Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1841-12-11
THE CURRENCY,

Many independent and sound financial reasoners
have, from time to time, nooted the question as 10 the
expediency Of separating altogether IN banking, the
making from the loaning OF notes, the creating from
the issuing power. The creating power is an attribute
Of sovereignty, while the loaning power is directly CON
nected with the business wants, and but too often with
the mere stock jobbing and specializing demands OF the
country. Whether tits feasible 10 effect the separation
referred to, is matter of great question.
The different States of the Union have long exercised
the right of Incorporating Banks of discount, deposite,
and issue, which have now swelled to between : and
900 in number, and have 50 inflated the currency, that
thew cannot now contract and settle down TO a healthy
state, without causing an immense pressure upon all
classes of society. The great profit of these Banks
arises from the interest on the fictitious capital in the
shape Of issues which they are enabled TO keep in cir
culation in the community while their losses occur
from the insolvency of their debtors, and the great and
constant expenses of the banking business, the present
system being conducted at a cost of some to So,O0U,-
600 per annum, to which may be added those from rob-
berries, %forgeries, frauds, Encouragement and breaches
Of trust.
The issues o thanks should be reduced to a standard
called for by the commercial and business wants OF the
country, and then those which hold out would be sound
and stable, and TO continue so, must be well managed
and prudently conducted. For, whenever banks ex-
tend their issues over and above the wants Of the coun-
try by discounting other paper than that based on real
transactions the currency undergoes a corresponding
depreciation, and the redundant paper issue will be re-
turned upon them to be exchanged for coin, and this
drain upon them will continue until the currency IS
brought back, by the reduction Of the over issue, 10 It's
natural level. =,
Uniformity in issues and s~teadiness in the value Of
currency, are the great elements of financial safety, and
material contributors to the prosperity of a county,
But how can uniformity and s~teadiness be attained
while the inconsistent powers ofissuing and regulating,
of expanding and contracting, are committed to the
same hands. These powers involve, moreover, the con-
licting interests of the stockholders and the public
r.. ~ Ittas L,,,a haon of all timps hpa Y " sufferers DIV
the cupidi,y which has led TO redundant issues; by
bills of broken banks; discredited and de preciated notes;
and innumerable counterfeits and forgerles.
The idea of either governments or banks regulating
exchanges is preposterous, as they depend on the un-
erring laws of trade, but as the creation OF money IS a
prerogative of sovereignty, its regulation may be fairly
charged to government. A uniform and unques'oned
paoer currency seems to be the desired
Cannot this be attained, if the two elements oil Inc
credit of the government, and convertibility into specie
at certain specified points, be united IN paper ISSUES
Such issues would certainly be every where substl-
tuted for the numberless and oft unknown local issues
now in circulation. Would the public object to this
substitution: Assuredly not, for they care not whence
the money comes, provided it IS good; and The banks
would find il to their interest to receive and use lhese
issues, rather than TO issue largely their own promises
10 pay, which are liable TO be returned upon them, and
thus bring upon them at times much inconvenience
Such issues being received by creditors OF The gov0fn-
ment in individual payments, would go out again "
the same way; merchants, traders, dealers, ana Ill
classes, would receive them, for all have payments OF
remittances TO make, and after a local circulation, they
would ultimately reach the principal points where they
are convertible into, and of course equal to gold or SUI
yer. Such issues, being convertible at the Commercial
points, where the currency is measured, and pom 40
nestic and foreign exchanges fixed, and specie eVel
Wing ready to adjust foreign balances, would have both
local and general circulation; They would be freely
used both BY banks and by individuals, and would fur
nish when needed, a convenient medium OF remittance