Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1820-04-07

sell Stock IL extremely sensiiier and
liable 10 be affected by Il yresirr v.iieiy
oi permanent and ,en.pnrary causes than
almost any other ar,i, le OF value IA is
Affected by the quaUiii, oi 1t thrown INTO
!lie market by Individuals-by every new
lean winch the government makes bV
ihe demand for II as AN investment OF
capital for The sake of profit BY every
!uuur oi war or OF peace: by The wisdom.
patriotism or stability OF The government.
MIR. T.. says " that there is lust rpasou To
apprehend that emergencies may arise in
Tie affairs OF every nation, in which lis
stability ma! be- menaced by foreign force
or domestic insurreciion. In such al,
event, pane might ensur, aiId the credit
ol III" currency be utterly annihila,td.'
should such an event occur, into What a
wrctched condition would The ration be
plunged! Every country, no matter What
Is the form OF lis government, - liable 10
frequent conimoiiuns. On such occasions
| metallic currency rises III value, on ac-
count oi the universal estimation in which
ii is N, IT,
II must indeed be an age Of experiment,
~ even distinguished advocates can he
found for the abandonment of a metallic
currency, for one not at all connected with
the metals, and subject 10 fluctuations so
Numerous and destructive
But, MIR. &. SAYS, that the mutual con-
vertibiliy OF stock aud currency will have
tins effect. that II there be too much OF
ore, II will be converted INTO he oiher.
aud rice rsrsa- So that there will be Reiiii
err a redundancy nor deficiency of either.
When redundancy occurs la tue circu
iatloD, he contends that the rate Of inte-
rest viii fall III proportion 10 such excess,
below the raic OF interest al which the
stock is funded.-The currency will
therefore disappear, and be converted
into stock.-Bui will il have Ills rftc,
WIN The cirs uaIiou which is excessive III
! lis relation 10 other countries, thus cor.
rect iisel!, through The operation OF The
| rate OF interest! 10 maintain this pros
position. MIR. {. must tOutend, itat iiIr
| rate ol interest necessarily depends on the
quantity aud value of money in circula>
Ton. But is l, true that as yon multiply
| or diminish The quantity OF money, The
| rate of interest rises or falls Certainly
II Ia not se.-The value Of money ami
the rate OF interest are affected Nv differ.
eni principles. The value Of money de
penis upon The proportion between the
circulating medium and the quantity at
| exchanges. lie rate of inter- 81, on the
! contrary, depends upon the real ur sup
| posedsprctit of capital and Tie prof az
| capital depends upon the proportion be.
| Tween The quantity ot capital, and the
demand for lis profitable employ meni -
| We should recollcct that money aud ca
pi'ai are not the same thing.
| But To illustrate the principle that tie
| rate OF interest is moi IN proportion 10 the
! quantity OF tnoncy-As money is chiefly
considered tue representative of value, II
YOU increase il four inld, il will take four
! lines as much TO represent any given ar
| ticie as beiore-l.i that case, interest will
! mol rise III this rat!o-because Is per cent.
bears the same proportion TO 100, that II
does 10 4O0-Betore The increase Of mo-
ney, Hou goi 5 6 interest; and since lis
Increase, you gel 81, which only repre-
SCENTS the same value thai previously did
! But this whole doctrine is developed by
| Adam Smith IN his chapter oil interest,
"ho says, The interest Ofmoney, keep
ing pace alwas With the profits of stock,
| (captal.) might in this manner be e','eutiy
! diminished, though the value of money, or
the quantity Of goods, which any parii.
cular sum could purchase, was greatly
| GugHleHted.
| Hence II seems clear, that there may be
| too much currency afloat, without iucTea-
sing lie profits OF capital, and With il, ihe
rate OF in,erest-on the contrary, The cur
rency may be deficient, and, OF course
appreciated yet from The limited range
| OF enterprise, The demand for capital NAV
he so small that the rate Of interest will
no, be equal 10 The interest If the landed
| stock ; say per cent. In the latter case,
there w0ua be 10 demand for currency
which would induce the holders of stock
| 10 wish 10 possess themselves of il. But
| when The range of enterprise widens, and
| The profits OF capital are great. the stock
| would be converted IDio curreHCy 10 he
employed III active enterprises. This
operation might go on, Uni the curren-
| CIV would reach a stale OF great depreci-
| alton.
| Let us borrow an illustration from the
| melancholy state of things which has lust
past over us. Can we shut our eyes 10
the fact, that amidst the late rage Of
| speculation, men did buy up bank stock
on credit and at high prizes. as depesiie
for ehtalninlng the deprecated d deprecI-
ating noles OF banks Is il not fact that
men did rash 10 The banks with their own
! negotiable notes, upon which they pull
an interest Of more than per cent, for
tie purpose of obtaining the deprecated
notes OF The bank But is il not the same
thing 10 gire q per cent, on your own
mole, and TO iOSe 6 per cent on The public
stock, which, under Mir. C's. scheme,
would be surrendered, 10 purchase ia
tioDal currency As the one did not
check the redundancy and depreciation
Of bank notes, So would not the other
check The depreciation of Mr.. C's. paper.
The truth is, in Tie mad rage TOR spVcn-
latiou land il might create This very mad
| messy this currency wOuld be called for,
If 6 per cent stock could be obtained, un-
I'll il would deluge the nation. II such
state OF things Is not repeated, il must be