Lawrence John Lumley Dundas Zetland.

Cause of, and cure for, hard times: a definition of the attributes and qualities indispensable in money as a medium of commerce, and also an investigation of the effects of the banking system online

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Online LibraryLawrence John Lumley Dundas ZetlandCause of, and cure for, hard times: a definition of the attributes and qualities indispensable in money as a medium of commerce, and also an investigation of the effects of the banking system → online text (page 5 of 6)
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merehant,who has a capital of his own honourable ac-
quisition, or who hasinht'rited it from his worthy ances-
tors, -that he may be entitled to its legitimate advan-
tages in exclusion of all intruders, that he mny be
known, regarded, and respected as- a worthy labourer
in the vineyard of industry, as having done his sliara
of duty in improving the moral condition of man. He
is now lost and amalgamated among the \\ reck of
things ; my object is to remove as much as in my power
the rubbish, and bring forth the upright and honest
dealer before the public, as a worthy model for the
present generation to imitate and for posterity to fol-
low. The nation ought to be restored to her genuine



rights, and every individual to his own, that the worthy
man may be known from the unworthy, that those who
labour for the good of society should be restored to
their political rank in society, that they should be re-
stored to their just rank among their fellow-men, and
to all the domestic comforts that nature hath designed
for their general felicity, from which they are or soon
will be driven by the banking system, and left in the
back ground of human depravity, to wear out their
days in. woe. It is high time to commence the work of
reform, it has been too long delayed, and the favoura-
ble representation of our situation by great characters,
and the responses of their votaries are calculated to in-
crease our apathy, and divert our attention from the all
important concern of reformation. The condition of
humanity requires our most active and vigorous exer-
tions | to delay it longer would be dangerous. In a
few years more, there may be men with bayonets in
their hands to restrain or prevent our efforts, men that
will vote charter privileges to and organize robbery :
\vill not be very likely to hesitate to provide force to
protect it. Authority that can pronounce sentence and
,inforcean unconstitutional law in one case, can with
as little scruple render nugatory, every law that pro-
tects the liberty and privileges of the citizen.

Notwithstanding the immense and almost countless
millions of bank money already in the market, there
are now before the state legislature petitions praying
for charters for several more Banks with capitals of
several millions. His Excellency the Governor ob-
serves in his message at the opening of the legislature
on the subject. The evils arising from the disorder-
ed state of our currency, have been aggravated by the
banking opperations of individuals, and the unauthoriz-
ed emissions of small notes by corporations. They re-



57

quire the immediate and correcting interposition of the
legislature. " I also submit to jour serious considera-
tion whether the incorporation of banks where they are
not required by the exigencies of commerce, trade or
manufactories, ought to be countenanced. Such insti-
tutions having but few deposits of money, must rely for
their profits principally upon the circulation of their
notes and they are therefore tempted to extend it be-
yond their faculties, (more properly expressed) their
abilities. Their bills are diffused either in the shape
>floans or by the appointing confidential agents, to ex-
change them for those of other establishments. But
the former mode being conducive to profit is at first
generally adopted, and in the early stages of their
operations, discounts are liberally dispensed. This
produces an apparent activity in business and the indi-
cations of prosperity, but it is all fictitious and decep-
tive, resembling the hectic heart of a consuming disease,
not the genial warmth of substantial health, a reaction
soon takes place. Their bills are in turn collected by
civil institutions, or pass to the banks of great cities ;
and payment being required, the only resource left
is to call in their debts, and exact partial or total re-
turns of their loans. The continual struggle between
conflicting establishments to collect each others notes
occasions constant apprehensions.' 5 He then proceeds
to enumerate some of the mischievous consequences, of
the system such as " the banishment of metallic money,
the loss of commercial confidence, the exhibition of
fictitious capital, the increase of civil prosecutions, the
multiplication of crimes, the injurious enhancement of
prices, and the dangerous extension of credit, are among
the mischiefs which flow from this state of things,
and concludes the subject by recommending a serious
inquiry, whether a much greater augmentation of such



58

institutions, may not in course of time produce an ex-
plosion that will demolish the whole system.

