The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1842-02-19

was it is well known The frequent expedient of pub
lie necessity or public cupidty to obtain relief from
some pressing pecuniary embarrassment.
Moreover, the precious metals, though of less bulk
IN proportion TO their value than other commodi
ties, yet cannot be transported from place place
without cost and risk coin 10 subject be stolen
lost and IN that case cannot easily be Identified
to be reclaimed the continual counting of it in large
sums is inconvenient it would be unsafe and would
cause much money to remain idle and unfrutu fevery
merchant kept constantly on hand sum of coin for
all his transactions and the displacement of large
amounts OF coin, Its transfer from community or
country to another, liable to occasion fuctua
tons IN the value OF property labor and to embar
rass commercial operations. And there is necess
y that for each and every commercial transaction be-
tween two individuals, two communities, there
should be transfer of coin fiom to the other
render payment therefor The mutual dealings Of all
the members OF a community or of two separate com
munlties, will to certain degree produce state Of
reciprocal Indebtedness of the one balancing or
less that Of the other and the excess only of which
needs to be paid And release individuals and
governments from the inconveniencies attending the
continual personal custody and handling and trans
portation Of specie from place to another, bills of
exchange banks and other establishments for dealing
in bills and money, and receiving money in deposte,
and for the adjustment of commercial and other
counts by bank credits, checks and bills came into
use and became fixed ingredients in all the monetary
operations Of the modern civilized world.
Bills of exchange it is obvious, though perform
ing the functions of medium of exchange, like mo-
ney not money. They are, for the most part, in
their proper use, only the representative of the mo-
ney or of the value of the merchandise on which
they drawn and in this respect they of such
universally admitted utility to render certain their
continued employment in the business of society.
Bank credits, checks, or bills, though they also per-
form some of the functions of money and constitute
a circulating currency, are not money They are
nothing but promises or orders for the payment of
money, according to their tenor. And whist paper
actually and truly redeemabe in coin on demand, is
not money. still less that paper in any sense money
which, whether professedly or not is yet IN point OF
fact, not redeemable in coin on demand.
Bank paper, If it stand on solid specie basis, has
circulation by reason of its convenience, and its be-
ing therefore preferred to the coin ITSELF This pre-
ference may continue to exist to have the effect
OF keeping suspended in circulation at all times
quantity OF the paper and to free the banks from the
necessity of retaining always on hand an amount of
specie equal to the amount of paper Issued And
thus cheap medium of circulation is supplied in
place of dear one And if the redemption OF its
bills be continually enforced and the prudence of its
conduct necessarily tested and secured the operation
is useful one to the community, as veil a pro-
htable one to the bank.
But in this way the bank acquires the facul-
ty not, indeed, of creating value, butof creating at
will that which commands value lis tempted by
the cupldlty OF gain to expand its ksues The re-
deemabty in coin, set forth the face of its paper,
comes to be fiction or falsehood. If the Govern
ment of the country see fit to permit this operation
to go on, or the people inadvertently acqliesce in it,
the gradual expansion of the currency stimulates to
an artificial excitement in business property rises in
nominal value, it is quickly exchanged for that
which has no intrinsic value, and every thing wears
the aspect of high prosperity until the bubble of in
fated paper circulation bursts throwing all the
rency into confusion, suddenly reducing prices, ar
resting business, and filling the community with
bankruptcy and distress.
Hence, If it be needful to legislate concerning the
coined standard of value it is equally and for the
same reasons, needful to egislate concerning that
which takes its place, performs its functions, aug
ments Its nominal quantity effects its value, and acts
potentially in all the relations Of labor and property
1t IS idle to forbid individuals to coin money, they
be left to make at will that which usurss all the
of money. And, accordingly, in those countries
where the issue OF paper to circul3.e as money eX-
lists, it exists by permission and under regulation of
Government.
And it speedily becomes government question in
another and still more mportantpont of view
10 issue paper having currency asmoney, is in fact
to borrow money, and command commercial values,
at will Why, then, should individuals or corpora
TONS have the exclusive enjoyment of this wealth
creating power' Why should no Government itself
participate in it, or take it to Itself 1t has done
BY the issue of bills of credit orassignats it has,
under the pressure of and for'gn invasion, alb
sorbed all the labor and property the community
for public uses.
There is no difference of principle between bills
not redeemable in specie issued by the Government
for circulation as currency, and SIMILAR bills issued
IN the same way by corporations ory individuals ex-
cept that Government may have tie power to make
them forced legal tender Nd is it material if
they be not actually redeemable il specie, whether
they be issued on faith and credit .ny, like the COM
mon promissory notes of individual, whether they
be nomnally secured by the pedg of lands effects
set apart for their redemption. n either case such
h lie nfofLo
of money In both cases. the couse of things is the
same, whether they be issued public or private re-
sponsibility They continue to haze currency as mo-
ney, so long as, from ignorance Iadvertence, ne
cesslty, men voluntarily receive them But under
the most favorable circumstances possible, and when
such bills are issued upon the highest conceivable
credit, and though governments hculcate, and COM
munes believe, that the bills ap equal in value to
coin, still they speedily begin to undergo gradual
depreciation, indicated in the riseof the comparative
price OF the precious metals And in general, of all
such issues, the fate is the SINE, gradual de-
probation in value to greater or less extent, some
times absolutely to nothing, having the effect to i'm
pose and levy tax on the community, to abstract
from it property or labor without compensation,
nearly to the total amount of sucl depreciation.
! here have been, and NAY more be, occasions
imposing upon Government the indispensable necessity
of resortng to such means of obtaining the
only possible ones to maintain is independence or
existence. In such cases. Government, representing
the political unity, and welding the physical force,
of the nation has the right to lake the property
labor of individuals for the salvation Of all And the
question of the form Of taxation in which this shall
be done, whether by the forced oune of paper cur
rency or otherwise, may be reduced to problem
OF e1pediency or practicability But in every such
operation the premises case of overwhelming
public necessity
| But there can be such considerations to Justify
governments in allowing private individuals corpo-
ratlons to issue lrredeemable bills to circulate
ney, and thus to extort tax from the community,
for the purposes of private gain 1t conceded that
individuals ought not to aduterate the CON- fasify
its denomination for which reason the coin is placed
under the safeguard of the public authority The
reason is greater for subectng the issues of paper
currency to public authority; because the extent
of the possible evil is greater, and the nature of the