The Journal of Banking
by William M. Gouge,

Vol. I., No. 5,
Philadelphia, Wednesday, September 1, 1841.

The Veto.

We gave notice in our first number, that it was no part of our intention to lumber our columns with heavy documents.  But the President's late message is not a heavy document.  It has the rare merit, for an American state paper, of not being inordinately long.  Most of our readers must have already perused it in some of the daily or weekly newspapers;  but we give it a place in this Journal, as it will be wanted hereafter for reference.

The doctrines of the message have called forth the most violent denunciations from the organs of the stock jobbing interest.

We observed in our last, that the Sub-Treasury act having been repealed, and a veto having been put on the Fiscal Bank bill, "the result is the revival of the pet bank system, the worst of all possible systems."  The new pet bank system will, however, it may be hoped, be only a temporary evil.  The Fiscal Bank, if the stock should have been taken, if it could have been brought into successful operation, and if the act to establish it could not have been repealed, would have been a permanent evil.

The Banks!  The Banks !

We sometime ago gave a hint to the Boards of Directors of each and every of our nine hundred banks, that they ought to pass resolutions to supply each of their own number, and each President and each Cashier, with one copy of the Journal of Banking.

Will the reader believe it ?  Not a single bank has complied with this very reasonable request !  We have, indeed, Bank Presidents and other bank officers on our list of subscribers, and some banks have, in their corporate capacity, subscribed for one copy each of the Journal;  but not one Board of Directors, that we can hear of, has passed the resolution we so respectfully submitted for their consideration.

One Bank President informs us that he brought the subject before his board: but they said, "No, no.  The editor of the Journal of Banking is opposed to banks: and we are for them.  We will not subscribe."  We told the President, that we could not see why difference of opinion on certain points, should prevent a man's subcribing.  It might be of interest to him to know what the principles of banking are, as we understand them, and our facts are of great importance.  "We wish," said the Bank President, "to have nothing to do with either your facts or your principles."

Here is gratitude !  Here are we endeavoring to elucidate the principles of banking, in such a way as to make them intelligible to the humblest capacity, and yet the banks wish to have nothing to do with our principles !

Does any bank officer wish to immortalize himself, as Levis has done ?  Here we are ready, with pen in hand, to record all his feats of daring in finance;  and yet the banks wish to have nothing to do with our facts !

"The Credit System."

Part of the policy of the supporters of the present inequitable paper money system, has been to dignify it with the title of "The Credit System," --as if there could be no credit except that which is founded on promises which are often made only to be broken.  Another part of their policy has been to represent the friends of hard money as opposed to credit in every shape and form.  Such as have been deluded by their misrepresentations should read candidly the seventh and eighth chapters of the "Inquiry," which will found on subsequent pages of this number.  As they read them, let them bear the fact in mind, that they were written nearly ten years ago, and then not to meet any exigency which grew out of political controversy.

At that time, it will be seen, that from six to eight hundred persons annually took the benefit of the insolvent laws in Philadelphia.  Now we have increased the number to about fourteen hundred.

Bills of Suspended Banks.

In different parts of Georgia, the people are passing resolutions to receive the bills of suspended banks, at only their current or market value.  The movement commenced at Macon, and is called the "Macon specific."  The following notice appears in the Augusta Chronicle:

Public Notice.-- In consequence of the great inconvenience and loss attending the circulation of a depreciated and fluctuating currency;  believing it to be the interest equally of the planter, as of the merchant, to have a sound currency of uniform value;  and believing that this can be secured only by encouraging the circulation of the notes of such banks as pay specie for their issues, promptly, to all demands;  and also believing that it will result to the material interest of the whole State;  by reducing the price of merchandise, and enabling the planter to receive a sound circulating medium for his crop, the undersigned, merchants, factors and citizens of Augusta, have determined that from the opening of the fall market, for the present growing crop, say after the first of October next, they will not receive in payment, or pay out, the bills of any of the suspended banks, except at their current market value, taking the bills of specie paying banks as the standard.  [Signed by 134 commercial firms, factors and citizens of Augusta.]

New Hampshire.

