The Journal of Banking
by William M. Gouge,

Vol. I., No. 2,
Philadelphia, Wednesday, July 21, 1841.

The Bank Question.

We sometimes hear people say, "Ah, if banking was an original question, such views as you entertain ought to be generally adopted.  But we have grown up under the present artificial system, and a multitude of interests have thereby been created, any interference with which seems more likely to do harm than good."

To this we reply, that banking is an original question.  This country is, to borrow an expression from Edmund Burke, "but yet in its grizzle."  Our population which was but three millions at the period of the revolution, is now seventeen millions: twenty-five years hence it will be thirty-four millions: in fifty years, sixty-eight millions: and so it will go on increasing till it equals the population of China.  Is a population like this to suffer, through a long course of ages, such evils as we endure at present from our factitious credit and false money system ?

We take it for granted that every man of good sense will admit that a country like this, ought to have a sound money, a sound credit, and a sound banking system.  There may be difference of opinion as to what constitutes a sound system: but all intelligent men must agree in opinion that a sound money, a sound credit, and a sound banking system, are essential to the prosperity of the nation.

We take it for granted also, that every man of good sense will admit that, if our present system is not sound, much exertion ought to be made, and some suffering ought to be willingly endured, in order to make it sound.

"But would you," it may be asked, "in endeavouring to effect this object, entirely disregard existing interests ?"  We reply, certainly not.  We think that nothing can be fairer than to afford men who have contracted debts in bank currency, an opportunity of paying their debts in currency of equal value.  We are anxious that every man who has invested capital in bank stock, should, if possible, get back every dollar thus invested.

We hold it for a first principle, that all changes in the currency system of a country should be gradually made that a sudden transition from a bad system to a good, must produce much evil.

We would not amputate a diseased limb, without first making suitable preparation.  But then again, we would not defer amputation too long, lest gangrene should ensue.

What our own views are of a sound money, a sound credit, and a sound banking system, will be developed in this Journal, and also how such a system may gradually be made to take the place of that which is at present productive of so much evil.  We ask for these views the candid attention of the unprejudiced.  If we are in error, we are, we trust, open to conviction.  Is it asking too much of those who differ from us in opinion, to give our arguments a fair hearing ?


Gold and Silver.

A member of Congress, who has mixed much with the people in one of the States, gives it as his opinion that one of the principal obstacles to a bank reform is, the erroneous opinions entertained by many, of the quantity of gold and silver in the world.  He has requested us, and in fact almost exacted a promise from us, to say something in very number of our Journal, which may tend to lighten men's minds on this subject.  Since it is of so much importance, it shall receive a due degree of attention.

We begin to day with Mr. Gallatin's estimate of the quantity of gold and silver in Europe and America.  In a work published by him in 1831, entitled "Considerations on the Currency and Banking System of the United States," he estimates the amount of the precious metals in these two quarters of the world at between four thousand and five thousand million dollars.  This, it will be recollected, was ten years ago.  The amount has since been considerably increased, as the mines have annually produced millions, and the demand for the China trade has been greatly diminished.

Taking the medium, however, of the two sums stated by Mr. Gallatin, namely -- four thousand five hundred million dollars, and supposing the population of Europe and America to be two hundred and seventy-seven millions, it will amount to sixteen dollars and upwards for every man, woman, and child, on the two continents.  The same gentleman estimates the whole amount of currency in the United States in 1829, paper and specie together, at only six dollars a head.

But the subject may be presented in a stronger light.  Take us, man for man, and we are the richest people in the world, with the exception of the English, the Hollanders, and the Belgians. -- Where the natural order of cause and effect is not inverted, the richer a country, the greater in proportion to population, will be the amount of gold and silver that will flow into it, and be retained in it.  If a day's labor in America will produce a bushel of wheat, and in Poland only one-tenth part of a bushed, it is evident that America must have a much greater amount than Poland of surplus produce wherewith to purchase the precious metals, or whatever else may be desired. -- It is not too much to say, that if the natural laws of supply and demand had not been interfered with, the United States would have, in proportion to population, four, five, six, seven, yea, eight times as much gold and silver as many of the countries of Europe.  Take it at only the double of the average for the population of the two-continents, and it will amount to thirty-two dollars a head, or to five hundred and fourteen millions.  This would give us one-ninth part of the stock of gold and silver in Europe and America, while our population is but one-sixteenth: but for the reasons already stated, under a natural order of things, we should have, man for man, a much larger portion of the precious metals, than falls to the lot of most countries of Europe.

