Lexington union. (Lexington, Miss.) 1838-18??, 1840-12-12
INC AND CURRENCY.

MIXING AND COnHI1NCA'
~ article on "Banking and Cur.
IN tho Dublin University Maya
ebruary, 1910;
oF,cls of rival banks of issue on
s,nations of trade, may DO thus
described. When trade is prosper.
orices high, the currency Of the
rm;Il bear some addition TO be
w :, without being theseby depreci.
Eacb bank will struggle that this
III shall proceed from ite own issues;
This purpose will discount upon
.o,,l terms than before. From the
If The banks, trade will receive
I;,;ooal, an unnatural, but a tempo
.ootus Manufacturers and mer-
'" will make and import larger
40 Of goods, for which they anlici.
" :.Ie upon credit; at the same time
.ssrs are more ready to give bills, as
rro confident tina, when the bills come
INV they can easily procure mon
u ..y them from the banks. While
re- Of things continues, all is pros
and the banks, in particular, make
'ro6ls from the quantity Of bills they
ri The circulation is full 10 over
hut the exchanges gradually turn,
scome adverse; the stock of gold in
.nEors' hands rapidly diminishos.
hank Is Obliged TO contract its dis
often very abruptly, and is happy
srch n course. it can avert the i'm
min Bat this conduct, although
ave the banks, is necessarily fol.
bv a paralysis of trade, and general
.iih distress. Those who expected with
.lenco to fulfil their engagements by
,,''sg their bills discounted, are dIsap-
IA, and are either reduced to insol'
.. or obliged, at great loss, to force an
.Mtiiate sale Of their goods in a dull and
", hooked market. The public, scarce
WIN N 10 fulfil their existing engagements
4 unwilling to enter upon new ones.
|S,I people then discover that, during
4 skciement, they purchased a larger
&6Iity of goods than they can either
|s,6se of or afjrd TO keep on hand.
inv becomes every day more scarce,
II hoods fail in value with still greater
.o5ity, The depression of trade makes
Albmount of currency redundant, which
,6fdinary times, would not be more than
.lieient 10 conduct the exchange Of the
.1hunny The demand for gold, there
i'll continues for expectation: some ai
4 Worst conducted banks are unable TO
Ilslaad the pressure, they stop payment,
IA public panic arises, and gold is
landed for boarding, as well as for
|55raton. 70 this latter demand there
IA limit. The demand for gold for
'Shrhion celses as soon rs the currency
|'hfcienty C ,ntracted, for the exchanges
IA then turn; but the demand for gold
h horlag proceeds with augmented
.siliy. Ii is like an epidemic. One
ia runs to the bank for gold because he
hs reighbor do the same, and this
aand may continue rs long as bank
N remains in the hands Of the public.
ii Ike the plague, or any other infectious
&se, which may cease elLalthough
human power can arrest its progress
Dis general calamity, the poorest are
|sghelned; the wealthy alone survive
Shock. After a few months, trade
rpmmences, and is conducted for some
M with considerable caution; confidence
HluaIlv revives, the banks increase their
.seS trade becomes more lively, and
ID hs former events occur in the same
n h as before; and as long as rival banks
pcrmitted to enjoy their present immu-
||Rs, and to make paper money, there
y be perpetual vicissitude OF change in
Hin ths following older: caution,- conf
'Ee, Iivelincss, oycrtrading, great nppa.
prosperity, Sudden cessation, paraIys.
aIsrust, panic, bankruptcies