if
MM rim liifcui'Mi inn.
.hftllthe Ihmh be compelled t9 pay Specie 7
'i ll f.!lrttMijJ Icttrr from ritl.cn At a diitancc to h!
, friend in Ihc iww tt!Iy, rcuprcting ihc Imvinjf
rf n communiciiUu! to ie irciitlomcn, ami nr !
tr'mjf to rrl It tlmn en pcruwi the original, penniv
niyn lui bfn cliuinel to put it in print. It in plain
nml rarnlil itatcmrnt of fact on a question vhieh
'jjrtce& flccth4.Vi;irirf f th citUewsfthis date.
" I) KAlCC IR, , " i ""7
' You desire my opinion upon the expedi
ency of 'the Legislature adopting measures
to compel the' Banks of the State jo redeem
iVeir notes with specie at an enr1yday ; and
ou .ask me at what time, if left to themselves,
triey- probaUyouldrcsumehepayntent of
ipe'eic r No one can atuch less importance
t my sentiments on these points than I do
myclk.Yet if.
place, together can. In any degree aid your de
ciding on the question before you, I shall not
regret the, few minutes bestowed on this let
ter. I cannot but regret that any portion of the
Legislature think themselves called on at this
time, to interfere with the management of the
Hanks j and it measures are adopted to com
pel the Banks to pay specie immediately, un
der the penalty of paying heavy interest, or
damages in case of refusal, there cannot be
any doubt but that the Dank will be driven
into measures for their safety, and defence,
which must greatly increase the distresses of
the country.
That the Danks in suspending specie pay
ments have not conformed to their underta
kings id admitted. But common justice and
candor require that they should not be con
demned (or a course of conduct, produced in
..lhc fir5tiastan.ee-by. the. distress of-the goujw
trv, and continued subsequently in mercy to
the people. The distresses of the country
have been ascribed to the Hank : The charge
is, they first issued too freely in loans, and then
igourously called in. Those charges are un
funded in fact. Money, whether of gold and
ilver or paper, may be too abundant. When
the supply is greater than the business of a
country requires, its value will be reduced ;
like tobacco or cotton, its value depends on
the quantity in market. And yet, freely as
the Uanks may hase issued, their notes with
in the State have not depreciated ; but in eve
ry transaction between the citizens of the
State, have answered the purpose of money
as well as gold and silver ; and so far from
Lting too abundant, an universal complaint
h is prevailed of the scarcity of money, and
;f the want of more Bank Notes. Of the
nm issued in loans, I think not more than
'.i ft ecu per cent, has been called in in payments,
itnd so far from having made heavy collections
irom their debtors, I feel confidence in the
opinion that at this day, the sum due to the
Banks in the aggregate, is within fifteen per
ent. as large as it ever was. Such are the
facts as regards issues and collections.
That in some instances loans mav have been
made to indiscreet men, who have used the
money to their injury, must be admitted. But
what species of trading has not proved injur
ious to indiscreet men ? Do not men ruin
themselves by injudicious purchases of tobac
co, cotton, and pork ; by erecting mills, es
tablishing manufactures, bv extravagance in
dress and in living ? Unfortunately the proofs
are so abundant, that every man must answer
m the affirmative. When, therefore, it is
found practicable to prevent indiscreet men
from trading in merchandize, produce and
lands, when you can curb the follies of man.
control the- vicissitudes of trade, and regu
late our expenditures 4y prudence and tem
perance ; then having secured him against all
other chances ot. mjitqvtunc, ybu may wisely
close thedodr of a Bank upon htm, and deny
1c .him this only remaining means of mischief.
But while it continues impossible,, (as it does
V and ever will,) tor Legislatures to guard men
7 against the consequences of their own impru
dences, to which they are subject without re-
- course to Banks, surely it cannot be seriously
v contended, that the country is to be denied
.I-1' ' the advantages resulting from the use of Banks
pT ad vantages contended for bv the first states-
tabltshment.
The distresses of the country consist in the
lo w , pri ccs ,ovprodu& .and ; pi opertyv and in
the consequent, difficulty in payiiig debts,
A very little reflection must satisfy every
iwind, not devoid of reason, that these evils
Hnrfiry exist independent of any influence of
the Banks, and that in the present times
they, actually owe their existence" to Dther
causes.
