The Register of Pennsylvania : devoted to the preservation of facts and documents and every other kind of useful information respecting the state of Pennsylvania, Vol. IX, Part 102

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 440

USA > Pennsylvania > The Register of Pennsylvania : devoted to the preservation of facts and documents and every other kind of useful information respecting the state of Pennsylvania, Vol. IX > Part 102

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do; John Edwards, do 12 do; Thomas M'Leary, do 10 do; Daniel Zack do 10 do; John Eliis, do 10 do: James Folsom, do 10 do; Andrew Johnson, do 10 do; David Caldwell, do 10 do; Robert Louther, do 10 do.

FRENCH CREEK DIVISION.

NAMES, STATIONS, AND COMPENSATION.

John Anderson, superintendent, $3 per day; Alonzo Livermore, principal engineer, 2000 per annum; B. B. Vincent, assistant engineer, 3 per day; Michael Kenne- dy, sub-assistant, 2 do; William Moore target-man, 1 50 do; Kennard Hamilton, do 1 50 do; James M'Ewen, axe-man, I do.

BEAVER DIVISION.

NAMES, STATIONS, AND COMPENSATION.

John Dickey, superintendent $3 per day; C. T. Whippo, principal engineer, 2000 per annum; M. R. Stealy, principal assistant engineer, 3 per day; H. B. Iloyt, assistant engineer, 2 do; Joseph Hoopes, do 2 do; John Power, target-man, 1 50 do; Henry C. Moore, do 1 50 do.

SUSQUEIIANNA DIVISION. NAMES, STATIONS, AND COMPENSATION.

Lord Butler, superintendent, paid upon the North branch; James Ferguson, principal engineer, do do; Andrew M'Reynolds, supervisor from North'd to Mont- gomery's, $2 50 per day; George IIerold, Jacob Layr, John Brohel, foremen, each 1 50 per day; Joseph Mape's, Edward Dugan, William Montgomery, William Bergestresser, Jacob Ilamilton, John Lynch, Peter Leonhart, Charles L. M'Carty, William Kelly, David Collar, George Martin, Robert Dougal, John Baugh- man, lock-keepers, each $10 per month.

NORTH BRANCH DIVISION. NAMES, STATION, AND COMPENSATION.

Lord Butler, superintendent, $3 per day; James Fer- guson, principal engineer, 2000 per annum; John Ben- net, principal assistant engineer, 3 per day; Farmar C. Ingham, George W. Laying, target-men, each 1 50 per day; Oehmig Bird, Charles Saylor, Axe-men, each 1 per day; Ellis Ilughs, John Robison, supervisors, each 2 50 per day; William Owen, James Lemon, foremen, each 1 25 per day; Michael Raber, Jacob Cooper, Henry Hess, Casper Hoffman, Paul Hopper, William Snyder, Robert Leyon, Adam Lehman, Joseph R. John- son, lock-keepers, each $10 per month.

WEST BRANCH DIVISION. NAMES, STATION, AND COMPENSATION.

William B. Mitchell, superintendent, $3 per day; Jos. J. Wallis, clerk, 2 50 per day; Robert Faries, James D. Harris, principal engineers, each 1750 per an- num; Antes Snyder, Edward Watts, principal assistant engineers, each 3 per day; W. E. Morris, W. R. Shoe- maker, W. B. Foster, Jacob Antes, sub-assistants, each 2 per day; A. B. Stoughton, W. R. Wilson, John Pear- son, Charles Beard, target-men, each 1 50 per day: William M'Clintock, William Hamilton, chain-men, each 1 per day; Jacob 1logendobler, Moses Ilenry, axe-men, each 1 per day; Thomas Follmer, supervisor, 2 50 per day; Benjamin Reed, George Snyder, Jacob Kline, Jonathan Martz, Michael Seckler, lock-keepers, eachı 10 per month.

DELAWARE DIVISION. NAMES, STATION, AND COMPENSATION.

John Barber, superintendent, paid upon rail-road; Josiah White, engineer, $4 per day; John Carey, Simp- son Torber, supervisors, each 2 50 per day; Owen Sul- livan, Michael Burk, Michael Halpen, Farrell Galleg- han, foremen, each 1 per day; John J. Flibbs, Elias Gilkenson, lock-keepers, each 12 per month; Daniel Kirgan, William Brown, Dennis Nicholson, David | Kirgan, Samuel Daniels, each 10 per monthi.

357

UNITED STATES BANK.

1832.]

