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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.