Virginia Argus. [volume] (Richmond, Va.) 1796-1816, 1812-05-28

inducement with tine people to accept il, a
circulating medium, on equal terms wit,
| a bank note; because, with the mass of CT
tizcns and traders, Whose wants and obliga
| tons call FOR daily liquidatiuns and expen.
ditures, 1t will be mere fugitive property
not long enough in their possession to make
the interest demandable. The interest, of
| course, viii have no attractions for the great
body OF the citizens: And the exchange of
| the note for silver or gold being impossible
Tor one year, the bank note, which is i'm
| mediatelv exchangeable, will have a decid-
ed preference.
IL follows, then, that these Treasury Notes.
deprived of a current value equal to that
OF BANK notes, can be attractive chiefly for
Their ultimate value, as principal stock,
bearing interest. And IN this point of view,
they would only be sought for by men of ca
pltai, who might think it profitable to west
their money in them. 1t is presumed, that
the Treasury notes hold out no lure to per-
sons of this description: First, because
the interest is below the market price of mo-
ney; and secondly, because the term of
twelve months is too limited period to ex
cite monied iqen to the Investment of their
funds.
There would, from these considerations,
remain the banks alone to which to lock for
countenance and support in giving to the
Treasury Noes the current value of a spe-
Gle circulating medium.
The banks which have the deposits of the
government, .oight, without risk, agree to
receive Treasury Notes, and to issue bank
| notes upon them: because, the Treasury
Notes being legal tender in debts due To the
United States, upon any cali upon the banks
by government for the amount of its depo
sits, the amount Of Treasury Notes receiv-
ed i'll exchange for bank notes, would salts
! factorily answer that call. This exchange
| might be safely made by any bank having
government deposits, to the full value of any
| sum in Treasury Notes equivalent to those
deposits. But still, the exchange would not
be so lucrative to the banks as bank loans TO
individuals because, from the latter they
derive profit of more, than six per cent.
whilst from the former, they would only re-
ceive an interest of FIVE and two-thirds per
cent. The banks which have no deposits
from governments, Could only enter into such
| an exchange by curtaiiing their discounts to
individual borrowers; and as the profit
would be less, it cannot be expected that
they would do it.
As circ ulating medium, therefore, and
as principal stock, the proposed notes are
| detective. In their simple character of mo-
! ney, they arc also objectionable.
The precious metals have always been
preferred for a current medium of value.
This arises from their possessing an intrinsic
value, quite or nearly equal to their repre-
sentative worth. Hence, an issue of gold and
| silver coin from the mint requires no previous
! pledge of redemption to sustainits circulate
4 on Rnf alt raI
\ redeemable by the act which creates it, un.
less the redeeming fund be &c permanent
nature & distipctls specified -iin be regard
| ed as a mere y.ekcsl sign Of alue, liable 10
| defFeCiation. To render paper-Inoney po-
| pular, its basis should always be. fred, indie
| pendent of the fluctuations of policy and the
caprices of party. Viewed in this light, the
proposed Treasury Notes present nothing to
the mind but field for speculation or har-
vest for petty usury.
The proposition of the Secretary of the
Treasury presents difficulty still more Sc
1 rious. The obstacle occurs in the Constitu-
| ton of the United States.
The eighth section of that instrument gives
to the Congress the power to 6orrozu and to
coin money; but in no part OF 1t is there to be
found a single phrase authorship the federal
| legislature TO ISSUE PAPER-MoNET To
con-, means to mini or STAMP metals for mo-
Hey; aud in no sense is the word applicable
to promissoiy notes.
That the issuing Treasury Notes does
not come under the denomination of loan,
and cannot, therefore, be implied under the
| power to 6o1To7u, is obvious from the very
terms OF the proposition. In borrowing, the
specie, or what may be Instantly converted
| into specie, is actually received by govern
ment. which then issues certificate TO the
lender as an evidence of what it owes
| Whereas, in issuing Treasury Notes, the go-
vernment issues them in the first instance os
| money, without having any thing in hand for
which they are issued And so distinct are
| these two operations Of finance, that in Crea,
Britain Treasury Notes are never uttered
| till the ability of making loans is exhausted
and the operation is there considered as the
last effort OF bankrupt ministry to replen-
ish an empty exchequer.
Indeed, 1t is deducible from the constitu-
ton of the United States, that the trainers Of
That sacred contract and its amendments, in
tended To put an end to the practice of issu-
inS paper-money forever. And it is not at
all surprising that they were pseeerafed with
| ideas OF the necessity Of doing so. Who could
be insensible TO the evils prodaced by utter
ing bills of credit during the war of the re-
voiutions The fraud and ruin occasioncd by
the paper-system ofthat period are too noto-
rious to need recital and were too severely
felt for any rejecting man to wish to see Il
| revived.
BY Clothing Congress with authority only
to coin and borrow money, by precluding the
states from emitting bills Of credit, and by
reserVing to the people whatsoever power i.
not delegated to the United States, the con
stitution wisely guards society from one Of
the greatest curses with which il ever was
afflicted. The experiment of paper-money
has been fairly made: IL was tried during