The disasters
attendant on this deviation from the former course of business in this
country are now shared alike by banks and individuals to an extent of
which there is perhaps no previous example in the annals of our country.
So long as a willingness of the foreign lender and a sufficient export
of our productions to meet any necessary partial payments leave the flow
of credit undisturbed all appears to be prosperous, but as soon as it
is checked by any hesitation abroad or by an inability to make payment
there in our productions the evils of the system are disclosed. The
paper currency, which might serve for domestic purposes, is useless
to pay the debt due in Europe. Gold and silver are therefore drawn in
exchange for their notes from the banks. To keep up their supply of coin
these institutions are obliged to call upon their own debtors, who pay
them principally in their own notes, which are as unavailable to them as
they are to the merchants to meet the foreign demand. The calls of the
banks, therefore, in such emergencies of necessity exceed that demand,
and produce a corresponding curtailment of their accommodations and
of the currency at the very moment when the state of trade renders it
most inconvenient to be borne.
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