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 90
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The majority of the committee have selected for com- mentary, a particular branch of the foreign exchange business of the bank-that which is connected with the trade of India and South America. This subject has been already explained in another form, and it will be sufficient to remark here, that it has almost entirely ar- rested the direct exportation of specie from this country to China, and that it saves to this branch of our trade the whole of the interest upon the entire amount of every commercial adventure, for at least six months out of twelve. On the subject of the general facilities which the hank has afforded to the country, in the operations of foreign commerce, the minority of the committee will refer the House to the perspicuous exposition fur- nished by the president, of the general operations of the institution, which is herewith submitted and mark- ed A.
It will be seen from this document, that during the re- cent pressure upon the commercial community, pro- duced by the excessive importations of the last two years, the bank furnished, since September last, " from its own accumulations and credits in Europe, the means of remittances in its own bills, to the amount of $5,295,- 746, and parted with its surplus specie to the amount of five millions, making an aggregate contribution to our commerce of $10,295,746."
The extent to which these operations of the bank must have relieved the country, are too obvious to re- quire comment. Without this temporary relief-and it was only temporary relief the community required-the greatest commercial distress would have probably en- sued. The crisis is now nearly passed. The pressure on the money market bas, in a great measure, ceased; commerce has had time to correct its own excesses; im- portations have been diminished; the unfavorable state of the foreign exchanges no longer exist; specie has ceased to flow from the country, and has begun to flow into it. Since March last, the specie in the bank has increased more than a million of dollars, and every thing is rapidly assuming a sound and healthy condition.
The majority, in the concluding part of their report, intimate the opinion that the bank, by itsimprudent and excessive issues, has had a considerable agency in pro- ducing the over-trading and excessive importations of the last year.
Whatever show of plausibility there may be in this opinion, facts demonstrate that it is entirely erroneous. It will be seen from the statements herewith exhibited, that the domestic discounts of the bank had not increas- ed perceptibly from March, 1829, to March, 1832; but that they maintained an almost uniform level during the whole of the intervening period. The excessive impor- tations, however, commenced in March and April, 1831, and must have had their origin in causes some months anterior. It is apparent, therefore, that these excessive importations were not produced by the excessive issues
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1832.]
UNITED STATES BANK.
317
of the bank, and must have originated in other causes connected with the state of Europe. The more correct view of the subject, is to consider the excessive impor- tations as producing a state of things which rendered it necessary for the bank to extend its discounts, with a view to relieve the community from the temporary pres- sure to which it was thus exposed.
It so happened, that at the very time the country stood most in need of bank accommodations, the bank had increased means and inducements to extend those accommodations. The government having paid off, within the last eighteen months, ten millions of its stock, which was held by the bank, the directors found that if they did not increase their discounts considerably, some millions of their capital must be idle and unproductive. It thus happened that the wants of the community, the means of the bank, and, it may be added, the obligation of the directors to the stockholders and to the commu- nity, all co-operated to call for that extension of bank accommodations, which, so far from having produced overtrading and excessive importations, has been the means of correcting and mitigating the temporary evils and embarrassments which these irregularities of trade would otherwise have unavoidably produced.
The minority of the committee deem it to be their in- dispensable duty to notice that part of the report of the majority, which institutes a comparison between the re- sources of the bank and the condition of the country in 1819 and at the present time. They cannot but regard the comparison thus presented by the report, as unfair and partial, and calculated to produce impressions on the public mind as absolutely erroneous as they would be positively pernicious.
If it had been the design of the majority to produce a scene of general embarrassment and distress in the commercial community, in the absence of any natural causes for such a state of things, they could not have adopted a more effectual means of accomplishing such an object than they have done in this part of their re- port.
Fortunately, however, for the country, the commer- cial community of the United States have too much in- telligence to be thrown into a panic by the loose, dis- jointed, and garbled statements, the crude speculations, and the random conjectures, in which a part of the committee have thought it expedient to indulge. If a general alarm has not ensued, producing a run upon the banks, or curtailment of discounts, and a general scene of failure and distress, particularly among the govern- ment debtors in our principal importing cities, it is be- cause the community understand the subject better than a portion of the committee, and have placed a proper estimate on their statements and speculations.
