Daily Richmond Whig. [volume] (Richmond, Va.) 1840-1842, 1841-05-31
CIRCULATING MEDIUM.

CIRCULATING MEDIUM.
The general consent OF mankind has established
gold and silver the common measure Of the value
OF all other commodities, and has given them, in the
state of coin, the name Of money. Some nations
making OF OF these metals, some Of the other,
and some OF both.
Coinage may be considered as merely the affi King
certificate Of the government to the quantity OF
pure silver gold contained in each coin respect.
lively, on which alone its value depends. The ft-
ness of gold and silver for the medium of exchang-
ing oil other commodities, arises from their contain
ing much value in small bulk, from the difficulty OF
their quantity being materially Increased, from heir
easy divisibity and their indestructibility.
1t is usual to consider these precious metals as the
common MEASURE OF other property; but they have
anothec quality essential 10 their performance Of the
junction of money. Their intrinsic value makes
them also the common equipd!ent. They not only
the value OF other commodities, they replace
it, this is an importiut distinction.
The laws Of the United States establish the coin
age and currency OF both metals. BY the law OF
1899, gold estimated TO be worth fifteen times
ITS weight in silver, which was, at that time per-
hips, an accurate estimate of the actual relative
value of the two metals. Since that period decid-
cd and permanent change has taken place IN that
Spcct in favor of gold; and by the law passed IN
1881, our gold coinage and several foreign coins
made current in the proportion OF sixteen times their
weight of silver.
The effect OF this law is, TO make important
change in our metallic currency. Previous to its
passage, our whole currency consisted of silver;
gOlu was merely merCnanuiZe, worm ABOUT i've or
six per cent above its legal valuation. Since 1884,
gold has been constantly displacng silver, and is
becoming the bass of our bank circulation.
Banks establishments for the purpose of car
rying trade traffic in money, or in contracts
or obligations for the payment of money.
Il ink notes promises TO pay on demand n
given quantity Of coin; they are promises TO pay
money, but they are not money in themselves. THIS
Is an important distinction, and the not making it
the source Of most OF the popular errors on the sub
Iect OF currency.
Bank notes, payable in coin on demand, in the
common Transactions between man and man, are
generally preferred to the coin which they repre-
sent. They thus perform all the functions of mo-
ney, and in common parlance nre called money.
But there is important distinction, and in STREET
ness bank notes can with no propriety be called
money. bank note gives IOvsr TO command
the com, the money which II promises, at the plea
sure of the holder. This poioer is more conven-
lent, therefore valuable TO the possessor, than
the thing, the coin itself This preference is the true
basis OF bank circulation. Ills founded in the nature
oi things Ii is essential, however, that this power
should be real that il should exist in fact that the
coin can he had on asking for Ii is not, perhaps
surprising, that superficial observers seeing the ia
cty with which bank notes perform all the func-
tons of money without this power TO command
coin heins put to the test, should become nsensi-
ne 10 It's existence disbelevers in its necessity
hey see ianh IN this power supeIsede the use OF
The power, and sanguine and visionary spirits are
led To believe that the faith may be built on
some other basis, on something else less expensive
than gold and silver. This is doubtless the origin
0i the various projects for furnishing currency of
paper not convertible into coin TO which every age
gives RISE and which always finds favor with the
debtor class Of mankind, but which are sure TO end
in chagrIn and disappointment.
Bank credits, commonly called deposits are Of
precisely the same general character as bank notes
they arse from the deposit Of coin or bank notes,
from the collection of individual notes or bills of
exchange, or from discounts made by the bank for
the parties TO whose credit they placed. How
ever originating, the bank admits them TO be debt
payable in gold and silver on demand.
