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I THE REFLECTOR MILLEDGEVILLE, G. TUESDAY, JULY 14, 18l‘s. Nil. BANKING. OM NILES’ WEEKLY REGISTER. PAPER SYSTEM—NO. VII. LAST or THE SERIES. aving in my last letter detailed the liner, and means by which bank have sometimes been obtained, I proceed to explain how their capi- or the most part constituted, honest tradesmen, and persons hav- money to spare, are persuaded nowing ones—the speculators—to , and these in reality are the only tioiis that are ever paid until arrives, when the great speculators ut to advantage. The residue is y a knot of speculators, and di- to the amount of hundreds of thou- ay in some particular cases millions fur which in reality they never a farthing of real value. The first of the hank is to discount for tlies • T enable them to pay each instal- bccomes due. For these discounts ators pledge their script, and give and, renewed ad infinitum. It is t to dissect this plausible security, lidity of which the people are ever,- rely, for the redemption of a grea of the notes of the institution. Tir os pledged, is simply the represeo- f the very instalment, for which u pledged. It is merely pledging one bank paper, for the payment of an > e of bank paper ! Thus this mighty is nothing but the simple process of ‘lig of a man some of his own money, e as security for its payment—except per is here the substitute for money, change is fair enough between two in ’s for their mutual accommodation ; n it is practised as in the case of the hr the purpose of deceiving the people einblance of real capital where none whatever may be its polite denomina- banks & brokers’ shops, it is nothing rrant swindling. For let it be re- d, that unless the capital of a bank de paid in, its script is of no real hatever, and the only security the as for the stability of an institution tuted, is the personal security ol the rs. If by practising the usual arts i public credulity is made subservi- e gains of the worthless, the stocks nks can be raised above par. tin r sells out and pays the bank ; bu contrary it should depreciate by a- ntal insight into the true state of r, he cannot redeem his pledge, the or goes on secretly renewing debts lie which it ran never pay. Thus ly perceived that the basis of the aper system, is.nothing more than sibility of a knot of desperate spe- dependant altogether on the public for their existence, and who will d run away or take the benefit of enient bankrupt law, wherever the 11 burst. The system, sir, is a pa- throughout—paper guarantees all sides—speculators bolster up rokers are cats-paws to bank (fi nd it is in vain that we look f.«r 3, can and ought to bo the basis of institution—silver and gold. The ot even gilded on the outside, and gudgeons we swallow the naked , sir—one may suppose almost any mpossible in this age of banks ana es—suppose one of the great spe- the stock of the bank of the Unit- hould fail, in debt to the bank a a half, for money borrowed of pay his instalments to the bank, t in order to prevent the dopres- stock by such an amount coming nto the market, the remainder of speculators assume the whole, like manner, the script, and their hand for the payment—renewa- y can sell out to a great profit, n that the additional weight of assumed by the remainder, and al discounts required to enable ! n this enormous amount, till the y blown, should bear so heavily ;tors of the institution, at length ble at the situation in which s placed the nation & the stock- had appointed them to a trust ad thus shamefully abused and at they should at length, to t of a desperate case, or refuse to ccommodations to the specula- aud the payment of these mil- Ji a case, might not the exag h of the mightiestof these migli- prove inadequate to this sud- y ? Might not his property— quite certain that it would— unexpected pressure of this e- , when sacrificed as property ch cases? Far be it from me sir, to insinuate the remotest possibility of men whom the world gives credit for being worth millions, being in reality and to all in tents and purposes bankrupts—and still fur ther be it from me to even hint, that the men of real substantial wealth, have alrea dy quietly sold out, and realized a moderate profit on their stock, leaving the bank entire ly to these beggarly speculators in millions, who if the stock were by any chance to fall below par, would be bankrupts to-morrow. Thus is the public left with the security of a script, depending for its value, on the pled ges of men, who in turn are dependant on this very script, for the means of redeeming their pledges ! Such, sir, is the situation of a great portion of the newly erected banks. Destitute of any real capital, they are every lay increasing debts to tiie public, to an a- mount almost beyond the reach of