Daily Richmond Whig. [volume] (Richmond, Va.) 1840-1842, 1841-06-01
REMARKS ON
CURRENCY AND BANKING,
Essay concluded
A NATIONAL BANE
Isvng reference tho present arrangement II the elre
laiing medium In the Unitei States.

Essay concluded
A NATIONAL. BANK.
The existence non-e Nistencc of n national bank
has been mingled with the contests of the polit.
cal parties into which the country has been divided
that the attempt to discuss il merits, with
out reference to its political bearing, may DO con-
sidercd rash II not visionary. Yet il involves ques
tons Of political economy Of the most difficult and
abstruse nature, which can be little and mperiecty
understood by the masses of the community. Gen.
eral jackson made this question the symbol Of par
~. The consequences has been, that for nearly ter
years the mercantile business Of the country ha.
been agitated, and sometimes parnlized by the con.
nection OF banking operations with the struggles o
patty. IL is to be hoped that this unhoy union vii
cease and that the question Of establishing national
bank and the character OF H. will be dcussed its
own merits as nice and difficult question, which il
certainly is. At any rate IL is IN this view OF il
that It will be here presented.
That national bank Is so convenient as TO be all
but essential to the collection, safe keeping, and dis
bursement Of the revenue, the writer can have no
doubt On this point theory and experience coin
eide. There can be no doubt that bank, as fiscal
agent OF the treasury can receive and distribute the
moneys Of the government, with more safety and
than any other instrument or agency which can
be devised. This is also undoubtedly its strongest
constitutional basis. To afford proper security, the
back must possess certain amount Of ca ptal. For
this purpose perhaps the least sum which i, would
be prudent TO fix on, is ten millions of dollars. To
such bank there would seem to be no reasonable
objection.
Arother ground put forwa ard in favor OF nation
al hank, embraced by large portion Of the eommu-
nifty, its necessity as regulator oil the currency.
For this purpose large, magnificent bank is wan
ted bank with capital of fifty one hundred
millions osdoars. To such bank there are 6eci-
ded objections As n regulator of the currency j, is
of doubtful utility. Banks issuing paper currency
are established by the authority Of the different
States. They furnish currency having no legal
character, but having a conventional circulation arr
sng from its convenience. These banks good
or bad institutions, according TO their management.
a bank which iulfls its promises by paying its
notes demand, readily and cheerfully, and fur
nshing capital to those who need it, is good; but
bank which asks for credit, whilst it bellies It's
promises, sets an example injurious to all sound
morals, and great evil. But the fault lies in the
community which toeraies such an abuse. Public
opinion should prescribe the remedy. IL is mean
choy fact that there is little security for the good
conduct OF banks, but in the power OF coercion by
law IL was legal coercion which brought the coun-
try banks Of New England to n seEse of their duty
in $685. when they had introduced system of eva
sion or delay OF payment OF their notes. IL is toe
penalty Of TWO per cent month, enacted in lslO,
which has insured their punctualty since that time
IL is not too much say that il the legal penal
ty OF forfeiture Of charter, and the belief that the
law could not be changed, which secured the re-
sumption in New York, in 1888. IL is owing 10
the unreasonable relaxation Of the laws in Pennsyl-
wanna that Philadelphia is still suffering under de-
precated currency. When public opinion reaxes
this power of coercion, under the influence of the
debtor portion of the community, giving the banks
SOFT of immunity, IL is certainly a had state OF
things This is our present state. But the evil
will work it's own cure. A national bank has no
direct power Of coercion. Ii only act by moral
force--the force Of good eXample-upon public
opinion. With correct public opinion, II IS who'll
iy unnecessary.
The chief argument in favor Of the necessity of
national bank, as regulator OF the currency is
drawn from the facts that the suspension OF specie
payments, IN 1874, took place after the expiration
OF the charter OF the first bank and that specie
currency was not restored until the establishment
OF a new bank, which went into operation in Is H.
The power OF the bank in this restoration is much
overrated. The suspension OF the banks in Sep.