---[And the people of Europe should do what for money ?  according to your concept the boom-areas of the planet should have the money, and the rest should live in squalor.  The amount of silver and gold in the U.S. should be enough to facilitate the transaction or choose something else as the medium of exchange.]

Suppose, however, we had but the average of sixteen dollars a head.  This would amount to two hundred and fifty-seven millions.

On two points do people (that is, some people) capitally err.  First, in regard to the quantity of gold and silver in the world.  This is much greater than they imagine it to be.  Next, in regard to the amount of money required for commercial purposes.  This is much smaller than they suppose it to be.  Under a sound money, sound credit, and sound banking system, ten dollars a head would probably be amply sufficient in the United States.


The Times.

It is one of the peculiarities of a paper money system, that under it, a country may abound in wealth, may owe nothing to foreigners, and yet every man in it may be bankrupt.

This may sound strange to many readers, yet it will be easy to demonstrate it.

Suppose a state to have within its limits one hundred thousand families, and each family to be worth ten thousand dollars.  Here will be an aggregate of property of the value of one thousand million dollars.

Next suppose each head of a family to dispose of his own property on credit, and purchase an equal amount from some one else on credit.  Here is an aggregate of debts and credits of two thousand million dollars.

Then suppose the circulating medium of such a community to be suddenly reduced in amount one-half.  Through the shock that would be given to confidence, prices would fall more than one-half;  but suppose them to fall only one-half.  Here then will be but five hundred million dollars' worth of property, with which to liquidate two thousand millions of debts and credits.  Each man will receive five thousand dollars from his debtor, and pay five thousand dollars to his creditor.  Yet when all this is gone through with, each man will owe five thousand dollars, and have five thousand dollars owing to him.  Every one would then be bankrupt, although the land, the houses, and all the other wealth of the State would be just what they were before "the contraction" began.

Now such a case as is here supposed, cannot occur in practice.  A trading nation will owe more or less to foreigners;  and much as we are in love with the "credit system," every man will not dispose of all his property on credit, and purchase an equal amount from others on credit. --The case will, however, serve to illustrate the effects of "a flexible" standard of value.

In a greater or less extent, such effects are produced by every contraction of our currency. --Sometimes they fall on one class of commodities, and sometimes on another.  Sometimes on one part of the country, and sometimes on another. --The ruin is not so general as in the case we have supposed, but it is not therefore the less effectual with those who are the victims.

In the former great bank revulsion of 1819, the distress in Pennsylvania fell principally on owners of farms and town lots.  Now it falls more directly on the owners of stocks of various descriptions.  The incomes of different citizens of Philadelphia, from this single source, have, it is said, sustained a reduction of between one and two million dollars per annum.

Of course such a reduction in the income of one class of capitalists, affects very sensibly the general operations of society.  Confidence being shaken, other capitalists fear to make investments, and many of the laboring classes have not profitable employment.

Yet in defiance of all this, our city seems to be advancing.  New houses are going up in all directions, and among them are not less than seven or eight churches, including some founded last year.  It was not so in the revulsion of 1819. --Then a stop was put to nearly all improvements.

We regret to say that appearances with us are in some respects better than the reality.  For an example:-- in a conversation with a leading capitalist, we learned that several large store houses he had in a commercial street, brought him no rent, and yet he suffered them to be occupied by men calling themselves merchants, because if they should remove, it might be thought that the neighborhood was a poor one for business, and then others of his store houses would be vacated.  As a sign of the times, this is decidedly a bad one.

Then again we learn that in some large mechanical establishments, the men, though apparently on full wages, receive weekly only one half.  For the rest they have to trust -- till times become better.

Yet, many individuals are doing a better business than they did in the years of great inflation.  We will give one case by way of example.  A certain manufacturing and commercial firm, having a branch in a city in one of the south western States, thought it was carrying on "a most flourishing trade" in the year 1835, '36, and '37.  Its profits, according to its books, amounted to at least 25,000 dollars a year, which divided between two young men, who had but little capital to commence with, was certainly doing "a very fair business."  When they tried to collect what was due to them, all their profits vanished, and happy enough were they to preserve their capital untouched.  They are now doing a much less extensive, but far more profitable business than they did in the years of inflation, and this, we doubt not, is the case with multitudes of others.  Indeed, our merchants generally are said to be much less dependant on the banks than they were in former years, and this is a sure sign, if not of present, at least of coming prosperity.