- . M one of those who- ascribe the Iow'pri
' ccs t.t produce to the man'itif of money, yur
i hasp and ship our produce to anv ban of the
v "nu xie -will unci .the prices abroad so low,
" ' that afier.payingiVeiht and charges, he will
market abroad, and not the uW oj miney at hour, every demand on them has beert fully ccs m.Uj hi ttich ai I have invested, the e.t-
home, cause the low price of produce, ll satisfied by draf ts on the Bank north or pcrimcnt ought not to be madc. .The banki,
the presiureof the times ex'uteii only umong south ; which drafts, as those to whom they in the neighboring state of Virginia, crippled,
... mJ.Kf iidrr'ihi it t.i hrurriiviif mciti were mid resided abroad, answered every and for fcomc time put fiort de combat" bv
y. and lay all the blame on the poor Banks of
North-Carolina, fpr their parsimonious hsuc
of notes. But the same pressure is felt every
where in Luropc. as well as in every part ol
the. United States He who searches lor the
causes of national distress, must elevate, hi
view-wove tne peuy uauiKi-ii-couHiry-r
the little extravagances ot his neighbours.
Whatever the parish politicians of the btate
may decide to be the cause of our distress,
let-them learn from the testimony of the ven
erable John Adams, that at the dose of four
.ajts jyhicUilc gld.ejnouglacLTi:membcr,
ihe name distresses have prevailed s incident
to the change of circumstances, and he may
learn also from the message cf President
MdflrfoTtKrpirmnF Congress,-- that w e
are" liable to be affected in some degree liy the
changes .which, pecur. iu . the . condition and
regulation of foreign countries" that "it
would be strange if the produce of our soil
received at all times and in every quarter an
uniform and equal encouragement" u we
trace these pressures to the peculiar character
of the epoch in which xve live, and to the ex
traordinary occurrences which have tignulized
it. "Ihe convulsion with which sevend
of the powers of Europe have been shaken,
and the long and destructive wars in which
all were engaged, with tne ir sudden transi
tion to a state of peace, presenting in the first
instance, unusual encouragement to our com
merce, and withdrawing it in ihe second even
within its wonted limits, could not fail to be
se is.bly felt here. The station, too, whiclvwc
had to support through this long conflict, com
pelled as we were finally, to become a party
toTTwith a principal power, and lo make great
exertions, sufler heavy losses and to contract
considerable debts, disturbing the ordinary
course of affairs by augmenting to a vast a
mount the circulating medium, and thereby
elevating, at one time, the price of every ar
ticle above a just standard, and depressing it
at another below it, had likewise its due effect
It is manifest that the pressures of which we
complain, have proceeded in a great measure,
from these causes." So far the words of Mr.
Monroe. Yielding to these high authorities,
I think the distress of the country is owing
to the extraordinary occurrences of the times
in which we live, and not the petty Banks of
North-Carolina.
The Barilts are censured for suspending
specie payments. Before they are condem
ned and punished for this step, its cause and
the consequences of it should be enquired into.
A concurrence of circumstances, and among
them not the least in effect, the course adop
ted by the Bank of the United States toward
all other Banks, had compelled the Banks,
particularly those to the north of us, to call
in their debts m large proportions ; an extra
ordinary demand for money in all the States
was the consequence. The debtors and the
agents of each particular Bank were active in
drawing from every other Bank, all the spe
cie they could obtain to give strength to that
one in whose support they had particular in
terest. At the same time Spanish muled
dollars were . particularly sought after for
shipment to the Last Indies. In this season
of gathering, North-Carolina did not escape
visitation ; and Bank agents, brokers and ped
lars from the north and from the south, in
quick succession, were calling on our Banks,
and taking off specie by waggon loads. It is
a fundamental rule in banking, to regulate the
amount of notes afloat, by the amount of she-
cie in. tne vaults ot the Dank. 1 he extrac
tion of large sums of specie from the Bank
demanded a corresponding reduction of the
notes afloat ; or in other words, as the Batiks
pam out their specie they were required to
call in their notes. The consequences soon
became obvionsri f that course were persist
purpose of specie, and hjid every effect a pay- hits from the liank of the United States, have
inent in specie-could have had, except only been recruiting their strength, but are not yet
undermining our Batiks and dbtrttsing our sufficiently restored not to need help they -
people. will gladly now, ts thev heretofore dia,clutcfi
As to the consequences of Ruspcnding every Carolina Bank Note to draw specie for
specie payments, us they operate among our- themselves. The bank of the United State;
