The daily union. [volume] (Washington [D.C.]) 1845-1857, 1848-02-12
Mr.. GaIIatlus Views.


We must go further with our objections. We object
to his making the depostes in the New York banks, and
those of few other cities, the only from which
government can borrow.
There is most important distinction between eueu-
lating medium and circulating capital and it is aston
shng that two things different should have been con-
founded by man of Mr. Gallatn's talents and knowl-
edge. Circulating medium, when ii consists of mere
promises to pay whether they be bank notes. or nscrp
tons of credits on the books of the banks commonly
called depostes cannot any proper of the word
be regarded capital in summing up national wealth
1t may be that the banks of country may be able
promptly to meet every demand that may be made upon
them, and yet their notes and their depostes evil
dences of debts due by them
In countries the money of which consists exclusively
OF gold and silver the circulating medium part of the
circulating capital But bank credits and bank debts
whatever form they may assume, cannot, with any pro-
priety, be so denominated
Mr. Gallan, however, argues on the supposition that
inscriptions of credit the books of the banks are crcu
lang capital; and what is more that such inscriptions
of credit on the books of the banks of New York and
few other cities, almost the only circulating capital
available for general purposes
poses in all the banks of the United sates which
truly available for general purposes may estimated as
twice that which is deposited in the city banks of New
York"
"That the deposites in banks the most dsposablc
circulating capital of the United States indubitable be-
cause they bear interest They constitute there fore,
evidently the fund likely supply the of sub
scrbng the loans of the United STATES Is any other
similar fund. any other of dormant unemployed
circulating capital which may, any considerable extent
contribute to the public loans There may be still
snperfluous specie in the interiosome small amounts
boarded up, and waiting for eligible investment
the totar amount that can be derived from that
will be most Insignificant item compared with the
amount of the loan which is required"
According to these views, "the whole amount of cir
culatng capital" in the United States, "avalabe for
general PURPOSES is but little re than fifty millions
namely. about twenty five millions in the banks of New
York. about the amount in the banks of the other
cities, and some small amounts of specie boarded up in
the interior"
Ii this were the the condition of the government
would indeed be hopeless for the merchants and other
capitalists of the large cities would require to retain at
least threefourths of their bank credits wherewitha to
carry on their own ransacons and the ability of the
people to lend and of the government to borrow would
be limited, at the utmost to about fifteen millions
culatng capital in the United States. Mere bank me-
dunn, we atlrm constitutes no part of it. But the ag
sregae amount is very considerable and that portion of
available for general purposes is far larger than Mr.
Gallatin has supposed.
The distinction between fixed and ccu atine capta] is
rather popular than scientific, and different writers draw
the line in different ways In the most general sense all
the capital in the country is circulating capital except,
that which is fixed to terra frma--that is to say, the
land and its improvements All the rest may be made to
circulate, not only by changing hands, but by changing
place In less general sense, only that capital is circu
latng which yields profit by changing hands In this
sense, the machinery of the manufacturer part of his
fixed capital, well his mills and his machinery
His circulating capital viewed in this light consists
only of what he employs in paying wages and purchasing
materials.
Now what may be the amount of circulating capital
in the United States viewed in either of these lights we
shall not attempt to calculate but he who does not con-
found it with the paper medium by which it is cir
culaed will see that must amount to many times fifty
millions.
According to the census of $780, the domestic products
of the United States, arranged by Professor Tucker
amounted 10 than one thousand million dollars,
nat UNI
der the census of $780, the returns OF the various products
of the United States were very imperfectly given By
the United States census of 1910, the products of domes-
tic industry OF Massachusetts represented to be
S7547o297 By taken by the State for the year
ending April ls 1885, they found to be Sll7oi2 e2s
Taking these facts basis, and supposng there to be
the difference the other States the Secretary of
the Treasury estimated the aggregate amount of products
of the United States at than three thousand million
dollars, ($3,o2s s3O0O0 or, as he stated by way of
"In any view OF the case the totally of the
annual products of the United States cannot at this time
QS46 be less than two thousand millions of dollars"
In late number of the Merchants Magazine Pro
lessor Tucker supposes they could have been more
than 500 or 100 millions. On such subject as this
there is room, admit for difference of opinion But
have given the bases of the Secretarys estimates
namely, the United States census for 1910, and the
Massachusetts for 1s45-every reader Judge
for himself
Now, all this annual produc-or at least all but small
circulating capital 1t is not indeed, all
existence at any time in the year, for part of it is
consumed nearly fast it is produced, and part of il
is converted into fixed capital But suppose one-fourh
If il to be in existence on average in each period of
he year, and it amounts, the largest estimate, to $50
Millions, and on the smallest, to 400 millions.
But this portion of our annual products constitutes but
part of our circulating capital To this must be added
Ill the accumulatons of the industry of past years, which
Al. - e al p,t,l