The Legislature of New Hampshire, at its last session, passed an act prohibiting any Bank Director from being indebted to the bank of which he is Director, for a greater amount than fifty per cent. of the stock he may hold: and any Cashier of any bank, from being indebted to said bank, in any manner whatever, except upon his bond given for the faithful performance of his duty as said Cashier.

If any director of any bank in New Hampshire, being a subscriber to this Journal, wishes to borrow more than the Act of Assembly allows, we can inform him how he can accomplish his object, without infringing the law.  Letters, post paid will be duly attended to, and regarded as strictly confidential.

To the Philadelphia Reader.

Gentle Reader,--

When you next walk up Chesnut street, please to cast a glance at the house belonging to the estate of the late Pierce Butler, at the north-west corner of Chesnut and Eighth streets.  Do not pretend you cannot see it.  It is one of the most stately mansions in the city;  and has, on the east and north, a spacious and beautiful garden.

That house was built by an English gentleman, who, it is said, brought with him to this country eighty thousand pounds sterling.  He speculated in Morris and Nicholson lots.  He lost his all.  He spent his last years in the Alms-house;  and there he died.

Now, reader, from this take warning.  If you have eighty thousand pounds sterling, or eighty thousand pounds currency, or eighty thousand dollars, or eighty thousand cents, or eighty thousand mills, be cautious in what manner you make your investments.

Banks as Corporations.

In this number, we commence a chapter on banks as corporations.  In it is found the remark, "that corporations are so powerful as frequently to bid defiance to government."  How many examples have we had of this truth since that sentence was penned.

Deacon Graball's Diary.

It was intimated in our first number, that application had been made to Deacon Graball, for some passages from his Diary, for publication in this Journal, and that, though his reply was rather equivocal, hopes might be entertained that he would ultimately accede to our request.

The Deacon has at length yielded to our earnest solicitations;  but he makes it a sine qua non, that we must first republish such extracts as have already appeared in the Democratic Review.  We have begged hard for "original," but he says that the extracts in question will, to ninety-nine readers in a hundred, be "as good as original," and that without first reading the extracts that have already been published, such parts of his Diary as still remain in manuscript cannot be properly understood.

Still pushing our request for "original," the Deacon has bid us "not forget the immense distance there is between an editor and a bank director.  Heretofore," he says, "he has had only to intimate his wishes to Journalists, and they have been immediately complied with.  The London Times, the leading paper of Europe, republished the extracts from his diary, whole columns at a time, without so much as his asking it: and he thinks it very strange that the editor of the Journal of Banking, a paper just starting into existence, should not joyfully comply with the condition he prescribes, especially as the said editor is soliciting additional favours from him."

We assure the Deacon that we are duly sensible of the difference between an editor and a bank director.  We feel it in our pockets.  And, as in duty bound, we commence to-day the republication of the "extracts," hoping that the "additional passages" will be furnished in due season.

United States Bank.

When we stated in our last that Col. Drayton had resigned the presidency of this institution, on account of his age and infirmities, we repeated what was said in the daily papers.  The state of his health would, under any circumstances, have prevented his holding the office long;  but it is whispered in private circles, that the cause of Col. Drayton's resigning at this particular juncture, is to be found in the reappointment of Mr. Jaudon as agent for the bank in London.  For the same reason, it is stated, that Mr. M. Kempton and Mr. Rawle have resigned their places in the board.

We have for many years been acquainted with Mr. James Robertson, the successor of Col. Drayton as president of the bank.  He was once a merchant of this city, and as such sustained an unblemished character.  When a member of our State Senate, he showed himself a sound political economist, opposing the incorporation of coal companies, and the establishment of other monopolies.  He was subsequently cashier of the branch bank at Richmond, and as he conducted its business on commercial principles, he hardly made a bad debt during the period of his cashiership.  If he had been Mr. Cheves' successor, the bank would never have been broken.  It may be beyond his power, or beyond that of any one else, to save any thing for the suffering stockholders, but we are fully persuaded that whatever can be done, will be done by Mr. Robertson.  Himself and his immediate friends have a deep stake in the bank.

