The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-04-05

Ton oil excess III u paper 10
the amount of that paper compared with the gold
ard silver in the banks Such excess would mol be
proved absolutely and certainly, in every case, by
the fact OF the suspension Of specie payments
because such an event might be produced by panic,
or other sudden cause having power to disturb the
best regulated system Of paper circulation. But The
immediate question now Is, whether, taking the
whole circulation together both metallic and paper
there was an excess existing in May or Is an excess
now existingl i one hundred and thirty millions
an excessive or undue amount Of circulation for the
United Staiesl Seeing that one part Of this crcua-
ton is coin and the other part paper, resting upon
coin, and intended TO be conyeHi5e, Is the whole
mass more than may be fairly Judged necessary 10
represent the properly the Transactions and the bu
snesS OF the country Or in order TO sustain such
an amount OF circulation and to keep that part of il
which is composed Of paper in sale state should
We be obliged 10 attempt to draw 10 ourselves more
than our just proportion OF that metallic money,
which is in the use OF all the commercial nations
These questions appear To me 10 be but different
modes OF stating the same inquiry.
Upon this subject may, perhaps, form some gene
raj idea 10y comparing ourselves with Others, Various
things doubt exist, IN different places aud countries,
modify either by enlargng or diminishing, the de-
mand for money currency IN the transactions Of bu-
sness still the amount OF trade aud commerce may
furnish general element OF comparison between diff
ferent states or nations The aggregate OF Ameroan
imports aud exports in 1886 was three hundred and
eighteen millions that Of England, reckoning tho
pound stPTillH ~ VI cVp dghl, was lVui
eighty millions as near can ascertain; the curren-
~ OF England being, already stated SIXTY millions
sterling or two Hundred aud eighty eight millions Of
dollars If We work ont result from these proper
tons, tile currency Of the United States, II will be
found, should be hundred aud ninety millions, in
order to DO equal to that Of England bot, according
the estimates Of the Treasury, did nor in that
year, exceed one hundred aud eighty millions.
Our population Is about equal 10 that OF England aud
Wales. The amount Of our mercantile tonnage per-
haps, one-iilh less. But then are consider that
country vastly wider and facilities Of inter-
nal exchange, by means of bills Of exchange greatly
less Indeed, there branches OF Intercourse IN
which remtances cannot be well made, except IN
rrncy Take one example The agricultural products
Of Kentucky are sold to the South her purchases Of
commodities made at the North There can be, there
FORE very little OF direct exchange between her and the
places of purchase and sale The trade goes round in
a circle Therefore, while the Bauk Of the United
States existed, payments were made to vast amount
IN the North and East by citizens of Kentucky and Of
the States similarly situated in bills Of exchange, but
III the notes Of the Bank.
These considerations augment the demand for curren-
cy. More than all the country is new sir almost the
entire amount of our capital active aud the whole
amount Of property, In the aggregate, rapidly Increasing,
In the last three years thirty millions OF OF
land have been separated from the wilderness, pur-
chased paid for, and become subject to private indyi-
dual Ownership, ranter and sale, and all other dspo-
become property, to be bought and sold for money
whereas, while in the hands OF Government, called for
expenditure, formed the basis Of TRANSACTIONS and
created demand for currency. Within that short pc
Rod people have Dough, from Government terri
tory large the whole Of England and Wales, and,
taken together, far fertile by nature This seems
Incredible yet the show IT, Suppose all this
have been bought at the minimum price OF dollar aud
quarter per acre and suppose the value 10 be increased
in the common ratio in which we know the value of
land increased by such purchase and BY the premi
nary steps and beginnings of cultivation immense
augmentation it will readily be perceived, made
in so short time, Of the aggregate OF property, IN
nominal price, and to great extent, in real value also.
On the whole, sir, confess know standard by
which decide that circulation is present in
excess. do not believe IL is Nor there, as
Think any depreciation in the value Of money, up the
moment Of the suspension OF specie payments by the
Banks, comparing our currency with the currency OF
other nations. An American paper dollar would buy
silver dollar in England, dcducng only the charge of
transporting dollar the ocean, because it
nanded a silver dollar here. There may be excess,
however admit, where there is present deprecla
ton, in the i'll which now usa{h he term. .
1t is hardly necessary dwell, Mr. President, on the
evils OF suddenly deprecated circulation 1t arrests
business puts end to it, and overwhems all debtors,
by depression and downfall Of prices And even if we
reduce clrcuatlon-not suddenly, but stl reduce 1t
farther than is necessary keep within just and
sonable llmlts-wc produce many mlschlcis; We aug
ment the necessity Of foreign loans we contract bus-
ness discourage enterprise, sacken the activity ocapi
tall and restrain the commercial spirit OF the country
1t is very important be remembered, sir tina, in our
intercourse with other nations we are acting prlu
cple OF equality that is to say do not protect
own shipping interest by peculiar privileges ask
clear field and seek favor. Yet, the materials for
ship building high with US, and the wages of ship
builders and seamen are high also. We have TO
tend against these unfavorabe circumstances; and it.
ll,,a spfTar T,r,to hu
sary restransts on currency, aud by cramped credit,
who tell what may be the effect Money is abundant
in England very abundant the rate OF interest, there
FORE is low and capital will be seeking its investment
wherever II hope to find it If we derange
currency, compusvely curta circulation, and break up
credit how are the commerce and navigation Of the u.
States to maintain themselves against foreign COMPETE
ton!
Before leaving, altogether, this subject Of an Excess
sve circulation, MIR President. will say few words
upon topic which, if time would permit, should be
glad TO consider length mean, sir the proper
guards and securities for paper calculation. have
occasionally addressed the Senate on this subject before
especially in the debate the specie circular, in De-
cembcr, 1896 but wish to to 1t again, because
hold it to be of the utmost Importance to prove, TO the
satisfaction of the country, that a convertible pap
currency may be guarded to be secure against
probable dangers say, sir, convertible paper
rency for lay down unquestionable truth, that
paper can be made equal and kept equal TO gold and
silver but such convertible into gold and silver,
demand But have gone farther, and still go farther
than this; aud | contend that even conyertbilty,
though itself Indispensable is not certain and unla
ing ground OF reliance There liability OF excessive
Of paper while paper is convertible at will
OF this there can be no doubt, Where, then, shall
regulator be found What principle Of prevention may
rely on .".
Now | think, sir, it is too common with banks, in
10 lgng of their condition, set off all their liabilities
against all their They look to the quantity
OF specie in their vaults and TO the and bills be-
coming payable. as means or assets and, with these,
they expect be able their returning notes and
to answer the claims of deposors SO far the bank
is 10 be regarded bank of discount all this is
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