, 1840-09-26

Nalue. Inc prOnlS Oh iduueu CdPiGl may,
with accuracy enough for our purpose, be
supposed on a par with those of other CAPT
tai. This would give us then for the United
States, a capital of two thousand millions,
all in active employment, and exclusive Of
unimproved lands living in a great degree
dormant. Of this, fifteen millions. would be
the hundred and thirty third part. And i,
is for this petty addition to the capital of the
nation, this minimum of one dollar, added to
one hundred and thir:y-three and a third or
three fourths per cent, tbat we are to give
up our gold and sill !er r.edium. its intrinsic
solidity, its universal value, and its saving
powers in time of war, and TO substitute for
it paper, with all its train Of evils, moral, po-
%litical and physical, which / will not pretend
to enumerate.-
There is another authority to which we
may appeal for the proper quantity of circu-
lating medium for the United States. The
old Congress. when we were estimated at
about two millions of people, on a long and
able discussion, June the 22nd, 1775. deci
ded the sufficient quantity to be we millions
of dollars, which sum they then emitted.*
According to this, it should be eight millions,
now that we are eight millions of people,
This differs little from Smiths minimum of ten
millions, and strengthens our respect for
that estimate.
There is, indeed. a convenience in paper;
its easy transmission from one place to an
other. Put this may be mainly supplied by
bills of exchange, so as to prevent any great
displacement OF actual coin. Two places
trading together balance their dealings, for
the most part, by their mutual supplies, and
the debtor individuals of either may, instead
of cash, remit the bills of those who are
creditors in the same dealings; or may OBJ
tain them through some third place with
which both have derlings. The cases would
be rare where such bills could not be obtain
ed, either directly or circuitousiy, and too
unimportant to the nation to overweight the
train Of evils flowing from paper circulation.
From eight to thirty-fvc millions then
being our proper circulation, and two hun
dred millions the actual one, the memorial
proposes TO issue ninety millions more, be-
cause. II saws a great scarcity of money is
proved by the numerous applications for
banks: to wit, New York for eighteen mill
ions. Pennsylvania ten millions, &c. The
answer TO this shall be quoted from Adam
Smith, B. ?. C. 2. page 462: where speak
ing of the complaints of the traders against
the Scotch bankers, whohad already gone too
far in their issues OF paper, he says sthose
traders and other undertakes having got sn
much assistance from banks. wished to get
still more. The banks, thew seem to have
thought. could extend their credits to what
ever sums might be wanted, without incur
inc any other expense besides that Of a few
reams of paper. They complained of the
con- racted views and dastardly spirit Of the
directors of those banks. which did not. they
said. extend their credits in proportion to
the extension of the trade Of the country;
meaning, no doubt. by the extension Of that
trade, the extension of their own projects
beyond what they could carry on, either
with their opn capital, or with what they
had credit to borrow of private peoP'e in
the usual way of bond or mortgage. The
banks, they seem to have thought, were in
honor bound to supply the deficiency, and
to provide them with all the capital which
they wanted to trade WITH And again.
page 40: 'when bankers discovered that
certain projectors were trading, not with
any capital of their OWL. but with that which
they advanced them, they endeavored to
withdraw gradually, making every day great
er and greater difficulties about dicounting.
These difficulties alarmed and enraged in
the highest degree those projectors. Their
own distress, of which this prudent and ne
cessary reserve of the banks was no doubt the
immediate occasion, they called the distress
of the country; and this distress Of the coun-
try. they said was altogether owing to the
ignorance, pusillanimity, and had conduct 70
the banks, which had not given a sufficient.
~ liberal aid to the spirited undertakings
Of those who exerted themselves in order
to b~eautify, improve and enrich the
country. II was the duty of banks,
they seemed to think, to lend for as long a
time, and to as great an extent, as they
might wish to borrow 1t is, probably, the
good piper Of the projectors which the me.
mortal says, the banks being unable to dis
count, goes into the hands Of brokers, who
.(knowing the risk Of this good pnper) dis.
count it at a much higher rate than legal in-
teresr, to the great distress Of the enterpris.
ing adventures. who rather try trade on bor-
rowed capital, than goto the plough or otherla-
borio1s callings Smith again says. page l7s,
{ that the Industry of Scotland lanruished