Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1840-01-06

pair the stability, OF the mercantile commune.
they have become borrowers instead of lenders.
they establish their agencies abroad they deal
largely in stocks and merchandise; they encour
age the issue Of State securities until the forogn
market is gutted with them and, unsasfied
WIN the legitimate use Of their own capital and
the exercise of their lawful privileges, they raise,
of speculation 'V
The disasters attendant on this deviation fron,
the former course OF business in this country are
now shared alike by banks and individuals ~ nm
extent OF which there IS perhaps no previous ex.
ample in the annals of Our coIntry So lono no
Willingness OF the foreign lender and n suHicen,
export of our productions TO meet nny pecpssorv
partial payments, leave the flow of credit unds
uIrbed, all appears TO be prosperous; hut as soon
as it is checked 10y any hesitation abroad or nv nm
lnab'lity TO make payment there in our produc-
tlOns, The evils of the system are disclosed The
paper currency, which might serve for domestic
purposes, Is useless TO pay the debt due IN Europe
Coll aud silver are therefore drawn, in exchange
tor their notes from the banks. To keep up their
sup " oi Co u, these institutions obliged TO rail-
upon their own debtors who Jay them principally
! III their own notes, which arc as unavailable to
mem as they are 10 the merchants to meet the for
eign demnud. The calls OF the hunks. therefore.
III surh curgencles of necessity, exceed that de-
oAhl' ana produce corresponding curtniIment
| OF their accommodations and OF the CURRENCY nj
the very moment when the state Of trade renders
! 1t most lnconvcnient To be bDrnr The INTENSIVE
OF TINS pressure on HE community is in propor-
non To me previous liherality Of credit and ronse-
q'ent expansion OF the currency; forced sales of
! property are made vt the time when tine ,uenps
purchasing are most reduced, aud the worst ca-
ln,nItfcs To individuals only at ns arrested bv
an open violation OF their obligations by the banks
II reiusa to pny specie for their notes and an mn,
position upon the community of flucuating aud
deprecated currency.
These CONSEQUENCES are Inherent in ,ia ,,-,s,,,
system They ARE not influenced by the banks
beng large or small, created by National or Stato
governments. They are the results ut the irresis
uIIe laws OF trade and credit. In the recent everts
which have strkingly illustrated the certn,n
effects OF these laws, have seen the bank ofIh
lnsgest capital in the Union, established under a
National charter and lately strengthened, us we
were authoritativey Informed by exchanging that
fora state charter, with new aud unusual prive-
ges IN II condition too as it was said of entire
soundness and great prosperity, not merely unable
resist these effects, hut the first to Weld TO them
Nor is 1t to be overlooked that there exists chain
/ OF necessary dependence among these institutions
$ which oblges them, to great extent TO follow
the course OF others, Notwithstanding its Injustice
f to their own immediate creditors or injury to the
, particular community in which they are placed.
n lhs dependence OF bank, which is in proportion
to the extent OF It's debts for circulation and demos
u lies, is not merely on others in its own vicinity but
on all those which connect it with the centre of
i trade. Distant banks may fail, without seriously
u hut the failure Of the latter is felt at the extrem-
ties OF the Union. he suspension ar New York
4 in 1897, was every where, with very few excep-
tlans, followed, ms soon as it known that re-
Gently at Philadelphia Immediately affected the
IS banks OF the South and West in a similar manner
= This dependence of our whole banking system on
the institutions in few large cities, is found
Al in the laws of their organizations but OF those of
Is trade and exchange. The banks at that centre to
e which currency flows and where it is required in
disc tcIl ,l,a
J. trolling those in regions whence it comes while
=, the latter possess of restraining them
u. SO mat the value OF Individual property and the
: prosperity of trade, through the whole interior of
d tho country, are made 20 depend on the coed or
l. bad management oil the banking institutions in the
N great seats oftrade on the seaboard.
g But this chain OF dependence does not stop
Is mere. 1t does not terminate ut Philadelphia or
II New York 1t reaches across tie ocean and ends
IN London, the centre of the credit system. The
e same laws of trade, which give to the banks i'm
is our principal cities power the whole bank
e. ing system OF the United States subject the for.
= mer IN their turn, to the money power in Great
= Britain II is not denied that the suspension of
s. the New York banks in 1887, which was followed
d in quick succession throughout the Union, was
Is produced by an application of That power and it
re Is now a'ieged, IN extenuaon otthe present con-
T. dtlon OF so large portion OF our banks that their
T. enlarrassnents have arisen from the same cause
ID From this influence they cannot now entirely
" oil the two countries; il is strengthened by the
es currency OF trade and exchange, which centres in
= Lonuon ana IS RENDERED almost irresistible hy the
N large debts contracted there by our merchants our
or banks and our States. 1t is thus that ntrOduc-
I'd uOn Of 4 new bank into the most distant of our
,y villages, places the business OF that village within
the influence OF the money power in England. IL
m Is thus that every debt which contract in
rs that country, seriously affects our own currency
Hr ana extends over the pursuits of our cI Us its
II
H. tins by making new banks, great or snial Slate or
Z, National, The same chains which bind those
s now existing 10 the centre of this system of paper
T. credit must equally feer every similar institution
IT.. we create
OIL 1t Is only by the extent to which this system has
re been pushed of late, that have been made
n fully aware of its rres sble tendency 20 subject
H. our own banks and currency 10 a vast controlling
nv power in foreign land and it adds new argl-
ed ment to those which illustrate their precarious
H. situation. Endangered in the first place by their
IS own mismunagement, and again by the conduct
rs of every institution which connects Them with the
he centre of trade in our own country they are vet
ed subjected, beyond all tbs the effect Of whalev-
Il or measures policy, necessity and caprice, may
IN induce those WHO control the credit of England
20, resort 10. mean not 10 comment upon those
or measures, present past, and much less to dis
H. courage the prosecution Of fair CONNIE fcal deal
&c ing between the Two countries, based on recipro
us cal benefits; but il having now been made mani
er fest that the power ofinfictng these aud similar
n injuries, is, by the resisess law OF credit cur
il rency and credit trade, equally capable of extern
ps ding their consequences through all the ramiica-
ed tons OF our banking system, and by that means
" indirectly obtaining, particularly when our
H. banks are used as Repositories of The public mon.
- oys, dangerous political influence in the United
l. States, have deemed it my duty to bring the sub
n. ject TO your notice, aud ask for it your serious
H. consideration.
Sc Is an argument required beyond the exposition