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THE REFLECTOR.
M1LLEDGEVILLE, G. TUESDAY, JULY 7, 1818.
BANKING.
M NILES WEEKLY RI'.dlSTEH.
PAPER SYSTEM—NO. VI.
OF BANKS IN TUE U. STATES.
enter un this part of my subject
ned reluctance, because it involves
duty of exposing scenes of man-
intrigue, and imbecility, disgrace-
haracter of those entrusted with the
wer, exercised by human beings
cr of legislating for the happiness
9 of freemen. But I hold it trea-
f How-citizens to be. now silent ;
pprehension of the consequences
longer prevent my pointing nut to
ily and distinctly the source of the
the means of preventing its fur-
~*9s. In so doing I shall be care-
implicate the dupe with the teinp-
simplc and unwary, with the
igning and unprincipled. Above
studiously abstain from unwar-
•reonalitics—and while I tell the
e severe language of honest sim-
guising nothing that 1 know—and
othing but what is well known, or
ved to the conviction of all—1
o perform the task that the most
advocate of a corrupt system,
dare to accuse me of any oilier but
t motive, or of using any language
ing my own character, and the sub-
hicli I treat.
liking system, in its origin among
the legitimate offspring of the fund-
in, a measure of parly policy, deem-
ny of the best men of that day dan-
n its principle, and in its consequcn-
ious to the welfare of this nation.—
erally understood, to have been a-
rincipnlly through the influence of
general Hamilton, a man whose re-
has suflered more from the injiuli-
iscB of his admirers, than the de-
of his enemies. Both his friends,
ncmies, will probably long contrive
as to the tendency of bis political
and the decision of the question re-
the wisdom or folly of bis measures,
left to time, which will finally de-
heir consrquences.
rst banks were also the children of
... system. Tliey were granted to th"
of certain wealthy and influential
of the party, and spcrulation conti-
(1 ually to extend itsejf, by slow dc-
d \Vith consequences comparatively
tant, to the general welfare, until
d when the banks took advantage ol
otism of the people, to stop payment
of great public danger—Since then,
as grown with a most alarming cx
and from causes which I shall pre>-
xplain.
uspension of specie payments, open
neyless spec ul;«.ors a prospect ofes-
g bartks without the very disagrcca
sity of having a real capital—It ar-
the people to put confidence in
at would not or could not pay their
d consequently it gave an opportu-
ankrupts to become bankers. There
tic, except, the necessity of render-
witli specie, of sufficient force anil
to secure the people against the a-
the banking system, nor can tin 1
y legislator devise any expedient
that to prevent the multiplication
money without bounds. The loo
ks can do business without specie—
ent they get rid of the necessity of
real capital—since they can pay
with mere rags of their own,
asily exchange them for the rags of
ks, and thus relieve one rag will
ment therefore the system was re-
this inrmYivenient stumbling bloc k
payments, it spread like, wildfire,
w up like inushroons, some with
ome without, & all destitute of that
pf specie which alone can and
rnish the foundation of institutions
to afford its equivalent in paper,
a more convenient and portable
is the only proper and legitimate
ks, which were never intended as
ncreasing the quantity of acircu-
"ium, although they have been
indulged by the munificent legis-
s, in the privilege of issuing notes
e amount of their nominal capi-
these institutions have multiplied
hat motives, and by what means,
ill multiplied, I will now proceed
of the precious blessings of this
at those who are not accomplices
‘CBSity become victims, as I have
in the preceding letters. It was
refore that every person of the
sions, should wish rather to share
s, of the privileged order, than
its vassals, and pay tribute,—
different legislative bodies were
besieged at every sitting, by hungry expec
tants, and clamorous petitioners to extend
the benefits of this monied monopoly ; ami as
it was obviously and on the face of it unjnst to
confine the immense gains and advantages
of this monopoly to a few, they perhaps,
from the best motives, extended the privi
lege of banking from time to time. For this
[ do not sit in judgment on them. They did
not at that moment see. the dangerous conse
quences of this extension, and in all proba
bility wore influenced by the motives 1 have
ascribed to them. It perhaps did not occur
to them that they were multiplying the evils
of this monopoly by extending it, and thus
increasing its pressure upon all those'who
were excluded from a participation in its ad
vantages.
