The daily union. [volume] (Washington [D.C.]) 1845-1857, 1854-05-17
CONDITION OF THE BANKs.-No. 3.

OONDlllUN VI IHE BANkS.--No. j.
To-day we give the last of the bank tables have to
present to the public.
On examining it, the reader will find that the circulation
which was but little less than hundred and fifty mil
lions in 1881, in ls43 but little more than sy-eght
millions Facts like these ought to be forgotten The
reduction of currency nearly wo-thirds in the short
space ofx years productive of the runous con-
sequences.
AT all times lighy important the bank are at
the present moment peculiarly So of the effect
OF the eons'usiona,reasury system and of the influx OF
gold from California on their operations
1t was confidently predicted by some that the constu-
onatreasury system would break up the banks or if not
that il would restrict them in their operations that they
could do profitable business In contradiction 10 this
find the banks taking the country throughout quite
much expanded any sensible prudent banker would
wish to see them expanded.
We will go further than this For such solidy as our
banks at present possess they indebted mainly to the
constitntonaltreasury system. Before that cstab-
ished there effective check in bank issues except
the demand for specie for expectation.
To this the constitutional system has added domestic
demand the beneficial operation Of which Is to be estma-
ted not simply by the amount Of gold and silver in
treasury Offices but by the current Il keeps up
in rather circuitons route of gold and silver from the
banks TO the treasury and the treasury back again to
the banks.
In examining the table the reader win hardly fail 10 be
struck with the small increase specie the banks in the
last six years II was according 10 the returns forty -four
millions in ls4s and fy-ninc millions in 1854 or IL we
allow for specie included under head OF Specie funds
sxty-three sixtyour millions The increase is at the
u,r ,o,l,,, n
number Of banks has increased from ISL to 2os and
their capital from hundred and four to three hundred
and millions and while the deposites of California gold
the United States mint and branches have exceeded two
hundred millions
Perhaps il viii be said that the large amount Of gold in
the treasury Offices is the why there Is so little in
the banks Nay, reply, the Of specie IN the
banks would have been less than il the cons,tu-
onal system had not been established Then there would
have been little demand them for specie except for ox-
port and to pay such bank balances cannot otherwise
be conveniently adjusted The rule Of banks is never to
keep on hand more specie than will meet probable de-
mands And now, in addition to the stock necessary to
supply the demand for export for the payment Of bank
balances they have to keep additional to sup
ply the domestic demand by the various operations
Of the constitutonal-treasury system
The gold and silver in the treasury Offices is so muc,
added 70 the stock Of specie in the country these Offices
had not been established that gold and silver would
deed have gone into the vaults Of the banks but 1t would
not have remained there long II would have been made
the basis of issues and bank circulation in
stead of being hundred and four millions would have
been three hundred millions This would have led
such Of trade and circulation as 10 cause rrea,
export gold and then the banks would have been le
with less specie than they have now IL more das-
trous consequences had not ensucd.
The late Dixon II, Lewis who was n man Of no common
mind, used to say that he had but objection 10 tn,
consutional-easury system and that was that would
act as balanoewhee in the banking machinery Of tn,
country He was conscientiousy opposed paper money
Of all kinds and thought the constitutional system would
by ITS various operations render toerabIe system of pa
per issues which ought to be entirely abandoned,
Whatever views may entertain Of paper issues
tain II is that the system has check
ed, without controlling the banks and all prudent sens
BILE bankers know that their system requires such
check As II is not by the modicum Of specie in thei