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


ruin the Bank by nigh premiums given Tor
borrowed cash, and if not redeemed, must
lose all value, and ruin the individuals in
whose hands they happen to perish.
Yet with all the precautions and sane
tons against Fraud and Imprudence, which
have been adopted in a country so watchful
over credit, so conversant in the affairs of
commerce, and money criminals are fire.
| quently punished for dehasEg the coin
Bankers fail to the ruin of their conhdnr
customers, and the Bank of England itself,
Tor 10 years past, has been shielded by law
from the obligation to redeem its notes in
coin-A violation of the principles of com
mcrce and credit so bold, that no country
could have escaped its disastrous conse-
quences. but one possessed of so immense a
capital. so vast variety OF exports, and
those IN such universal demand.
The best writer's and practical rrasonsrs
on Trade and money. have attributed the
authority OF maxims, to the following pro-
positions.
lst. That in every country, the whole
produce of its land and labour, the whole
OF its dealings and exchanges, REQUIRE
certain amount Of current money for their
proper circu'a alton and distribution.
%. That because a number of these oper-
atoms are effected by bills of Exchange and
other means, and because the same peicc
OF money in the course Of a wear will serve
to make many payments, the amount of
current money required, is very considera-
bly, less. than the whole value of the things,
1t is annually employed TO circulate md
stribute.-(a)
3. That it the quantity of currency be
greater or less than is requ site for the cir
culation OF country, the excess or the de-
feet will both be injurious
4. That when the Gold or Silver coin of
a country circulate in excess, it will iniuri-
ously raise the nominal price of vendiblc ar
ticles, but will soon be exported for benef-
cial objects Of trade, and the proper level
be restored.
S. If the currency of country be bank
paper, an excessive issue of it cannot be
exported; it will return upon the hands that
| issued It, and if payment on demand in coin
be evaded or refused, and this shall happen
in country where credit and money are
we'll understood and protected. its credit
will be Immediately exploded, or if the
same occurrence happens in country,
where credit and money are not so under
stood and protected, the excess may act
as psstilent leaven, in insensi5ly depreci-
ating the whole currency, in raising the
nominal prices Of all vendibIe things, and
finally in running great numbers of those, in
whose hands the paper bubble is ultimately
destined to perish.
In the abundance that has been written of
late, about Btnks and Bank paper, in our
own country, frequent references have been
made to the ''Wealth ofNations," as highly
respectable authority, in support of posi-
tions and practices that are in direct oppo-
sition to the fundamental doctrines of the
able author of that Work.
In deducipg the beneficial effects of bank
paper, DIR. Smith POUNDS them on the strict
observance of two indispensable conditions
the first, that there must be moral Ger
tainty of the redemption OF the notes by
payment in coin on demand, and the second
that the amount of the notes issued, must
never exceed the amount of the current
money, which the circulation and distribu-
ton of all the vendible commodities of the
country fairly deman!.(6) The Banks in
this country not only refuse to pay on de-
mand their own notes in coin, but refuse at
pleasure, to receive the notes of other
Banks, or to pay the holder of their own
the notes Of such banks as might suit him
better. This license assumed by Banks,
removes all checks upon excessive issue Of
paper, to which the profits of discou1ting
SO strongly tempt them, except that of
run upon each other--A check which
SCHoS Vi COIilIlOn interest may occasion, Tor
long time, to lie dormant.
Doctor Smith says, - what B nix can
advance to merchant or unds rtakev of a.
ny Kind, is not either the whole capital
with which he trades, CT even any consid-
cradle part of that capital but that part
of it only, which he would otherwise be OBJ
iigcd to keep unemployed and in ready mo-
ney, to answ er occasional demands" (c) In
this country, a company Of persons, unde-
fined in numbers and of unknown funds,
start up into banking company, Lad the
circulating currency, such as it is, by great
issues OF bank notes, and at their birth, some
concerned have been seen greatly to eli
large their capital in trade, to undertake
expensive projects, to purchase estates in
land, and all these to an amount, that
few weeks before, would seem far beyond
their reputed resources.
The Wealth Of Nations has been quoted
in favor of multiplication of Banks, be-
Cause their mutual competition is thereby
increased, & free competition affords Sc
curity against abusive issu Of paper.-An
DIR. Smith says in favor of multiple ton of
Banks is, that it may he admitted "zyhh
safety to the Public 20 but this admission
is alone granted OH the most express
and inseparable coHditions.--' If bankers
are restrained from issuing any circulating
bank notes, or notes payable to the bearer,
for less than a certain sum--aDd If they are
subjected to the obligation of an immediate
and unconditional payment of such Bank
notes, soon as presented, their trade niav
NTH sGfefy 10 The fu6hc, be rendered in