The Cadiz Democratic sentinel. [volume] (Cadiz, Ohio) 1854-1864, 1857-09-24

Our F,innucinIs syster,,.

Our Financial System.
As we have stated heretofore, the average hal
ances keptin New York by Cincinnati bankers
and merchants, does not fall much, if any, short
of million and half Add to this the balan-
ces ofthe Ohio, Kentucky, and Indiana banks
six millions at least, and to all this the Mis-
souri,, Illinois-and Tennessee depoSites and it
will be found that the balances belonging to the
six States kept on deposit in Wall street is G.
quail TO the specie strength OF the New York
City banks. With this western capital, wes-
tern paper, State anc county bonds are shaved
by New York brokers, and loans are made to
western railroads. In a word, we put club IN
the hands of eastern money dealers, with which
they beat out Of US, in the shape of usurious
charges for money. the life blood Of our fnanei-
al independence Why is this? Is it necessa-
ry? We arc told that it is necessary, because
we purchase foreign goods in New York, and
the exchanges provided by the balances referred
to cqualize our trade accounts. This is a falla-
cy--a delusion. Does anybody suppose the
baance oftrade is really against the West?-
We imagine not; for it must be very evident
that ii we purchased more than we sold, our
people instead OF becoming wealthy, as they
certainly are, would very soon be impoverished.
No; the balance oftrade is really in our favor,
and yet the exchanges are against us. This re-
suits from unnatural causes, of course, and It'll
therefore possible to remove the evils growing
out of the false system; but we cannot relieve
ourselves from the burthen placed upon us by
the former, without changing the latter.
The false system originated withthe Legisla-
five Assemblies Of Western States, who, in char
terng Banks, placed Eastern credit on a par
with coin. The law regarded balances in Wall
Street to the credit of western banks as cquiya-
lent to gold in the vaults of those institutions
Thus the absurd currency standard came to he
established, and Western people have, by Gus
tom ofseveral years standing, been educate to
regard paper money as equal to gold, when the
fact is, itnever has been, nor never can be while
the present system continues equivalent to the
federal currency There is a great deal in q
name. Our trainers Of bank charters, and man
ayers Of banks have not been slow to under
stand the force Of this aphorsm. Hence the
currency standard was adopted, and instead OF
calling the premium we pay on exchange, a dis
count on currency, they reversed the matter,
and thus they have succeeded in reconciling the
public to the idea that instead ofpaying a dis
count on bank notes, they are paying exchange;
md the people who discharge this enormous
tax, are assured that it is the result of"overtra-
ding" Now, it is fact, that the amount OF
exchange sold annually in Cincinnati, runs from
seventy to eighty millions dollars. The premi-
um paid on this is between six hundred thous-
and and seven hundred Thousand year. This.
then is the aggregate of the discounts paid on
bank notes at this single point The banks in
stead Of keeping coin in their vaults, keep specie
or its equivalent in New York, and to support
this, the Ohio Valley pays an annual tax direct
lily, Of perhaps two million dollars; besides the
indirect losses sustained in having ten
or twelve million dollars Of active means be
longing to the west constantly on deposit
in Wall street, where it is often used, as dem-
onstrated by the late revulson in the circle OF
stock gamblers, to the disadvantage of the whole
country
But the evil to which we refer is not con
fined TO the Banks 1t extends through every
department of trade. All notes given for debts
due to New York and other eastern merchants
are made payable in their respective ctieS and
more than this, notes given for goods purchas-
cd here are very often made payable in New
| York, because bills are negotiable here, when
local paper cannot be discounted. These bills
are sent to New York by the purchasers, and
they are redscounted there with money that
. SnOulu DC III Uuc west, 1 lten again ueDIS utte
from the West, North and South to our busi-
ness men arc paid in the majority Of cases in
Eastern Exchange, the premium in all cases be-
ing charged against the latter class. If a mer-
chant in South Carolina, Georgia, or Alabama,
sends an order for produce or manufactures he
RENTS Eastern Exchange. Soft is with orders
from othersect Thus New York is made
the great centre, and the West, by the opera
lions Of this unnatural system becomes depend
ent upon the Fast, and the producers of the
great West appear in the attitude of hewers OF
wood and drawers of water to the great "Mon-
ey Kings" of Wall stleet--tax payers to the
stock gamblers of that cesspool of mercantile
immortality where the Bulls and the Bears, the
Gamblers and Shylocl5s vf the country. congre-
gate daily, and sacrifice their customers to the
Moloch of their profession
Having thus glanced at the cause of the sys-
tenn, and the evils resulting therefrom, let lls
now inquire whether remedy is possible, and
if so, how it is to be applied In the first place
we remark, if the West buys more than it sells
the exchanges must be against US, and the sys-
tenn to which ws have referred is not the cause
ofour trouble. But on the other hand, if We
sell more than we buy, existing evils are un
questionably attributable to our financial system
| 1t is not necessary we think to undertake to
show that the bllance Of trade is in our favor. ~
| This will be generally admitted. The system
i therefore must be the cause of the troubles thai
are experienced; and this being the case, rem.
edy is certainly possible. 1t is in the power o
our business men to lnaugurate a new system
and place it upon basis commensurate with
i the wealth, energy enterprise AMI mercantile
intelligence and sagacity OF the industrial clas-
ses Of the West,
The first step in reform movement must be
i directed toward the establishment Of specie
4 standard While the currency standard is
maintained, we may talk, and evenact, as much
as we please, but it will all be to no purpose
\ The merchants of Cincinnati have the power r
their own hands, to bring about change tha
will make the paper currency centering at thii
point equivalent to coin. If bankers will no
make their notes equal to coin here, their paper
will put at a discount. This is precisely
what is done in New York and other cities ii
the East and ST. Louis in the West. This. in
stead Of being injurious to the Banks, would il
the end be beneficial to such institutions as arc
lin good standing and these, we have reason Il
believe, would cheerfully cooperate ID any
moyementlor the establishment Of a bank up
on aspecie basis. 1t would break up the trade
now, SO extensively carried on, in the notes 0
such banks as would provide for the redemption
of their paper here
Then, having established a money standard
drafts drawn on thiscity would be paid ingold
orits equivalent; and the balances that are ROW
deposited In Wall street would be kept at ,homt
\ because they would be more useful here than
/ there. Merchants purchasing goods in the east
could under this system, make their paper pay.
able here. There would beno difficulty about
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