The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-24

great benefit of full and especially Increasing
circulation thus, consists not only in quickening
and facilitating exchanges, (itself an immense
Stimulus to industry, br in securing to the indnstri
GUS classes rather larger proportion Of the income
of society than they would otherwise enjoy. Every
thing which they buy to sell again advances in price
while Is in their hands, and this unquestionable
truth Is of itself total reuaiion OF all that is said
concerning The oppressive operation OF bank paper
upon the productive c1sseS BY the very persons who
in the same breath, speak Of lis excess apd depreca-
ton.
With population then increasing at the rate Of
4 OF per cent year, and with an accumulation OF
capital and productive power proporionaby greater,
hold II 10 be utterly absure TO talk of any thing
like metallic currency in the United States There
IS no possible means OF procuring II, and II by any
means it could b, procured venture to affirm that
our people would get rid Of il in the course Of a
few years, though all the penal laws OF Spain
against the expectation of gold and silver should b.
re-enacted here--aws which were passed with no
other effect, even in that country, but to show the
utter futility of such legislation. say, sir, that
with their present habits OF active enterprise and
strict economy, the American people would export
the precious metals fast as they were imported,
beyond any amount of them which might be
absolutely necessary for the domestic exchanges Of
the country, and they would do so because gold and
silver would be of use abroad in purchasing com
moditieS, and would be wholly superfous at home
where paper would do as we'll Ii you put down
"the Banks" il would have no effect but 10 sci up
something worse in their place, in the shape Of
private paper There are some things over which
the most despotic law giyers unable TO exercise
any control and one OF them, as all experience
shows is this commerce in bullion.
Sir il has been said that the only advantage of a
paper currency over the precious metals consists in
its cheapness. | am, by no means, as you may ga
Their from what have said, ready TO admit this, but
supposng il TO be true, Is that saving really an I'M
important mater2 Mr.. Gallatin, in pamphlet Of
signal ability. has as conceive, fallen into grave
III 'tIhia 10 p1nch Ia mr. rp
important TO rectfy, as perceive that he has mis-
led others more disposed than himself 10 turn spe-
culative error into practical mischief he states
the whole benefit derived from the use OF paper IN
stead of the precious metals in the United States in
1880 including, under the name of circulation, pri-
vae deposits in the banks, asst hey ought undoubtedly
to be, at about five millions of dollars year II IS
true, that according to principles admitted by Mr.
Gallatin the progress of the country both in wealth
and population, in the last screen years, would re-
qure very considerable addition to be made TO this
estimate in order to correct application OF It. to our
actual condition. But, sir, il appears to me that the
estimate was made on data altogether erroneous
In the first place the quantity Of currency, II II were
metallic, necessary to the circulation OF this coun
try, was prodgiouSly moderated. For reasons that
need not be stated here, il is found that given
amount of metallic currency does not circulate as
rapidly equal amount of paper, and therefore,
that more of il is ceteriS parbus required to do the
same business But without going into such minute
inquiry here, why should the United States with
sixteen millions of inhabitants, and relatively the
most active trade both foreign and domestic in the
world and with extraordinary productive power of
all sorts, not need at the rery least half the circula
ton necessary in France, with only double their
population and not half their industry! The stress
that ought to be laid on this latter circumstance may
be illustrated by comparing Asia with Europe in
this particular-doube the population in the former
possessing according othe most accurate researches,
only one-fiih the quantity of gold and oliver, which,
in addition TO paper of all sorts is required in the
latte 81 ,1ntiN ,,f uraE haf,,
the first revolution set down BY Neckar al ESQ., 600
000t-and Theirs in his history of that event. makes
similar estimate.t Its present amount ought, in
reference to the increase of her capital and popula-
ton to be at least 600 600 900 of dollars and accord
ingy, as was observed by of my colleagues
(Mr. thompson it is stated at that on good authority
Mr. Rothchild, in his examination before the Com
mittee Of the House of Commons in 1882, mentions
the paper circulation OF the Bank OF France as
amounting to 150O0O,OO0 of franks. According To
this; then should require the footing of popu-
laon alone, at least 100000 900 of dollars. So
much for the amount-now for the loss upon it.
Mr. Gaatln considers IL only much interest on
dead capital and even the interest he puts exceed
ingly low rate But apprehend the difference to the
country between having vast inert mass OF gold and
silver currency and turning it into productive capital
be determined not in reference to interest merely
but to the profit Of stock laid out, in active industry
which is no where this country less than 10 per cent
and in the great orty of cases. the new states and
all included, nearer double that amount on average
You then, sir what enormous loss metallic cur
rency would be to the nation without taking into the
account its and tear Look back at the half cen
that has passed and what that loss would
have been, on principles OF compound interest," from
the beginning up to the present day Why, sir, it cx
ceedS all powers of calculation nay of Imagination DO
not suppose for moment that so important. so pal pable
truth, although never stated in abstract terms
general proposition has occurred to the people of
the United States They have fet it without pcrctiring
1t, they hayc acted it without reasoning about it, they
have perfectly well comprehended the real uses of mo-
ney without studying the principles of currency, and
they have preferred paper as circulating medium to
gold and silver because better for their purposes
than gold and silver, the simplest maxlms Of pru
dence and economy You may depend upon it, this
conclusion is deeply rooted as it is just. Yov will
be able to shake it. All your policy will be Of
avail all legislation is forever vain which comes into
conflict with the genius OF people, especially IN mat
tiers deeply and visbly affecting their private in
tcrcst. The Barbarian who in his impotent rage threw
letters into the lellespont and scourged its foamng bill
lows, did not wage insane against the nature
of things.
But told that if 1t is an experiment that has
been proposed to uswe need not be alarmed at IT. be-
cause we are accustomed to experiments and successful
ones-that constitution itself mere experiment
Sir, deny utterly, and he that says shows that
has either not studied at all studied very little pur
pose the history and genius Of institutions The
great cause OF their prosperous rcsutsa which
every one OF the many attempts since valny made to
initiate them on this continent or in Europe only de-
monsrates the clcarlyis precisely the contrary.
1t is because fathers made experiments, and had
experiment to make that their work has stood They
forced by violation of their HISTORICAL hereditary
rights under The old common lac of then race to dis
solve their connection with the mother country Their
external their cderat relations were of changed
and in that respect, and in that respect ouy they
compelled to do their best in the novel situation in
which they stood What relates, therefore, merely to
the uniou OF the States all that gives the least coun-
tenance to this superficial idea OF an Experiment
which has done much to misgude the speculaons Of
visionary minds upon these important matters
Even in this respect, however, attentive study Of
history will show that strong federal tendencies ex
listed and had, frequently, former occasions manifest
cd themselves But the whole constitution of society