The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-01-01

drawer and so long as his means are ample To meet
his engagements there is no dstrust without reflect
ing that considered currency il cannot safely ex-
coed one in thirty in value compared to property
and the deuson Is further increased by the constant
increase IN value of property, with the increase OF
the notes in circulation to maintain the same rea-
tive proportion. II follows that government may
safely contract debt many times the amount of its ag-
gregate circulation but if il were to attempt put
It's promissory notes IN circulation amount equal to
ITS debts, an explosion in the currency would be ne-
ytable. And hence, with other causes the constant
tendency to an excessive issue of bank notes in pros
porous times, when so large portion of the comm'i-
NIFTY are anxious to obtain accommodation, and who
are disappointed when negotiable paper is refused by
the banks, not rejecting that il would not be safe TO
discount beyond the limits have assigned for safe
circulation, however good the paper offered.
"Ohwhat then ought paper currency to restf
would say on demand and supply simply, which re-
guates the value of every thing else the constant de-
mand which the Government has on the community
for its necessary supplies medium resting on this
demand, which simply obgates the Government to
receive il in all of its dues to the exclusion of every
thing else except gold and silver, and which shall
be optional with those who have demands Govern
ment TO receive not would it seems to me, be as
stable in its value as those metals themselves and be
little liable to abuse the power of coming. II
would contain within itself self regulating power.
1t could only be issued to those who had claims the
Government, and TO those only with their consent,
and OF course only at above par with gold and sill
yer which would be its habitua state for far as
the Government concerned il would be equal in
every respect to gold and silver and superior in
ny; particularly in regulating the distant exchanges
of the country. Should however, demand for gold
and silver from abroad other accidental causes de-
press It temporarily, compared with the precious
metals, II would then return to the treasury and as II
could not be paid out during such depression. It's graz
dual dimnuton in the market would soon restore II
to equality, when would again How out INTO the
general circulation Thus there would be constant
alternate fux and reilux into and from the treasury
between il and the precious metals but II at any
time permanent depression in its value, be possible
from any cause, the only effect would be to operate as
reduction of taxes on the community, and the only
sufferer would be the Government itself Against
this, its own interest would be efficient guarantee
Nothing but experience determine what
amount and of what denominations might be safely
issued but it may be safely assumed, that the cou-
try would absorb amount greatly exceeding its
| annual income. Much of its exchanges, which
amount to vast sum, as well its banking business,
would revoKe about it, and many millions would thus
be kept in circulation, beyond the demands of the
Government. 1t may throw some light on this sub
ect to state that North Carolina, just after the reyo-
luton issued large amount of paper, which was
made receivable in dues to her. 1t was also made a
legal tender, but which of course, not obligatory
after the adoption Of the Federal Constitution. A
large amount, say between four and five hundred
thousand dollars, remained in circulation after that
period, and continued to circulate for more than
twenty years at par with gold and silver during the
whole time, with other advantage than being re-
ceiyed in the revenue of the State which was much
less than 100000 per annum. speak on the infor-
nation of citizens of that State, on whom, | can
rely.
But whatever may be the amount, that can be
circulated, hold it clear that to that amount, it
would be as stable in value gold and silver itself,
provided the Government be bound to receive it
clusivey with those metals in all its dues, and that it
be left perfectly optional with those who have claims
the Government, to receive it, or not Ii will also
be necessary condition. that notes of too small a
denomination should not be issued, so that the Trea-
sury shall have ample means to meet all demands
either in gold or silver, or the bills of the Govern
ment at the option of those who have claims it.
With these conditions no further variation could take
place between it and gold and silver, than that which
would be caused by the action of commerce An
unusual demand from abroad for the metals would of
course raise them little in their relative value and
depress relatively the Government bills in the
proportion which would them to flow into the
Treasury, and gold and silver to flow out while
the contrary increased demand for the bills in the
domestic exchange would have the reverse effect,
causing, as have stated, alternate hux and refux
into the Treasury, between the two, which would at
all times keep their relative values either at near
par" .Ac