EXAMINATION OF THE PRESIDENT OF THE UNITED STATES BANK. (Continued from page 311.)

QUESTIONS ON THE SUBJECT OF BRANCH BANK NOTES AND DRAFTS.

1. Since you began to issue branch drafts, it appears that your circulation has increased many millions: do you think it would have increased so rapidly if you had continued to issue none but notes signed by the presi- dent of the bank?

If branch drafts had been issued, no notes at all could have been issued, from the mere physical impossibility of preparing them. But branch drafts do not increase the circulation more than branch notes would.

2. Does not issuing branch drafts and notes, redeem- able at your interior offices, enable you to sustain in circulation a larger amount than could be sustained if your notes were issued and redeemable principally at the offices on the Atlantic?

The circumstance that both are payable where they are issued, and not merely at the Atlantic branches, by giving them more value, increases the demand for them. They are now used both for local currency and for re- mittance. If they were stript of their character of cur- reney by not being redeemable where they were issued, they would lose part of their value; but then the west- ern and southern states would be deprived of the great advantage of having them for circulation.

3. What was the amount of notes issued from the of- fices at Baltimore, Philadelphia, New York, and Boston, which were in circulation on the 1st of January last, and what the amount for all the other offices?

For the offices mentioned, 4,600,559

The other offices,

16,647,931

Totals, S21,248,490

4. When over-trading occurs, from whatever cause, does it not draw into the large revenue ports on the At- lantic, a large amount of these interior bank notes and drafts, which press severely upon the offices at Balti- more, Philadelphia, New York, and Boston?

No: It may produce the directly contrary effect. If the over-trading consists in large purchases of western and southern produce, the Atlantic notes would be ear- ried to the south and west. I am not aware that any great inconvenience has been suffered from this cause.

5. You have stated to the committee, that the parent bank redeemed $5,398,800, and that the branch bank at New York, redeemed $13,218,635 of branch notes and drafts during the last year-is it your opinion that the branch at New York, would have been able to redeem thirteen millions of the notes of other branches, alarm?

in one year, if any circumstance had occurred to excite [ by selling its drafts on the branch at New Orleans; or

This is a question difficult to answer. The redemp- tion took place in the ordinary course without any in- convenienec, as it has taken place often before. But it is quite impossible to say what would have been the ef- feet of any "circumstance to excite alarm." If it be meant alarm on the part of the bank, all that can be said is, that that may be done safely if it be done cooly, which cannot be ilone at all if the agent is alarmed. If by alarm be meant the alarm of the community, alarm is often the best security against danger.

6. If the offices at Philadelphia, New York, and Bos- ton, found it difficult to pay their notes in specie, and receive these branch notes for revenue in 1819, when the whole circulation of the bank was about six mil- lions would it not have been under similar alarm, more difficult in January last, with a circulation amount- ting to near twenty-five millions'

proportion than the increase of the circulation. The circulation, moreover, was not twenty-five, but twenty- one millions.

7. When too large an amount of these branch notes press upon the offices here and in New York, is not the bank compelled to curtail its facilities to southern and western traders?

The question still remains what is "too large an amount." A large amount-a very large amount, does not compel eurtailments'to western and southern traders, for this obvious reason. These branch notes are brought or sent to these very western and southern traders cither to buy goods or to pay for goods previously bought, so that these branch notes themselves are better than dis- counts to western and southern traders, and supersede the necessity for them. The arrival of the branch notes is the signal of relief to the western and southern tra- ders.

8. So long as the bank continues to enlarge its cir- culation through its interior offices, and the branch at New York is bound to receive the whole of these branch notes if presented in payment of revenue bonds, must there not be periodically a pressure on that branch which must re-act on all the offices in towns or cities trading with New York?

Not necessarily nor naturally. Every- branch is bound to redeem its own paper, and the branches whose notes are received at New York, remit bills of exchange to cover them: For instance, the branch at New York, has received during the year 1831, $13,219,635 of branch notes and drafts, yet the branch of New York was at the close of the operation in debt S1,622,819 05 to those branches, because they had provided by remittances to meet their notes.

In point of fact, I do not think that there has existed any such periodical pressure.

9. Does not such a plan of general circulation inevit- ably tend to disturb the regular course of trade, by oc- casionally obliging the bank and its branches to curtail its discounts at some points, and enlarge them at others; and by transferring funds between branches, not ac- cording to the wants of trade, but the necessities of the bank and its branches?

