Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1841-04-27

-FOUR WIoHS
On the 22h Of March, 1889, asserting that the Bank
WIS prosperous in all its relations.
On the lst Of July, 1889, declaring dividend OF
foar per cent. with surplus of than four mil
lions.
On the 18th of Nov, 1884, afler detailed cxamina-
lions BY two committees, asserting still surplus OF
three millions
On the LIST Of January, Isi0, exhibiting surplus
Of more than FIVE millions, and abstanng from max
ing the dividend which they might do, merely from
prudential considerations IN respect to the Legislature
After this exhibition can any one deny what pro-
posed TO prove, that when left the Bank in March,
1889, il in safe and prosperous condition:
II remains TO show by what causes the whole OF
that changed into the present total prostraiIon
Of the Bank. Some Of them are unhappily loo obyio
Gus.
| have just stated that the winter Of 1889, was a
Of great abundance and ease in moned concerns
both in England and i'll this country but England was
after startled by the discovery that the grain crop
was deficient, and demand for specie to export
for grain, combined with some continental loans that
changed the whole surface Of affairs. The Bank oil
England itself, utter borrowing ten millions OF dollars
from the Bank of France, was still much drained Tor
coin that it forced into very restrictive mea
sures which raised the interest of money to twice or
three times its usual rate The most injurious effect
was the stocks Of this country, which no longer
convertible in England except at great sacrifices. lhese
causes Immediately reacted this country, producing
the usual effects Of embarrassment in the community
they were, like many which had been met and over
come in former times by the Bank, might perhaps, have
been again surmounted by an exertion Of the means
and the credit of the Bank but for circumstance which
is thus described in letter from the late Cashier OF the
Bank TO whom applied for information to The causes
which had brought on these misfortunes His answer
| is as follows
MARCH 90, ISL.
" BIpDLE, Esq, Philadelphia
My Dear Sr-The queries you have proponnded, TO
me have occupied no small share oil my thoughts The
utter prostraton of the Bank oil the u States passes,
confess, my comprehension; may, however, point out
some of the causes that, in my judgment, have mainly
contributed to bring about its present painful and u
initiating condition The consequences of the preIna
ture resu mpton of payments after the first suspension
by the Banks and the efforts Of the Bank fhe u s. 10
make that resumption universal, required in the adm
nis,a,ion Of affairs, the utmost wisdom and eSpe.
ence in finunce-and in abiding 10 adopted
| BY those gentlemen most prominent IN It's management
after your retirement, do not 10 mpugn their mo-
lives or detract from their merit After the feveris
excitement consequent this too speedy effort to re.
turn TO cash payments had in good degree subsidized,
another crisis anticipated and was feared that the
Banks generally would be obliged again TO suspend
This was unhapply too to be realized, for the
storm was then ready TO burst but instead Of meeting
lis full force at once deemed best to make il fall
first upon the banks Of New York To effect this pur
pose large necessary and to procure these,
resort was had to the sale Of foreign exchange The
Sl
abroad, did not warrant any large drafts upon them,
especially that of the Messrs. Hoitinguer in Paris
This difficulty however, was thought mightbe avoid
ed by shipping the coin TO be drawn from the \. York
Banks, Immediately 10 meet the bills. Accordingly,
large masses of exchange particularly bills OIL faris,
winch were then in great demand, sent 10 ~ ork
to be sold without limit Indeed the bills signed
in bank, and SO sent a. York; and although large
book was thus forwarded, it soon exhausted, and
application was made TO the Agent Of the Paris House
in New York for further supply who drew consde-
rable amount besides The proceeds of these immense
sales of exchange created very heavy balances against
the New York Banks, which, alter all, sgnally failed
in producing the contemplated effect The bills not
being provided for not regularly advised, as had
uniformly been the custom OF the Bank, were dlsho-
nored, and although the agent in London did every
thing which skill and judgment could accomplish, the
credit of the Bank gone, and from that day 10 the
present. lis effects upon the institution have been more
and more disastrous. Other causes might be advericd
to-e connection with the Commonwe altii-the over
estimate OF the value Of the chareran various mat
,ers all however subordinate 10 the particular unhap
NJ measure that have thus hastily brought to your
notice which Mr.. Jaudon and myself equally de-
pored as the immediate Of the disasters which
have afflicted the Bank.
Very respectfully,
J. COWPERTIWAIT.
Hcre thcn is revealed the real and secret Of
the disasters OF the Bank. Now without meaning TO
saw single word about the object OF these draiis ana
without intending The slightest censure OF any one, u
is impossible not TO sec, IN this single circumstances
,hcc solution of many of the difficulties of the Bank
The Bank, as | understand, suddenly draws an I'M
mense amount of bulls Messrs lloltinsuer ~ 20,
without having dollar of funds IN their hands-wi'h-
out having authority 10 draw for doar--withou.
line Of explanation as to the nature ana extent OF
these unexpected drafts-and, without even the usual
commercial notice that such bills has been drawn.
Mcssrs Holtlnguer 4 Co. could not as prudent men,
do otherwise than protest these bills and thus, The
Bank in the very fulness Of its high credit was SUD
denly disgraced in the eyes OF all Europe. inc talents
of Mr. Jaudon repaired TO certain extent this as
aser but it obliged him, in order TO protect the drafts
drawn on himself as we'll Messrs. Hottinguer "
Co., TO make loans and TO pledge stocks which were
thus instead of being sold, locked up TO await ine oe-
probation which has since overtaken them. anu no"
let me ask in all fairness, whether this secret wound
this neglect, or inadverance, omsslon-cal y BY
whatever name you choosc-to apprize Messrs' i1o',
,nruer & Co. of these drafts-a thing which be longed
10 the interior details Of the Bank-can be charged
upon nv administrations which had ceased long before
that time Yet these two officers as we see IN the
above letter regard that 'as the immediate cause OF
the disasters which have afflicted the Bank.
Even after this shock, such was the vitality Of the
Bank that have doubt 1t ms mt have revived ara
prospered, but for the late iatai fesunP'o" " P.s
payments. cl .,a
il is undoubtedly true, that the only lawful and
proper banking is The payment ofspece: but where
by any suspension once takes place, 'hc t'ue
OF resumption IS question OIL eSpeu'chey 's .s
on many circumsanccs-on the position OF the BANK IL
se-,he position of its neghbors, the position OF other
banks in other sections of the country just as health
is the natural condition of men; but if by accident we
are Sick prudence must decide when we may venture
out without the danger Of relapslng. Inc BANK oil
ENGLAND continued its suspension for twenty-five years,
and if had been forced into premature resumption,
would have certainly fallen second time. Now, ne'-
Their the banks the community OF PhIladelPnia' nor
the banks nor the communities with whom rhiadei,
pha principally deals ready for resumption and
in my udemen, the project and execution OF 1t were
equally unfortunate.
was in town during TINT period, though merelyas
private spectator and il seemed to me that the true
position and the only safe policy of the Bank was this
The new administration of the Government OF the u
States will find itself the 4th of March with very
small funds, and its policy will be, if possible, not TO
encounter the debaeabe question OF National
Bank, whatever may be its disposition hereafter II
then the Bank of the u. States is in position to 10
the public business temporarily it will from Its e1-