The national era. [volume] (Washington [D.C.]) 1847-1860, 1857-12-03


director of the bank: +" For a .fidt state Of the
! circulation and depOsites, say t,ceaty-one nsl-
! Inns of notes and siE millions of deposites,
/ making ia the lChote tacenty SeUen millions OF
/ liabilities. the proper sum IN coin and bullion
i FIR The bank to retain is nine millions" And
/ to the same effect awore other directors. But
| in Great Britain it is not sufficient that this
! proportion of one-third is required to be on
hand, bat it must be shown, and that continu-
ally, that it is there.t This is accomplished
/ By the publication OF the quarterly weekly ave-
rage of the liabilities and assets of the bank,
from which the public can always see when the
bank has crossed the line of safety. How diff.
terent this from banking in the United States,
where no proportionate rate of specie to the
liabilities is even prescribed; and where fve,,
ten, fifty, an hundred paper dollars for one hard
one In the vault is frequently issued.
But one thing was wanting 10 complete the
titles of our banking systems TO utter unworthi-
ness, and that one thing has been discovered
Ii Is dispensation Of the specie basis Through
cut the world, SO far as paper money is known,
a specie basis is deemed necessary to an insti-
tuition which issues promises to pay specie.
Not SO in the United States. Paper upon pa
per has become the vogue with u.s. Stocks,
and the notes Of other banks, are the sandy"
foundation upon which q large proportion of
our banks are built.
l do not expatiate upon the evils Of small
paper money; they are palpable to every OBJ
server, and only require enumeration. l. 1t
drives away all hard money of equal denomina-
| tons; for, in competition between two cur-e
rences, the meanest is always the conqueror,
and chases the other out of the field. 2. 1t is
the great source of the crime Of counterfeiting;
for the mass of the counterfeits consist of small
notes. 3. 1t demoralizes the community; for
Ia 49, l. e
which they have given value, instead of burning
1t when rejected by knowing one as counter
felt put it back in the pocket, and offer it again
to an Ignorant person, who receives It, and who
goes through the same process when rejected
IN his hands. 4. Small notes make the panics,
and bring on the runs which break down good
banks for these small notes being in the hands
Of the masses, when they get alarmed, they as
semble by thousands at the doors of the insti-
tution which issued the notes, demand the
mcney, break the banks, and propagate the
alarm which themselves feel until 1t becomes
general; for nothing is more contagious than a
Eoneyed panic, nor anything more unmauage-
able. 5. II pillages the poor and the ignorant;
Tor every base note, every one that is counter
felt, on broken bank, or on a bank that
never existed, although it will run for while,
must stop somewhere and when it does, is
sure to stop in the hands Of the poor and unin-
formed, upon that class least able TO bear the
less, who have no advantage from banks while
III operation, and who bear the loss when they
stop. 6. 1t excites to swindliDg; for knaves,
with nothing but brass for their capital, and
that in their faces instead of their Golfers are
induced TO set up manufactures of small pa
per, TO be sent abroad and sunk upon the hands
OF those among whom it is scattered; all that
Is so sunk being clear gains to the manufac-
turer. Z. 1t induces and even compels people
| TO be wasteful Of their money; for such is the
natural, honest, and Just contempt and disrust
OF small notes, that he or she that receives one
hurries off to lay it out for something not
needed; while piece Of gold Of the same
| amount would be valued and cherished, and
| laid 10y and kept, and added to, until enough
accumulated to make purchase of something
needful and useful. 8. 1t subjects the payer
| TO be cheated or worsted in change; for, giving
paper IN payment, he must receive the change
IN other paper and for that purpose the mean
est, most ragged, dirty, and worthless, will al
ways be picked out and showed upon him. In
short such are the evils, the crimes, the de-
moraization, and cheating, of small paper,
money, that all nations, except the United
States, place it in the category of a criminal
agent, and suppress it accordingly.
! Iwenty-odd years ago, when we were labor
ing to restore the constitutional currency to
the Government and the People, the ready OBJ.
| lection, repeated by all the friends of paper
money, was, that there was not gold and silver
IN the world to carry on the business of the,
United States; and the ready answer to that
objection was, that there was precisely enough
and that exactly enough would come to the Uni
| ted States, if we would only create a demand
for 1t by correcting the gold standard, make it
the Government currency, and suppressing
small paper. Only part Of these things have
been done, and there have flowed into the Uni
| ted States, or been obtained from our own
| mines, about four or five times as much gold
| as the business of the United States could en-
| ploy. The supply has been nearly thousand
millions OF dollars, and the business of the Uni
ted States would only employ about two hun.
| dred millions. This is not guess-work, but bot.
| toned upon authentic data for the statistics
OF political economy show that nations can only
use certain amounts of money, some more some
| less, according to their pursuits. Thus. high.
| " manufacturing country, where the employer
| needs money necessarily to carry on his bust
| ness IN the purchase of raw materials and the,
| payment OF operatives, and in the construction
| or repair OF buildings and machinery, and
| where the operatives themselves need money
daily tor the support of their families, the guam
| tity OF money required is far greater than In an
| agricultural and planting country, where the
farmer raises his own supplies, and has his
crops and produce to pay large demands. And
| therefore England, the foremost manufacturing
| country, requires the greatest amount of mon
ey; and has 1t, to tcit, about eleven dollars a
mead and Russia, so largely agricultural, re-
/ qures the least amount of money, and can en-
pioy but about four dollars head. SO the
United States, In small part manufacturing aud
largely agricultural and planting, would find her
maximum demand for money someW here half
way between the two-say, eight dollars head; ;
when, at the present amount of the white popu.
iation, lsay twenty-five millions,) would give
two hundred millions az the national demand !:
always remembering that the great payments
are made with crops and bills of exchange
founded on the proceeds of industry. And
thus 1t becomes proposition demonstrated that
the United States, since the correction of the
gold standard, twenty-three years ago, have re,
ceiyed a supply of gold to four or five times
the amount which the business operations of
the people could employ.
Of that amount, the leading banks estimated
two hundred and ninety millions to be remain.
ing In the country at the commencement of
the present panic and since that time more
than twelve millions have arrived, and very
little gone out; so that about three hundred
millions would be the present estimate Of the
amount of gold and silver in the country
being one hundred millions more than the busi-
mess of the country would employ. Three hun,
dred millions is exactly fifteen times as much
rs the United States possessed in the time oil
the late Bank of the United States. Twenty
! millions was the whole amount at that time,
r and that all In silver, not a particle of gold
) hniDp then in oircu latiop A nd ~ "a eyactlJ