Rutland herald. [volume] (Rutland, Vt.) 1823-1847, 1840-01-07

every branch Of manufacturing industry was
crowned with rich rewards and the more
than usual abundance Of our harvesis, after
supplying our domestic wants. has ief our
gtanarics and s.0re-houses filled with a sur
plus for expectation. I, is IN the midst OF this
that an irrcdccmablc and deprecated paper
currency iscn'ailed upon the people Ivy large
portion Of ihc banks They are not driven 10
It by the exhibition Of loss Of public conf
dencc OF Of a sudden pressure from their de-
pUsiiors or note holders, hut they excuse them
solves by alleging that the current Of business
and exchange with foreign countries which
draws the precious metals from their vaults,
would require. in order 10 meet H. larger
curtailmeni Of their loans TO a comparatively
small portion Of the community, than it will
be convenient for them 10 bear. or perhaps safe
for the banks 10 exact The plea has ceased
TO be ono ofnecessi,y. Convenience and pol
lev are now deemed sufficient to warrant these
Institutions in disregardine their Solemn obi
cations. Such conduct is not merely an inju-
~ TO individual creditors, but it is a wrong TO
the whole community, from whose liherality
they hold most valuable prvileges-whose
rights they violate, whose business they de-
range, and the value Of whose property they
render unstable and insecure Ii must be ev-
ident that this new ground Tor ssnk suspen-
sions. in reference 10 which Tbs. sction is not
only disconnected with, but &holIf in,lepend-
ent of, that of the public, gives character TO
their suspensions more alarming than any
which they exhibited before, and greatly in
creases the improperly of relying on the banks
in the transactions of Government.
A large and highly respectable portion Of
our banking institutions are, IL affords me
unieigned pleasure to state, exempted from all
blame ON account of this second delinquency.
They have TO their great credit not only con-
tinued to meet their engagements, but have G.
ven repudiaied the grounds OF suspension now
resor,ed to. II is only by such ascourse that
the confidence and good will OF the communi-
ty can be preserved, and, in the sequel. the
best interests Of the institutions themselves
promoted.
New dangers to the banks are also daily
disclosed from the extension of that system of
extravagant credit Of which they are the pill
lars. Formerly our foreign commerce was
principally founded on all exchange Of COM
modIties, including the precious metals, and
leaving in its transactions but little foreign
debt Such is not now the case. Aided by
the facilities afforded by the banks, mere cred
1t has become too commonly the basis oftrade
, Many Of the banks themselves, not content
others, have usurped tho business, while they
impair the stability of the mercantile commu-
nifty they have become borrowers instead of
lenders they establish their agencies abroad;
they deal largely in stocks and merchandise !;
they encourage the issue of State securities
until the foreign market is glu!ted with them !;
and unsatished with the legitimate use of their
own capital and the exercise of their lawful
privileges, they raise by large loans additional
means for every variety Of speculation. The
disasters attendant on this deviation from the
former course Of business in this country, are
now shared alike by banks and individuals, to
an extent ofwhich' there is perhaps no previous
example in the annals of our country.
So long as willingness of the foreign len
ders and sufficient export Of our productions
to meet any necessary partial payments, leave
the flow of credit undi,turbed, all appears to
be prosperous; but as soon as il is checked by
any hesitation abroad or by an inability to
make payment there in our productions, the
evils Of the system are disclosed The paper
currency which might serve for domestic rur-
poses, is useless to pay the debt due in Eu-
rope. Gold and silver are therefore drawn, in
exchange for their notes, from the banks 70
keep up their supply Of coin, these institutions
are obliged to call upon their own debtors, who
pay them principally in their own notes, which
are as unavailable TO them as they are to the
merchants to meet the foreign demand. The
calls OF the banks therefore, in such emergen-
cies, OF necessity, exceed that demand, and
produce corresponding curtail of their ac-
Communications and ofthe currency, at the very
moment when the state of trade renders il
most inconyenlent TO be borne. The intensi-
ty OF this pressure on the community is in pro-
portion to the precious lberality of credit 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 not on
ly at last arrested by an open violation of,her
Obligations by the banks, refusal to pay spe-
Gle Tor their notes, and an imposition upon the
community of fiuctualing and deprecated
currency.
These consequences are inherent in the pres
ent system They are not influenced bv the
banks being large or small created bv National
or state Governments They are the results of
Inc irresistible laws of trade and credit. In
The recent events which have so sirikingly il
Illustrated the certain effects of these laws, we
have seen the bank of the largest capital in the
Union established under a national charter,
ana lately strengthened, as we were authori-
iaiIveiy informed, by exchanging that for
state charter, with new and unusual privileges
IN a condition too, ~ suij, of entire
soundness and great prospenty-not merely
unable 10 resist these effects, but the first to
yield TO them.
Nor is il TO be overlooked that there exists
a chain Of necessary dependence among these
institutions which obliges them, 10 great ex-
tent, 10 follow the course of others, notwilh-
standing ITS injustice TO their own immediate
creditors, or injury to the particular communl-
~ in which they are placed. This dependence
OF bank, which in proportion to the extent of