Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1834-05-02

-, ~ -" U'aiu 't paper OF tc various
oahks onc'oding the Bank of The United Sta,es} in scIual
ervu,s"on % ordioary times, amounts to at least eighty
m'.'o" VI oo''ars. vi This sum, the Bank Of the United
States furnishes less than twenty millions. and the various
STATE Banks more than sixty millions, the specie i'm the
does not probably exceed twenty. five millions.
In estimating the amount OF specie, l con6ne myself TO
Tue coin supposed to be in possession Of the Banks. In
some o. the States, the circulation OF Bank notes below
h'e dollars Is prohibited by law, and in these States there
: a considerable amount of specie passing from ha d to
dunn. Ii does not, however. exceed four millions of dol
lars. This metallic circulation lessons by so much The
amount oil paper, and 10 that extent it diminishes the evil
occasioned by the great disproportion betw cen the paper
supeis'ructhre and hs metallic basis. But the coin W hich
is thus circulating, cannot, be brought in aid OF the paper
currency, when a panic, or any other cause suddenly
'hro"s-it back upon the Bank for redemption.
Ii catinot, therefore, be estimated as a part of the m cans
to secure the payment OF the actual paper circulation. 1t
,'Nes me place OF go much paper in The mass OF The crcu-
iaiing medium, and thereby lessons the amount to he re-
deemed. But it will never find its way into the Banks
when "ie'r notes are rapidly returning upon them, They
mus. rely upon The amount actually in their vaults-aDd it
Is with This amount that W. must compare the paper cir
cniaUon. m order TO decide whether ii is in a safe condi-
ton. II is evident hiatt the chiei part Of the paper curren-
cy OF the United States must always be furnished by The
State Banke No Bank of The u. States could provide a
sufficient amount for the whole nation, without giving TO
II a capital oil such enormous and startling magnitude, that
no one, II is presumed, would seriously propose il. And if
congress are 10 iegislate, with the view Of securing 10 the
People OF the U. States a sound pap err currency, the con-
dition OF the notes of the State Banks is OF much more inn
United States.
The notes of the different local Banks form the ordi.
nary cNcu'a,ing medium Tor the great body OF our citizens,
and it would be unjust 10 them TO disregard its condition.
The whole currency OF the country should be placed in a
sonnd ana healthy state, as far as the legitimate authority
oil The United States will enable them TO accomplish that
Object.
Under the authority delegated to Congress by the Con.
sii'uion OF the United States, they have no power 10 es-
tablsh by law a paper currency; and the ioauence which
they may lawfully exercise in securing its soundness. is
altogether incidental. In legi.laing within the admitted
scope OF Their authority, they may. without assuming pow.
ers not granted, look TO the effect which their laws
viii produce upon AN interest OF so much importance as
tha nj fp ANA nnlat; ,o. -
country.
Taking this view of the subject, the first in qufry is
WHAT is the present condition OF The ordinary circulating
medium OF The U. States Is the great mass of the paper
currency in a sound and healthy condition. If il il. we
must endeaSSr TO md means to preserve it in its present
il il is not then it is obvious that the apeatien of a bank
OF the U. s. will not accomplish this desirable object; and
that even on the score oil expediency, without reference
10 constitutional objections, some other plan should be de-
vised.
II the esiiraa'c l have made of The proportion between
The paper circulation and The specie in possession of the
b"nks"becorrect or nearly so, the condition of the curren-
cy is obviously such that the nation slouId not he content
whit, nor desire TO. continue il in its present state. Ii is
an immense supsrs'ruo'ure OF paper, resting on a metallic
foundation too narrow to support IL. 1t has never been
sustained by its own inherent strength, but by public con-
hdence.-When every one firmly believes that the notes
OF the banks will, on demand, be paid in coin, thew readily
circulate and answer all the purposes Of money. But the
moment that confidence is impaired, they lose their value
as a part OF The circulating medium, and are returned upon
The banks for redemption in specie, and the disproportion
between 'ie paper circulation and the coin prepared 10 re-
deem 1t, isso great, that it is constantly iahls 10 have is
Chief support, public confidence. Withdrawn from it,
In speaking OF the dangers to Hhich the currency ia
exposed, y do not mean 10 intimate hat the State banks
are unable 10 pay the amount OF notes they have Issued.