He has been blamed for not imitating the conduct of Messrs. Drayton, Kempton and Rawle, and immediately resigning his situation at the board.  We have had no intercourse, either direct or indirect, with Mr. R. since his appointment to the office of president, and cannot, therefore, say what may have been his motives for acting differently from some of his colleagues.  We have, however, learned from another source, that the reappointment of Mr. Jaudon as agent in London, was a matter of necessity, as the affairs of the bank in Europe are so complicated that nobody but he can understand them !  If this be so, it does not speak much in favour of the wisdom of the agent.  A really good agent would have kept the affairs of the bank in such way, that any body would have been able to understand them.

Fears have been expressed that the new president will be too much under the influence of certain members of the old directory.  It is the duty of the stockholders, and they will find it their interest, so to sustain the new president as to enable him to act an independent part.  We wish not to see the bank resuscitated, (to resuscitate it is indeed impossible,) but we should be much pleased if every creditor could be paid in full, and something saved for the stockholders, the condition of many of whom is such as to call for commiseration.

While we write, ten dollars in Philadelphia currency cannot be obtained for the stock of the bank, and there is little chance of its rising before we can get our paper to press."  Some sales of notes of the bunk have been made at a discount of 30 per cent. currency, equal to 32½ specie.  But these were extreme cases.  About 27 per cent. may be quoted as the average.

The claim of the bank against Mr. Biddle has, it is said, recently been reduced, from about one million dollars, to $249,000.  Some persons think that this is only a preliminary to the entire abandonment of the suit.

Considerable excitement has been occasioned by a publication in the Public Ledger, giving a narrative of the manner in which the charter for the bank was obtained from our State Legislature.  Among other things, we have what purports to be a bill for tavern expenses, incurred by the agents of the bank when at Harrisburg.  Supposing it to be genuine, it shows that the agents of the bank, and also such members of the Legislature as were in the habit of visiting them, were fond of good eating and drinking.  What harm is there in that ?

Then we have what purport to be receipts from the agents to the bank for money paid by the bank in requital for services rendered by the agents.  Two of the gentlemen appear from these receipts, to have got ten thousand dollars each.  The third does not appear to have been so well paid.

Then one of the members of the Legislature from this city, is openly charged with having received from the bank, though in rather an indirect way, the sum of seven or twelve thousand dollars, for services rendered on that momentous occasion.

Till the accused shall have an opportunity of exculpating himself, we abstain from the mention of further particulars.

Bankrupts in America.

Mr. Senator Tallmadge estimates the number of bankrupts in the United States at five hundred thousand;  and the editor of the Philadelphia Gazette, estimates the number of persons now lying in the prisons of the United States, for debt, at sixty thousand.  If these estimates are not too great, they afford beautiful illustrations of the paper money system which Mr. Tallmadge and the editor of the Gazette so cordially support.

Bank Failures.

An injunction has been served on the Bank of Mineral Point, Wisconsin, and, according to the Galena Advertiser, the concern closed.

The Bank of Steubenville, Ohio, suspended banking operations on the 11th ult., and assigned all its effects to three trustees, to collect all dues and pay all demands as speedily as possible.

The Ohio Statesman says that the Bank of West Union, in that State, "is at last closed, and hundreds of thousands of its bills have been thrown an the hands of the holders as worthless."

Injunctions have been served on the Chatahoochie Rail Road, and Bank of Columbus, Georgia.  The Union Bank of Montreal, broke, at its agency in Wall street, New York, on Wednesday, August 27th.  A considerable quantity of its notes were, as is usual in such cases, in the hands of the laboring population.

Bank Defaults.

We stated in our last, that no doubt Mr. Ball, the absconding Cashier of the Fayetteville branch of the State Bank of Arkansas, was of a highly respectable family, as well as Mr. Town, the defaulting teller of the Jacksonville branch of the State Bank of Illinois.

Our conjecture has been verified.  The editor of a journal published at West Chester, Pennsylvania, states that Mr. Ball is a native of Newcastle county, Delaware.  He studied law in the office of Mr. Darlington, in West Chester, and so excellent was his conduct and character while residing in that borough, that the editor thinks there must be some mistake in what is related of his doings in Arkansas.