calcula tion, while the besotted continue to take their notes with as much confidence as if they were silver and gold, although one every day hears of banks becoming openly insolvent til many parts of the United States. In ad- tivssinga people, thus voluntarily bowing 'o wholesale imposition—so docile in submitting to be cheated by every piece of pictured paper—I feel as if I were wasting iiy time, and occupying a space in your va- 1 ua’ule paper, that might be devoted to more salutary purposes. This letter shall there- ‘ore conclude the series for the present, and ;ke many a well meaning man, I must sit -I >wn and solace myself with the example of pour Cassandra, whose pr .phecies though always fulfilled, were never believed, until il . as too late. It is utterly impossible that the present system of banking can endure five years.— It cannot impose on the people much longer, and if it could, it would perish by its own corruptions. A little while, and it will be come necessary for the hanks to pay specie, and then will their solvency be severely test ed. It will not be long before some great question will be agitated, and decided in this country— •' Some village Hampden, that with dauntless breast. The l.ttle tyrant ot his fields Withstood”— Will enroll his name among the benefactors of his country, by prosecuting these privi leged gentlemen who do not choose to pay their debts like other people, and finally as certain whether the spirit of justice yet wakes in this bank-ridden land. But sav the jackalls of the banks—we do not refuse to pay specie—we pay every body that asks for it. True sir, but it is well known, that whoever dares ask for it is from that time i .narked man—he becomes obnoxious to a bo dy of men that can destroy him if he be i trader—mechanic or merchant—and which will assuredly make an example of the offen der, in order tif deter others. What unheard i f insolence then, to pretend to pay specie, and annex a penalty to the demand. The belief of the generality of banks being able, to pay now or at any future period th amount of their debts in specie, is worthy of the people who have submitted to the gallin impositions of the paper system. The rerk- I. ss, and unprincipled issue of notes, by which they arc enabled to make such enormous di vidends, will forever preclude them from the possibility of specie payments. There is not specie sufficient in the whole universe, to re deem the paper of England and America True it is, that the difference between bank notes and specie is but a few per cent, jest now, hut only let the public confidence in this paper system be once fairly shaken, and one shall then see the real difference iu the value of specie and bank notes. The first will he worth twice as much as now, and the latter will he wonli nothing—it will gra dually sink as the public confidence is with drawn from it, and finally like continental money, be stowed away in old pocket books, to remind the owner of past delusions, and afford another lesson, from which his poste rity will derive no benefit. Among the many privileges of chartered banks, that of running in debt to three times the amount, and only being liable for the a- mount of its capital, is not the least prepos terous. I should like to know hy what au thority any legislative body can thus exempt inen from the pay mentof their debts—are not all men obliged to pay their debts, or sub •nit to the disgrace of open palpable bank ruptcy ? Yet here is a case where men may grow rich out of the spoils of the bank, and then quietly retire, leaving the funds of the institution, no matter what they arc, to an swer for debts to three times their amount. I am no great special pleader, sir, but I will venture to say, that such a practice is at war witli every principle of law, equity and com mon sense. It is a privilege abrogated by its own palpable absurdity—by its direct op position to all the laws and customs of gene ral society—and above all by its unequalled partiality and injustice. You will forgive this digression, but the truth is, that as I ad vance into the subject, so many points of fol ly, injustice, iniquity and abuse present themselves, that I am embarrassed with a multiplicity of materials. I have little doubt but it will be argued by many, that the banks will in time acquire a basis of real property, by exchanging rags, for houses and lands, and the creditors be thus Secured in the last resort. But, sir, let it be remembered, that when the time ar rives, thafjlie. hanks must sell their real pro perty to pay their debts, a state of things will occur, fatal to its value. Universal dis tress, doubt, apprehension and dismay, will deter almost every man from purchasing,— all will he sellers, where none will he found to buy, and the consequence be that the banks will