Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1839-12-27

49,.
lenders; they established their agencies abroad1 fney
deal largely in stocks and merchandise they e@couf'
age the issue Of State securities until the oregnmar'
ket - plullsd with them; and, unsasnes win eAe
legitimate use of their wn capital and tue exercise o
their lawful privileges, they RAISE py large oans AZ
ditIoaA means for every variety OF specoiation Inc
disasters attendant on this deviation from the former
course NJ business IN thus counuy are now snsisS
alike bv banks and individuals, 10 an extent OF which
there perhaps previous example IN the annals OF
MISUNDERSTANDING NJ rfefn
lender, and sxficens export Of prodscuons 70
meet any necessary partial rPayssents ehvsthr now
of credit dad istuFbed nit spPearsogu DO pros seJous;
but as soon an checked ny any hesiralion absoan,
or BY aninabty to aaske payment thsse an our pro-
ductons ne evils OF the sysscni are dsc'oses ihe
paper currency which mightssrvc fordnfrs'ic puft
poses is us.les 10 pay te debt due ~ Eursp. Cold
and SILVER are there fore drawn in cxchange their
notes from the bhnks. TO keep mp Their sarpy of
coin, these institutions are oog 10 call npoif Their
own debtors, who psy them Principally n tiittr owH
notes VIII On are as unavailable "a them MS tsty are
10 ,he fnercha.ts to meet The foreign dsina.d. The
calls of the banks therefore, ~ sucn emergencies OF
necessity, exceed that demand, and produce cor
responding carlalhent ftlielr &C ommod ATOMS and
OF the currency al the very moment when The STATE
OF trade nders il most lncsnvsnlent to BIZ borne,
Tkentensity ofthis pressure on the c0mm uny Is IN
proportion TO the previous hbcralty sfcred nd con
sequent expansion Of tae currency; forced sales 81
properly are made, at the time wnens M means 81
purchasing are most reduced; and the worst lahir
violation OF their on cations, by tho banks. a refusal
TO pay specie for then notes. and an impos'i on upon
the.conmuglty Of . fiac,uaang aud deprecated cur
rency- ! "A. s.aisss : sA siElasas \ i 4 y 81
These oorseq tences areiniierehriu hs present sys
tenn g'Ehcy afe not nauaneed' by the barss being
lar ac or snail cfcated by Naeilat or Srdc Govern
ments They are tlie results oF tT rres stnie laws
of trade and credit Ia tberecent eve'ts VIII cl have
so s,rkngiy Illustrated the certain effects Of these
laws, ehave seen the bank ofihe large stcapiial in
the Union established under national charter, and
lately strengthened as We were aulhoritively Inform
ed, byexchanghg that for State charter, Elh new
and Unusual privileges In csnduon TOO, as l. was
said, Of entire soundness and great prssperity-not
merely uhaSle 10 resist these effects, bg! the fst to
Nor is Il 10 be, ovesrlos;tied that ,hsro exists
chain Of necessary dependencies among these iHsi-'
tens, which oblige them TO gaeat extent,go fol-
low the course Of others Notwithstanding its inlns-
tce 10 their own immediate eredMers or om]ary to
the particular cospnlunity in which they are placed
This Qepeldence of a bank winch II ~ prpp rten
to the sxen, of its debts for cIrcuaiisn ana depos
ites ,s net nerelyon Others in own yiclnHy but
on all those which connect u with the centre 81
trade. Distant banks may fad, without seriously
affecting those praclPal com usefcai ciies: hut
the faure oGthe arter Is felt at the exremlti's If
the Union. The snsp snston at New York, III 1887,
was every where, with very few exceptions, follow
cd az soon as il was known; that recently at Phila
depla inaediaiely affected the banks of the Soath
and Westin a similar manner. This dependence OF
few large cites is not found in the laws Of their or
ganlzaon, but in those of trade and exchange The
banks at the ceRtre 10 which currency flows and
where II IS required IN payments ior merchandise,
hold the power OF controlling those IN regons
when II comes, while the latter possess means
of restraining the m that the value of individual
property and the prosperity Of trade, through the
whole Interior OF the country are m lde 10 depend
on the goodor had management OF IN. banking in
stitutons in the great seats of trade on the sea-
board tet ~ tNe .
Bat this chain OF dependence does not stop here.
1t does not terminate al Philadelphia or New York
1t reaches across the ocean, and ends in London, the
centre OF the credit system. The same laws OF
trade, which give the banks In principal cities
power over the whole banking system OF the United
States, subject the former, their turn, the
ney power an Great Britain. Il 10 denied that
the suspension Of the New York banks in 1881, which
was followed in quick succession throughout the
Union, was produced by application ef that po W..
sent condition Of SO large portion Of our banks,
that their embarrassnents have arisen from the
cause. ~ + ~ s-..r 5 lf45list p 80 ~
From this influence they cannot now entirely
cape, for il has its origin in the credit cu-repcies
of the two countries; it - strengthened by the
rent Of trade and exchange, which centres In Lon
don, and is r,noered almost irresistable by the
large debts contracted thvre by onr merchants. our
banks, and or States. Il is thus that intro
duction Of a new bank into the most distant Of
villages places the business Of that village with
in the Influence Of the money power in England
thus THAT every new ueDt winch We S'HtidCt IN
that country, seriously affects our own currency,
and extends over the pursuits OF our citizens its
powerful influence. We cannot escape from this by
making banks, great or small, State or Nation
al The same chains which bind those now existing
TO the centre Of this system Of paper credit, must
euualy fettcr every similar Institution we create.
Ii isunly by the extent owhch this system has been
pushed Of late that WE have been mxde faliy aware
Of it's IRE tendency to banks
and currency vast controlling power In foreign
land, and it aids new argument 20 those which IL
lustrafe their precarieusl situation Endangered
in the first place by their own mismanagem
and again by the conduct of every institution;
which connects, them with the centre Of trade in
our own coantry, they yet subjected, beyond all
this to the effect Of whatever measures policy, ne
cessity,. or caprice, may induce those who con-
troll the credits Of England 70 resort to- mean
not TO comment upon these. measures pre-
sent or past and much less to, discourage
the prosecution Of lair commercial dealing
between the two countries, based on recpro-
cal benefits; but il having now been made
manifest that the power Of infcung these and SINH
lar injuries, is, by the resistIess law Of credit
currency and credit trade, equally capable Of ex
tending their consequences through all the ramhca
tions OF our banking system, and by that means in
directly obtaining, particularly when our banks are
used. as deuositofies OF the public moneys, dan.
rerods political Influence in the United States, !
have deemed IL my duty to bring the subject 10 your
notice, and ask Tor II your serious consideration,
Is an argum mt required beyond the exposition OF
these facts. 60 show the improperly of using our
banking institutions deposstories OF the public
money r., Gan we venture mot emily 81 encounter the
risk OF their iadiy idnal and mutual engagement