New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1851-03-13
REFORM OF THE CURRENCY.
BY PRoUDHoN.
The Bank Of Exchange.


n sruestsndard Of value established the next step
will be TO ORGANISE cTRcULATIoS, for until tniS
be accomplished production will be absolutely as
If il did not exist.
This is the eliminating point OF the Revelation.
We have expelled the last Of our Kings We
have cried Down with the Monarchy; Long
live the Repubicl" Butifthe idea has not already
struck you, you may believe me that the only dill
ference u.s. that there are few Princes less IN
France and in Europe than before. Royalty itself
still stands erect. Royalty will subsist until we
shall have abolished that form Of it which is at
the same time its most material and most abstract
expression The ROYALTY OF GOLD. Gold Is
the taismsn which paralyzes the industrial life oil
society, which letters circulation which criPPIes
labor and credit, which places all men In state
Of mutual slavery.
We must therefore destroy also this royalty OF
gold; we must repubcanize the circulating me
dunn, rendering every product Of labor current
money. Let no one take alarm until he nave
cause am not going to revive under new form
the old ideas of paper money, bank notes, assig'
mats, &c &c Ali of these palliatives have been
long since known, tried, and condemned. These
psper representatives, by whichit was attempted
TO replace the absent god, are all of them mere
homages rendered to the metal, worship Of gold,
which was always present in idea, and always
used as general standard Of value. Between
the new currency which propose and bank pa
per. or any thing Of that kind, there is as much
difference as there is between reciprocal or mutual
credit, and credit according to the system o.
usury. Let US go to fundamental principles
] A. of cold cradif il "a
of legal expression) unilateral, one sided that
is to say the holder of gold can alone give credit
! he does not receive it. According to the system
of reciprocity on the contrary credit Is blateral,
two sided each party reciprocally giving and re-
ceivug credit for part of his labor.
To gire credit, under the monarchical regime OF
gold is TO LEND.
To gire credit, under the republican regime OF
reciprocity, IS TO EXCHANGE.
Let US now consider the problem OF the organi'
cation of Bank, formed not as house of bust
ness. but as an instrument Of credit-that is to
say, as an organ of exchange and of circulation.
Every one knows what bill Of exchange is-a
demand made by the creditor on the debtor, to
Pay fixed sum to him or to his order, at certain
place, on given date
A note Of hand is the reverse Of bill of ex-
change; it is promise TO pay, &c, made by the
debtor to the creditor.
A bill of exchange is thus legally defined 1t
is drawn from one place on another; it is dated;
il mentions the sum to be paid, the name of the
person who is to pay it, the time when and the
place where the payment is to be made, and that
the value has been furnished in cash, in merchan-
disc on account, or in some other manner; 1t is
pay fable to the order of third party or to that of
Inc drawer If il be the LIST, End or 3rd OF the bill,
il is so numbered.
bill of exchange, therefore, supposes OK.
change, provision for payment, and acceptance
that is TO say, value delivered by the drawer &c
ceptance and the ability of the acceptor to pay
When bill of exchange unites all these qualh'
cRtions-thst is represents real service done, or
goods delivered; when the drawer and acceptor
are known and solvent; when 1t IN TACT possesses
sll the conditions necessary to guarantee its pay
ment, tbe bill OF exchange is considered as good
D0gey as real value IL circulates in trade like
bank paper, like money. no one objects to re-
csve it on the ground OF rs being " only piece
Of paper" But since, a. the end of it's term, the
bin must he paid in specie before being destroyed,
it pays to specie kind Of vsssalsge called DIS
count.
1t is precisely this promise Of being paid in
SPECIE which renders the b,il OF exchange preca.
rious So that the idea of coin iDtects the bill
F " ~~NU'ie INV "N'tA f''''b -~
its certainty.
Hence, the whole problem Of circulation consists
n eenelalizing the bill of exchange that IS TO say
III making it anonymous, that lie, not payable by
any particular individual as well ss exchaogaole
tOTev6r and pay Sbe 1t sight bat only In pr0docssor
services. Or speak language which Will be per-
hsps better understood in the money market, rue
problem of circulation and credit consists in guar
snteeing paper money by products, insseaa Oh
by coin, by bullion, or by real estate, since
lokkn Il n dIaQQtPOna
oscillation between usary and bankruptcy, be-
tween specie and rredeemsbe bank paper.
This is the great question OF the age, the solu-
ton Of which will be the completion OF Repub-
hcanism
The following is my project for the generalza,
ton Of the bill of exchange hundred tnoussnu
manufacturers proprietors OF mines, factors, LOT,
warders, farmers merchants, &c. from all parts OF
the country will meet by delegation in general
convention; they will engage themselves, indi'
vidualy and reciprocay, to adhere 70 the statues
OF the Bank Of Exchange, which will be e great
central Bank, the constitution and powers oil
which should be determined according to the tol
lowing principles
/. The Bank of Exchange is an institution de-
voted to the public interest it il placed under the
supervision OF the Government, but it's managed
by delegates from ali branches of business
Q. Each subscriber will have an account opened
at the b ank of Exchange for the discount Of his
commercial paper, up to the amount which would
have been discounted for him on the present sys-
TEN that is 10 say, according to his known means,
his business, and the positive guarantees he can
present in other words, according to the real ere.
dit he now enjoys.
3. The discount ofordinary commercial paper-
drafts, orders, bis OF exchange or notes OF hand
will be made in notes Of tho Bank Of the valse Of
81, IS, $40, $50, 800 or $500.
The fractions Of 81 only, will be paid in cash.
4. The rate OF discount will be fixed st per
cent without regard TO the time Of payment.
Each subscriber will agree to receive in all
payments, and at par, the paper of the Bank Of
Exchange.
Is this paper money
Without hesitation / ansWsr-No, it is neither