vious 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. The intensity of this pressure on the
community is in proportion to the previous liberality of credit and
consequent expansion of the currency. Forced sales of property are made
at the time when the means of purchasing are most reduced, and the worst
calamities to individuals are only at last arrested by an open violation
of their obligations by the banks--a refusal to pay specie for their
notes and an imposition upon the community of a fluctuating and
depreciated currency.

These consequences are inherent in the present system. They are not
influenced by the banks being large or small, created by National
or State Governments. They are the results of the irresistible laws
of trade or credit. In the recent events, which have so strikingly
illustrated the certain effects of these laws, we have seen the bank
of the largest capital in the Union, established under a national
charter, and lately strengthened, as we were authoritatively informed,
by exchanging that for a State charter with new and unusual
privileges--in a condition, too, as it was said, of entire soundness
and great prosperity--not merely unable to resist these effects, but
the first to yield to them.

Nor is it to be overlooked that there exists a chain of necessary
dependence among these institutions which obliges them to a great extent
to follow the course of others, notwithstanding its injustice to their
own im