Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1844-10-24
To Mcssre F. H. Hill. William Fiaks. and
others, Madison c. H., Va.
(Fioa lie D.mo,rGtic Rcrtetr Of Insust.)
ONE NATIONAL BANK-SHALL WE
TRY ANOTHER2

! (t'"m De D.morotic Rerte,r Of Ansust)
I ONE NATIONAL BANK-SHALL WE
TRY ANOTHER?
CO>CLu DED
/ II. WHAT TlIE BANK ORD roR orR COMMERCIAL.
I STABILITY.
/ III IN es>ay published hy Nj Biddlc, in tho
GUS the following passage
/ III Il Eank lends IL money ON mortgages or
oiocks. or long terms, and 10 persons Careless oi
pI1te,i> il incurs this great risk, that the one
/ hand is notes are paJ able on demand, while, oil:
/ the other IL debt, cannot b. called IN without
/ great deay-a delay fatal 10 lis credit and cha
racter. =. A welmanased Bank has is funds
! mainly i'll short loans 10 persons in bu,incs>-the
| result OF business traI>aclOns-pay on day
! named"
Such risk it was that The Bank OF the United
/ States ran at two distinct eras in lis history.
" hen, on the l1th OF January, Isl1, il went into
/ operation, il made no hesitation i'll Offering lis
discounts, AMI issuing notes, ufon almost every
imaginable security. 81 the most protected dates.
Instead OF -IWn.UD0 being paid in specie, as The
charter required, little more lh.n one third that
/ amount Va, received. But the day for the rc-
sumption oi specie payments was drawing nigh,
dnd tic rapid expansion which marked > first
year was succeeded by >ill more rapid coEtrac-
| ton. In eight months between the Both JULY
ISIS and the 1T oi April 1919 loans were drawn
IN, to tie amount oi ST 5300 O0. The Bark found
Itself on the vcrgcof bankruptcy, and only recover
ed itself b. means which brought The mercantile
in,ec>t, 10 the dust. After pamperiny and ndus.
in. IL, debtors, renewing their notes when thcy
became due, and increasing their loans when il
vas desired II suddenly called in lis dues and,
without 4 moments grace, commenced 4 course
III treatment "a stringent a. that which had pre-
/ coded was lax such was the secret oi the @rca
CONFUSION OF lolS-l9, by which credit was up
SOL ant IN amount OF bankruptcy incurred which
threw into the worst confusion our commercial
relations.
Throwing out Of the calculation the FIRST four
rcal, Of The Banks history, when It's alterations
NAV I've excused on the ground OF the novelty of
Inc experiment, and the ineNperience .! lho>c en-
gagged IN il management, there remain, from
1871 to l-3,i fifteen years OF corporate existence,
ample enough and recent enough 10 enable Us 10
discover, wiki some accuracy. how much, during
50 long a Course 81 power the Bank did for the
commercial community. 1t is here that we are
able 10 90 home 10 lis own assumptions, and dc
| tcrnine from fact, not from theory. how fer
they have been made good. Let il he inquired,
| briefly,
ii. How far i, eqnazcd The yicissiiuics OF
trade;
2ily, How far i, controlled the exchanges OF
banking:
Bis, How far it levellcd the inequalities of ex-
change.
such, in fact, were the three great Attributes
which were claimed for it by its most eminent adj
vocate; and, il il he shown that the Bank, b. is
history has ncgatived the claims which are thus
made, it is difficult to on what species OF rca-
soning II can in future he supported
Isl. How far tie Bank cqualizcd the vici>.iI-
ules of ,retc.
ls2i.-Thc severe contraction OF isls-l9 be-
ginning &C. give place TO more genial measures,
hs Specializing interests aw0kc from their torp0r
and. 90 the strength III fresh ssue> and increased
discounts from the Bann prices rose rapidly, and
fancy investments thickena!.
ls22-A reaction began about Nav and, dur
ag the whole year. the money market was tight,
and the business interests distressed.
