The Richmond Indiana palladium. [volume] (Richmond, Ind.) 1854-1855, 1855-01-12

cious metals, and at Cleveland Columbus, Cir /
clevie. Toledo and Sandusky. banks which had
hitherto been in full confidence, also brought
TO suspension, and their notes TO very severe
and ruincus rate Of discount Chicago and Illi- /
nois generally, next the theater of the eff
fects of this combined demand for coin, also, re-
sulting IN the failure of several banking houses.
and depreciation of their notes. The fact that
the notes OF the Indiana banks. under the Cen
eral Banking Law, We're secured by interest pay
ing bonds OF the several States of the Union, !!
and in many instances by the very best securities
that any State issues. seemed to be of no value in
the estimate put upon their notes bv the public.
general depreciation ensued. Those banks
which continued through all the pressure that
made upon them, 10 redeem in coin, We're
alike discredited with those which had refused to
pay 10 brokers, bankers and their agents There
many banks in the State, which have rigidlv
complied with the demands made upon them for
specie At all times, when they might have saved
or made much money by refusing TO pay, and by
surrendering bonds 10 no.eholders.
Added 10 the disorganzation of financial af
fairs in the West, and at the same time, an unu-
sual stringent state OF the money market IN New
York and the other great commercial cities in the
East This tight condition of the money facili-
ties in the East. being the point at which all heavy
transactions in State Socks and bonds are usual
4
Stock secured paper, for capitalists could not be
found who Were able and willing to protect the
paper to purchase the State bonds which secured
it, unless they were sold at unreasonable depreci
alton and loss,
TIE excited and unsettled condition Of Europe
affairs seemed, at this crisis, TO be also unfa-
yorable to the Stock market Of New York, and
there was a consequent falling off of foreign or
ders for the purchase of State Stocks. The large
amount of those Stocks which by the redemption
of bank paper was liable 10 be thrown upon an al
ready depressed market, produced the conviction
upon my mind that if they Were. by operation OF
law, to be forced for sale for what they would or
might bring, much loss must ultimately result TO
the public by an insutficency of the securities 10
meet the issues OF the banks If bank has
notes out to the amount of enc hundred thousand
dollars, which were issued upon an equal sum IN
State bonds if these bonds be forced into market
at loss OF twenty per cent, deficiency of twen-
tv thousand dollars must be the result, which
sum must fall upon the note holders, if there be
no other assets or personal responsibility
To avoid such state of things l resolved, at
ter due deliberation, 10 exercise such power as
was conferred upon me by law, to give as much
opportunity as the emergency would allow, for q
reaction in the money markets, and 70 give OPP
portunity to foreign capitalists. through their
abroad. 1t is my belief that in thus acting un-
der the law the bill holder was benefited and
the interests of the bond owner promoted, and
that at no distant day heavy foreign competition
in our own markets will bring State securi
ties back to their face and to their full value. In
order that all persons interested in these results
should be placed upon footing of equality,
published circular dated on the first day of No
vember last and which is in these words, to wit
The circular we omit having heretofore pub
lished it.
So great has been the commotion Throughout
the whole country, on the subject of money and
currency, that the history of the times has mark
ed it as epoch. The whole effect may no
yet have been felt, nor the great results known.
| The circulation issues of the banks organ
zed under the security system of genera
banking law, was on the first of May last, neal
nine millions of dollars, since which period, and
up to the 9TH of December, there has been can
celled and destroyed of said amount, near the sun
of two millions eight hundred and fifty four thou
sand, two hundred and seventy nine dollars, thu.
reducing to less than six millions at that day
since which time the work of redemption ant
cancellation is still in rapid and extensive pro
gress, giving almost positive assurance that full
FIVE seyenths of the whole amount ever issued
will be retired before the first of May next, which
will leave but about two millions in circulation oil
existence at that time; provided the same unfa
yorable course is pursued by the public in de
manding coin for every bill which falls into the
hands
In such contraction Of the circulating medi
um of a State, so vigorous, industrious and en-
terprising as Indiana much embarrassment ant
difficulty must ensue unless some other and bette
circulation shall fill this sunden vacuum.
1t will be one of thesmost difficult and mpor
tant duties of the Legislative department to de
wise a system which can furnish, on a safe an(
reliable basis, so large a sum- or sum sufficien
for the trade business and commerce Of ou
people. The want Of confidence, now so gen
orally diffused, in reference to banks or bankers
Will make it exceedingly difficult to organize an
system OF credit, as represented by paper promi
ses to. pay, which will command the confidence 0
the public.
If bank notes issued upon the stocks Of State.
which have never failed to pay the interest as i
became due upon their bonds with the addition
al securities of personal responsibilities in many
cases worth more than the whole issues Of the
bank, and the whole specie and assets of the banl
faithfully applied to the redemption of their notes
are insufficient to inspire confidence in the safety
and value of the paper, then indeed it would
seem to be very questionable whether any system
of paper currency would be regarded with pub
lie favor. Indeed those banks which have been
most prompt and unceasing in the redemption
Of every note as it is presented, have me
with but little more favor than have those whc
conveniently allowed the brokers, bankers and
other bill holders to take what they can get under
the comp promises of parties the strength of the
law II this want Of public confidence, this de
sire to make trade and traffic of exchange and o
coin shall continue, and what shall abate t2 wha
hope IS there that the old system Of mere conf