31 Series IV Volume I- Serial 127 - Correspondence, Orders, Reports and Returns of the Confederate Authorities, December 20, 1860 – June 30, 1862
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With this view I addressed a letter to each of the banks, a copy of which will be found in the following to the people of Alabama, published on the [17th] day of December, 1860. I refer the convention to this address for a full statement of the reasons which induced my action in this matter:
"Montgomery, Ala., December 17, 1860.
"THE PEOPLE OF ALABAMA:
"Strong appeals have been made to me by many citizens from different sections of the State to convene the Legislature for the purpose of providing the ways and means of protecting the interests and honor of the State in the impending crisis, and for the further purpose of authorizing the banks to suspend specie payments, to enable them to furnish greater facilities for moving the cotton crop, and thus relieve, to some extent, the embarrassed condition of the cotton marked and the people. These appeals were made by those whose opinions are entitled to the highest respect, and are disconnected with the banks, either as directors or stockholders. After giving to the subject the fullest consideration, and viewing it in all its bearings, I determined not to convene the Legislature, for reasons which I will now give. I did not doubt, and to do now, that the convention to meet on the 7th of January will determine that Alabama shall withdraw from the present Union at an early day. Should this contingency occur it will be necessary forthwith to convene the Legislature to provide for whatever the action of the convention may render necessary in the way of legislation. The imposition upon the State of the expenses of the convention and two extra sessions of the Legislature at this time, when economy is a matter of the highest consideration, ought to be avoided if it could be done consistently with the public interests. If the Legislature could anticipate the action of the convention and provide for it, it would supersede the necessity of convening after the convention s but this would be impossible.
"It was my opinion that if I issued a proclamation calling an extra session of the Legislature every one would believe that the object, in part, was to authorize the banks to suspend specie payments. This would have caused an immediate run upon them, and would in a great measure have exhausted their specie, and thus rendered them unable to aid the State in her emergency or relieve the people. It appeared to me that these difficulties could be avoided by the banks and myself assuming responsibilities which never should be done under any other circumstances. I considered it a matter of the utmost importance that the specie in the vaults of the banks should be kept there, so far as it could be done, in order to aid the State in providing the means to sustain herself in the approaching crisis. It would be inexpedient at such a time to tax the people, and State bonds could not now be sold except at a great sacrifice. I considered it the duty of banks, upon whom extraordinary privileges had been conferred, to come to the aid of the State in providing the means to sustain herself in the approaching crisis. It would be inexpedient at such a time to tax the people, and State bonds could not now be sold except at a great sacrifice. I considered it the duty of banks, upon whom extraordinary privileges had been conferred, to come to the aid of the State in her hour of need, and therefore determined to request them at the same time to suspend specie payments and retain their specie for the benefit and security of the State so far as might be necessary. In this way a run upon the banks would be avoided, and they would remain in a condition to relieve the State from immediately taxing her people, or selling bonds at a heavy discount, and render unnecessary an extra session of the Legislature before the meeting of the convention. The extension of relief to the people in selling their cotton crops would follow as an incident. In consideration of the premises, I addresse banks a letter, of which the following is a copy:
" 'Montgomery, Ala., December 4, 1860.
" 'THE PRESIDENT AND DIRECTORS OF THE CENTRAL BANK OF ALABAMA,
" 'Montgomery, Ala.:
" 'GENTLEMEN: The peculiar and extraordinary state of public affairs and the interest of the State make it a matter of State necessity to retain in the vaults of the banks all the gold and silver in their possession. From present prospects there can scarcely be a doubt that Alabama will secede from the Union before the 4th day of March next. Should that contingency occur, it will be necessary for the State to raise not less than $1,000,000 in specie, or its equivalent. Under the circumstances which surround us we could not sell State bonds either in the North or in Europe, except at a ruinous discount; and it would be inexpedient to tax the people immediately for that purpose. How, then, can the State secure the money that may be necessary in her emergency? But one practicable plan now presents itself to my mind, and that is, to call upon the banks of the State
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