The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1854-03-22
But a single Bank has failed. or sus.

Pehueu specie payments, OF all tne BANKS
which organised under the banking laws of
l845 and '5l. That one, the reader will
recollect was the Licking County Branch
at Newark, which failure occurred by the
bad management, or dishonesty of its
cashier. Blu, did the public lose any thing
by the failure3 Not dollar, except, per.
haPs, loss by few persons who were
mislea and deceived, by such partisan dec.
iara,ions as those quoted above, and thus
induced to sell their notes to the money
shaver for mere song. The enlightened
bill holders who had read the banking law,
and understood its provisions, its modi6-
cations and restrictions, and its securities,
felt perfectly easy on the subject. They
knew its notes would be redeemed, to the
last farthing, though the Bank might not
be worth dollar. The banking opera
tions of the Branch were Immediately
wound up, according to the terms OF its
charter; yet its notes passed at par any
where in the State; and continue SO to
pass to this day, those of them which have
not been presented for payment.
The independent banks, which have
been established under the law Of 1845,
and the free banking law Of 1851, give
ample security for every dollar they are
permitted to issue. In addition 10 their
capital stock paid in, thsy are required to
deposite with the Treasurer of State, either
in money or stocks Of the State, or United
States, a collar for every dollar they are
allowed to issue and put in circulation;
tE.ere to be held as safety fund, for the
redemption OF their notes, under any and
all contingencies. The banks are requir-
ed to get their notes for circulation of the
Treasurer, who causes them to be signed
by Register, under his own appointment;
and the amount of notes for circulation, to
be limited to the amount Of actual depos-
ties; thus affording the most perfec, secu-
riiy imaginable for the redemption Of their
paper. These are facts which the people
should know for their own protection, that
they may not again be deceived, and de-
frauded. by ill-advised friends, or political
demagogues, as they were in the case of
the Newark failure. Adopting The Ian
guage Of "Ohio" it might here be asked,
"1s ignorance ever beneficial? Is error
or falsehood ever useful?''
Bank contractions and expansions arise
from several causes, under the very best
regulated systems Of banking. First, from
failure OF crops, contraction is produc-
ed. And secondly, from over,rading by
our Merchants, with foreign countries.
Either of which produces balance of
trade against US, and consequent de.
mand for the precious metals. to pay this
balance. The result is necessary cur
tailment Of issues, by the banks, in pro-
portion 10 the amount OF specie Withdrawn.
This is very evidently an unavoidable and
justifable contraction Of the currency; it
produces tightness in the money market,
and interest goes up. The same state Of
things, precisely, would be produced if we
had no banks Of circulation in the coun-
try. Although "Ohio" remarks: elf the
banks were out Of the way. how could a
scarcity Of money be fixed up any more
than scarcity of marble, or free-stone.
Of copper or iron2" Does "Ohio" imag.
inc that il we had no banks, it would not
be necessary to pay our foreign debts!
Is not, how does he propose to do it when
the balance Of trade is against US, withou,
reducing the currency! and if that is done,
hard money contraction is at once pro-
duced, with all the evils and inconveni-
ences Of s'soft money contraction"
Another potent cause Of bank contrac-
tions, and one which is unnecessary and
highly pernicious to the public interests
may be found in the fact, tha, The question
Of The currency is made party question,
and scarcely constable, or sheriff, can
be elected, or even be candidate for nom-
ination, without making it their hobby
"Ohio" says at present there are two clas-
ses Of this kind Of, had almost said DEM
apogues, but he said men. The first, he
denomin a,es s.Demagogues" and "Fire-
EATERS" "The second are the enlighten-
ed. patriotic and unseJfsh men, who un-
derstand the laws Of trade and currency"
To this latter class, OF course, the gentle.
man belongs.
The banking system Of Ohio, can never
fully subserve the interests OF community
while it is made a party hobby, and is
the subject OF unmeaning general decla-
nation, intended 10 distroy confidence
without producing any corresponding ben
eft. Treason or experience were to point
out any defects in our banking laws, and
no doubt such exist, the subscriber would
be among the first to apply speedy rem.
edy. Blu, the rights and interests Of com.
munity are far two sacred, TO be continu'
ally disturbed and annoyed for the mere
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