most speedy and safe manner; or, in other words, they are the receiving and disbursing agents, through whose hands the capital which has been drawn from its usual channels of trade, is returned to it sooner than by any other means. It is also claimed, that banks are capable of acting in money matters as the man of capital does, who, by reason of his great wealth, is enabled to buy and import large quantities of merchandise, and distribute it in smaller ones, to suit his less wealthy customers, either for cash or credit ; and thus extend the great benefit of trade to all. Banks are also made use of as a repository, by men of large means, for the sake keeping of their unemployed funds, which can be, and are, disposed of by the bank, to the benefit of those in want of money in their business, without incommoding any one.

Secondly.--Because banks are capable of influencing a promptness in all business transactions, and thus justify the uses of the credit system to all departments of trade, by rendering it equally safe and easy. Their own great credit, , it is claimed, being the result of the promptness with which they fulfil their own obligations, makes it necessary for them to reject all customers who show a want of promptitude with them. The result of such regularity in dealing, has the effect of making one dollar serve in the payment of twenty different claims of the same amount, when, if such were not the case, it would only be able to be used in the

payment of one or two in the same length of time. But it must be recollected that this one thing is a source of great power to the banks, and which they often make use of after inducing men to increase their business by throwing out to them hopes of assistance, or success, which are not always realized. It should be borne in mind, that bank officers do not always throw aside their prejudices against individuals, when assuming their new powers and responsibilities. It has been frequently the case that the ill-feeling of a single person connected with a bank, has been the cause of that bank suspending, to the injury of the whole community in which it was situated, by his making use of its capital for the furtherance of his own evil designs. But, if the powers of issue and redemption were taken from all banks, they

could not affect the interests of others, any more than an individual. As they are now conducted, their capabilities of evil are very large; so much so, as to make it a source of continual anxiety to every business man. It required, as we remember, all the power that President Jackson was possessed of, to crush the great United States Bank, which had at its head a man well worthy to represent and enforce the immense power, for evil or good, belonging to an insufficiently restricted banking institution such as that. Jackson soon saw, with a just apprehension, the powers belonging to one man, possessing so much capital, centred in one institution, and over which he alone had the control. It was to prevent this ever being the case again, that he recommended the establishment of small banks throughout the country; assuming that they would be kept in check by the general opposition and competition which would exist amongst them; and that, working thus as competitors, they would not be likely to employ their concentrated powers to deprive the community of those rights and privileges so essential to the common interest and safety. He also entertained the opinion that, whilst we are increasing the number of banks, we are also increasing the mutual interest existing between them and the people. We believe his judgment to be correct in every particular, however its application may have been marred by inadequate application to details.

We will now consider those objections to the establishments of banks, which we think of most importance and to be most worthy of public attention. They consist of the following serious charges, as popularly made, viz:

That, they have a tendency to increase usury.
That, they retard or prevent other kinds of loaning.
That, they induce over trading.

That, they increase the number of ignorant adventurers in speculation, bolster up their fictitious credit, and thus enable them to practice and continue their impositions upon the public; and That, they directly, or indirectly, influence the exportation of gold and silver.

Now, if such charges can be made out against banking insti

tutions, their benefits must be of a very superior nature to induce us to countenance them, or to reconcile us to the evils which they generate. But, it is our opinion that these charges cannot be maintained against banking institutions, which are properly restricted in their powers. It is not the principles of banking that we condemn, but the false systems on which they are now too frequently carried on. Let us look, however, to these charges in general, and see by what sort of evidence they are sustained.

First. That they have a tendency to increase usury.

We have said, elsewhere, that banks have the power of enforcing punctuality in the payments of sums due them from others. This, necessarily, in certain cases, must compel the debtor to resort to usurious borrowing, or else lose his credit with the bank. The bank is not chargeable with this evil, unless it has, by its excessive discounts, instigated the debtor to extend his own business wildly, and far beyond his available resources. It is also contended, that, inasmuch as bank stocks pay a much better dividend than the same amount of money would, if made use of in the ordinary way of loaning, men are better satisfied to invest their surplus capital in banks than to loan it out themselves to the community generally; and that, when it gets into the hands of the banks, it is only loaned to a particular few, to the exclusion of the many; having the effect to make the rich richer, and the poor poorer. The feebler naturally goes to the wall, and is driven, by the necessity of his situation, to apply to the usurer to obtain such money as he may need, let it cost him what it may.

