Herald of the times. [volume] (Newport, R.I.) 1830-1846, 1840-05-14

cannot be paid in Bank Bills as the specie
bills ore in Bank, and must in all cases be
puid out first. Therefore, neither b. nor any
other depositor, can be paid at all be the
amount eper so small, unit, the specie on hand
is agoin $1,000.
Therefore the first objection to the system ia,
as show II above, That the Bank might be, and
most il'iy ,Oouid be, suspended ersry 'oeek IN
The gear. A provision is made for the Banks
in the State to hold altogether $4,000 in
specie above tho per cent named, for the
sake of safety. This would give the Bank
with 100000 capital $4,000 specie.
1t will be readily seen that this will not
remedy the difficulty, for if the specie should
be increased to Sc 600, or 5000, or $4,000,
the specie bills being always out would have
to return but three times TO take every dollar
Of the largest sum.
A Bank in this town with specie on hand
equal TO every dollar in circulation, being out
of The arrangement for redemption in Provi-
de nee and Boston, would find its bills in the
various parts of New England at from ! to 5
per cent discount, probably 2 or q per cent
in Boston, varying according to the distance,
and the difficulty and expense Of returning
them. 1t is well known that Bank in War
rem in 1886 orr, refused to pay tribute, os
they called the expense Of collecting and re-
turning their bills. This bank paid specie at
its counter for its notes, and yet its bills were
at 2 to per cent discount in Boston, as any
one may see by looking at bank note table
Of that time.
The specie bills Of the Bank on the nem
plan would certainly be no better than those
of any other bank paying specie for oil lis
bills, and if the past be any guide for the
future, they would be at a discount Of about
p per cent in Boston. Now if the specie
bills would not pay debt in Boston without
n loss of 2 or 3 per cent, what repute the
" Bunk Bills would have abroad | cannot
pretend TO determine, when il is admitted by
the Proposcr of the plan that they could only
be made to pass at home where known, and
where they would be wanted 10 pay debts at
the bank issuing them, by keeping the guam
tity in circulation entirely below the actual
wants of tho people. The proposcr says
81 believe that metallic and paper currency
can never pass side by side, Of equal value
and equal favor, except where the latter is
Instantly convertible into specie, unless the
quantity Of paper is below the wants Of the
people"
The people are forced to receive them,
because they can obtain nothing else. And
the present system is to be destroyed to pro-
duco that distress, showing that the people
are now altogether too comfortable-too well
off.
Men have sometimes been driven by hun
ger to cat dogs, reptiles, and even human
flesh. Will the gentleman to carry out his
doctrine, and just for the sport Of the thing,
make himself uncomfortable enough to do
the same? Itnppcars to Inc tina; my request
to him is quite as reasonable us is his to the
community.
The gentleman assumes the fact, that "ihe
fluctuations of the currency arc caused by
the banks" s. says ",hey are SO attributed BY
most intelligent men, conversanr with the
question:" Would it not huye been more
had the gentleman given proof Of
the fact that such was the case with the
present banks, and that such would not be
the case with the Bank he proposes? Limit
the issues of the present banks to the same
amount ho limits his, and oil the difference
there coule be would depend on how nearly
The " Bank Bills" could be made to do the
office Of specie bills. they were so bad
in repute that no one would take them, the
disease would surely be rcmedlcd.
But it is not admitted that expansions are
caused by the banks, for they have no power
10 compel any person to borrow their money,
however much they might wish to Lend
they have never had any such power. In
he opinion Of the writer the gentleman has
he " cart before the horsc," the effect for the |
:ausa. When business is active money is |
wanted, and Banks are applied to for loans
re often urged and entreated 10 loan more
han they wish to. The business causes the
the loans the business.
In regard to contraclons, the banks pos
ess no power to collect their debts that in
viduals do not, and so far as the writer
nows, are not more but less likely to use
what power they have. Their own prosperity
cPends on loaning as much as they prudent
y Gun, and they are not likely to cause II
anic if they could do SO, which would bo
uits as likely TO njure themselves as any
me else.
But intelligent men do not all at least
gree that fluctuations IRE caused by the
}anks.
Htdreih, acknowledged TO be one of the
'cst modern writers on Banking, says: /
"a bank 10 doubt may issue more of it's
lotcs then is safe or prudent; but though
hey may be issued, It is impossible for the
'ank to keep them IN circulation except