These observations of his Excellency most assuredly
merit the most profound deliberations of that body to
to whom they are addressed, if there are any to be
found among those who are advocates of the banking
system capable of serious reasoning on that subject.
Had their former deliberations been influenced by such
suggestions I presume very few banks would have ever
had an existence in our country. That merchant,
trader, or manufacturer who depends for support from
the banks will be always in the most extreme exigen-
cies, and w r ill have occasion of access to more than one
bank, which may enable him in these exigencies to
borrow from one to pay the other, and thereby
support his credit. This, as his excellency is
pleased to observe, gives the appearance of activity and
indications of prosperity to his affairs also ; but the
same fatal malady or hectic is by this intercourse com-
municated to his affairs, and although extraordinary
industry, or a train of favourable circumstances may
procrastinate the period of his final destruction, yet the
effect is certain. Desperate adventurers may by loans
iioin those accommodating money manufacturers ob-
tain large sums, which will enable them to make a
dash (as they term it,) which if fortunate, may give
them further credit, and enable them to continue their
course of speculation, until ihey evenlualiy involve
themselves and their friends in remediless ruin. To
such, (and there are thousands such,) I never would
apply the honourable appellation of merchant, or that
of mercantile, to auch base robberies as the bankers
enable them to commit. A great part of the business
termed commercial is carried on this way, aud were
it not for those vermin, the regular and prudent mer-
chant would require uo other aid from paper^ than that



in the form of bills of exchange, and no other ought to
be allowed by any government under heaven. Banks,
as many of them are conducted, are mere factories of
a commodity called bank bills, and these manufactories
are by far more numerous (ban those of any other com-
modity in the United States, and these bills arc not
only introduced into circulation by confidential agents,
but when they have found their way to our large
cities, re purchased up by the same confidential agents
at from 6 to 30 per cent discount.

There is no useful manufactory carried on in these
states that can afford to pay bank interest on their
stock, admitting they were sure of successive discounts,
and as they cannot be sure of this, their whole stock is
liable to be forced into the market and sacrificed to
bank rapacity and to their total rnin ; and this has been
uniformly the case with many of our most useful man-
ufactories to the incalculable injury of the country.

There is nothing more certain, than that the com-
merce of every country must depend on the quantity,
quality and price of its productions. Make as much
bank money as you please, it never willjuduce foreign-
ers to purchase anj more of your productions : the
more bank money you have the higher price you must
pay for the productions of the soil, and also every kind
of manufactured articles will come higher in the mar-
ket, and consequently, the profit less, and purchasers
will get supplied on better terms elsewhere.

In addition to what has been said on the banking sys-
tem, 1 here insert a succinct history of a bank in the
state of Ithode Island, near the line of Massachusetts,
taken from the democratic press.

< In the year 180f>, a bank was established in the
town of Gloucester, containing about a dozen houses.
This bank commenced its operations with a capiial



60

composed of two thousand shares of fifty dollars each,
amounting to one hundred thousand dollars. From
this bank, Andrew Dexter Jun. an illustrious specula-
tor, borrowed the small sum of eight t hundre'd forty-five
thousand seven hundred and seventy one dollars in the
notes of that bank, for which he gave his promisary
notes in a new and improved form. As every revolv-
ing ;year produces novelties to excite admiration and
wonder, the reader should not be surprised that this
neplus ultra of paper accommodation was reserved for
the invention of this village, neither let him wonder
why this important discovery was not first made in
Boston, New- York, or Philadelphia. This little town
has long been miraculous for inventions. As early as
the year 1778-9, founderies was established in that
vicinity for manufacturing money. A coin was cast in
immense quantities in imitation of English half-pence,
which obtained extensive circulation, specimens of
which are still to be met with in almost every state in
the union. But since the discovery of creating real
and substantial wealth by ingenious impressions on
slips of handsome paper, which of all others is the
greatest ever made by man ! the tedious and laborious
practice of procuring materials'and fabricating metallic
money is superceeded, and the most penetrating and
prolific inventions have been turned to that object,
This bank having accomplished all the purposes of its
establishment closed its concerns, which circumstance
has developed some of the secrets of such institutions,
and we may reasonably expect occurrences equally
wonderful, on the final result of many other similar
Institutions, in places of greater consequence.