In some other parts of the country, the signs of prosperity are less equivocal.  The revenue from the New York and some of the Ohio canals, has exceeded that of the corresponding months of any previous year.  This shows an increase of real trade.

If we turn to our foreign trade, we shall find nothing therein to discourage us.  Our exports of domestic produce in the year ending September 30th, 1840, amounted to nearly one hundred and fourteen millions.  In 1839, they were only one hundred and three millions.  In 1838, they were still less, having been only ninety-six millions;  and in 1837 less still, having been only ninety-five millions.

If Congress will only "let us alone," all will at length come right.  If we do die, it will be of the doctor not of the disease.


Congress.

In compliance with a proclamation of the late President, (Gen. Harrison) a special session was convened on the 31st of May.

Owing to some difference of opinion on points of order, it took the House longer to organize, than it would take a man to travel from Liverpool to New York.  In the Senate no such difficulty occurred.  While we write, the two bodies have been in session for more than six weeks, and yet, an act appropriating 25,000 dollars for the relief of the widow of the late President, is the only one that has been passed, or at least the only one of moment enough to attract attention.  We mention this not by way of reproach or regret.  As a general rule, the less legislation the better.

In both houses there have been some interesting discussions, especially in the Senate, on the state of the public finances, and on the repeal of what is called the "Sub-Treasury bill."  This bill was ably supported by Messrs. Woodbury, Calhoun, Wright, Benton, Allen, McRoberts, and others;  but when the vote was taken, its friends were to its opponents as only 18 to 29.  We are not surprised at this result.  The measure has not been suffered to rest on its own merits;  but has been made to bear the odium of whatever was (whether rightfully or wrongfully) unsatisfactory to a portion of the people in the administration of public affairs during the twelve years in which Gen. Jackson and Mr. Van Buren held the reins of Government.

Regarding the repeal of the measure as a signal triumph over the last two administrations, it was pushed through the Senate with a haste which gave its friends just cause to complain that the rights of free discussion were invaded.  After all, however, the measure is but half repealed.  The Independent Treasury system has two leading features.  By the first, bank and state are professedly separated:  by the second, the application of public funds to private uses is made a criminal of fence.  The Senate's bill will, if it should become a law, (as we suppose it will) restore the connection between bank and state, but will not justify the application of the public funds to private uses, on the part of those officers who are entrusted "with the safe keeping, transfer, or disbursement of the public moneys."  It is, we suppose, intended that corporations being public depositories shall have the privilege of using the money;  but this privilege which was, by connivance, exercised by individual officers from the foundation of the government till the passage of the act of July 4th, 1840, is not to be restored to them.  It should be matter of congratulation with the friends of the Constitutional system, that this important part of it is to be retained.

In the House, a bill has been passed, to divide the proceeds of the public lands among the States.  The hope that this will relieve the State governments from their embarrassments, will prove utterly fallacious.  And it will, in the present state of our finances, impose on the United States Government the necessity of imposing new taxes on the people, in an amount exceeding the sum to be distributed among the States.

Another bill, which has been pawed by the House, is one to authorise a loan for twelve million dollars.  In our treasury notes we have a floating debt, which is bad enough.  If a nucleus is laid in time of peace for a permanent national debt, what may it not ultimately swell to ?

Among other measures that have engaged the attention of Congress, are Mr. Ewing's (the Secretary of the Treasury) and Mr. Clay's plans for fiscal agencies.  These are of importance enough to require separate articles.


Mr. Ewing's Fiscal Agency.

This is nothing but an old fashioned Bank of the United States, with some provisions which render it more objectionable than either of the two former national banks.

The bank is to be located in the District of Columbia, with power to establish branches in the several states, with the assent of the States.

The capital is to be thirty million dollars.

The United States Government is to subscribe one-fifth part of the capital, or six millions;  and on the supposition that it is the intention of Congress to pay the fourth instalment of "the surplus revenue" into the treasuries of the States, the U.S. Government is to subscribe about nine millions more on account of the States.

For the amount to be subscribed by the government, in all about fifteen millions, a stock is to be created bearing an interest of five per cent. per annum, redeemable at the pleasure of the government, at any time after fifteen years.

