Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1820-03-14

st ould De withdrawu itom circulation, they |
would gradually he reduced 10 the demand |
tor them tor the transmission OF money. IL
the effort 10 withdraw than should be con- |
unued beyond that point, Specie would be |
pnid into the banks by their debtors, III pre-
ference 10 bank notes; aDd the just propor-
uoD between The paper circulation, aud the
specie In their vaults, would be promptly res
tored. la the latter case, as the debts due to
thu banks would not, according TO the under
siandius OF the parties, become due At short
Intervals, the only mode OF meeting tile in-
cteasiag demands upon them Tor specie would
be to require OF the whole mass OF debtors the
payment oil u Fixed proportion Of the sums
due by them. As the circumstances which
would require this measure, Oh the part Of the
banks, would generally affect the community
in the same degree. The capacity of their debt
ors TO meet this demand would generally tee
found To be IN an inverse ratio TO the demand.
he demand itssh being inconsistent with the
impression under " hich the debt Was contract
ed, would DE resisted in every case where
the Interest of the debtor would be subserved
by delay As specie formed but an iucoDsd-
cradle part at the currency, the reduction OF
the paper circulation would have to be car
Tied TO u greater extent than in the former
case. just proportion between the paper
circulation and the specie necessary TO support
IL, conld be obtained only by the positive
reduction uf The former, as il would be inn
pracucable 10 Increase the latter, while the
demand eoniinned.-Under sHch circumStau-
ces, The suspension OF payment would De tue
probable result.
ouch, Ia fact, were the circumstances un der
which The suspe nsiou iu 1914 occurred.
The inJudicious multiplication of banks,
where capital IN that .o,In. to some extent,
might have been useful the establI Shmeui of
them where they could only be injurious
the permission To issue dollar notes, by which
specie was bduished from circulation au, the
demand or SpecIe fOreApostdtici which sNisIcd
during The Years 1913 aud 1911 imposed uIOn
tile banks IN the middle, southt Ia aud western
Slat he .xttN nt Ht,,..
longer et0r; 10 dlschaIge iheiT notes in
specie would not only have been inCtfeciuai
but would certainly have postponed, 10 more
remote period, the resumption o; specie pay
ments. The evils which have resulted TO the
community from thatsusp ensIon have certain.
ly been great but il NAV well be duubted,
whether Others Of equal ma .nI 'ude would not
have been sun r' d, II that event had not oc-
CURED The sxteut % which the currency
must have been reduced, liz order TO have
avoided the suspension could not have .ailed
NJ any period, TO produce Great embarrassment
ami Distress 10 the communit, Bn,, IN lime
~ war when the country was invaded when
he pubic safety requiI ed that the energies OF
the nation should he fully developed, sud.
ne' ana eHieDNSe TeddeliOn or The currency.
ny any cause whatever, would have been fat IL
Under such circumstances, The de mana for
currency wauid have been too imperous to be
les Sled. Ii would from necessity have been
supplied by the issne OF treasury notes
HE iac', thai, IN small portion Of tie
not be admitted as evidence, that it was prac-
ucabse throughout the nation In that part
OF the country, the extensive bank ISIS ues
consequent upon loaDs TO the government in
the middle states. had moi occurred. Foreign
L. de %htCb. ~ the other parts of the Union
was neaIiy annihilatPd still preserved there a
la sn,d existence, through the permissiou or
connivance OF the enemy. These eircumstan-
ces could not fail 10 enable tue banks, in the
eastern states. TO continue specie payments
IonSer Than those OF the middle, southern and
western states. In an effort To preserve their
crediI, the> wonid, inevitably, he i;ir lasI
which would tall Ia such Il struggle, bow, YER
they must have failed had moi The circula-
ton ut The paper OF their weako' neighbors
and the issues OF treasury notes come TO their
ala But tor this atfsntItiOus assistance
wholly uocOnnected with the wisdom aud
foresight of thGlr directors, specie paNments
nlus' have been suspended there, or the best
ln,eTests OF the community have been sacri.
need. From that period until The IeSunip-
non ot specie payments in The early part of
1917, Treasury notes, and the notes rfIhe banks
which had suspended payment formed the
great mass of The circulation in the eastern
paf' OF tie UniCn. Specie. or the notes OF
banks which continued 10 pay specie, formed
no pant ~ the receipts OF the government in
Boston and the districts east otShi I IoAD, IN
ui about the close of of the year l5i6
In al great eAigencies, Which. ~ the course
OF human events, may be expected to arise in
every naton the suspeusioR of payneGi by
banks, where the circulation consists pruci-
pally of bank notes, is Que ofthe evils which
ought to be considered as the inevitable cons
sequence OF their establishment. Even in
countries where paper does not form the
principal part OF the circulation such an event
Will sometimes happen. In the wear 1877,
when the restriction was imposed upon tirs
back OF England thR average of it's circulation
for several successive years was about ft0 OQO-
900 sterling, whilst the metallic currency as
estimated at $50 O00,UO0. Yet, in that country,
whose trade IN time of wal, through the pro-
lection OF It's fleets, was rather expanded ttan
contracted, u waS found necessary to Bniho-
TiZe the bank 40 suspend paynIeHt; which
suspension, after lapse OF tWenty-threeN ears
still continues. When the vxisience of banks
depends upon the authority which regulates
the currency, II may be practices Dle 60 impose
sanitary checks against ehCesSiVr issues OF
paper during SUSPENSION and in some de cree
10 guard against an excessive depreci~ ton
OF tine currency. ...But. whore these IN
siitnrlons are created by dB authority havisg
no power 10 regulate the currency. and
eSpCCisly Nhere they are created by great
variety OF authorities independent of each
NihrI, aud practically incapable OF acting IN
cOuceTt, u is manifest that no such checks
or restraints can be imposed Ii is impossible
90 ina ine currency more vicious than
mat which depends npOn the will OF nearly i
four hundred naHks entirely indepeF dent of
each other when released from all restraint
against exc esSiVe issues. BN the term cur
Tcucy, ia. issue Of paper by soVeTHmPnf as
final resource l. exclude Even such an
issue in a state where The reigp OF law is finn
- established, aud pubic Opiaion CONTROLS
tue public cOuHClH would be preferable 10
currency similar TO that which existed, IN
some part Of the United States during the
general suspension, aud Whjcb now exists III
,ome of the states. This truth has been prac-
tlraiiN demonstrated, by tine redemption of
the whole of the Treasury Notes, issued during
the var within the lit, st space Of abOut two
years after the 10 ace whist a large amount
al bank notes issued, during the suspension.
ate get unT,demerd ard greatly DEPRECATED.
lBere can he 40 dOnbi, that metallic cur
renc,, connected with paper circulation,