Constantine republican. [volume] (Constantine, Mich.) 1836-1838, 1837-01-11

pie. The country it is true, is laboring
under an unprecedented pressure in the
money market. But it is a mistaken idea
that extensive issues of bank paper will re-
move this evil. Banks are rather the eft.
feet, than the cause of the prosperity of a
state. They may afford facilities in trade,
but they are not the foundation of the pub
lie wealth. The wealth of the state has a
deeper source; It springs from the agricul.
tural industry of the country it emanatcs
from the labor of the people. The cause
of the existing pressure, does not arise so
much from the want of banking capital in
the country, as from an unnatural state of
trade, produced by the wild and reckless
spirit of speculation, which has overrun the
land, and has withdrawn our capital from
its usual channel. This capital must re-
turn to the channels where il properly be-
longs before entire relief TO the community
can be experienced: and rs it is generally
invested in real estate, this return will be
found to be gradual in its operations. A
wise and prudent economy, accompanied
by cessation from all extragagant specu-
lations, can alone restore proper tone OF
trade, and relieve the embarrassments Of
the country. Without this, multiplication
of banks, and bank paper, would but In
crease the evil.
In relation to the applications which you
may deem proper to grant, | would res
pectfully suggest, the utmost caution in fra
ming your charters, so that the public may
be protected from the losses inevitably to
be occasioned by deprecated circulating
medium. We have before US striking
instance Of the consequences OF incautlous
legislation on this subject. We SEQ Rail
Road Company, chartered for Especial pur-
pose, issuing evidences of debt in the shape
of bank paper, contrary to the evident in
tent of the legislature, but by virtue of a
charter negligently guarded. The effects
of this Legislation are, that the country may
be flooded with paper which carries with
it no assurances of redemption at the will
of the holder, and the tendency of which
is to depreciate abroad the whole circu-
lating medium of the State. | allude to
tho notes of the River Raisin and Lake
Erie Rail Road Company, and without any
disposition to reflect on The high character
and standing of its present directors, leave
it to the legislature, if they possess such a
power, to take the subject in hand and pro-
vide remedy for the evil. My objections
are not to men; they are directed against
the powers and privileges assumed, and
at present exercised by the company.
Whilst legisating on this subject we
must recollect that bank notes are not cur
rent money, but merely its representatives
Gold and silver are the basis of our curren-
cy, and when your bank notes are not con-
vertible into this medium ut the vii! of the
holder, they must depreciate in value.
Without the ability with the banks to re-
deem their notes at the pleasure Of the hold
err, and the power with the State to compel
it, or to stop their circulation, your circula-
ting medium must be inevitably bad one.
No confidence in the ultimate solvency of
the institution, will prevent the depreciation
of its paper, where this ability with the
bank power on the part of the state do not
exist. 1t is not alone sufficient hat the
confidence in your banks should exist at
home, it must exist abroad, and their paper
must answer the purposes of exchanges
with other states. Your merchant in his
commercial relations with New York, or
elsewhere, must be enabled to use the pa
per of your state banks, or be able, if ne
cessary, TO convert it readily into the circu-
lating medium Of the state to which it is
sent. Every guard should therefore be
thrown around your bank charters, which
may have tendency to satisfy the public
mind Of the solvency of the institutions and
Of their ability to redeem their paper at the
will Of the holder.
Gold and silver being the basis Of your
currency, il is important to keep within the
state, as far as may be prac icable an exten-
sive metallic circulating medium. 1t is i'm.
possible, and perhaps not to be desired,
that a metallic circulating medium should
be altogether substituted for bank paper.
The measure, however, should be at least
partially carried into effect so as to pre-
vent constant huctuation in the value Of
bank notes, which are the representative Of
metallic currency, and which will rise and
fall in value in proportion to the scarcity
or abundance of the precious metals. With
this consideration in view, submit to you
the policy Of prohibiting the circulation Of
Bank notes Of less denomination than five
dollars. The tendency of such measure
would be to withdraw from the circulating
medium of the country the snail notes
with which it is now cloycd and sub.
stitute in its stead, substantial metal
ic currency possessing an intrinsic value.
The recent pecuniary embarrassment OF
the country, have produced strong reasons
to doubt the wisdom and policy of our ex.
stpg usury laws. The interference ofthe
government between citizen and citizen,
debating the rate of interest at which one
shall lend, and the other borrow money, can
but be regarded as an unnecessary and
needless restraint upon the freedom of
trade. The rates of the money market,
like all others, should be left to the regula-
ton Of the existing demand. AS well
might government regulate and restrain the
prices upon the produce of agriculture or
the labor Of the mechanic, as the rate Of
interest upon the loans of the capitalist.
Remove all needless restraints upon the
freedom of trade, and the. value of money
like the value of every other article con-
ncctcd with the commercial relations of
the country, will sink TO the level ere.
ated by the demand or supplies of the mar
ket.
But what are the practical effects of
your usury laws ? You are but 10 look