If Congress shall not see fit to pay the fourth instalment to the States, the States are to be permitted to take the stock of the Bank, according to their respective amount of population, to the extent of ten millions in all, issuing therefor stock of their own.

If no subscription is made on the part of the States, the U.S. Government is to subscribe for ten millions of the stock.

The affairs of the Bank are to be managed by seven directors, two of them to be appointed by the President with the advice and consent of the Senate, and five to be elected annually by the stockholders.

Each branch is to be managed by not more than seven, nor less than five directors, two of them to be appointed by the State in which the branch is situated, if such State be a stockholder, and the rest to be appointed by the Directors at Washington City.

The Bank is to be the fiscal agent of Government.

Its existence as a corporation is to continue for twenty years, with power to use its corporate name for two years longer in settling up its affairs.

This plan proposes to involve the United States in a debt of from six to fourteen millions;  at a time when it is asserted that the ordinary revenue is insufficient to meet the ordinary expenses.  In one contingency, it proposes to add to the amount of State debts, although many of the States are unable to pay the interest on debts already incurred.

It complicates the affairs of the State governments, and the United States government, in a manner never contemplated by the framers of the constitution.

It establishes a political bank, and of all kinds of banks, political banks are the worst.  Government directors not being directly responsible to the stockholders, care less, generally speaking, for the interest of the institution which they control, than for their own interest.  With two government directors at Washington, and two in each State, politicians of the party that happens to be uppermost, may expect to be amply accommodated, but the interests of merchants will he a secondary consideration, and those of the stockholders will be hardly regarded at all.

The constitutional objections to a national bank are not removed by this plan.  In requiring the assent of the States to the admission of branches within their bounds, it tacitly admits that the constitution does not confer on congress the power to establish banking institutions in the States without their assent.  But it provides for an enlargement of the power of the U.S. government in a manner unknown to the constitution.  The perfection of republican government consists in securing the rights of the minority.  This object the framers of the constitution sought to attain, by giving the weaker States an equal representation in the Senate with the stronger, and by providing that amendments to the constitution shall require the concurrence of two-thirds of both houses of congress, and that of the legislatures of three-fourths of the States.

On this plan, however, the powers of the general government may be greatly enlarged by the concurrence of a bare majority of both houses of congress, and that of the legislators of less than one-half of the States.

Is it possible that those States' rights men who have given this plan their countenance, have considered it in all its bearings ?  Admit the principles on which it is founded, and the District of Columbia becomes a mere fortress for the invasion of State rights.


Mr. Clay's Fiscal Banks.

This differs from Mr. Ewing's principally in not requiring the assent of the States to the establishment of branches within their limits.  The capital is to be thirty millions, with the privilege of increasing it to fifty, if deemed necessary or expedient.

To it the following objections apply.

1st.  The ninth amendment to the Constitution declares that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or the people."  The Constitution contains no clause giving Congress the direct power to establish a bank.

2nd.  When it was proposed in Convention that Congress should have power to establish corporations, the proposition was rejected, on the express ground that this would give Congress power to incorporate a bank.

3rd.  The establishing of a corporation, is not "the necessary and proper," or, if the phrase be preferred "the natural and appropriate," way of conducting the fiscal concerns of the Union.  The he natural and appropriate way is in offices established by Government, and by officers subject to the complete control of Congress.  These are all that are "necessary and proper."

4th.  One of the main objects for which the Federal Constitution was established, was that of making this a hard money government.  This object is completely frustrated by the use of bills of credit (for such are bank notes) in fiscal transactions.

5th.  The sixth article of the ninth section of the Constitution declares, that "no money shall be drawn from the Treasury but in consequence of appropriations made by law."  This article will be violated if the bank makes any loan or discounts on the public funds.  Money to the credit of the Treasurer of the United States is always considered as being in the Treasury.  It cannot be in the Treasury and out of it at the same time.  It cannot be lent to individuals all over the country, without violating the express provision "that no money shall be drawn from the Treasury but in consequence of appropriations made by law."

6th.  If the Government of the United States becomes a money lender, it must, having at present no "surplus revenue," impose additional taxes on the people, or else run the nation in debt to a greater extent than would otherwise be necessary.  The balance nominally in the Treasury (but really lent out to speculators) must be from four to six millions more than would be requisite under a sound fiscal system.

