The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-14

BY the above Official tables, Mr.. X. said it would
clearly appear that the national wealth and industry had
greatly increased, whilst the currency had remained
about stationary. as previously established Mr. X
thought he had fully established that the currency
of England had not been equally expanded with our
own, but the contrary, there had been actually "a
gradual Increase in the value Of money"
The second proposition (Mr X sadly scarcely needed
proof from its close connection with the first. He
would put the matter at rest, however by the produce
ton Of evidence that ought to he satisfactory to all This
evidence was the perfect agreement, this point of
Mr. Horslcy Palmer and Mr. Knowles in their contro-
versy concerning the action Of the )ont-sock banks and
the conduct of the Bank of England. Mr. Palmer in
apologzng for the contraction of the Bank, and aud
ing to the causes, &c says 1t is necessary TO state
these as they SEEM IN no degree to have arisen from
overtradng any undue speculative advance com
mercia prices" Mr. Knowles, however, is satsfi-
ed with this admission but wishing the fact established
beyond doubt, he the thing. and refers TO
the proofs. Mr. Knowles, after proving that the egt-
mate demand for currency had been increased by the
increase of national wealth, says "a table Of prices,
had time to prepare one would prove beyond question
that far from prices generally in many cases
there has been fall with decreasing stock fact
quite incompatible with over-ssue and depreciation
Of the currency. While, again, where rise in prices
has taken place, it is distinctly reerable to causes pros
pectIsely affecting the market to supply" Some
fluctuations doubtless exhibited the manufacture
ing districts in particular articles and especially in arti-
clcs for American consumption, which, from the heavy
Increased demand for them could not he readily suppl
ed by existing establishments. This, however, !" is dis
tncty referable to affecting the market as 10
supply" and no evidence of a redundancy of the
circulation The distinction might always be settled by
an observation OF the following rules That whenever
there great fuctua,ion in the value Of particular
article commodity whilst the value OF the property Of
the country generally remains unaffected we NAV take
for granted that the fuctuaton is owing change in
the relation between the demand and supply For in
stance, IL there be short crop of corn the SUNNY will
fall short Of the demand and the price Of corn will rise,
whilst all other commodities may stand firm This rise
is occasoncd by the change in the relation between the
supply and demand But if find the price of every
commodity raised to unusual elevation (as lately in
the United States, we may take it for granted that the
price owing to the change in the relation between cur
rency and commodities IN other words, that currency
credit, BOTH has been greatly increased aud con-
sequenty deprecated. This partial and local Auctua-
ton, then, where 1t existed, amounted nothing, as it
traing and partial, and attributed to a huctuaton
between supply and demanda iuctuation to be found
TO some extent in all countries and at all times. Doubt
less some additional activity occasoned by our ar
fetal and credit demand for manufactures attended also
with increase Of manufacturing stock 1t was very
likely aso local overactlon in the Joint stock
banks occasioned by the large profits they derived
from the discount Of American securities and credits to
supply credit demand for money for under our pre-
posterous system adopted in 1884 of importing borrow
ed money to multiply credits upon have been will
ing 70 take all their cash well all their commod-
ties, and give than any body else for them if they
would only let us have them credit These partial
fluctuations were uncertain and unmporant, and far
as they did efist if all easily accounted for and
principally. If not entirely to be attributed TO connec-
ton with In view Of the subject could they be
used as evidence of national redundancy of currency
or credit or Of national overtradng, neither of which,
as we have seen, had taken place.
To be continued.