There may be more than one man in the country, bearing the name of Wm. McK. Ball.  And all bearing the name may at one time have borne a good character, and been correct in principle.  But as our American banking system is the most efficient of all systems in converting honest men into rogues, they may all have fallen victims to its demoralising influences.

There is no rnistake about the character of the doings in Arkansas, whoever was the author of them.

Farrington, or Harrington, (the newspapers spell the name in both ways,) the late President of the Gallipolis Bank, created quite an excitement in the towns through which he passed, on his way to the Ohio Penitentiary, at Columbus.  He had been convicted of forging bills of exchange.  The people were at a loss to know how it was possible to convict a bank president of any thing;  and as he was accompanied by a lawyer, who was using every stratagem to get him off, they seemed to think that though the law had got hold of him, it would not be strong enough to hold him.  So it proved.  His lawyer proceeded to Cleveland, and obtained from the Supreme Court leave for a new trial in Gallia county, on a writ of error, and the bank president was immediately released from imprisonment.

Merril B. Sherwood, who got up the Gallipolis Bank, and who, to use the very uncourteous language of some of the papers, swindled the State of Indiana out of 540,000 dollars, "it is stated, on the best authority, has left the country, taking with him TWO HUNDRED THOUSAND DOLLARS, the proceeds of the Indiana bonds," and also a very fine young lady, to whom he had as little right as he had to the money.  As the story goes, he did our goodly city of Philadelphia, the honor to select it as his port of embarkation, taking passage in the ship Renown, for Hamburg.

According to one of our exchange papers, the Middlesex Reporter, published at Waltham, Massachusetts, he is quite a "distinguished man," having in addition to getting up the Gallopilis Bank, and swindling the State of Indiana out of 540,000 dollars, also "got up the Erie County, (N.Y.,) Bank, and purchased the Dry Dock Bank," of New York city.  The same paper adds that he has left his wife and children in Buffalo, to shift for themselves.


A bill to re-charter the Banks of the District of Columbia, for three years, has passed both Houses.

The Bankrupt bill has also passed both Houses.  It goes into operation on the 1st of February next.  On the final question in the House, the votes were-- yeas, 111; nays, 106.

The Senate has passed the Land Distribution bill, with an amendment, declaring that the distribution shall cease whenever the duties on imports shall exceed 20 per cent., ad valorem, as prescribed by the compromise act of March, 1838.

The Fiscal Bank.

The message of the President, containing his objections to the bill, was read in the Senate on Monday, August 16th.  Some symptoms of disapprobation were expressed by the galleries, but the decided course taken by Mr. Benton and other Senators, prevented any great disorder.

The Senate postponed from day to day the consideration of the message and of the bill, till Thursday, August 19th, when, after a discussion of about five hours' continuance, the vote was taken.  The yeas were 25, the nays 24.  There not being the constitutional majority of two-thirds, required in such cases, the bill could not be sent to the House for its concurrence.

On the next day, Friday, Mr. Sergeant, of the House, reported a new bill, substituting the name of Corporation for that of Bank, and Agency for that of Branch.  The new bill also differed from the old, in fixing the amount of capital at 21 millions, instead of 35,000,000, and in confinin the dealings of the Corporation to domestic and foreign exchanges.  The bill allows the Corporation the privilege of employing any State Bank or association of individuals as an agency.  Nothing is said in it about the assent of the States to the establishment of branches.

So rapidly does the present Congress do business, that this important bill, which was reported on Friday, was passed on the following Monday.  The yeas were 125, the nays 94.

It was then sent to the Senate, where the consideration of it has been from time to time postponed.

Some of those members of the House who were formerly professed friends of President Tyler, have used the most opprobrious language towards him, on account of his vetoing the Fiscal Bank bill.

Lynch Law.

In a former number, we mentioned the remark of a reflecting man, that the worst sign of the times was the utter disregard of law shown by men in high stations, and we expressed our fears that private individuals would, in imitation of officers of moneyed and municipal corporations, substitute their own discretion for the laws of the land.