There are no two periods of our commercial history so utterly dissimilar as those which have been selected for the comparison instituted by a part of the commit- tec. In 1819, the bank was engaged in the painful but necessary office of correcting a redundant and depre- ciated currency, produced by political causes, and having scarcely any connection with the state of trade.
At this moment, whatever may be said to the contra- ry, our currency is in as sound a state as that of any country in the world; and this is conclusively proved by the state of our foreign exchanges, and the relative va- luc of bank paper and coin in our own markets. The foreign exchange is an infallible barometer to indicate the soundness or unsoundness of our currency. A re- ference to the state of the exchange between this coun- try and Great Britain, at this time, will furnish a conclui- sive reply to the charge brought against the bank, of having encouraged over-trading by excessive issues, and a depreciated currency. In fact, specie is now flowing into the country, by the natural course of trade, a phe- nomenon which is utterly inconsistent with the alleged depreciation of our currency.
After making a partial and imperfect statement of the relative resources and responsibility of the bank in
1819, and at the present time, the report expresses the opinion that "at no period in 1819, when the bank was very near suspending payment, was it less able to ex- tend relief to a suffering community, as [then?] at the present moment."
Now, the very complaint urged by a part of the com- mittee against the bank is, that it has been too liberal in its discounts, or in other words, that it has granted too much relief to a suffering community already; and yet it is here set down, as a subject of lamentation, that the bank is not able to extend this relief still further! The country has just been laboring under a considerable, but temporary pressure upon the money market, during which the bank, with as much liberality as judgment, has put forth all its resources to sustain and relieve the commercial community.
The crisis of this pressure has already passed by, and the necessities of the merchant for bank accommoda- tions are gradually diminishing; and it is precisely at this point that a part of the committee, having complain- ed that the bank went too far in its accommodations when they were necessary, complain also, that it cannot go still further, now, that the emergency is passing away.
The actual resources of the bank will now be stated, with a view to show its perfect ability to meet all its en- gagements. The specie in its vaults on the first of the present month, was $7,890,347, heing upwards of a million more than it was in March last.
There was due, then, from the State banks, $726, 196. The domestic bills of exchange held by the bank on the 1st of May, amounted to $23,052,972, ten millions of which will be paid in the course of a month, and none of which have a longer period to run than ninety days. These sums united, make $31,669,515, a fund, the greater part of which may be considered as availa- ble for any probable emergency of the bank, as so much specie in its vaults. These domestic bills of exchange are founded upon the actual operations of our internal trade, and are in fact, drawn in anticipation of the southern and south-western crops, which regularly ar- rive in the northern and eastern cities in time to pay them. They are uniformly and promptly paid at their maturity, without any expectation of a renewed accom- modation from the bank, as in the case of discounted notes. In addition to the sum already stated, the bank has good notes discounted on payment, and other secu- rity, amounting to $47,375,078, and real estate and fo- reign bills, amounting to $3,012,825.
The whole of the available resources of the bank will be thus scen to amount to $82,057,438, at least one half of which could, on any emergency, be converted into cash in the course of a few months. . On the other hand, the whole amount of the responsibilities of the bank, including the circulation, foreign debt, and public and private deposites, amount to only $43,685,603.
So that, instead of being reduced to the frightful pre- dicament of having only "an aggregate of $9,640,000 to meet an aggregate responsibility of $42,643,000," which the author of the report might well set down with two notes of admiration, the bank has undoubted re- sources amounting to $82,057,438, to meet a responsi- bility of $43,685,603.
In the actual state of the country it is visionary in the extreme to imagine the bank is in the slightest danger of being reduced to the necessity of "suspending pay- ment." The whole amount of its circulation is now only $22,000,000, and this is the only portion of its re- sponsibility which can be properly taken into the esti- mate, in the view now under consideration. The depo- sites, except in periods when all commercial confidence is lost, so far from being properly regarded as a debt for which the bank should make provision as for its cir- culation, are universally considered by all banks as a fund upon the faith of which they may safely issue their paper to an equal amount. Whatever may be the amount of the deposits, at any given time, it is a fair
318
UNITED STATES BANK.
[MAY
calculation, founded on actual experience, that it will be equally as great at any future time.
