As the proceeds of this stock would materially aid the preparation for the 21st inst., it is hoped that no objection exists to the sale thereof in the market, for the purpose I have stated. I have the honor to be, The Hon. WM. H. CRAWFORD, Sir, your obedient servant, Secretary of the Treasury, Washington City. Bank of the United States, October 15th, 1818. 4 List of funded debt in possession of the Bank United States. $16,589 53 Deduct moiety of Louisiana stock, to be redeemed on the 21st October, 32,500 00 Amount of 6 per cents. which will remain after the 21st inst. Deferred six per cents. 42,319 09, at 40,280, 190,934, Total value of the funded debt which will remain in possession of the Bank United States on the 21st inst. 284,089 33 91,562 10 351 48 17,046 21 $393,049 12 W. JONES, President. Bank of the United States, Oct. 21, 1818. SIR: I have the honor to transmit, for your information, a copy of the remonstrance of a committee of the Banks at Cincinnati, in answer to a demand of payment of the debts due by the said Banks to the Bank of the United States; and a copy of the proceedings of the Board of Directors of this Bank, on the 16th instant, in consequence of the refusal of the said Banks to pay their debts in specie, or in any other effective manner; and I am instructed to say, that the Board will be impelled, by duty, to pursue the same course in all cases of a like nature. The originals were forwarded by the mail of Monday last; and the statement received this day, from the office at that place. shows that the debts of the said Banks had increased, since the date of the remonstrance, $53,000; and are as follow: I have the honor to be, with great respect, sir, The Hon. W. H. CRAWFORD, Secretary of the Treasury. W. JONES, President. Cincinnati, 20th August, 1818. The order of the Board, which has just been communicated, by the Cashier of the Office at this place, to the State Banks here, requiring so rapid a reduction of their debt to the Branch, as twenty per cent. per month, has excited much astonishment, and no small degree of alarm, as it respects the course which the National Bank intends to pursue towards these Institutions. If this is the settled and determined policy of the National Bank, with a full knowledge of the circumstances of the Western Country, and of the manner in which this debt has been contracted, it can be viewed only as the commencement of that scene of ruin and distress to the community, which the enemies of the Institution have so often predicted. But, we are induced to believe, that this measure has not been dictated by a spirit of hostility to the State Banks, and that a correct exposition of the causes that originated this debt, and of the utter impracticability of complying with the requisition, without subjecting this part of the country to a wide spread ruin, will cause the Directors to pause and reflect upon the measure which they have adopted, as fraught with consequences unforeseen and indescribable. Under these impressions, the Banks of this town appointed the undersigned a Committee, to prepare a remonstrance, to be addressed to your Board, against the enforcement of the requisition. We feel fully sensible of the important duty that is assigned us; and we enter upon it with sentiments of the most respectful consideration for those who manage the extensive concerns of this Institution, and through it, have it in their power, in a good measure, to rule the destinies of the nation. But, at the same time, approach the subject with the liveliest feelings of interest for the prosperity of this part of the country, which is so vitally threatened by this measure; and we beg leave to be indulged in a few and unrestrained expressions of our views, while we attempt to deprecate the impending ruin which, in its train, may engender collisions, equally injurious to both parties. The Banks of Cincinnati are able and willing to meet, with promptness, all demands that can be made upon them, in the ordinary course of business; but they are not prepared to redeem, at a few months notice, all the paper they have issued, for years past; nor are they prepared to inflict unexampled distress upon the community, to discharge a debt, created as this has been, by the transfer of Government deposites, made in every species of paper, and by an almost instantaneous collection, under extraordinary circumstances, of more than two-thirds of the notes they had in circulation. The operations of the Branch, although conducted with no hostile views, has had a constant tendency to oppress and embarrass them, by a rapid accumulation of their paper, from every quarter where it circulates, without replacing it with issues of its own, which might enable us to be on a footing of some kind of equality with it, in our resources. This paper flows into the Branch, through the medium of the Land Office, and through the other Branches, where it is collected in the same channels. The vast sum paid into those Offices, for the purchase of Lands, are immediately transferred to Branches, and debited to the Banks, at an interest of six per cent. to be liquidated monthly. By these means our paper accumulates in the Branch, and returns upon us in a few months after it is issued; and, as we find none of the paper of the United States' Bank in circulation here, we are compelled to create extraordinary resources to redeem it: our own interests have hitherto been a sufficient memento on this subject. We have paid to the Branch, at different times, within eighteen months, that it has been in operation, a sum that, to your Board, must appear almost incredible; it amounts to $1,431,000: and you will not be surprised when we say it has compelled us to curtail our business, and has withdrawn our paper almost entirely from circulation. This policy, which has been forced upon us, operates injuriously to the community, and has given life and vigor to many institutions of doubtful character, whose bills are taken, of necessity, to supply the vacuum. The banks of Cincinnati, during the war, were induced by the embarrassments under which the Treasury Department then labored, to make larger advances than, under other circumstances, they would have thought justifiable; but, influenced by a desire to afford to the prosecution of the war all the aid in their power, the only limit placed to their issues for the