Vermont watchman and State journal. [volume] (Montpelier, Vt.) 1836-1883, 1837-01-24
People, and The extension and most successful use

and the prices which the article bears. Last years
crop reached, probably eighty millions Of dollars
Now most of the cotton produced in the United
States Is sold, once, at least IN the country and much
of it many times. The bills drawn against it when
shipped either for Europe the Atlantic ports, ave
usually cashed at the place of drawing, commonly
no doubt, by means Of bank notes, or bank credits.
put all these caser but instances showing thu
increased value Of property and amount Of business
in the country, and accounting therefore for an ex
panSion Of the crculation without supposing great
excess since 1t is obvious that the circulating
ncy Of country naturally bears proportion to the
whole mass Of property, and to the number and a
mount Of bu7incss transactions.
But there is another cause Of less favorable
character, which may have had Its effect already
or, if not very likely to have it hereaite in aug
menting the circulation of bank notes. | mean the
obstI uction and embarrassment of the domestic OK
changes. In proper an natural state of affairs,
the place of money, is filed to a great extent by
bills ofexchange: and this continues to be the case,
SO long as the rates Of exchange remain low and
steady. Nobody for example, Will send bank notes
or specie from New FORK TO New Orleans, If he
can buy good bill at par, or near par. But when
exchange becomes disturbed. when rates rise and
huc uaic, bills to be able operiorm this func-
ton, and then bank notes begin TO be sent about from
place to place, III quantities, TO supply the place OF
bills Of exchange in payment OF debts and balances.
All such md all other, arrangements and dlsirac-
lions in the free course Of domestic exchanges ne
cessarty produo an unnatural and considerable IN
crease Of the circulation. So far our circulation
has been, or NAV be, augmented by this cause, so
far both the cause and the effect to be deplorcd.
In my opinion, have certainly reason 10 fear this
excess hereafter. What is to prevent it.? Is il pos
slblc that many Stae banks, so fit apart, so IN
known 10 each othe., with no common object no
common principles of discount, and no general reg
uaton whatever, should act SO much in concert,
and upon system, as TO MAINTAIN the currency Of the
country steady, without either unjust expansion or
unnecessary contraction believe 1t is rot posi-
l.al.. e
on hard money circulation believe this also and
that they press their mpracticable hard money
lions from conscio lsness that the dlsconinuancc
of national institution has brought the country i'll
ia "a condition in which it is threatened with issues
Of rrodee 1ab,c paper.
Our present evil however, is Of different kind
1t is, indeed somewhat novel and anomalous. With
high general prosperity, good crops generally speak
ing, abundance of the precious metals, and fa-
vorabe state Of foreign exchanges, men of business
have yet felt, for some months, unprecedented
scarcity Of money. That is the state ofthings its
cause in my opinion, is expressed in few words ;
1t Is the arrangement Of internal Intercourse, and
internal exchange. Our difficulty is not exhaustion
but obstruction. Every body has means enough,
! but nobody can use his means. All the usual chan
nels of commercial dealing blocked up. The
manufacturers of the North cannot OBJ ain from tho
South the proceeds of the sales Of their articles
the South finds money scarce, too, in the midst Of
! its abundant exports.
| In country so extensive and so busy every mer.
chants means become or less dispersed, and
exist in various pisces in the shape Of debts. FIX
change is the instrument, the wand, by which he
reaches forth to these wherever they are and
uses them for bis immediate and daily purposes
! But this instrument Is broken. He can no longer
| touch with IT his distant debt, and make that debt
present money. He seeks therefore, for expeClIens
borrows money, If he cam till times change pays
enormous rates OF interest TO maintain credit thinks
things, when at the worst, must soon change looks
for reaction, and sacrifices capitalists, brokers' and
money-lcnders, the hard earnings Of years, rather
/ thdn iai 10 iuih his commercial engagements. 1t
is happy and blessed hour, this for greedy capital
ana graspins brokerage an excrucatGg one for
honest industry. The very rich grow every day
richer the laborous and industrious, every day poor
err Meantime, the highways Of commercial dealing
and exchanges grow more and more founderous, or
are all breaking up. Specie, always most useful as
the basis OF circulation, when most in repose, gets
upon the nuve Any time the last four months II
might nave happened and many times doubtless ii
happened, that steamboats, from New FORK, carrying
specie to Boston, have passed in the sound steam
boats from Boston carrying specie TO New York.
Boating and carting money backward and forward,
becomes the order of the day and there are those
who The more they hear ofspocie, hauled and trans
ported about from place to Place, IN masses, the
more they ilauer themselves with the idea that the
country rs returning rapidly to safe and happy
specie circulation.
There may be other minor causes They are
not worth enuneraung. The great and immediate
origin of evil is disturbance in the exchange and
in my opinion this disturbance has been caused by
the agency Of The Government itself. The fifty
millions in the Treasury have been agtated by un.
necessary transfers. As large portion of this sum
was to be deposited with the States the beginning
of the next year, the Secretary seems TO have
thought 1t necessary to cut up divide, and remove
assigned portions of it before the time come. 1t is
this idea Of removal that has wrought the mischief
In consequence of this money has been taken from
places Of active commercial business, where it was
much needed and all used, and carried 10 places
where it was not needed, and could not be used
The agricultural Stale Of Indiana, for example
is full Of specie the highly commercial and manu-
featuring State of Massachusetts is severely drain
ed. In the mean time, the money in Indiana can
not be used 1t is waiting for the new year The
moment the Treasury grasp is let loose from II, II
will tend again TO the great mars Of business that
is to say, the restoration Of the neutral state of things
will begin TO correct the evil of arbitrary and Irt-
fetal financial arrangements The money wall go
back to the places where II is wanted. 1t will seek
its level, and It's place Of usefulness. In my opinion
the proper execution of the deposlte law did not
make ii at all necessary for the Treasury to order
these pneyous local changes. The law ltselfis not
answcrable for the Inconvenience which has re-
suited. When the time came, the STATES, all OF
them, would have been very glad to receive the
money where it was. They wanted but an order
for il. They desired no carting. Can any thing
he more preposterous than to transfer specie from
New York to Nashville, when TO n man in Nash
| VILE, specie in New FORK two per cent more
valuable Than fhe had it in his own house There
is always a tendency in specie, not actually IN the
pockets of The people, towards the great mars and
places Of exchange, Those who want II, wantit
there. There the great transactions Of commerce
urc performed, and there the means Of those trans
actions naturally exist, simply because there they
are required. Now, what reason there for dis
turbing the revenue, thus lying where it had been
collected and thus mingled with the commerce of
the country? Why lahoriously drag it oil, far from
its place Of useful action, to places where was not
wanted, and could do no good, and there hold 1t, UNI
der the key OF the Treasury
This anticipation Of the operation Of the deposie
| lnw--ihis attempt n hcai disribuon--hs arb
trery system Of transfer, which seems 10 forget at
once, the necessities afcummercc, and tho real uses
/ Of m1ney, regard as the direct ami primo cause Of