The daily union. [volume] (Washington [D.C.]) 1845-1857, 1846-04-14
THE OBSERVATION-DISCLOSURES
+ TIoNAL TREASURY. go

THE CURRENCY-BANhIN
TIoNAL TREASURY. 80
We have been favored with the following letter
from political economist in Boston TO Mr. Burke
on one of the most interesting subjects OF the day
There is no question that every effort is now ma
king TO defeat the introduction Of the independent
treasury system, as appears from the following let
ter, addressed TO a member of Congress:
"PHILADELrHIA, April 10, 1916.
"DEAR SIR You may perceive, by the move
ments making here and in New York, how hard
the banks endeayoring 10 grasp the money OF
government, by the panics which they are creating.
The fact is, the government should lose no time to
get all its moneys out of the banks. IL IL beyond
controversy that they have again been guilty OF
loanng out 10 spectators The funds Of government
and now that there is prospect Of It's wanting It's
own, II Is curious to see how clamorous the banks
are, through their poor dupes, the merchants, who
are silly enough to believe that the banks, which al
ways act as curse to them, their best friends.
candldly believe the wicked expansion of the banks
Is at this moment great just prior to the sus-
pension in 1887; and il deposltor are determined
now TO have their money In coin, should not the
government also get its own IN the same currency
have no wish to excite such Panics as the banks
wish To produce but this trick, which has got to be
well known, ought, on no consideration TO influence
any good democrat in carrying out faithfully the IN
dependent treasury bill without the slightest delay
You, sir comprehend the tricks of the banks, and
hope to see every friend Of the people take firm
ground at this crisis"
But 10 the letter from Boston!
BosroS, March 80, 1886.
Hon. Edmund Burke:
DIAR srH-I now fulfil the promise to write let
ter on banking and currency but on renewed exam
nation Of the subject, fna so much has already
all.
tighten, that have no confidence in my own abili-
ty to give any new views upon these important
questions All that aim at, or hope for, Is, TO ac-
tract the attention Of those IN active life who have
not the time or inclination to read books and
upon the subject, and 10 lead such 10 more careful
and unbiased consideration Of the whole matter.
On account Of the tendency Of ignorance and pre-
udice TO view with distrust all reasons and argu-
ments drawn from foreign writers, 1t is fortunate that
on these questions we have high authority in our
own political writers. Mr.. Gallatin, Mr. Gouge,
Mr. Henry Lee, Mr.. Webster, Drs. Vethake, and
MeVIcar, Mr.. w. C. Bryant, and many others; in
fact, there is scarcely an intelligent and thinking
writer or speaker in the country but admits that our
system Of currency s liable TO great fluctuations,
and consequent mischief; and every one must own
tie truth Of Mr. Webster's idea Of the wants Of the
public as put forth at Trenton, in 1874:
THAT which every branch OF industry in this
country most needs, is reasonable and steady, not
extrsvdgant or AuctIating prlces-sudden changes
deprive men Of employment and distress families;
steady occupations with reasonable gains, constant
markets with fair prices, with no apprehension Of
sudden change, and the security that man feels
that that is money which he has taken for money,
freedom from alarm and panic, and no fear OF dis.
order violence, these things comprehend the ele-
ments Of general and enduring prosperity among
the producing and industrious classes Of the com.
munlty."
onn.a.. 10 ~. roor. cor..o, al al;
and every man engaged in trade must feel that our
banking system has induced a state of things the
very opposite Of what is so desirable although as
has been well said by another writer chat through
the medium of currency every mans interest is af.
feced, and that in manner so Imperceptble, and
yet so certain, that though he feel the evil, he
not foresee it; and even il he could foresee it, he
cannot avoid It,"
After the panic Of 1886 81. commerce was subject
to various fluctuations consequent upon the break
ing up of an inflated currency, and attempts TO re-
new it. until 1912, which may be termed the last
year Of the struggle, and in which trade settled
down its natural and quiet basis, and bank issues
limited in amount.
lS42 was, upon the whole, a prosperous year to
the prudent and Industrious trader; and the general
belief that affairs had come to true basis, very
apparent in the increased confidence felt in the
spring Of l543 and the general rise OF prices
sequent thereon.
1 wish those (if there are any ssch) who believe
that an increase of paper money permanently adds
to the pentifulness Of the money market, 10
bear in mind that money has never been more plen-
tfu under expanded, than under restricted cur
rency and that the rate of interest averages lower
in what are called hard money ceuntries-France
and Holland, fer instance-than in those where pa
per money is more abundant.
Banks are necessary instruments Of commerce,
and add to the convenience and facility of mercantile
operations. Bank notes, if founded a solid spe-
Gle basis, are very convenient and almost necessary
but the tendency Of banking from the profit derived
from these issues, is constantly to transcend the
point of safety, and to exceed the amount which
experience has proved to be judicious. IT, then,
the power of issue granted to any corporate
bodies, it should be restricted by the strongest
guards. The usual legislative restrictions have no,
generally been found sufficient for the purpose OF
nsuring the public safety.
Taking the first of January, 1S43, as point al
which the currency was comparatively in sound
state we shall be better able to trace the effects OF
our banking-Upon the amount Of currency at that
time (boh specie and notes) were based the value
of the lands, stocks, merchandise, and every de-
scription Of property throughout the United States;
as the circulation increased, these various kinds
of property said to rise; that is to say, they
command greater number of paper dollars than
they would of silver People said to be making
money; that Is, they nominaly sell their property
IL
profit is absorbed in the increased price they are
compelled to pay for the new investment in which
they place the proceeds Of their sale. For instance
A has land costing in ls43 $4,000, which he sells
in 1916 for 50 500, and believes he has made $500
profit; but it is necessary, in order to draw an inter.
est or income from this money, that he should in
vest it in something, and he therefore buys of B
railroad or other stock at par, which in ls43 was
sold for 80 per cent.
has nominally made $500 by his land, and B
the same by his stock, and yet, perhaps, through
brokers or agents, they have merely made ex-
change The stock and land are Of the same in.
trnsic value as in l843. Mr.. Henry Lee justly
saws that 'this increase of prices Of commodities as
far as it arises from an increase of currency is not
an augmentation Of value" This fictitious rise Of
property has the effect to lead men into speculative
operations and extravagant habits of life, so that
when the reverse comes, it will come sooner OF
later, they find their debts greater than the market
value OF their property, and failure and ruin the
| consequences
II is an error to think that the prosperity of the
country has been increased by the use Of paper
money. 1t has doubtless been an injury. Mr.. Lee
remarks that "the banks as they have been man.
aged have been among the rtadng and are not to be
IL. e Al.