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monty the basis of trade Many of the banks
themselves, not content with largely stimulating
this system among others, have usurpPd the busi-i
ness, while they impair the stability ofthe mer-
camille community: they have become borrowers
instead Of lenders; they establish their agencies
abroad; they deal largely in stocks and merch-
andlSe; they encourage the issue of State securl-
ties until the foreign market is glutted with them;
and unsatis6ed with the Legitimate use Of their
own capital and the exercise of their lawful pri-
viIeges, they raise, by large loans additional
means for every variety of speculation. The dis
asters attendant on this deviation from the former
course of business in this country, are now
shared alike by banks and individuals, to an ex-
tent of which there is perhaps no previous ex-
ample In the annals of our country. So long as
willingness of the foreign lender and sufti-
cient export of our productions to meet Ruy ne
cessary partial payments. leave the flow OF credit
undisturbed, all appears TO be prosperous; but as
soon as it is checked by any hesitation abroad,
or by an inability to make payment there in our
productions, the evils of the system are disclosed
The paper currency which might serve for DOM
estic purposes, is useless to pay the debt due in
Europe Gold and silver are therefore drawn,
in exchange for their notes, from the banks
To keep vi their supply of coin. these institu-
tions are obliged to call upon their own debtors,
who pay them principally In their own notes,
which are as unavailable to them as they are to
the merchants to meet the foreign demand. The
calls of the banks, therefore, in such emergen-
cies of necessity, exceed that demand, and pro-
duce corresponding curtailment of their ac-
commodations and of the currency. at the very
moment when the state of trade renders it most
inconvenient to be borne, The intensity of this
pressure on the community is in proportion to
the previous lberality of credit and consequent
expansion Of the currency: forced sales of pro-
perty are made at the time when the means OF
purchasing are most reduced, and the worst ca
lamities to individuals only at last arrested,
by an open violation Of their obligations by the
banks, refusal to pay specie for their notes, and
an i'm position uponthe community OF fuctuat-
ing and deprecated currency.


These consequences are inherent in the pres
ent system. They are not Influenced by the
banks being large or small, created by National
or State Governments. They are the results ot
the irresistible laws of trade and credit. In the
recent events which have so strikingly illustrated
the certain effects of these laws. we have seen
the bank of the largest capital in the Union, es-
tablished under a National charter, and lately
strengthened as we were authoritatively inform
ed by exchanging that State for charter, with
new and unusual priviIeges-in a condition too,
as it was said, of entire soundness and great
prosperity-not merely unable to resist these
effect, but the first to yield to them.


| Nor is it to be overlooked that there exists a
chain of necessary dependence among these in
stitutIons which obliges them, to great extent,
to follow the course of others, Notwithstanding
its injustice to their own immediate creditors, or
injury to the particular community in which
they are placed. This dependence of bank,
which is in proportion to the extent of its debts
for circulation and deposites, is not merely on
others in its vicinity. but on all those which
connect it with the centre of trade Distant





in our principal commercial cities; but the failure
of the latter is felt at the extremites ofthe Union
The suspension at New York, in 1887, was
every where, with very few exceptions followed
as soon as it was known; that recently at Phil
adelphia Immediately affected the banks of the
South and West in a similar manner. This
dependence Of our whole banking system on the
institutions in few large cities, is not found in
the laws Of their organization but in those OF
trade and exchange. The banks at that centre
to which currency flows and where it is required
in payments for mercantile, hold the power of
controlling those in regions whence it comes,
while the latter possess no means of restraining
them so that the value of individual property,
and the prosperity Of trade, thro' the whole in
terror of the country. are made to depend on the
good or bad management of the banking institu-
tions in the great seats of trade on the seaboard


But this chain of dependence does not stop





New York. 1t reaches across the ocean, and ends
in London, the centre of the credit system-
The same laws oftrade, which give to the banks
in our principal cities power over the whole
banking system of the United States, subject
the former in their turn, to the money power in
Great Britain. 1t is not denied that the suspen-
sion of the New York banks in 1887, which was
followed in quick succession throughout the
Union, was produced by an application of that
power and it is now alleged, in extenuation ofthe
present condition of so large a portion of our
banks, that their embarrassment have arisen from
the same cause.


From this influence they cannot now entirely
escape, for it has its origin in the credit curren-
cies of the two countries; it is strengthened by
the current of trade and exchange which cen
tres in London, and is rendered almost Irresisti-
Bile by the large debts contracted there by our
merchants, our banks and our States 1t is thus
that an introduction of a new bank into the most
distant of our villages. places the business ofhat
village within the influence of the money power
in England. 1t is thus that every new debt
which We contract in that country. seriously af-
fects our own currency, and extends over the
pursuits of our citizens its powerful influence