Here follows the form of a promisary note, received
at the Gloucester bank without indorser.



61

I Andrew Dexter Jun. do promise to pay to the
President and directors of the Farmer's Exchange
Bank,, or their order in years from

the date with interest, at two per cent per annum. It
being understood, however, that the said Andrew Dex-
ter Jun. shall not be called on to make payment, until
he thinks proper, he being the principal stock-holder,
and best knowing when it will be proper to pay the
same."

For the gratification of the reader and further illus-
tration of the honesty of bankers, I insert the amount
of the respective notes with their periods of payment.

1st. Note dated Nov. 4th. 1S08, pay- 1 QQQ

ablejin 8 years, at two per cent interest. J *
2d. Dated Nov. 30th, for the sum of 32,000
3d. Dated 12th, for the sum of 6,000

4th. Dated about the same time, for 507,771



Making in the whole eight hundred and forty-five
thousand seven hundred and seventy one dollars, with
which Dexter carried on a scene of speculation and
fraud, similar to what is continually practised by
others who have not yet consummated their plans.
Hundreds, and perhaps thousands of people deplore
the fatal credulity by which they were induced to con-
vert their property into this paper, not no.w wortli a
far thing on a thousand dollars, and which has reduced
them from affluence, to beggary and wretchedness.

Not being scrupulous about prices, Dexter and his
friends possessed themselves of property to an immense
amount, in the most valuable estates in New-England.

This bank ceased its operations on the 27th of Feb.
809, with tlie sum of specie in its vault, of eighty-



62

six dollars and fifty cents. The legislature of Rhode-
Island, appointed a committee to investigate the whole
ef this nefarious transaction. That committee publish-
ed a luminous account for the information of their
constituents, from which the substance of this account
is taken. I believe, however, that Dexter and friends
are left in the full enjoyment of the fruits of their
villany.

Besides the banking system, there are other establish-
ments equally repugnant to justice, and not only ab-
horrent to the principles of republican forms, but to
the principles of every other foi'in of government un-
der heaven.

I shall here in addition to what has been said on
banks, notice some of them : though they are not so
universally mischievous in their consequences and
abominable in their effects, yet they are highly repre-
hensible, and are further evidence of the corruption of
legislators, and of the little regard paid by them to
those laws called constitutions*, which have been fram-
ed with so much circumspection and care by wise sa-
ges, to set bounds to the power of legislative authority,
and are sometimes called the supreme laws of the land.

Totally regardless of every restraint either of law,
conscience, or justice, they are at any and at all times
ready to promote the interested views of mercenary
speculators, or in other words, public robbers.

The establishment of turnpike companies, though
they have met with considerable opposition, they have
nevertheless succeeded universally, and thek univer-
sality has been adduced as an argument, in favour of
their utility.

It must be acknowledged that a combination of mer-
cenary wretches, will always succeed in obtaining a
majority in their favour, in every case where profit of



63

cent per cent is the object. Thus they Lave induced
legislatures to wrest the soil of highways from the pub-
lic, the rightful owners, and to vest it in themselves,
and with it, the power to rob the traveller as he passes.

The laying out, improving highways or roads, was
one of the first improvements of civilized society that
history records, and I believe anteriour to the setting
up the bounds of individual property in lands ; be tins
as it may, no one I presume will dispute its antiquity,
or the universality of the right, that every son of Adam
has in the free legitimate use of the lands thus set
apart, like the air we breathe, it is free for every one
that has lungs for respiration : so also on original prin-
ciples the road or highway, is as free for all the hu-
man species who have power to travel. The native
Hindoo has an equal right on these principles, to occu-
py the roads in the United States as the native citizen,
and this right is made reciprocal in every civilized
nation on earth. It is therefore, original, universal?
and unalienable. Where then in the name of righteous-
ness, do legislatures obtain the right or the power of
vesting this property in the hands of any company of
speculators whatever.

