New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1851-03-13

time the soida rity Of their operations. ouer
probability Of payment which may be trusted as
fit were a certainty. Gold useit IS less secure
In fact If in the general way Of business. II may
he said that bill OF exchange drawn BY good
house. ureseDts two chances OF pas ment Tor one
of non nsymept the same bill, if endorsed by
smother good house would offer four times as
mary chances Of payment; add il IL has three
four or more good endoIsers, the goodness OF Ine
bill viii be increased in geometric ratio 20 tne'I
number, or in proportion to the lmProoaoii''y SuHs
the endorsers will all become bankrupts before
the bill becomes due. How great then must be
the security Of bill Of exchange guaranteed oy
100 coo substantial endorsers, who all nave
great interest in the circulation OF the paper sueu
under their united guarsntys. -,
add that this new paper is not susceptloie Oh
depreciation. This is owing in the hrss place 20
the complete solidity OF body OF loo'ooO enoors
era bnt there ia another cause which is more III
rect and If possible more satisfactory; it is in tho
fact that there never can be an over issue oil the
new naper as there often is OF the ordinary kinds
OF paper money, because it is only issued IN ex
change for good commercial paper, and In proper
tion 10 the real exchanges OF products which take
place in the community.
The insecurity Of paper money OF all kinds is
occasioned by the deficiency Of one or the other
If tbe,e four essential qualities, limitation as TO
issue. guaranty, acceptance, orproylslon Tor pay
ment .,
Tins. compared with bank notes we are more
certain that the issue does not exceed that OF the
assets bv which 1t is to be met, as vas the case
in ls4s. in France, when the Government forced
the circulation of the bank paper, so that the
bank received instead Of giving credit and its
bills became simple acknowledgements wlsnout
either acceptance or guaranty
AS Tor that paper money, which is based on real
estate it's least defect is, that it is not reallzabe
at will, and that il is consequently as II 1t were
without guaranty.
In the system propose, the paper Of the Bank
of Exchange, which is sign OF credit, and the
circulating medium, will DC secured on the best
commercial paper, which represents products de-
hrered and not unSotd products. This paper
say, can never be issued in excess, because II is
only delivered in exchange for value It can
never be refused in payment, because II has been
endorsed by great body of producers,
The carrying out of this system would DO entlrely
without danger, from the TACT that IL may 20 S'o9
on small scale, without deranging general ousi-
ness. NJ e ~
Surprising that to this effect BANK OF Elk
change should begin operations with list OF lOOO
snbscribers instead of lOO0 600 the amount OF pa
per issued by it must be in proportion to the ous'
mesa of those subscribers, and negotiable only
among themselves but they could add gradually
to their numbers, and increase the amount OF tnelr
paper in proportion to the mercantile standing
of their new members and 1t would continue TO
circulate among themselves until by degrees the
whole people would join them the issue oil paper
would then be always on e level with the totallty
of the products in circulation
familiar comparison will render the "oIAinS
of this plan perfectly clear Twenty persons
meet in a house TO play, (gamble.l Instead Oh de'
posting cash, they make use OF counters wuiIn
thew have received from the head OF the establish
ment either for cash, or if OF known solyency ior
tbeirown signatures After they have done playing,
the banker will give cash for the counters, and tne
players will not have any settlement to make De-
tween themselves. In this company the count.
ers-guaranteed by the banker, who is himself
guaranteed by the sums which he receives, or by
safe sgnatures-are in fact money.
The Bank Of Exchange fGllills the same once as
the chief of such An establishment. Through It's
Intervention the 100000 members have the same
relation 10 each other ss the supposed players,
the bank supplying them with notes instead OF
counters. These notes represent good CONNER
cial paper, which represents products; consequent
ly they are payable in products. Ihey are uelIV
cred to each member only in proportion 20 the
amount of his known regular business. that Is 20
saw. against goods delivered, or az least ordered ,
and this excludes the sUPPositlon OF an sohormab
irregular, or disproportlonate production.
do not consider any further explanation neces-
saw. men of business will easily lay hold OF my
idea. and supply the means OF carrying It OUT.
To those who iudge only by material appear
o,co notbino can more resemble ordinary pa
per money than does note oil the BANK Oh *
change. But for the economist who can iolly
appyeeiate the idea nothing can be more differ
ebt. They are two instruments which. while
they are Of the same material, under tue same
form, OF the same denomination, and put TO the
same use, are in complete opposition 20 each
other The one is, in fact, the expression OF one
sided credit. The other is the expression OF re-
ciprocal credit. The first IS guaranteed By gold,
saTer, land, me promise Of G0reTnmeHtj me
second IS secured by Products. That represents
anarchical and monopozing commerce: this rep.
resents equal exchange, and mutually responsible
commerce.
This is the idea which has been SO constantly
sought by Law, Ricardo, and all the economists
who have endeavOred to solve the problem of
circulation and credit; they have never arrived
at any other results than those OF reproducing
the idea Of paper money under forms more or
less disguised, and of organizing bankruptcy.
This has been the forced and natural consequence
OF their having accepted metal as the standard OF
value, having sought their guaranty either in
cash or in business capital, and having backed
themselves by the land and by the Government,
each in it's turn
Propose by my system to develop the indus-
trial resources OF the country, which are at pre-
sent useless for want OF the mutual credit wnich
that system will occasion. By it propose also
TO repay Immediately the required credit TO de-
stroy speculation at its source, and 10 produce
cheapness, which is equivalent to wealth, by re-
placing the arbitrary price of goods and services
by their cost price. Propose also to organize i'm
mediately circulation hitherto unknown in the
annals OF commerce to increase business beyond
example, and TO render the occurrence of financial
crises impossible, by organizing a Bank Of Ex-
change according 10 the principles which consti
tute the Bill Of Exchange.
The realization Of these projects will be carrying
into effect the grand principle ofrecprocty which
governs the universe, and the frat free and intel.
hgent application of that principle
The first consequence OF the organization of
mutual credit and of the Bank Of exchange, will
be the abolition Of the metallic currency, which
will be only used for small values; the metals
will become mere merchandise or be used only in
the arts.
This will be the end of the reign Of Finance
the banking trade will be positively as well a.
Justly suppressed. The withdrawal oil specie by