7th.  The money thus lent out, will, when most wanted, not be available for the public service.  If the bank should endeavor to collect it, at short notice, it will thereby spread ruin through the community.  This is exactly what occurred under "the pet bank" system.  The public money was lent by the banks to merchants and speculators.  Congress directed it "to be deposited with the States," in order that it might be applied to public uses.  The banks made an attempt to collect it from those to whom they had lent it.  Is it necessary to tell what was the consequence ?

8th.  In time of war the bank must inevitably suspend specie payments, and who can say how long it would be before such an event would occur even in time of peace.  So complicated would be the affairs of the bank and the government, that it is probable the litter would connive at, if not directly sanction, the suspension of specie payments.  Then, for all practical purposes, our standard of value would be gone.  Under the existing laws we have been able, through three suspensions of specie payments, to preserve the standard of value.  This is what never before occurred, in either Europe or America, under like circumstances, and none but those who have diligently studied the effects of former suspensions, can judge of the good that has been done, or rather of the evil that has been prevented, by our preserving the standard of value, through all our commercial troubles, and pecuniary difficulties.

9th.  The institution will improperly connect banking and fiscal transactions.  Resting on distinct principles, they ought to be kept distinct in practice.  Our banks will never be conducted on true commercial principles, till a complete separation is effected between their affairs and those of the government.

10th.  A leading object in a republican government should be to preserve the individuality of the citizens.  The balance of social power is destroyed when a few men, out of a multitude, are conjoined in one body, with the privilege of making money out of paper, and with the power of affecting, either directly or indirectly, the credit and the business of every man in the country.

11th.  In the present state of society, the grant of pecuniary privileges to individuals, is much more injurious than would be a grant of political privileges.  If Congress should pass an act granting to some thousands of persons in different parts of the Union, five hundred votes a piece, such a grant would be less injurious to the public welfare, than that which is proposed in the bill.

12th.  Supposing the act of Congress to be irrepealable, (a supposition to be indulged only by way of argument) the practical control of the finances of the Union, will be taken from the people, or from their representatives, for the period for which the bank charter extends.

13th.  The property and the labor of every man in the Union, will be pledged to pay the interest of the stock the Government will subscribe, and ultimately the principal.  But few, relatively speaking, will derive any advantage, either directly or indirectly from the Bank: and favoritism will determine who those few shall be.

14th.  The plan proposes to substitute the discretion of little knots of bank directors, for the laws of nature and the laws of trade, in the regulation of foreign and domestic exchanges.

15th.  It holds out a delusive prospect of regulating the State Banks and State Bank currency.  Unless Congress shall pass a bankrupt act including corporations, no power on earth can regulate the State Banks, but the power that created them;  that is, the Legislatures of the different States.

16th.  The establishment of this bank will interpose obstacles to the introduction of a banking system founded on correct principles, that is to say, to a system in which bankers shall be responsible in the whole extent of their private property, and in which they shall conduct their business by means of hard money, and bona fide bills of exchange, or notes of such denominations as will be representatives of real bills of exchange.

17th.  If all the instalments, after the first, due by private stockholders, are paid in with stock notes (as is usual in forming bank capitals in this country) the new National Bank will be a mere bubble bank.

18th.  If the bank is to have a solid capital of gold and silver, collecting that capital together will derange the operations of the present specie paying banks, and prevent many of the others from resuming specie payments.

19th.  After the bank is established, all the legitimate business it will do, will be so much taken from the other banks.  For every dollar it circulates, the State banks will have to draw in a dollar.  This will cause a pressure on their customers.  Creating a new credit is no compensation for the evils produced by destroying an old one.

20th.  The political party which is in power, for sixteen years in twenty, is opposed on principle to the establishment of a National Bank.  In every step it takes, the new institution will meet with strong political opposition.  Though we place this objection last, it is not the least.

We do not pretend that there is much novelty in these remarks.  But truth loses none of its force by age.

We hope sincerely that Messrs. Ewing and Clay, and their friends, will carefully reconsider this subject.  It will be quite possible for them to establish a Fiscal Agency which will be free from all these objections.


Bank Failures.

