The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1842-03-17

duced, than which nothing would have been
more opportune as matters have stood. Our
readers are fully aware Of the deplorable condl-
tioo into which the credit of local banks and
other moneyed institutions has fallen for months
mast. owing TO the want of basis, the value OF
which would be generally recognized as equi-
vslent TO that Of gold and silver. la the secu-
rites OF the Government, such basis would
have existed, and thus would the currency OF
the country have been sustained in sound and
wholesome state. What, then, must have fol-
lowed Instead of having bank bills of local in
stitutions, at depreciation greater or less, ac
cording to local circumstances, these securities
would have been Of equal value every where
OF nearly so, and the industry of the work
ing classes would not have been taxed,
as il has been, TO pay for the real or sup
posed worthlessness Of the circulating me-
dium. 1t will perhaps be said, that admitting
all this 10 be true, the amount required Dy
the public service, even according to the estl-
mates presented, would not have been adequate
TO the wants of the people To certain ex-
tent the objection may be valid one, but by no
means to so great degree as might, at the hrst
blush, be imagined. In the first place, suppos-
ing Government securities to be equivalent to
coin for all home purposes, these securities be-
ing in possession of the local banks would have
enabled those institutions to discount safely to
twice or three times their amount and, conse-
quently, would have swelled the supply of cir
culating medium TO a corresponding extent In
n. ,iro1f for ho ma
val service would, in the hands of the State
Banks have enabled them TO issue TO the
amount Of from $16,OOO,OOO to 1924, 900, 900.
Nor does the process stop here, as every days
experience among business men will show.
ten dolat bill paid 10 A. B. in discharge of in
debledness, does not remain with him, but is i'm
mediately passed away to G.. d., by whom il is
transferred 10 E. f. who, in turn, gives it to G.
H., and so on. Thus, during given time, it
goes through, we will say twenty different hands,
and cancels as it goes, IN each case, indebtedness
to the amount of $40. Now, it is evident, that
the $40 Of which we speak, in twenty transfers,
will pay two hundred dollars of debt instead of
ten dollars. Taking then the ground that
100000 of Government scrip will sustain a
local circulation of say $l6,00O,000 and that
these sixteen millions will cancel obligations in
the course of days transactions to fve times
its own amount, we have the surprising pract-
cal result that the $8,OOO,OOO can be safely
made available, directly and indirectly, to the
payment OF no less than $SO,00O,0OO of debt.
We have here selected FIVE as the number of
transfers not as regular standard, but because
case once came to our knowledge in which,
under ordinary circumstances, it was ascertain
ed that 500 had paid in single day $500 of
debt. Believing practical results to be peculiar
ly valuable in the way of illustration, we will re-
late the circumstance. A friend of ours was
applied to in the morning for the loan of 800:
he had not the money by him, but having pre-
viousy loaned 500, to be returned on that day
he went and procured it for the applicant. The
receiver took it, and the same note being return
ed to the original lender in the course OF the
day, he determined, for curiosys sake, tot lind out
through what number OF hands it had passed.
He learned, ON inquiry that the person who had
borrowed it from him had made use Of it 10 pay
a loan from another neighbor, who, in turn, had
paid it to second, by whom it was paid over to
a third, who paid it back to the first lender and
by this means the, note had paid engagements,
within the day, .fue times its own amount. We
give this instance merely by way of illustrating
the every day course of business, and leave 1t to
the intelligence of our readers to make the ap-
phcaton of it TO the point which we are endea-
voring to elucidate. To carry this argument
little further. let us take the case of a
mechanic who earns his ten dollars a week,
which sum will suppose to be the amount
of expense incurred by half dozen or ten fam-
lies with whom he has dealings. On receipt of
his ten dollars, on Saturday night, our mechanic
pays his grocer for the tea, &C.. furnished dur
ing the week, his baker for his bread, his butcher
for his meat and so on. Each Of these persons
in turn pays his little weekly debts, having each
received the sum mentioned in the interchange
of services rendered for work performed Is it
not evident that in its limited circle of opera
ton, if the services reciprocated be among ten
persons, the ten dollars will have paid one hun
dred2 Such is the effect of circulating medium
as experience shows and we are at loss to
discover how the debts to be paid by the $9, 000,
900 can be confined to that any thing like
that amount. 1t will be seen that we have here
taken. for the purposes of the argument, the es-
innate of single departments but if we take
$15,00O,00O the amount contemplated to be fur
nished by the Exchequer scheme alone, to say
nothing of the Government expenditure, we
shall find that, instead of furnishing the means
of paying debts to that amount only, it must
have served to discharge obligations to an inf
nitely greater extent.
Keeping the process above described in view