The midland journal. (Rising Sun, Md.) 1885-1947, 1893-12-01
QUESTIONS OF THE DAY
A FINANCIAL HISTORY.
Course and Effect of Legislation
Since 1851.
No. III.


were placed in a peculiar situation
they dare not decline for fear of the
Government, and their patriotism was
not of that character which would per-
NIT them to receive on deposit a cur
rency that had not first been purchased
of them. AS result, on the 28th day
of December the banks suspended
specie Payments. At the time the
bank suspended they held in their
vaults over 100000, 900 of specie, and
had notes outstanding to the amount Of
only $16,O00,000. This shows clearly
that the suspension was a fraud, and
unfair to the people. The banks sus-
pended for the purpose of making
money by depreciatipg the credit of the
Government, and not because they were
compelled to. England suspended
specie payment in 1897, but it was
after years of war and when its national
resources had become nearly exhausted.
The banks compelled this Government
to suspend before decisive battle had
been fought, and while negotiations
looking towards peaceful settlement
were being conducted. 1t was an ex-
ample Of cold blooded treachery, and
nothing else. There was no need Of
their suspension. In this they had a
precedent in the operations of the Bank
of England in latter years.
Mr.. Gilbert, in his Treatise on
Money says:
"During seasons of pressure parties
who profess to be friends of the Bank
of England do all that they can to
destroy public confidence. Reports
are said TO be in circulation, banks are
said to have failed, mercantile houses
are said to be embarrassed. All this is
done with view to serve the Bank of
England. The bank directors may not
themselves set in motion these reports
but though they may despise the traitor,
they profit by the trcason.''
Mr.. ]. s. Lloyd, one of the greatest
of the English authorities on money
says:
against the actual exhaustion of her
treasury by drain through the foreign
exchanges, the Bank of England, under
almost any circumstances, has the power
to protect herself; but to do this she
must produce upon the money market a
pressure ruinous from its suddenness
and severity, she must save herself by
the destruction of all around her."
Sir John Lubbock, an eminent
London Banker, and author of trea-
Else on money, says:
"The difficulty of maintaining thei
convertibility Qhe Bank of England
notes) is enhanced in this country b,
the choice of different standard gold
from that of other nations, If GU
metallic standard was silver, the de-
mands of this country, and those OF al
other countries, would mutually regulat,
each other; and in case any countr,
suddenly required, for temporar,
motives, any great quantity, the demand
would be spread over the whole civil.
lied world.'
The associated banks, at the time o
suspension, held over SIS, 100000 mor'
coin as reserve, than in January, 1860
OF course, when the banks suspended
specie payments, the Government wa'
forced to do the same; and from JAN
uary l, 1852, to January 1, 1879
treasury notes were not redeemed il
coin. Just previous to suspension, anc
while it was being considered, the
banks proposed to take the amount Of
their coin reserve, and add to it about
$150,000,000 of the Government bonds
then authorized to be issued, and make
the aggregate the basis for currency
with which to carry on the war, aud
prohibit the further issue of demand
notes this being rejected, suspension
Of specie payments was declared as a
retaliatory measure. At the time Of
suspension, there had been issued
$50, 100000 of these demand notes
Secretary Chase continued their issue
until the whole S50,0o0,0OO were in
the hands of the people. They were
paid the soldiers, who sent them home
to their families. The merchants re-
fused to receive them in payment for
merchandise, because Eastern banks
had instructed country banks that they
would not be taken from them in
settlement for balances, or on deposit
for current funds. On account of this
disloyal and unpatriotic spirit on the
banks, which Comptroller Lacey SC
pointedly Celebrates in his report, these
notes were sent to the Government
Treasury. Secretary Chase could only
reply. as he often did "We have ne
money; the banks have suspended ant