Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1834-03-11


Banks, when the wisdom of their monarchs, and
the enterprising spirit of their subjects gave new
world TO commerce and TO man? Sir, was there
no commerce in Europe until the year 1882 Was
there no commerce, no happiness, no prosperity in
England, until William the third chartered the Bank
OF England? Experience then does not shew that
Banks IRE necessary to make nation powerful and
wealthy, nor its people prosperous and happy.
come now TO the last argument in favor Of
Ranks, and II is particularly urged in favor of
The, or a United States or National Bank, viz:
Ina, they are of great importance i'm saving the
trouble and expense of transporting specie, and in
equaliZng exchange between the different States.
VIII first observe that there would be no more ne
cessy Tor the transportation Of specie if we had
Banks, than there is mt this time; for all commerce
domestic as well as foreign, consists chiefly i'm a
barter or exchange of one commodity for another;
NJ least, II may be regarded in this light; and money
Is used merely MS n measure of their value, and not
as an equivalent actually paid This believe, is UNI
ucrstood by merchants, but it must be obvious ALL
that MS neither u. $ Bank notes nor the notes of
any other Bank, will be rcceivedby foreign nations
ese noes can ne OF no service to us in commerce or
ioreisn trade That trade is conducted by bills of
exchange, and the same instrument would be used
Ut nome or with the other Suites, without the Banks
ana IS even used with Them No man would draw
u oiii on another, unless he knew the drawer was
MS DEBTOR or would be his debtor before the prcsen-
tation OF the BILL i'm consequence of his 1.-THE draw
CT :! receiving money, or some other commodity, Of
or for the drawers and where this is the CASE there
Gun be no danger of protest. and the bill must he
good as gold in the exchange with the trawec for
any properly he may have. But let us suppose
That specie must he transported, and let us see
now ENORMOUS the erpense will be. A dollar
weighs less than an ounce; but we will suppose
tnere are sixteen to the pound. There will then he
sixteen hundred dollars in one hundred weight
Now, as the ordinary price of transportation is n,
present one cent per hundred per mile the trans
poration of sixteen hundred dollars for one hundred
miles will be one doLar or TEN doNary |6r ONE THOU
nj HE Inx,
then less than Seren-fenths Of one per cent per o-
sand miles, and if gold be used it would he fifteen
times less. Sir the of transportation is too in.
considerable TO be regarded. We must however
add to this the insurance and this last, i'm fact is
the only expense of sufficient magnitude TO be est-
mated. What the amount of insurance is, | know
no.; but the actual cost Of carriage is insgni-
cant TO be regarded, and is daily becoming less and
less by the improved and improving modes of trans
portation
The Banks make more profit by dealing in bills
OF exchange than in their ordinary business as thew
get not only discount but premium bills. Let us
hear the President of the Bank mr. Bddle describe
the advantages he offers the community, and the
nlodus operondi Of these dealings. "The crop of
Tennessee is purchased by merchants, who ship il
to New Orleans, giving their bills founded on it to
the branch of Nashville, which furnishes them with
notes. These notes are in time brought to New
York for purchasing supplies for Tennessee. They
'are paid in New York, and the Nashville Bank be-
comes the debtor of the branch at New York. The
Nashville branch repays them by drafts given to
'thc branch at New York. on the branch AT New Or
leans, where its bills have been sent, and the branch
IN New York brings home the amount by selling
ITS drafts on the branch at New Orleans: or, the
New Orleans branch RENTS. This very plan of
circulation, is the basis of the whole interior trade
'ofthe United Sta,es."-( Amer Banking, part Cd. D..
2O3) This is subject that have not reflected on;
nut let us take a common-sense view of ii. Our
tennessee merchant has sent crop Of cotton flor
believe that is the staple of that Stae TO New Or
md is in Naxx Nnr
present Mr.. Biddle tells us, the branch i'm New
York brings home the amount" (of the drafts on
New Orleans which it has received from Nashville \
"oy selling ITS drafts on the branch at .Ne,o Or
leans, or the .Nep Orleans branch remits." Now,
SUPPOSE there were no Banks-coud not our mer-
chant sell has drafts on New Orleans or could
not his agent remit well as the Bank? But
let us have our authors reply, (Gougc, ib.) "The
rue basis OF the interior trade of the United
states, is, The fertility of the soil and the industry
ofthe people. The sun would shine, the streams
would flow, and the earth would yield her increase
IT the Bank of the United States was not in exist
ence. What is now performed by it, in the way of
exchange dealings, would, ifthere were no corpo-
'ratons be as well performed by private exchange
merchants. Perhaps they could not perform it at
quite as low rate, for they would have provide
capital OF their own, whereas The U. S. Bank per-
forms 1t by the control il has of the public demo-
sites, and by means of the credit its charter gives
II IN different States. Employing no capital of its
DION IN the business-ihe whole affair being mere
paper transaction between the Bank and its branch
es, ii may ,ceH GGordto do ii cheap. 1t may, howe
ver he questioned, if the reduction Of the price of
exchange below IFS natural rate, is an equivalent
Tor the evils which must necessarily ensue from
the substitution of the discretion of the officers of
the u 5. Bank and its 25 branches for the laws of
mature. Whenever and wherever the Bank OF the
United States reduces exchange below its natural
rate, 1t removes the only effective check on over
Trading. This, in short time makes necessary a
reduction of discounts, and thus we have in The
10Y Inu A..
commercial vicissude. If there were no paper
money institutions the rate of domestic exchange
would be regulated by the cost of Transporting
specie from one part of the country to another-
This, eUen bettOee The most remote parts of the Union
,coMd not erceedt,co or three per cent and il would
'be better 10 pay this per cenfagc than TO be expos
ed TO all the evils of inernnabIe series of ex-
'pansions and coniractions."
Thus, sir, lave endeavored to examine the ar
gmenls which are generally used in favor of Banks;
and hope have at least excited doubts which
will lead to inquiry, and if the inquiry shall be pro-
secuted patiently and calmly, do not apprehend
the result Gentlemen regard with contempt, which
can scarcely be concealed, the opinions which /
have expressed. They talk if they were supported
by the authority of every writer of any reputation,
and yet the first and greatest ofthem all and whose
authority is mos; relied on, affords them little sup
port mean Adam Smith The whole spirit of
his book, like the spirit of our Government and
people, is in determined opposition the practice of
granting peculiar privileges or exemptions to any
set OF meD-lie was opposed TO monopolics i'm
every form, and consequently TO the great and
fundamental principle of our Banking systems
lie also had chiefly in view, the Scotch Banks,
art.