The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1843-09-25

J.303
re ia observed, that specie il generally as great
and sometimes largely in excess circulation The
latter is positive expense especially under the opera
lions Of the law, and loss interest is sustained
on the large amount of specie hand. These corsi
deraons principally governed the Manhattan Bank to
cease issuing notes altogether and they did from the
date Of the operation of the law At that time she
stood as follows
Specie on hani. 5000 o2s
CifCuihtion. LOG 5i2
In such state Of things there can be profit On cir
culaop, and when the law required ell chartered
banks register their bills she took that opportunity to
cease issuing altogether, and keep less specie on hand
In sucn state vi things the government notes form
very desirable circulation. Precisely analogous to this
is the conduct of most Of the English joint stock bar KS
They are not obliged to keep specie hand because
Bank oil England bills are legal tender. Yet large
number OF them, rather than issue their own bills form
an arrangement with the bank of England, by which
they obtain sufciency of its bills for circulation at
rate varying from u to per cent according to special
agreement these they pay out in their business and
their profit consists in the difference Of the of interest
they charge. lwoud undoubtedly, in this view Of the
case be to the advantage of the city banks to
recall their circulation and that Of the Treasury
department, or they continue their own circulation
and retain the latter in the place of specie.
II follows, however, that to redeem these notes in spe.
cc fund must be here to do This is always furnish.
ed by the receipts at the custom house. which are about
SiooooJo per month"; annually, and always accumulate
faster than $4,000 900 of government bills disseminated
through all the channels of internal exchanges could
ever be presented for payment In giving perman ept
character to such circnatien however, it would be
sirabe 10 make proportion Of the bills pay able at each
leading city, equivalent to the ratio OF
bic there. That say, SO 900 goo Of notes we're is
sued, s2ooooGO should be payable in New York only,
end $4,000 at New Orleans only and the balance pro
at other cities. Yet all the notes should be
ceveable every where for public dues The
of this would be, that adverse exchanges would
bring all the notes 10 point, TO exhaust the
Of meeting them. The accrping revenue of each
city would always afford fund prOportionate to the
maount Of notes liable to there for redemption.
One Of the greatest evils Of paper issues is its fuctua
ting character In fact there would be objection
moderate Gred amount Of paper put shoa il the
was unchangeably fixed at certain point that, not
whstandng its existence, the fluctuations Of the whole
mass Of the currency will take place only in accordance
with the movements of trade. Thus if the whole amount
of specie in the Union is 500 OOO and the quantity
which flows in and out each year in accordance with the
movements OF commerce is $40 OOO then there re
mains $50 OOO fixed amount in the country which
10 used currency partly but mostly laws lille in III,
back vaults. Now OF that amount $40 600 900 could b,
turned into government paper which would be absorbed
in the channels OF exchange operations leaving the re
maindcr 10 come aud go as 1t pleases The danger is
however that the amount outstanding would be altered
that il would be increased diminished and thus create
disaster, as in the use OF bank pa This government
paper would constitute permanent debt the govern
ment costing only the expense of its manufacture, and
rs long the necessity for that debt existed now
the case would offer faci ities which would some de
gree, counterbalance the evils of its existence
In fact borrowing in such form doing directly from
the whole people, instead OF indirectly through the
dim OF banks The law Icstrcs the amount OF Ire
ssuTy notes, as we have stated at S5000C0o aud cannot
CO increased without legislative action. Hence antic
patio from this movement greatly stimulated internal
trade Government debts will be paid by IL ia all corners
Of the country, and chain of Indebtedness equal 10
perhaps $50 coo 900 will be effected by the passage OF this
additional amount OF currency to the great commercial
centre.
Thc amount OF this money authorised is not more
than will be kept in constant activity by the
receipts and expenditures. The government receive,
mo.y at the ports an average of S25Ooo0Oo Thi,
y'ar, however, the customs scarcely SI9 OO0oo0
The -verage receipts are however saoOOOOo per month
In certain sections and tho expenditures much in other
see5ns consequently $1,000 600 in government paper
psd "" all over the Union on the st October would b,