The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-02-18

nominal Representatives Of money capable of being l~
'ricated at will the adulteraon of COIN instead Of IT.
was It is well known, the frequent expedient OF pub
lie necessity public cupidy 10 obtain relief from
some pressing pecuniary embarrassment II
Moreover, the precious metals, though OF less bulk
in proportion to their value than most other commodi
ties, yet cannot be transported from place to place
without cost and risk coin is subject to be stolen or
lost, and in that cannot easily be identified a.
TO be reclaimed the continual counting Of il in large
sums is inconvenent; il would be unsafe ands would
cause much money to remain idle and unfrut u fevery
merchant kept constantly on hand sum Of coin Tor
all his transactions and the displacement OF large
amounts of COIN its transfer from community or
one country TO another is liable to occasion iucua
tons IN the value OF property labor and TO embar
commercial operations And there is necessl-
ty that for each and every commercial Transaction be-
tween two individuals, or two communities there
should be transfer of coin fiom one TO the other to
render payment therefor The mutual dealings OF all
the members of community, or of two separate com.
munities will TO certain degree, produce state oil
reciprocal Indebtedness of the one balancing or
less that of the other, and the excess only of which
needs to be paid in coin. And TO release ind vduas and
governments from the inconvenencies attending the
continual personal custody and handling and trans
portation of specie from one 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 ac-
counts by bank credits, checks and bsmcame into
use and became fixed ingredients in all the nenetary
| operations of the modern civilized world. -
| Bills of exchange, il 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 of the value of the merchandise on which
they drawn and in this respect they are Of such
universally admitted utility 10 render certan 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 order Tor the payment Oh
money, according to their tenor. And whilst paper
actually and truly redeemable in coin on demand, IS
not money still less is that papern any sense money
which, whether proiessedly not is yet, in point OF
fact, not redeemable in coin on demand.
! Bank paper If il stand 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 as to have the effect
4 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 m
place OF dear one And if the redemption OF It's
bills be continually enforced and the prudence of its
conduct necessarily tested and secured the operation
is useful one to the community, as well as a pro-
| itable one to the bank.
But in this way the bank acquires the faeu
y, not, indeed Of creating value but Of creating at
4 Will that which commands value. IL is tempted by
lihe cupldlty of gain to expand its issues, The re-
com, lOrtf on the lace oil It's
comes to be fiction a tasehood. If the Govern
men of the country fit to permit this operation
to go on, or the people inadvertently acquiesce 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
tlated paper circulation bursts throwing all the cur
rency into confusion suddenly reducing prices, ar
resting business, and filling the community with
! bankruptcy and distress.
Hence, If it be .needfu to egislate concerning the
coined standard Of value il is equally, and for the
4 same reasons, needfu to egislate concerning that
which takes its place, performs its functions aug
mens ITS nominal quantity effects its 4alue and acts
potentially in all the relations of labor and property
i IS idle to forbid individuals to coin money if they
be left to make at will that which usurps all the
| OF money. And, accordingly, in those countries
where the issue of paper to circulate as money ex-
ISIS, IT exists by permission and under regulation of
1 Government.
And it speedily becomes government question in
another and still more important point of view
no issue paper having currency money, is, in fact
to borrow money, and command commercial values
4 at viii Why, then, should individuals corpora
tons have the exclusive endowment Of this wealth
creating power Why should not Government itself
participate in it, or take il to itself Il has done So
j By the issue of bills of credit assgnats, it has,
under the pressure Of and foreign invasion, alb
sorbed all the labor and property Of the community
for public uses.
There is no difference Of principle between bills
not redeemable in specie issued by the Government
or circulation as currency, and similar bills issued
nthe same way by corporations or by individuals, OK
llcept that Government may have the power to make
them forced legal tender Nor is it material, if
they be not actually redeemable in specie, whether
they be issued on faith and credit only, like the com
mon promissory notes of individuals or whether they
be nomlnay secured by the pledge of lands or effects
set apart for their redemption. In either case such
of money In both cases, the course of things is the
same, whether they be issued public private re-
sponsbility. They continue to have currency mo-
lney so long as, from ignorance nadvertnce, ne
cessity, 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 nculcate and com
munities believe that the bills are equal in value to
coin, still they speedily begin to undergo gradual
depreciation indicated in the rise of the comparative
price of the precious metals And in general, of all
such issues, the fate is the same, a gradual de-
probation in value to greater less extent some
times absolutely to nothing, having the effect to i'm
pose and levy tax on the community to abstract
4 from it property or labor without compensation,
nearly to the total amount of such depreciation
There have been, and nay once more be occasions
imposing upon Government the indispensable necessity
Of resorting to such means Of obtaining the
\ only possible to maintain its Independence or
existence In such cases, Government representing
the political unity, and welding the physical force
of the nation has the right to take the property or
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 course of paper
rency or otherwise, may be reduced to problem
Of expcdiency or practicabilty But in every such
operation the premises case Of overwhelming
public necessity
But there be no such considerations to Justify
governments in allowing private individuals corpo
rations to issue irredeemable bills to circulate
ney, and thus to exor a tax from the community,
for the purposes of private gain 1t is conceded that
individuals ought not to aduerate the coin, fasify
lis denomination for which reason the coin is placed
under the safeguard of the public authority. The
reason greater for subjectiDg the issues of paper