THE FARMERS' REGISTER. 



533 



general procedure, and be just so much lessening 

 of their profits maJe by their su!jpen>ioii of pay- 

 ments, and depreciatfoii of their bills. Individuals 

 would not buy the specie, because, as above slated, 

 it is the interest of no individual to use specie, 

 when depreciated paper will pay all his dues as 

 well, or necessity then, under such circuiu- 

 etances tlie specie, soon or late, must leave such a 

 country, and be sent to New York, or to Europe, 

 where it will command its value as currency. 



Thus specie is continually fiassing li-om the 

 states which permit their banks to suspend pay- 

 ment, and where consequently specie is not used 

 as currency, and going to New York or oiher 

 places where the currency is baped on specie. 

 But the specie-paying policy of New York has 

 already served to supply it to the trade oC New 

 York abundantly. The banks there have as 

 much as they desire to keep in their vaults, ami 

 all the channels et' trade and circulation are filled. 

 Of course the surplus receipts ol specie must be 

 sent abroad, as a commodity, to be exchanged for 

 other commodities more needed there than specie 

 — and so it is sent continually. More than 7,000- 

 000 of dollars in specie have been shipped from 

 New York to Europe within the last ten nionihs. 

 The last packet adveriised to sail from that pori 

 to Havre was to carry ^62,000 in specie. And 

 thus, as long as bank suspension is permitted, as a 

 regular or permanent jiohcy of Virginia and other 

 stales, it operates constanily to lessen still more 

 the stock of specie that is in the country. How 

 absurd then is ihe belief that the extension of the 

 limit of suspension serves to facilitate the resump- 

 tion of bank payments ! 



There are but two poseibie modes by which 

 suspended banks can prepare to resume specie 

 payments. The one is, to draw in and lessen 

 their amount of notes in circulation — the oilier by 

 buying or otherwise procuring and retaining an 

 increase of specie, to meet the expected demands. 

 As may be seen liom the official report of the 

 banks themselves, they have been doing neither, 

 but the reverse, during the first six months of the 

 present year of indulgence to their suspension ; 

 and it is equally certain and notorious, that no- 

 thing had been done by them, effectively, orto any 

 important extent, in either mode of preparation 

 during the previous year ; and nothing ever will 

 be so done by them, until imperaiively command- 

 ed and ybrcec? by the popular will and indignation, 

 acting through the laws. And in thus failing 

 to prepare for resumption of payment, the banks 

 are guilty, in the highest degree, of bad faith to 

 the community, inasmuch as every successive 

 extension of indulgence has been granted to them 

 by the legislature, and acquiesed in by Ihe credu- 

 lous and deluded people, because of the under- 

 stood promises, expressed or implied, that such 

 extended lime of indulgence would be faithfully 

 and honestly used by the banks to prepare them 

 to resume specie payments at the end of that 

 limit of time. Instead of that, these repeated 

 acts of indulgence have been used but to increase 

 the illegitimate and dishonest profits made by 

 the very act of suspension, and the violation 

 of legal and moral obligations by the banks. 



The selling of specie by the banks. 



But, in addition to this failure to increase their 

 stock of specie compared to the amount of their 



notes in circulation — a designed and systematic 



failure vvhirh well deserves to be called treache- 

 rous to the iiidulueni legislature and confiding 

 people — what would be thought if it were cliarired 

 ihat these banks have been and are regularly en- 

 gaged in selling specie, fiir their own or oilier de- 

 preciated bank notes, lor the profit ofsuch premium 

 or difi'erence of price, as is caused solely by the de- 

 preciation, and that from these sales the richest of 

 the present large and unrighteous profits of suspen- 

 sion are derived by the banks? Every disin- 

 leresled hearer of such a charge would pro- 

 nounce such conduct to surpass every thing of 

 itad Itiith belbre known of the procedure of soi- 

 vent banks — and most of the apologists lor 

 the present bank policy would cry out against the 

 charge as a monstrous and <frouiuiless calumny. 

 Yet we maintain it to be true, lo rtie letter as well 

 at! in the spirit. Such traiisaciions, indeed, are 

 not called by so ugly a name as "selling of spe- 

 cie;" they are known, in common parlance, as 

 the "selling of drafts on New York;" but it is 

 nothing more nor less in each case than selling 

 ihe amount if specie which the draft or check com- 

 mands, and which amount is, at the time of the 

 &ale. in a New York bank, ready to be paid in 

 specie. The specie is not Ihe les- beloniiinff to 

 the Virginia bank, becatire it is lying in the vault 

 of a bank in New York, instead oi' one in Rich- 

 mond or Petersburg; nor is it worth any less, as 

 specie, to the hank here owning it, because of be- 

 ing in New York — but the reverse. Drafts for 

 specie payable in New York will be worth more 

 to most of those persons who may demand specie 

 here, than would be specie paid here. And, 

 therelbre, the fund of specie in New York need not 

 be brought here to be used for resumption. 



In another place the evils of this general sys- 

 tem of the banks dealing in exchange have been 

 shown. As they use their power over the bor- 

 rowing class to drive hard bargains with the first 

 holders of the drafis on New York, an unfair and 

 usurious profit is usually made in the first pur- 

 chase by the banks. But, after having made that 

 profit, if the specie, which these drafts at their 

 maturity will command in New York, were but 

 held there, every one of these numerous pur- 

 chases would strengthen our banks, and prepare 

 ihem the better to resume specie payments. But 

 they cannot bear to yield so mucli present gain 

 lor such an oliject ; and therefore iheir fund of 

 specie in New York is regularly sold at such pro- 

 fit of premium as is regulated by the degree of 

 depreciation of their own nole.^ — and which de- 

 trree of depreciation is itself in a direct ratio to 

 the supposed discredit or bad faith of the banks. 

 Their self-inflicted dishonor is thus made the most 

 productive part of tlieir trading capital. 



Bank usury, in principle and in effect. 



As was explained more fully in another report 

 to the Association, the individuals with whom the 

 banks carry on this profitable trade of "dealing 

 In exchange" are subjected to the payment of 

 what is in effect a grinding rate of usury. And 

 there ate still other kinds of extortionate usury, 

 in point of fact and in a moral view, continually 

 practised by banks, though the acts may be legal- 

 ized ,by the unjust indulgence of law. Of this, 

 we will offer an illustration that any one may 

 see the truth of, and which none will venture to 

 deny. 



