igiiiiig
Ssm&Sl;; , í : ysr,¡ ' «. ' fia'
TED.
for one uniform circula'ing medium, to be sufficient for ou*
population, and commensurate with our property, at all
times;jmd l > accelerate irnnrmwrnents. and 1o lower inte¬
rest; and to ab'dish usury and oil 'he miseries of our pre¬
sent fina cia! system, now tottering.
Author« on poiitiral economy have written much in defini¬
tion of the term, wealth, in oar opinion, it comprises .the
valuable products of the earth, and of our minds, and of our
hands. By the artificial value ¡jiven to the precious metals,
they have been established as the circulating medium of na-
tions, though impartially considered, they will be found most
objectionable. We will contrast with them, the noies of a
Government, with a Constitution, by a free people; for un¬
der despotism we admit that gold and silver, being easily con¬
veyed away from oppression, by o'ne or many, would be pre¬
ferred :
The notes of a Government,
convertible into intere-t, bear¬
ing stocks, are valuable, and
depend also on demand.
The quantity of notes to
co-operate with coins, may
be issuud annuajly, always to
bo in a due proportion »i h
our other articles ol domestic
wealth.
The valu? of Government
notes will not fluctuate, not
being exportable. *
The National currency be¬
ing a domestic article, is
never reduced in quantity.—
The rate of interest may be
fix- tl tiel iw six per cení isir
Joshua Child terms low inte»
Gold and silver have their
values,depend upon demand,
like all other articles in ex-
ohange.
The quantity of gold and
silver is regulated by the pro¬
duction of mines.
The quantity fluctuates,
as the"precious metals are ar¬
ticle- of commerce-
The interest of money rises
from 5 and 6. sometimes to
30, and upwards. It is now
adveriised' at Cincinnati at
80 p*-r cent, and all fixed
propeity has fallen 30 per
3 53./
TSo-o
3 * ^
¿-^7 yû
y
^ W ® * 0 * W 0V00 0 ^'Q
Cent ^^pV'yj^miiVfejhpc-j; Éefctj thé :squ1 of commerce,
ed, bank* curtajl, usury/rises,*^ This requires a separate chap-
and enormous Vâôctfiçè^ •ife^'i^r^eing of great importance
made, and the w«aItlJJ^ff>:tj).tlje productive manufactur-
of the community bewared. ing classptt
In times üfdíftip currency con-
the nation s^^tnT strug^ing tinùes, lilte an administering
for independence, the pre- angel, with the sons of free-
cious metals, like summer dorn,
friends, disappear. They are
hoarded, orient away.
Gold and silver are melted,
and employed in manufac¬
tures, ttr mi fl mount exceed¬
ing the production in modern
times* The consuinptiifh in
Great Britain is 2.000.000 pet-
annum. Ab uno disce omnes.
To obtain the precious me¬
tals, a nation has to give pro¬
perty foi gold and silver, to
be a currency, and suft rs
a loss of 6 or 10 per cent
upon all the quantity in cir¬
culation or in coffers.
Gold and sil ver being hea¬
vy, and liable to robbery, are
transferred at great expense
from one place to another;
therefore inland bills of ex¬
change are at a premium, to
the loss of merchants.
As productions and interchanges increased ^more rapidly
than coins, and it was found convenient to have them deposi¬
ted in secure'hands, where they could not be stolen, and it
was found advantageous to have places for receipts and pay¬
ment, wealthy individuals, or partners, set up as bankers,
that they might discount merchants' bills, and benefit by the
usp of the deposits entrusted to them, which formed a large
sum, far exceeding daily demands. In many nations Bankers
onlv exist to the present period; when they cannot obtain
discount on merchant's negotiable notes, they lend money on
mortgages, at legal interest, and at longdates.
There is no reduction of
noteâ» except of a few by
tosses.
A National circulating me¬
dium is cheaply made.
Government notes may be
sent by post, at very little
expense.
*Mr. Jacobs is the first person who has attempted to ascertain the quan¬
tity of the precious metals, and in a most estimable work, he demonstrates
that the quantity increasing till the beginning of the present century, is ra¬
pidly now decreasing.
3
After this, some cunning men associating, introduced the
pre-eot bank system, to issue notes, pr uniting to reiieetn
with specie. At first these bank companies began with ti¬
midity, and kept a sufficiency of specie, to prevent any pos¬
sible drain. But by d-grees, thev calculated probabilities,
and issued four, five, and more notes than they could com
maud specie. As they discount every week, they have an
hebdomedal power over their debtors, and when, by sud.ten
deimnds, they make bankrupts, they plead necessity for the
exercise of that power which they planned and originated.