If this were not the case, the government deposits, about which so much has been said, would be of no va- lue to the bank; but, on the contrary, a very great in- cumbrance.
Upon the whole, then, the bank is not only fully able to meet all its engagements, but is in a state of the high- est prosperity. And it is but bare justice here to re- mark, thas its general operations have been conducted with singular judgment and ability, in these very par- ficulars which a part of the committee have selected as topics of disapprobation and censure.
The minority of the committee will barely advert to some of the other topics introduced into the report.
It is alleged that the bank has given an undue exten- sion to its branches, and by some process of reasoning difficult to comprehend, it seems to be informed, that the alleged excess of the circulating medium, is owing in part, to that cause. It is sufficient to remark, on this point, that the greatest improvement which has been made in the administration of the bank, and that which gives it its trae federal character, has been ef- fected by the establishment of branches wherever the commerce of the country required them: and by the system of exchange operations, which these branches have enabled the bank to carry into effect.
The whole business of dealing in domestic bills of ex- change, so essential to the internal commerce of coun- try, has been almost entirely brought about within the last eight years. In June, 1819, the hank did not own a single dollar of domestic bills; and in December, 1824, it owned only to the amount of $2,378,980; whereas it now owns to the amount of $23,052,972.
The opinion of Mr. Cheves, in 1819, is adverted to in the report, to prove the impolicy of increasing the num- ber of branches; and the fact is stated, that a large pro- portion of the losses sustained by the bank have been owing to the mismanagement of the branches.
The opinion of Mr. Cheves was founded on the pecu- liar state of things which existed at the time. He felt the difficulty of controlling these branches, of which, as he stated, the "directors were frequently governed by individual and local interests and feelings;" and he came into the administration at a time when immense losses had heen suffered by their mal-administration. But it is very important to remark-what the report does not bring to view-that almost all the dispropor- tionate losses incurred by the branches were previous to 1819; and that, since the extension of the branches, of which the report complains, they have not sustained greater losses, in proportion, than the mother bank; while -nine-tenths of the commercial facilities afforded to the country, and nine-tenths of the profits secured for the stockholders, have resulted from the operations of these branches.
The report makes reference to the obligation of the Bank to transfer the funds of the Government, to any point where they may be wanted for disbursement, and seems to have made.the extraordinary discovery, that this operation is no burthen at all, but an actual benefit to the bank! For the satisfaction of those who might bbe sceptical, the words of the report will be given:
" The largest portion of the revenue, particularly from imports, as is universally known, is collected in the Atlantic cities, north of the Potomac. These cities being the great marts of supply to nearly the whole of the United States, and places to which remittances cen- tre from almost every part of the country, creates a de- mand for funds upon them from nearly every quarter, constantly, and generally at a premium. Therefore, so far as the bank is called upon to transfer funds from those cities to other places, it becomes a matter of profit and not of expense to it: and the greater the distance, the greater the premium; and the larger the amount they require to be transferred by the government, and the greater the distance, the greater the profit and advantage to the bank."
If these views of the report be correct, the bank is certainly an invaluable institution. It has not only anni- hilated time and space, but it has done something more. It has produced such a state of the exchanges, that it is much easier for a man in New York to pay a thousand dollars in St. Louis, than to pay it in Wall street; and in which, consequently, the New York debtor actually makes a profitby being required to pay his debt a thou- sand miles off, instead of paying it at his own door! If this be a correct view of the subject, it is undoubtedly one of the greatest of the modern discoveries in finance and commerce.
But the minority are still incredulous. They cannot understand how it is possible for the bank to make a profit by transferring funds, when it is expressly stipn- lated that they shall transfer them for nothing. Nor can they still conceive how the loss which the bank sus- tains by the operation of transferring funds for the go- vernment, can be more than the difference between the " nothing" which it receives from the government, and the profit which it would derive from the same opera- tion, if performed for individuals.
If the government collected its revenue in specie at New York, and had occasion to spend it at St. Louis, it would certainly cost it some thing to transport the specie from one place to the other. If, in the absence of the federal bank, it collected its revenues in bills of the State banks, as it would be obliged to do, the ope- ration of transferring these funds to distant places would involve a still greater expense. But under the existing system, the bank is responsible for the safe custody of the government funds, and for placing them wherever they may be required, without any expense whatever to the government.