Government service, was to avoid endangering the safety of the institutions. The paper thus issued had an extensive circulation, and the banks, after the Treasury became enabled to pay the bills drawn for the advances, found themselves in possession of large funds which were then inactive. These funds were loaned to various manufacturing and commercial establishments, to public, literary and charitable institutions, and for the improvement of the town and country, generally, believing that a sufficient amount could be collected at any time to meet the return of the notes. Various causes, however, have combined to disappoint these expectations; the leading one is, undoubtedly, the establishment of the United States branches, which, by suddenly withdrawing our paper from circulation, without supplying it with their own, have deprived both us and our customers of the ability of a prompt compliance with our engagements. The paper of the banks of Cincinnati, when the branch commenced its operations, formed almost the only circulating medium of a very large district of country. The rapid collection of this paper through the land offices and collectors of the revenue, and the accumulation of it in the branch bank, created a claim against the banks so suddenly that no ordinary means were sufficient to meet it; and the directors were unwilling to proceed to measures, the tendency of which would be to produce a state of things ruinous to individuals and injurious to the banks themselves; and from the course which had been pursued by the Bank of the United States, no disposition had been perceived which seemed to require such measures. As a very considerable part of the debt now due from the state banks has not arisen in the ordinary course of business, and as it will appear, by a reference to the accounts, that a much larger sum has been paid, than, under ordinary circumstances, would have been required, it is believed that, in future, the banks will not only be able to meet all the claims of the branch bank, but to reduce, gradually, the present debt. The state banks are required to pay either in specie, United States notes, or eastern funds; neither of these can be had. The nature of the payments, therefore, would form an insuperable obstacle to a compliance on our part. The banks have not more specie than is absolutely necessary for their ordinary business. This will not appear surprising when we inform you, that they have furnished nearly the whole of the specie eapital of the branch here; and, also, that they have contributed largely to the specie capital of the host of new banks lately established in Kentucky. United States paper is out of the question; it cannot be procured on any terms. All the issues from this office having found their way to the eastward, and the balance of trade with the eastern seaports being greatly against the state of Ohio, it is extremely difficult to procure eastern funds; to the amount required it is impossible. The banks of Cincinnati have not notes in circulation to the amount due to the United States Bank, and it is out of the power of their debtors to procure any other means of pay ment. We consider the liquidation of an interest account at the expiration of every thirty days as a grievance unprecedented; an interest account, it is believed, is not usual between banks; in the western country it certainly is not; and taken in connexion with the extraordinary manner of incurring this debt, it is, in this instance, considered as oppressive, without any reference to the monthly liquidation of it, which renders it doubly so, and savors so strongly of usury, that if we felt disposed to continue the interest account at all, we never would consent to pay an interest which, in arithmetical progression, has no limits, and, if continued, must eventually consume all our resources. Under these circumstances it is proposed that the banks should continue to reduce the debt as fast as they can conveniently, that payment be received at any point where a branch bank is situated. Our banks could make considerable payment in Kentucky; and, although this mode would probably transfer a considerable part of the debt so paid from the state banks here to the state banks of Kentucky, yet these banks have the means of procuring eastern funds which these have not, by means of large deposites having been made there, of eastern capital, for the purchase of produce. In behalf of the state banks of Cincinnati. O. SPENCER, J. G. BARNETT, To the President and Directors of the Bank of the United States. Bank of the United States, October 16, 1818. SIR: The Board of Directors having, with signal forbearance, but constant anxiety, witnessed the unreasonable procrastination of the Banks of Cincinnati, in the liquidation of the heavy balances due by them to this bank, on account of their bills received in payments due to the United States and credited as cash, while these funds have been required by the Government to pay the public creditors in the Eastern cities, for which this bank has had to procure specie from foreign sources at a great expense, did direct the Cashier to instruct you to require the liquidation of the debts due by the said banks, in the manner prescribed by the resolution transmitted to you in his letter of the 22d July last. This reasonable demand has been answered by a committee of the said banks, in a stile so unreasonable and declamatory, that if the Directors could recognise the propriety of discussing with its debtors, collectively, the distinct claims of the Bank of the United States upon them individually, the spirit and temper of their communication, would preclude a resort to that course; for it has more the air of an appeal to popular prejudice and delinquent sympathy, than the frank and manly exposition of a candid debtor. It has, however, the merit of decision; it leaves nothing to doubt, and frankly points to the only course which this bank can pursue, to shield itself from further imposition and responsibility from the same source. It positively declares the inability of the banks to pay their debts in effective money at any stated period. It treats with levity and indifference the idea of liquidating them by payments either in specie or bills on places where the bank can find an equivalent for its responsibilities on their account. Yet in no other way is |