The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-03-14
ind one combining greater safety with equal con

find one combining greater safety with equal con
yenience,
IT, then, the merchant in New Orleans can pur-
chase, with his coin, bill certificate, or instrument,
which proclaims TO all the world that this coin is ac
tuay in New Orleans locked up for its redemption,
and To be kept there until this instrument is present
ed for redemption, and which instrument will also be
received Tor It's nominal amount in payments TO the
Federal Government, IN any part of the Union, he
will prefer such instrument TO a bill OF exchange
or the transmission of his coin. So if a citizen
wishes TO order newspaper from distant place, he
has the alternative of sending coin by private
yeyance, or paper by mail and if he can procure
instrument representing FIVE dollars actually locked
up for its redemption the publisher will prefer il TO
any note oil distant bank, although it be at par in
the place OF publication. In short nobody will find
fault with paper, for the redemption of which coin
to the iu nominal amount is always locked up and
preserved and all prudent men, who have no parti-
san ends to serve, will admit that such currency
would be perfectly safe and eminently convenient
IL IS Tree from the principal objection to bank pro-
misses, expansibility In the banking by which the
country has been so long and much afflicted, the
circulating medium IS augmented and often sudden
ly and this produces instability in all prices and con-
sequently IN all business. Ii causes US TO buy of
other nations more than we sell, because it d.
minshes the foreign demand for productions at
remuneratng prices. If bank with capital of a
million be allowed to issue two Millions the circula-
lug medium is doubled, though one half Of it is mere
ly fictitious, and may be suddenly exnguished To d-
late upon this subject is needless for we have
said enough, for the last six years, to render it in
telligble to all who read and think; but in the
scheme now before Congress, expansion is impossible,
because no paper dollar comes out, unless metallic
dollar goes in, and the paper in circulation is always
just equal to the coin locked up for its redemption.
Thus II certificates of deposite should suddenly be-
come tie only circulating medium in one day, and
every one of these certificates should be redeemed
the next day, prices could not be affected, because
the amount of circulating medium would be exactly
the same in both So if any portion of the coin
should be locked up it would be succeeded by the
same nominal amount of paper and if any portion Of
this paper should be redeemed it would be succeed
ed by the same nominal amount of coin If then,
der this system, the circulating medium cannot huc-
tlate IN quantity, like bank paper, beyond the results
of productive industry, and every certificate always
represents the same amount of coin, and is always
convertible into coin at the place Of issue, the system
Is certainly free from one Of the greatest faults of
American banking.
Another fault of the banking system is its cncou-
ragemen of speculation and overtradng through ia
cility in borrowing The object Of banks is to lend,
and, according to the system, they authorized to
lend more than they worth, and to manufacture
substitute for the deficiency and call it money, up
on the false supposton that it represents money.
But the system before Congress contemplaes no Dor
rowing, because the institution will have nothing TO
lend 1t will have CON- but for this coin il is already
debtor to the certificates issued upon it, and must
keep It to redeem them on demand.
We shall hereafter examine other features of the
plan