Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1837-01-12
ION, which goes to re establish that bank, ant

WDtcn
to suppress tina! golden currency. :. It,, ,-;,l
Having stated the :a:nbcr Of the banks IN Inc onee
Slnes he would cay ~@Tc AS 10 lhelF lePuteo 1'p
and circulation. The chartered capital was conPI'ru
n mar one ,iio:saad millions OF d"iars Inc paidup
CA ,aI Was sisted three hundred and twenty H!
lions the char cred 81: 10 issue paper money eHceeu
one iinu and ,i.ons and the actual circulation YVES
computed al hundred and thirty millions no" al
the specie in the country computed at mn!
lions; and ain Tic baLHS at nrty.Ere mic!s' so ma,
the repued pndup capita! is four times g'ca'et th ~
the specie in The country, and seven times greater @
all tine specie the hans passes Mr. - ora h"' ~;
that the banks should always have all their capital IN
their hands but he did insist that 1t E1S oe =" INC
counlry,so that, when needed, II cnu'a nc jan AZ,
puled paid up capital is not IN The coeh'1y' oy u
ence of four 20 one; that the TACT STANDS fcT'"''
that great uoporon Of ths So hanks are banking on
stock notes and each others notes. ana Tile STUN
holders not being liable, The foundations OF great num-
Der Of these banks must be unsoi'd ana ce'uSie Ln
trely unsafe The community to rely upon ana 'hat
il would be a cruel thing for the Federal Governmch
BY increasing their credit, 10 extend The sphere o l
circulation, and to enlarge the vortex 81 Hri' "'SI
when the day comes TO when all uhs"lc OahhS "'e '
liable. ,
MIR B said that we had borrowed the paper System
from England, end from The Adam Smith school, "l;"se
work on political economy had appeared about Inc c'se
of the American Revolution, and created that 2ass'c"
f., banking which has since prevailed in Great BRIAN
au. oil: America He would show that The Eng!sn re-
presena,ivcs Of that school convinced OF their
error, and cndeavorng TO cS!rcae the c"oIy F"t"
for The suivency OF Which the Government OF 1real
Britain stands security 10 the Whale amount OF lie ca
pi,a Repeating that had borrowed the paper sys
lem from Great Britain Mr.. B. had two Te:arks 10 make
unoo IT, first that banking with US Or lar more
asaf footing than in Great Britain; ScceEdig that Tie
banks of issue found to be TOO unsafe 70 ne iohee
tolerated there Tie proceeded t. show the foundations
on which he made these assrr'lons ard afterwards l"
make practical application Of his remarks to The CUES
ton bei::re the Senate.
First that banking in the United States was on more
unsafe footing that in Great Britain here was lun'
Ga,uen;al difference (e sally between classes or BANKS
In Great Britain there were Giles OF dIscuun
Opposite and exchange, another, OF crcuialinn in'
latter class the only one existing IN the olateS'
and it from it that ALL the public evils oil oank'"g
flowed. Here, then, radical diiteTnce between
the systems of banking in The two countries, the BRUSH
system having the two species Of banks, ana We A"e'
can system having but one and that the dangerous one
Continuing his remarks then TO the class common Il, "
the two countries (banks Of ssue) lie would show mat
this class is on far more unsafe iuutng in the United
States, than in Great Britain The Bank OF hmgRnu
(e sad) backed by the Government OF Great britain
10. its debts and capital The notes ct the Insulation
were IL gal tender to the Government and in Govern
ment whose annual 2oO millions OF dollars me
legal receivaby of n"tes to this amount is unu 'o
the redemption of more notes than the Bank OF England
ever had circulation. Her highest issue, curing Tue
suspension Of Specie payments and issue OF one ana
two pound roleS, was twenty-nne million aha ha'
pounds sterling, say $46, 0Jl $40 tier issues since tie
resumption Of specie payments and suppression ol one
and two pound notes, has, period III SIX years, an
terror 1882 ranged from els uG4 QUO TO t23 OU0;eVo
sterling, being about 100 QUU,OoO OF dollars The taxes
10 The Government, then, would absorb them, though
at loss all holders who did not owe to The Govern
ment the amount of what they held. This was some
security for the Of tile bark but there WIS another
and greater security, and this lay IN tie direct resPon
sibtv Of the government for the whole amount OF the ca
ptal Of the bank The capital Of that bunk consisted ui
successive loans to the Government, commencing III
1854, in loan Of 81 200 900 sterling, and cunllnurd
by additional loans different periods, until it amounts
TO GS5 GOO, aud bearing an Interest all The time at s
per cent per THIS is now the capital OF the
bank, and the debt Of the Government TO The baGk,
and The amount of the Governments direct securi
tyship for the liabilities Of the institution No such
Government security as this has existed or can exist III
country and even with IT, the Bank vi England has
twice suspended specie payments, and once COR twenty
years besides inhicling The ordinary evils G! banking
upon the Government and the country.
