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# THE PHILADELPHIA BANKS IN EXPLANATION OF THEIR COURSE.
At an adjourned meeting of the Delegates from the Banks in the city of Philadelphia and adjoining districts, held on Wednesday evening, Oct. 23d, 1839, the committee appointed at a previous meeting to prepare and report an address to the citizens of Pennsylvania, presented the following, which was read, unanimously adopted, and directed to be signed by the Chairman and Secretaries, and published in all the daily papers:
To the Citizens of Pennsylvania,
The Banks of Philadelphia having decided to suspend for a time the payment of their notes in specie, deem it their duty to explain to the citizens of Pennsylvania, the reasons of that measure. This they will do frankly and briefly.
In May, 1836, the Banks in New York suspended payments in specie, and the rest of the Union followed their example. This just and necessary measure was required by the commercial relations between this country and Europe; and all the Banks of the United States immediately directed their efforts to assist the country in the honorable discharge of its foreign debts, and to prepare for the resumption of specie payments. These operations were proceeding in a manner easy for the country and satisfactory to its foreign creditors, when their progress was disturbed by a premature effort for a general resumption of specie payments. The Banks of New York were unfortunately constrained by law to resume on a given day, whatever might be the state of the country; and they naturally endeavored to induce all the other Banks to do voluntarily what they were compelled to do. This purpose was effected, aided as it was by the impatience of the public, by the competition of political parties anxious to appropriate to their respective sides the popularity expected from hastening the resumption, and by feelings of local pride, which prevented many from declining to do what in reality they disapproved, and accordingly a day of resumption was named.
The banks of Philadelphia were quite as ready to resume as those who were most anxious to begin, for they had greatly reduced their liabilities, and one of their number had no less than $7,357,000 in its vaults. But they believed that the country at large had not yet sufficiently recovered from that violent shock to be ready for resumption. They recollected that under similar circumstances the Bank of England had continued her suspension for upwards of twenty years, and they avowed their apprehension that a resumption in the unprepared state of the country must be followed by a relapse. Overruled in this judgment, and obliged at the hazard of greater evils to unite in the resumption, they sincerely co-operated in it, and, being satisfied that the measure in order to be useful or permanent must be general, they made great efforts and large advances to the Southern and Southwestern States, who were thus enabled, almost exclusively by the assistance of the Philadelphia Banks, to unite in the resumption. But the inefficacy of the measure soon became obvious. The Southern and Southwestern States placed by the resumption too much in advance of the crops, which alone could sustain them, gave way at the earliest demand for specie, thus breaking the general line of resumption, and weakening the Atlantic Banks by the amount of the advances made to support them. Nor was this all.
The delusive appearance of the resumption worked injuriously on both sides of the Atlantic. In this country it caused the belief that all the danger was over, and individuals rushed into new enterprises, and States undertook new improvements, relying on the enjoyment of the old facilities of credit. Abroad, the extraordinary and honorable efforts made to discharge its debts, exalted the character of the country; and merchants hastened to sell on credit, and capitalists to lend on the public securities of a people who had been thus faithful to their engagements.
It was then that the anticipations, under which the Philadelphia Banks gave their reluctant assent to the measure, were realized. Ar.d now, after little more than a year of nominal resumption, the Southern and Southwestern States are more embarrassed than ever. The Atlantic Banks are weakened by their fruitless endeavors to aid those States-the commercial debt to Europe is larger than at the resumption-the debt of the States in Europe much larger, and the specie means of the country much diminished. The premature resumption of specie payments therefore has left the country in a state of exhaustion, which has prevented its being able to stand the new shock which forms the more recent and direct cause of the present suspension, and drain of specie to Englond.
In our relations with England, she is largely and habitually a creditor. Like all other creditors, she is willing to buy more and lend more while her AWA pressed, she ceases to lend, ceases to buy, and proceeds at once to exact payment. Thus in ordinary times she receives payment for her goods in our own produce, or in our own funds, and rarely requires, because she rarely needs, specie. But a sudden trouble has come upon England, which reverses the whole of our relations. Her crops have failed, and she is forced to protect her people against famine by purchasing food, and this not from our own country, which might furnish a market for our crops, but from her neighbors who can furnish it cheaper than we can and as these are comparatively small consumers of her products, she must pay with specie for her food. Accordingly the Bank of England alone has been obliged to furnish more than thirty-five millions of dollars in specie to be shipped abroad-a drain that has threatened that institution with suspension. By the latest statement of her affairs, it appears that with immediate demands for which she is liable, of £25,742,000, the whole stock of specie is only £2,800,000, and this after borrowing from the Bank of France £2,000,000-so that without this extraordinary aid, her position would have been extremely critical.
The consequence is that money has risen to twice or three times its ordinary value-that the staples of this country are unsaleable except at ruinous sacrifices that the stocks of this country sent by the States, or by the banks, or by individuals, are wholly unconvertable, leaving as the safest and the favorite mode of payment, the exportation of specie. The demand for this article is still further increased by the efforts made in England to produce relief at home.
The manufacturer, pressed by some urgent want, empties his warehouse into the packets, and selling his goods here at a small sacrifice, for notes which are discounted at a second sacrifice, he ships the specie, which reaches England in time to relieve him, leaving this country flooded with goods without any regard to its wants or its coasumption.
The result is, that the coin of this country is wanted in England to send to the continent for food-that a very large portion of it has already gone, and that the rest will probably follow. The banks of Philadelphia have already contributed many millions-one single bank of their number having since the resumption in August, 1838, paid out no less than 8,712,000 dollars, in this city alone, and the demand seems to increase, instead of subsiding.
Under these circumstances, they have had to adopt one or two alternatives-either to force the community by sacrifices of its property to pay its debts to the banks, in gold and silver, to be shipped forthwith to England, or else to resort to a temporary suspension until the community as well as the banks could have time to recover from the effects of these foreign troubles. They have not hesitated to prefer the latter, as being the most conducive to the true interests of the State; and they confidently rely that their motives will be duly appreciated by the public authorities of the commonwealth. To that commonwealth they owe their existence, and they regard her prosperity as a paramount consideration, to which they have always sacrificed their own merely pecuniary interests. Every loan wanted for the service of the State, every great improvement for the development of its resources, has always found a constant and
