The Athens post. [volume] (Athens, Tenn.) 1848-1917, 1856-02-01
SMALL NOTE CIRCULATION.

The report of Hon. James Guthrie, Secre
tary of the Treasury, is an able document
and argues the difficult questions relating t
our currency, in eogent and forcible man
ner. We commend to the careful attention
of our readers the following arguments or
the evils resulting from the multitude Of
small bank notes nov in circulation. We
are not prepared to unite with the Secretary
in recommending the interference of Con
gress in this matter, but we entirely concur
with him as to the necessity of providing
some security against the increase of this
mischevous currency:
The notes of the banks chartered by the
| States continue to circulate in some sections
of the country, to the exclusion Of gold and
silver except in government transactions; and
more particularly where the blnks circulate
notes under the denomination of FIVE dollars.
These small notes are mostly circulated by
banks of doubtful solvency, at adstance from
The place of redemption. They constitute a
deprecated currency, which no one is willing
to hold, and this leads to hasty expenditures,
in order that the loss may fall on Others -
The evils of a deprecated currency are at
tested by the experience of all countries where
such a currency has been tried, and in none
more certainly than in the States of the Con-
federation.
The legislature of the several States and
the Congress of the confederation, all issued
bills of credit during the revolutionary war,
and all felt and acknowledged the evil and
the ruinOus consequences. The constitution
of the United States was framed by the men
who had felt all the evils thereof; and when
provision was inserted in that instrument,
that no State should emit bills Of credit, nor
make anything but gold and silver tender
in payment of debts, and the coming of mo-
ney was given to the general government, they
believed they had provided for hard money
currency, and against the evils of n deprecia.
ted one; but these provisions were nullfied
when the courts held that the States had
power to charter banks, with authority to is
sue and circulate notes as money. 1t is now
too late for the courts to retrace their steps,
and give broader construction to the prohi-
bitohs of the federal constitution, whilst tits
hopeless to expect the States to refrain from
granting bank charters, with authority to issue
these small notes; or that the States will con.
eur in enlarging constitutional prohibition in
respect to bills of credit, SO as to prohibit this
power to banks.
The same local and individual interest that
induced the granting of bank charters with
this privilege, would induce the legislatures
of the States TO refuse Congress the power
Of prohibiting the use and circulation of
bank notes. The thirteen hundred banks
now in existence under State charters, and
the circulation of over $20O,O00,000 of bank
notes, rs money in constant competition with
the constitutional currency, attest the mag
nitude of the evil, and justify the worst ap
prehensions for the future. The gradual in
crease Of banks, banking capital, and bank
Gadef Gatd r's6piaif appr4pfia,e Site TeglsIatoh:
When these thirteen hundred banks shall
be increased to some two, three, four or lve
thousand, It may be feared their aggregated
power will not be easily overcome, until
suspension of specie payments and universal
bankruptcy shall call for a suppression OF the
evil and restoration of the constitutional
currency. II the States shall continue the
charter and multiplication of banks, with au-
thority to issue and circulate notes as money,
and fail to apply any adequate remedy to the
increasing evil, and also fail to invest Con-
gress with the necessary power to prohibit
the same, Congress may be justified in the
exercise OF the power to levy an excise upon
them, and thus render the authority to issue
and circulate them vaueess.