This right could never be delegated by their consti-
tuents for it is unalienable ; it is therefore, as in the
case of banks, an assumed prerogative, despotic, and
arbitrary. I am sensible that when legislators are
called on to vindicate their conduct in this, as in many
other eases, they begin to recite their precedents and
author! lies imported from Great Britain and elsewhere,
and expatiate largely and learnedly oil the utility and
importance of good roads, of easy communication, the
advantage* that Lave thence resulted in Europe, &e.
J acknowledge the force of their reasons, and lament
that they arc so palpable. I know that the rights and



64

liberties of Englishmen were once recognized and re-
spected by their rulers, but they by degrees have been
wrested from them, one by one, by unprincipled and
infamous knaves, until they have no rights left them,
except that of being governed by their superiors, in a
despotic merciless manner, to which condition we are
advancing with gigantic strides. The public are al-
ways competent to make all such improvements as will
conduce to public happiness and prosperity. To en-
deavour to advance those improvements, faster than the
public ability will allow, by wresting public rights out
of their hands and placing them in the hands of specu-
lators to improve for them, is the most damnable of
all political herisies; and it is invariably the case, the
public are plundered for individual emolument. It is
not reasonable to expect, that when the legislature
Lave robbed the people of their interest in the soil of
highways, and bestowed it on a company of their fa-
vourites, that they will not follow their example, and
rob the traveller.

Men may as well attempt to annihilate the principle
of gravity, as to derive public good from political
evil, or by legislative interfluence make that right
which is naturally and originally wrong. If the inten-
tion in vesting the property of roads in the hands of
chartered companies was to public advantage, that in-
tention has been disappointed; it has succeeded as every
public measure eternally will, which is founded in er-
roneous and unjust principles. A company chartered
for the ostensible purpose of making good roads, and
for facilitating inland communication, have widely dif-
ferent views ; the avowed end is calculated to reconcile
fools, (which unhappily make a majority without, as
well as within,) to the measure. The real intention, end
and aim of this turnpike gang, like bankers, is to make



65

the most money they can right or wrong. They set (6
work, make superficial repairs, provide their gates and
century boxes at stipulated distances, and as soon as
the road passes the sanction of some interested unprin-
cipled inspectors, they commence the plunder of the
\vay worn traveller. He is frequently unreasonably de-
tained, often insulted and abused, and nine times out of
ten pays for making the road worse instead of better.
Thousands who were compelled to make long journies
by land during the late war, will attest to the truth of
this statement. It is not denied, but that there may be
cases in which the local circumstances may be such, as
to render it expedient for government to take a voad
or highway under their immediate guardianship ami con-
trol, and circumstances may also render it jusf to de-
mand a contribution from the traveller ; but these cases
are extremely rare, and when they do happen, a con-
scientious regard should be had to the rights of the peo-
ple, and as soon as necessary improvements ate made,
such interference should immediately cease, and the
rights of the people be restored.

The only legitimate object of all political institutions*
is the advantage of the individuals who are to be immed-
iately or remotely effected by them. All thatcannot be
made to centre in this national wealth, prosperity and
glory, can be advantagious only to those self-interested
impostors, who from the earliest account of time, have
blinded, duped, and confounded the understandings of
their fellow-men, the more easily to sink them into de-
basement and misery.

The desire to extend national improvements beyond
what the genious, inclination and circumstances of the
people will justify, is founded in error and prejudice :
neither power or knowledge are happiness, nor can they
vontributc any thing towards producing it, unless they



66

are accompanied with strict morality and virtue. Even-
the desire to promote the acquisition and dissemination
of science, may become inordinate, and measures may
be adopted to effect that .purpose, totally incompatible
with justice, virtue, or sound policy, and which will
ultimately lend to oppress one part of the community.
The poor man of merit may be, by political establish-
ment, thrown into the buck ground, and the most use-
ful talents and worth, lost to society, while the gradua-
ted dunce is basking in the sunshine of public patron-
age and favour. It becomes us to desire that all men
may he made wise, and it becomes us at the same time
to desire that every political effort should be founded
on such principles of equality, that every member of
the political family might participate in the favour.
Not that one part should be instructed, by hazarding
the morality, happiness, and consequent, well being of
the rest.