But it is sometime since this excuse has
ceased to be availing—and the effects of the
paper system have become too glaring to es
cape the notice or elude the investigation of
the most superficial observer. For more
than four or five years past, a great portion
of the bank charters have been obtained by
means and combinations, of which the peo
ple, who suffer by their consequences, ought
no longer to remain ignorant- It is high,
time they should know to what idols they have
been sacrificed. The first process to which
I shall carll their attention, is that of a com
bination of persons in a particular town, pos
sessing political influence, or the means of ex
citing this influence to aid their purposes.—
These petition the. legislature of the state for
a charter, and make this politic al influence
the means of obtaining it. Persons appoint
ed for directors in the original charter art
frequently as cats paws, because they are in
fluential with the people, who believe and
hope that through their means, they will hi
admitted to a share in the. favors of this now
Plutus. These friends of the poor however,
having answered the end they were intended
for, are generally voted out of the directory
the next term of election, to make way for
others, belonging to a more dignified order
too elevated to think any thing of the labor
ing classes, except just about the time of a
contested election—and too eager to appro
priate discounts to themselves and their de
pendants, to pay any regard to the general
wants of society. The bank which was thus
sanctioned by the legislature in compliance
with the wishes of the people who expected
to derive benefit from it, by these means fail
to answer the desired object, and the next
s ssion the same people are again gulled into
the support of another application, because
tliey cannot see, that a inonied institution
must and will inevitably be converted into a
tool for monied men—instead of an instru
ment. for lending to the poor. From my
soul I am glad it it is so—I rejoice that this
tremendous influence of two hundred millions
of paper money, is employed for the purpose
of individual gain, rather than in bringing
the wholesome population of our country into
an abject subjection to a privileged order by
means of largesses, in the shape of discounts.
[ rejoice that it is employed in picking their
pockets rather than in bribing their suffrag
es. When the period shall arrive in wliii h
this great ppper capital becomes an instru
ment of ambition rather than of avarice,
woe to our country—for its freedom will b
annihilated. All distinctions of party will
then be merged in one common interest, and
the members of the paper aristocracy, will
forget their federal and republican antipa
thies, in a combined effort to render tlieii
<l!.*".ities and immunities perpetual, by en
slaving the people. All experience sanctions
this conclusion, nor is there any principle in
human nature more invariable, than that
which combines a privileged order, in one
common effort, to one common end.
Another mode of forming bank charters
succeeded. This was by connecting a bank
bill with some popular object with which it
had naturally no connexion whatever. A
bridge or turnpike, for instance, was petiti
oned for by the people of a particular dis
trict, and a bargain made by certain mem
bers to support the application, provided the
banks were includedeintlie sameact: Thus
in effect, the members of a legislative body
barter their votes with each othor, & a species
of bribery is introduced of the most petni-
cious character.
A third mode is that of getting up a litter
of banks so distributed in every portion of the
states as to act as a sweeping bribe to a majo
rity of the members and their most influen
tial constituents, who expect to become pre
sidents, cashiers and directors, or to receive
a direct, or collateral advantage, understood
or specified. Such was tho example set not
long ago by the state ofPennsylvania,resisted
by tho virtuous and respectable Snyder, and
persisted in by its legislative guardians, to
its great consummation. Such lias lately
been the conduct of Kentucky and Ilho**,e
Island, and every friend of this country
must regret to see two states, one distinguish
ed by its gallant patriotism, the other enno
bled as the birth place of Perry, following so
pernicious an example, a similar plan was
laid in Virginia, during the last session of
the legislature but one, and failed, I think,
from the virtuous resistance of the senate. If
Virginia have any other influence in the.union
than that of her numbers anti talents, I hope
it will be the influence derived from such ex
amples of political virtue. The example
first set by Pennsylvania, was the laughing
stork of the nation. The litter of banks, as
it was called, became the theme of common
jest and ridicule, and it lias passod into a
proverbial phrase, forever incorporated with
our language.