The bank that creates the appetite which it refuses to pacify, is a moral mischief; but even where chargeable with this offence, the mischief is of but small consequence, in comparison to the effects of a money pressure which has been produced by its over-issues. The prostration following the artificial stimulus, is an evil of more mischievous magnitude, when it operates upon a whole community, as, in such cases, it always must.

Now, in this connection, we admit that banks are placed in the same position with individuals, during a pressure in the money market, or while it is approaching one. Their

own liabilities are equally subject to the rule of promptness in business with those of individuals. We yield the point cheerfully; but we claim that, at least one half the panics which visit us, from time to time, originate through causes arising from improper management on the part of the banks; and, sometimes, when the management thereof has been, with a view, on the part of the officers, to increase the profits of their stockholders. This is done, first-by making use of their funds to oppress other institutions, so that they may run their issues out of the market, and place their own in it. This awakens a feeling of resentment on the part of those oppressed, and they all engage in the warfare with their means, instead of using them for the benefit of the public. Before this contention arises, money may be easy enough. Many are induced to extend their business, in consequence of great bank facilities; and the crisis resulting from this private struggle' among the banks takes them unawares. There is no reason for a crisis of a public or social nature, that they can see-there is no lack of resources in the community-no lack of credit among themselves ; but they are the victims, and suffer from the greedy competition of the banks. Unprepared for the unexpected crisis, they are forced into the clutches of the usurer, and must pay exorbi. tantly to uphold a credit which no act of their own has shaken.

Secondly.—The banks operate hurtfully by making use of their furds at remote districts, where they pay them a better interest, instead of distributing them among their own citi

They thus serve as agents to drain the local capital from the very people for whose use it was designed in their establishment, and send ii away for the benefit of others. This is a practice common to almost every bank in the Union ; because it has proven a source of profit to them, both by the increase of their issues and the amount of their rates of interest. For this we cannot blame theni, no more than we can individuals, unless it be for a want of patriotism in behalf of their own business community. Trade is naturally selfish, and it would be absurd to ask them to pay no regard to their own interest, and to sacrifice it entirely to



Such liberality is not to be expected from any class of business men. If we wish to remedy this evil, we must apply proper restrictions to them, when we invest them with the powers of banking. If, then, they accept our conditions, we can exercise a power of restraint, and can coerce their obedience in various ways-by penalties, by forfeiture of charter, and the repeal or modification of the usury laws.

Thirdly.Banks, by an over-issue of their notes during a season of plenty, and by increasing their discounts because they are overstocked with money received from their depositors, suffer with the rest, and are equally enfeebled, when a reaction takes place. Their shortsightedness brings its penalties upon their own shoulders. To relieve themselves in such periods, they contract suddenly both their issues and discounts, and thus compel their customers to seek a new market, which extends the pressure still farther, until it becomes universal. Therefore, we claim that, as banks are now established and managed, they are directly or indirectly chargeable with the panic, the crisis, and their fruits, the increase of usury.

Again :--That they retard or prevent other kinds of loaning.

We have, we think, sufficiently shown elsewhere, that they have the power of drawing and concentrating the capital of the country away from those channels in which it might lie idle and non-productive; but we claim that, although this is the case, yet, by reason of their anxiety to in. crease their own issues, they are induced to make use of both their capital and deposits in other ways than those which would be of benefit to their own community; and that they are thus made instruments to take from us those means which would be otherwise distributed among us by private loans. Their immensely concentrated capital, also, enables them to enter into large enterprises through their agents, whether in the districts where they are situated, or in remote places; and thus do they frequently divert from us the money, which, if in the hands of the stockholders individually, would necessarily seek investment entirely among our own people. It has been claimed, as an argument in their

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