Boon's Lick times. [volume] (Fayette, Mo.) 1840-1848, 1842-02-05
FAYETTE, MISSOURI, SATURDAY, FEBRUARY $, 1912

the Exchequer, Mr.. Francis Barring, of the
present Prime Minister, Sir Robert Peel,
of Mr.. Hume, of Mr.. Goulbourn, Of Mr..
Herries, Mr.. Clay, Mr.. E!lice, and divers
other leading members of Parliament char
ged to inquire into the effects produced on
the circulation of the country by the va
rious banking establishments issuing notes
payable on demand. 1t is remarkable
fact that, out of the nine witnesses examin-
ed before that committee, (all of them dis
tinguished bankers and practical fnanciers,)
seven expressed the strongest conviction of
the necessity and expediency of efectually
separating in practice, as they were distinct
in theory, the faculty of issue from the bu-
siness of discount, or banking proper
| They reason thus To issue paper cur
rency is to create money which is the right
ful province of the State, or public author
ity, while the appropriate function of bank
ing is to use or distribute money, when Gre
ated in carrying on the business of society.
These two functions are alleged not only to
be separate and distinct in their nature, but
often conflicting and incompatible in prac-
tice. The interest of the banker is to OBJ
tain the largest profit he can by extending
his circulation to the utmost limits consist
ent with the probable security of his loans,
while the duty of the issuer is often to COM
bat and resist the solicitations of private
gain, and to govern the amount of his issues
sternly by the consideration of public safe
ty, and the preservation of sound and sta
bic currency. Functions, thus distinct in
their character and opposite in their tenden-
ces, it is insisted, should not be united in
the same hands, but should be kept separate
and apart; and the arrangement proposed
by almost all the witnesses who were eX-
amined before the committee, for effecting
this separation, is to provide for the issue
of a convertible paper currency, by pub
lie authority, not. however. through Execu-
tive agents dependent on the Crown, but by
commissioners acting under the control of
Parliament.
/ refer to these proceedings (said Mr..
Rives) to illustrate and enforce the position
of the Senator from South Carolina, that
issue and banking are not only separabe,
but intrinsically distinct, and to show the
Senator from Pennsylvania that the limited
power Of issuing convertible paper cur
roncy which is proposed to be exercised
through the Board of Exchequer, in the
plan of the Secretary of the Treasury, does
not, of necessity, make Bank. will not
undertake to say that the idea which is so
rapidly gaining ground in England from
the imperlections and abuses of the bank
ing system as at present organized, that it is
expedlent to effect complete separation
between the power of issue and the bust
ness of banking, is, in all respects, suited to
the condition and circumstances of this
country. 1t has been carried out with sig
nal success, but under the essential guard of
a constant convertibility of the paper is
sued, into specie, in Prussia, the country
which, of all others in Europe, enjoys, at
this time, the best constituted currency
How far limited application of the same
principle, modified according to the charac-
ter Of our institutions, might be ventured
upon here is a question which, it must be
admitted, after the disastrous experience
we have recently had of the dangers and
evils of the present system, is at least fair
subject for enlightened inquiry and consid-
GRAFTON.
No person (said Mr.. Rives) can have
greater horror than have of Government
paper money, properly so called. resting on
no basis but the general credit of the Gov
ernment, representing no real value, and is
sued ad libitum to supply the place of bo-
ma fide tangible revenue. Such a paper
money, from the tempting facilities which
attend it, requiring no outlay but the wages
of the manufacturer and engraver to Gre
ate it in illimitable quantities, has been Just
ly pronounced to be "a seducing and dan
gerous eXpedent." But when the paper is
sued is made Immediately and uncondtion-
ally convertible into specie at the will of
the holder and the Government is compell-
ed to provide real funds in advance to re-
deem every dollar of its paper liabilities, it
is a very different affair. The danger of
abuse ceases, and the national paper, thus
bottomed upon solid specie basis becomes
an obi ect of general confidence and trust.
The honorable Senator from South Caro-
lima, at the period to which he has referred,
if | mistake not, the decided advocate of a
Government paper currency, and of a Gov
erument paper currency, too, Uhich should
be anconrertiJle. He then thought that a
convertible currency was bungling con-
trvance, behind the progress of the age, and
that an inconUertible paper issued by the
Government and endued with certain con-
ventional qualities, was the best magma
BILE form of useful and convenient curren-
cy. Mr. Calhoun here shaking his head,
Mr.. Rives said he had not the slightest de-
sire to misrepresent the views of the honor
able Senator and would cheerfully give
away to enable the Senator to explain
Mr. Calhoun daclininr Mr. Riyes procpd-