THE FARMERS' REGISTER. 



285 



Whole amount of specie - - 1,669.634 



Or one dollar in specie for every 5.39 of paper 



money in circuiiHion. 



On January 1, 1841— 

 Ouisianding debts- - - 815.350,041 



Circukiiion - - - 7,503,530 



Specie ... - 2.422,192 



Or one dollar in specie for every §305 ot paper 



money in circulalion. 



From these official reports, then, it will appear, 

 that during lour years of the ontinued operation 

 and pressure on the banks of the strongest of all 

 inducements for "curtailin<r," and reduction oC 

 liabilities, (saving self-interest, which opposed,) 

 aided by the so-called compulsion of law, the 

 banks reduced the total amount of debts due to 

 them only a fraction more than one-seventh of the 

 amount at the previous time of greatest expan- 

 sion. The reduction of the irredeemable paper 

 currency of all the banks, durinn the same lour 

 years of great effort, was only about one sixth of 

 the first amount ; and the specie on hand is still 

 only one dollar to S3. 05 of paper circulation. If 

 then, such is the extent of bank reduction of lia- 

 bilities, and improvement of responsibility, pro- 

 duced under such various and cogent reasons (or ac- 

 tion in these different ways, we leave it to the read- 

 er thence to estimate, or inlijr, how long it will be 

 before the banks, by such a course of relbrmation, 

 will be enabled to pay in specie, and comply with 

 their now violated obligations, and re-construct 

 their justly (brfeited credit and reputation. 



It has taken the banks four years to reduce 

 their debts by as much as one-seventh, and their 

 paper circulation by one-sixth, of the former 

 bloated and excessive quantities of both ; and 

 these small reductions have been considered (by 

 paper-money advocates,) as so distressing to the 

 community as to justify and make prelerable the 

 continuance ot all theevilsof irredeemable currency, 

 rather than to reduce bank debts even so rapidly. 

 Yet the first blow of the banks' suspension in 1837 

 depreciated all their notes 10 per cent., and there- 

 by robbed the then holders of the notes (nearly 

 9 millions in amount,) of just that proportion, 

 or about ^900,000 ; and, in 60 days, that deprecia- 

 tion reached 14 per cent. ; and, lor exchange on 

 New York, (requiring specie payn)ent,) there 

 was actually paid a premium ol 17 per cent. 

 Yet this enormous and instantaneous confiscation 

 of the property of the note-holders was scarcely 

 thought of as a wrong to them — and the act which 

 produced it was hailed as a measure of unmixed 

 relief and benefit to the community ! ! ! 



That the general amount of detjt to the banks 

 has been so little reduced is not owing to the want 

 of abundance of curtailment actually inflicted 

 upon individual debtors. But while the older 

 banks have reduced their respective shares of the 

 whole outstanding debts, there have been estab- 

 lished a new bank with branches, and new bran- 

 ches to the old banks, which have added nearly 

 as much to the debt as the others had operated 

 in reducing it. This is not worth naming, except 

 to avoid the appearance of mistake. We have 

 not distinguished, nor do we care, which bank 

 has most reduced o.- which most increased its bu- 

 siness. We have spoken of the whole banking 

 operation together, and of all the debts to all the 

 existing banks, without regard to the respective 

 shares of the dilfereDt banks. 



Further — it may also be true that each sepa- 

 rate bank has been continually and rapidly "cur- 

 tailing" their debtors, (or some oi' them,) during 

 all these lour years. But if so, the general re- 

 sult shows that they have been, on the whole, 

 nearly as fast making new loans to other persons. 

 Now this double operation, (besides deceiving 

 the public into a belief of the progress of general 

 reduction,) serves in two ways to increase the 

 influence, and forward the objects of the banking 

 inieresi. The "curtailed" debtors, when made 

 to leel the pinch, cry out with all their might 

 against the banks being compelled to adopt this 

 harsh course, by the requisition of law, and to pre- 

 pare for pacing specie; and all the influence of 

 their class is used lu prevent any contraction of 

 circulation and of loans, and of course to con- 

 tinue unabated, lor all future time, the dishonest 

 policy of suspension by the banks. Next, the 

 hungry class of expectant borrowers, by receiv- 

 ing new loans, or by the bope of obtaining them, 

 are made lully as zealous lor the continuation of 

 that course of banking policy, upon which the 

 extent of their ''accommodation" will depend. 

 Thus by curtailing old debtors, that class of 

 bank slaves are made the more zealous and ac- 

 tive in the service of the masters ; and by ma- 

 King new loans, the equally zealous services, of 

 another body of partizans and slaves are secured j 

 and also general support gained from all who 

 only hope to become borrowers, though not yet 

 on the Javored list. 



There never was a more false and even ridicu- 

 lous pretence than that which is generally receiv- 

 ed as true, that the continued operation of the 

 banks, on any thing like the same scale of expan- 

 sion, is necessary lur the benefit of the communi- 

 ty, or even lur the benefit of the debtor class 

 alone. If all the debts to banks which have been 

 incurred in the last six years, had been ^enied, 

 the applicants for the loans would now generally 

 be much better off than they are. And those 

 persons that were already in debt in 1837, 

 and who have not yet paid, perhaps have not 

 been benefited by such long continued indulgence. 

 Yet this matter is always spoken of as if the 

 privilege of contracting debts, and of continuing 

 in debt lor the longest time that the creditor will 

 permit, is the greatest of all possible benefits to 

 individuals, and the operation the most vitally 

 important to public and general interests. 



JlIV. Effects of bank suspension and irredeemable 

 paper currency. 



When the banks all first suspended payment in 

 1814, under the pressure of a Ibreign war with a 

 lormidable power, the case was novel, and the 

 public were easily deceived by the lalse and shal- 

 low pretences then set up by the banks in excuse. 

 It was not (so it was alleged) that they were not 

 able to pay their notes, but that the specie, thus paid 

 out, regularly and rapidly flowed to the enemy's 

 possession. The latter part of this assertion was 

 as true as the former was false. The excessive 

 issues of paper here had served to depreciate all 

 the currency — and also our armies required specie 

 in Canada, because bank notes were of no value 

 there. Therefore, the specie flowed from the 

 country where it was depreciated, and where it 

 was pushed away by paper to foreign countries 



