Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1838-04-20
VOL. XT..No. E6 ,

range our own currency cOmpulslvely Gu.
I all circulation, and break up credit, how
are the commerce and navigation of the
United States to maintain themselves
against foreign competition!
Before leaving. altogether, this subject
Of an excessive circulation, Mr.. President,
will say few words upon topic which,
If time would permit, should be glad 10
consider at more length mean, sir, the
the proper guards aud securities for q
paper circulation. ! have occasionally
addressed the Senate on this subject
before, especially in the debate on the
specie circular. in December, 1886; but
wish to recur to it again, because | hold it
to be OF the utmost importance TO prove, if
1t eau be proved to the satisfaction Of the
country, that convertible paper currency
may be SO guarded as to be secure against
probable dangers. ! say, sir, convertible
paper currency: for ! lay it down as an
unques'lonabe truth, that no paper can be
made equal, and kept equal TO gold and
silver, but such as is convertible into gold
and silver, on demand. But. have gone
further, and still 90 further than this; and
| contend that even convertibiltv, though
itself indispensable, is not certain and
nnfarllng ground of reliance. There is
liability to excessive issues Of paper, even
while paper is convertible at will. OF this
there can be no doubt. Where, then, shall
regulator be found What principle Of
prevention may we rely on?
Now think, sir, it is too common with
banks, in Judging of heir condition, to set
off all their Liabilities agans, all their re-
sources. They look to the quantity Of
specie in their vaults. and TO the notes and
bills becoming payable, as means or assets;
and with these, they expect to be able to
meet their returning notes, and 10 answer
the claims of depositors. So far as the
bank is to be regarded as mere bank Of
discount. all ,h, is very WELL But banks
of circulation exercise another funcl ion.
BY the very act of issuing their own paper,
they nff';c; the amount of currency. In
England, the Bank of England, and in the
United States, all the banks, expand or
contract the amount of circulation, of
course, as they increase or curtall the gen.
cral amount of their own paper. And this
d renders 1t necessary that they should be
= regulated and controlled. The question
: is, by what rule TO this answer, by
ubiectlDg a II banks to the rule which the
most discreet OF them always foow-by
: compelling them to maintain a certain fixed
y proportion between specie and circulation
without regarding deposites on one hand,
or notes payable on the other.
= There will always occur occasionally
= fluctuations in trade, and demand for
= specie, by one country on another, will
arise. 1t is too much the practice, when
y such occurrences take place, and specie is
- leaving the country, for banks to issue more
paper, in order to prevent a scarcity Of
- money. But exactly the opposite course
=, should be adopted A demand for specie
!, to 90 abroad should be regarded as conclu.
:, slve evidence of the necessity Of contract
d ing circulation. If, indeed, in such cases,
-, it could be certainly known that the de-.
" mand would be of short duration. the tenn.
i porary pressure might be relieved by an
"" issue of paper to fill the place of departing
:" specie. But this never can be known.
- There is no safety, therefore, but in meet.
my he case at The moment, and in conform
- ing to the infallbIe index of the exchanges.
y. Circulating paper is thus kept always
~ nearer to the character, and TO The circum-
=, stances Of that, OF which 1t is designed to
-, b, the representative, the metallic money.
~ THIS subject might be pursued. | think
y; y, and clearly illustrated; but, for the present,
~ only express my belief that, with expert
:, encc before US, and with the lights which
~ recent discussions, both in Europe and
j., America, hold out, n national bank nigh,
he established. with more regard 10 ia
= function of regulating currency, than TO is
" function Of discount, on principles, and
subject to regulations, such as should rem.
10 der ITS operations extremely useful and
'ir should hope that, with an example before
40 them Of plain and eminent advantage, State
l institutions would conform to the same
OF rules and principles; and that, in this way
Oh all the advantage of convertible paper might
70 be enjoyed, with just security against i,s
OF dangers.
ar have detained the Senate too long, sir
e. with these observations upon the state o
a the country. and its pecuniary system ans
n condition.
y And now, when the banks have suspend
IN ed specie payments, universally; when III,
;" internal exchanges are all deranged, an,
the business of the country most seriousl,
IT, interrupted, The questions are
'e Whether the measure before US is suta
90 BILE to our condition, and
os Whether 1t is just and proper exercise
Us, and fulfilment Of the powers and duties @
~. Congress?
VS. What, then, sir, will be the practica
~ operation and effect of this measure, if i
y. should become law,
lr> Like its predecessor of the last session
,p the bill proposes nothing for the gener,
of currency o: the country; nothing to res. or
bo exchanges nOthinu 10 hrn1 ah,,,
rse speedy resumption of specie payments b
in the banks Its whole protested objec,
not 'he cohect'o" anu disbursement of II