions, and upon the credit of the
dePositcs, extended their circulation
and thus fully and more than fully sup
piled any vacuum that would have been
made by the withdrawal of the capital
Of the Bank Of the United States-and
this not only prevented any pressure,
but caused a temporary prosperity as
unfortunate in its results as it was allur-
ing in its prospects.
The Government at too late a period
discovered that the State Banks were
using the credit derived from the public |
funds too IiberaIly-were discounting
too freely-that things were going wrong
determined to prevent, or stop the
evil, and therefore issued the Specie Cir |
cular, which they knew would necessari- !
Iy cause the State Banks to contract |
their issues, and call in their circulation
The Government was correct in their
conclusions, but at the same time we
doubt whether they forcsaw, that the
policy of the Specie Circular would also
cause the credit of the banks to be injur-
ed, Frustrated, and a general distrust of
them by the community, and a run upon
them for their specie.
But the remedial measure Of the Spe- |
Gle Circular came too Iate-the banks |
had already ventured beyond the means,
and the demand Of the Government for
their funds, which they had not antici-
pated, and individuals for gold or silver,
caused the banks to close their vaults,
and suspend the payment of their notes.
But as we have said before, the banks
had gone 100 far to fall back so soon on
their old position-they had discounted
too literally upon the faith of the public
funds TO the Planters and TO Commission
Merchants. The Commission Merchants
finding it an easy matter 10 get their
notes discounted in bank, were induced
10 extend their acceptances for Planters,
to almost an unlimited extent by which
the planters could realize the money by
selling those acceptances in market. 1t
was thus that money became so plenty,
and every thing appeared prosperous,
and the prophecies of the panic makers
as they scornfuIly termed the leaders
Of the Wing Party-were proven false.
But the time had not yet rolled round
when all that was toretold was 10 occur,
but it followed close upon the heels of
the Specie Circular, which discredited the
banks, and thereby caused the banks to
stop all accommodation, both to Planter
and Merchant.
This universal prostration Of credit
fell not so heavily upon any community
IS that of Mississippi, who on account of
he energy and industry of her citizens,
he fertility of her soil, and great value
If her products had enjoyed an almost
unlimited credit, and consequently had
become deeply involved both at home
and abroad.
The Banks to sustain their credit made
r,Ro7 planters and