The true Democrat., 1857-05-05

| JOo-" few days before the bank commenced io9o,a business, declared that regular
 "Amid the general distress. the lo,. .e dit, and the want of confidence which foH i cre- the suspension of the banks throngbo'owed Union, no State in it has stood up from ,a' I 'ne 1 general ruin nor a0ith better c,e{;t tL Y" as State cf Arkansas. It has been almost o' hs ranty to the business men of our sortbor, sua- to be known as one of her citizens snot 'yes been the promptness and punctualitv of nS merchants during all the recent sevsra Ter sure" Pes' "A very short time," added Mr h.. "will eapse before the beneficial effects D,.eS o,;. from the use of foreign capital mtroducaJ ssug the State through our banking iustitutio,s .oo 'uo be felt and seen. They will be felt in tbo s.W from pressing debts; in enabling us to coro.} "ei with all or nearly all, our mouied obJi,a,IY at home and abroad; and in the satisfactio, Knowing that we are free from embarras., --and will be seen in the extension of orr I'S tatlons and villages; in opening the puna,' a.a' sources of wealth scattered thruuybon, % State; Tn the increase of our cultivation ' exports; Tn the Improvements and comf-n added to our homes; and in the atteuton ! to the education of the rising generation. faG a' in the spread of intelligence and re6pe,,o.9 ! among all classes of our citizens" "' With these views and expectations tbo | flee of the principal bank at Little Rock or.I ed its doors regularly for business on the Ia- of December, 1888, and so vigorous was ! aCtIOn that in less than month, 1t rnadaI,. and discounts to the amount of S5GS poo Ga ] The Helena office was opened February l5- the Columbia, March oth, and the Was6ipgo April 1st, 1859 By their combined acton ii. | loans aud discounts of the bank were by the 2q. ot May, made to amount to Sl 29o 339 9 ,,t by the 3l-t eff October to Sl ,5S5. l9O 80
 Nov. 7, l03J, the principal bank at LrA, Rock suspended specie payments, and w,, ! quickly initiated therein by the branches
 If reasons should be required why b,,L that commenced operations with a solil cs,t,, of one million and half of dollars, shouli .a less than one year suspend specie payme', and then when its loans and discounts eyca.3 ed its original capital in the sum of only Ss5 l9O 80, none can be found except in the fo. that the managers wished to extend their lo,r. and discounts further than would be practicaHs if they continued to pay specie. That ,b,, was the true motive is evident for Kind of proclamation which was, by orIer of the car, tral board, issued by Carey A. Harris, the nre. sideut of the principal bank, in which, an9no other things, he said:
 As long as the bank paid specie it wa, found impossible to keep out as much money as the public wants anl the business of the country rendered proper" And again: "t cannot but be proper that a prudent expansion of the currency of the State should be pro. duced-an expansion which should, and 1t is hoped, will be so gradual and guarded as to oNhIH f1o Iar lati r. on the one hand, and au mduly deprecated cur. rency on the other"
 It is true that the banks of Philadelpba which had protessed toresume specie payment, in October, l630 suspended them a5ain il O,. tober. 1859, and were initiated therein by the banks of the south and west generally.
 l. IS true that this second general suspension by the banks of the south and west afforded the Real Estate bank pretext for suspeadia: also. But the real causes of its suspeuS09 were such as are set forth in the extracts from the proclamation of the president of the pr.n. 1 cpa bank. Th, second suspension, though general, did not embrace all the banks oi the south and west None of the banks in the ad. joining State of Missouri then suspended. and the Real Estate bank of Arkansas was at th,; time as we'll able to maintain specie pavme1s
 
 banks of New York or New England. Is whole outstanding circulation was then cuy slot, BIO, to meet which it had in specie Slll. 96I 54, prol ortion of specie to paper which banks do not often possess. This circulation was scattered all over the State, and over the adjoining States, and could not be presented I for payment in the mass, as part of it was payable at the principal bank, and the rest ' ,iIrIHal tba tbrao hrnr,abos
 Nothing could be easier than for a bank SO situated, to maintain specie payments. But fl | it did so, the directors and their friends coad not be accommodated to the extent desred- | The first iustaImeut on the stock notes was falling due. The stockholders and others owed also on accommodation notes, many of which were overdue: It had been very easy to U,r. row from the bank. It was not so easy to rav back even part of what had been borrowed The rea!iest way of meeting the emergency was by the bank itself su>peudiug specie pay. ments, in which case it need not press .or payment of what had beeu lent: but, on tht contrary, could grant new accommodations to it customers.
 The directors then proceeded to carry int execution their plan for '" c prudent erprnsio of the currency" and between the 1st ot No vember 1859 and the 1st of January, 1S4O increased the circulation of the bank from Sl03,9lO to S32S, 4OO. lu other words, Il the short perloa of two months they more thm doubled their issues. In the same time they increased their loans and discounts from Sl. 5S5, l9O to Sl $50 259. But even this was ir tbelr opinion ' too stt,ltet an accommo ,aton t. the public" and accordingly they added to their issues so much, that in May they amount ed to about S759OVO, being five fold what they were SIX months before when the bank sus- pended specie payment
 This free emission of paper money, not re- deemable in specie of course diminished its value; and according to an entry in the journal ot the House of Representatives it fell at times to D and 40 per cent. below par How ir in the opinion of the directors, d paper curren- cy might sink below the specie standard with. out being "uuduly depreciatei," :" does not dis- tlnctly appear. Butit is evident that they re-. garded 50 to 40 per cent. as too much, for on the l>t ot May they resolved that {" a commit tee of four be appointed to devise the ways and means for securing, if practicable, the ap- preclalOn In value of the paper of this bank" And, on the Huh of said month, they "resoly. ed to appoint an agent to proceed to New Or leans for the purpose of making arrangements, II practicable, for the appreciation of our pa- per-" What these arrangements were, is not mentioned, but they seem not to have been very effective, as in the latter part of Septem- Der, l04O by which time the circulation was considerably reduced, the cashier states tha. Real Estate bank notes were then, at L. tie Rock, at 35 to 40 per cent. discount Alter wards the notes appear to have increased in value, as an entry in the House journal under date of November 24, 184O, speaks of them as oelns then at only IL to 20 per cent d-s- count.
 Under this prudent expansion of the cur rency" the " too stinted accommodation of the pubhe," was increased between November lst, 1859, and May, l04O, in an amount not exactly known. After May there was some reduction Tn the loans and discounts, yet they, on the lst Of November, 164O, amounted to S. l58869 57, while on the 1SL of November of the preced. ing year, they were only $ 595, 19O so.
 While the bank was thus exteniing it's cir. culaton and increasing its loans and discounts, q ;,, [ l.