On the contrary, this plan of circulation is governed entirely by the course of trade and regulates itself. A single example will make it intelligible. The crop of Tennessee is purchased by merchants who ship it to New Orleans, giving their bills founded on it to the branch at Nashville, which furnishes them with notes. These notes are in time brought to New York for pur- chasing supplies for Tennessee. They are paid in New York, and the Nashville bank becomes the debtor of the branch at New York. The Nashville branch re-pays them by drafts given to the branch at New York, on the branch at New Orleans, where its bills have been sent, and the branch at New York brings home the amount the New Orlean's branch remits. Such an operation so far from "disturbing the regular course of trade" is its best auxiliary.

This very plan of circulation, moreover, is the basis of the whole interior trade of the United States. I can refer the committee to no better authority than one of their number, who at the request of the bank, visited the interior of New York, in order to examine the rela- tive advantages of particular situations for a branch of this bank. His report is before the committee, and they will perceive that the comparison between these places, turns mainly on their respective facilities to is- suc notes which, when they reached the city of New York, could be provided for by bills of exchange, drawn on the transportation of produce from the interior of New York, that plan of circulation being universal in the western part of the state.

Thus of Utica, he says:

It would not have been more difficult but more casy, " The banks in the west, generally circulate more because the resources of the bank were much greater in 'than their capital. The bank of Utica and all the

358

UNITED STATES BANK.

[JUNE

banks in the west, do a large and profitable business by | Philadelphia, should the country banks issue an extra- discounting drafts on New York at sixty days, and long- ordinary amount of bank notes? er terms, at the rate of seven per cent. per annum, for The substantial difference is the same as there is be- tween a man's paying his own debts and paying the debts of every body else. The Philadelphia Bank would assume to redeem the issues of country banks over whose issues it has no control. The Bank of the United States redeems the issues of its own branches, which it regulates and constantly superintends. the use of those who purchase produce for the New York market, or wheat, and other materials for manu- facturing for the same market. The cashier of the bank of Utica, told me that he remitted from 100 to $150,000 of these drafts monthly to the Mechanic's Bank in New York, and that a balance was generally due them from that bank except in mid-winter. On the other hand, 12. Was not the branch bank at New York com- pelled to receive about seven millions of the notes of the other branches in the last five months of the last year; and was not its specie in the same months redu- ced from $2,226,429 81 to $664,686 64? the Bank of Utica supplies her merchants and others, with drafts on New York, at a premium varying from a half to one per cent. Their notes are also remitted to New York, where they are now at a dis- count of one per cent. (the present rate of the Roches- It did receive them. The principal reduction of its specie was not compulsory but voluntary, being by the sale of bullion. ter and all of the good banks in the west. ) They are oc- casionally returned to Utica, and are redeemed in, spe- cie, or by checks on New York."

Then of Rochester:

" The most profitable business of the Bank of Ro- chester is said to be discounting drafts on New York for millers and others, as mentioned in the case of the Bank of Utica, and drawing on New York for their dry good merchants at 2 to 1 per cent. premium, generally. the latter. Of these drafts of the millers, &c. they remit about $100,000 monthly to New York. Their own drafts on New York amount to about 600 to 700,000 dollars annually. The agent of the New York and Al- bany banks, presents the notes of the Rochester bank for redemption, about once a fortnight, and sometimes has a balance against the bank of 10, 20, or 30,000 dol- lars, which is occasionally paid in part with specie, but generally by drafts on New York or Albany."

And finally of Buffalo:

" But Utica and Rochester have been aided by other causes which must have given a powerful impulse to their industry and population. In addition to the usual discounts of a bank, and their influence upon trade, we have seen the banks of Utica and Rochester, each re- mitting $100,000 monthly, in drafts on New York, and supplying their millers, manufacturers, and traders, with a corresponding amount monthly for the purchase of produce and raw materials, the produce or manufac- turers being afterwards transmitted to reimburse the commission merchant in New York.

"Rochester has hitherto monopolized the flour trade; but if the bank were established at Buffalo, it would soon do a large and safe business with the millers of its neighborhood. As these drafts are generally drawn on the most substantial commission houses of New York, they form the best class of paper discounted by our western banks.

" Buffalo is certainly superior to Utica, for the pur- pose of circulation, Its merchants must become the purchasers of the produce of the west for the New York market,-it manufacturers must have the wheat, &c .- means for these purposes would be afforded by a bank, and its notes would be put in circulation through- out the whole of the western country and Canada. Be- sides, there are thousands of trayellers and emigrants an- nually at Buffalo who would circulate the notes of a bank very extensively, particularly if it was a national in- stitution. A bank at Buffalo would always receive much specie from Canada, and might dispose of a large amount annually, in drafts on New York at a premium, as remittances for supplies, tolls," &c.

