Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-28
From HUNTS Merchants Nqg0FiHs
BANKS AND CURRENCY.
lC0HnH lsd /


We have extended, thus Tar, considerations of
the nature and effects Of a xed currency. We have
ssen that. from its nature it must be consl antly
fuctasting in quantity, aud consequently produce
certain ey Is which Wehaye emu Grated None OF the
positions we have taken will perhaps. be disputed
by any one acquain ed with the subject, yet it may
and will be ccnIended that, admitting all these dis
advantages, IL suli confers gre benefits the
community. These alleged benefits it is our
purpose TO consider.
Isl. THAT this system increases the capital of a
country, and makes money plenty"
THIS is q popular idea No bank, however. Of
any kind, whether value or a mixed currency bank,
eau increase tue capital Of a country one dollar
Let us look a. The mater All that banks do Il
10 collec capital from class OF persons and loan
il to another Cspilsl, 10 whttever form, Oul,
be created 5F4abOr aud banks do not perform labor
Officers of such institutions do not create wheat
or cotton, dollars. They only gather together
that which others have produced. Whatever exists
in society they may concentrate in favored locality
but they cannot increase the quantity unless they
20 to work, and by labor create value So it IL
not true in any of the wOr that banks Of any
kind increase the capital of the country. Mixed
currency do, indeed, increase the quantity Of
81, but tnis is done by promising to pay specie
than they have on hand. They issue their own In
debtednrss, which they exchange for III indebted
Of Others and thus increase the general credits
Even this increase Of money Is nominal We have
before SHOWN Lhat Inc Wn0le amount issued mas no
more power than the specie on which it is based
The over-issue has so raised prices and increased
credits that proportion 10 the demand money is as
scarce as before. The term plentiful" when ap
phed 10 money, is altogether relative; money is plen-
tIful scarce according to the demand for 1t. No
fact is demons able than that the more credit
money there is in circulation the the crcU-
lstng MEDIUM. by the stiu ulating nature of credit
money, the demand increase to greater extent
than the currency itself tuai IL IS actually true
rs all business men know, that the pressure for
money is greatest and the rate Of interest as highest
when the banks are at the highest point of expan-
sion. This has been frequently verified.
There will be, however, lime during each cycle
Of such currency when money is really more plenty
than it would be If there were none hutvaUe money
II is when the bank are The process Of imitation
During that period vieIng, as they do, with each
otheriu gettin- up large circulation, money vii be
plenty and easily Obtained but when the initiation has
taken place, the demand will greatly outrun
the supply aud from that time until full cOntrac-
ton has cOu about, and the currency is nearly
restored 10 its ural limit, money viii be scarce
aud bear an enhanced rate of interest. So that, on
the whole, money, instead Of being more plentiful
and cheap, will be actually scarcet and higher All
this is apparent the very face Of the thing, and
might be proved by hume Gus statistics.
IL hardly seems worth the while farther to combat
the fallacy that mixed currency banks increase the
capita OF the country, aud make money plenty, the
idea itself being absurd; yet nothing is more
generally believed, or eGerts greater influence IN
sustaining the mixed currency system
I'd. "Ihatamixed currency cheaper than specie
and thus great saving to the country made by It's
use"
Let us examine the facts in regard TO the currency
Of the United states where this kind currency
more extended than anywhere else. First let US
fud what he assumed saving Isl
Our whole paper currency Is Sl95,OoOOvy
Spscie IN banks, 5SoodVV9