Columbus Democrat. [volume] (Columbus, Miss.) 18??-18??, 1837-10-21


support also stated that, in supporting the Bank
then, welded 10 the necessity of tie case growing
OUT oi The then existing and iong established con-
necuon between the Government aud the banking
system. took the ground even at that early peri-
Oh, that so long as the connexi0n existed so lonr
as the Government received and paid away bank
notes as money, they were bound 10 regulate their
value, ank had no alternative but the estabiShmentof
National Bank
found the connection ia existence anil establish.
cd before my time and over winch could have no
control yielded 10 the necessity IN order To cor
rect The diSordered state Of the currency which had
iaIen exclusively under the control ofthe State
yielded to what | could not reverse, lust as any
member Of the Senate now would, who might be-
heye that Louisiana was unconSttutionaly admitted
INTO the Union, but who would nevertheless, feel
compelled TO vote 10 extend the laws to that State.
as one GIFTS members, the grnuud that its admis-
son was an act whether constitutional or unconsl-
tuu0nal, which he could not reverse
In 1851, acted IN conformity TO the same princ-
pie, IN proposing the renewal of the Bank charter
fora short period. Ny object AS expressly avowed
was 20 use the Bank to break the connexon between
the Government and the barking system gradually,
IN order Oavert The catastrophe which has now be-
fallen us, and which then clearly perceived But
the connection which believe To be irevcrsibe IN
1916, has now been broken by operation flaw. Ii
IS now an open question. feel myscfiiec, for the
first ume to choose my course on this mportan,
SUBJECT and IN opposing Bank, | &C: in coniormi-
" TO principles which have entertained ever since
have fully investigated the subject.
But my opposition 10 re-union with the Bank is
not confined to objections limited to National or
State Banks. 1t goes beyond, and comprehendS
others Ola more general nature relating to the cur
rency, which to me are decisive. | am of the i'm
preston that the connection has most perncious
influence over bank currency; that it tends to dis
trb that stability aad uniformity Of value, which is
essential TO a sound currency and is among the
leading causes OF that tendency 10 expansion and
contraction, which experience has shown is incident
to bank notes as a currency. They are, in nv
oplmon at best without the requisite qualities to
cons tnte currency, even when connected with
the Government: and are douby disqualified by
: reason olthat connection which subjects them To
sudden expansions ard conlractions and expose
them TO lata catastrophes such as the present
VIII explain my views. bank note Circuatcs
not merely on account Of the credit of the institution
by which it is issued, bat because Government re-
ceves it like gold and silver in all its dues, and thus
adds It's own credit To that Of the Eank. It, in fact
virtually endorses on the note o.cvery specie pay
ing Dank, receivable hy the Government in lis
dues. 10 understand how greatly this adds to the
circulation of bank notes, we mus. remember that
government IS the great money dealer Of the coun-
Try, ana Tue holder OF immense public domains, and
tIat " mas the power Of creating a demand against
every citizen, as high as pleases in the shape of
TAX, or duty winch can be discharged, as the law
now IS only by back notes or gold and silver This.
OF course cannot hut add greatly TO the credit of
bank notes aud contribute much TO their circulation
though 1t may be difficult 10 determine with any
precision to what extent II certainly is very great.
For why SIT that an individual of the first credit
whose responsibility is 50 ndEpuable that his friend
OF equal credit endorses his note Cor nnthnu should
put his name with his friends being their ioiut cred
IT, into bank, and take out the notes OF the bank
which IS, IN fact, but the credit Of the bank itselr
and pay SIX per cent discount between the credit OF
himself ana his luend ara mat OF the BanK the
known and established credit Of the bank may be
one reason, but there is another and powerful one
the Government treats the credit of the bank as
god and silver in all its transactions, and docs not
treat the credit Of the individuals in the same man
ner. To test the truth, let the case, and
suppose the Government TO treat the JOINT credit Of
individuals, as money, and not the credit Of the
bank and is it not obvious that, instead Of borrow
ing from the bank, and paying six per cent discount,
the bank would be glad to borrow from them on the
same terms. From this we may perceive the pow
eru influence, which bank circulation derives from
the connection with the credit Of the Government.
Ii follows, as a necessary consequence, that to
the extent Of This influence, the Banks expand
and contract with the expansion aud contraction
OF the fiscal action fthe Government; with the
increase Of IFS duties, taxes and expenditure, with
the dcp0sltes IN It's vaults, acting as additional
capital, and the amount Of bank notes Withdrawn,
in consequence, from circulation all OF which
must directly affect the amount OF their business
and issues, and bank currency, and must, Of
course partake of all those vibrations to which
the fiscal action of thc Government is necessarl-
y exposed and when great and sudden must ex-
pose the system to catastrophes such as We now
witness. In fact more suitable instance cam
mol be selected to illustrate the truth oil what as
sert than the present, as | shall proceed to show.
To understand the causes which have led to
the present state of things, we must 90 back to
the year 1924, when the tariff system triumphed
IN CongrPss--a system which imposed duties not
for the purpose Of revenue, but TO encourage the
industry Of one portion Of the Union at the ex-
pense Of the other This was followed up by
the act of 1928, which consummated the system.
1t raised the duties SO eytrayaganty, that out of
an annual importation OF sXty-iour millions, thir-
ty-two passed into the Treasury, that is, Gov
eminent took one halt for the liberty of introduce
ng the other. Countless millions were thus
poured into the Treasury beyond the wants Of
the Government, which became in time the source
ofthc most extravagant expenditures. This vast
increase Of receipts and expenditures was follow
ed by corresponding expansion ofthe business
Of the Banks. They had to discount and issue
freely to enable the merchants to pay their duty
bonds, as well as to meet the vastly increased ex-
pendures Of the Government. Another effect
followed the act of 1928, which gave still far
ther expansion to the action Of the Banks. and
which is worthy of notice. 1t turned the ex-
change with England in favor Of this country.
That portion ofthe proceeds ofour EXPORTS which,
in consequence of the high duties, could no longer
return with profit, in the usual articles which we lad
been in the habit Of receiving principally from that
country in exchange for our exports, returning in
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