The Ohio Democrat. [volume] (Canal Dover, Ohio) 1840-1900, 1840-12-18

be admitted. The evils which have beeu in
Rcted OH the community through the instru-
Of banks of banks of circulation have
become SO great and alarming. that the question
will soon be between reformation and Geslrucs
ton. lftheY cannot be reformed so as to pro-
tect the community from the losses occasioned |
BY their insolvency and mismanagement, tho de
probation oftheir paper, their exhorbitant exac-
tons Of interest under the disguise of exchan>
ges, and the evils consequent upon their sudden |
expansions and contractions, the public, for
their own protection, will be forced to dispense
with tho existence of banks of circulation ato-
gether. However difficult it may be to reform
these institutions so as TO prevent the evils of
which we complain, and however doubtful the
result of the undertaking may be do not think
we should despair accomplishing, to consider
able extent, result SO desirable. The object
and end TO be obtained is at least worty the e(.
fort of the patriot and statesman, who desires
to zee the industry of the country protected
from the plunder and fraud of incorporated
wealth.
If the effort to reform our banks should prove
unsuccessful, the remedy will be found in the
substitution of banks of discount and deposit, for
those ofcirculation.
THE BANKING SYSTEM.
The banking system, as it exists in this coun-
try and in England, has direct tendency to
lead to the opulence of the few, and the pau-
perism ofthe many. Such has been its un.
doubted effects in England, and such has been
and will continue 10 be- its effects in this coun.
try, 80 long as mere credit, and not capital is
permitted 10 tax LABOR. Its influences in this
particular, IS worthy of investigation.
There are upwards ofnine hundred and fifty
banks in the United States, having an aggregate
capital Of about three hundred and twenty four
millions. The whole amount of specie upon
which this immense banking capital rests, for its
basis, does not exceed forty, or at most fifty mil
lions, leaving between two hundred and seven
ty four, and Ell ghty four millions ofbank capital
to consist of nothing but credit; or, in other
words, the stock notes or bonds of the stock>
holders, and bank notes, 1t IS obvious, that a
paper system resting mainly on credit or paper
instead Of gold and silver the only basis on
which banking can be safely conducted car
neither be safe to the public, or regular or uni
form IN its action. Such a paper system will
ever be disturbed by the slightest reversion il
the trade and business operations of the countr,
and unable to Withstand the shocks to which ,h
trade and business ofevery commercial commu
nifty must occasionally be subjected But il
capacity and inherent tendency to double tn
currency at one time, and diminish it one hal
at anolher-and thus increase or diminish tin
nominal value ofevery mans propert, and la
bor one half-is utterly ruinous to every grea
Interest in the country. Whether this irregu
larity is brought about by those who control tn
banks, with the view of speculation, or is til
necessary and unavoidable operation of,he sys
tenn ITSELF makes no difference, so far as the eI
fectS and consequences to the public are con
cerned,
| EXPANSIONS g. CONTRADICTIONS.
! Every expansion by the backs, beyond til
real wants of the country, must be followed b
h corresponding contraction. Whsn they dis
count freely, and food the country with their p
per, they give to the times deceptive appear
ance ofprosperity. The merchant is induce
TO extend his business, contract unn ecessary e
penses, and engage in doubtful speculatlons.-
| 10 la in L.
to the whole community. We are liable to b
deceived hy the appearance ofgood times. "
contract, debts more freely, live more exiravu
gan'Iy, and are less disposed to labor, Th
contraction OF the currency, which must of nc
cessty follow, and which we are unable
pay. and and an extended business which W
cannot sustain. The consequences are pecu
'lary severe and unjust, on all the debtor po
ton of community. The farmer who contrec
. to pay debt ofa thousand dollars, when Il
currency amounts to eight millions, and whe
one dollar bushe, finds when the circulate
is reduced to four millions, and consequent
wheat to fifty cents bushel, it takes double Il
produce, and consequently double the labor,
pay the debt, that it would have done if the C
rcncy had remained the same. The same pr
: ciple applies to the whole debtor community.
is true, what one man loses, another may gal
but the loss and gain are unjust. Thus by CT
ating an uncertain and tfuctuating measure of v
b ue, contracts between man and man are impai
f ed. and virtually changed,
n TENDENCY OF AN INFLATED PAPE
;. CURRENCY.
;, The prejudcal effects of this inflated pap
system on our manufacturing and exporting i
terests are still more palpabIe, Double the.
}, mount of the circulating medium Of this cou
If try, and you double, or at least greatly enhan
the nominal price of foreign merchandise. II
:, price of every thing that is sold, 10 be cons
n med here goes up with the initiation of the CT
d rency, while the price of our cotton and 9th
e staples, for export will be regulated by the pri
:, they bear in the foreign market, to which tn
y have 10 be transported for sale. Uur expor
d then, derive no advantages from an increase
ID the currency beyond the real wants of the CO
t.y; while foreign merchandise il imported