The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1841-04-30

RicnMosp, April oath, i8il.
| Question BY equasing the Exchanges, will the
currency be increased or diminishedl
| Answer. The currency will be diminished A
very true saying has long been very current among
the people, 'that nimblc sixpencc is better than
slow shilling" The principle is very apparent. The
value Of money consists in its exchangeable character
and the quantity required, therefore, depends upon
the facility and rapidity with which it is used A
given amount only can be used in any placc-when.
the supply exceeds the demand it becomes entire
~ useless No man will keep in his possession more
bank notes specie than he has use for in the way
Of paying debts, and buying and selling if
he does So he will be loosing interest that amount
Thus, wien farmer gets sum Of money on hand, he
is generally anxious to dispose of it in such
as to interest and with persons of every
other profession and calling. Thus bank bills and
specie limited to the wants of trade and the
active and rapidly they circulate the less interest is
lost by each holder and the less is required
answer the purposes Of commerce. A plain will
| illustrate this position.
Suppose a merchant banker residing in Rich
mond, shall make contract to pay ST. 900 per day to
merchant in Baltimore as long the mail shall pass
between these cities in twenty -four hoursone thou
sand dollars only will be the road and, therefore,
only 81 900 more is required than would be if the pay
ment should be made in Richmond, but suppose from
the bad state oftho roads the mail pass through
in less than days--the merchant must use 80 600
more, because there will be $4,000 on the road 10
Baltimore, constantly, instead of one. Thus it will
be that the rail roads and steamboats, and regu-
lariy Of the nails have very much lessened the de-
mand for so large currency
While the Exchanges are left to the extraordinary
action Of thousand conflicting currents and uncur-
rent notes forced into among merchants in diff
fcrent sections of the Union the consequence is that
large sums must and will remain inactive, because Of
the great discount at which they be sold to con-
vert bank notes, deposits in distant banks, into
available funds in the place where the money is re-
CURED.
system Of Exchange that will equalise and reduce
the rate Of Exchange different sections of the
Union below the charge for transporting specie will
render available all the money of the country and put
it into active circulation. The result will soon prove,
that one dollar, under proper SYSTEM will perform
| the Office that now re qures two.
@. What is the practical operation Of fro eurren-
| cies?
| A. Currency may be divided into convenient and
| inconvenient-good and bad.
| When two currencies are equally good, the most
convenient will be preferred Thus we find that the
notes Of specie paying banks in tho vicinity of the
bank are always preferred to gold silver and hence
very unwise attempt is made force upon the peo-
pie the use Of CON- by aboiishng bank notes under
the denomination of one dollar 1t is unwise because
the people the best judges of their own interest in
these particulars and the attempt benefit the cur
rency by forced infusion of coin to the great incon-
venence Of the people always fail of the desired
effect. Give the people the opportunity Of choosing
between paper and coin and they will decide accord
ing to Their interest.
Again, where there two kinds ofcurrcncy equal-
y convenient, the least valuable will generally drive
slight.
As long as the holder of an uncurrent note find
some one to take the paper 1T par he will continue to
take IT also. And therefore, there debts due
to the banks in many places where the notes circulate
the notes that are at par at small discount will be
collected to pay these debts in bank-whe the notes
that are at greater discount will be passed Off in the
ordinary course of trade without loss Of discount and
thus to great extent become the currency of the
neighbolhood.
q. What causes bank notes to be under par in this
countIyl
q. What causes bank notes under par to be made
a circulating medium
@. How deprecated paper be driven out of cir.
culaton