The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1842-04-16
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and are only nominally in favor of the latter city, in con. |
sequence Of the deception caused by the depreciation .of
the local currency. If resumption were forced immedi.
ately at those points, the precious metals would rapidly
aow towards them. The same state Of fittings existed in
Philadelphia and Baltimore previous to the late resu mp
ton. When questioned as to their abili ~ TO resume,
some of the Bank officers OF the latter city had the super. |
la.ive folly to plead inability on the ground thai exchange |
was against Baltimore, because the currency of Balti.
more was deprecated by the acts ofthose officers. The
following vast the remark of the President Of the Bank
eff ltimors to the Committee, which we published in
an article ofJanuaiy u, with comments, as ollsws:-
"N must be evident to The least ref ection. that should |
the banks in Maryland resume spe lie payments, whilst
those Of Virginia and Pennsylvania, now largely indett.
ed to us, remain sus pended, that a very large part of our
city banks circulation will be presented for payment |
in coin, to be Afterwards sold for the premium, and ex.
ported from the country. The unavoidable policy of the |
mediate resumption, must be at once to cease making
any loans or discounts whatever. and the distress that
willie ensure to our whole community, it would be super
Auous to enlarge upon"
Let US now look at the actual state of ex changes, as in.
Dictated by the rates current in the Baltimore market
s,sh. .,,. . : R so.,., OF BILLS AT BALT'sGnr: =.
s'''' gus on s ST. City ':' ct s ':sa'
Sae sSis, $. c. e gar a II ! per per Ct G: P si:e,:
Specie, including American gold, asa- prem.
From this table it appears that bills on New York are
att aparfor specie, while bills on Richmond and Phila.
tNSApuAo ~ " uAsOount UtluS dctu8kly the
creditor city.
This was our view in January last. and since the
banks have resumed with the most perfect success; and
as the banks themselves acknowle 'ge, they receive
more specie than they pay out. At this moment resump-
ton throughout the south and west couli be effected
with the most perfect facility. The cupidity Of the
Banks, and the folly of the Legislature alone prevents
such a Even the Federal Government,
to which the hopes of the mercantile community have
been directed for the last year for relief, has not only
done nothing to restore confidence, but like the most
disgraceful OF the state governments, they gave q fur.
Their dispensation to the Banks .fthe District of Colum.
bia, thereby adding their example to increase the gene
raj want Of confidence. The force Of public opinion
will, however, soon set at nought the weak legislation
of interested politicians.
The idea of q metallic currency, which it has been the
custom to ridicule for years, is every day assuming a less
1udicrous form in the eyes of commercial men. The
great and enormous evils which have attended the issue
Of paper money are such as greatly to overbalance the
good that comes out of banking. 1t is an undoubted fact
that, if the currency Of this country were at this moment
exclusively metallic, money would be infinitely more
abundant, great causes of distrust would be removed,
and specie, the pressnce of which is itself confidence,
would flow freely, and commodities would be exchanged
rapidly. The legitimate business Of banking is to supply
the money to traders, which they want to make a pur-
chase in their business without banks. A dealer having
purchases or payments to make would, in anticipation
Of them, be obliged to accumulate and keep by him a
sufficient sum in cash to meet them. This exposes him
TO a loss Of that which he would have made on that
money lying dead, had it been actively engaged in his
business. To avoid this, capitalists who have money to
loan form a company which they call a bank. To this
bank all dealers in good credit can come and obtain
money at the moment if they want it; consequently their
own capitals can be entirely employe ed in their business
From their sales they reimburse the bank for the loan
which thus always receives, or should receive, as much
with one hand as they pay out with the other. The &C.
tual money Of the capitalists is thus brought into the
assistance ofdealers advantagtously to all parties; but it
has come to be true, that the banks, instead Of loaning
that money which they actually possess to the dealers,
have been in the habit of investing it in mortgages,
stocks, and other property, and of loaning their credit
only to the dealers. This credit is issued in the form of
paper TO circulate as money, and can be increased in vo.
lums at the will of the issuers, checked only by the
state oil public opinion in regard to it. In this consists
the great evil of banking, and from this source arises
nearly all those disasters that svertake the commercial
world whereas, If capitalists or banks were restrained
from loaning any more money than they actually pos
sess, the productive industry Of the country would regu.
late the volume of the currency, which would always
bear an exact proportion to the wealth Of the country.
II the wealth of the country increased faster than the
metallic circulation, prices would fall, or, in other words
that Of specie would rise, and it would come in from
other countries for sale. IL the wealth Of the world in
creased faster than a inst proportion of specie. it would
become more profitable than it is to mine the precious
metals, and their product would increase precisely the
same a. any other article which becomes relatively
scarce.
The constitution and the laws furnish a currency Of
gold and silver. To establish a Bank, then IL capitalists
pay in for its capital 500 900 in gold aud silver; instead
Of investing that money in property and loaning their
credit, they are rs luired to lend their capital or actual
money on nero antile bills, promptly payable at the end
ofsixty days, the volume of the curren cy could never
be increased beyond that Ii nit fixed by the industry and
prosperity ofthe country; and banking by discount and
depo site, would be prosperous in the exact ratio in
which trade is increased BY the actual increase Of the
national wealth. The Banks Of London are not ALLOW ed
TO issue paper-.hey are banks of discount and deposits
oplv an do their business with the currency furnished
bv the Bank Of Englsni; and yet that business Of dis
,coun, and deposite only is lucrative enough to cause
great competition for it. The great business Of this AM
all other countries is, and always will be- done through
the medium Of mercantile bills OF exchange, these hsv
ing nothing to do with the vile paper issues oil the BANK,
on the contrary, their stability and usefulness are niue