They all represent inverted pyramids, and ihe notes are au¬
thorities to remove the foundation We have seen how spe¬
cie fluctuates, how it is exporteJ, how it is hoarded, how it is
melted, and converted to other uses than coin; and yet
these banks unblushingly call it a solid basis—even «hilst,
perha. s, every bank in the country is suspending specie
payments.
That it is the interest of a Bank to issue as manv notes as
it can keep out, and to keep as little specie as it can well dj
with, is a management known to every one. and that theie is
a scarcity of money, is proved by the high rate of usury, the
unsaleableness of estates, and the embarrassment of mer¬
chants. If the Government issued the currency, the nation
might gain interest upon the amount thrown into circulation.
Money is wanted for marketing, contingent expenses, and
the payment ot wages, and large sums ought to be accumula¬
ted in banker's deposits to make purchases and great improve¬
ments. The value of fixed property, of course, depends
upon ihe number of depositors, who bid against each other.
Writers on political economy estimate that a civilized
people require from ten to fifteen dollars per head. The
United States Bank, and all the State Banks, have about
fifty million of notes out—whereas our population, amount¬
ing to about fifteen million, requires at least 150,000,000
of dollars. Nay, we doubt nut that two hundred million
would be absorbed, without the value of money falling below
legal interest.
We have for forty years, with moro or less ardor, been
anxiously demonstrating the uncertainty, and concomitant
evils of an exclusive specie currency. The report of the
Committee ot Parliament has happily relieved us from all
further exertions, to expose the hydra-headed monster that
the system has generated. It intimates that the Bank had
not been at all times amply provided with bulloin, as it now
is; for it appears "that in addition to the surplus resting in
the hands of the Bank, amounting to ¿E2.88U,000. The capi¬
tal on which interest is paid to the proprietors, and for which
4
the States is debtors to thp Bi",k. amounts to Jgl4,553.0f>&,
o» less a sum than +6ol7,4 3.U0Ü over anil above all
its abilin-««**
Great Britain has heavy debts due to it from Spanish Ame¬
rica, and hold» tuant of its mii.es. It holds also a heavy
amount o! our stocks, which it can sell here, and convert
ii.io specie. Let us now see the situation of the Bank of the
United ¡Stales, according to the. report of the Committee, oa
the Istol Apiil, 1852:—
Funded Specie. Circulat'On. Deposits. Due to
Debt. Europe.
1831. Sept. 1st. 3,497,631 11,545,116 22,393,447 15,884,598 168,372
1822, April 1st, none 6,799,753 23,717,441 17,056,386 1,876,502
ts t;i, » of other b uks. 2,080 4+2 —51
H it- .ve see that tin.- Bank has no funded debt; and this is
the situation of all the Banks. What therefore have they to
Sell to raise sp. cie il pressed?
Is this basis o( seven millions of dollars, sufficient
when divided amongst twenty five or more Banks of the U.
: and have not tile Stale banks a smaller proportion of
Specie i han die Government balk, which has always demands
on ill in. and can make itself the last to suspend species pay¬
ments.
in New England the currency consists of 1. 2, 3,5 and 10
doliai note«, of which the forgeries are numerous. In Gieat
Britain the Parliament ptohibits even notes of 1 ai d ¿£2.
Ought the eneigies of a country to be parahzed, and the
piospeiity and happiness of the people to be endangered, by
the exportation or evanescence of an article of commerce to
a small amount? It has surprised us that sensible men
should have so long had their understanding obscured by
prejudices, that only now they are becoming enlightened, and
acknowledge that gold and stiver cannot, with safety, be re¬
lied upon. See the statement of four Batiks.
Jul} 7, 18.11. March 29, 1832-
The Bank of the U. S had in specie. 4,093,536 2,575,075
Boslon Office do. 1,107,382 318,075
Uew York do. 2,257,427 606,995
Batiiuiore do. 6+0,000 253,OuO
ft would draw tears, were the ruin and distress.of families
pourlrayetl, which bank.upt bank, have occasioned. Imagine
also the tower classes, with their small notes, at once become
valueless. 1 he State Batiks did not fail, when ordeied to re¬
sume specie payments, because the blundering financiers of
Congress hao given 100 of six per cent stock lor 80 oí their
Botes.