It is difficult to describe more accurately the plan of circulation of the Bank of the United States, of which this branch at Buffalo was to form a part.

10. Will you explain what substantial difference there is between the present plan of circulation and redemption, of the branch bank notes, and an obligation on the part of a bank in Philadelphia, to redeem the notes of all the country banks in the state of Pennsyl- vania}

11. What would be the condition of such a bank in

13. What is your opinion of the expediency of making all the notes issued by the Bank of the United States payable at one place?

I should think it an injudicious measure.

14. Would it not tend to diminish the aggregate cir- culation of the bank and prevent any extraordinary or sudden increase of circulation, and would not the bank have greater power in regulating the amount of its general circulation?

In all places except the place of payment it would take from these notes a great part of their value. Now they possess the double character of local currency and of bills of exchange: the change would tend to make them mere bills of exchange. By reducing their value, their amount might be diminished, but the pro- posed alteration would give to the bank no control over them which it has not now.

QUESTIONS ON INVESTMENTS IN PUBLIC DEBT IN 1824 AND 1825, AND THE ABILITY OF THE BANK TO MAKE LOANS TO GOVERNMENT.

1. I perceive that between June 1824 and June 1825, the bank increased its investments in funded debt from about ten millions to twenty millions-do you think that the bank can aid government with long and large loans with safety?

With perfect safety.

2. If the bank had not employed its funds in govern- ment loans (without the power to sell the stocks) would it not have been better prepared to meet the crisis you have referred to, growing out of the speculations of 1825?

- The bank has never employed its funds in govern- ment loans which it had not the power to sell, and so far from being better prepared for the crisis without the loan, it was the loan which assisted the bank to over- come the crisis more readily.

3. Would the bank have been compelled to resort to the expedient as you have stated of procuring a tempo- rary loan from a private source in 1825?

I am not aware of having stated that the bank was- compelled to resort to a temporary loan in 1825. The circumstance mentioned is not I think of that description.

4. Had the same investments been made during the war, would not the bank have been compelled either to sell its stock, or suspend specie payments?

I cannot perceive why. A war would not have oc- casioned as much difficulty as the state of trade grow- ing out of peace-and if the alternative of selling stocks, or suspending specie payments, were presented, the stocks would of course be sold.

5. Is there not a material difference between originally investing the capital of a bank in funded debt, and sub- sequently attempting to make loans to government?

I am not struck by any material difference.

6. After a bank is in operation, its capital invested, and its notes in circulation, how can it make loans to government without curtailing its discounts, increasing its capital by new subscription, or by augmenting its paper money?

1832.]

UNITED STATES BANK.

359

Very readily-Though its capital may be invested. the investment can be changed from other stocks to government stocks. Though it may have notes in cir- culation, it may safely have more in circulation. The bank in 1824 took loans from the government to the amount of ten millions. Yet it did not therefore either curtail its discounts, or increase its capital, and the whole augmentation of its issues growing out of the loans was little more than three millions, thus-

June 3, 1821, $33,010,305 48

June 2, 1825, 32,729,834 09

Discounts. Circulation. $6,185,162 9,472,519

Funded Debt. $10,873,407 78 20,858,600 00

$290,471 39 $3,287,357 $9,985,192 22

7. How can a bank continue to hold such loans and make dividends, without increasing its paper, depre- ciating the currency, forcing specie abroad, and sus- pending its payments in gold and silver.

Easily. It may make dividends out of the interest on its loans as well as on its discounts, and as the bank did actually hold the loans-did make dividends, did not in- crease its paper more than three millions and neither depreciated the currency nor forced specic abroad, nor suspended payments in gold and silver, the existence of the fact itself is some evidence of its possibility.

8. When a bank takes a loan from government for the purpose of selling it to fund holders, is it any better than a mere speculator on government?

Names in such matters are of no consequence. If the government wants money, and the bank lends it at a rate mutually acceptable, the government may as pro- perly be called the speculator on the bank as the bank on the government.

9. So long as government holds an interest in the bank, does it not effectually secure a monopoly of every government loan which congress authorises it to con- tract for?

I do not perceive this. If the government can make more advantageous terms with the bank than with in- dividuals, why should it not?

10. Would not competition among banks and fund holders, secure loans to government at the lowest rate of interest?

Competition is doubtless useful, but I am not aware that there is any thing to exclude it in loans to the go- vernment. 1

11. In case of war, will you explain how the Bank of the United States can efficiently aid government with loans, without inevitably suspending specie payments, and substituting a paper for a metallic currency?

