The Caledonian. [volume] (St. Johnsbury, Vt.) 1837-1867, 1838-04-24

7 j
many mischieis; we augmen, the necessity of for
eign loans; we contract business, discourage inter
PRISE, sacken the activity of capital, and restrain
The commercial spirit of the county. 1t is very i'm
Portant to be remembered, sir, that in our inter
course with other nations, we acting on prin-
ciple OF equality; that is to say, do not protect
our own shipping interest by peculiar privileges;
we ask clear field, and seek no favor. Yet the
materials for shipIbudlng areshigh with us, and the
wages of ship builders and seanen high also
We have to contend against these unfivorable cir
cumstances; and if, in addition to these, are to
suffer further by unnecessary restraints currency
and by cramped credit who can tell what may be
the effect2 Money is abundant in England, very
abundant; the rate of interest, therefore, is low,
and capital will be seeking its investment wherever
it can hope to find it, If we deranse our own cur
rency, compusivey curtail 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 ex-
cessive circulation, Mr.. President, will say few
words upon topic which iftime would permit, |
should he glad to consider at more length 1 mean,
sir the proper guards and securities for paper cir
| culation. have occasionally addressed the Senate
on this subject before, especially in the debate on
The specie circular, in December, 1885, but wish
To recur To it again. because hold it to be of the
most importance To prove, il il can be proved, TO
the satisfaction of the country, that convertible
paper currency may be so guarded to be secure
against probable dangers | say, sir, convertible
paper currency: for lay it down ms an unqueson-
able TRUTH that no paper he made equal, and
kept equal 10 gold aud silver, but such is
ib'e into gold and silver on demand. But | have
gone further, and sIill 90 farther than this and
contend iha; even convertbility, though itself in
dispensbe, is not certain and uniailng ground of
reliance. There is liability TO excessive issues of
paper, even while paper is convertible at will. OF
this there can he doubt. Where then shall n
regulator be found? What principle OF prevention
may rely on?
Now lI,ink sir, it is too common with banks, in
Judging oitheir condition, to set off all their abil.
itics against all their resources They look 10 the
quantity Ufspecie in their vaults aud to the notes
aud bills becoming payable as means assets; and
with these, they expect to be able to their
turning notes, and To the claims of deposit
ors So far as the Bank is To be regarded MS mere
bank OF discount, all this is very well. But banks
OF circulation exercise another function BY the
very act OF ISSUING Their own paper. they affect the
amount of currency. In England. The Bank Of Eng.
Land and in the United States, all The Banks, ex.
pand contract the amount of crcuaiion of course
as they increase or curail the general amount of
their own paper. And this renders it necessary
that they should be regulated and controlled Thn
question is by what ruler TO this answer 10y sub
jrciing all The banks to the rule which the most
discreet of then, always pllowby pelling Their
Ia mai1tain certain fixed proportion between spe-
Gle and circulnon; without regarding depcstcs on
one hand u notes pay able tho other
There Will always occasional fluctuations
in trade and demand for specie, by one country
another, viii arise. 1T is much the practice
when such occurrences take place, and specie is
leaving the country, for banks To issue more paper
in order To prevent Il scarcity of money. But eX-
actlt The Opposite course should be adopted. A de-
mand for specie to go abroad should be regarded as
conclusive evidence OF the necessity of contracting
Ii, indeed, in such cases, 1t could be
certainly known that the demand would be of short
duration, the temporary pressure might he relieved
by an issue of paper TO fill the place OF departing
specie. But tins never be- known There is |
no safety, therefore, bnt in meeting the case Mt the
m tn I'm
exchanges. Circulating paper is thus kept always
nearer TO the character, aud to the circumstances of
that, Of which il is designed to be the representa-
uve-the metallic money. This subject might be
pursued, Think and clearly nsrrated but for the
present, only express my belet that, with expe-
rience before u.s. and with the lights which recen,
discussions, both in Europe and America, hold ont,
national bank might be established with more re-
gard to its functions of regulating currency than To
It's functions of discount, principles, and subject
10 regu laons, such should render It's operations
extremely useiul;-and should hope that with an
example bef"re them of plain and eminent advan-
age, state institutions would conform to the same
rules and principles; and that in this way, all the
advantages of convertible paper might be enjoyed,
with just securities against Its dangers. s
] have detained the Senate too long, sir with
hese observations upon the state of the country, 1
and It's pecuniary system and condition s
And now, when the banks have suspended pay ,
nents, universally; when the internal exchanges ,
ire all deranged, and The business OF the country
host seriously interrupted, the questions are
Whether the measure before us is suitable 10 cur
condition? and
Whether it is ajust and proper exercise and fall
iIment of the powers and duties of Congress? ,
what then Sir, will he the practical operation d
md effect of this measure, If i. should become Il i
aw? !
Like Its predecessor Of the last session, the bill
proposes nothing for the general currency of the c
oun'ry; nothing to restore exchanges; nothing to
ring about speedy resumption ofspecie payments =
y the banks. lst whole protested object is the ii
objection and disbursement of the public revenue. ii
some OF its friends indeed, say, that when it shall
% INTO operation it will, incidentally, produce Ia
oraole effect on the currency, by restraining the
ssue OF bank paper But others press it If its !;
meet was to be The final overthrow of all banks, T.
nd lhenroduclion of an exclusive metallic curren. y
tor all the uses of the country. -
Are we to understand them that it is Intended, p
means, OF which thsis the first to rid the coun- Ii
y OF all banks, as being but many nusances, CO
nd to abolish all paper currency whatever? CO
or is II expected on the contrary that after this III
ysiem shall be adopted for the of the govern III
len there will still no paper currency in the G
m