The enquirer. [volume] (Richmond, Va.) 1804-1815, 1805-04-26
(Conehded.)

DIALOGUE BETWEEN CRITIC AND MIDAS.
(Coneluded.)
C.. There is, Sir, a third reafon, and during
the preient fate of the bank, mott efficacious
reafon, for the adoption of this cautious policy
Let me ak you, whether you would not fooner
receive bank note, than the note of private
individual?
M. Certainly.
C. Your reafon, Sir
M. Becanfe the capital of any bank is always
more permanent and certain than the property
of any private trader.
c. Ii then you had receiveda note of each,
which would you keep the longef in your
hands
IA. Certainly, the bank note. l fhould al
ways know the time when the private note be-
came due, and fhould Immediately after the
expiration of that time prefent it for payment.
But Mould fcarcely ever think of pretending A
poi note of the bank for payment even when it
became due, becaufe the capital of the bank is
always fate and always futficient to anfwer occa-
Gonal demands. fay apoft note, becaufe the
current notes of bank are made payable " ON
demand."
C.. Really, my good friend Midas, though
you no longer pol1efs your tabled power of
turning every thing you touch into gold, fee
you have not yet loft the great art of knowing
when you ought to turn your paper into fpecie.
You have now admitted that private note can
feldom run on, after it has become due, but
that bank notes may circulate for weeks, 81
months & years, without any application to
the bank for payment. You have confrquently
| aflerted, that it is not the intereft of any
trader to ffue greater number of his notes than
what the amount of his fpece at their reflective
periods of payment will nearly difcharge: but
that a bank may " confidently with its own
iafety" emit its notes TO much greater amount
than that of its actual capital. Will you now,
| fir, inform me how thefe emiIions are effected
NJ Principally, by difeounting negotiable
notes.
C.. Is it not then, fir, very obvious maxim
that the extent of its difcounts NUT always
bear certain ratio to the length CT the time,
during which it's notes may be permitted to cir
culate {: or IT other words, to the extent of its
credit? Did they not poGefs general and
fubftantial credit, thefe notes would be CONT
nually returning upon it to be exchanged for
fpecie and fuch applications might be 70 fire.
quently repeated as ultimately to endanger the
fecurity of the bank. Is it not therefore the
obvious intereft of every bank always to have as
much fpece in its Golfers as will be equal to that
part or their own notes which will return upon
them for payment and confequently to regu-
late the whole amount of their emifions, or the
whole.amount of difcounted paper, by this pro-
portional part?
But what is the prefent fate of the Bank of
Virginia Its notes do not yet poffefs general
currency. The cultivators Of the upper coun-
try, when they vifit Richmond with their crops,
will icarcey receive them from our merchants,
and the next moment they prefent them to the
bank to be exchanged for fpecic. greater de-
gree of confidence mutt be infpired the cult
vator mutt gradually learn to appreciate the
real value of notes from the permanence of the
fund, on which they are emitted, and from
their artificial value in the payment of his taxes,
before the emiilions and the di/con1ts of the
bank can correfpond to the expectations of its
cutomers.
M. Then you will not have me put any re-
lance in the fandard, which / had EMPLOYED
for discovering the difproportion between the
prefent banking capital of Virginia, and the eff
fettual demands of the market? Although the
Bank has thrown out great deal of good paper,
you tell me there are ofbcr reafons for this poll
cy, behdes the abfolute employment of ali its
capital Is then no reliance at all to be placed
in this ftandard at no time and under no circum-
frances!
C.. ihould be forty to deprive you Of your
principle, particularly, as ] am unable TO f1rnfli
you with A better one. The bank of Virginia mutt
however be under very different circumstances
before you can make any advantageous app-
cation of this criterion. You NUT wait until
its fourth inftalment fhall have been paid in
until its notes fhall have circulated over great
fpace and for a long time You NUT extend
your obtervations upos the amount of difcounts
to all the feafons Of the year, both when the
markets are fall and when they are empty, and
then perhaps you world he able to apply your
criterion. If under fuch circumstances you
found thatit was the cuton of the bank TO re-
Jeet good negotiable paper, then it would be
farto conclude that more money is wanted
than the bank can lend out, or in other words,
that its prefent eabi.aiis non fllficient to fup-
ply the demands of commerce.
M Have ron then po "a ~ &c Iec;d;,, ,L;s