It can be explained easily and simply. When a war takes place, and money is wanted to prosccute it, bc- forc individual capital is disengaged from the pursuits of peace, and before the war system of taxation becomes productive, as the war itself diminishes the active dc- mand for discounts, the bank has dispusable means with which it at once supplies the government. This, when the war begins. As individual capital is withdrawn from peaceful occupations, it secks investment in the funds, and the bank then sells the government loan to the citizens, thus replacing its active capital, and prepa- ring for the next loan. Or, if the citizens themselves wish to take the next loan, the bank may make advan- ces to them on the several instalments of the loan, so as to enable them to take the whole loan, and thus in suc- cession during the war, or until the taxes defray its cx- penses. The benefit to the government then, is that the bank has an accumulated capital, which it places at the disposal of the government for its immediate wants, and is the channel by which the loans are diffused over the country. Now as almost all banks that ever existed, have made loans to government, the operation does not appear in itself a very difficult or ruinous onc. The whole matter is explained by Mr. Gallatin very clearly :

"We have not advertcd (says he) to the aid which may be expected from that institution in time of war, and which should, we think, be confined to two objects. |

First. The experience of the last war has sufficiently proved, that an efficient revenue must be provided, be- fore, or immediately after that event takes place. Re- sort must be had, for that purpose, to a system of inter- nal taxation, not engrafted on taxes previously existing, but which must be at once created. The utmost dili- gence and skill cannot render such new taxes produc- tive before twelve or eighteen months. The estimated amount must be anticipated; and advances to that ex- tent, including at least the estimated proceeds of one year of all the additional taxes laid during the war, may justly be expected from the Bank of the United States.

Secondly. It will also be expected, that it will pow- erfully assist in raising the necessary loans, not by taking up, on its own account, any sum beyond what may be entirely convenient and consistent with the safety and primary object of the institution, but by affording facili- ties to the moncy lenders. Those, who, in the first in- stance, subscribe to a public loan, do not intend to keep the wbole, but expect to distribute it gradually with a reasonable profit. The greatest inducement, in order to obtain loans on moderate terms, consists in the proba- bility that, if that distribution proceeds slower than had been anticipated, the subscribers will not be compelled, in order to pay their instalments, to sell the stock, and, by glutting the market to sell it at a loss: and the assist- ance expected from the bank is to advance, on a dc- posit of the scrip, after the two first instalments have been paid, such portions of each succeeding payment, as may enable the subscribers to hold the stock a rca- sonable length of time. As this operation may be re- newed annually, on each successive loan, whilst the war continues, the aid afforded in that manner is far more useful than large direct advances to government, which always cripple the resources and may endanger the safety of a bank."

PENNSYLVANIA HOSPITAL.

Statement of the accounts of the Pennsylvania Hospital, being a summary of the receipts and payments for the year ending 4th mo. 28th, 1832, as adjusted by the managers, and laid before the contributors at their an- nual meeting, 5th mo. 7th, 1832.

PAID THIS YEAR.

Medical department, $1681 84

Ilouschold expenses, 29,099 38

Live stock, 1,199 18

Repairs and improvements,

4,823 18

Salaries and wages, 6,623 94

Medical books and binding, $417 37-sta- tionary and printing, $211 76-books

for the insane patients, $14 11-pay- ment to the city library, $2 67, 645 91

For a lot on Eight street, purchased of . Joseph Strathan and others,

10,000 00

Incidentals, 660 39

S44,743 82

To sundry sums placed at interest,

2,350 00

To balance in the hands of the treasurer, 4th mo. 28th, 1832, $1,448 87

To balance in the hands of the steward, 1,302 55

2,751 42

$49,845 24

By balance in the hands of the treasurer, 4th mo. 23d, 1831, $860 29

By balance in the hands of the steward, 4-47 93

1,908 22

RECEIVED THIS YEAR.

For board of patients, 25,573 49

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The Register of Pennsylvania : devoted to the preservation of facts and documents and every other kind of useful information respecting the state of Pennsylvania, Vol. IX, Part 102

Author: Hazard, Samuel, 1784-1870 Publication date: 1828 Publisher: Philadelphia : Printed by W.F. Geddes ; Number of Pages: 440

Author: Hazard, Samuel, 1784-1870
Publication date: 1828
Publisher: Philadelphia : Printed by W.F. Geddes ;
Number of Pages: 440