lo23.-The Bank TOOK q fresh start, and threw
ont on the world vast quantity OF nGtes-(so
many, that the number at last was checked oa.y
from the physical inability of the officers IL
sign any e)-and discounted with great pro
tusene>-
lS2f-j-The mercantile interests were stimu-
lated by the liberallty OF the Bank, and engaged
in number OF enterprises, 10 meet which their
paper was freely discounted. So great WIS The
excitement among The moncved interests, that, in
one dav, CA pril .. le2j. seven expresses arrived
at Philadelphia from New York, with news O.
the rise oi the Liverpool cotton market. The
price Of cotton rose onethir! sugar doubled: cot
Ton goods Iosc sXty per cent; and wages par!ci-
patcd in the universal Jump. Every day. accord
ng 10 the newspapers OF the time, reports were
to be heard of men, who, BY one operation, had
made thirty forty. or .itv thousand dollars. The
Charleston Patriot, Ia show the state OF feeling,
mentioned that in many cases 80 great was the
ACTIVITY OF the market, the same parcel OF cot
ton had changed owners six or seven times in a
week, without leaving the hands ot the factor. -
In Nav 1921 the famous Pennsylvania Bank
Hill was passed, which established, in the Stale.
| Sl5O19g $50 banking capital. The larry spread
over the whole country IN New York alone,
sj2 010 900 OF cooperative capital were chartered
ana not Il STATE was exempt from the conta"ion.
In JULY. io23, The bank, finding it' notes were
not paid. became alarmed and began drawing III
il Recommendations. a general SUSPENSION OF
.f,oce payments was threatened by the directors
| NOT onr o! the local BANKS. bu; even, at one pc
| riad ni he parent institution OF to1r thousand
weavers employed at Philadelphia in the begin
! min. OF 1926, only one thousand could find work
at the same time in The following year.
/ lS26--In April, 1896, the Marble Manuiactu-
! ring Company one OF the new BANKS, was BANK
| tnpt, and in lis wake, with all imaginable rapid
t.. swan the Dundaii and New Hope Banks Of
s.! Pennsylvania, the Jersey City bank, and Paier-
SON Bank OF New Jersey, the Green County bank,
, the United States Lombard, the franklin Manu-
! featuring Company, and the New York Life In
surance Company, Of New York; and, at shor,
time after. ;hey were followed by shoa of insu-
rance and ock-lobbing companies, which had
| been spawned in the previous expansion, and
had nat strength 10 bear the first shock.
lS31-Thc bank, feeling little more easy and
seeing tha; business vas beginning to rally, crawl
f,l,, Ill, ~ m
relax the severe measures which the late revul-
sion had forced upon IT, Butso sensitive had the
commercial system become, under The violent e1-
cesses To which il had been subjected that the
Slight stirnuant thus administered, and the in
creasing accommodations thus given, lei 10 a
great rise in prices and fresh attempts al specula
ton The bank, little more cautious than be-
fore Immediately shrunk in It's circulation. and
pared down itSdiScounis.
lS29-Ablut the beginning OF 1898 the coua-
Try gradually relapsej into the distress Which had
characterized lo25-6 At the North The pressure
was extreme The President of the Bank. in 4
Letter 10 the Secretary Of the Treasury, dated July
18th. 1929 saws that the Office al Portsmouth
last year was nearly Frustrated in the general
ruin which spread over the country. Dat of
$50 900 Of loans. Slls 900 were thrown under
protest still further protests were expected: and
the actual loss sustained there will not be less
than Sll2,000'
Is3o-Money became more plentiful. and the
Bank. DESTROYS Of keeping up its dividends dis
counted once again with liberia ity.
Is3l-Anoiher relapse, severe but transient,
was experienced and after short recoi, prices
appeared 10 have found their true level, and labor
is safe market. Ii was about the close OF 1881
The preceding table is taken, in some mea-
sure, from book already mentioned, but whose
usefulness cannot be too often adver,ed TO. Gouges