Phenix gazette. [volume] (Alexandria [D.C.]) 1825-1833, 1826-11-22


silver are the circulating medium, full scope is
given for gradual production Of wealth, be-
cause those metals can be increased by time q
labour in proportion to the increase ofpopula-
ton, and the natural augmentation Of commod-
tiles AT the same time positive check TO over
production in every branch Of industry is sup
piled, because the metals cannot be lnstantane-
ousIy and Indefinitely increased; whenever
goods are produced with undue rap'dity, mo-
ney will become relatively scarce and prices
fall
On the bank note system the order OF nature
is exactly reversed. Ifimmense manufacturing,
buving, and selling take place, even without
corresnond;ncr consumption, bills are multlpll-
ed and when bills are multiplied, discounts m
,reas. and where these abound, the paper Cir
culatinp medium increases; when the clrcula'
limp medium increases prices rise, and hence
we have the absurd anomaly OF rising markets
in the face of most enormous over production.
We have also the oddity OF interest falling as
trade increases, and the difficulty OF hndlng en-
ployment for capital reaching It's acme when
transactions to most unwanted extent are 60
ing forward, requiring vast amount oil circu-
laiing medium. The resat this system rem
ders the error Of principle involved IN 1t still more
consnicuous The bankers, tempted by the flood
Of interest for their notes, preserved no bounds
10 their issues: they disco unted bills at s, 9 and
q months date, lent on mortgage, and in En-
pland bought mills and lands, and even com
mpnccd manufacturers themselves. When their
notes were returned, their securities were not
convertible, the bankers failed, panic arose,
and paper was poured back upon them IN
stream of frighlful magnitude and extent
Those bankers, who had nothing 10 give IN re-
turn for their notes, except the bills OF mer-
chants for which they had al FIRST issued them,
called on the merchants to pay; the latter, how
ever, had nothing except the goods which inc
bill represented The goods, unfortunately,
had not been produced TO meet the real wants
Of society. but had been fos;ered into existence
by the temptation Of profit, which dazzied first
the manufacturer, and then the banker who dis
counted his bills; and at last, when the pa
per currency ceased TO flow, and the goods re-
ouired 10 be bought by real capital, they Tell
so per cent; the merchants were unable to pay,
and bankruptcy s,alked far and wide over the
land
II, as in Scotland, the bankers had land, hou.
ses, stock. or other property behind their notes,
they were able to make up the deficiency afl-
sing from the failure Of the merchants; but they
became alarmed at the extent OF their losses,
drew in their notes, lessened the circulating me
dunn, and depressed the prices OF goods 10 'ne
lowest ebb. Real capital then came into re-
quest, interest rose, and 100 IN real cash oougnt
more goods than ll5o would have done whlle
the country was deluged with paper.
Matters will remain in this state until the
stock of manufactured articles is brought be-
low the natural demand; trade VIII 'hen revive,
and for time be profitable; confidence will be
4, no
follow. paper currency will increase, prices will
continue to rise, production will be pushed 10
the last extremity, every thing will appear to
flourish for time, till another crash arrives,
and then we shall be told about the caamities
Of life and commercial distress, and perhaps
see little deeper into the causes, and at last
look for remedy.
According 10 our view, instead or the aboll-
ton ofone pound bank notes being an evil, the
only fault of the measure is, that it does not,go
far enough, and do away with bank paper alto
gers,er We fear that the national debt would
become an ntolerable burden if this was done;
but, nevertheless, as long we suffer paper
currency 10 exist, a currency which can be pro-
duced without abour, and Increased without
limits, and which enables the insurer OF 1t to
reap double profits at the expense OF those who
do not issue bank notes, SO long will the nation
be doomed to suffer the punishment which tot
lows every departure from justice and sound
principle 1t has been said, that the holder OF
100 900 of capital may lend this sum, and he
will easily get credit for other 100000 on the
faith Of it, and that thus he will be on par
with a banker who invests his capital, and then
issues notes. But there is this difference, the
banker and capitalist are, no doubt, on par
in both drawing a return for their 10000 it
they lend them, but when the latter goes to
market and asks credit for 10000 worth OF
goods, he has to pay the credit price, or D per
cent Tor three months, whereas the issuer OF
notes pays his notes for the goods, and gets this
per centage Of discount. Here the injustice Of
Of the principle is equally obvious.
Selected from late Foreign Journal.
We have been favored with copy of rather
singular letter from the Count de Bid,
Piedmontese Refugee in London, addressed to
Don x an exiled Spanard, who has sought
safety in England from the persecution OF Fer
dinand.
81 have never ceased to speak to Mr.. c. "a
bout relieving the great dis,resses OF the unior-
tunate Italians and Spaniards, who have sought
an asvlnm in This generous country. told him