Lynchburg Virginian. [volume] (Lynchburg [Va.]) 1829-185?, 1837-11-16

bank, which added so greatly the increase ot its
circulation. These again. when eacetcdby the Gov
efnlncnt were placed III dcposie IN the hank; Thus
s"ns to not only the pratt resulting from then alb
sr'eton from circulation, from the time OF collection
TIL disbursement, but also that from the OF tho
public dcposies' in the interval To complete the pic
inrc, The hank, IN its capacity OF lending to the Gov
eminent IN fact paid IN its notes which rested the
i.itl 1T The Government stock, which Ii draw
ing eight per cent. thai, IN uuth, II but loaned TO
the Government its own credit.
Such were the extraordinary advantages conferred
on this institution. aud ofwhich il had an exclusive
monopoly; aud these are the causes which sisc
such an extraordinary impulse 10 ,ts growth and IN
nnchco. that II Increased, III lullc m",e than n
hundred years. from 1904 10 l.9i, (when the second
era oil The system, commenced with the establish
ncnt OF the Bank Of England. tciminated,) from
l2uo, 00ot, 10 nearly llGDO,0oW. AMI this manly
by the addition 10 It's eapa by loans 10 the Cavern
'nent asovc the profits fits annual dividends. Before
entering on the third OF the system, pause TO
make atcw reflections On the second.
AN struck, in clsiin. eyes II, Ia find thti,
not" outstanding the .rcat dsslmllrity OF features
which TIM system had assumed IN passing from a,netc
hank OF depnsto 10 that al dcpo>e. discount. aud
circulation. tue operation OF the latte, was eouound
e''htooshout tins long period. as 1t regards Ahe EFF
'rcs on the currency. with tue bank Of deposN. Its
notes were UNIVERSAL, REGARDED representing gold
and SILVER, and a. depending thai rep e.entaon
exclusively for ther circulation rs much 81 rs did
Amsterdam. No Que supposed that they could re
tain rir cr-rll for moment after try ceased To b.
convertible into he uetas on drmand; were they
suppo sed IT, h Sc hs ellee, OF increasing the aggfc-
gate amount Of he cu.ency; nor, oi eo"t+e OF m
creasng prices. ~ a word ,raH were IN The pub
lit nnd ~ completed, lcnt'iied win llic meta'lic
currency rs II every note ~ cire nlhon hal lad ur
N the vaults oilhe banh equal anoun, pound ior
pound, INTO which all Us paper could be con, erlrd
thr moncnt It WAS presented.
Al lhI, was great dcn,ion. The issues ol the
bunk b5-cr dui represent, from ne tf the precious
metals. lnscadoi Hs PrcScafHires, lis notes were
N reality the substitute !or com. Instead OF being the
N re drudgcs, performing all the outdoor service,
while the coins reposed At their IN the yaus OF
The banks. Tree from aud tear. aud the hazard OF
loss or destruction were the certificates Of rposiies
III the original Bank OF Amsterdam, hcy substituted,
degraded, aud banisled the CONS. Every note cir
eualcd become the Substitute OF 50 much CON, and
dispensed with IT IN clrcnl,tion and thereby deprcci-
aird The valu" OF the prccmus metals and increased
thrlf consumption in the same proportions, while II
diminished, IN the same degree. the supply b, render
ine money less productive. Tho system assumed
gold and silver ~ the basis OF ITS circulation and
yet h. the Laws o lis nature. Just rs II increased is
cTehl1tlon Ia the saino degree the foundation on
winch iiir system stood weakened. The con
,nlnr'ian oi the metals Increased, and the supply d
hlnNhed. As the weight ot the supersiructufc in
ercase1 Just IN The same proportion it's foundation
was Undermined and weakenrd Tins, the germ
II dfrtri'on was mated in the system at lis birth;
baS Expanded "iih its growth, and must terminate,
one day or other. ~ dissolution, unless, indeed
II s'mull by some transition, entirely change ns ma
I'M, 1nd pass into othsr and en,.s different
a. .anic form. The conflict between bank cifcnla-
fiob aud metallic (thongh not perceived III the hrst
sfage "i The system, when they supposed 10 be
lnd.ssonhl, connected) i mortal; one al the Other
mus perish IN the struggle Such Is the decree OF
falr; tia irrcyerslble.
Mar the close oil the seconl era the system pas
sud lilr Atlantic, and took root lApur country,
~he.c found tic soil still more ,<s aud the eli
mate more crngenial. than even in the parent coun-
iy. The Bank OF North America Was established
IN 1881, with capital Of 100 0t)O aud bearing all
the features OF its pro'oi,pc. the Bank of England
In the short space Of Il litlr more dian half II
century, the system haS expanded from, bank 10
about eight hundred, mclu Ing branches tno Que
Nno"s the exact anonH ~ rapid the ncfea>r) and
from capital Of l. s. ihana h,t million to about
800 900 900 without apparently exhausiing or dnp-
shiny its capacii, to increase. So accelerated has
been its growth with ~, from causes which explain
ed an former occasion. tltu.' already II has al
tanned point mneh nearer the assigned limits OF the
system in its present form tldn wlat II has ia En-.
land.
During the yr5r ltoT. t'lr Bank Of Engl,n su.
pendod specie patment; ,n event destined by It's
consequences IL effect rrvolutronsn pubic op'nion
~ relation To the s>stc,n aud 10 accelerate the peri
pd winch must determine it, tate Engltnd WIS
ated III ia. French revolution AMI her financial OPP
rrltions the mast extended scale, followed
by corresponding. increase III the action OF the bank
~ her fiscal agent. It sunk urd, over tion.
Specie payments were suspended. Panic and dis
may spread through The lind-so deep and durable
wa, HE impression thu the credit Of tie bauk de-
pended exclusively OH lhe Plnc,nai, oi It's payments
la the nihis oil the alarm an act OF iaraturn, was
passed, making the notes Of the b~bk legal tender
and. The surprise ofall, the instnfivn proceeded
on, apparently without any dinhuulioi OF It's
credit. j., notes circulated freely osrr, and with
any dcprecaiioi ioi time. compared with gold
and silver and continued to do for upwards o
twenty years, with an average diminuiion Of about
per cent. per annum. The SHOCK did much 10
dspcl the eliisou that bark notes represented gold
aud silver, and that they circulated in consequence oil
such representation, but without entirely obteraiiog
on that point the good impression which had taken
such strong hold on the public mind. The credit oi
its notes during the suspension WAS generally aiir
bncd 10 the tender act aud the ~ sat aud untcd re-
sources of the bank am, the Government.
But an even, followed of the same kind. under
circumstances entirely different, which did more
than any preceding to she'd hight on the Of
the system, aud 10 unfo4 lis vast capacity to sus
tain itself without exterior aid W. finally became
involved nthc mighty struggle that had so long de-
ISOLATED Europe, and enriched our country. War WAS
declared against Great Britain in 1912, aud, in the
short space OF one year, our feeble banking system
sunk under the increased fiscal action oihe Govern
mcnt WAS then member otthe other House. aud
had taken IN, full share of responsibility in the mca-
snrcs which led To that result. shall forget
the sensation which the suspension, and the certain
anticipation OF the postration OF the currency oi the
country, as a consequence excited IN my mind.
We could resort to tender act; had no great
aud central regulating power like the Bank OF Eng
land andthe credit and resources otihe Government