Columbus Democrat. [volume] (Columbus, Miss.) 18??-18??, 1839-09-28
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TIE EXCHANGES.

rates. This assertion - most positively contra
diced BY the history Of the currency. Exchanges
viii always be high when the currency Is unsound
and deprecated.
We have already shown how often that vas the
case during the existence Of United States
Bank. We have already seen by he statement
OF the bank Itself that exchange vas a. high as f-
~ per cent. IN some OF the western States during
It's existence. Exchange, when the banks hon
estly pay specie, can never be more than inie
over the cost OF the transportation Of specie from
point TO point. This expense will not exceed Two
per cent. ~ any portion Of the Union. As an un-
answerable argument upon the doeiIne Of ex-
changes, We present the following extract Rom the
memorial Of the bank TO Congress IN 1921. II
will be found In the ninth volume OF American |
State Papers page 500
"Forly and fifty per cent. have been paid ia the
current medium IN some parts Of the western
States for the notes Of the branches Of the bank o
the United States. II the notes Of the branches
had been made local currency from their first
establishment, the business Of the bank would
have been under control, and would no doubt
have been so regulated as 10 have JudciOnsly dis
tribuied the capital OF the bank Under such
circumstances, tor example, there Is no doubt Il
would have been the interest Of tho bank 20 have
sold exchange IN the western States on the Allan
tic, at a light premium. and 10 have received ne
payment by another operation Of exchange on n.
Orleans where the Western States find their mar.
ket. The premium Of exchange, whatever II
may at any time be, will be fixed by unconlrola-
BILE causes, which are perfectly just, and almost
perfectly accurate. II must inevitably DO as cqul-
taby aud correctly fixed rs the price Of wheat
cotton. tobacco, rice, or any other commodity. u
is an utter misconcepton OF tho principles Of cx-
change to suppose, that the Bank Of tho United
States. with any capital, or any means, Tor terms
Of any material duration, could exact an unreason-
able premium, If the en,r sncy be sound. II that
he unsound, there il no basis for fair dealng and
il is idle TO project remedies against Unfair Pracii-
ces. The discerning will easily perceive, and
the candid will readily admit, TINT the bank u
more likely 10 suffer than TO gain IN such state
OF things but If The cur eney be sound, tht rates
of srehamge can nsesr be sreessirc, because they
can mover materially, aud for my considerable
length Of time, exceed the expenses risk and loss
of inlerest incurred by the transportation ofspecic
The person DESTROYS Of purchasing exchange wi
either have the specie IN his hands, OF VIII receive
j. on demand from some bank whose notes he
holds Who then will be guilty Of the folly Of CIV
ing much more Than the expense Of transporIa
hon, Sc.
nThore will bo competition too, wherever iher,
il gain, which will DO carried on as far and con
inued as long as |, continues to be ganiul. IT.
true tina, exchanges between some OF the Statei
have, Cor considerable tImo past. hnfRHnRtt N
Rat shcrevs- f.as so1lh Of MAN - .,N'y hgn
."saia ifienls W 4 was high tho currency wasin
'' greater or less degree unsound the banks wer'
curlang and the currency decreasing. Ihes'
causes could produce no other result. Had ihes'
causes not existed, the premiums OF exchang
would no, have been high. In some places, tho
the banks pretended 10 pay specie tor their notes
they cvaded |, in effect. Let specie be pan
prompily and bona tidc Tomorrow IN places wher
exchange is high, and the premiums OF eSch0pg
will immediately fall TO rates founded on u
charges and risk Of transporting specie ana "
fle, perhaps, beyond their aggregate. lha' III
il an inevitable result, It Is believed has nevt
been denied. In England IT was denied that u
adyerse state Of exchanges which that COUNT
suffered while its notes were tnconiroveT'lb'e, u
pended on the suspension OF cash payments b.
Il was never denied. that ,f the currency could
INV time be converted into precious metals, u
rates would be governed by the cost OF irarspo
tation, SC. Let the currency be sound, and u
premiums Of exchange must be precisely just l
attempt 10 cqualIse exchange, or to pince II
charge Of il on any other operations than mo
which shall cause demand for IL VIII be us "
practicable as il viii be UNJUST"
Such is the testimony Of the U. y Bank IN
la,on 10 the exchanges, from which WE learn u
National Bank does moi regulate exchange,
control liz price, but tina, this depends upon
payment of specie by lie banks.
Az further illustration Of the condition OF
exchange during tho existence OF Y. >. ba
nnd Of other periods, we make the following
,rac, from a speech delivered by Col. btntot
1898, whose efforts to reform the currency
promote the liberties ofihe people. enhle h'n
tho gratitude OF his country and o. mankind
"This comparative table is made up from
prices current Of Philadelphia, the very seat
citadel Of the great regulator ITSELF and v
does tsay Listen to It, and Il will tell YOU
.Mane, New Hampshire, Vermont, Massa'
sets, Rhode Island and Connecticut, from
alp per cent. dscodn, in December 1929, 7
ll.2 10 il February 1888. New York
par then, and par now. Country banks OF
York ~ to per cent. discount 'hen par u
Baltimore Ia then, par now. Western Nue
3 10 discount then, l.2to now Norm
rolina IL to then, IL 70 . now .
Carolina IL TO them IL TO SNOW 1eo
2l.2lo 3 then, l-2 to4 now. Alabama
IS then, 9 10 . IL now. Louisiana
to 6 then, and now. MISSISSIPPI.
I, I6 then, Is now. Tennessee 10 TO
then, IL to IL IL now. Ohio to then, J
10 now Kentucky land, at the name Of
tacky, Mr. benton raised has voice aud fepe
.hc name with great enphasis,) Kentucky iro'
90 So aud fiom So TO So per cent dlscounl
from IL 10 discount now Let no gentle
suppose that there s any mistake IN tgaT'
this reference to Kentucky"
WHY are the exchanges now confused ans
otbitant in some portions Of the country