The Ohio Democrat and Dover advertiser. [volume] (Canal Dover, Ohio) 1839-1840, 1840-01-10

eIgn commerce wss principally iou0oedI
on an exchange oi commod,hes, inclu-
ding the preclnus metkls, and leaving IN
us transactions little foreign debt.
Such ~ not NV the ease. Aided by
the facilities afforded by the banks,
mere credit has become TOO commonly |
the basis Of trade Many OF the barbs J
them,e vss, not ccntenl with largely !
stimulating this system among Nothers,
have usurped the business, while they
impair the stability ofthe mercantile
community: they have become borrow
ers instead Of Irnders: they establish
their sgencies abroad; they deal large
ly in stocks and n,err haudlse; they en-
courage the issue ofSlate securities un
Ill the for, ign mssket is glb'ied with
them; and. urs ,istisd viii The leg IL
H.aie use of iher 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 basioees in
this country, are now shared alike by
all banks and individuals, 10 an extent
of which there A perhaps no previous
example in the annals of our country.
So long ss Willingness Of the foreign
lender, and sufficient export of our
productions to meet any necessary par
ual payments, leave the flow Of credit
undslurbed; all appears 10 be prosper-
Gus; but as SON as i, is. checked by any
hesitation abroad, or by an inability 20
make paymeu. in our productions. the
evils of the system are Disclosed. 'fhe
paper currency which might serve for
domestic purposes, is useless 10 pay
the debt due in Europe. Gold and
silver are therefore drawn, in exchange
for their notes, from the banks. To
keep up their supply Of coin, these in
silulions are Obliged 10 call upon their
own debtors who, pay them principally
in their own notes. which are as unaveIl
able 10 them as they are to the mer-
chants to meet the foreign demand,
The calls of the banks, therefore, IL
such emergencies, Of necessity, exceec
that demand, and produce correspon
I ding curtailment Of their accommo oda'
: ,ions and Of the currency. al the very
n moment when The state Of trade rem
= ders il most inconv eaient TO be borne
i The Intensity OF this pressure OIL th
: community Is IN proportion 10 the pre-
v,ous iibei atty of credit aud cOnsequen
$ xpansion Of the currency; forced sale
b property are made al The time ~hel
II the means Of purchasing are must redu
@ ced, aud the worst cslamilies TO indI
}. Vduals are only a, lasl arrested, by a
Al open violation Of their obligations b
70 The banks, a refusal 10 pay specie lO
d their noles, and an imposition npon tn
ID community Of a Auctuatlng and depre
l. eiated currency.
; These consequences are inherent
e the present system They are not in
:, iAuenced by the by the banks being jarg
)" or small, c,ea:ed by National or Sta
II t1oVernnents. They are the results
VI he il resislibe laws Of trade and credi
u Ia the recent events which have 4
'' slrikingly illustrated the certain etiec
u nc these laws, we have seen the ban
ed of the largest capital in the Union, es
ne tabllsbed uuder National charter. ar
II lately strengthened, as we ore suiho
lie nivsly informed, by exchanging III
lot for a. State charter, with new and VI
ic usual p'ivileges-iD condition 200,
elr Ii, was sad. Of ,n're soundness al
n grsa, pr prosperity y-uot merely unable
ss re sisi these effects, but the FL st to yie
ch 10 hem. .''.
rs. Nor is i, to be overlooked that the
IT. exs,s,s a cham of necessary depe
all dance among these institutions viii
,n- 'bi'ges hem, To great extent. 10 tc
Inc ow the course Of o,hers. BOiwIihsls
ma ting It's injustice TO their own immcc
NV ate creditors, or injury 10 The pori'cu
community N which they are place
Nv fins dependence Of bank, which Is
:, "opUrhou to the extent oftS debs
" cncU All n and deposltes, is mot mer'
v on others in ITS own vicinity, buI on
o'' those which connect 1t with the cen
''e, of trade. DIsian, banks may fail, W
OF uu. seriously affecting those in our pr
Sc, cpal commercial cities; bu. the fail
lnd of lhe latter is felt at the ex'rema
heir Of the Union. The suspension at N
lol' York, in 1887, was every where, "
IS yer! few exceptions, followed, as 8,
ing ss it was known; that recently at p
eat adelphia Immediately affected the ba
the of ,hesSouNh and Yves, IN simllag I
I. uer. This dependence Of our WI
or banking system on the institutions
il few Largo cities, rs no, found in the
tate of their organization, but in those
I of trade and exchange. The banks
i've, that centre TO which currency flows
tin where il l,s sIequired in payments