On the contrary, L am persuaded that. with very few "
ceptions, they are as safe ss the Bank of the United g ates.
For that Bank has never been in a condition TO redeem its
notes in specie, il they were all suddenly thrown back
upon IT. Ny object in inviting the attention of the COM
mittee TO this subject, is not only TO shew the real condi.
ton of the currency, hut to mark the utter inconsistency
OF The argument, which urges the e-chartep OF the Bank
OF the United States, on the ground that it has furnished a
sound currency to the nation, and at the same time at
'emp,s TO discredit the notes of the State Banks. Both
parts OF The Argument cannot be true. The Bank OF the
u. States has not furnished the nation with a sound paper
currency, and has produced no saIu,ary effect on the
grea, mass OF il, unless the issues Of the State Banks are
now iD a safe and healthy condition.
The difficulties under which he State Banks are labor
ing at this lime, does not prove that they are unsound,
ana mat they have been worse managed than the Bank of
the u. Sta'es; when reports injurious to the credit of the
State Banks are industriousiy and widely circulated, some
degree OF embarrassment is unavoidable; especially when
II is general supposed 10. be in the nower Of The Bank Of
the U. States to stop them at lis pleasure. The evil 10
however III its nature temporary and will soon pass away.
And the intelligence of the citizens will readily discover
that the present difficulty is The offspring of useless alarm,
and OF a deliberate design to destroy the credit OF the
state Banks. And whenthe real object OF the excitement,
] and untounded rumors which are daily circulated. shall
be understood BY The people, confidence will soon be res
t0fed, and business resume lis usual channel The ,on.
page Oft bank from any cause naturally pyoapces a rrfn
On the banks in its neigbborhood, and il pains are fakea
TO increase the excitement and alarm. the evil will he
more extensively felt than ii would be In ordinary times.
The dangerous expansion Of the paper circulation, COM
pared With its specie basis, shows that there is something
oS"h""h} stNiOu W 'He WnOtc system, anu the mischief,
so Tar from being corrected or lessened by a Bank of the
United States. is mere probably aggravated by such AN in
siiiu ion. The great amount OF paper sloat proves that
the qnabtity depends more on the discretion and Judgment
OF those who make the paper, than on their ability 10 re-
deem ii whenever IL IS called for. The dominion which a
Bank OF the United States must always exercise over the
smaller corporations OF The States, vests in il the entire dis
STetiOn OF expansion or contTact ion. II il discount and is.
sue its paper freely, the State Banks are induced, by the
hopes OF profit, TO follow its example. lit suddenly cur
tails, they must cuTtail also, or become the victims Of their
own impfudeDce. And II, by any means, the conduct of
that Bank disturbs the public confidence in the safety of
The State Banks, their notes will be returned upon them
with such Tapidity, 80 10 endanger evep,the best managed
institutons-aBd while such a power remains in The hands
OF a single corporation, tho country will he constantly lia.
bic 10 sudden agitaUOps and eHctemenis from The alternate
expansion aud contraction OF the currency and those en-
gagged in commerce will, in the years of abundance, be led
into an extension Of their business, which must, in the sue.
ceediog years Of scarcity, inevitably result IN bankruptcy
and ruin.
In a time Of pressure, confidence Is sasly shaken; and
whenever ii becomes the interest OF the Bank of lhe Uni
ted States 10 excite alarm in the country, is great money
power will mos commonly enable it 10 effect The Object,
and by destroying confidence and credit, in a few months,
system OF currency thus liable 10 constant fluctuations,
aud always in danger OF being entirely overthrow, is GER
tainly one OF the norst that can be devised. Every spe-
cies Of property is unstable and insecure, unless the cur
rency which is 10 be exchanged for IL shall be steady in
its value, and not liablb TO be seriously disturbed by acct.
dent or design. And the danger and evil is abuDdanIy
manifested By The history OF the United States, .incc the
establishment Of the present Bank. Years Of hollow
pfospetity have been succeeded by yeats o. pressure and
suffering; and the present condition OF things demonstrates
how readily a concerted effort 10 excite a p 4nic aud destroy
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