The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1841-12-31
OPINION OF BANKS FIFTY YEARS
AGO

OPINION OF BANKS FIFTY YEARS
AGO.
We have before us copies and extracts Of let
tiers written half century since, on the subject
of banks and their tendency, by statesman
and patriot of the Revolution, and one of the
first representatives from Vermont upon the
adoption OF the Constitution. These letters
were written when the eXpedlency and const-
tuionaty of Incorporating the first Federal
Bank, and State Banks, were the leading topics
of the day, and epgrossed and agtated the pub
lie mind. The public can now appreciate the
value of the opinions entertained then and Judge
whether the results of the banking system have
not in some measure, at this day verified the
prophetic views entertained half century
since.
1t will be unnecessary TO introduce the sub
ject with any prolix preface, but it is perhaps
proper to premise that the letters, written 10 a
familiar friend Gas we understand were not ex,
pected, OF course TO meet the public eye, and
therefore not prepared with any elaborate care
or studied polish. l may be proper also to add,
that the writer has long since passed from the
stage, and that we are indebted 10 a near rea-
tive for copies Of the extracts which we Shall
give.
No longer to detain the reader, we shall com
mence with the following extract, taken from
one of the many letters we have before US:
g shall now submit TO your consideration (says
the wrter) question which is deeply interesting to
oar country. 1t is, whether banks in their opera.
tion friendly or uniriendy to the continuance of
Republican Government frankly own, that they
seem to to be uniriendy. The following are some
Of the reasons of this opinion;
In the establishment of BANKS, the Government es-
tablishes MONOPOLY. 1t may not indeed put it out
of its power TO increase the number of establish
ments Of the same kind, and upon the same princi-
pies but whether these establishments are more or
less numerous and extensive they are taken together
monopolies. They have Extensive privileges granted
them by law, While individuals are not allowed to
loan money at any greater interest than six per cent
these companies allowed to let theirs in reality, at
twelve eighteen rather they allowed to take
six, or twelve and perhaps eighteen per cent in err
change of their notes for mine
Set aside the legal establishment, and the transac-
ton amounts to the [thngl as for a usurer to
give me his note for 500 payable on demand for mine
Of one hundred, payable in sixty days.
legal establishment authorizing person, or a
company to exchange their notes for those of other
men, in this way give them that credit, which pre-
vents their notes from returning with demand for
payment until the holder needs his money for some
purpose, not to be directly accomplished by the bank
notes that the countenance and credit afforded by
the Government really amounts to license to a
usurer to loan his money at as high rate Of interest
as the bank receives on its capital
Let any usurer then be supported by Government
and he would prefer an interest derived in this way
to an equal interest derived by usury odios because
it has not the sanction of the Law
Did the law give equal sanction to the credit Of
usurer he would soon possess fair character as
that of bankers.
know not but that any man, or company of men,
may legally 90 into the banking business The usu
rer is at equal liberty But the applications made to
the Legislature prove, that the applicants esteem
legal incorporation PRIVILEGE, since otherwise they
would not apply for it, law creating such a cor.
poraon, acts public and crediinble testimony of
the trustworthlness of The company and could the
procure such testimony, he might derive all his
present usurous emoluments from banking.
The banker and the usurer are agreed in their
object, which Isl to derive higher interest for their
money han the law allows in common cases. This
exclusive privileges generally granted mercantile
men, and for the emolument of the mercantile in
terest.
At present the mercantile capital IN our country is
fully sufficient TO circulate all the produce of out
country and TO bring to own market all the pro-
ductions of other countries, which either needfu
or advantageous 10 our own country THIS is abun
dainty evident from the immense sums which are
employed in carrying for other nations. The extent
of the carrying trade is certainly a secondary object
with the merchant carrying goods to
ket and supplying our markets abroad is the primary
So that no more than the surplus of this capital can
be employed in the carrying trade
IL then the design ofthe Ba nks is to berae the
coin from domestic circu ation, TO capital
for foreign commerce. the coin liberated must 90 into
the carrying trade in which society at large seems to
those aborers of whom the country stands in great
need
Thus the enlargement Of this capital may prove Of
real disadvantage 10 the country"
We must suspend our extracts here for the
present with the single remark that BY the blcs
sings of BANKING PRIVILEGES, &c &c. &C, we
can boast of having upwards of $50, 100000 OF
banking capital in eighteen States 1.-THE Unioa,
wholly inconvertible and irredeemable in spe-
cie-boast of staggering under $200,000,000 OF
debts and, finally, boast of having lost by the
blessings of the banking system, Cfthe report OF
the Secretary of the Treasury February IL,
1s41, be true the highly respectable modicum
of $685. 45l, 497