The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1847-10-02
Opinions Of Thomas Jefferson.
OF THE BANKING SYSTEM.

OF THE BANKING SYSTEM.
"The system of banking we have both
equally and ever reprobated. l con-
template it as blot left in all our Con-
sti,utions, which if not covered, will end
IN their destruction, which is already hit
by the gamblers in corruption, and is
sweeping away in its progress the for
tunes and morals Of our citizens. =
And sincerely believe, with you, that
banking establishments are more dam
gerous than standing armies; and that
the principle of spending money to be
paid by posterity, under the name of
funding, is but swindling on a large
scale."
"Capital may be produced by indus
try, and accumulated by economy; but
ljugglers only will propose TO create It
by legerdemain tricks with paper"
OF THE EFFECTS OF PAPER MONEY.
"To trade n equal terms, the COM
mon measure of values should be as
nearly as possible on par with that of
Of Its corresponding nations, whose me-
dunn is in a sound state: that is to say,
not in an accidental state ofexcess or de-
fciency. Now, one of the great ad- /.
vantages Of specie as medium is, that
being of universal value, it will keep it. /
self at general level, flowing out from
where it is to high into parts where it
is lower; whereas, if the medium be Of
local value only, as paper money, if too
little, indeed, gold and silver flow in to
supply the deficiency, but il too much
il accumuiates, banishes the GOLD and
silver not locked up in vaults,and boards
and depreciates itself; that is to say, its
proportion TO the annual produce Of in.
dustry being raised, more of it is requir-
ed to represent any particular article Of
produce than in other countries. This
is agreed by Smith, the principal advo-
cate for paper circulation; but advoca-
ting it on the sole condition that it bs
strictly regulated, He admits, never
lheless, that the commerce and industry
OF country cannot be so secure when
suspended on the dedalianwings of pa
per money, as on the solid ground of
gold and silver; and that in time ofwar
the insecurity is greatly increased, and
great confusion possible where the cir
culation is for the greater part in paper.
OF PAPER BEING AS GOOD AS SILVER.
"lt is said our paper is as good as sill
yer because we may have silver for it
at the bank where it issues. This is not
true. One, ,or three persons might
have it; but a general application would
soon exhaust their vaults, and leave a
ruinous proportion of their paper in its
intrinsic worthless form. The inhab-
itants ofthe banking cities might obtain
cash for their paper, as far as the cash
Of the vaults would hold out; but distan-
,e puts it out of the power Of the coun-
Try to do this. A farmer having note
,f Boston or Charleston bank, distant
hundreds of miles, has no means of call
NC for the cash. And while these calls
ire inpracticable for the country, the
,anks have no fear OF their being made
rom the towns; because their inhabi-
ants are mostly on their books, and
here on suferance only and during
rood behavior"
"lt is a palpable falsehood to say we
IAN have specie for our paper when
ver demanded"
ADVANTAGE OF SPECIE CURRENCY.
"The sum of what has been said is,
hat it would be best our medium should
e so proportioned to our produce as
0 be on par with that of the coun-
les with which we trade, and whose
,edium is in sound state; that specie
, the most perfect medium, because il
will preserve its own level, because
aving intrinsic universal value, it can
ever die in our hands; and it is the
urest resorce of reliance in time OF war;
lat the trif1ing economy Of paper, as
cheaper medium, or its convenience
,r transmission, weighs nothing in op-
osition to the advantages of the pre-
ous metals; it is liable tobe abused,
as been, and forever will be abused, in
very country in which it is permitted;
lat it is already at term Of abuce in
Iese States, which has never been
ached by any other nation, France
whose dreadful catastrophe
oulG be warning against the instru-
snt which produced it," y sas 4AW