Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1842-02-24
No. 94.--VOLUME XXXyIII.

'ss monty called specie paying banks. The persons ssu
g ing this, may err in judgment the capacity of the
ne market to hold it in circulation; temporary and un
On natural capacity of the market this respect NAV be
81 sudaeny followed by construction of it which the
cuuia NOT ioesee IN season; they may the pursuit
oe GAM extend their circulation by artificial means 10
Inc certain prejudice of the community The true and
- ecient check to this excess of issues whether the
cess be wiltul accidental is the rigorous enforce
8, ment OF payment of the bills in COIN at all hazards
IS and by the full power of the Government
a Without this the evils of paper currency are greater
i than its benefits For one of the advantages of metal
Tic money is It's comparative stability in value il having
'r natural price, measured by the cost of production
/ But paper currency has intrinsic value il is srscep
uoie OF imitable augmentation in quantity; and the
amount of it, which may be held in circulation al a
gwen moment, depends part the hopes and expec-
tatlons OF men, and the extent of business which they
, may thus be prompted to undertake Hence the nlu.
iious hucYai'nns 10 which paper currency is subject
perpetual redeemabiy IN coin is at the check 10,
ana the partial remedy for, tins disease Of paper cir
: enlation
fo 70 It still remembered that, in the opinion Of the
most "a .onced writer's, the issue of paper
perfect when than equal in amount IN given
country TO what the currency Of that country would
be, if It consisted only Of gold and silver
$ Governments have generally that the faculty
Of issuing paper to circulate money should not be
conceded to persons engaged in the business of trade
Tor u y were, issuing bills at discretion they might en-
gross directly an indefinite amount Of the property of
the community. Accordingly, the privilege has usu-
ally been granted only TO persons companies engaged
in the business Of lending money. But the persons
constituting the company, controlling its affairs may
themselves be borrowers; and then the restriction be.
comes nugatory one; for in that they create
currency to use it in trade themselves; which, not tho
least frequent cause of bank issues and has
led TO the opinion entertained now by MANY that mas.
much as the business of trading and of issuing paper
currency should be separated for the same reason that
OF lending money, and OF issuing paper currency,
ought not to be entrusted TO the same hands.
In case, however, the Government itself be borrow
er, and does not choose TO issue paper Of its own to
circulate money, it may, and often does attain the
end by the establishment Of bank Of ISSUE for
the very purpose OF arranging its debts anticipating
its revenues Hence the origin, in many cases, OF the
direct association between governments and banks
So that in all communities, and in every form in which
currency exists, whether coined money paper
representative of and whether this be issued by banks
or public authority directly, the question Ct the
cy OF the country and that of its fiscal affairs are nsc
parable facts.
And next 10 taxation ITSELF the question Of the ma
teral in which taxes shall be levied, whether in kind
or an equivalent, and if So whether in coin or mol is
the most important Of all. The question Of the place
and agent OF deposite or transmission, conve-
nience security use that of the standard and ma.
terla OF payment is Of the substance Of the thing
These general results, applicable to all systems of IL
nance are derived from the experience of Eu
rope and America. In the u. S. the application cfthem
depends on the peculiar form and organization of our
Government.
Our political institutions the work of compact
and consent. To the Federal Government belongs all
such legislative and administrative power and such
only, as the Constitution defines all functions of CO.
vernment not thereby granted TO the Union remain
ing 10 the separate States 10 The people thereof and
the States themselves possessing many Of the substan-
tive powers Of political sovereignty.
Among the substantive powers of political soye.
relgny exercised whether rghtiully nop by each
Of &aasnEs i ptper 10 i c1ifcdate as currency
The faculty of issuing paper to circulate currency,
n necessary incident OF the faculty 10 receive
money in deposite and TO loan il IN the discount Of
notes and purchase of bills than il IS necessary inc
cident of the faculty to buy and sell merchandise.
bank having authority to issue bills, after purchasing
bills with THAT is loaning OUT the whole of its capital
proceeds to purchase other bills with It's own promises
10 pau Thus il does business than if rigidy
confined TO its capital it could and makes interest on
its own credit promises well as on its capital
The real operation would be the if the merchant
had the same authority. Yet, by the practice in tic
u S., not generally in other countries) the two ia
cultes of loanlng money and OF issuing currency are
conjoined in the banks of the States.
1t may well be doubted whether the bills SO issued
by the banks Of the States, and constituting curen
cy are not bills Of credit within the meaning OF the
prohibition of the Constitution.
Historically, it is demonstrate that the expression
"bls of credit applied, in all the period anterior 10
the adoption of the Constitution, 10 these bills of banks.
There were two forms of bills OF credit recognised in
bills of credit" and ssbank bills of credit
ltseems difficult to conceive how these two species
Of the same generic thing to be considered SO tar
different as that one should be constitutional and tho
other not To be legal tender is not of the essence
of either that is, each had been issued extensively
without being declared legal tender and in all other
respects they effect and mischief the same; tend
ing in the same to excess, alike usurpng the place OF
money! producing the disorders in the currency,
and having the deeterous influence over the re-
lations Of labor and property.
And it would seem 10 be strange anomaly OF Tue
fundamental law, or if not anomaly, then oversight
10 provide that State shall not issue bills OF credit ny
the instrumentay Of legal person called its reasu
rer" but may, by means of legal person called iis
bank;" in other words, that it cannot, and yet mat u
cam be the dervative source OF the issue Of Dhis OF
credit.
Nor does il vary in principle, enact that the bank
shall consist in part in whole of incorporated private
stock This appears by the PRACTICAL TACT OF inc ses
Most of the banks of the United States, South OF New
York have ceased pay their bills in cash. large part
of them having failed 10 make any effective redemption
for the space of than four years. Their bills are
an irredeemable paper currency And their continued
rredeemabty has been legalized by State Legislatures
in many instances, the means of procuring TO The
use of the State Government an issue OF bills OF Gre
dit with which TO deray the charges Of the State, m
stead cf levying taxes the inhabitants Tor mat puf-
pose The State cannot issue bills OF credit by It's urea
surcr but it and does by IFS banks; when IS one
great cause of the existing disorders in the currency oil
the United States.
Thus of the sovereign function TO make, ISSUE ana
regulate money, Tor its substitue) the State Govern
ments whether BY usurpatlon or cons,uonai''y IS
immaterial TO the resulV possess part IN common
with the Federal Government.
And this is the radical difficulty in the whole mat
ter Of the currency For the States have the power
so 10 issue bank bills Of credit, then the Federal Co
vernnent canno, (by any direct legslation) prevent
their issue, and of course cannot (by any direct legs
ation apply cure to the inherent chronic disease o.
the paper circulation of the United States Whether
it may administer any indirect remedy S'ii oe seen
hereafter.
1t is of the power and duty of the Federal Govern
men in the first place. to provide for ITSELF sale ana
suitable fiscal agent receive, keep, and dsburse the
public moneys. This it does under the tax power ara
other powers of the Constitution.
The Federal Government has, in the second p!ace,
under m ore than one claus, Of the Constitutions certain
powers 10 exert and duties to discharge concerning The