never be able to realize, the amount for which this property was originally pledg ed. Thus, the debtor bank, and the holder of its notes, will share one common fate, and wide spread distress, difficulty and ruin be 91 attered over this smiling land. This is no fancy picture. In the. event of a loss of confidence in bank paper, which must very soon res dt from the present mode of admin istering the great paper system—and when the public shall cease to believe in this new doctrine of the transubstantiation of rags into silver and gold, the demand on tho banks f< r specie will he general—consequently the sale of real property pledged to them will be general. The inevitable consequence of such -i vast property being all at once thrown into the market, will be a depreciation in the land lmost equal to that of the paper money. But, sir, the advocates of the true paper ‘‘nth—who believe against the experience of all ages, and the evidence q£ facts occurring very day—will tell me that this ratastro phr of the paper system is so distant as to pass the limits of a distinct anticipation— oat it is like the end of the world,—nobody hinks of predicting it but crack brained en thusiasts, laboring under the delusion of fan d inspiration. Sir, they may tell us so —bat they don’t believe it—they know bet ter—they feel that the bubble will soon burst —the knowing ones are at this moment qui- >,tly extricating themselves from the rouse ]iiences that will soon take place, by ex -hanging their bank stork for real property iving it to the wretched beggars or dupes to stand the storm when it shall roine. Not only this, sir, but toe more prudent banks— those that really merit confidence, and mean to pay their debts, are gradually withdrawing their notes from circulation, but at the same time are too many of them practising an un pardonable imposition on the public, by as sisting to circulate the notes of petty banks, unworthy of the public confidence. The consequence will be, that ere long the great mass of notes in circulation, will be those of the most worthless and Unprincipled institu tions, which never meaning to pay their debts, are anxious to run in debt to the pub lic as deeply as possible. And here, sir, a most momentous question arises, which I hope to see one day decided in this country. Whether the hank which thus pays me a debt with the notes of another hank, does not in effect guarantee the validity of these notes? Common sense says yes— A justice says yes —and analogy will fully justify the doctrine. If 1 pay a man a debt in counterfeit dollars, am 1 not liable to be made to pay it again, whether I know of the counterfeit or not ? If I pass away a note of hand received from another, am l not obliged to guarantee, the payment of the not''—and does not this rule •un through every transaction of business ? Under what statute of law, or principle of justice, then do these hanks hope to escape the penalty which every individual incurs in similar cases, and how will they screen them selves from the consequences of thus paying their debts, in the worthless paper of our in- olvent banks ? Let them reflect seriously n this ; and assure themselves, that as yet, there is no power in this country that can •xonerate either individuals or corporations from the operation of the fundamental and inflexible prim iplcs that lay at the root of e- ery system of law. Such, sir, are the great features of the present paper system, as I have faithfully ndeavored to delineate them in this and the preceding letters. It was, and is still, my intention, todevelope some of the moral ef fects, certainly not the least important con sequence of this system, that have fallen un der my observation. But this I shall post pone awhile, for I am conscious that your li berality in affording me so large a portion of your valuable paper, has been not a little inconvenient. My letters have been too long —but the honest truth is that the subject o- pened so many views of mischief, that 1 hardly knew whereto begin, or where to end. For the present, I shall conclude this series with a few observations, leaving it to you to bring forward those statements, which your practical knowledge, and more exten sive, sphere of observation, may have ena bled you to collect. 1 think I have given sufficient proof in the course of these letters—that the paper sys tem under its present slovenly, not to say un principled character, is highly injurious to every class of people but one.