The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-10-05
FREE BANKING.

lied country. Free Banking must certainly
result from the abuse of the Banking system,
and upon that subject now let me offer few
reflections.
1t is very remarkable that after all the discus
sions which have been going on for years about
he Banks and the currency, you Will not meet
with an individual in a hundred who knows
anything about either not one IN Thousand
who knows that monopoly constitutes the Pec"-
iiarity of our Banking system. We are the
only People on earth who have made Banking
a monopoly. Everywhere else, except for oo
miles around London, it is open for every one
that pleases 10 engage in ii, like every other pur-
suit Our boosted credit system reminds US oil
the derivation of "Locus a non tucendo" IL
is called our credit system, because II prohibits
US from using our credit in one Gifts most valu-
able and useful forms. Reason and philosophy
would teach US that free competition in banking,
as in all other pursuits, would be attended by
good results. Experience leaves no doubt GA
the subject, for banking is better conducted
everywhere else than with us, and no People
have so fettered and restricted the banking prI-
ylege as we have; yet despite OF the teachings
of reason and experience, he who proposes Free
Banking with US is looked on as a VISION
airy, reckless innovdtor. Could public alien
ton be drown 10 an investigation OF The sub
jec, we have no doubt that all our State re-
straining laws would be repealed and the evils
of our banking system thereby corrected; but 1t
isunext TO impos sibe to convince any people, IN
,Lo "a tbof, hart hpvh a "A
been accustomed to is not right
We will succncty state a few Of the reasons
why private banking is preferable to corporate
banking:
1st Bank notes circulate on the credit OF the
debtors TO the Banks, and must be redeemed by
those debtors, who not The portion OF the
community most distinguished for credit, wealth
or punctuality.
I'd. Private paper would be successfully issu-
ed only by individuals distinguished for ntegri-
ty and punctuality, or by those who possessed
undoubted wealth.
Sd. The debtors to the Banks, the real issu-
ers of the Bank notes, receive no interest from
the public for the use of those notes and derive
from their circulation no increased means of re-
deeming them.
9TH. Private bankers would get interest on all
the notes they issued and have no interest 70
pay so that their means of redeeming their
notes would be continually increasing.
5ih Corporate Banks are managed loosely
and extravaganty, because the loss or gain Is so
minutely divided that no one feels it his peculiar
business TO attend to it, According to the old
adage " what is every body's business is no
body's Blu ,ness"
9Th Individual bankers would manage their
affairs with prudence and economy, because
the whole gain or loss would fall upon them
selves.
7th Private bankers have souls and con-
sciences TO deter them from dishonesty, and are
surrounded by society, which Is sure, in some
way 10 punish their moral delinquencies.
Sth Corporations have neither souls, con-
sciences, nor bodies, and have eyer been proven
bally Observation-Disclosures very often, when
composed Of honest individuals
9th. Corporate banks have fixed amount of
capital and the amount of their issues cannot
safely huctuate with the demands of trade, the
rise and fall of prices When our exports fall
greatly in price in foreign markets, prices gene
rally fall at home, less paper is wanted for cir
culation, and the bank notes returned on
the banks for specie to supply the deficiency to
pay foreign credtors--this occasions suspen-
| sion.
10Th. Private banking, like all other business,
not fettered by restrictions and monopoes,
| wnulI ho cd hu he 1auo nd mi "a
tai would be invested in it when prices were
high, and a large circulating medium required :
when prices fell, capital would be Withdrawn
and applied TO other purposes.
1lth. Corporate banks so connected with,
and dependent on, each other, that when one
suspends, ALL suspend.
18th Individual bankers would be too hume
rous and too prudent to form such connexions
and the failure Of one or more bankers would
not affect trade generally.
18Th. Bank-notes have a forced circulation
from the connexon Of the banks with Govern.
ment, which receive their notes in payment OF
taxes, and in practice, though not in theory,
compel men to receive them in payment OF
debts Hence bank-noes expel specie. Pr-
vate notes would never be forced into circulation
by law, nor their suspensions legalized. Hence
when private banking is permitted, specie al
l ways bounds.
18th. The public would be less liable 10 impo
sition from private bankers, because it is less
difficult TO ascertain the sovency of an ndivi
, dual than that of a corporation.
These, Mr.. Editor, are few of the argu
mens for free banking and against restraining
laws, but the best and most conclusive argu
ment is drawn from experience. Free banking
has always succeeded Jour monopoly system ha:
been a monstrous and wicked failure.