The Chattahoochee Rail Road Bank, of Georgia, which has just closed its doors, is said, by the Jeffersonian, published at West Point, Georgia, to have been a stupendous fraud.  The whole country is flooded with its issues, amounting to millions, and yet it never had ten thousand dollars of specie in its vaults.  Its nominal capital was three million of dollars, but it is averred that three millions of dollars were never paid in.  Its very first step in obtaining its charter was a fraud on the Legislature, as the making of a road was never in serious contemplation.  Not a dollar, adds the Jeffersonian, was paid in by the Stockholders, but on the naked charter they went on to issue bills without limit.  "Now, it is said, the bank is broke.  How broke ?  How could it break if there was the smallest particle of honesty in its transactions ?  For nearly the whole time the bank has been in operation, specie payments have been suspended.  It has paid out nothing but bills.  How then, we repeat, could it break ?"

This is the greatest fraud ever committed in Georgia.  There is scarcely a man or a woman in that part of the State, who has any bills at all, but has most of them on this bank.  This, added to the pressure of the times, will make the distress very severe.

The Bank of Darien, Georgia, it now, says the writer of the money articles for the New York Herald, "broken to all intents and purposes.  There are now judgments outstanding against it, and the banking house and property would long since have been levied upon, but for the management of the Cashier."

According to the return made on the 17th of April last, the whole assets of the bank were $688,000.  Of this amount, $559,000 consisted of bills and notes, and of these $410,000 were either in suit or under protest.  Thus three-fourths of the assets of the bank were in the hands of the lawyers.

The amount of specie the bank had in April, was, according to its return, $10,565;  and the amount of bills in circulation, $146,499.  This, the Herald states, the managers now refuse to redeem at any rate, "and the bill holders will probably lose all."  It adds that the amount of bills out is greater than stated in the April return, as the Cashier came on to New York, and in order to raise funds, put in pledge notes of the bank to the amount of $200,000.  In case the house which received these notes should not be reimbursed in due season for the advances it made, "a sufficient amount of the bills hypothecated were to be sold, and in addition $50,000 of the bills were to be forfeited.  This process may be going on, as the quantity of bills now offering is rapidly increasing."

The history of the Bank of Darien would, if faithfully written, be very instructive.  This is not the first time that it has broken.


Bank Defaults.

A gentleman not long since requested from us a list of the defaults that have occurred among officers of banks within the two or three last years.  We could not give it to him.  But it is proper that we should make a distinct classification of them in our Journal, in order that any person who is so disposed, may sum them up for himself at the close of the year.

The following are all that have fallen under our notice since the publication of our first number.  It will be recollected that that was issued in advance of the regular day of publication.

A committee of investigation appointed by the stockholders of the Amherst Bank, Mass., have discovered some unfortunate discrepancies in the accounts of its former managers, amounting in all to about twenty-four thousand dollars.  The persons implicated are said to be men who have heretofore sustained characters as free from reproach as any in Massachusetts.

The Stamford (Conn.) Bank recently made a dividend of one dollar on each share, which report says was out of its capital.  The Commissioners say it was not in a condition to make any dividend.

The Rochester Democrat states that the Cashier and President of the Farmers' Bank of Seneca County, N.Y., have been brought to that city from Maine, and committed to jail in default of security, on several charges of a very serious nature relating to financiering operations.

The Savannah Georgian says, "that the amount of the deficiency of the late Cashier of the Branch of the Central Rail Road Bank at Macon, has been secured to the satisfaction of the company."  The amount was, we believe, $25,000 dollars.

The Mobile Journal states that several arrests have been made in Benton and Tallapoosa counties, of persons accused of being parties to frauds on the Montgomery branch of the State Bank of Alabama.  The Jacksonville, (Benton County,) Republican adds, that one of the parties, on being arrested, refunded the money, and that another contrived to escape and took to the woods.  He was discovered there, and recaptured, after a short conflict with one of his pursuers, named C. Samuels, in which guns were snapped on both sides ineffectually, and Mr. Samuels wounded by a bowie knife.

The amount of these frauds is variously stated at from 150,000 to 200,000 dollars.  They have caused much excitement in the interior of the State, and meetings have been held in several of the counties, at all of which the State Bank system has been denounced as corrupt and ruinous;  and in most cases the question of winding up the State Bank is to be made a test at the ensuing election of members of the Legislature.  "We presume, however," says the Mobile Journal, "it will be very difficult to find any candidate now who will take ground in favor of the system."

The Frederick County Bank of Maryland was robbed on the 23rd of May, of one hundred and eighty-five thousand dollars, in notes, specie, and other valuables.  Such were the circumstances of the case, that one of our newspaper editors was led to inquire whether the robbery had been effected by means of false entries or false keys.  Very recently all but about $19,000 of the property stolen has been recovered through the agency of Mr. Wylie, an Associate Justice of a police court in New York.  As the matter will be judicially investigated, we will wait for further developements.