When Congress, without investigation, ordered a resump¬
tion ol specie payment, with a sic volo, sic jubeo, stat pro
ra'oiiie voluntas, i hen motto ought to be, incidit in Scyllam
cupietiB evitare Chary bdiii. Individuals have run in ciebi, int»
5
the United States bank(exrlu-i ve of State Banks,)70.000,000}
anil I leiguers are purchasing her stocks ot 'he bai k. We
are running more and more in debt t<> Europe, although we
âre augmenting estates and p oducts. We double popula¬
tion in less than 25 years.
We have now ... 15,000.000
In 25 years - 30.000,000
In 50 do - - - - 60,000,000
In 75 do - - - - 120.000,000
liow can we expect a sufficiency of the precious meials?
If a national currency be made, the nation, in their corporate
Capacity, will gain 5 or 6 per per cent on every hundred
nullum of ouïes is»ui-il; m ntlier word-, the áiate Govern¬
ments may exempt the people from so much taxa'ion
In an annexed extract from 'he report of the Committee,
will be seen t .eir opinion of the stability of the U. S. bank.
The next important question has never been asked, it the
U S. bank, after a general crush by curtailments, notaries
protests, suits. &c should notwithstanding suspend -p tie,
will Congress still take its notes, and enable it to is-ue
30,000,000 sterling as the Brit. Parliament do,and to receive
an interest of 8 or inore million of dolls. Is it not an abuser
of terms to call specie the basis of bank notes? Do they not
depend on seventy millions of discounts? Is not the -even
million in specie to answer drafts for deposits of 17,000.000,
and notes 23.000.000 in circulation. Exporters, manufactu¬
rers, hoarders, &c. are all taking away our gold and silver.
1 will now submit to our statesmen and financiers a sim.
pie, feasible, plan, for an advantageous, uniform, paper cur¬
rency. in addition to specie.
1. Let the Congress and President, forming the Govern¬
ment appoint a Board, to make 100,000,000 of currency
2d. Let thein be given to the several states according to
their population. The states each to appoint a Board to lend
the national notes at legal interest, but not to lend more than
a tenth of the estimated value of any estate—the borrower to
give a power to sell if he fails to pay the interest annually.—
If an estate should be divided, the laod-holdcr receiving a
portion to bind the estate "so separated, for its portion of inte¬
rest, &c. &c. By this mode there cannot be partial corrupt
loans.
3. The states to receive three-fourths of the interest and the
General Government a fourth.
5. An act to be passed that these notes and specie only will
be received in any payment to the Government, and the
states to pass die saine law.
6 That Bankers shall give security to secure depositors
from loss.
6
7. The Government to deposit stock bearing interest, to
give in exchange to every national note holder, who shall
present 100 dollars.
Can there be any doubt that a nation having internal
taxes untouched, and two or three hundred millions of acres
of land, can by receiving only these national notes, by the
Générai Government, and by the States keep them without
depreciation; and that according to the quantity issued, the
interest may be fixed at 5 per cent. ,
These are the outlines of a permanent uniform system,
whereby there can always be a supply of the circulating me¬
dium in due proportion with the interchangable labour, pro¬
ductions and property of the Netion. Tuen will be vanished
the present complication, and the numerous companies who
every week have the despotic power to raise up or crush the
useful class of citizens.
I will not describe the exhilirating prospect of future com¬
fort and tranquillity, the hopes of saving mv adopted coun¬
try from inevitable suffering by a destructive crash.
Forgery is easily prevented by a particular paper and en¬
graving, as was proved by the Bank of Paris, (the only one in
France) and an act may be passed to prevent the making of
similar paper.
Feebleness has made ine brief. If this plan shall be appli¬
ed to Ireland, that people, with superior strength, animation
and sensibility—in consequence of their pure climate would
be comfortable and tranquil, and the non residents would re¬
turn. If England shall adopt this currency, similar effects
will be obtained.
If the East India Company shall establish it in their exten¬
sive populous possessions, the inhabitants will no more be
impoverished by drains of specie, and their income may be
easily increased without oppression. In 1825 we gave the
outlines of this currency to the Directors of the East.
THOMAS LAW.
The following is an extract from the Bank Committee's re¬
port.
