The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-12-16
THE CREDIT SYSTEM.

SiuutnS Jul iAoui ahu SiNAhS aOA shC CASiuoAC
| market
THE CREDIT SYSTEM
Ertraet Of Gou. Clark's message to the Legis-
iature Of kentucky now in session.
Since the last session of the Legislature, an
unusual and widespread arrangement Of the
pecuniary concerns Of the whole country has
occurred, involving consequences fearfuly
injurious to the operations Of trade and vitality
affecting every effort of industry and enter
prise The banks in our State, as well as
those in every other part Of the United States,
have suspended specie payments, refusing to
| redeem their notes in circulation, by the pay
ment Of gold and silver This position was
assumed by them in May last, and is still re-
tanned, although during that period those Of
our own State have been managed in good
faith, with view to as speedy resumption
Of specie payments as practicable, reducing
in the mean time, their notes in circulation as
rapidly and to as great an extent as the wants
and necessities of the country would permit !;
not forgetting that it was their duty 10 afford
to the country in its period Of difficulty and
distress, all the relief in their power, they
have acted throughout fully and honestly upon
this principle, and have uniformly manifested
a high regard to the general interest and well
fare Of the country.
| A refusal on the part Of the banks to pay
their notes in gold or silver when demanded,
cannot be defended by arguments compatible
with the dictates Of honesty; and is prohibited
by true regard to their own prosperity; nor
is it reconcilable with our laws and the spirit
e ~ nd 10
nant to our republican notions of good faith
and fair dealing. Banks should have no Pri-
vileges in the fulflment OF contracts denied to
the citizen. He is compelled to pay his debts,
and want Of punctuality affects his standing
and his credit. No sound or even plausible
reason can be assigned, why the same conduct
on the part Of the banks, should not be produc-
tive of the same effects that INDUCED IN by
individuals calls down upon them the merlted
chastisement of public condemnation. The
operations of the banks are more extended, the
consequences Of their want Of punctuality
more injurious and deranging tothe whole bu-
siness of the country, their example carries
with it moral contagion, loosenng the strong
ties of conscientious, as well as legal obliga-
ton, and relaxing the binding effects and
quickening influence among men, Of deep
sense of right, justice and propriety. They
ought then to be held even to more strict
adherence to their duties, more unwaverlng
compliance with all legal acquisitions, than
individual citizens. 1t is demanded by due
regard to the purity of our laws and our insti-
tutions, by that feeling in favor of equal rights
and privileges that pervades the hearts of free
men every where, by all the considerations
connected with desire to promote the public
welfare, and by those solemn obligations that
we are under as Christians and as patriots,
not only to preserve, but to cherish a sense of
Justice and the power of moral influence in the
community.
Banks are generally compelled 10 suspend
the payments Of their notes by unrestralned
issues, by emissions to an extent unwarranted
by their amount of capital and by the opera
ton of adventurous circumstances In forcing
back upon them their notes for payment. In
Vulnerable are the evils that flow from excess
sive issues Of paper money. They generate
wanton and capricious spirit OF speculation
they give rise to idleness and produce sud
den, inevitable and destructive changes in the
value of property, or with more proprety 1t
might be said, in the value of the circulating
medium itself. One single commodity may
rise or fall in its value, by its own abundance
or scarcity but when there is great and uni
versal advance in the prices of all commodi-
ties, it is manifest that property has not only
risen, but money has fallen in value. The
increase of money even in consequence OF
internal industry, profitable trade, and great
national prosperity. will necessarily have the
effect of raising the price of labor and Of all
its products. But when an amount is thrown
into circulation beyond the fair demands Of
trade and the ordinary wants of the commu-
nifty, it will be attended with much more per-
nicious effects, by seeking employment in
untried and visionary projects, and yielding to
the wild impulses Of sudden and inordinate
gain. The condition of some of the monar-
chies in Europe ought to teach us lesson on
this subject, and their history is replete with
salutary examples. Spain, when she acquired
possession of South America, was one of the
most powerful and wealthy States in Europe.
| 1t would at that time have been deemed an
indication of insanity, to have suggested the
possibility Of her population growing poor by
means of their gold and silver mines-it has
however happened. They thought that gold
and silver would procure every thing for them,
without labor or industry forgetting that it
pampered idleness and imposed on them the
necessity Of paying so much more to those
who were willing to perform the labor of the
country. II is evident that money must fall
or rise in value, in proportion TO the quantity
| in market compared with the demand there IS
for its application to legitimate purposes and
that. consequently, when the quantity exceeds