Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1839-12-27

lie dues; that the next largest have been by dbursn,
officers and the least by collectors and receivers Ii
the losses on duty bonds included they alone will
be tirccfold those by both collectors and receivers
Our whole experience therefore, furnishes the strong.
est evidence that the desired legislation of Congress is
alone wanting insure in those operations the highest
degree of security and facility. Such also appears to
have been the experience of other nations From the
results of inquiries made by the Secretary of the Trea
sury regard to the practice among them am enabled
to state that in twenty out of twenty foreign
Governments, from which undoubted information has
been obtained, the public moneys kept in charge of
public officers. THIS of opinion in favor
of that system is perhaps great exists on any
question of internal administration
in the modes of business and official restraints on
dSbursng officers, legal change produced by the
suspension of specie payments The report last refer
red to will be found to contain also much useful nto
nation in relation TO this subject.
| have heretofore ASST gncd TO Congress nv reasons
for believing that the establishment of Independent
National Treasury, rs contemplated BY the Constitu.
ton, necessary the safe action Of the Federal Co.
vernmcnt. The suspension OF specie payments in 1897
by the banks having the custody of the public money
showed in alarming degree dependence on those
institutions for the performance Of duties required BY
law, that then recommended the entirs dissolution of
tina. connection This recommendation has been sub
rctcd as desired it should be, to severe scrutiny and
animated discussions; and allow myself 10 believe that
notwithstanding the natural diverscs of opinion which
may be anticipated all subjects involving such i'm.
potant considerations has secured in its favor &c.
neral of public sentiment as could be ex
pectcd on one of such magnitude.
Recent events have also continued TO devclope new
objections to such connection Seldom is any bank
under the existing system and practice able meet on
demand, all its Liabilities for deposites and notes in
circulation. II maintains specie payments, and trans
profitable business, only by the confidence Of the
public in its solvcncy and whenever this is DESTROYED
the demands Of its dcpostors and hoders-pressed
more rapidly than it can make collections from its
debtors-torcc 1t to stop payment This loss OF conf.
drnce with its consequences, occurred in le1 ard a
orded the apology OF the banks for their suspension
The public then, acquiesced IN the validity of the CT
cuse and while the State Legislatures did exact
from them their forfeited charters, Congress- accord.
ance with the recommendation of the Executive al.
lowed them time to pay over the public money they
held, although compelled To issue Treasury notes
supply the deficiency thus created.
II now appears that there are other motives than
want of public confidence under which the banks seek
to justify themselves refusal TO meet their oblga
tons. Scarcely the country and Government
Eeved, in degree, from the difficulties occasioned by
the general suspension of 1887 when partial one,
curing within thirty months of the former produced
new and serious enbarrassments though it had no pal
ation in such circumstances alleged lustii.
cation of that which had previously taken place There
nothing III the condition Of the country 10 cndanger
a well-managcd banking institution; commerce was de-
ranged by no foreign war; every branch of manutac-
turing industry crowned with rich rewards and
the than usual abundance of barvests after
supplying domestic wants, had left granaries
and store houses filled with surplus for expectation.
II is in the midst of this, that rrcdecmable and de-
prcCated paper currency entaed upon the people by
large portion of the banks They are not driven 10
il by the exhibition of loss of public confidence OF
sudden pressure from their eposors holders
but they themselves by alleging that the
of business, and exchange with foreign countries,
which draws the precious metals from their vaults,
would require in order to meet it, larger curtament
of their loans to comparatively small portion of the
community, than will be convenient for them To bear,
or perhaps safe for the banks exact The plea has
ceased to be of necessity Convenience and policy
deemed sufficient to warrant these institutions
in disrcgarding their solemn obligations Such con-
duct is not merely injury to individual creditors hut
it is wrong to the whole community, from Whose
liberalty they hold most valuable prIvIcgcs-whosr
rights they violate whose business they dcrange and the
value of whose property they render unstable and in
secure. 1t must be evident that this ground for
bank suspensions, in reference to which their action il
not only disconnected with, but wholly Independent of,
that of the public gives character to their suspensions
more alarming than any which they exhibited before,
and greatly increases the improperly of relying the
banks in the transactions Of the Government
| large and highly respectable portion of our bank
ing institutions arc, it affords uni,ncd pleasure 10
state, exempted from all blame account of this
cond delinquency. They have, 10 their great credit,
not only continued To meet their engagements, but have
even repudiated the grounds of suspension resort
cd to. It is only by such that the confidence
!
in the sequel the best interests of the institution them
selves promoted.
New dangers the banks also daily disclosed from
the extension Of that system of extravagant credit of
which they are the pillars. Formerly commerce
principally founded exchange of commodities,
GLIDING the precious metals, and leaving its
tons but little foreign debt. Such IS not now the
Aided by the facilities afforded by the banks,
credit has become too commonly the basis of trade
Many OF the banks themselves not content with large
the business, while they impair the stability of the
mercantile community they have become borrowers
instead OF lenders they establish their agencies abroad
they deal largely in stocks and merchandise they
courage the issue of State securities until the foreign
market glu.ted with them; and unsatsed with the !e-
Ultimate of their capital and the exercise of their
lawful privileges, they raise, by large loans, additional
for every variety of speculation The disasters al
cndant this deviation from the former of bust
this country, shared alike by banks and
individuals of which there perhaps no pre-
vous example in the annals of our country. So long
as willingness of the foreign lender, and sufficient
export Of productions to meet any necessary par
tial payments leave the flow of credit undisturbed, all
appears be prosperous; but it checked
BY any hesitation abroad, by nabtyto make pay
mcnt there in productions the evils OF the system
are disclosed The paper currency, which might serve
for domestic purposes useless TO pay the debt due IN
Europe. Gold and silver therefore drawn, in ex-
change for their notes from the banks To keep up their
supply of coin, these institutions obliged to call
upon their debtors, who pay them principally IN
their own notes. which unavailable to them as
they are the merchants to meet the foreign demand
The calls Of the banks therefore, i'll such emergencies,
of necessity, exceed that demand, and produce cor
responding curtamcnt of their accommodations and Of
the currency, at the very moment when the state OF
trade renders II most announcement 10 be borne The
intensity of this pressure the community IS IN pre-
portion TO the previous lbcray Of credit and conse-
ouent expansion of the currency: forced sales of pro-
perry arc made the time when the means OF pnrchas-
np are most reduced and the worst calamties to nd,-
r;duals arc only at last arrested by open violation Of
their obligations by the banks, refusal pay specie for
their notes and an imposition upon the community .!
la fuctuating and deprecated currency
These consequences are inherent IN the present sy'
lem They are not influenced by the banks being large
or small, created by National or State Governments;