, 1840-04-04

AhuCCu. Tie Uduh dl Olc tnIlc WOuil,
IN all human probability, have gained the
victory, had the election of President CHANGED
to occur at that period; and we should then
have witnessed the appalling spectacle Of the
triumph Of the bank over the rights aud lib
critics Of the People. The Constitution Of
the country and democratic party would then
have been Frustrated together.
On Friday last, when | very unexpected
ly addressed the Senate. ! stated a principle
of political economy which | shall now read
from 4 book. 1t is this: THAT il you
double the amount of the necessary %circula-
ting medium in any country, you thereby
douple TIE nominal price of every article.
II, when the circulating medium is fifty mill
ions, an article should cost one dollar, it would
cost two il, without any increase OF the
uses of a circulating medium, the quantity
should be increased 10 one hundred millions"
The same eliec; would be produced whether
the circulating medium were specie, or con-
vertibIe bank paper mingled with specie. j
is the increased quantity of the medium. not
lis character. which produces this effect
Of course, | leave out of view irredeemable
bank paper.
lido not pretend that, on questions OF po-
Iltical economy, YOU can attain maIhemati-
cal certainty. All you can accomplish is 10
approach 1t as near as OS:iblo. The princi-
pie which | have stated is sufficiently near
the truth 10 answer my present purpose
From this principle ] drew an inference that
the extravagant amount OF our circulating
medium. consisting. in Il great degree, of the
notes thrown out upon the community by
eight hundred banks, was injurious 10 or
domestic manufactures. In other words.
TINT extIavagant banking and domeSiIG man
uiactures are directly hostile 10 each other.
did not understand tina, the Senator from
Massachusetts, { Mr.. DAVIS contested the
general proposition that an Increase in the
currency o! any country, without any In
c:ease of the uses 4 circulating medium,
would. in the sane proportion, enhance the
price OF all The productions of ihlt country
whose value was not regulated Ivy a foreign
demand. He conld not nave contested this
principle. II he had. all history and all ex.
p~etience would have been arrayed against
him.
The discovery OF the mines Of South
America, and the consequent vast increases
of the precious metals put into circulation
in the form of money, have greatly enhanc-
ed the nominal price of all property through,
ont the world. Indeed, il is now Il matter
of curious amusement TO contrast the low
prices Of articles three centuries ago with
their present greatly advanced rates. The
Bank of England recognises and constantly
acts upon this principle, though ci;en with
out success. When prices become so high,
in consequence Of redundancy of paper cur
rencv and bank credits, that IL is more prof
liable 10 export The precious metals from the
kingdom than its manufactures, tins bank
constantly dinisishes lis loans, raises tie
rate of interest. and reduces its circulation.
with the avowed object of reducing prices
10 such n standard as will render 1t more
profitable to export merchandise than bullion.
Ii is in this manner that the hank seeks 10
regulate the foreign exchanges.
But why need we resort TO foreign nations
for illustrations of the truth of his position.
when it has been brought home 10 the actua!
knowledge of every man within this coun-
try I? Have we not all learned, by better
experience, that, when our periodical expan-
sions commence the price of all property
begins TO rise IL goes on increasing with
expansion, until the bubble iurst and then
bank accommodations and bank issues are
contracted, the amount of the currency is
reduced, and prices fall to their former level.
This is the history of our own country, and
we all know it. A certain amount of cur
rency is necessary TO represent the entire
exchangeable property OF n country; and IT
this amount should be greatly increased,
without Il corresponding increase in the ex-
changeable productions of the country, the
only consequence would bea great enhance
ment in nominal prices. say nominal, be-
this increased price will not enable the
man who receives 1t TO purchase more real
property or more of the necessaries and lux
uries of life than he could have done before.
Let me now recur TO tire proposition with
which | commenced; and | repeat that | do
pretend TO mathematical accuracy in the
illustration which ! shall present. The u.
States carry on a trade with Germany and
France; the former Il ~hard-money country,
and the latter approaching it so nearly as
to have no bank notes in circulation under
the denomination of five hundred francs. or
one hundred dollars. On the contra
nv, the United States is emphalically a pa.
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