Mobile daily commercial register and patriot., 1841-08-18


 ships from the ocean, and 10 crcumscrbe the opera tons and the enterprise of that class within the mar row limits of hard-money dealings The financial policy of Mr. Van Buren's administration was ye- hemently denounced, as hostile to cledit banks and commerce, and large majority of American mer- chants were at time (here have been great chan ges snce) strenuously opposed an administration which they falsely taught to believe was war ring upon their nterests-while. in fact il was only battling against these false systems of banks curren- cy and credit, from which class has suffered so much the class of merchants Two eminent whig bankers, Mir. Galaln of N. Y. and Mir. Appleton of Boston, have late publishnd, each pamphlet upon these mooed points between the whig and democrat c parties. These furnish the occasion for the art- cle from which we shall presently quote.
 "Would it not be strange" says the Reviewer, eff we should find in these pamphlets, conceded and laid down as fundame tal truths, many of those very opinions upon which side of the contest has been from the commencement insisting, and which at the time, when thus advanced by us, furnished the occa- slons for the most violent and embttered abuse alike of our doctrines and our motiyesl"
 "We do not propose here to retrace the whole line of the argument, the grounds of political economy which we have been accustomed to maintain, on our side Of the general discussion, in justification of tine financial policy it has been ours to advocate We will only refer to few points of prominent impor- tance, which may be said indeed to involve the merits of the whole controversy, and on which we find in inc two remarkable pamphlets before It's, the concession of he views taken of them by the democratic party
 ''ln the frst place, for example, it has been fa- vOre whig idea, that bank paper was D,onev; that no money, whether metallic or paper, possessed or need possess, any intrinsic value in ilself ts sole function being that of 'repes,nting" the values of other things, according to certain conventional proy- sons of law ; and that therefore certain oblonq printed paper representative of value, in which we should determine to have ''conidence" which we should agree to receive and circulate as our cur- rency, would serve the purpose just as well, what ever might be the amtquaed notions and practices of other nations, as one of similar denomination stamped on the bright disk of little circular niece of white or yellow metal.
 ct is true that this notion presupposes profound ignorance oi the very first principles of the science of political economy. Its extensive prevalence throuob out the great mass of the whig party is nevertheless an unquestlonable fact
 "Tis true, 'ts pty-and pity tis 'tis truen Were the following remarks on this point from the pen of Benton, a Gouge, Legeett, or De mocratlc Reviewer, they would be rejected with con | tempt for the ignorance, with horror for the de. pravity, they would be presumed as of course to in dcate. From the lips of one of the most wealthy and intelligent wing merchants and bankers of Boston, il IS to be hoped that their seeyident truth may have chance to meet with a somewhat more favorable re. ceptlon:
 "The general consent of mankind has established gold and silver os the common of the value o all other commodities, and has gwen them in the state of coin, the name of money some nations mak- ing of one of these metals, and some of the other | and some of both.
 ''Coinage may be considered as merely the aftxino
 certificate of the government to the quantity of pure silver or gold contained in each coin respectively on which alone its value depends. The fitness of gold and silver for the medium of exchanging all other commodities, arises fl om their containing much yalue in small bulk, from the difficulty of their quantity be- ing materially increased, from their easy dvsibility, and their ndestructibility
 ''t is usual to consider these precious metals as the common measure of other property; but they have a. mother quality essential To their performance of the function of money. Their intrinsic value makes them also the equivaie,t. They not only measure the value of other commodities, they replace it. this | is an important distinction.
 "Bank notes are promises to pay on demand a ei. quantity of coin ;they promises to pay monev, but they are not money in themselves. This is an in portant distinction, and the not making it is the source of most of the popular the subject oi currency"
 Let once get this ''important dstincton'' fairly understood by the people, and we have no fear that the 'popular errors on the subject of currency' by which the minds of so large portion of them have been egregiously deuded by the cunning clamors of our opponents, will long prevail Another ayorite
 idea of those profound political economists who dis course daily wisdom through the columns of most ot the whg press has been, that if our currency were l thare ,vauld ho therefore bank circulation is necessary to supDv the amount of currency required by the wants of our native domestic and foreign commerce. We have even heard many very worthy and respectable gem teman insist with great vehemence that there is not gold and silver enough in the world to serve the me- cessary purposes of currency for the Uuiied States On this point Mir. Appleton very coolly and very correctly, tells his whig readers that ''l to be the opinion of the best writers on the subject, that the most perfect bank circulation would be which should be preciseiy equal ia amount 10 oha he circulation of he country ouid be i, the precious metals, other circulation permit ted.'
 ject to promote more full and abundant circulation of "money" through the of bank -paper in lieu of gold and siver the highest degree of perfection at which even the theory of paper currency can ann, is, that it should exceed the amount which would circulate, under the operation of the gr at laws of tfaue, were II purely lnetaiiic.
 The utility 0i the 'elasticity'' of paper circuat- ing medium, one of those old whig ideas which we had to combat at former day, though we have of late not heard much on that once favorte text What is Mr. Appleton's opinion on this point!
 ' The great evil of the modern system of banking is the great fuctuation which it is liable to produce in the quantity of the circulating medium This is easily understood. Bank notes being, as already shown,* preferable for common uses to coin and cost nothing make. the process of incraa inn tho circulating medium is very easy, and certain to go until it meets the necessary check in demand for payment. This check the individual Bank will receive in its exchanges with other BHnks. Howey- CT individuals may in their transactions consider Bank notes money, the Banks themselves take different view of the matter. A Bank balance can only be paid in coin. Here is check upon an ind- yidua Bank; but suppose all the Banks expand sic multaneousy, or nearly so, which is very apt to be th9 case, this check ceases te operate"
 He then proceeds to give rapid view of the con sequences of these elastc expansions, which have often been depicted at length by the democratic writers and speakers within the last few years.
 [" An expansion of the currency tends to an ad- vance of prices-excites commercial enterprise, and finally speculation and overtrade. High prices en- courage importation and discourage exportation-a rise in the foreign exchange follows, which causes an export of specie, which acts as corrective, by compelling tho Banks to call in portion of their s- sues. This is done bp lessenng or suspending their usual discounts Here is action and re-action, very beautiful and all very agreeable to the public ercept the last part of the process. contraction of the currency causes contraction in the money market, reduces prlces parayses rrade brings out failures. This is all disagreeable. IL makes what is called C hard times." But in fact, it is always return from false position to true one. It is ne- cessary to diminish currency which has not been