The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1853-02-01

CFrcm the Philadelphia Ledger, Jan. ~
Not long since, large number Of small notes. pur-
porting 70 be issued by private bankers in Washing
ton were in circulation. not only there, but in dis
tant cities where bank notes under five dollars were
legal. They did not come here, because they were
restrained by our laws against small notes. But they
began to appear so abundantly in New York, and
other cities of the Empire State, as to excite the
special notice of the New YORK HERALD, and some
other Journals, which warned the public against them
as frauds Since this warning some of these private
banks in Washington are blown up, and their notes
are now scattered about among the poor, who are
always the sufferers by the failure Of shinpasters"
TO the great profit of the issuers This catastrophe
at the seat Of the federal government, reused Con-
gress TO the necessity Of little prohibtive legs-
lation on the subject; and bill is now before the
House which prohibits as felony the issue receipt
business under license in the District of Columbia.
A contemporary of 80 city which lieth northward
and eastward pronounces this bill preposter0us, and
regards as very extraordinary the wish OF anybody
to suppress the circulation Of small notes particularly
because they are just a. good as large, and vastly
more convenient for the general purposes Of trade
and travel and because "a prejudice against them,
simply because they are small is sbsg y; ae adds
district are idle while they are tolerated in other
States or districts; and that Washington needs
good, sound specie paying banks. like those issued
under the free banking laws of New York, with au-
thorty to issue three dollars in paper for dollar
in coin. Wondering at "thelack Of brains disclosed
by this bill against the small notes, he advises the
Committee ON the District Of Columbia, who have re-
ported such BILL to "burnit and go to the root Of the
matter by establishing "goOd, sound spece-paying
banks AZ described above
Whoever will 60 to 1.-The root of the matter" will
perceive that all paper currency expels COIN and
that, wherever paper supplies all the necessities OF
exchange. coin will disappear We, Of Pennsylvania,
tried that to satisfaction and our sorrow during
the suspension Of 1897, by violating our own laws
country tried it in 1873 in the general suspension Of
all banks and general issue of "shinplasters in all
the States south Of New England. New York tried
it effectually in the suspension Of 1887. And New
York has tried and is trying it extensively under
her free banking law"
Our contemporary says that all attempts of any
State or district to suppress small notes will be nu-
gatory, while they are allowed by adjoining or
vania, have found such difficulty, though ada
cent to New jersey and New York. both OF which
are inundated with small notes.
Our contemporary recommends for the District Of
Columbia good, sound, specie paying banks like
those established under the free banking law of New
York. to issue three dollars in paper for in COIN.
We think that the best banks for the District would
be no banks at ALL with penalties against the crcu-
lation of paper from any State. Then the District
would have coin in abundance, and could transact
any business proftably, and quite safely any
adjacent State. A circulation Of three dollars in pa
per for one OF COIN presupposes few things. one
excess of money, whchis no money at all in revul
sion: and sudden decrease in snch prices when the
revulsion comes. Another is that ''sh0ck to conf
dence. or foreign demand for coin, drives all this
paper suddenly home and produces the very scarcity
which according to its advocates it prevents. Does
our contemporary remember the revulsons Of 1927
and 1897 We do, and would refer him to our CO.
lnmns OF those days. We far from being in love
with the free banking laws Of New York, for they
render banking quite too free for tastes. Those
free banks, founded on Federal or New York State
stocks, sometimes suspend; and though their notes
ultimately redeemed, if the stocks are worth the
money, and If not, not, these notes always dis
credited during the suspension, the loss always falls
upon the poor, and the gain always goes into the
pocket Of him who buys the notes at discount and
who may be. and sometimes is-the owner Of the
bank.