Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1815-12-09


1t may be advanced, think, with confidence. tial
whenever there is run upon the banks, ther, is
conclusive evidence that the circulation has been too
much increased. II does NOT, il is true, follow that
this ev does not exist when there is no run ON the
banks, since confidence may for long lime pr.
ven, such IN event, even though the issue OF paper
has been too great.
W, on the one hand, run uron the bank II e.
"ehcc OF an excess oi paper circulation Dr., ,iour
~ existing, It has the cBect the other net only OF
correcting that excess, hut ofreducing the quantity
OF the currency, even below its natural and soe, y
mount. For, run upon the banks often creates on
alarm, even ii does not originate in apprehen
and the paper medium IS therefore naturally d;s,o
sed 10 pour from all quarters into the institutions 10
winch 1t belongs; where, from prudential eonsiie-
ir'uons, 1t IS Retained, until the moment of danger
Is over. Moreover, to meet the pressure cur
tail Of discoouts geaeraliy take place aai the deal
eis IN paying up these curtsls naturally make use
ii the paper 81 the institution which they are IN
dchted. An effort is thus making on all sides. TO
correct the excess, and 10 draw from the circulation
the paper which has been issued. In this STRUGGLE
the bankiirec'ors, their dealers, and the note-hol
dets so heartily lutte, that they wholly over.hotbe
business and deficiency t.lcs place pr,portioned
To the former excess, alarm aid pressure The va.
ration between the quantity j., circulation at differ
eu' tunes produces acorresp0ndcnt variation in The.
price the currency and Of commodities as has been
shown very mush at large by Mr. Thornton. in
the commencement Of his Sti chapter The de-
gree OF this yarton in the quantity and price ofthe.
currency, is the degree the iluctuation of which
We have been speakug.i
Nor is IT only when run takes place, that we
are 10 conclude the banks have over-trae or issued
AN excess oipaper. They frequently discover from
the silent return Of their paper and from other ey-
mences, that they have been imprudent. They i'm
mediatcly become liberal of their discounts mr.
resort TO curtais. These measures are always re-
sorted to with view of correcting their ove,.-f,ot
ing and as they have the eff CT and operation of
corrective, they of course diminish the otatftv and
encTedse the Tuttte OF the curreiicy-thus as In n
Their cases producing flucuation orin other words
making the value otmoney greater ut one tine than,
another.
Thus perceive that a paper currency is al
ways liable to 1uctuation: sometimes erester sone-
times less, hut, like the ocean, almost ALWAYS in n
state OF ehb or flow. The establishment of COIN
try banks tends greatly to cncreaee this nuctuaon
and tn erection of banks hy individuals without e.
gIs'ah'e authority w'lt add to IL very considerably.
Tins VIII appear from several considerations
], itthere was only one banking conpany in the
community, they would not find so difficult to re
guate the quantity III the currency AS where they
IRE numerous They would krow precisely the A.
mount which, had been issued which furnishes one of
the means OF Judging wheihcr the quantity he greater
or less than usual. The more numerous banks are
the more impossible il to know what is the amount
circulated The excess in circulation is then only
known by b;ing felt that is to say the nressure
must exist, The evil must be sensibly operating be-
tore they are aware OF the necessity NJ caut;on-
nus then mere increase of numher, in ths mode
encreases the Ructu7ting character of papcr
= IL there was only one Bank m the community
tie corrective could BE- applied with less danger of
OVERRIDING the matter. Where there are MANY.
ALI equally affectedby season of alarm and ali
are equally soic;tous and eager TO draw in their ma
per Z; e. TO lessen the qWaatifV of currency
8. The more numerous Banking Comra.ies are
the NOR, danger of bankruptcies, disagreement and
Earring among them all which have direct ten
dency to lesscn publc confidence in the whole. and
20 produce TRAIN OF measures which must throw
the currency into state ofca7s.ant H1ctIalion
Tie. .sidella3 'i9ss Furnish ne fca.
sons against the multiplication of Banks f,om which.
however, do not mean to contend that there
should be only one. But, it the erection OF Banks
without Limitation be permitted, i IS easy to per
ceiVe that they would be carried a. an extent at
which, the causes above alluded T. rould have the
most alarming AMI fatal effects
There are other oonsideraec,s too connected
with Ibis subject, which weigh against the uropri
ely oil permitting individuals to establish uncharer
ed Banks nd f6ii7nH AT the moment such a pro.
jet started the Banks already established are at
once alarmed whether reasonably or not is nm
important. They are aware. that. as soecie ia not
TO he bad without taking it from their vaults the
Stockholders oi the iaten1ed bank will either nav
up their subscriptions in their paper or that de-
Inand for specie will be made on them, for the pur
N
they are threatened with more than usual demand
tor specie in other words, with a RIM. Hence
they commence immediately precautionary avs
tenn This consists in drawing in their notes and
curtailmg their dealers. Thus they themselves call
IN much Of their paper; the intended bank on It's
part receiving large quantities of the psper before
IN circulation and accommodating il in i's vaults ure-
paratory 60 the commencement OF lis business
Here then IS a double operation gong on both
cnnspiring for time to lessen the 9nanARy Of
the circulating medium and thus to raise
its Price or in other words to creating;
fiuetuation in its value. But this is not ou
for while the price of the currency encre.sed by
its quantity being lessencd it is also enereased by
the eHcredsed demand for those who are navi,n
their subscriptions, and those whose discounts have
been necessarily curtaied during sneh state or
things, are scraping together whatever can lie nro
cured to meet those claims upon their purses.
Hence It Is that we always find money is zery
scarce just before new bank CONNIE es operation
AS soon 3s they do commence, every thing runs TO
the other extreme. The new hank is in search of
customers, and anxious to issue its papers the old
banks, finding the difficulties passed away AGAIN he
come more liberal, and the community are deluped
with flood ofpaper, soon rs the obltructons are
removed, which, before, had damned IT an Hero
then, are the two extremes OF q too prouse and ton
limited currency; here is luciuation Of the most
serious character. And, whence has it proceeded
From the unlicensed act of private individuals ,yLn
with nrical prospects Of advantage to themselves
and regardless OF fitness Of time and place. unite in
forming association, which acts Ikea powerful en-
CINE upon society, i4rrng all its elements, disorder
logthe wholesome circulation, and throwing the
whole body polite into tle most depIorable cond;-
ton Thus il is that, by suffering individuals with
ont the authority of the experimenting wisdom Of
the legislative body, TO establish banks 1eben anil
Igherethey please whether the time or blce renders
II desirable, they either producea starvation of the
body polite, by lessening the circulating medium,
bv Cutting fitfv crpafs f,orc.,.,;l,