—to wit, the band of brokers, bank directors and specu- Idtors. It impoverishes every order of men, >y diminishing the value of the gains, of honest labor—by enhancing the pri< c of cve- y article of necessity, without affording any quivalent advantage—by seducing the far mer into ridiculous and ruinous prodigality and speculation, to which he finally fall3 a victim--by rendering it impossible for the manufacturer, to exist in consequence of the high price of his materials—by lessening at least rme half, the real value of incomes arising from any permanent source—and by depriving our gallant sailors and soldiers of me half the comforts they could procure, if their pay were not diminished in that pro portion, by the depreciation of the medium in which they are paid. The advocates, and those who revel in the corruptions of the system, dare not deny this—they only hug themselves in the security of public creduli ty, and legislative folly or corruption, and smile witli contempt on the ineffectual resis tance of a few dispersed, and impoverished victims. But respice Jincm—Gentlemen—look to the inevitable fate foretold in the examples every day occuring, but which are so imma terial, of so little consequence to the. people that they pass without notice. If the city editors make any remarks on them, they as suredly forfeit their-discounts—the bank di rectors will throw out their notes, and enjoin it upon all their wretched dependants on ’change, to withhold their advertisements from the impertinent meddlers. A y< i<* or two ago a bank failed in Alexandria indebt ed to the public several hundred thousand dollars—another in New-York state in the same predicament—and the other day wo Heard of a similar catastrophe happening to two banks to the westward—the German bank of Wooster—and the Farmers bank at Canton.* It is no wonder sir—banks without capital, administered by people, who if they are honest, are ignorant of the first principles of banking, or by hungry unprin cipled speculators determined to grow rich at the expense of the public—must and will fail, the moment they are called upon to p.i/ in specie. For my part, I wonder they don’t nearly all fail, for fail they most assuredly will ere long—leaving it to the good people of these United States, to pocket their loss es,—to wonder at their delusion—and to fall victims to the very next bubble, that may be set afloat. I take my leave for the present, with a repetition of my thanks to you, for your exertions in a righteous cause—for the good you have done already—and for that which I am satisfied you will yet perform. Whatever may be the result of our joint la bors, for the public benefit, if will always he to me a source of honest pleasure, to recol lect that I was once a fellow laborer, in a good cause, with a man, who I have ever no ted, as always to be found administering those principles and supporting those doc trines, most conducive to the glory and hap piness of our native land. You will hear iron me occasionally, when 1 shall be fur- lisln d, as I have been promised, with a free and true exposition of the occult mysteries f brokering, banking and speculating, as they are now generally practised. Be as sured I will not let this si.eject rest, until s ime of the evils of the system are cured, >r all hope of cure is lost. * Mv friend might have added three in Maryland that are a«» good as gone.” and several r Pennsylvania are preparing to “ give up ihe oijoar.” Thu same is about to happen in other places. I pray the people wh • owe these hunks to collect their notes and settle off, vbilst such notes are yet received in payment—and then u be at ts” roHi.vMi with them. NOTICE TO FLOUR & RICE MILLERS. \^STHERKVS Oliver Evans. Esq. the pa- V ▼ tentee of there improved inventions, hath regularly given notice in the papers from the year 1810 to 1815 his tariff of patent fees, that begin ning in January, 1813, he would require of those ho infringed his patent, and continued so to do, those rates : that from 1813, he would call for nterest on a new sum saved in labor, board and wages annually till license be bought and paid for ; and all those who continue to violate the law, may expect suits against them without res pect to persons immediately. Those owing pat ent fees, they will be received by his table with interest in single damages ; but when suits are brought against them, and judgment rendered, treble fees and damages will be required at the bar. The patentee has f»und by many years dear bought experience, after being involved in very heavy expences to support his just rights, that all other modes are unavailable, and have proved fruitless. License may be had of John Love, of Puck- land, for Mills in the Northern Neck, and from the subscriber for Mills from Rappahannock so far to the southward as any Machinery may be found in mills or factories, whither I am buund shortly for discoveries. No'other persons in Virginia, but those named, are authorised to receive payment and grant Li cense. I am, with very great consideration and res pect, the publics’ most obedient. John Moody, Agent. Richmond, Va. June 16.