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 immediate creditors or injury to the particular community in which they are placed.  This dependence of a bank, which is in proportion to the extent of its debts for circulation and deposits, is not merely on others in its own vicinity, but on all those which connect it with the center of trade.  Distant banks may fail without seriously affecting those in our principal commercial cities, but the failure of the latter is felt at the extremities of the Union.  The suspension at New York in 1837 was everywhere, with very few exceptions, followed as soon as it was known.  That recently at Philadelphia immediately affected the banks of the South and West in a similar manner.  This dependence of our whole banking system on the institutions in a few large cities is not found in the laws of their organization, but in those of trade and exchange.  The banks at that center, to which currency flows and where it is required in payments for merchandise, hold the power of controlling those in regions whence it comes, while the latter possess no means of restraining them; so that the value of individual property and the prosperity of trade through the whole interior of the country are made to depend on the good or bad management of the banking institutions in the great seats of trade on the seaboard.

But this chain of dependence does not stop here.  It does not terminate at Philadelphia or New York.  It reaches across the ocean and ends in London, the center of the credit system.  The same laws of trade which give to the banks in our principal cities power over the whole banking system of the United States subject the former, in their turn, to the money power in Great Britain.  It is not denied that the suspension of the New York banks in 1837, which was followed in quick succession throughout the Union, was produced by an application of that power, and it is now alleged, in extenuation of the present condition of so large a portion of our banks, that their embarrassments have arisen from the same cause.