, 1862-01-13
Tt)f Trihunt..
CERTAIN BANK MATTERS.

in which we are taken to task for the late
assertion that tie banks Of that State, OF !
Indiana and Of Ohio. viii be forced to sus-
pend specie payments. 1t is possible that
wc did not allow time enough il which
our predictions must be realized: hut it is
:l|1c;;dy certain that these banks mus: fol-
low the example Of New York, or call in
their circulation and d. no business what
e7er with their OWN currency. That much,
We say, is already demonstrated; and 1t Is
inevitable that boards Of directors and
bank managers, whether III New England
or the West, will not long be content 10
foregoc the enjoyment Of the profits,
which, in time Of suspension Of specie
payments, inevitably accrue to ali "wcll
managed banking institutions. They may
lc compelled to wait the meeting Of their
respective Legislatures, to release them
frcn, the penalties which the law prcscribes
for refusal to pay coin on their hotes: but
sooner Or hter, despite the confident pre-
,iic:iors of our 1cwa censor, they Will iol-
low the crowd, shut up their vaults, and go
into the business Of making and lending
,,a,,er dollars to swell the volume Of cur
rvncy already ahoat, and 70 hasten the
catastrophe, the approach Of Which all true
political economists can so p1ainly see.
Another correspondent, and he writes |
from the "hub Of the universe Boston,
tells us, that, admitting our premises, we
are clearly right in supposins That period
"of great initiation. ofenormously exaggera-
"tcd prices, Of large importations, of scarcity
"of coin and Of diminished expectations, is
tat hand, and that the end Of all will be
"the bankruptcy and ruin Of nearly all our
material interests But says be, "you
.:sre mistaken as to the main 1act-the cor
"ncr-stone on which your prediction rests:
THE banks will no. expand. They are
"mainly controlled by men Of real wealth;
"they are, in all New England, in safe
4.nands, and their interest will not be pro-
*.motcd by Issuing the floods Of money
from which you apprehend such
"eyil.'' This is all very well, but
one fact is worth ship-load Of predic-
lions; and IS we have, in this country,
since our commerce approximatcd to its
nresent amount, had no suspension ofspecic
payments in time Of war, we will refer
our Boston friend to another paper money
country in which the experiment that we
are about to Try was worked out. We al
lude to England between 1877 and 1891,
when all the banks were in a state Of sus-
pension. When the suspension took
place, the country banks in England
numbered about 200; in 1915
they had increased to $40; and,
says standard authority, j" though every
manager knew from the state Of foreign
Exchanges, the scarcity Of specie and the
s'discount on paper, that currency Was re
abundant, there was no contraction The
t4banks found their profit in issues thai
"they were not called upon to redeem
tbencc they pushed out their notes in al
sthe channels Of trade and into any hand:
"that could furnish security for payment
"Thc crash was foreseen, but the selisl
reasoning Of those who ought to hay'
stayed this food prevented the use O
"any measures to avert it. There is nj
s'rcason why we should CONTRACT Wa
"thc CRY Of every board, while our neigh
*'bors are expanding. We can do nothin!
alone, then why should We refuse Oh
share Of the profits that others are max
ling? We viii take our chances Hcnc
"the floods rose, and with it prices wcr
inflated, and though the end was fort
tsseen, nobody was prepared for
"when it came. The banks that ha
sheen the cause Of the ruin wel
"unable to afford any aid; they We
impoverished, and toppled over like
<smany cob-houses which children BULL
"their customers were ruined, and En-
"land, through all classes, never kne
ssdays as dark as those which fol1owt
ct the disastrous policy that the banks hs
"pursued" This is the history, and ?
who know that the love Of money is
strong in America as in Great Britain, til
our methods Of business arc invariably loo!
that to "take the chances" is the Amt
ican custom, that our banks have little II
capital though an abundance Of the del
currency which they create, that they &
managed by men who with little sl
and no. knowledge Of political eco1
my, expect round profits-wc cannot ho
that our experience will be whit MT
agreeable than that Of our trans-Anan
ncighbors. On the contrary, with G
:. American impulslyeness, nc shall afort
q marked exaggeration Of their history, a
the result will be multiplication Of
evils that they endured.
Itmust be remembered that the susp
sions Of payments in this country, Fl
which many are disposed to reason, Il
been temporary-the result Of compl
lions that were soon unravellcd, and
banks expecting to resume, were c.
PEELED to keep themselves in
condition in which resump
would be possible. We deal I
with other agencies. The suspens
as every man Of sense ought to knoHr, is
definite. Its duration does not depend u
the length Of the war alone, but upon
means that the Government will be c
pe1lcd to adopt to carry on the war.
resort to an exclusively paper cure
in addition 10 that fathe1ed by the ba
is necessity, We are safe in saying
though the war may tasminate next )
five years will elapse before resumption
be possible This the banks underst
and 10 say that they will not take ad
tage Of ii to increase their profits, is to
that the Millennium has come.
No, in whatever way the subject i
amincd. all men who know the tender
and effects Of paper money, who know
wants Of the Government, and the certa
that it viii be driven to the exclusive
Of Treasury Notes, must see that the
safety Is in prompt Congressional acdt
levying restrictive tax upon bank i
"A tax so large and 50 honestly COLI
that they will be forced to take their c
lation in, and leave the channels Of
open to the Government currency =
Congress, noZens po|ens, will be comp
10 create, That is bad enough, but il
necessity, and an alternative Of ir1emcG
ruin. viii Congress act2