There is yet another mode of procuring,
bank charters, which has been found highly
successful in legislative bodies which have
passed through the preparatory stages of
corruption—Agents are sent up to the high
seat of legislative wisdom and purity—
prime dealers in the service of corruption—
hoary-headed professors of intrigue, with
the power of disposing of some thirty or for
ty thousand dollars of the stock of the em
bryo bank. They have a carte blanche, to
d > what they please with this, nor is any ac
count ever required of them provided the
charter is obtained. I know not how it is
disposed of—but this I know, I once happen
'd to he at the seat of one of our state gov
ernments when a game of this kind was go
ng on, and the common morning salutation
if men, meeting in the street, was—“ well
what is the price of a member to-day ?” “ So
many shares”—was the answer ! Yet there
as a certain member always below par—
and such was Ills well known purity, that he
never rose to the market price during the whole
session. Do not understand me lo say that
here was any bribery in the case. No, sir !
it was—•< If you arc favorably disposed to-
vards the hank, already, if you believe in
y.iur conscience that it ought to be chartered
rhere arc shares at your disposal, pro
vided the charter is obtained.” These facts
were notorious—they were talked of in open
day—tho thoughtless ridiculed and laughed
—the corrupt chuckled at the success of their
schemes, end tho reflecting and virtuous
looked on and sighed at the degradation of
the people in the persons of tlioir legislators.
Men were prosecuted for offering and ac
cepting bribes—but as the only parties to
such a business, are both equally guilty in
the eye of the law, no testimony could be
proved sufficiently strung to convict them.
I will go on, sir—I have rent the veil and
the whole monster shall be exposed to public
view, in its own naked deformity. There
have bren instances, at least one instance,
where the executive of a state was obliged
to check this mania—that is the polite phrase
for the boundless virus of corruption, which
is every day spreading and infecting the
whole body politic—he was obliged to check
this torrent of corruption, by proroguing the
legislature—an act 1 believe without a par-
rallrl since the independence of this country
was established. He had in his speech on
the opening of the. session, displayed in the
most unanswerable argument, the evil con
sequences of further enlarging the system of
paper banks, but finding that there was a
determination to sacrifice the interests of the
people to the gains of a few speculators, he
prorogued the legislature, and sent the mem
hors home to learn lessons of virtue from
their constituents. That this high handed
art of executive authority was sanctioned by
the people, and that the, popularity of this
excellent magistrate was increased by a mea
sure' which, in other circumstances would
have destroyed it, is an unanswerable proof
that it was proper—nay absolutely necessary
to the public good. And here, sir, I will
indulge my respect for that distinguished
magistrate, by this public avowal. Every
man that ever knew him can bear testimony
to his talents and his worth—and every true
friend to his country, will feel grateful to
him, that in a time when the knot which
bound this great confederation together was
almost untied by unhallowed bands—bis sit
uation enabled him to arrest the disunion of
our country—to stand in the breach just
opening to our enemies—to put back, the rol
ling tide of unchastened ambition—and to
confer an obligation on the people of the U
States, that ought never to he forgotten.—
To this he added another benefaction—that
of exhibiting an example which has not been
imitated of manly, dignified firmness, and
energy without a parallel, in proroguing a
powerful body, to preserve people—from
their worst enemies—a mad, or mischievous
legislature.
It is notorious to the people of the United
States, that we have more hank capital, and
have had for several years, than can be em
ployed to any beneficial public purpose ; no
body denies this—and nobody dare deny it
Every pretext therefore of administering to
the pubiic good—and every argument, here
tofore urged in favor of extending the paper
system, falls to the ground. I ask therefore
confidently, what honest motive can govern
legislative bodies, in granting every day, as
they do, new charters ? When, in canvassing
thq conduct of our rulers, we find that a mea
sure cannot by any ingenuity of its advo
cates, be referred to any honorable motive,
to any salutary end—we are authorized to be
lieve that it proceeds from something directly
the contrary—from some secret influence of
which they are, or ought to be heartily asham
ed. Such is the natural, such the just modo
of reasoning on these subjects. In applying
this rule to the late conduct of legislative bo
dies, we shall feel ourselves fully justified in
the conclusion, that to the various motives I
hare assigned, may be mainly ascribed the
multiplicity of charters granted of late years
by the munificence of so many of the state
legislatures. If it is not so, it is full time
for the advocates of the paper system—the
defenders of monopoly and corruption, of
legislative wisdom and purity, to come forth,
and instead of charging those who have dar
ed to denounce them witli being governed by
unworthy motives, disprove what they have
boldly advanced, and cover them with eter
nal shame. For my part, I will be grateful
to any man, that shall convince me I am
wrong ; for I love my country and will bo
obliged to any one who will prove that she
has not been thus dishonored. Of sucli
men I would ask an explanation of the con
duct of one of the state legislatures which,
after a full and fair debate, refused to char
ter a bank, by a majority of nine votes, and
the very next day, at the very last moment
of its session, without the formality of dis
cussion or debate, granted, by a majority of
nineteen, what they had before thus unequi
vocally refused ? 1 would enquire by what
unknown, unutterable series of occult ra
tiocination this modern wonder was arhie\ed
—by what mysterious influence, this sudden
change was wrought in the minds of men,
that could thus prompt them so hastily to re
cede from a solemn expression of their will ?