They remain 20 the credit of the party OWNING
them, because a bank credit, like a bank note Dos
sessins the power Of commanding the coin at any
moment, is preferable 10 the possession of il IN
specie. Bank notes and bank credits are convert.
ibe into each other at the pleasure Of the possesso
They are essentially the same. II has been some
tunes made question whether bank credits car
properly be termed currency. IL is question abou
words, and Of little importance, according 10 IN,
sense IN which currency is used. Bank credits con
sist chiefly OF the money kept on hand Ly merchant,
aud others for their daily Were there no banks
Il would be kept at home in iron chests and If So
Nept, whether IN coin or bank notes. the question
Inght be equally raised, whether these deposits in
large masses should be said TO be in circulation
There Is but one basis for a sound paper curren.
cy, tho actual poicer to command the coin IL i,
true, no paper can circulate without confidence Lut
u all important that this confidence should rest on
solid foundation. ltis best it should be frenuent
confidence which has caused the arrangement Of ON
currency, but, on the contrary, the prolific cans,
has been, the giving confidence where IL was no
warranted, where it was not due
Preference is then the only basis ola sound no,e
circulation, and il is not ssficut TO perceive Inc
grounds on which this preference rests: facility o
counting, facility Of transportation or transmssion
and security against loss or robbery. To these pc
neral advantages must be added full assurance ri,
The money viii be paid 'ohen wanted and Iohsy,
wanted.
The place where a bank note is payable il ortb,
utmost importance IN order to secure It's general cir
cualon at par with specie. That place must be IN,
commercial centre Of the district through which il
70 circulate. " "
The constant demand for remittances TO this cen
tfdl point, will give to Bank notes payable there
constant equality with or preference over specie
through all tue region dru wing their sunne. g.,
that centre. Thus, bank note PAYABLE in Ros,oo
~hl have a natural circulation through all that n, ri
OF New England drawing their supplies from thence
b'' the moment the line Is passed into the district
"aNing their supplies from New York, bank note.
payable ~ that city can alone supply pure cifcu.
latiOn, and 30 OF the other great cities nree town
~ CUES IN the interior have certain limited cirr h
81 their own, but for general circulation bank note
must be payable m the great commercial cities
nc currency OF deprecated paper, issued b,
hanks paying specie, IS owing TO departure iron
correct puncpss IN this particular. The bank not
~ not payable ot the place where tho money
wanted. Previous 70 1924, the currency Of Bosto
""' Wv tsHslaHu CDHsisttu mostly OF country BAN
nolef subject TO discount varying at different time,
ga, generally about one per cent. In 1924 what
'allcd The Suffolk bank system, was adop,ed. b,
winch the bills Of all New England banks are viz
Iah'ly redeemabe ~ Boston az par. The system i
hs' Certain banks IN Boston have contributed
sum agreed on 70 common fund, and IN consde
ta'9n OF the use Of that fund, one Of them. IN,
3uuoik, undertakes 20 receive al bills of New Enc
anu BANKS ~ cash, and collect them from the eouS
Wy BANKS The mode Of doing Il Is as CsdloVs ri,
country banks are invited toikesp fund IN dspo.i,
~ I've suffolk bank ioT the redemption oftbs,, IAN.
" they decline, the bills are sent home n, n,,,r,c,
~ winch case nothing but a legal pavmsnt IN en-,
viii be received. The trouble atisnding ,b,s ,,ed
0i payment, soon induces the bank 10 Wild 40 !,
true interest and keep up the deposit sJnce J, -.
hY dong 30, keepa larger amount of bills IN c,,c,
lition than il.wouid Otherwise he SAT. IN .,,.,,
Under this system the whole currency cso,e,i,. /.
boston, v convertible OF pleasure into Isg.i 60,
without any loss whatever state OF tbnSs ,ybicl
does not probably exist in any other ososiderabI
city.
The State Of New York is nov suffering und.
currency Of county bank notes deprecated in
small degree from beng payable at places where IN
money ~ not generally wanted. IL u impossbl
hat bank notes payable at Buffalo can be pfefene
70 specie in the city Of New York; but Il will b
perceived Al that bank notes pa yahle In the c
vol Mes York will to preferred TO specie not on
" ~ that city, but IN Buffalo also, and iiroughou
tho vholsc immense region Of which New York
the commercial centre. The legislature Al Nes
York have attempted partial remedy 10 this evil