If, then, the bank has not " aided the fiscal operations of the government," as the report seems to intimate, a uniform currency and a revenue safely kept, and univer- sally transferred at the risk of the hank, and without ex- pense to the government, affords no aid to its financial operations.
The report, adverting to a letter from the president of the bank, of the 26th of March last, in which he in- forms the Secretary of the Treasury, that the collector of New York had requested the "bank to authorize an extension of loans in that city, in order to assist the debtors of the government," and that this had been promptly done, gives a view of the discounts of the office at that place, calculated to make the impression that no extension of loans had taken place. This is an error. It proceeds from confounding notes discounted with bills of exchange purchased by the bank. It will be seen by the weekly statement of the New York board, that the amount of notes discounted on the first of Sep- tember, 1831, was $4,103,134, and that on the 21st March, 1832, a few days before the date of the presi- dent's letter, the amount was $4,834,917, exhibiting an increase of $731,782, in a little more than six months.
If the amount of domestic bills falling due at a dis- tance, during the same period, were larger than the amount purchased by the bank-this fact has nothing tu do with the extent of the accommodation afforded by the bank to the merchants of New York. The true measure of that accommodation is the amount of domes- tic notes discounted, and not the amount of these notes united to that of the domestic bills purchased.
If the bank has relieved the commercial community of New York, during the recent pressure, it is a fact well understood, and practically felt by merchants there; and it will be difficult to reason them out of the convictions of their own experience, by artificial state- ments and conjectural inferences. Upon a review of the whole ground occupied in the examination they have made, the minority are of the opinion, that the affairs of the bank have been administered by the president and directors, with very great ability, and with perfect fi- delity to all their obligations to the stockholders, to the Government, and to the country. They regard the
1
1831.]
MISCELLANEOUS.
319
bank as an institution indispensable to the preservation of a sound currency, and to the financial operations of the government, and should consider the refusal of congress to renew the charter as a great national calamity.
They will add, in conclusion, that they are equally decided in the opinion that Congress is called upon by the most weighty and urgent considerations, to decide this important question during the present session. The uncertainty which prevails on this subject, is calculated to exert a very pernicious influence over the industry, enterprize, and trade of the country. If the charter of the bank is not to be renewed; if the tremendous ope- - ration of withdrawing from the community, fifty mil- lions of bank accommodations, and twenty-two millions of circulating medium, must take place, it is full time that it should be distinctly known, that the shock of this operation may be mitigated, by timely arrangements on the part of the bank; and that the community may have time to provide the necessary substitutes. Considering the immense extent of the operations of this institution, the time which its charter has yet to run, will be scarce- ly sufficient for winding up its affairs.
To the report of the majority is appended a great number of questions, proposed to the president of the bank, by a member of the committee, on the general subjects of banking and currency. As the questions alone, throw very little light on these matters, the an- swers are herewith submitted for the information of the house.
GEORGE MCDUFFIE,
J. Q. ADAMS, JOIIN G. WATMOUGHI.
METEOROLOGICAL REGISTER. Extract from the Meteorological Register, taken at the State Capitol-Harrisburg, Pennsylvania, BY JAMES WRIGHT, Librarian. APRIL, 1832.
Days of Week.
Days of the Month.
Morning temperat.
Noon temperature.
Even. temperaturel
Mean temp, of day
Highest in Morn.
Highest at Noon,
Highest in Even.
Mean height of Ba-
rometer each day
WINDS.
Thermometer.
Barometer.