Incidents.

The Bank of the United States has instituted suit against Mr. Nicholas Biddle, to recover nearly seven hundred thousand dollars, paid out during his administration, for which no vouchers can be found, and of which amount, it is asserted, more than four hundred thousand dollars were paid by him for purposes unknown, upon the checks of the cashier.  A writer in one of the papers, maintains that it is very unfair, not to include some of the Directors in the suit.  The facts which will be revealed in the course of the trial, will, no doubt, show whether this charge of unfairness is well founded.

The present President of the United States Bank has given notice that an application will be made to the Legislature, at its neat session, to change the name of the institution to that of "State Bank of Pennsylvania," and to reduce its capital to fourteen millions.  We can see no use in this.  Reducing the nominal capital of the bank, will not add one cent to the value of its assets, or take one cent from the amount of its obligations.  The nominal value of each share of stock in the market, will thereby be doubled: but this will produce no substantial advantage to the stockholders.  As the Bank is at present, with its stock at 18 for 100 paid, it may serve as a beacon to other banks, and many of them require such a beacon.

The Farmers' and Mechanics' Bank has given notice that it means to apply for an extension of its charter, with the privilege of increasing its capital to two million dollars.  From this disposition to invest more capital or at least fresh credit in the business, it would seem that paper money banking is still profitable to those engaged in it, although they want either the inclination or the ability to discharge the demands of holders of their paper.  Banks with a moderate capital are, generally speaking, best managed.  The Farmers' and Mechanics' Bank has been among the best managed of our institutions.  We doubt if the permanent interest of the stockholders will be promoted by increasing the capital.

Dr. Eldridge, who was accused of passing simulated checks on our banks, has been tried three several times, and finally discharged, the jury in no one case being able to agree on a verdict.  In some respects this is a most extraordinary case.  It is not alleged that he had any accomplice, and supposing him to be the guilty one, he must have paid very many visits to the banks, in carrying out his frauds, yet he could not be identified to the satisfaction of judge or Jury.  From the reports we have seen of his trial, we could not, if we had been of the jury, have voted for his conviction.

Mr. Daniel Albright, one of the clerks who was dismissed from the United States Bank, on the reduction of the number of persons employed in that establishment, has laid violent hands on himself, and left behind him a paper, giving as his reason, his dread of coming to want.  The Pennsylvanian, with great good sense, advises persons in such a frame of mind, to betake themselves to labor on a farm or in a garden, or, if that be not practicable, to study diligently some branch of science, till some more profitable employment shall offer.  The advice is most excellent, and may be followed by those who are only in the incipient stage of melancholia.  Thousands are probably now in this condition.  Never before, within our memory, were suicides so frequent.  Many of them can be traced to diseases of body: but trouble of mind is one of the most efficient causes of disease of body.

At a session of one of our county courts, held during the week beginning July 4th, three hundred and forty-eight persons applied for the benefit of the insolvent laws.  Considering the times, this is quite moderate, being only at the rate of fourteen hundred per annum for the city and county of Philadelphia, or 81,000 a year for the whole Union, supposing the insolvents in other places to bear the same ratio to population.

The borough of Hollidaysburg has, in imitation of the borough of Harrisburg, issued small notes, bearing a very small amount of interest, and redeemable some years after date.  Thus we go.  The State violates the constitution of the United States: and the boroughs violate the laws of the State.  We heard a reflecting man say not long since, that the worst symptom of the present times, was the utter disregard of law shown by men in high places.  How long will it be, before private individuals, in imitation of the officers of moneyed and municipal corporations, begin to substitute their own discretion for law, and what then becomes of society ?

The Pittsburg Mercury complains of the trustees of the U.S. Bank for compelling the debtors to the branch at New Brighton, to pay their debts to the agent at Pittsburg.  It further avers that "in the collection of debts due to the branches in Pittsburg, Beaver and Erie, the trustees first refused to take the paper of the Bank in payment of the debts due to it: and many of its oppressed and down trodden debtors, after having been at much trouble and expense to procure U.S. bank notes to pay off their liabilities, were coolly told that the trustees could not take such money."

Let us pass into other States.