Proceeding to what are called the country banks in
England, MIR. g. showed that they on safer foot
ing than the local banks Of the United States In The
first place. the partners and Stockholders were each la
bic in his person and property for the whole amount OF
the debts of the institutions and this liability continued
in the of joint stock partnerships until three years
after partner had ceased TO belong TO the institution,
for every thing done while he was member OF it. In
the next pace, the English banks issue no note under
Is, which is both check upon their circulation, and
dimn ution of the danger OF losses to the couIInun
~. In England, every mute bote governnsat stamp
sues a he mode 81 n.o some restIssnt on Is
only tender to the amount Of forty shilings so that
country bank notes could only be paid in gold bank
of England notes, and these latter could only be pad Ia
gold; so that directly Indirectly gold the fund
Of redemption for the whole Eng circulation, which
far greater check upon bank issues taf' silver
In the last place. torgeres could be punished aud re-
strained in ngund and hardly be punished or re-
strained in the United States. The extent oiour coun
try, and the independence Of til" Sates and their judi
ciaries nerpose etfectua barriers against the punish
men Of forgeres in State upon The paper OF other
and distant States. These differences, Continued Mr..
b. show that banking is less dangerous footing in
Great Britain lha in the United Slatts and now what
is the result Of experience there: 1t is fifty years since
the Adam Smith school established their perfect idea
OF paper system, and brought into general use those
banks of issue which they laylslied all the holiday
phrases still in vogue in the u. States: "Wc regulated
specie paying banks-propery constructed specie pay
ing banks-duy restricted spec'e.p paying Oanss
and solid specie paying banks" 1t fifty years since
these phrases ruled the legislation Of Great Brtan and
what is the lesson which fifty years experience has
taught Mr. b. would not answer this question: from
the writings Of the tipaper school, ifcn the
bullion school of Eng land; he would answer II irun the
Adam Smith school selt-from the writings q! Mr..
NlcCulloch, Professor of Political Economy in the Uni.
versity Of London and the present head Of the Adam
Smith school, whose work he has recently edited with
volume Of notes. to show what has happened since
the time of Dr. Smith, and what Improvements the pa.
per system required in England Mr.. Z. read the TILE
Of Of his chapters anu passages from the CHAP
Ter ITSELF This is the tile, or index, 10 lie contents VI
the chapter:
"Quanti,y Of Bank of England paper aaoat at differ
ent periods effects produced on the country banks by
contraction of the issues Of the Bank OF Eng land; des
truclion Of country bank paper in 1888; Crisis OF 1877
destruction of country bank paper 1874 1915. Isle;
also in 1924 and 1885, proposed i'll lo6, for
improving the of the curreucy remarks those
measures; proposal for tukng security from country
banks advantages that would result from carrying lkis
proposal into effect; objections to it examined and
swered."
Mr. B. then read some passages from the chapter it,
SELF regrettng the necessity which limited him to few
and brief exlructs
l. Pane of 1898 extended transactions Of the
country required fresh facilities lor carrying thr'
and, in consequence, bank erected in every
ket town, and in almost every village. 10 force their
paper into circulation the object of all The calas
trophe which followed such might hare been
foreseen The currency having become redundant, the