Qliep. No. 460-J
"The preceding table shows that, at no period in 1819,
when the Bank was very near suspending payment, was it
less able to extend relief to a suffering community as at the
present moment. In April of that year, the month in which
its difficulties were the greatest, its means of specie, notes of
other banks, and funded debt (which could have been turned
into specie, or notes of other banks) amounted to upwards of
of ten millions of dollars; and the whole demands, which
could come against it in the saine month, of circulation, de¬
posites and debts owing abroad, amounted only to about four-
w
teen millions. But the committee feel bound, in candor to
state,'hat this was after a number of months of constant
contraction, not only by the bank of the United States, but
also by most of the other bankin„ institutions of the coun¬
try, where a general exhaustation had been produced It
was on the 6th of April, 1819, that Mr Crawford, then Se¬
cretary of the Treasury, writes to Mr Cheves thus: ' It is
even doubtful whether it is practicable, with all the exertions
which it is in your power to make, to continue specie payments
through the year.' Under the same date, he says, * My im¬
pression is, that the safety of the Bank can only be effected
by withdrawing nearly the whole of its paper in circulation.
If the Rank does this, all other solvent Banks will be com¬
pelled to do the same. When this is effected, gold and silver
will be introduced into the country, and make a substantial
part of the circulation, and enable the banking institutions
gradually to resume their accustomed operations. Whilst
this is effecting, the community, in all its relations, will be
greatly distressed. Considering the extent of the suffering,
it is greatly to be desired that some good may result from it.
" The committee believe that the course of operations by the
Bank, during the years 1830 and 1831, have been nearly of a
similiar character to those of the years 1817 and 1818. Drafts
and notes, payable at distant offices, were then freely dis¬
counted at the Bank of the United States, and the different
offices Bank notes were issued by the Bank without fegard
to the wants of the community, or the effect upon the circu¬
lating medium, which became depreciated, driving the pre¬
cious metals from the country; and. until the re-action had
operated to check them, led to extravagant speculations, which
ended in ruin; and relief was not obtained until the circula¬
tion of the Bank of the United States had been reduced to
about 4,000,000 of dollars. Before this was accomplished,
the expedient was resorted to of curtailing loans; and, while
they weie doing that, they continued the issue of Bank notes,
thereby continuing the evil which they were striving to avert.
" What is the state of the Bank now?
"On the 1st of March, (see monthly statement marked
No. 35,) the Bank had 86,800,000 specie, §2.840,000 notes
of other Banks, and of funded debt, none ! ! making an ag¬
gregate of 89,640.000 to meet its circulation of 823,717,000,
deposites 817.050,000, and foreign debts owing 81,876,000,
making an aggregate of $42,643,000; and this evil exists
wh le a reaction or contraction is operating to a considerable
extent.
"This contraction commenced on the 7th of October last,
and is evidenced by the following circular, which^indicates,
beyond all doubt, that the Bank had over traded."
.6
A writer in London. savs, that the state of the Bank of
England in 1835, and the whole of the evidence of the witnes¬
ses pi ove that a currency adequate to the demand for exchange¬
able property cannot ne obtained by a gold circulation.
The Secretary of the Treasury to publish every six inooths
the number of notes issued, and a statement of the amounts
apiv-opriated by the General Government, and State Govern-
me its—in short, every publicity to be given, to insure
coin lence. Bank secrecy becomes unnecessary: the more
this plan is understood 'and prac'iced upon, the m-re will
jov arise at relief from dangers of bankruptcy and oppression,
which now give oo rest or security.
VVe had laid down the neu. when humanity ur^ed us to
exhibit a faithful, melaoch d v picture of the scenes we wit¬
ness: of families ruined bv fluctuations in value, cau-ed by
specie, when banks call in four or five of notes, for -very
amount of specie removed; of depreciated property which is
almost unsaleable: of inactive energies, for want of means;
o> distresses, which emp'y handed charity cannot relieve;
of maidens pining in celibacy, now too frequent; of marri¬
ages deferred, and of s.dfi.h unions: of venality; of party
spirit of office hunters; of criminals bv poverty, who w .uld
overflow poor houses and prison-, but for the back country,
whither young men with abili'ies, and the bankrupts a"nd
flyers from sheriff's resort, and realize in the Atlantic states,
the lamentable ini-eries so pathetically described in Gold¬
smith's Deserted Village
The receipts into the Treasury amounts to 825.000.000
The discounts to Banks, • - . 9,000,OfrO
Taxes exceeding any under a despotista, and rent-, and
lawyers, and contingencies, and house expenses must be paid.
The deposits in all banks may be estimated at 30.000.000,
composed of small balances, and of sutn- to be paid or appro¬
priated. It must be obvious that very few men have funds
bv them to be applied to improvements and purchases, and
that every year our population and properties increase, and
specie diminishes.
In my next I w ill prove that stockholders will gain as
much as bankers, as uu the existing banks- .
«s