Sunday
1|48 58 59|55||29.70175|75||29.73||\V
Monday
2 42 51 58 50
70 75 76
74 S
Tuesday
3 46 52 54 51
72 73 75
73 NW
Wednesd
4 37 50 60 49
68 70 76
71 W
Thursd'y
5 36 41
48 42
70 70 70
70 N
Friday
6133145
51143
70 7575
73 NE
Saturday
7 37 49 58 48
70 75 78
74 NE
Sunday,
8,40 45 45)43
74 72 74
73 N
Monday
9 29 40.50 40
70 73 77
73 N
Tuesday
10 39 52 60 50
73 77 81
74 NE
Wednesd
11 45 60 73 59
75 81 84
80 E
Thursd'y Friday
13
51 70 73
65
76 82 86
81 SW
Saturday
14 54 75 79 69
76 85 86
82 W
Sunday
15 56 65 58 60
80 80 80
80 SE
Tuesday
17 43 56 51
50
73 75 75
73 N
Wednesd
18 44 52 51
49
73 73,73
7311N
Thursd'y
19 45 50 49 48
73 72 72
72 N
Friday
20 46 52 49 49
70 70 70
70 N
Saturday
21 35
47
60 47
68 70 75
71
[W
Sunday
73 74 74
74 |N
Monday
23 43 55 59 52
71|75 751
74 SE
Tuesday
24 45 70 65 66
73 76 80
76 SE
Wednesdl
25 53 73 68 65
76 78 80
78 SE
Thursd'y
26 58 76 73
.69
76 78 80
78 SW
Friday
27163 79 74 72
78 78 78
78 SW
Saturday
28 52 57.52154
73 73 73
73 E
Sunday
29 46 53 50 501
70 71 70
70 E
Monday
30:45 50 52 19
68 70 72
70 E
1
Barometer.
Maximum on the 27th
72°|Max. on the 14th 29.82 in.
Minimum on the 9th Difference
32º Difference . . 10 in.
Mcan
53° Mean
29.74 in.
Days of the month.
1
Il'inds.
5 8 9 17 18 19 20 22,
8 days North
6 7 10 16
4 " North-East
11 28 29 30
4 " East
15 23 24 25
4 " South-East
2
1 day South
12 13 26 27
4 days S. West
1 4 14 21
4 West *
3
1 day North West
Days of the month
Atmospherical Variation.
14
2 days
Clr blust'ring CI'r blustering
2 5 6 7 9 12 13 24 8
Fair
Fair
10 11
2
Smoky
Smoky
3 15 17 20 30
5
Cloudy
Cloudy
16 18 19
3
Light rain
Light rain
27 28 29
3
=
Cloudy
Rain
14
1 day
Fair
Cloudy
8 25
2 days Cloudy
Fair
21
1 day |White fr'st, clr,Cloudy
23
1
White fr'st,clr Clear
22
1
Cloudy
Clear
26
11
Clear
Cloudy
On the 14th in the evening, Thermometer at 79º, the highest.
On the 9th, in the morning, do. at 29º, the lowest.
Range in the month, 50º.
On the 14th, in the evening, Barometer at 29.86, the highest .
On the 4th, in the morning, at 29.68, the lowest. Range in the month, . 18 inches.
The wind has been 12 days East of the meridian, 9
days West of it, 8 days North, and 1 South.
This month was 43º warmer than last April.
DOMESTIC COAL TRADE.
We are indebted to a private communication receiv- ed from a highly respectable official source, that a re- port has been made to the United States Senate by Mr. Dickerson, on the recommendation of the Secretary of the Treasury, in favor of depriving us of nearly all Je- gislative protection by a wholesale reduction from $2 16 to 46 cents! per chaldron. The intelligence of the threat- ened calamity has spread deep consternation wherever it has been told. The reviving hopes of the industrious miner whose career has been marked by a steady perse- verance during a long period of ruinous depression in the coal business, are about relapsing into feelings of renewed disappointment and despair. As many of our friends are probably unacquainted with the real extent of property jeopardized hy the measure proposed, and the individual ruin attendant upon its success, not to mention the injury which the national prosperity must sustain, we have thought proper to offer the following statements, founded on the best information we have been able to obtain.
Statistics of the Schuylkill County C'oal Region.
The number of inhabitants whose means of subsistance are dependent on the coal region in Schuylkill county, may be estimated at 8,000
There are ahout 900 persons employed on ca- nal boats, who, together with their families, will amount to 4,000
Making twelve thousand persons who derive their support from the coal business.
Monday
16 4.0 43 44 42
71 70 70
ONE
12 49 69.69
62
76 82 76
78 SW
48
53 60
54
Thermometer.
40° Min. on the 5th 29.72 in.
3.
A.
320
MISCELLANEOUS.
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