664 



THE FARMERS' REGISTER. 



red, or, still worse, until the limit of time for dis- 

 continuance has elapsed. 



THE REMEDY OF EACH INDIVIDUAL. AGAINST 

 NON-PAYING BANKS.* 



Prom the Bank Reformer. 



Having perused your first number, and con- 

 sidering your ot))ect to be one of general interest, 

 and highly praiseworthy, the writer readily con- 

 tributes the result of his observation and experi- 

 ence (or its promotion. 



A continued suspension of the banks is an 

 abuse only tolerated by a depraved public opinion. 

 The circulation of the notes ol suspended banks, 

 as money, \s an absurdity. It introduces a cur- 

 rency ot fluciuatiug and imiefiniie value, or ol' no 

 value at all, destructive ol' all credit, and highly 

 demoralizing to the community which tolerates 

 it. In fact its evils are universally admitted m 

 theory. The great mistake is in so readily sub- 

 milting to them in practice. The greai error is 

 in relerence to the remedy. Every individual is 

 made to believe that he alone can do nothing, that 

 he has no alternative but submission, until the pub- 

 lic provide the remedy. 



Now the fact is directly tlie con'rary. Every 

 individual has the remedy in his own hands. 

 That remedy is the refusal to receive broken pro- 

 mises in exchange lor property, or in payment of 

 contracts. This every man can do. And in the 

 latter case eventual payment, in the legal curren- 

 cy o( gold and silver, is secured to him by the 

 constitution of the United States. Ii is true in- 

 dividuals are unwilling to delend their rights by 

 law against a powerful public opinion, however 

 false and mistaken that opinion may be. But 

 in a case like the present, when a great public 

 evil is the result of such acquiescence, it becomes 

 an act of patriotism, an absolute duty, to enforce 

 the laws against the abuses of the banks. This 

 remedy, or I am much mistaken, still exists 

 against the banks of Virginia. The legislature 

 has most improperly relieved the banks Irom the 

 penalties of suspension, but has no power, to se- 

 cure them against eventual payment of their 

 notes with interest. Let a number of patriotic 

 individuals unite in the measure of bringing suits 

 on every bank note, or in whatever way will 

 make the suits most expensive in costs to the 

 banks, and you will very soon see the resump- 

 tion of every solvent bank. They will either pay 

 or break. This is not mere speculation. The ex- 

 periment has been tried in New England, with 



* Were we permitted to give the name of tfie author, 

 it would command respect and attention for this com- 

 munication, even if its merit were not of itself con- 

 spicuous. We may however say thus far, that it is 

 the production of one who is friendly to the banking 

 system properly conducted, and to a currency princi- 

 pally of bank paper — and who, moreover, has learned 

 by long practical acquaintance as much of banking 

 and commercial business, as he has by study and 

 reasonino- of the theoretical truths and principles of 

 political 'economy. We are proud of such a contribu- 

 tion to the Bank Reformer; and shall be gratified 

 hereafter to present through its pages the views of so 

 well-informed a bank-man, even should they come 

 in conflict with our own opinions.— Ed, B. R. 



perfect success. In 1808, the country banks in 

 New England had adopted various expedients 

 to evade or delay the payment of their notes, in 

 consequence of which they became depreciated 

 to the extent of three or four per cent., and thia 

 very depreciation gave to them the entire circula- 

 tion for common purposes, even in the city of 

 Boston. Each bank justified itself as now by 

 the practice of others. A number of individuals, 

 viewing the matter in its true light as an abuse in 

 banking which ought not to be tolerated, from the 

 best motives united in the measure of bringing 

 separate suits on every note presented fur payn)ent, 

 relying on the coercion arising from multiplying 

 the costs. As the laws of Massachusetts imposed 

 no penalty at that time beyond the legal interest 

 of six per cent, per annum, some reams of blank 

 writs were prepared and notice given lo the banks 

 of the determination to resist their abuses. The 

 success was complete. The first bank on which 

 the experiment whs tried gave up the contest 

 after a lew days' resistance. The others cried lor 

 quarter. The relbrmation was immediate and 

 complete ; but soon revealed the actual insolvency 

 of many banks, which had (bund it easy to sustain 

 their credit under the former system of non-pay- 

 ment. Experience has hilly shown that there ia 

 no remedy lor bank abuses like the coercion of 

 the law. We recommend this specific to the 

 patriotic Association of Petersburg. A bank 

 which will not pay its notes alter a suspension of 

 four years, should be treated as the established 

 enemy of sound credit and honest dealing, and 

 driven from the community. The common error 

 put Ibrward in the school ol Mr. Biddle, and wide- 

 ly circulated by the needy Iriends o( a depreciated 

 currency, is that one portion or community of the 

 United States cannot maintain a sound currency 

 whilst a neighboring community tolerates a de- 

 preciated one — that there can be no resumption 

 unless it be general. Thus, the legislature of 

 Virginia is made to believe that the banks of 

 that state cannot resume specie payments, whilst 

 Baltimore is in a stale of suspension. So Mary- 

 land must wait ibr both Virginia and Pennsyl- 

 vania ; and as all can never agree upon the time, 

 there will never be resumption. Now this idea is 

 wholly false, the veriest of errors. Specie is whol- 

 ly out of use in a community where a depreciat- 

 ed currency is generally adopted. It commands 

 a premium for the purpose of being transmitted, 

 abroad or where it is properly appreciaied. Ita 

 tendency is to leave the community where the 

 banks are suspended, to go to that where the 

 banks pay specie. The result is as unilbrmly 

 true in practice as the theory is sound and reason- 

 able. 



Boston, and the country of which it is the com- 

 mercial centre, found no difficulty in maintaining 

 specie payments in 1815 and 1816. When the 

 banks of every other portion of the United States 

 suspended, the banks of New Entrland ivere never 

 more at ease. So, since April 1838, Boston and 

 New York have maintained the integrity of a sound 

 currency, without the slishtest difficulty. When 

 Philadelphia suspended, did her doing so make 

 specie payments more ditTiciilt to maintain in 

 New York? On the contrary, after the panic 

 aTising from a false public opinion was over, it 

 was found that the current of specie was wholly 

 /roHt Philadelphia, where it had ceased to be in 



