Daily Nashville patriot. [volume] (Nashville, Tenn.) 1857-1858, 1857-12-05
Extract from Col. Benton's Letter on
the Currency

Banking in the United States is the most m
restrained and unsafe that there is in the world;
and unsafe even for solid and well conducted
banks there being enough of the unsoid and badly
conducted to fail down of themselves every fe"
years and TO drag down the rest with them tne
laws put few restraints penalties upon them;
and these restraints and penalties ara regularly re-
pealPd just often as the community needs the
benefit of them. It is by name in some piaccs and
bv facts in others, a system of Stree banking"
which the hard mOnev Democracy was accuston-
ed to call 'free swindling." Anybody becomes
| banker that p'eases, and issues small notes ana
sends them off a distance to be circulated, ana
| lost and 10 sink upon the hands Of the l4boring
Ope. a f4v0rite plan is to issue notes at one
place p~yabl- at another far off, out OF the way,
| and difficult to he got at, "a to compel the
/ holders TO submit to shave. That mo- 81 40
/ ing husin SO invented nv a ScOtchman OF An-
erdeen in SOC; but he in Great Britain, not IN
the United States; and the British Ministry and the
| British Parli mant Immediately took cOgniZInce OF
| the inventor and h= mitators, and placed them all
III the category Of swuilers, and so put an END 10
their operations. No stamp duty, no bankrupt act,
! and no r~0uisition to keep any proportionate
amount of hard money on hand completes the IL
! cense and unbounded freedom, and the rect uue
to periodical explosions, which belong to Ameri-
can banking.
This last requisiton, that Of keeping on hand an
/ amount of hard money propOrtionate to th'lr ma
| bites seems to b. unknown (even IN natne) 10
the United States; vet that requisite Is legal anu
! fundamental con iition of the Bank of England;
and the proportion of oncthrd in gold OF the total
amOrnt of its liabilities in circulation ana q post
the rate epforce@: and below that proportion the
| Bank of ENGLAND does not deem itself safe. Thus
swore VIZ HorsIey Palmer, Governor OF The BANK
| Of England before Lord AlthOrpe's committee, ID
1882: THE average proportion, as alrefuy oo-
| served of coin and bullion which the bank deems
it prudent to keep on hand is at the rate OF thiru
of the total amount of all her liabilities Including
| deDOsit.s "a well as Issues" And thus sWore Mr.
| George Ward Norman, a director OF the oank:
''For full state of the circulation and deposlte
say twenty one millions of notes and SIX mlllons OF
! dpDosites making in the whole twenty-seVen MIL
lions of liabilities, the proper sum IN com ana ou
lion for the bank to r tain in nine Millions AND
! to the same effect swore other directors But IN
Great Britain it is not sufficient that this proper
ton of one-thirl Is required to be on hand out IL
must be shown and that continually that II Is Inere
/ This is accomplished by the publication OF the
Quarterly weekly average of the liabilities and as-
sets of the bank from which the puohc can al,
| WAYS see when the bank has crossed the line OF
safety How different this from banking 10 the
! United States where prOpOrtiOnable rate OF
specir to the liabilities is even prescribed; and
! where We ten fifty an hundred paper dollars for
one hard one in the vault is frequently issued.
But one thing was wanting to complete the titles
of our banking syst-m to utter unworthIness, ana
that one thing has been discovered is pen5a-
ton of the specie bassl Throughout the world,
so far as paper money is known, sp'cie basis Is
| deemed necessary to an institution which issues
promises to pay specie. Not so IN the United
! States. Paper upon paper has become the vogue
| with u.s. Stocks, and the notes OF other banks
are the SANDY" foundation upon which large
| portion of our banks are built.
! | do not expatiate upon the evils of small paper
money; they palpable to every observer, and
| only require enumeration. l. 1t drives away Gil
hard money of equal denominations; for, IN a com
| petition between two curTencies, the meanest IL
! always the cOnuueror and chases the other out OF
the field. 3 It Is the great source OF the crime OF
! cOunterfeiting; for the mass of the countertelts
consist of small notes. 8. It demOrallzes the com
munty; for the people, not being willing to lose a
note for which they have given value, instead OF
! burning it when it rejected by knowing one
as counterfeit put it hack in the pocket and offer 1t
! again to an ignorant person, who receives i, and
! who goes through the same process when rejected
! in his hands. f. 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 assemble
by thousands at the doors of the institution which
! issued the notes, demand the money, break tue
| banks and propagate the alarm which themselves
feel until it becomes general; for nothing is more
! contagious than a moneyed panic, or any thing
| more unmana geabe. B. It plllages the poor AMI
the Ignorant; for every base note, every one that
| is counterfeit, OF on a broken bank, or on bank
that never existed although it will for awhile,
| must stop somewhere; and, when it does, is sure
| TO stop in the hands of the poor and uniformed,
upon that class least able to bear the loss, who
| have no advantage from banks while in operation,
and who bear the loss when they stop. 6. 1t ex-
| cites to swindlng; for knaves, with nothing but
brass for their capital and that in their faces III
stead of their Golfers, induced to set up manu-
| factories Of small paper, TO be sent abroad and
! sunk upon the hands of those among whom 1t IS
scattered; all that is so sunk being clear gains to
| the manufacturer Z. 1t induces and even COM
| pels people to be wasteful of their money; for
| such is the natural honest, and just contempt and
dstrust of small that he she that receives
one hurres off to lay it out for something need
ed; while piece of gold for the same amount
would be valued and cherished, and laid by and
kent and added to- until enough accumulated to
make a purchase of something needed and useful.
s. It subjects the payer to be cheated or wOrsted
in change; for giving paper in payment. he must
rec i've the change in other paper; and for that
purpose the meanest, most ragged, dirty, and
worthless will always be picked out and showed
upon him. In short, such the evils, the crimes
the Generalization, aud cheating OF small paper
money that ali nations, except the Uuited States
place it in the category OF criminal agent Bnc
suppress it accordingly.
There is not a monarch in Europe who would
treat his subjects, suffer them to be treated at
the people Of the United States treated by tn,
base part of their own banks, and the indulgen
Lsei lstures which legalizs their violations of law
promises, and contracts. The issue of currency
and it's regulation j. an attribute of sovereignty
and every where is Exercised by the sovereign pow
err, except in the United States.