Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1841-05-11
Dialogue betoecn MAssIsc, Merchant, and MAsoS,
Farmer at The honse Of the later in the country, or
tie Isl 81 .NnJch, 1eil.-[No WI

TIC IN " .""b, lcil.-l NO. ~
We 10 preseryr entire tbosc which
they avr delivered Ia We Ia our
To slrr l'mIr dearest inheritance be destroyed
.Nan"iag If he thinks paper money ..thc most Of.
iectual OF inventions TO Jtr-e the rich mans field By
the s,oeat If The pO0r mum bro,c wby does he now adj
vocate the establishment of rreat paper mill by
Uncle Sum l should like 10 hear him answer that
question My confidence in his political views is yery
much impaired, and begin to think that lie is more Of
puzzle than politician
lhanS you Tor correcting me as 10 the amount of the
precious nhetnis III Europe and America, and as the
amount IS so great, really do not think the specie
feature OF the sub-Treasury law quite as harsh as did
formerly But this idea of trusting the public money
to the custody OF receivers general is ridiculous They
will steal your public revenues and awav tbev w;II oo
Let the revenue be deposited in Banks which are in
tinely better than any other places Of drposi,e In
dvduas may break, but Banks are strong and never
fail.
.Hasoa.-Ths is news 10 me. If banks are so SAFE,
and strong why did hundred aud sixty five banks
break between 1911 and 1880: Your favorite regula
tor was in existence in the greater part of the time
deavorng, as you think, 10 make sound currency
DO not bank officers sometimes steal large of
ney !? You nod assent When banks break from time
to time-whcn every now and then officer Of
bank steals The money from the vaults, why puff the
banks for their safety Bank officers have not
polized the honesty and virtue Of the Union. Some o
| them are good and some bad men. Lord Coke sale
corporations had SOULS and it cannot be denied tina
men, when united in companies, will often commit acts
| which separate individuals they would scorn to do
Association weakens responsibility and blunls the SEN
sblliiy of men TO public opinion
.ifannng.-A Bank of the u. ). would regulate eY
changes and keep them at moderate rate, and this is
a matter of vast importance.
| .Hason-Then National Bank would do what the
late failed To do. Exchanges will always be high
when the currency is unsound and dcpreciated The
memorial of the Bank of the IT, $ 10 Congress in ISL
shews that exchange high as fifty per cent. in
some of the Western States, during the existence o
that institution When the banks honestly pny specie
exchange much exceed the Of transport
| ing specie from place to place.
"TMe currency be sound, says the memorial of the
U. s. Bank, sfhc rates Of erchange be
sire, because they can materially, and for any
considerable length Of time, exceed the expense, risk
and loss of interest incurred by The transportation
specie. 1t is true that exchanges between
some of the States have for considerable time pas
been rcry high. But wherever il was high, the cur
rcncy was IN n greater or less degree uDsound, the
banks were curalling and the currency decreasing
These causes could produce other result. Had
these cases not existed, the premiums of exchange
banks pretended TO pay specie for their notes, they
evaded II in effect Let the currency be sound, and
the premiums ofexchange must be precisely just.
We learn from this testimony of the late National
Bank that the rate Of exchange is not regulated by
Unitcd States Bank but that it depends upon the pay
specie, they ought 10 be abolished if they do pay it,
then exchanges cannot be excessively high
!. In his address 10 the stockholders Of the Bank in
| 1881, MIR. Ridde declared, ''As long the general
currency Of the United States consists Of specie its
eguiraicnt, the rates OF exchange between any two
places in il, never much permanently vary from
the expenses oil their transportation from place 10
another: and reduction 10 nearly that rate was the
inevitable consequence Of the resumption Of specie pay
mrnfS."
IL al. a.. l..,.,,
guishcd banker, the payment Of specie regulates e1
changes.
| .uanning.-But if Congress would establish new
Bank with capital of fifty hundred millions,
the State banks would always pay specie and suspen
sions ofsprcle payments would be unheard of. The
whole paper currency Of the Union would become safe
and sound
| acknowledging from the experience Of the past,
the new Bank of the u. States never would accom-
psh these results The last National Bank went into
operation in 1cl7. In 1910 the Banks Of Tennessee
suspended specie payments and the Banks Of Nashville
did not resume until September, 1876 In 1890 the
Banks of Georgia suspended, and in c2i the Governor
OF that State insisted hat all the Banks should
specie payments. The Banks Of South Carolina
pended in 1919, and all Of them did not resume until
1923 The Banks Of North Carolina, suspended in 1872
and the currency OF the State continued IN very de-
precated condition for six eight years and appears
from testimony taken before committee Of the legis
ature in 1922 that the banks of that State had been in
the habit Of buying in their own notes al discount
OF the one hundred and sixtyfve State banks which
Mr. Guatin says failed between III and $780, period
Of 10 years by far The largest number broke during the
reign Of National Bank. The Bank of Kentucky COM
menced discounting in April c2l but in despite Of the
Great Regulator, the notes Of the Kentucky Bank
pidy deprccated and in May, 1893, t'ro hundred md
ten dollars 0 its paper would command only one hun
drcd dollars in specie.
/ DENY that National Bank would prevent
the State banks from overrading or suspending spc-
Gle payments But even 1t did regulate the State
banks and prevent excessive issues their part who
can regulate National Bank
.Hannng.-Your question is SO knotty and tough that
really cannot answer it,
!gason-What is the use of pulling out the little
thorns if You leave the largest and most dangerous
behind to annoy and distress and torment the patient
nunninc-l know but little of medicine, and | be-
gin to fear that know not much of the political re-
me dies which are needed by the country.
Mason-You cannot divest men Of their selfish pas
sons by making them directors and stockholders OF
National Bank. The duty Of such an institution, as
regulator Of the currency, would conflict with It's IN
terest rs Bank. The powerful instinct OF selt-Interest
would induce a National Bank 10 extend its loans and
issues whenever it could do So without cndan5ering
IFS own safety. II is idle 10 expect that the president
and directors of United States Bank would become
efficient regulators of the currency, at the expense Of
their own interest and that Of the stockholders, who
woud be as selections TO obtain large dividends the
stockholders Of any other banking institution. Should
4
Congress determine to establish Bank, its capital
would probably be from fifty to seventy millions of dol
lars Possessing branches in the several States, this
tremendous moncyed power would by its expansions
and conlraclions, direct when the prices Of conmo-
ditcs should rise and when they should fall. If II
should form political alliance with the party creating
il, their united influence and power would be almost
irresistible Your friend MIR. Riyes used TO say, that
"associa,ed wealth is the dynasty of modern States"
If he meant the banking system, he was not very far
wrong. ,o,c
in the House of Representatives, against the ncorpo
ration of the late u. $. Bank, said:
ellis objections 10 the agency Of Government in
Rank was therefore, OF recent date, but one long
formed-thc objection vtal-tlat it would be an
engine of irresistible power in the hands of any Admit
nsiraon-,hat ii would be, in politics and finance,
what the celebrated proposition Of Archimcdcs was in
plysics-a place, the fulcrum from which, At The ,rM
Of The Ereeutirc, the whole nation could be hurried TO
destruction mangsd in any ray at has nil and dts-
crsfon.
Manning We have no reason TO suspect that new
National Bank would NEEDLE with politics in any way.
Ua bo We had two Banks of the u. S., and reckon