The daily union. [volume] (Washington [D.C.]) 1845-1857, 1851-06-06


uaaks asd DssAsn~.
Yesterday submitted few remarks on this subject;
bal importance. the present condition Of the country,
demands further comment
We have already alluded 10 the policy OF the admins
uslon relative to coinage. aud have spoken Of the Ten
dency OF that policy To export OF SPECIE and
create fictitious necessity if may the phrase for
bank supply currency In addition to this we
should mention tho spread OF comparatively new princi-
ple in banking. which invented by a gentleman
whose cannot call TO mind al the present mo-
nent That principle FIRST officially endorsed by MIR
Fillmore when comptroller Of the State of New York
Mr. Fillmore recommended departure from the specie
basis and advocated issue OF notes countersgned by
State officers. and predcaed deposes of certain stocks
which should be receivable in psymen, of State dues
Within the last two years it has been recommended TO
extend the principle the financial operations OF the fed
ea government. and to allow the issue of notes. ecev
able in paymen, OF custom house dues and other ndeb
edness to the federal government, deposle OF United
States stock. This latter recommendation has been APP
parenty abandoned; but there can be doubt that it
will b renewed and pressed. il the States should adopt
Mr.. Fillmores borrowed idea OF making State stocks the
basis Of State bank issues.
The principle is this Any bank or banking establish
ment may dsposite given OF State or United
States stock. and making such deposite it shall
have its notes countersixd BY the comptroller treas
urer. or some designated State officer.
This scheme to be the one adopted by most OF
those who wish increase the amount OF paper crcula
lion. and TO diminish the quantity and strength of the
specie basis To US appears the worst the most un.
just and at the same time the most dangerous species OF
banking In the first place, it makes the evidences OF
the indebtedness of the general and State
basis for the issue of equal amount of the evidences
OF corporation indebtedness Promises to pay are thus
built up, not the ability to pay, but other promises
TO pay, which were made because there an inability
topay. Ia
We must say that we harbor favorable feelings for
banking corporations, any other manufactures OF c
tious capital but. if to have bank notes which
have intrinsic value, insist that they ought not to
be issued State indebtedness but SPECIE which can
meet and pay every note presented Not only the paue
but the market price Of stock varies from day to day
Let there como times Of commercial embarrassment
that money is really worth twelve instead OF six
per cent At twelve per cent, fifty dollars will yield
Just much as hundred dollars at six per cent
Suppose, then, time OF commercial embarrassment
which will carry up the value OF money twelve per
and suppose, ALSO that the credit of the federal
and State governments remains unshaken that they pay
punctually six per cent interest that they engage TO
pay EVEN under these circumstances stocks must fall
and. if sold in the Market will not and cannot realize
their par value for when money or twelve per cent
one hundred dollars OF six per cent paying stock cannot
be worth eaving out the durability of investmenp
than fifty dollars In times OF prosperity, the evil
consequences Of any banking system may escape
observation but wrath is laid up for the day OF
wrath. In times OF commercial depression, those
evil consequences come upon with accumula-
ted force. and the respite Of apparent prosperity
is bitterly paid for. Banking State and federal in
debtedness cannot increase the real value OF anything
Doubling the amount Of currency may double the market
price of everything; but it does not add jot te
the real value OF any one thing Why multiply the
currency by fictitious issues' Why test the public
ais by speculative exravagance Why place ourselves
within the reach Of run'
AS much rs we oppose the old system Of banking. we
must admit that there some check-nadequaie,
know-but still there check indefinite and
dangerous expansion The banks compelled under
that system pay specie for their notes and al
though they calculated that credit would enable them
to issue more notes than their specie could meet,
yet there was always the necessity OF having a
specie basis That basis must from the nature of the
case, be always inadequate, for = bank must issue
than capital to pay even six per cent WELL
sustained run on any bank will, therefore, break it,
eep, in prosperous times. when it borrow specie
credit In unprosperous times the banks, taken as a
WHOLE cannot meet their engagements But still, as they
must keep certain amount Of specie in their vaults and
the laws OF several States require them TO keep GER
proportion Of specie measured by their issues, they
furnish, times OF revulsion and want OF condolences
specie fund for currency purposes The multiplication OF
small COINS of vase less than the ordinary bank notes.
however, the only reliable and real foundation for
nency in times Of distress.
These principles to plain that he who runs
may read but il is strangePassng strange-hat they
are not considered BY many Of those who advocate bank
ssues founded specie, but State and federal
stocks Let US suppose a revulson like that Of 1897,
with the Union dotted over with banks, after Mr.. Comp
roer Fillmores idea, and after Mr.. President Fill
more's coinage policy Eighty per cent. OF the bullion
Of America will have gone abroad, because coined
in double eagles The banks, even. will not keep them
when stocks will the purpose basis OF
bank issue. The country 10 flooded with paper coun-
tesgnsd by State comprolers registers, and Ieasures
Specie 10 refused for those notes At the counters Of the
banks which issued them The holders demand sale
Of the stocks deposited security. Money. will
suppose. worth only twelve per cent the stocks yield
The ~ ep,,tun fovs nls and orlv Hftv