Republican vindicator. [volume] (Staunton, Va.) 1849-1857, 1854-11-27
Pressure and Paper Money,

condltlon.A We have alluded
tc Abs subject before and OK Wess edSthe /
opinion that the sst!ingency in lhs money |
mari ct was produced bysahe ulifavofAble |
operation oftheaastlry laws, ofafhe dsffrra
ent States, ara that ti9e ma ndfatture orfF
bank notes, which, filling to great extent
the channels of circulation, have caused
large imports and heavy shipments of
specie.
The prosperity Of the, county since the
present commercial and financial system
OF the United States went into operations
has created confidence, given rise to spec
culatioo and impaired powerful impulse
to credits These. in their turn have in
duced many Of the States to add TO the
facilities for manufacturing paper money.
The supply furnished by Tie old banks
which were compelled to obtain afi actual
money capital to begin with, was deemed
insufficient by reckless fnahcers; and
new principle of banking and new pro-
cess Of making paper money was invented
and extensively adopted.
This new principle of banking does not
require specie capital before engaging
in the manufacture of paper money. 1t
permits individuals or associations to de-
post the stocks OF the Federal or State
governments with designated State officer
aud that officer must then countersign the
notes of those individuals or associations
to all amount equal 10 the stocks thus de-
posted. Those TIf55 Wees gain currency at
oHce by virtue OF the uhimate security
which the signature Of the State officers
is supposed to give them. Frequently The
individuals or associations thus engaged
in the manufacture Of paper money are
bit little known. and hot .unfrequently the
location Of their banking houses is a mat
ter of uncertainty. 1t will be seen that
by this pfecesss instead fof specie being
made tie basis, The evidences of Slate and
Federal Indebtedness are made the basis o.
paper issues. s.rz+.=-4= -z.- z-zs
These paper issues, emanating in small
Ter or larger quantities from innumerabIe
sources, and being generally receivable in
payment for State taxes, and other State
dues, are received with but little regard
to the sources from which they emanated.
This being the case, a triflbg amount of
specie is requisite to keep them in clrcula-
'tion, whilst the stocks on which they are
issued, maintain their position in the mar
ket. Whilst this is the case, and conf.
dence continues, these notes are rare
presented Tor payment. es.ces; IN smair
sums, and Of course they take the place
OF specie, wh.iic ;s sent abroad teaa"ss
no p'a'.s Is thas taken. Thds II istIthat
outstanding the larss. specie product.
OF California, we are fast obtaining cur
rency, very large portion Of which is
based entirely on the evidences of State
and federal Indebtedness, instead of real
acfaal money.
This system has fair appearance in
Calm tif1es; and, therefore it is the more
dangerous to the community, and will be
the more prolific Of evil when reyulsiom
comes. When from any cause there is
foreign demand for specie beyond Ftf,at
created by the ordinary course Of trade all
bank paper must depreciate ii value,
which Is not issued by individuals OF as
sociations that keep themselves prepared
to redeem in specie. Notes issued OH
stocks, do not derive their ability to circu-
late, so much from tie idea that they will
be pro nptly redeemed as from the pre-
sumption that they are sesured ultimately
by deposits of stock. Therefore, those
who issue them do not keep themselves
prepared to redeem when such prepara-
ton becomes costly. Besides the persons
who deposte stocks for the purpose Of
manufacturing fictitious money, receiv.
their dividends regularly, whilst they
profit TO an equal amount BY their notes
and receive thereby double share of the
national production. 4aiaz
It seems to he perfectly PLAIN, from
what we have said, that, " hen foreign
demand for specie or any other cause pro-
duces stringency in the money mark ct
which makes the stocks deposited fall be-
lew par their holders have no pecuniary
motive to meet their notes, because they
have no objection to have their stocks
Sold to meet their notes. Then, when the
stocks are put % fer sale, there is but lit.
tie specie n tie country to buy them with.
They nast sink like lead, or the note-hel-
ders must submit 10 ruin by taking them
at par when they are a. grieyous dis
count.
The truth is, the whole banising systsfa
is dangerous. Human ingenuity has ney.
er devised. and in our Judgment, never
will devise, sound system of banking.
The issue OF fictitious money, in any form,
is oppressive 10 labor and perilous to the
nation, aud it breeds corruption ir a hun
dred forms. In the present instance we
have spoken more specially of a pariicu-
lar system, because ii is more recent in its
origin, is less understood, and is the most
dangerous, because it wears the most pau-
sible appearance. Just now, the war IN
the Eas, requires vast supply OF spe-
Gle from France and from England, and
the specie market of France and England
must exert powerful influence OH the
specie market OF the United States. it
behoves US, therefore, to be cautious. We
ought to look the real state of affairs IN
the face-understand what threatens, and
learn what makes the threats dangerous.
Ia 1913 the commercial reyulsions OF Eu-
rope, created by the revolutions OF that
year, were much greater, than we may
now reasonable anticipate but yet those
revulsions hardly caused a ripple on the
surface here, although we were then en-
gagged in foreign war. Then, however,
prosperity had not created dangerous ex-
pansion Of the credit SYSTEM and, above
and beyond all, the circulation medium
OF the countfy was not composed to any
extent OF paper money, issued upon The
Evidence Of State and Federal indebted