Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1857-10-24

of his Department to supply, and 20 be fully
up in every respect with the Vigoroes and adj
vsncing spirit of the age. In addition to this
be is a laborious public servant. de knows
what it is to labor, and the value Of labor in
the public service but in this respect, indeed,
be is but one Of the whole number Of Cabinet
officers, selected with such x~:ellent Judgment
By President Buchanan. They are all work
ing men ia their particular Departments, and
this fact is seen in the order, the prompitude,
the regularity and efficiency which charactf-
rize every branch Of the public service.
BANKS Oh no BANKS.
For the Memphis A7pssl.l
In my last Communication I attempted to
show that fluctuations were inseparable from
the very nature Of the Banking system of the
United States. 1 desire still further to cOnsid-
er this branch Of the subject.
If it is essential to the self-preservation Of
banks to maintain a due relation, say 81 to 1,
between Asir circulation ard their sps Gle,
how much more essential will it seem when the
amount Of their deposits are considered.
On the 18th Of July last he circulation Of
the New York city banks amounted to Ss,4Is,-
1913, whilst their deposits amountedtO se4,446,-
1873; mere than eleven times the amount Of cir
citation.
Now even If banks confined themselves to a
Legitimate business and held dollar.for dollar in
exchange, the amount of deposits, in times Of
panic and general failure they could hardly
preserve themselves from bankruptcy.
Unless there is money and confidence, ex-
chssge cannot be sold, and in times Of ps.nie is
as unreliable as the 90 and - days notes in the
vaults Of the banks. Had sterling exchange
commanded a price we probably would not
have had the recent bank suspensions in the
cities OF New York, Charleston and New Or
leans.
Deposits are demanded in gold and silver on
call, and in times Of panic they are withdrawn
b. millions. From tbs sh Of August. to 12th
S ,ptember, little more than a month, is millions
o. dollars Of deposits were Withdrawn from
the banks of the city Of New York. The sam
was relatively true of all the banks in the
United States with their circulation running
back upon the N, and their deposits Withdrawn
with such frigh # Il rapidity, how can the banks
stain themselves?
And withhow much more intensity is their
mdUlllAf elOhM HuNA L4Ef Adt6 tlEAA 1AcLDA4L.
upon these deposits; and / may say that this is
more or lsss true Of every bank in the United
Sites.
The foundation of their deposits as we'll as
their circulation is gone. Instead OF having
specie or even exchange to meet their deposit
tors call, they can only hope lessly point to
pronissOry notes maturing ia 90 aud 90 days.
CONSTITUTED as our banking system is, il is
impossible for them, however ciscreetly man
aged they may be, to suTpiBs ersn a PdHie.
The experiences Of tn last month shows E
for 1 take it that the general bankruptcy Of
our banks that hasrecentIy taken place, has no
other cause than bare JrigH, a PaRie tAat per
FADED the banking and mercantile cOmmgni-
ties, and that very fac shows that it is a sys-
TEN that should be blOtted ont Of existence.
Hence with the system as it is, we are bound
to have expansion and ontractions folio sing
one another as naturally as the auxes aud re-
faxes Of The tides OF the ocean.
Expansions may not entail ca our people as
much suffering and distTessss contradictory yet
the evils are great.
They UNDERMINE the morals Of the people,
destroy Industrious b shits aud engendsr a
spirit OF wild, reckless speculation. They
transform the humble c. pn.ented country store
keeper into the magni ieent city merchant,
who, living in a system Of credits, is thrown
into bankruptcy aad bsggsIy BY the succeed
ing revulsion.
Tnsy take away from tie productive classes
Of our people and ada thela to the consumers.
They eneoursgs high living, bigh notions, and
sxtravagant habits.
They do not add one dollar 10 the capital Of
the country, fof nothing is capital that is not
productive. Land, factories, wheat, and pO-
tatoes are capital, but paper promises to pay,
even though they come from banks, are nothing
but mere debts. There is not one iota Of value
in them They are 10 fac: lssE valuable than
he promises to pay of indis1duals, for the
individual is liable to the pxtsn's &C his private
fortune for the redemption OF I is promises to
pay, whilst the bank is only lie BE to the sx-
tent of its capital stock and az sets.
The share holder can only l5ss his capital
sock, bis private property being exempt from
liability BY law. And though bs NIX expansions
i've an artificial value to prOpsrty anI CON
modities, they in that respect add nothing to
our national wealth.
An acre OF land worth twenty dollars an
acre viii proddce no more than the same acre
worth ten dollars. This artificial value is ouly
temporary, and will pass away at the succeed
ing contraction. Lands On the Illinois Central
Railroad that a few months ago sold Tor SO per
acre, will not now sell for 500
Cotton, the great sorthsrn com modify, is
father injured thaR benefited by expansions.
Il bsInga commodity peculiar to nis country,
and comparatively free Of competition, De-
ponds FOR lis. price on foreign demard; and
that foreign demand Is not affected By the fac-
~tuatiOns Of oW bank CURRENCY.
But The profits of the rotten planter are les.
sened by the Increased expense, caused BY re-
dlndaney Of currency, Of producing cotton
Groceries, negro clothing, bagsing and reps,
mules, and plantation Supplies generally, arc
all enhanced in price By bank expansions.
When there are other competing markets Of
supply Of any commodity cur country prOdu-
Gee, bank expansions CO ass an actual injury.
Such is the case with wheat -four, sugar, iron,
and manufactures.
Rassia, and tie wheat growing countries CT
the Baltic, are unaffected By our currency hnc-
t%uatious. Every dollar an expansion gives to
the price Of wheat in thi country, operates so
far to prevent its expectation, and is SO far an
Encouragement to the expectation OF compe-
ting foreign eoHniriss. The sam principe
will apply to every other exportable commodl-
~ Of our country that has a rival in any f9r-
sign country.
Wherever this artificial value is given to
commodities (aBl wehsvs shown il is an in
separabls Incident Of bank sxpansion) they
cannot be exported sfh profit, and gold and
silver will be exported IN their place. In
series Of years or exports must equal in value
our imports. And if We csaaot export other
commodities with profit to ray for or Imports,
must liquidsts ths bilance in specie. This
last year our imports imOuated to S360,s9O,-
III. to meet which we exported in domestic and
foreign produce 1928 ST. POP, leaving a balance
against Us Of s67.077,al9, which was paid by
the expectation Of 500 1856 922 OF specie aud
bullion. Now this void 20. have happened !
had not chr ecmnodiiss received an a~rti6,isl
BY a redundancy az bank elrrrencv. Ia
the first place our imports you'll have been {
less, AMI exports would have consisted Of more I
aud lees specie. )
As I said before; ~hsasver yoa destroy The :
~sxchangeable vulue Of specie with con- B