The Rhode-Island Republican. [volume] (Newport, R.I.) 1809-1841, 1839-10-23
BANKS. BANKING, AND MONETARY
AFFAIRS.

! immediate cause Of the present endorsements
and shall endeavor TO !ook behind the veil and
If possible discover the causes which have got
the great money machine out OF order. The
cause is generally believed TO be oyerbanking.
and many evils arising from that source have
been ably discussed; but one point-and ia
n my opinion, very important 0ne-has been al
most wholly oyerlooked-that of the custody
+ and use made Of the specie coin now 10 the
country. viii il not be universally conceded
that if all the specie now in banks was thrown
out into general circulation, the present panic
would vanish as if by enchanrmentl
10 times Of universal confidence. when spe-
Gle is deposited or paid into banks in common
with bank bills, and as freely paid out at par
and Without reluctance on the part Of the banks
then. and then only, the people have the bene-
fl OF a sound and available currency snited TO
all The various operations Of trade. The banks
/. then are able to perform The duty assigned them
to the letter-fof the hanks can always pay spe-
Gle on demand when but little or none is de.
manded or wanted. At such a period specie
is of but little use, except to make splendid
bank reports up0n; and is in fact held only as
a reserve to meet future emergencies growing
out Of contingent circumstances, which NAV
and as experience teaches. will occasionally op-
press the trade Of this county with all the evils
it nov feels and has almost periodically felt for
the last twenty years. These panics are be-
boming more aud more frequent, though not
the less seyere--of course the evil is RAPIDLY in
creasing IN this otherwise highly favored land
nave already assumed the fact, that if the
specie IN the banks of ihi, country vas all
thrown into general circulation at tb. time. /
II would restore health, vigor. and confidence.
II that rs the fact, why not resort to an expe.
dent so amply within our power! The prec. /,
Ious metals which have been brought into this
country by our nntIring efforts and successful
intercourse with the rest Of the world. were not
so procured 10 lie as useles, on our hands. as
they were before they were dug out Of the mine
hey were procured to give facility to trade,
TO sustain exchanges, settle balances and sim.
pity all the various pecunisry intercourse be-
ween man and man. Now lie; us see if thew
IRE so applied, practically, in times when they
IRE the most useful and indispensable.
a short crop OF such articles AZ are produced
or foreign markets, and excessive importation
or even large crop unsold-generally pro-
'"ces an advance of exchange on England, un-
II the merchant finds it his interest to export
ome oi the specie, which, under other circum.
'ances, he had brought from other countries
o tins. 1t the necessary amount could be at
'nce distracted and shipped, SO as to briny
io"n the exchange to specie par, without excl
ing alarm, all would be well, and the specie
scarcely missed. But the specie. when the
merchant imported it, found its way, in the
course OF business. silently into the banks. and
10" mat 1t IS wanted TO carry back il has 10 be
aNen out again and the cry is raised--specie
$ going out of the country ! look out-ano,b.
y pane Is coming-evcry newspaper trumpets
orth the evil presages, and every bank take,
he alarm. The banks begin to hold on 10
her specie keep all they can. and get as much {
more as they can; TO do which they curtail
her discounts, and money begins to get what '
hey call hight. The necessities of the trade e
emain the same, the banks discount but Ettl, I
nd that to a few favorites. CAPITALISTS with. v
raw their deposits, to buy post and other notes.
t rnnous rates for the borrower business be- /
omes paralized, sales of goods fall of, even
ew commercial paper cannot be had 10 nav old
nth. and next the merchants and traders be;po
naoe longer to swim many of them fail By
=
his time the banks feel Insecure, bill holders
ock ~ upon them, the alarm spreads. the ex. "
nement Increases, and then one or two fail TO
ay In this stage Of the business a meeting
! called of representatives from all the banks
a city, who determine that il is expedient
D stop specie payments for the good of all par "
les concerned. This news flies from civ TO II
ity and from post TO post, and all the banks in
he country follow the example so rapidy that c
he first the holders of the bills bear about it is
ha, the banks have stopped specie payment. II
The Banks still go on with their business in n
u other respects the same as beforehand il is o
est they should; but would it not have bees u
e'tcr to have paid out what specie they hap O
ened To have at the time into general circula.
on, that it might relieve trade in such depart. a
nents as the paper would not suficei r'
blame not the banks for suspendns when l
hey do so from necessity. They are not re. u
ulred TO keep in their vaults, a sum in spe. c
Ie equal to their circulation, nor in most s.
ases equal TO twentieth part Of their imme.
late liabilities; therefore, TO require them 10 u
'eeI, a, any one time. all demands that NAV be u
rousht in. is to require impossblIites and to u
eclare their privileges to be forfeited for not 4"
impossblities is uuwlse and unjust. o
Let the Legislature OF one or more States. or Of o
he whole Union, pass simple act Of protec- G
on, providing that all banks shall meet their u
Ills IN circulation, on presentation, in specie, TO
10 rNfcnf of thrir snnr,a -, L-.I IL al