Portage sentinel. [volume] (Ravenna, Ohio) 1845-1854, 1846-02-18

enc in New York, one in Maryland, one In
Rhode Island, and the Bank of the United
States in Philadelphia. The first four of
these were established by state authority;
the last by the authority of the national gov.
ernment. All these banks went on very Wen
for number of years. The people OF the v.
nited States were acquiring wealth instead OF
contracting debt. We do not mean to be un-
dsrstood as saying that they contracted no
debts. for of course facilities could not be OBJ
tanned from the banks except upon debts dis
counted by them. But we mean to say that
the acquisitions of the people constituted the
strngth of the banks. In 1911, the charter Of
the bank of the United States expired, and
was not renewed. In the meantime the Leg
islatutes of the several States had gone on
creating local banks, and after the expiration
of the charter, continued to prosecute the
work with exemplary diligence until 1916,
the number of State banks had increased to
246, with aggregate capitals of $9e, ,000,0
aggregate circulation of $68, 900, 600, and az
gregate specie to the amount of $19, ,oOo, 900.
Most of the State banks south of New Eng
land ceased to pay specie for their notes in
1914, and there was no general resumption
until 1917, and even then the resumption
was not universal. The suspension may be
said to close the third period of the history of
the paper money in this country. We shall not
stop to speak fully of the history Of bank
ing during this period. We shall only no
tice some Of the effects resulting from sus>
pension.
AT the time of the suspension, the governs
ment was in the habit of receiving its revenue
in bills. and making its deposites in the vaults
o. t. continued In do e.
ter the suspension. The consequence was,
that very different rates of duties were paid
at different ports. At Boston, where the banks
were all suspended, and their bills of course
were not deprecated, the importer paid the
full duty. At Baltimore, where the bank pa
per was deprecated 25 per cent, and was
nevertheless, received at par in payment of
duties, importer paid only three fourths Of the
full duty. The constitution declares that the
duties shall be uniform throughout the Unit>
ed States, and that no preference shall be giv>
en- by any regulations Of commerce or reve-
nue. to lhe ports Of one State, over those of
another. And yet here we have simple or,
der ofthe Secretary of the Treasury, author.
izing the receipt of duties in the paper of
the suspended banks, which makes duties
grossly unequal in different states, and which
gave to the port of Baltimore decided pref
erence over the port of Boston. We merely
mention this here, TO show how insidious and
dangerous is the action Of paper currency
upon the general welfare and harmony of the
country. And while we are upon this subs
jcct, we may mention another fact, rather
out of its chronological order to be sure, but
which strikingly illustrates this general pos
sition. 1t is well known, that when most Of
the banks of Ohio were compelled by law to
resume specie payments on their notes, in
March, 1842, the bank Of Chillicothe and
one or two others, were unable or unwilling
to do so, The Treasurer of the State. howev
er, authorized the receipt of the paper Of the
Bank Of fChilcothe in payment of taxes in
Ross and some Of tie neighboring counties
while the people of other counties were COM
PEELED to pay in notes Of specie paying banks.
This gave to the citizens Of those counties
palpable advantage over the citizens Of other
parts of the state, by enabling them to pay in
a medium worth only about nine-tenths as
much as that in which others paid.
The fourth and last epoch in the Banking
orpaper money system in this country, com.
menced with the charter of the second Uni
ted States Bank, and the resumption of the
specie payments which took place about that
time. 1t is supposed by some, that the Bank of
the United States had an important agency in
bringing about this resumption. The evi
dence in support of this assumption, howev.
er, seems to US to be of a doubtful character.
1t is certain that the affairs of the bank were
grossly mismanaged during the first year of
its existence. 1t went into operation about
the first of Januaey, 1917. Its losses previ-
GUS to March l9l9-that is in twenty seven
months-exceeded three millions and half
Its profits, which had been distributed among
the stockholders in dividends, had been du>
ring the same period, about three millions of
dollars. In other words, Of the capital of
thirty five millions, one tenth had been acu-
ally sunk in little more than one tenth of the
time allowed for the duration of it's charter.
The bunk at his time was on the verge of
suspension. Congress was memorialized to
prohibit the expectation ofspecie, and the ex
pediency of laws TO make the bank notes q
legal tender, was discussed in conversation.
The danger, however, was ayerted. The bank
Just escaped the shoal and no more. After
this, things went on pretty much as they did
after the charter of the first Bank of the
United States. There were some failures of
local banks, but they were not very numer-
ous. Those which survived the suspension of
1914, maintained their existence without
much difficulty. In truth, the operations of
the Bank OF tie United States were such, in
taking upon herself almost the whole burden
of Exchanges, both foreign and domestic, that
there was very little demand for specie, ex-
cept what the bank itself created. This was
for the time being. a very pleasant state of
things; too pleasant indeed to be permanent.
1t was more precious than solid. The a,u,r,er
OF the bank expired in 1885: an act for ,ts
recharter had received the executive veto.
Immediately before and afterwards, a host
of new banks were started in different states.
The Back of the United States itself obtained
q charro- from Pennsylve MIA, and then COM
menced lhe Gsvelopement ofthe most amaz-
ing financial delusion which modern times
have witnessed. The number of banks which
he'd been 10 1916, 246, had increased TO sos in
in 1884, and theil circulation had sweled from
sixty eight millions to ninety five millions,
and their capital from 80 to 600 millions.
Three years afterwards the number of banks
had increased to 634, th2Ir circulation to one
hundred and forty nine millions and thsir cap