This leads me to make some observations on lotte-
ries. They have generally been granted avowedly by
legislatures, to obtain pecuniary aid for the promotion
of some particular object, in wKich the interest of the
community is materially concerned, the expense of
which it seems is considered to be beyond the ability of
the public to pay by fair and equal taxation. Govern-
ment therefore, to avoid the abhorrent term taxation,
institute a gambling system, in which they are sure to
win the required sum, by indirectly bartering the vir-
tue and morality of the people at large, for the promo-
tion of objects local in effect and partial in operation.
There are now lotteries in opperatibn for the promotion
of medical science, opening roads. &e. I mean not to
descend to all the minutia of this scene of legal gam-
bling, but will marks its general character and effects.
It seems then that government for the purpose of rais-



67

jug some few thousands of dollars for the promotion of
a favourite object, institute this game, appoint the
managers to conduct it on their behalf, and challenge
the puhlic at large to engage in the play : but too im-
patient to wait the tardy movement of the public, they
offer terms to some dashing speculators, to throw for
the whole at once, and take the lot. These new. pro-
prietors, then divide and subdivide from halves to six-
teenths. The original terms are altered and new ar-
rangements made, and the original plan so improved,
as to form a variety of games in such a manner, as to
suit all ranks, characters, and conditions, from the
chancellor to the chimney sweep ; from ten dollars to
five cents ; and at every corner, in every street of city,
town and village through the land, the eye is met
with a lay-bill, Lottery and Exchange Office, inviting
people to call and play, and the call is but top effec-
tual, for we see them thronged with rich and poor,
Mack and white, bond and free, father and son. mo-
ther and daughter, all engage with avidity in this ne-
farious gambling, all play and all loose, and the few
who may chance to win are the most unfortunate.
Thus by dexterous management, government wins fif-
teen per cent, and the other players, her deputies,
eighty-five, and the whole country becomes a scene of
gambling. Millions are sported away, and thousands
of the citizens from this source, contract a habit of
gambling and all its concomitant vices, that continue
through life. Many who engage with timidity at first,
by his own or his neighbours good luck grows bold,
ventures larger, until at length he ventures all and
loses all. The time and money squandered in this abo-
minable manner since the Medical Science lotteries
have been in operation, has been more than double to
the amount gained by government, so that the fact po-



68

fiitirely is, that instead of promoting medical science it
bsolutely promoted a science of gambling, fraud
and iniquity, by three times the amount. Thus govern-
ment in their iaudible zeal for the promotion of a par-
science, are patronising and teaching by prae-
d science or art, ten thousand times wore in its
moral ejfects, than all the bodily maladies incident to
man.

Whither by fates decree or natures curse,
The human race degenerate still to worse ;
So the boats b*-awny crew the current stem,
And slow advancing, struggle with the stream ;
But if they slack their hands or cease to strive,
Then down the flood with headlong haste they drive."

Admiting the assertions of > the poet to be correct,
and they are corroborated by high ecclesiastical autho-
rity, it most assuredly behovei those who pilot the po-
litical bark, to encourage the hearts and strengthen the
hands of all orders of subjects, to strive against the
torrent of immorality, which threatens a total inunda-
tion.

It is alledged that there are laws with severe penal-
ties against vending policies or insuring on the numbers
of tickets ; that our pious legislature have taken all
possible precaution to prevent this as well as all other
vicious and immoral practices. This is just like a profli-
gate father correcting his son for throwing the die while
he holds the stakes and shares the winings. It has been
before observed, that what is originally wrong never
can be by legislative or any other authority made inno-
cent and right ; and legislatures by the inconsistency
of their conduct and by the appointment of men to of-
fices totally disqualified by ignorance and vice to fill
fhem> bave brought all laws however salutary into dig-



09

t expect, and uuthority into merited contempt. Laws


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Online LibraryLawrence John Lumley Dundas ZetlandCause of, and cure for, hard times: a definition of the attributes and qualities indispensable in money as a medium of commerce, and also an investigation of the effects of the banking system → online text (page 5 of 6)