Recent events have also continued to develop new objections to such a
connection. Seldom is any bank, under the existing system and practice,
able to meet on demand all its liabilities for deposits and notes in
circulation. It maintains specie payments and transacts a profitable
business only by the confidence of the public in its solvency, and
whenever this is destroyed the demands of its depositors and note
holders, pressed more rapidly than it can make collections from its
debtors, force it to stop payment. This loss of confidence, with its
consequences, occurred in 1837, and afforded the apology of the banks
for their suspension. The public then acquiesced in the validity of the
excuse, and while the State legislatures did not exact from them their
forfeited charters, Congress, in accordance with the recommendation of
the Executive, allowed them time to pay over the public money they held,
although compelled to issue Treasury notes to supply the deficiency thus
created.
It now appears that there are other motives than a want of public
confidence under which the banks seek to justify themselves in a refusal
to meet their obligations.
Pages:
637
638
639
640
641
642
643
644
645
646
647
648
649
650
651
652
653
654
655
656
657
658
659
660
661