Since then, we have read of some individuals in Ogle County, Illinois, taking the law into their own hands, and inflicting the punishment of death on certain reputed horse thieves: and of others in Bourbon County, (we think it was,) Kentucky, hanging with due solemnity, though without regular legal process, two men accused of committing a robbery on the highway.  As it is not our province especially, to record what concerns horse thieves and highwaymen, we introduced no notice of those events into our Journal.  The doings of rogues in higher stations occupy as much of our columns as we can well spare.  Among these are counterfeiters, and the fate which has befallen a part of that fraternity, is thus related in the daily papers:

"The New Orleans Picayune has the following startling particulars of the application of Lynch Law in Arkansas, communicated by a gentleman who had just come from that region.  It is the greatest act of violence and murder under that bloody code that the press has ever been called upon to record.  It is almost too horrible to be believed.  A numerous band of counterfeiters had their places of rendezvous and the abodes of their families in Philips county, Arkansas, and Coahoma county, Mississippi, on the opposite side of the river.  They were a desperate and lawless set of persons, annoying the citizens and flat boat trading men, encroaching upon their property, and stealing horses from their neighbours.  These repeated acts of depredation at last roused the whole neighborhood.  The citizens formed with a volunteer company of about 100 well armed men, and after an active search of several days, succeeded in capturing 27 men.

"These desperate characters were captured by stratagem.  Nine of them, the first account says, but later intelligence says twenty-three, were tied hands and feet, and, as the report says, drowned in the Mississippi, near Island No. 69.

"The informant who communicated these particulars, states that the company is increasing in number, and intends to proceed to the mouth of the White river.  When he arrived at Napoleon, at the mouth of Arkansas river, he learned that some six or seven dead bodies had been seen floating on the river opposite that place, and also that some of the counterfeiters who escaped had been passing down the river with uncommon speed, in order to evade their pursuers.

"This statement is vouched for as a combination of facts without a word of exaggeration.  If so, it is the most wholesale and horrible murder that has ever been perpetrated in a country pretending to be civilized and governed by laws.  The Cincinnati Chronicle of the 19th, confirms this story by the statement of a passenger who came up the Mississippi, and saw six of the bodies floating down the river.  He informed the Republican that it was rumored that from a dozen to twenty of the counterfeiters were killed."


The President and his family were not suffered to repose in peace, during the night following the day on which he sent his veto message to the Senate.  A mob of paper money men assembled in front of his dwelling, and by the hideous noises they made alarmed the females of the family.  They also burned the effigy of the President.

The news that President Tyler had vetoed the Fiscal Bank, gave great joy to many persons in New York and Albany.  In the former city, a salute of one hundred guns was fired, and in the latter a procession was formed.  In Philadelphia, we took the matter more coolly.

By the burning of the steamboat Erie, on Lake Erie, upwards of two hundred lives have been lost.  In the frequent accidents that have occurred since the passage of the "steamboat inspection act," we have evidence of the folly of those politicians who seek to correct all evils by means of legislation.

An association for promoting reform in banks and currency has been formed at Petersburg, Virginia.

The citizens of Columbus, Ohio, have resolved to dispense hereafter with the use of "shin plasters."

The Bank of Xenia, Ohio, is issuing notes payable in--notes.

North Carolina Silver.

We have all heard of North Carolina gold, but North Carolina silver must be to most persons "a new thing under the sun."

It is found in Davidson county.  The ore is an argentiferous carbonate of lead, and it is believed the veins will prove very productive.  A deposit of bullion of the value of $390, was made at the Mint in this city during the last week, being the first deposit ever there made of silver from a mine in the United States.  The assay made at the Mint showed that 1000 parts of the bullion contained 973 of silver, and 8 of gold.

Bank Robbery.

The Danville Branch of the Farmers' Bank of Virginia, was entered on the night of the 21st or 22d of August, by means of false keys, and robbed of ninety-two thousand one hundred and thirty-five dollars.  Fortunately for the bank $72,135 of this large amount were in mutilated notes, stamped on the face cancelled.

A Decayed Banker.

Samuel Williams, the well known American banker in London, was at one period in the receipt of £100,000 sterling per annum, from a regular commission business --yet this worthy and amiable man subsequently failed, and died lately in Boston, probably in a state of dependence on his friends.