TENDER, lsli, was IN consequence OF the advances
made 10 government on loans and treasury notes.
10y the banks OF the cities south Of New England
These securities suffered a great depreciation in
consequence Of no provision being mede for a re-
venue 10 pay the interest, and the great ex
pendlIures caused by the war. Boston and New
England took no part IN this suspension, having
taken but sparlngly Of the government loans partly
originally, on account OF not approving the war but
cheeky as matter OF calculation because there was
no adequate provision for the payment OF the inter-
est IL Is gratuitous assumption that there would
have been no suspension had q national bank been
IN existence at that time. On the contrary II is but
fair TO presume that such an institution acting in
would have been the first to propose il. The GOV,
eminent made no objection to the suspension Of
lSlI; on the contrary, II received everywhere the
deprecated currency Of the local banks and Q We
credit and support 10 the system.
Fortunately, peace came in February 1915 With
the peace, the credit of the Government revived NJ
once The immediate restoration of the currency
was Universally expected. New York currency
rose to within two per cent OF specie. II
was the fault OF Mr. Dallas, then Secretary OF the
y 'faag fFEW hat i. a
lie refused 10 execute the laws passed by Congress
for that express purpose. The immediate obstacle
10 the restoration of the currency in New York.
Philadelphia and Baltimore, was the large amount
OF treasury notes held by the banks of those cries
many Of them past due. The session Of Congress
expired on the 18th OF March but, in the short in.
teEval after the knowledge OF the peace a law was
passed, authorizing loan TO the amount Of twelve
millions Of dollars. with view to restore the credit
OF the government and the character OF the curren.
cy. The law was sufficint, but its execution was
entrusted to Mr.. Dallas, and instead OF executing
III It's proper spirit, 10y negotiating the loan in the
iegai currency, he gave new impetus to the issues
81 lnconveriIble paper, by receiving them in pay
ment Of stock, and passing them off as the only
payment which would be made TO the public credi-
tSR.
The fact is, Mr.. Dallas was al that time A paper
money man. An immense importation TOOK place
immediately after the peace. A great expansion OF
the banks m the south and west followed. The
enormous amount Of thirty six millions of dollars
was pad INTO the treasury IN the year 1916 arising
from duties alone. The golden opportunity forfe.
sumption had been allowed 10 pass by. The pa
per OF Phllade phia fell TO twenty per cen, dis
count. The government and the banks were in.
VOWED as partners in all the enjoyments Of paper
currency greatly deprecated
AT length the system would work no longer. In
this dilemma, the late Bank of the United States
was chartered, with large capital, made up chiefly
OF government stocks. There is no doubt that the
lOi this bank had some effect in the
restoration Of the currency; 30 those who have
distinct recollection, or will study into the monied
of that period, will make large deduc.
tons IRON the popular impression, that the estab.
iishmont nj that bank was an immediate and uoi
Yersnl panace1. The TRUTHS, the bank went into
operation on false principles. II undertook 10 bol-
ser up the fictitious paper money prices Of lSlG-
" impoftes specie at great loss which could mot
We made TO stay IN the bank or the country in com.
puny with a currency 50 inflated. The whole sys
Gem broke down IN 1919, when Mr.. Cheves was
called TO the administration Of the bank, by whose
energy II was barely saved from stopping paymeot.
ne restoration OF the currency then took place.
G ,tut nol without producing degree Of pecuniary
distress which has had no parallel since.
Another argument much dwelt on IN r,vo, NJ n
large NATIONAL bank, is its necessity 10 equuze the
There Is not much in this There h.
no difficulty with the exchanges where the banks
pny specie. There lies tho whole difficulty. Let
that be reformed, and there will be complaint on
That score. The exchanges soon regulate them.
selves where the currency is uniform as il the le
eal currency Of the United States. a large bank
with many branches, can manage the exchanges
WIN more profit 70 itssJ perhaps, than the local
tanks can DO The late United States Bank took
oAe 70 charge the highest rates for exchange which
we alternative OF transporting specie would admit
rol sevefa years the exchange at New Orleans on