The Caledonian. [volume] (St. Johnsbury, Vt.) 1837-1867, 1844-06-10

nOps TOWW,
his farm and with money in his pocket, if he wishes
10 buy more than no has 10 sell, or bringing home
more money, if his sale exceed his purchases
But 10 tho intercourse ofnntons, there are things
which affect tho simplicity Of this proceeding and
render il little more complicated without changing
its nature. Tho one orDiIs Of Exchange is universal
Bills Of Exchange prevent, in very great degree, in
settled state Of trnde The actual transmission Of coin
from country to country. They run tho round Of the
whole mercantile world, bringing nations to settle
mont, each one worth all the rest, paying The
debts to another, by drawing on its funds in the
hands of third, and envng coin to be chilled for
Iy where tho balances of debts considerable, or
appear to be accommodating ut some one point. Lon
don may be regarded as the centre OF exchanges Tor
Europe and the City Of New-York, for this Country;
Paris Hamburg and Amerstcrdam being auXilinries
10 London and Boston, Philadelphia, Baltimore, Mo-
bile aud New Orleans auXIiTies tI New Y ork Tho
State of Exchange, Them nj any t'mc between New
York and London, shows substantially the state of
trade in the aggregate between this country and Eu
rope, and the balances actually existing, to
arise on the one side the other. Speculatons,
founded IN calculations respecting future events, such
as tho probable amount Of staple articles, for the
ycnr, the results Of manufacturing industry, the
probable rise or fall Of prices, aud other such things.
affect to certain degree, the actual rate, Mt which
Bills &c Exchange bought and sold and thus quail
ify that which would otherwise be tho result of
fact, with more or less. of the nlluenc Of opinion
Still, the general ard the safe index of ie state Of
trudo, ia the state of the Exchanges.
10 an accurate understanding Of this subject how
ever, il is necessary to bear in mind that the nOmnal
exchange between the United Suites and England
does not correspond with the real commercial
change; by of the difference, which the laws
Of the countries have established IN regard TO the
value of gold, and Of the incorrect estimate usually
made here in the business Of Exchange, Of the value
Of the pound sterling. In Exchange, the pound sler
ling is received at AZ; its real value may be put
Mt So 80; and the law Of Congress regards it This
difference amounts to per cent; so that when bill
Of Exchange is bought in New York payable in Lon.
dom in sterling money, if the premium given for it
do not exceed per cent, it is really purchased vt
bout par and in this state of Exchanges there is
danger of the export Of specie
This topic may be hlJnghl to be not altogether fit
for discussion here. But have mnde these remarks
upon it for reasons which have already stated and
for the purpose Of preparing the way lutte for opin
ions which enter tain on the subject of a mixed me-
tlc and paper currency, and the influences of this
currency on foreign trade, and which opinions
wish briefly TO state. And wish TO do this ut this
time, because think foresee tha in the progress Of
no great number of years, probably sooner than most
men suppose, the currency question will again come
To be question of great interest
Gold and silver as have already said, constitute
the standard of value and medium of payment among
nations The same is true in effect in domestic trade
and among individuals. But hee comes in the mod
ern of Bank paper rs the representative Of gold
md silver which supplies the place Of COIN and al
most supercedes it in domestic transactions. Most
commercial countries authorize the circulation is
greater less, according to circumstances and to the
habits of the people In the United States and Eng
land is large, in France it is less.
am not speaking Of Government securities,
redeemnbIe Treasury notes or anything of that kinds
] am speaking of Bank notes promising payment in
specie on demand, and circulating cash. In the
United states such Bank notes are issned by many
hundred different Banks. They pass from hand
hand rs money, and little gold aud silver is in
the daily business oflra. This state Of things is
venent, far as local circuntons are concered, and
while the use Of paper Is restrained within just limits
But then comes the question What are the inst lin
its 2 and who is to preserve them? What IS the
standard by which to decide the question of
excess, excess! And who is to support this
stanford
Is there, or is there not, ar may there be- can
not there ever be- excess, 80 long as the tanks
able to redeem their paper What do we mean by
excelsior over issues or njudicious suPerabundance
ofpaper
To answer these questions, must remember,
that the operation of bank paper is representa-
tive character 1t represents coin. But this repre-
sentative, like other sometimes lorgets
its constituents and sets itself up TO be somebody,
something; when ofitsGf, it is nobody and nothing.
The one dollar bill which you have in your pocket.
is no better than blank paper, except 81 far as you
have confidence that it will whenever you wish bring
n dollar into your han DIS. bank note, protesting II
represent coin, and being true representatives,
respectable part in the drama of commercial affairs;
but when it sets up Cor Itself offers itself in in
moonshine." The security of paper, first against the
insolvency of banks, and secondly, against the gen.
era evil of issues& inf .ted circulation consists
in maintaining just and direct relation bet,ceea the
amount of paper, and The gold and Srer ,ohich rep
reSents do not of course say relation Of equality
but n just relation, and direct relation In other
words, mean to say, that when the of trade
withdraws specie from the country, then the amount
of circulating paper should be proporonably dinn-
shcd. Bank notes will not pay foreign debts Strnn-
gers will not trust this representative of coin Here
think, lies Of the great temptations excessive
issues Of paper. Then trade is such, that balances
rising against abroad s. the exporton of specie
commences. There those who always desire an
enlargement of the paper circulation, to supply the
deficiencyand to keep up prices. But enlargement
Of paper issues, under such circumstances, il the
first step towards crisis, commercial distress, and
revusion. This country is full Of enterprise. No
people have Almost every is active
WHILE at the same time, and for the reason
capital is less abundant than in older countries These
circumstances keep up a demand for loans and DIS
counts, especially in times of activity, and although it
doubtless that well conducted system of paper
circulation may, to some extent act expansion Of
capital, and, in that way he useful in
try, yet men too apt to delude themselves with
the idea that paper is currency.
But, am now considering mainly paper currency