Southern telegraph. (Rodney, Miss.) 1834-1838, 1838-06-20
FREE RANKING.

| of this subject, which is so little understood
but so specious and deceptive in its COLDER
promises, we take from the Southern Pa
triot of Charleston, S. c. As we entire
lv concur with the editor in his opinion n
Free Banking, we endorse them with ouI
appreciation.
The notion of creating bank capital on
llrprgages &C sks estate or on the pledge Of
spahlic stocks, appears TO occupy much oil
the attention at present Of those who wish
to effect the double purpose of improving
our system q currency and calling into nc.
tivity lhe 4 ,rmant resources of real capital
ists, whether in this country or in Europe
| The New York scheme seems to be the
origin Of mos: Of these attempts. 1t would
really appear as if it were conceived that
any amount ofcapitaI may be employed in
bankin,r that the mercantile or agricultural
wants Of the country may require, without
reference 10 that equilibrium between the
currency of tn and other parts Of the com
mercial world. which is an important ele
ment in any system of circulation that may
he devised. In the New York plan but one
object seems To have occupied the minds Of
its frnmers-to wit, the security of the note
holder-while level Of value between mo-
ney of The U. S. and the money Of other
countries with which we have constant
commercial intercourse, appears TO have
been entirely lost sight Of. The idea is
| p opounded, in the utmost confidence, of
extending by associations Of capitalists,
private banking ad liLitum. Capitals Of
fifty millions Of dollars are spoken of as
about being called suddenly into existence
by The magic words free trade in banking
as if increase of wealth depended On e-
gisIatlve fiat, or the mere will to become
rich and prosperous.
We have no question but what the con
fidence of the community in bank issues
may he entirely secured by the devices Of
ingenuity; but the laws Of nature CANNOT
be counteracted by artificial contrivances
however we'll adjusted on system. One o.
these laws is that there is a balance TO be
maintained between the productive power
and commercial enterprise of differen
countries exhibiting the mutual dependen
cies Of trade. II the only true measure Of
the quantity Of paper money tina. can be
put into circulation is the desire and ability
uf individuals to borrow Of banks Of issue,
then the whole labor Of the country might
be diverted into one department Of produc
ZION, and there could be nothing like reia-
live excess Of produce in that department.
Thus if two-lhirds or one-half the value Of
the lands and slaves employed in the cuI-
tivation of cotton should be morigaged to
create fund for banking--turned by the
alchemy of cLedit INTO capital as the basis
for issues Of paper money, and each mort
eager were to borrow in proportion to hi
wealth, we should have nearly every slave
noweemployed in the culture Of other pro-
ducts converted into a cultivator Of our sta
ple We need scarcely say that the equili-
brium between the wants Of its purchasers
and the ability of its producers would en-
| eIy be destroyed.
But tits on this equilibrium that the le-
vel of money and prices depends. We are
all aware that an excessive stimulus TO pro-
duction, it not attended by an equal stimu.
lus to consumption, is accompanied by such
fall Of value that The medium Of circn-
lation partakes also Of relative deprecia-
ton with that Of produce. We see it con-
stantly exempifed that a mere temporary
excess from over-abundlnt crops, unlccom-
panied by a correspondent increase Of con.
sumption, leaves less value IN the hands Of
the cultivator than if his crop was not
above an average product What then
would it he If his lands and negroes were
coined into credit, and he would convert
two-thirds or even one half OF their value
into the means Of extending his cultiva-
ton?
All schemes Of banking which do moi
look to the preservation Of the relative value
Of the currency as compared with the cur.
rencies Of other countries, but regard ex.
clusively the security OF the note holder
(as seems to be the case on the New Yor,
plan) is defective in one ofthe main ingredi.
ents Of sound system. We may argue
this question until dooms-day, and we sh III
arrive in the end at the sole legitimate
practical conclusion, that the true and only
mode Of depreciation Of paper money from
ercess, is its ready convertbiltv into gold
or silver. This is the law Of nature, which
The wit of man can neither evade nor cir.
cnmvent by devices. The principle Of
forming portion Of banking capital Of Sc.
curties, whether public or private, placed
in pledge with public officer as a guaran.
Tee for the issues, and which can be quick.
" convertible into precious metals, is salu.
tary To certain extent.
This prevents depreciation Of the curren.
CIV frum dIscredIt, but leaves the evil Of
depreciation from excess without remedy
by allowing unlimited composition, in the
Iormltion Of bank capital, and the creation
uf paper money. We, therefore, think the
rim eiple, that free trade. in banking ia