The national era. [volume] (Washington [D.C.]) 1847-1860, 1857-10-29

groans. Our circulating medium being, through
the issue of bank bills, -excessise, has been
flowing abroad, Gust as an excess of wheat or
corn would have done, and foreign fabrics and
products have come in IN exchange. No tariff
or want of tariff has produced this. 1t is the
result of the great law of demand and supply,
which is above and ovsrrides all legislative en-
actments. Had the tariff been fixed exactly
according to Mr. Greeley's widest dream, II
would not have prevented-it could scarcely
have diminished-the excessive importa-
abroad, cheap here and dear abroad and abroad
it would go in spite of all human enactments.
But when circulating medium begins to flow
abroad, it does not flow mixed stream, as it
win flow from one portion of the Union to an
other. Massachusetts bills may be very good
in Iowa, or Wisconsin, or Texas, but they are
good for nothing in England or France. No /;
the stream thus forced 10 go abroad is of specie
only. The bank bills az remain athome. You
read IN the papers no account of the ship YAM
pire taking out two MILLIONS in notes of the
Cotton Bale Bank. Sh, takes specie only; and
the Cotton Bale Bank, having IT'S specie drawn
ont to freight the Va npire, must curtsil its
circulation. And as o. ie million ct gold is the
basis of the issue of siA millions Of bank paper,
the withdrawal of one million from the banks
must cause reductioi of six millions in the
paper currency. Whe, we hear that ten mil
lions of gold has goH to London within so
many months, it does not often occur to us
that this has Produced, contracti6e of the cur
rency to several times that amour; yet, when
the exported specie h, s been dr.! wn from the
banks, this must gener lily be the lase.
The cause Of revulsic rs like that of 1887 and
that of the present tims, and of ne regularly
oltarnatipO q I'D 49, &c
intervening years, seems now pr tty obvious
In time of prosperity, ss specie accumulates
in the vaults of the hanks, thei circulation
swells in the proportion of five 81 six to one.
Presently our currency becomes excessively
redundant, prices rise here high above what
they are elsewhere, foreign goods FL W in, and the
excess of our currency lows abros l. But only
the gold goes-the bank bills fema aing behind
For every million that goes abroad our curren-
cy must be contracted, sooner or ater, several
millions. Then comes a pressure From this
We gradually recover. The banI circulation
having been very muca diminished, the banks
begin to feel strong again. Specie ceases to
go abroad-now COLLECTS at honta.f 1t fluids
its way into the vaults of banks. Upon it the
banks issue notes, fiVe,or six millions for one.
There is another expansion, to be followed by
another contraction as certainly and as regular
ly as night follows day. The contractions are
more or less violent and disastrous, according
as the previous expansion had been greater or
less, and as other more immediate Aggragating
or lessening causes may interfere to hasten
and sggravate or to retsrd and Mitigate Just
now, ultimate and imaediate cautes continue
to force an enormous AID most disastrous con-
traction. The redundancy of ckrrency has
been excessive, it has produced w@ld specula-
ton lin Western lands and otherTsse) and ex-
travagances. Other csuses aid ghe general
result The contraction has core, bringing
almost general bankruptcy and widespread
ruin.
The excessive import tions, wild Ejaculation,
and general extravagapce in living of the last
few years, now aggravate our disti esq. But it
is erroneous to speak OF them as cssases. They
are themselves only eff cts. The redundancy
of our currency has produced Their And the
of the curntncy has be produced
by our mistaken banki; system, which is
the root of all our troubles. do not under
take to say, that if we had never had bank of
issue, we should have hs,d no times of pecunia-
~ embarrassment. But do say, that but for
our banks of issue, such disastrous revulsions
as that of 1887, and the one under which we
are now suffering, could never have occurred
and that if our bank.note circulation could be
put an end to, our regularly Recurring expan-
sions and conuaetions would for the most part
cease.
| cannot undertake to discuss the question,
what would have been cur present condition if
no bank of issue had ever existed on this CONT
nent. Banks Of issue produce othe> effects be-
sides those of which have spoken. / believe
that they have, ON the whole, done much more
harm than good-but the discussion Of that
,a,4.o X
they are now doing-let US inquire for rem
edy.
The Constitution ofthe United Ste tes provides
that no State shall "eRit billy Of or edit" How
it is that under this the States have been per-
mitted to delegate to banks of theic erection a
power so forbidden to themselves, have often
The construction which has made
this provision of the Constitution dead letter
has, however, become SO firmly established, that
it were useless now to attempt to change it.
There is no hope in the General Government.
The remedy for our evils rests with the States
themselves.
A great part of the bank circulation Of the
country, and by far the most rnischievous part,
consist of small misunderstanding by that name
all bills under twenty dollsrs. We cannot de-
stroy the banks-it would be folly to do SO, ex-
cept very gradually, if we could-but we can
control the circulation. Let the issue and cir
culation of bank bills under five dollars be pro-
hibited as soon as may be. Let this be followed
in year by the prohibition of all bills under
ten dolars-and this, in year or tso more. by
the suppression of all bills under twenty dol
lars-or, better still, Of all bills un5er twenty
five dollars.
If all the States would Join in this, we should
speedy see an end of excessive ir1portatiops
and wild speculation, and the great throhs of
the money market would cease. Gold, no lon.
ger driven abroad, as it now is. would accu.
mulate in the country, and would prove our
common currency. If all the States will not
join in this at ence, that is no good reason why
we should not do our duty. Some State must
set the example at the East, aad what State can
better do this than Massachusetts Sooner or
later, the example will be followed. We can
at least stay the evil, so far as our banks pro.
duce 1t. We can do more; we cAu effectually sup
press the circulation of small bills of our own and
other banks in this State, thus SECURING our
people from come of the evils of the saext revul.
sion.
The operation of small billa in drying specie
from the country may be seen in another way.
Wheat is now one Of our chief articles of food.
Suppose substitute for it should be discovered.
cheaper, pleasanter to the taste, more con.
venient IN the use, generally believed to be
quite as wholesome, though not so in fact and
suppose this new article, exactly calculated to
take the place of wheat, but not of anv other
article of food, could be produced and used only
IN this country, what would be the result?
We should not want both that and the wheat.
The new article would not increase our powers
OF consumption. Incapable, as we suppose. of
being produced or used elsewhere, i. could not
be exported, while the wheat could. Manifestlv.
the substitute would generally take the place
OF wheat here, and the latter would, to great
extent, be driven out of the conIs.rv WoU