jelve., : the chartered enemy of the State banks,stands
Whether bank notes, not convertible' into also ready the moment the doors are open, to
specie at the pleasure of the holder, can sun- enter; and, as when they last had pportunityj
ply the place of specie as a ciixulatinjj medi- load waggons with our dollars. Agents fronj
urn, is question mo often. diiciiS2df. that 1 northern banks, brokers. and. clerks. of Jndix
would not agitate it again. 1 would only re- merchants, all will seize the golden opportu-
mind.you-as,T-pai.n,.that during our late nityf nd f remrthe-joint visitations of allfthre
war, all bank having suspended specie pay- specie of the banks will soon disappear. It
ments, every operation oi money was per-isnouiu uc remcmocrcu, ioo, wa a me raon-
lormtcl by hank notes, not convenioie into ey ueaicrs, mere is a special icmptation to
spear? and that- the ; bant of .England ; lus- Visit the ' banjfci of North'-CaroHria UTs this i ';
pended the payment of specie from 1797, to Spanish milled dollar, the only coin which ii
ed in, the debtors of the Bank, the people of
the btate would be ruined, while the specu
lators and brokers from other states would be
enriched. The alternatives before the Banks
were, either to pay specie and call in the debts
due them, unmindful of the ruin it might
cause ; or indulge the debtor and refuse 4o
pay specie, regardless of the clamour which
would be raised against them. They adopt
ed the latter alternative, and resolved to re
fuse specie payments to such demands. Such
is the history of the suspension of specie pay
ments. Northern brokers, speculators and
pedlars mav complain juf it, but it would be
indeed strange that citizens of the State should
find cause of blame in the determination to
prefer'the safety of the people.at large, to the
profits of 'a few speculators. . But in judging
oi tne conduct ot the Banks on this occasion,
it must be kept in piind that though they did
not pay specie, they did not fad to satisfy ev
ery just.demand on them. Thev had procur-
the. last year, in which interval the govern- shipped to the East Indies, .uniformly com,
ment with no funds but paper bank notes,' mauds a premium when the India ships are
prosecuted those wars which, in the fiual over- preparing to sail. 'I he northern banks pro
throw of Napoleon, established their own em- tcct their Spanish dollars by the tender of
pi re and achieved the independence of Ku- American coin ; and so desirable is it to the
rope. The experience of the world on this banks to possess this coin, that within a month
point, set at nought the theories of evil from past we have seen that three hundred thou
the substitution of paper for sccie. sand dollars of foreign coin have been sent
The value of money is estimated by the in steam boats and waggons from New-Enc-
quantities it will purchase of the necessaries, land to the mint in Philadelphia, to be con-
comforts and luxuries of life. Compare the yertcd into American coin. Our banks have
prices of produce and' property in 1617, 1818, very little American coin ; their foreign gold
and to June, 1819, while the banks redeemed is not a tender, and their Spanish milled dol-
their notes with specie, with the prices at this lars are thus placed at the command of ail.
time. Corn, pork, flower and most other ar- who choose to demand them. 1 hus it is that
tides of produce can now be purchased with I fear the banks are to be assailed the con
bank notes at less than one half the prices they sequences are inevitable the banks will do
commanded in the former period. In other no business but collect the capital rendered
words, qu can at ihis Umeobtajn in exchange unproduciive.cach.5tockholderwill nrefer to ,1
for bank notes, not redeemable in specie, doub- withdraw his stock and employ it otherwise,
le the quantity of produce, which in 1817 you and the charter will be surrendered. The
could obtain for the same sum in bank notes, state will lose its annu.-.l tax of sixteen thou
which were convertible into specie," at pleas- sand dollars from the banks of Newbcrn and
ure. Lands and negroes can be purchased Cape Fear, and its dividend cm its stock in
now for at least one third less than in the all the banks. The last dividend will be of
former period, payable too in the same abused land and negroes purchased by the banks for
bank notes. In short, in ever)- operation of the debts due them. If you think any fears
money, whether purchasing property or pay- visionary remember that probably not less
ing debts ; whether to private persons or to than fifty banks have surrendered their char-
officers in settlement of executions, the notes ters since the establishment of the bank -of
of our banks have answered, and still do an the United States. As the collectionof debts
swer every purpose of specie ; and with pretty due to the banks withdraw their notes from
ample opportunities of being informed, I do c iiculation, specie must become the only circu- ....
