Democrat and sentinel. [volume] (Ebensburg, Pa.) 1853-1866, 1854-08-31
From the London Leader:
Pennsylvania never Rspudiated her Debts.

LONDON, 18th June 1S54.-To the Editor
Of the Lcader-Sir:-I have read with much
/ interest your excellent remarks on the charac-
ter and writings Of the Rev. Sidney Smith,
but beg Shat you will permit me to correct
one error, as it is an important one, into which
he seems TO have fallen, and into which he
has led you. Pennsylvania, although select
ed bv him as the representative ofrepudiating
States, really never repudiated her debts. l
have heard it stated that Sidney Smith did
not hold any Pennsylvania Bonds at the
time when he wrote his pungent satires against
her, but used her as target at which to shoot
his arrows intended to pierce repudiators
wherever they existed, and I am disposed to
believe this statement to be correct
was not only in America but in Philadel-
phia at the time when that State suspended
payment of the interest of her debts, but |
actually held Pennsylvania Bonds, and [
hold them still l read the proceedings of
her governor and legislature with the inte-
rest which a creditor naturally feels in the
exposition of his debtors affairs and ! am
bound in duty to say that these authorities
never hintcd at Reputation. On the con-
trarv the governor in his annual MESA ges,
explained the circumstances which had rem
dered it physically impossible for the State
to pay the interest of her debts; he distinct
II acknowledged the incumbcncy Of the debts
on the States resources; asked only for
time and, morever, the legislature never
separated without solemnly acknowledging the
debt and expressing their anxiety to dis
charge it.
As was personally cognisant of the state
of financial affairs in Pennsylvania in 1888,
1889 and 1910, [ know that the causes as
signed by the governor for the suspension of
the interest were real The state had char
tered banks, and encouraged the issue of
paper money to such an extent that the
people engaged in the widest speculative en-
terprses-worse than our railway mania Of
1916 This was carried to so great ex-
tent that the balance of trade with Europe
turned strongly against the United States,
and forced them to export almost all their
cold and silver coin and bullion but still the
drain went on. The United States Bank first
suspended cash payments, and soon became
bankrupt. Innumerable country banks then
collapsed and al paper money was discredit-
ed. The gold and silver were gone to Europe,
or boarded, and literally there was not an ac-
creditrd circulating medium existing, even in
Philadelphia, sufficient to serve for carryin e
on the ordinary transactions of life.
Debts were paid by checks ON the few banks
good" by the bank on which they were
drawn, and carried to the bank ofthe creditor,
which received them as money, and placed
the amount to his credit In the rural districts
| trade was reduced to barter, and harvest Ia
| borers were paid in wheat, pork and potatoes,
! which they exchanged for other necessarles IN
! the shops of the villages. When the taxgath-
erer came to the farmers, they offered him
! pork, rye, barley, and other produce, at his
| option; but the duties of provision merchant
were not included in his commission, and the
State could not pay its creditors in kind by
/ sending such commodities to them. Supens-
ion, therefore, was physical necessity in the
circumstances; but as soon as her financial cir
| cumstances were reduced to order, the State
! paid all arrears of interest, and her stock is
| now in excellent credit in the markets of Eu-
! rope as well as in these of the United States.
| l have not lost penny by my Pennsylvania
bonds. On the contrary, they stand higher in
market value now than they did when | pur-
chased them, sixteen years ago.
Sydney Smiths satire was richly merited
| by number of the Western and Southern
| States, which did repudiate, and it did excell'
ent service in shaming them into honesty; but
| it was positive misfortune to him to have in,
/ hicted vicarious castigation on Pennsylvania
which never deserved it.
In settling the interest on the arrears of in
| terest which had accumulated during the per-
| lod OF suspension, that State allowed only 4!
| per cent, which was thought shabby, as hel
debt itself bore or per cent; but this is tn,
only complaint which the most rigid creditor
! can make against her.
1t has given me pain to see Sydney Smith
charge repeated again and again, even by tn
most respectable members of the press in Eng
, land such as the Times and your own paper