The daily union. [volume] (Washington [D.C.]) 1845-1857, 1848-02-14
Mr.. GalIatin's Views.
On coNTIsUATIoH.)


of inscriptions of credit the books OF the banks OF the
city OF New York, and of about twenty five millions
the books Of the banks OF some other cities but
OF all the loanable circulating wealth of the nation.
According to the lowest estimate the gross annual in
come OF the nation is 600 milons according to the
highest, it is 1900 millions Government proposes to
borrow sixteen millions, which is per cent of the
smaller estimate and little than half per cent
of the larger
Besides this annual product there is all the accumua
hon OF the industry of past years-a too
to be calculated Suppose population TO be twenty
one millions, and the average amount government pro-
poses to borrow from each is less than so cents Surely
this does not exceed our ability to lend
We have said that there is distinction between loan.
able and circulating capital Much OF the fixed capital of
the country is loanable and much of the circulating cap
tal is not All the houses and farms that are let on
hire in point of fact, loaned Government does not
indeed, want to borrow houses and FARMS but those
who have no other possessions may if so disposed, by
pledgng their real estate obtain the of lending
Let government only offer sufficiently high rate of in
eres and many man will mortgage his land and his
houses that he may buy United States stocks.
After all, however, as is justly observed by Mr. Gala
tin, he circulating capital must supply the loans and all
the other means of carrying the war" men who have
only fixed capital become lenders to the government
they must obtain circulating capital from other men.
Of this circulating wealth, amounting to untold mil
lions only part is loanablenamely that which the
owners do not wish to employ in their business
but the annual increase of this fund must amount to
some hundreds of millions. If those who have il refuse
to lend to government, it will take the form of State
stocks bank stocks, or insurance stocks or rail-
road stocks or bonds mortgages or some other such
investments Loaned in FORM it must be- for those
who have it can in no other way derive profit from it.
We approach now the next point in our inquiry and
that is, whether there is enough circulating medium in
the country and whether government get the use of
enough OF it for sufficient time to command sixteen
million dollars worth of circulating capital, without
seriously embarrassing commercial operations
Perhaps may not be unusefu here to point out fur.
ther the difference between circulating capital and crcu-
latlng medium Many persons conound them, and are
apt to attribute effects which result from want of the one
to want OF the other The recent troubles Great Brit
am were not caused by want of circulating medium but
wantOf things to be circulated The issues of the Bank
OF England and of the country banks were as great or
nearly as great in proportion to the things to be crcua
ted as they were in former years but multitudes of peo
pie had not circulating capital enough to obtain the use
of the desired quantities of the circulating medium.
One reason why men confound circulating capital with
circulating medium, is because part of that medium is At
the same time capital So much of as consists of ,od
and silver coin is real bona fde capital the product of
labor; and which may if there be no demand for its func
tons as currency be applied to useful purposes in the
arts But what is true of part men make false when
they affirm of the whole not considering the mportan,
difference there is between different parts of our crcua
ting medium.
Another reason why men confound circulating medium
with circulating capital because bank medium so long
as its credit is well sustained is servceabe to its pos
SCISSOR as so much circulating capital snot however
even them circulating capital 1t is like bonds and mort
gages-a mere lien capital
One important distinction between circulating credit)
medium and circulating capital is, that the latter is con-
sumed in the use, and cannot be replaced but bv an
amount OF labor equal to that which originally produced
1t; while the former Circulating credit medum) can
circumstances being favorable, be reproduced ad hbi
tum. The wages which the manufacturer gives TO
his workmen (not the money, but the real wages the
provisions and clothng) consumed and so much of
the circulating capital of the manufacturer is SUNK and
be replaced only by the exeron of so much labor as
originally produced it. But the bank notes, the medium
used by the manufacturer remain in existence and may
perform the to hundreds of other manufacture
ers The other branch of bank medium-the deposites-
may be said TO be consumed as used but dash of the
pen restore them.
Nations, however, suffer severely sometimes from want
of circulating medium and such was the experience
of our nation in 1sl9'2l, and again in 1s42-'43 We
had in both these periods abundance of circulating
capital lat least abundance of in every form but
one but bank medium suddenly fell in credit or was d.
mnished in amount, and gold and silver could not be
suddenly imported from abroad and as suddenly diff
fused through the country, suffered for time and
suffered severely. We continued thus to suffer till op-
portunity allowed to import additional quantity Of
gold and silver, diuse through the country and re-
store the credit of bank medium.
So long our present banking system continues we
shall be liable TO such reapses For nation to enjoy the
height of prosperity, and for that prosperity to be of
solid character it is necessary not only that its circula
ting capital should bear certain ratio to its fixed capital
but that different parts of that circulating capital should
bear certain proportion to another manufacture
ing community might have abundance of capital but
if it had an of provisions and deficiency of raw
materials, it must suffer; and likewise it must suffer
if 1t had an excess of materials and deficiency of
provisions. The laws of nature would, If we would
let them alone, exactly determine the proportion which
circulating capital should bear TO fixed, and which