The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-08-19

entertain and which have determined the shape Of the
proposition under their consideration.
In discussing the question OF a reform of the cur
rency it is necessary to settle our ideas clearly as TO
two things: FIRST the nature and extent Of the end be
aimed at secondly, the by which il is 10 be at
tanned II am asked, what is the end | propose
whether in favor Of specie circulation exclusive
ly aud the total suppression OF bank paper answer
Even If such object desirable, is plainly
impractcsble In the present state Of commercial pro-
gress and refinement throughout the world it would
probably be imprsccable any where; but in this coun
try, and under system ol government especially, it
is obviously wholly unattainabe. Whether right or
wrong find twentysx independent state legislatures
possessed Of the power create banking corporations
Whatever speculative doubts may exist in the minds Of
the constitutional validity Of this power the
states actually possess and exercise it, they
have invariably done from the foundation OF the Govern
met and there is the sghtcs, probability that they
viii ever be Invested of it. In every sober and prac
cal scheme Of policy, we must proceed upon the
sumption that this Independent state power will remain
How, them the banking system be suppressed by
this Government, Such notion, II entertained any
where, would be Utopan and visionary.
My object, then, would be, not the destruction Of be
banking system aud the total suppression Of bank pa
per, but efficient regulation Of IT, and Its restriction
to safe and proper limits not the exclusive use OF spe
Gle a circulating medium but such substantial en-
largement and general diffusion OF it, in actual crcula
ton, would make II the practical currency OF
life, the universal medium of ordinary transac-
tions-in short the money of the farmer the mechanic
the laborcr, and the tradcsman while the merchant
should be left lin the enjoyment Of the facilities Of
sound and restricted paper currency for his larger ope
raons. Such reformation IN the currency as this,
would, IN my opinion be productive OF the most bene
fetal results II would give security to the industrious
classes OF society for the products OF their labor against
the casualties incident to the paper system The labor
or in returning to the bosom of his family from his
weekly toll, would no longer find his sumbers broken
by the apprehension that the hard earnings Of the week.
perhaps the accumulation of long OF honest indus
try might be disspated, in moment by the explosion
OF bank the bursting Of some paper bubble. II
would give security, to a great extent to the whole
body Of the community, against those disastrous uc-
tuatons in the value ofpropery and contracts, which
from the GIBBS and flows Of unrestricted paper
currency. II would give security TO the banks them
selves, by providing them, in the daily internal circula
ton of the country, abundant and accessible fund
for recruiting their resources whenever they should be-
exposed to extraordinary pressure
This sir, is the happy state OF things we might pro-
mise ourselves from replacing (as it is the aim of the
proposition which have had the honor to submit dog
all bank bills under the denomination OF twenty dollars
with solid circulation of gold and silver Is there any
thing Wild any thing visionary any thing pernclous III
such system Of currency this It has the sanction,
Mr. President, of the prooundest writers questions
Of political economy and has received the practical
sent of the wsest nations am well aware that it
would Ill become to present for the consideration OF
the Senate any scheme which not thus tested and
approved. OF all the wrIters,who have treated and
amned questions of this character, none possess,
high authority as the author of the Wealth OF Ma
tons" II has been well and Justly said, that Adam
Smith had done for the science of political economy
what Bacon and Newton had done for physical science.
and Sydney and Locke for the science OF government
and the Fundamental principles Of civil and political If
berry His work, appearing contemporaneously with
the American revolution, was deeply lmbucd with the
free spirit, and the large and vigorous thought which
remarkably distinguished that great era. He came forth
tho jealous and powerful champion of free trade the
lnfexlbe opponent Of monopoly aud restriction in all
their multiplied forms, the ardent advocate of every
thing that is liberal generous, and popular, i'll the insti
tutons Of society and the intercourse OF nations No
work has exercised so large influence for good
on the policy and destiny of nations and none, am
sure, considering the stamp of liberty well as Wis
dom impressed upon it. is better entitled to the respect
of assembly Of American legislators. Adam Smith,
by strange mistake, has been held up, rather oppro
bnously the advocate of paper system-as the
founder, in fact, OF the paper school Sir, there can
be no greater mistake than this. While he recognized
the utility OF ludclous system OF banking, In liberia
ting and putting into productive employment capital
which would otherwise remain dead and inactive, and
the facilities it is calculated TO afford to commerce, he
yet insists that the general circulation of the country
should be of gold and silver
As the general principles he has laid down the sub
pcaled to by the enlightened writers who have followed
him, aording the soundest exposition of those sub
jects whatever notifications OF subordinate points
have been made by subsequent nqurers will give to
the Senate, and principally in the words Of Adam Smith
himself, outline of his system Of currency After
speaking of the advantages to be expected from udlc
and properly conducted system Of banking he
expressly, that g the commerce and industry OF coun
try not when suspended, it were, on
the Dadaian wings Of paper money, as when they travel
about on the solid ground Of gold and s,lccr." He
says, therefore, is the policy Of wise governments 40
guard, only against that excessive multiplication Of
paper money which RUNS the very banks which issue IT,
but against that multiplication OF II which enables
them to fill the greater paiof The circulation OF the coun
try with IT," He then proceeds 10 show that +" the
circulation OF every country may be considered as dl-
vlded into different branches the circulation OF the
dealers with one another, and the circulation between
the dealers and consumers" His next position Is that
paper money may be regulated as either TO confnc
itself very much to the circulation between the different
dealers extend itself likewise TO great part OF
that between the dealers and consumers This regu-
ation effected by fixing the denomination oil the notes
permitted to be issued 1t were better he adds
that bank notes issued IN any part of the king
dom for a smaller sun than fire potds. Paper money
would then conhnc itself the circulation between the
different dealers y and where this is the case, he says
J" there is always plcmy n gotd amt s,rcr" But
where extends itself considerable part OF the cir
cuatlon between dealers and consumers 1t banshcs gold
and silver almost entirely from the country The sys
TEN OF Adam Smith, then, resolves itself into this that
the circulation between deaicr and dcdlcr may be opa-
per but that the circulation between dcdcr and coaSum
should be fprccous metals that this result ought
to be secured by prohibiting the issue of bank notes for
less sum than five pounds and that If such rcstric
ton be adopted, hcle will always be plenty OF gold
and silver in circulation, performing all the Offices of
exchange in the ordinary Transactions of society,
while the use ofpaper would be confined to CONNER
ca operations Of larger scale, Instead of being the
advocate far less the founder Of unrestricted paper
system, he urges The necessity Of confirming 1t 10 COM
mercial accommodation In the larger transactions be-
tween dealer and dealer lie favor OF the suppress
sion Of all banks under five pounds whereby gold
and silver will be the ordinary channels of circulation,
and become, fact, the practical currency OF