Maumee City express. [volume] (Maumee City, Ohio) 1838-184?, 1840-01-11

their vaults, would require, in order to meet
it, larger curtailment of their loans to a
comparatively small portion of the commu-
nifty, than it will be convenient for them to
bear, or perhaps safe for the banks to exact.
The plea has ceased to be one of necessity. |
Convenience and policy are now deemed
sufficient to warrant these Institutions In
dsregarding theii solemn obligations. Such
conduct is not merely an injury to indlvldu- !
al creditors, but it is wrong to the whole
community, from whose hberaIi,y they hold
most valuable privlleges--whose rights
they violate, whose business they derange,
and the value of whose property they render
unstable and insecure. 1t must be evident
that this new ground for bank suspensions,
in reference to which their action Is not on
ly disconnected with, but wholly indie pend
ent of that of the public, gives character
to their suspensions more alarming than
any which they exhibited before, aud great
ly increases the impropricty OF relying on
the banks in the transactions Of the GOvern-
ment.
A large and highly respectable portion of
our banking institutions are, it affords Inc
unfeignel pleasure to state, exempted from
all blame on account Of this second deln-
qucncy. They have, to their great credit,
not only continued to meet their engage
ments, but have even repuliated the
grounds oislispension now resorted to. 1t
is only by such a course that the confidence
and good will ofthe community can be pre-
served, and, in the sequel, the pest interests
of the institutions themselves promoted.
New langers to the banks are also daily
! disclosed from the extension OF that system
of extravagant credit of winch they are the
pillars. Formerly our foreign commerce
was principally founded on an exchange OF
commodities, including the precious :Antas,
and leaving in It's transaction but little for
egn debt. Such is not now the case. Aid
ed by the facilities afforded by the banks,
mere credit has become too commonly the
basis of trade. Many of the banks them
selves, not content W th largely stnu'u-
ti1r this system among others, have usur-
pod the business, wllIe they implir the sta
bililv of the mercantile community: they
have become borrowers instead of lenders;
they establish their agencies abroad: they
deal largely in stocks aaJ merchandise,
thay encourage the lssue Of state securities
until the foreign market is glutted with
them; and, unsatistied with the Legitimate
use of their own capital and tie exercise
of their lawful privileges, they ralse, by
la roe loans, additional means for every va
riety of speculation. The disasters attend
ant on this deviation from the former course
of business in this country, are now shared
alike hy banks and individuals, to an extent
ofwhich there is perhaps no previous exam
oles in the annals of our country. So long
as Willingness ofthe foreign lender, and
sufficient export of our productions to meet
any necessary partial payments, leave the
flow of credit undlsturbed, all appears to be
PROSPEROUS; but as soon US it is checked by
any hesitation abroad, or by any inability
to make payment there in our productions,
the evils of the system are disclosed. The
paper currency which might serve for do
nestle purposes, is useless to pay the debt
due in Europe. Gold and silver are there
fore drawn, IN exchange for their notes,
from the banks. To keep up their supply
of coin, these institutions are obliged to call
upon their own debtors, who pay them prin.
cipally IN their own notes, which are US un-
available to them as they are to the mer-
chants to meet the foreign demand. The
, calls of the banks, therefore, IN such emer-
gencies, of necessity exceed that demand,
aud produce corresponding curtailment OF
their accommodations and of the currency,
ut the very moment when the state oftrade
renders it most inconvenent to be borne.
The intensity of this Oh the community is
in proportion to tile previous liberaty
ofc,edt and consequent expansion Of the
currency; forced sales of property are made
at the time when the means OF purchasing
are most reduced, and the worst calamities
to individuals are only at last arrested, by
an omen Violation OF their Obligations by the
banks, refusal to pay specie for their
notes, and an imposition upon the commu
nifty OF a fluctua!lng & deprecated currency.
These consequences are inherent in the
present system. They are not influenced by
the banks being large or small, created by
National or State Governments, They are
the results of the irresistible laws Of trade
and credit. In the recent events which
have so strikingly illustrated the certain
effects ofthesc law, we have seen the bank
of the largest capital IN the Union, esta-
blished under National charter, and lately
strengthened, as we were authorttatlvely
informed, by exchanging that for a state
charter, with new and unusual privileges
i'll condition too, as 1t was said, of entire
soundness and great prosperIty-not mere
~ unable to resist these effects, but the
first to ycd to them.
Norris it to- be overlooked that there ex-
lsts Il chain Of necessary dependence among
these Institutions which obliges them, to a
great extent, to follow the course of 9TH
ers, notwithstanding its injustice to their
own inmedIate creditors, or injury 10 the
particular community in which they are
placed. THIS dependence of bank which
is in proportion to the extent Of It's debts for
circulation and deposites, is not merely on
others its own vicinity, but on all those
which connect it with the centre of trade.
Distant banks may fal, without seriously
affecting those in our principal commercial
cities; but the failure of the latter Is felt at
the extremities ofthe Union. The suspcn-
sion at New York, in 1887, WIS every
where, with very few exceptions, followed,
as soon as 1t was known; that recently at
Philadelphia Immediately affected the
banks Of the South and West iu similar
manner. This dependence of our whole
| banking system OH the institutions in few
large cties,is not found IN the laws of their
organization, but IN those Of trade and ex-
change. The banks at that centre to
which currency flows, and where it is re-
qnired in payments for merchandise, hold
| the powe- uf confrollinp those in rnniops