New York. -- Mr. S.V.L. Wilder, one of no small renown in the financiering world, has failed for it is said a million of dollars.  His friends say he will ultimately be able to pay all.

The petition from New York in favor of a National Bank was two hundred feet long, and believed to contain fifteen thousand names.  On the other hand, some two or three thousand of those opposed to such an institution, have held a meeting, in the Park.  The proceedings were very spirited, and it is said a much larger meeting will be held.

Massachusetts. -- A young Virginian, formerly holding good rank in the United States Army, has been found guilty at Boston of forging a receipt for the purpose of obtaining money from a paymaster, and sentenced to lie one year in the Common Jail.  "He is," says the Boston Daily Advertiser, "a fine looking man, and of most respectable parentage.  His mother is a widow, who was formerly in independent circumstances, but has been somewhat reduced, occasioned in part by the failure of the United States Bank."

We would not in the least diminish the sympathy felt for this young man;  but human sympathy would probably be exhausted, before it could embrace all the cases of men who are driven to commit offences, through the poverty occasioned, either directly or indirectly, by the operations of our present banking system.

Michigan. -- The Detroit Daily Advertiser maintains that not one of the banks of that State has complied with the conditions necessary to entitle it to the benefits of the suspension act of last winter.

The farmers of Lanawee county intend, it is said, to enter into a compact to receive nothing but specie or the notes of specie paying banks, in payment for their produce.

Wisconsin. -- It is stated in a St. Louis paper, that the Bank of Mineral Point is paying out lead, instead of gold and silver.  A gentleman of that city, on presenting $40,000 of its paper, received lead in return.  "But it is not," says the Journal of Commerce, "in a crude mass, for a proper form and comeliness has been given it by letting it run through a Mississippi light house.  It is then paid out by the bank under the various denominations of balls, buck, pidgeon, duck, robin, and mustard shot.  And these assets "go like shot" among the creditors of the institution, who seem to have but little hope in this their fiscal agent."

Missouri. -- The Bank of this State at St. Louis declines redeeming the notes of its branches;  and in consequence thereof the notes of the branches are no longer received at the Land Offices in Missouri, Illinois, and Iowa.

Mississippi. -- The Union Bank was established a few years ago with a capital of five million dollars.  So low is now its condition, that the Cashier was recently endeavouring to negotiate a loan of 25,000 dollars, to pay the expenses of the institution.

Louisiana. -- In our first number we spoke of the unpleasant feelings entertained by some persons in New Orleans towards Mr. Wright, a merchant of that city, on account of some communications he was supposed to have made to the Vicksburg Sentinel.  They finally led to a duel between him and a Mr. Oakey, another merchant, in which Mr. W. was killed with a rifle ball. -- This resiult neither refutes nor sustains the charges which Mr. W. is supposed to have made;  and it is much to be regretted that recourse should ever be had to so very unsatisfactory a mode of settling disputes.  This deplorable affair is an indication of the state of excitement into which men's minds have been brought.

Arkansas. -- We copy from the Southern Patriot the following account of certain doings in one of the counties of this state.

"About twenty men in Philips county, Arkansas, recently 'ran off' the Judge, refusing him permission to do his duty, and resolving to hold court themselves.  Many executions being by law returnable the last May term of that court, and much property advertised to be sold;  and moreover the Real Estate Bank at Helena and the branch of the State Bank at the Post, having brought a great number of suits in that court, a long petition was got up, signed by some two hundred persons praying the Hon. Isaac Baker, who was to hold the court, not to do so.  The petition was borne to Columbia and presented to the Judge.  Judge Baker proceeded, however, to Helena, for the purpose of holding the court.  Finding that he could not be persuaded to decline doing the duty imposed on him by law and the obligations of his official oath, about twenty men armed themselves and took possession of the court house, the door of which they barricaded, and refused to permit any person to enter.  The sheriff attempted to obtain an entrance, and threatened to break down the door.  The response was, that if he did he would instantly be killed.  The sheriff accordingly desisted, and made a requisition upon the Colonel of the county militia for fifty men to enable him to suppress the rebellion, but the affair terminated in the full triumph of the rebels, and Judge Baker returned home to Columbia."

How long will it be if debt goes on continually increasing, before the authority of the courts in some of the other states will be set at defiance ?  It was debt that caused what is known as "Shay's Rebellion" in Massachusetts, soon after the close of our revolutionary war;  and debt, carried to a certain extent, will produce insurrection any where.