Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1840-01-03

4 tnttyf W tHo NutICuuttlC community. thav
have become borrowers instead Of lenders.
they establish their agencies abroad; they
denl largely in stocks and merchandise. tbev
encourage the issue Of State securities m.
I'll the foeiQn market is glutted win them
and uDsaiisfied with the legitimate use n
their own capital and the exercise OF tbe;,
lawful privileges. they raise, by large loan,
additional means for every variety of specu
latioD. The disasters attendant on mi,
deviation from the former course Of bus;no,,
IN this country. are now shared alike bv
banks and individuals, to an extent OF which
there is perhaps no previous example in the
annals ofonr country. So long as a WILLING.
ness Of the foreign lender, and a sufficient
export oil our productions to meet any neces.
sary partial payments, leave the flow of cred.
II undisturbed. all appears 10 be prosperour
but as soon as it is checked by any hesir
lion abroad, OF by an inability 10 make nav.
ment there IN our productions, the evils NJ
The system are disclosed. The paper cur
rency which might serve for domestic nu,.
poses, IS useless 10 pay the debt due in En-.
rope. Gold and silver are therefore draw.
10 exchange for their notes, from the bank,
10 keep up their supply Of coin, these in
stitutious are obliged 10 call upon their ow,
debtors, who pay them principally in then
OWE notes. which are as unavailable 10 Then
as they are to the merchants 10 NEE, ina
foreign demand. The calls of the banL,
therefore, in such emergencies, OF necessity
exceed that demand, and produce a CORES,
ponding curtailment of their accommods.
tons and the currency, at the very momep
when the state OF trade renders il mos, IN.
convenient 10 be borne. The INTENSIVE If
this pressure on the community is in prono,.
ton to the previous liberalily of credit and
consequent expansion Of The currency; for
eed sales Of property are made at the time
when The means Of poi chasing are most
reduced. and The worst calamilirs to ind.
rldnals are only at last arrested, by an open
violation Of their obligations BY the banks. A
refusal TO pay specie for their notes, and an
imposition upon the community ola huc,ua.
Jung end 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 Stale 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 OF these laws we have seen
the bank Of the largest capital in the Union
established under a National charter, and
lately strengthened, as we were uuthoriiivey
informed, by exchanging that for State
charter, wilhHnew and unusual privileges
IN condition too, as il was said, OF entire
soundness and great prosperity--not mere
~ unable TO resist these effects, but the
first to yield 10 them.
Nor is il TO be overlooked that there exists
u chain of necessary dependence among
these institutions which obliges them, to
great extent, TO follow the course Of Others
notwithstanding its injustice TO their own
Immediate creditors, or Injury TO the partic
ular community in which they are placed
This dependence Of bank, which is in
proportion to the extent of its debts for circu.
laiion and deposites. is mol merely on Others
in IFS own vicinity, but on all those which
connect il with the centre Of trade Distant
banks may fail, without seriously. affecting
those in orr principal commercial cities;
but the failure OF the latter is felt at the ey.
iremiiies OF the Union. The suspension at
New York. in 1887, was every where, with
very few exceptions followed, as soon as il
was known; that recently at Philadelphia
Immediately affected the banks Of the South
and West 10 a similar manner This Deepen
dence OF our whole banking system on the
institutions in a lew large cities is not found
in the laws oflheir organization, but in those
OF trade and exchange. The banks at tha,
centre TO which currency flows, and where
i IS required in payments for merchandise,
hold the power of controlling those in re.
gions whence it comes, while the latter pos
esses no means OF restraining them.so that
the value Of individual prosperity of trade,
through the whole interior Of the country,
are made TO depend on the good or bad man.
agcment OF the banking institutions in the
great seats of trade on the eaboard
But this chain OF dependence does not
stop here. lldoes not terminate at Phila-
dolphin or New York. II reaches across
The ocean. and ends in London, the rentre Of
the credit system. The same laws of trade.
which give to the banks in our prime ipal
cities power over the whole banking system
OF The United States, subjec, the former.
in their turn, to the money power in Great
Britain. It is not denied HAT the suspen-
sion Of the New York banks in 1897 which
was followed in quick succession through.
out the Union, was produced by an nppli-
cation Of that power. and il lis now alleged,
in extenuaiion of the present condition OF SO
large portion Of our banks. ihat their EN-
have arisen from the same
cause. .4r1
From this influence they cannot now on.