Do tliey suppose they can play such pranks
on the great theatre of legislation, without
exciting wonder, or pity, or contempt ? Do
they believe that such things can be done in
a corner, without the calm lookers on, of tho
surrounding states, believing in their hearts,
that they were tho offspring of intrigue or
corruption, and that the legislature which
thus acts, and the people who submit, liavo
fallen from that high elevation they once oc
cupied in the scale of the union ? I speak of
this state particularly, because the impor
tance of its situation, and the rank it occu
pies, have called my attention more espe
cially to that system of policy, by which it
seems she expects to gain her true station in
the union, where none more wishes to be
hold her than myself, when she shall exhibit
a better example and a better claim.*
The people are sought to be reconciled to
every new bank by a bonus—a sop in the pan
—to be applied to some beneficial public pur
pose. The gains of the banks, proceed from
a tax on the people, who are bribed with
some of their own money, to submit to a new
tax. They sell their birthright, not for a
substantial iness of pottage, but a bundle of
rags ;—the money with which they are se
duced into acquiescence, is their own hard
earnings, a part of which is thus employed
to cheat them out of their prosperity. But
let me not involve the legislative bodies in
one indiscriminate censure. The plain trutk
is, that, even if their views and intentions
are never so virtuous, they arc no match for
the cunning ingenuity, and intricate sophis
tries of hungry speculators gasping for gain
There were many of them too upright, nn< i
honest, and unsuspecting, to cope with s
Wiley adversaries, and in more than one in
stance were cheated out of their charte rs.
They else would never have so multiplied
their favors, and they would have carefully
guarded against the abuses of banking in
stitutions tlius authorized.—They would
have taken care if possible to shield the peo
ple from hanks without capital, by making it
a condition of their chait.cr, that they should
have the whole of the amount of their capitals
in bonaJide specie ;—tJiey would have taken
care at every session to ascertain by a com
mittee of inspection, that this quantity actual
ly remained undiminished from year to year;
—and above all, they would have punished
every breach ur abuse of bank charters by
the instant revocation of privileges th is a-
bused. They would moreover have dc. jar-
* The writer, doubtless, alludes to the incorporation of
the Franklin bank by the state of New York, for such
were the facts that occurred in its passage in the assem
bly. This great state, rich, populous and patriotic, and
possessing immense natural advantages, seems to be rent
with party feuds that hate existence no where else—the
merits of which 1 never have taken the trouble to endea
vor to understand, being out of my line; and to the feel
ings of contending politicians, it appears, mu.it be as
cribed the establishment of the bank just named. Whe
ther it was right in itself that this bank should be insti
tuted or not—it is most seriously to be regretted that
political considerations induced or opposed it—us there
by a door is opened for the multiplication of those esta
blishments not exsily shut again, though the vacdlat.ons
of parties. If they who were in the minority on this oc
casion, should ever happen to be with the majority in a
future legislature, we must expect that to check the
Franklin bank, tliey wdi immediately manufacture mo
ther new one, and seat it, if possible, in the same neigh
borhood.—and so on, until the “explosion” alluded to by
the governor, takes place and demolishes the whole sys
tem. Which however, if reformation cannot be effre ed,
A3 the only tiling thsd will save the people from pauperism.
