Lynchburg Virginian. [volume] (Lynchburg [Va.]) 1829-185?, 1838-04-30

| IN enforcing that proportion. But two questsohs
here present themselves what is that due ProPos-
ton and how is it. under systcm ibsnk IUg, 10
be enforced There is one proportion which VIZ
know be safe, and that is when for every dollar II
liability there il dollar bullion or specie bus
this would bring us back again to the old, h0ness.
and substantial Bank Of Amsterdam, so much sbu-
scd by all the advocates OF banks OF discount. u
that proportion be transcendcd-f we admit two or
three to TO be the due proportion or any other
that would make banking more profitable and eligi-
BILE than the mere leaning Of nancy or other pursuits
of society, the evil under winch now suffer would
continue. Too much capital would continue to
flow into banking, To be again iollowed by the cx-
cess oil the system, with all It's train oi disasters.
But admit thai such would not be the fact, how arc
we TO compel the twenty -sx States OF this Union
To enforce The due proportion, all Of which exercises
the right Of establishing banks AZ pleasure, and an
such principles as they may choose to adopt! II
can only be done by amendment OF the Consitu-
tion aud is there any one 81 Wild and visionary ~
10 believe that there Is the least prospect OF such an
amendment Let gentlemen, who acknowledge tho
defect before they Insist On u reunion with sys-
TEN acknowledged 10 be exposed, as 1t now s'and-,
10 such frequent and dangerous v,cissudes, rsi mp.
ply remedy aud remove the defect, aud then ask
oI operation.
But the Scnatortells MS thu, the means ofcnlorcing
the due proportion is 10 be found IN the regulation
ol the exchanges and for this purpose the only rule
necessary TO be observed Is 10 cuial when exchanges
are against us, and counterpart, ! suppose. In
enlarge when III ouf favor. How much dependencies
is TO be put this rule We have a strong illus,a-
ton IN the late catastrophe, under which the conn-
Try is now suffering The exchanges remained in
our favor ill the very last and before the 'ulc ON
which the Senator confidently relies, could be al
Piled the shock felt aud the banks lnpulled;
aud this " III ever be the case. when preceded by
general expansion in the commercial world such Az
preceded the late
The OF that commence ed on the other side of
the Atlantic, and originated ainly IN the provisions
on which the rcchart,f of the Bank Of England ~as
renewed; which greatly favored the extension OF
banking operations III county which may be COLI
sdcrcd ~ the centre o the conn elcial system oftle
world. The effect OF these provisions was deprc-
ciaion Of the value Of gold and silver there, aud
their consequent expulsion to other countries, aud
especially To ours, which turned the exchange with
England in our favor and which, in combination
with other causes the removal Of the dcposit,s AMI
the expiration OF the ehlrer OF the late Bank Of tho
United States, followed by great corrcspon-
ding expansion ot our hanhi1s sNste. The result ot
tis state OF things, WAS, great increase oil the lab
lties OF the banks. compared with their specie IN
both countries, which laid the tram for the explo-
SION. ! he Bank of EneIan first took the alarm, and
began To prepare to arrest the threatened calamity.
IL was unavoidable, and the only question was wEeto
II should fall The weakness Of our system, and
The comparative strength oi theirs, tnfnod the
shock on ours, but of the approach Of which, the
exchanges gave, rs have stated, indications al
most to the last moment. Aud even then, so arti-
fetal are exchanges, aud liable 10 be Influenced
by other causes, besides the excess Of currency
side aud the deficit the other, after Il began
10 show unlavorablc indications. we all remember
that single individual, nj the head Of a State insti-
tuition, ! mean Mr. B,ddlc. by appearing in New
York, and bringing into market bonds on ENGLAND,
drawn time, turned the current and restored the
exchange. All this conclusiveIy proves. that when
there is general expansion lle most dangerous Of
ally exchanges give no indication OF the approach
OF danger, and OF their uIdttOu, which
the Senator relies. affords protection against II.
might 20 further, aud show that al no time Is Il
TO be relied on tho index OF the relative expansion
OF contraction IN different countries, and that II Is liza
bic to be Influenced by many circumstances besides
those TO which have alluded, some of which
fleeing, and others more permanent. Ii presuppos-
es the perfect udiiy Of currency aud that /, is not
liable to be obstructed impcded by natural arti
hc,a causes IN its Gibbs aud flows, winch Is Tar from
being true as have already shown in the instance
of Mr.. BIddle's operation preceding the late shock.
10 fact, may be laid down rule that where tue
currency consists OF convertible paper, resting ona
gold and silver basis, the small po,tion OF specie
which may be required to uphold the whole has its
nuid,ty obstructed by SO many and such powerful
causes, as to afford no certain criterion oil the rea
tive expansion Of the currency between il aud other
countries and OF aold certain rule Of reg
uiiing banking operations The subject Is that
would require time to discuss than eau hrsiow
ON the present occasion but OF its truth we lave
strong illustration IN the OF things preceding
the late shock, when as have, stated the exchanges
renamed favorable To the banks, while the vast n
mount OF our imports, aud the unusual character OF
many Of the articles Imported clearly Indicated that
currency relatively greatly expanded, COM
pared with those countries with which have con,-
mercial relations.
10 correct the defects Of the system, the Scna-
tor must SO much deeper. The evil lies in its strong
tendency 10 increase; and that again, ,he extra
ordinary aud vast advantages which
ierrcd on it, beyond all other pursuits ol the co'nnu
ny which. il not diminished, must terminate in its
utter. destruction, or an entire revolution III our
cal aud political system. 1t is not possible that the
great body OF the community will patiently bear
that the currency, which ought to be the wost sta
bic OF all things should be the most huctuaitng and
uncertain and tat, too in defiance OF positive pro-
| visions in the Constitution, which all acknuwls ledge
were intended to give il the greatest possible
stability.