not know a single instance of dealings between lating medium. In proportion as Specie is
citizens ot the state, in which any difficulty scarce, in the same proportion will its value
has been made because bank notes, and not increase, and the price of property depre-
specie, were paid. JJank notes may, therefore, ciate, and in ilusefTect, will further . evils be
with truth he said to be" placetf by' uiilversal Tclt from the destruction of the banks,
consent, on a par with gold and silver. If It is true that the banks are by charter
there is any exception, it is in the case of those bound to pay specie ; but.by charter they are
tr tders and pedlars, who owe money to the also bound to lend money. In issuing notes
north. If they take our notes northerly, they have fulfilled the object of their crea-
they pass them at a discount of about two lion that they cannot immediately redeem
per cent. they would save this loss if they their notes with specie is not their fault ; it
would ship or waggon our produce abroad to is the fault, or more properly, the misfortune,
pay their debts. If the interest of these gen- of those to whom they h; ve loaned money.
tlemenin number, not one in a thousand of Ihe people of this state, oppressed by the
our citizens, conflicts with the interests of the disasters of the times, have failed to pay their
rest ot the state, there can be no hesitation debts to the banks, and leave the banks; ol
in deciding which, interest should be ju efer-1 consequence, unable to pay their creditors.
red. I It is not less the dutv of individuals than of
Admitting the correctness of all that is said, corporations to fulfil their contracts; and the
still the question remains, will the return to legislature, having the same control over. one
spcciepaymentsatthistime,beinjurioustothc as the other, may, with the same propriety,
banks, or to the people ol the state r My opin- affix penalties upon the non-payment in pe-
ion is, that such a measure would probably be cie of the notes of individuals, and in all cases
fatal to the banks and certainly very injurious punish delinquents in proportion to their mis-
to the people. fortunes. And surely even-handed justice
rrom the state of the banks laid before the requires, that if the banks are punished lor
last assembly, it appeared that the banks pos- failing to pay specie, thosejWhoja
sesseu oonus ana notes aue to tnem lor three specie, ana lau to pay mera, suuuw g
millions of dollars more than all the demands unpunished.
which could be made upon them. Yet, strong When I look at the situation ot attairs ai
as this statement proved them to be, and clear- the meeting of the legislature the notes of
ty as it put their :olvncy beyond question iY
iusu.appearcu uiai iney neia uui seven nun- j eriy-orwine ucoiorsrinereioic ymt'j
dred thousand dollars vi specie, to meet dc- and at parwith ge'd and silver in nis scacc
mnnds which rnnM h niarlt nn iKum frr fnnr VtYtf AfYitnr rnniftYiHtt themselves amid dlS-
... w.ww....0
million six hundred thousand dollars not tresses, with the hope that their debts would
quuc unc uouar in specie 10 meet six dollars oe called ior oy me oants as iMuuyv
of debt. Since that report their situation heretofore ; and when I contrast this state 0
may have improved, and I estimate their spe- things wiiji that which the proposed interfer
cie at this time at one dollar in five of their ence may create runs upon the banks for
debts. In this situation it is mere delusion specie; suits by the banks for debts due them;,
to believe that they can nayifr
demands which will be made upon them. If tales, and ruin of families I cannot but be -the
legislature say the banks shall pay specie licve the legislature are, without the least poi
under., heavy .,. pmilttlieonseuencei sible ndusxity, about to make one of the
plain,: elf dince :wsUie. dangerous s experiments ; which powerr cyef : , ,
avoid the penaltv, the exaction of which, if ventured upon. v
not counteracted, must speedily both destroy As to the time when the banks can resui
men prums anu ausoro ineir capital, anu to specie payments. r.
l mean i j
notes the) i&suenot
meet the demand as far as they can, the banks j By specie payments,
must t-pniiirf nil the
instalmpntq. .Hut 'th- ivhnlp iuAr mont. ..,:n o eV,ifflin(T lc'ihd of dealincr. which at tim
. i.w.. t juujjiiivim nui I iimv . , f ' 1 1 1 fl 17'
N( rnfrr'l .V.. f f...-. rl .1 U., 11 Ufrftrtfurt nr-.irt i4cd. OI ISSUJ H
dollars. Each
urged for payment
ors, and thus the
nity will be brought down in one torrent tin- holder is directed to take a journey acros
e (and at some expence) funds in other on our heads at the same ti. Hut um iU tnte to another branch.orwce.tor pa v-