, 1841-01-09
From the Montgomery (Aia.) Advertiser.
"BANKS MAKE MONEY PLENTY.'

"BANKS MAKE MONEY PLENTY
This is a ~favorite argument of those who
advocate the Ranking system, nOtwiihStand.
ing all the evil consequences which 1t has
produced, not only in this country. but IN
every country which has ever adopted 1t, moi
only at this present time, but periodically.
during its whole existence. This argumen
is one calculated 10 captivate the mind of
the ignorant and unrefleciing. The idea of
ssmaking money plenty or, in other words.
shaving plenty of money!" for that is the
wav 10 which the mind is apt TO interpret it,
is no doubt a very pleasing one 10 all. And
if we could only be persuaded gifts truth, it
would. as an argument, have more influence
than any other upon US, because We are one
of those who have had TO work hard all our
lifetime, vet still TO use the Bank phrase.
s.fnd the balance oftrade against u.s." But.
unfortunately for the shank argument
whoever really knows anything about bank
ing. and reflects Cor one instant. knows that
It is no, true. The ordinary operations OF
trade. when not interrupted by great natur-
al or p%o!itiral causes. are generally Uniform
in their character. The supply of money,
and when we speak of money here we mean
gold and silver, always adapts itself I" the
state of trade in different countries. II the
trade of any country increases, the money
Of the country increases in the same ratio
If the trade Of any country declines. the sur
plus, remaining over what Is necessary Tor
its commercial operations, Will flow of mi"
some other channel more profitable 10 ITS
possessors. No laws can prevent money
---- T-oo, thnSa no,lpfrrnS whore IS
amount is beyond what their trade and indus
irv require. M c"unlry can be deprived
Of its Just proportion of the prerInus metals,
except by the Use Of paper as a circulating
medium. or bv such natural or political caus-
es as ruin the and industry OF a
nation. No obstacle. except spurious mo-
new. can prevent the precious metals from
flowing into countries where wealth IS IN
creasing. If, then, by saying that banks
make money plenty. it is meant that banks
will introduce a suficiency of money to car.
nv on the necessary operations "t trade
we sav. trade naturally, and without any
assistance from banks, does that. If the
arpumen means that they introduce more
thar is neccessary-we say, that would do
the neople no good, as the inevitable result
would be to depreciate money IN the hands
Of its nossessors; or, in other words, raise the
nr;cee of the comforts and necessarIes OF
life.
.R,, 10 the assertion true in fact? Do
sbanks make money Plenty!' Quite the
contrary. Instead of making money plenty.
thew make it scarce. As bank paper Is CIR
cula,ed, gold and silver disappear. 1t is con.
trary TO the laws Of nature for two material
bodies to fill the same space at the same tIme'
and no fact is better established than that,
when there are too kinds OF currency
authorised bv law, or sanctioned ny custom,
tina, which las the least value will dIsplace
Tho other. But If advocates OF banking re-
,Iv that though the tendency of "A paper
c;rcuIa,ion be to drive out gold and silver.
vet tina, it does so by supplying circulating
medium as useful as specie, and capable OF
being made more plenty. we ask what good
do the people, the poor hard working people,
derive from it? If banks only supply an
amount of paper sufficient for the operations
of trade. we saw again. as we said before.
trade will always do that of itself, without
ianv aid from banks. If they supply more
than the trade Of the country requires, they
do a positive injury, and to the industrious
Door more than all others; for, by dong SO
they encourage overtrading, speculation, ex'
-trayagance, disorganizing the whole economy
of trade. and causing the depreciation Of the
naner used as a currency. The rich specula'
Tar. indeed, finds his advantage in IL; he car
borrow largely from the banks when dis
'cou6,inc freely, and by watching the turn
sT the tide, he can buy up property which
the Il. action, that always necessarily follow
too great an expansion, enables him to do a
reduced prices. Bot the man who has j."
.dspsndupon his labor for subsistence, unde
The stats ofthings produced by the clrcula
,tiono of paper instead Of specie for the ordlns
~ operations Of trade, finds il impossible