Southern Argus. [volume] (Columbus, Miss.) 1834-1842, 1838-05-15
COLUMBUS,

Icufrencyo @ IS ~
The most recent Treasury estimate,
which have seen, supposes there are
eighty millions Of metallic money now in
the country. This believe, however, to
be good deal too high; cannot believe
it exceeds sixty, at most; and supposing
one half Of this sum to be in the banks.
thirty millions are in circulation or in pri.
vate hands. We have seven hundred
banks and branches, with capitals assigned
for the security of their notes and bills.
amounting to two hundred and eighty mil
lions. The amount of bank notes in &C.
tual circulation is supposed to be one hun.
dred millions; so that our whole circulation
is about one hundred and thirty millions.
The amount of debts due to the banks, or
the amount of heir loans and discounts,
may be taken at four hundred and fifty
millions.
Now, sir, this very short statement ex-
hibits at once a general outline of our ex-
isting system of currency and credit. We
see a great amount of money or prope't y
in the banks, as their assigned and APP
prOpriate capital, and we see a great
amount due to these banks. These bank
debtors generally belong to the classes of
active business, or are such as have taken
up credits for purposes of investment in
lands or merchandise, looking to future
proceeds as the means of repayment. If
we compare this state Of circulation, Of
bank capital and bank debt, with the same
things in England, important differences
viii not fail to strike us.
The whole paper circulation of Eng
land, by the latest accounts, is twenty
eight millions sterling-made up of eigh-
teen millions of the Bank of England
notes, and ten millions of the notes of pri-
vate bankers and joint-stock companies !;
bullion in the bank, nine and half mill
lions debts due the Bank of England,
twenty-five and half millions. The
amount of loans and discounts by private
bankers and joint-stock companies is not
usually stated, believe, in the public ac-
counts. If it bear the same proportion to
their notes in circulation, as in the case of
the Bank of England, it would exceed
twelve millions. We may, therefore, take
the amount of bank debts in England to
be thirty-fve millions. But | suppose that,
of the securities held by the Bank of Eng
land, cxchequer notes constitute a large
part; in other words, that large part of
the bank debt Is due by the Government.
4 The amount of coin in actual circulation is
estimated to be thirty and half millions.
! The whole amount of circulation in Eng
land, metallic and paper, is usually stated,
in round numbers, at sixty millions !;
which, rating the pound sterling at $4 80,
is equal to two hundred and Lightweight
millions of dollars.
1t will be seen, sir, that our paper cir
culation is one half less than that of Eng
land, but our bank debt is, nevertheless,
much greater; since thirty-fve millions
sterling amount to only $168,O00,000
dollars, and this sum too, includes the
4 amount Of exchequer bills, or Government
debt in the form Of such bills which the
bank holds. These facts are material to
any Just comparison of the state of things
in the two countries. The whole, or near
ly the whole capital of the Bank of Eng
land, is lent to Government, not by means
of exchequer notes, but on a permanent
loan. And as to the private banks and
ioint.stock companies, though they issue
bills for circulation, they have no assigned
or appropriate capital whatever. The
bills circulate on the private credit of the
individual banker, or of those who COM
i pose the joint-stock companies. In the
I United States an amount of capital, sup
posed to be sufficient to sustain the credit
of the paper and secure the public against
J loss, is provided by law, in the act of In
corporation for each bank, land is assigned
as a trust-fund for the payment of the ia-
bilities of the bank. And if this capital
be fairly and substantially advanced, it is a
proper security and in most cases no
Z doubt it is substantially advanced. The
directors are trustees Of this fund, and they
, are liable, both ciyily and criminally, fol
i mismanagement, embezzlement or breach
] of trust.
This amount of capital, thus secured, Is
+ the basis Of loans and discounts; and thl:
: is the reason why permanent, or at leas
! long. loans are not considered so inappro
. pirate to banking operations, with US, a:
! they are in England. With US, it is evl
/ dent that the directors are agents, holding
a fund intended to be loaned, and acting
e between lender and borrower; and thi'
S form Of loan has been found exceedlngl..
! convenient and useful to the country.
n In some States, it is generally Preterre'
to mortgages, though there are others i
3 which mortgages are usual Whether ex
/ actly conformable. to the true notion 9
! banking, or not, the truth is, that the Oh
/ ject and operation Of our banks IS to loal
y money and this is mostly on personal sc
d curity. The system no doubt, Is liable Z
}, abuse, in particular instances. Their
y may Be directors who viii loan too freely
} themselves and their friends. Gross c.
al ses Of this kind have recently been detef
d ted and exposed, and, / hope, viii be sults
lfl bly treated but considering the gress
4 number of banks, these instances, ! thinl
f are remarkably few. In general, the bank
s. have been wen conducted, and are believe
r. TO be solvent and safe. u aefses hre
1fl We have heard much, sir IN the conrs
g. Of this debate Of excess in the issue
otl bank notes for circulation. ] have !
y doubt. sif, that there was a very impropi
Be- EXPANSION s0nle years ago. When Pres
p-I dent jackson, q 1892, had negatiYed e
be- bin for Continuing the Bank Of the Unite
n States, (Which oct esteem as the true q
& ginal source Ct all the disorders e !