The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1840-03-24
THE MADISONIAN.

6S'eShiah VI h'bs
extensive information. He has been uni
form and jealous supporter OF JACKSON and
VAN buren,. The ruinous and destructive
measures OF Mr.. Van Buren's administration
have caused him to pause, and after full deli
beraiion, he has come to the conclusion that
there is no salvation for the country except
through the election Of WILLIAM Henry
HARRISON. The following communication
gives his views in relation to the origin Of
our financial troubles, and the remedy which
he thinks ought to be applied. The plan he
proposes is one of which we have often
thought. and is eminently worthy Of the con-
sideration of statesmen.
CURRENCY AND IT'S REGULATION.
A sound and well regulated currency is essential
10 national prosperity lis quantity should be equal
10 the actual demand Of business transactions, and
should be neither raised above nor depressed bel w
that point by artificial means or government action.
A veil regulated currency adjusts itself by expand
ing and contracting with the actual business OF
country. II i Of unifor valae, and ought 10 be
equal 10 and convertible into specie. This makes a
sound currency.
As TO the quality Of a currency that is desirable
few Remarks will suffice Hi tory throws light on
this snbjec, In The middle ages money was scarce
III Europe. The Bank Of Venice was established in
li57. In l40l the Bank Of Barcelona, in Spain
had its origin, and the Bank of Genoa organ
lied In l407, and called the Chamber of ST. George.
The Bank Of Amsterdam founded in l6 %,
and the Bank OF England in 1894 The scarcity OF
money 10 the middle ages is apparent In The exor-
biant raesof interest and the low price OF produce
aud lab r. Henry Ill Of England prohibited the
Jews from lending money TO the scholars at Oxford
al a higher rate than per cent per annum. 10
the thirteenth centary the Jews usually charged 20
per cent In the early IT OF that century the Count
of Flanders paid her husbands ransom BY bpr-
rowing al the rate of 20 10 30 per cent. In 1871
Philip Nv fixed the of interest for the firs of
Champagne at 20 per cent. In 1870 interest
OF money in Pacenter was 40 per cent The
Bank Of England was established in the seventeenth
century. 10 England, the Baak, from l773 10 1922,
discounted foreign and inland bills of exchange at
per cent In 1922 The bank reduced the rate OF in
terest on ninety five day bills to per cent.
The discovery Of America and the working OF the
gold and silver mines made great and sudden ad-
dion 10 The currency OF Europe. The American
mines, prior 10 the year 1903 had produced IS, 6OO,-
100000. Europe and America are supposed now to
contain 81, 500 900 900 in gold and silver OF which
about 81 500 100000 are probably in circulation as
currency Ofths sum abou, $50 600 900 or ss5 OOO,-
OcO only are in this county. This estimate leaves
in Europe say "a 100000 Of specie in circulation.
The specie circulation Of Europe prior 10 the Disco
very OF America about $500 900 600. On the dis
covery OF America The and sudden increase of the
precious metals reduced their price fourth their
previous value when compared 10 all other properly.
This fact shows that great and instantaneous aug
menlaon OF the currency OF country BY gold and
silver mus, produce rapid rise in property of all
kinds The same effect j, produced by bank paper,
though convertible into specie. This is obvious,
and accords with our experience. Al The expiration
of the old INK Of the Unied States In 1911, there
were Lightweight State banks with captil OF
$42,6l0,6Oi, having a circulation OF 500, 700 600
10 1916 there were two hundred and fony-six State
banks, with capital of $3.50 81, 422, with SOS OOO,-
900 Of notes in circulation. great rise in properly
followed this food Of bank paper, which, overleap-
ing safe limits, produced extensive arrangement OF
the currency, bankruptcy and ruin
Again, on The veto Of the late Bank of the United
Stale, similar effect was produced. On the first
day Of January 1884, when the overthrow Of the
on the frA day OF January, 1887 there we're 634
and l54 branches, with capital of $500 TIP O9i,
having circulation of $l49 1876, 500 Tn. increase
OF State banking capital RON January first 1880, to
December first, 1887, was 800 millions of dollars,
and the banks had risen to 709 with l73 branches,
and The increase of bank note circulation up to ia
nuary fist, 1887, nearly SO millions of dollars
AS necessary consequence all properly rose in
md Ia
The public lands were bought 10 this mania in
those years. to The amount oil 39s millions ofdollars,
and his vast sum was deposited by he National Go
vernment in these State institutions 10 be loaned
The whole surplus OF our National Treasure.
amounting to about forty millions, was pu, into the
banks for the purpose of being loaned interest To
an infatuated people. In the spring If 1887 this
sagacious system OF finance exploded Thousands
became bankrupt. Golden visions passed away like
the morning dew. -.
II is well known from experience in England and
this country, that sudden contraction Of currency
renders properly inaenable, and reduces its price
in The ratio Of the reduction
These results are clear, and the principles on
which they depend are among the elementary truths
OF political science.
Sagacious hnanciers in 1884 anticipated the over
throw Oh The nnanrlal plans of The Administrations
No man dreamed that the statesmen at Washington
would cause vast expansions Of the currency by de-
post ng 40 millions 10 be loaned through the banks
TO wild specializing people. Nor did any man then
suppose that these statesmen would seek, in
1887, by sndden contraction 10 overthrow The banks
for these expansions of Government creation.
But the history Of the Sublreasury shows that
these wise fnanciers from 1884, have sought to force
contracons with a ruinous rapidly These violent
Government expansions and contractons Of the cur
rency are against principle and experience. Our
specie is about so or IS millions The property.