The herald. [volume] (New York [N.Y.]) 1835-1837, 1837-01-07

the precious metals, apply with equal force to the
power of regulating and controlling the issues OF pa
per money! which is used as substitute for metallic
Gu rency. The right and the expediency of exercs-
ing controlling power over both these subjects by
the Legislature arise from the necessity of aordng
general protection against fraud and imposition. II
the duty efthc government were to be graduated by
evils likely to ensue from neglect of either the care
OF sustaining thes oundness OF paper currency,
would seem to be the most imperative. My conclu-
sion this branch OF the restraining law is that the
privilege Of issuing paper circulating medium, can
not be claimed as the restoration of general right
which has been unnecessarily withheld by the Le-
gsanre, and that this power ought not TO be comb
sire to have it; because itcannot, in my Judgment
be thus given without exposing the public to evils
against which it is the duty of the Legislature to a
ford ample and certain protection.
In connexion with the subject of repeating the re-
straints on this branch of business it is highly proba
be that the policy of the usury law will be brought
into discussion. The legislation Of 70 mer times I'M
doubedly took wrong direction (and the present age
has not fully corrected the error when II assumed
the guardianship of private business transactions, and
endeavored to regulate the Judgment and control the
discretion OF men in relation TO the management OF
their ordinary affairs. The usury law appears TO me
to be the fruit of this error Money like other articles
of merchandise varies in price; and the same argu-
ments which sustain the policy of fixing its value by
legislative enactments, might be applied with equal
cogency many other objects OF traffic i cannet
of money like that Of other commodities, 10 free ope
ration of the general rule of demand and supply We
all know, that in defiance Of the law, II Is now and
ever has been, IN great measure controlled by TINS
rule. Any man who has money to lend, can readily
if he chooses get the market price tor IT. however high
that price may be above the legal standard. The law
undoubtedly embarasses the negotiation between the
borrower and the lender, and subjects the former to
the payment OF additional charges, but the lender gets
his price.
The succinct view of the object and operation of the
usury law would seem to Indicate the expedcncy OF
repeating all its penal clauses. Amore ample Discus
sion of its policy, bringing under full consideration It's
supposed advantages well its injurious effects,
would probably lead to the Same conclusion. If how
ever doubts should be entertained 10 the propnety
of going 50 far at this time, think you should not
hesitate to exempt from the penalties 1t imposes, all
negotiations in regard to what may be properly con-
sdered commercial paper arriving at maturity within
six months This modification OF the usury law
should not however In my opinion, extend 10 banks
or other Incorporated companies by the favor OF inc
Legislature the business of making loans and dis
counts is mainly engrossed by them. They would,
therefore, have it in their power by withdrawing their
accommodations when there Is no necessity OF dolsg
so, to raise the rate of interest The commercial COM
munty, confidng in the character OF those who ma
mage these institutions, may not apprehend any evis
from this source; but the Legislature will not pre-
sumo feel tselfa liberty TO repose upon this security,
and leave the public exposed even 10 the chance oil
suffering BY the abuse of this power. Besides, am
srclions now imposedupon them in this respect may
be continued They could scarcely hope to participate
in the benefit of increase in the rate OF interest
without falling under the suspicion OF having con-
trbu,ed to of thingsse decidedly advantageous
to them.
have i'm former messages expressed my views
somewhat at large against the policy OF increasing the
banking capital OF the State take the liberty TO re-
fer to them for exposition Of my present scnti-
ments on that subject, and to recommend that you
should abstain from granting any new charters, or IN
creasng the capital of the existing banks at the pre-
sent session.
IL / could anticipate a result different from what
conceive sound policy and public sentiment indicate,
should feel myself called to state the decided OBJ
ectons which exist against the mode heretofore pur-
sued, Of distributing bank stock. have at no time
approved of that mode and three years since suggested
to the Legislature the expedency of public sale or a
change i'm the manner of distribution which would, IN
my judgment, prevent, or at least mitigate, the evils
Oft. These evils are much more manifest now than
they then. shall, however forbear further to
urge the adoption of remedy IN the confident beliei
that you will not authorize any stock of this de-
scrlptien TO be issued
More than two years since, the Executive, by the
direction OF the Legislature, opened correspondence
with the Governors of the neehborlng States, IN or
der to obtain concurrence BY those States with this
in the measure of suppressing the circulation OF small
bills. Ii was generally conceded that such measure
would improve the paper circulating medium Of the
country. IL is to be regretted that we have not had
into effect The bills of banks, under the de-
nomination Of five dollars have been Withdrawn from
circulation, but similar bills from Of the adjoin-
ing States though prohibited by law, yet continue
to circulate here particularly in the border counties.
1t is very desirable to provide for the eiecual
ton of TIE law prohibiting their circulation; and re-
commend this subject 10 your attention. We have
constantly new evidence Of the wisdom of the law
supprcssing the circulation of small bills.
large amount of coin has been dtused through
the community since this law went into operation.
Our currency has acquired additional stability, and
though the present pecunary pressure has been quic
any previous one, there has not been, TO
my knowledge the slightest indication of doubt as
to its soundness; and the consciousness on The part
of the banks that they enjoyed unmpared public con-
fdence, has relieved them from all apprehensons OF
return of their bills otherwise than in the regular
of BUSINESS and they have therefore gone fur
ther than under other circumstances they could have
DONE accommodate the public in this period OF en-
bauassment.
EDE's oDoRIrER@us COMPOUND. or Persian Sweet
~ Dags-a grateful peume for seeming cothes drawers ward