The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1857-10-10

somewhat illusory when we consider that the debts
of banks are very different from those of individuals
They constitute currency and the essence Of this
prompt payment on demand. These bank-notes are
necessarily passing from hand to hand and constitute
the medium through which our daily necessities are
supplied. That class of men, which is by far the
most numerous in every country, and which lives
from hand to mouth, can't wait till stocks are sold
and converted into specie, or bonds and mortgages
realized by the tedious process of law. They must
have bread and, in order to procure it, dispose of
these notes of a broken bank at any depreciation.
Those who buy them generally agents of the in
solvent bank and when all, nearly ALL are bought
up the bank advertises to redeem them par hosts
its flag again. and sails before the wind till it meets
another adverse gale, and another shpwreck
But, setting this objection aside, the security af
forded by State or any other stocks, or bonds and
mortgages, is, in other respects, liable to many OBJ
jections in addition to the delays in their convert
biity into cash. All stocks liable to great luc-
tuatons in value. At one time the stock of New
York. which had been above par value, sunk to
twenty per cent below it that of Pennsylvania was
still lower that of Ohio lower YETI that of Illinois
was worth no more than eighteen or twenty per
cent. and similar depressions prevailed throughout
the Union. The case is the same at this moment to
lesser extent it is true but it is quite certain that
if the stocks deposited security for the redemp-
ton of the bank-notes for which they are pledged,
were to be Sold they would be totally inadequate to
that purpose. AS to bonds, they are, like stocks
and bank-notes, but paper promises; and as to mort
cages, they may be very good security in ordinary
cases. but in one like this where there are such
temptations and opportunities for fraud, experience
has shown they are not to be depended upon. Even
a specie capital is illusory, the memorable Mich
gan travelling capital" demonstrates, most especial
ly when we see by the bank statements that their
loans and issues of bills vary from three to ten,
twelve and fifteen times the amount of their specie
That specie, be it great small is here to-day and
gone tomorrow. 1t is continually exposed to great
and inevitable fluctuations. rise in the rate of
change is drain; overtrading in foreign commodi-
ties is drain a combination of brokers and specu-
ators to obtain specie to sell at profit is another
drain; and, in short, the banks, like adventurous
merchants may be left nothing to depend on but the
notes of debtors, who depend on borrowing money
of the bank to pay the bank.
In considering the subject dispassionatey in every
point of view that presents itself, We have not
been able to resist the conviction that banks of
issue, so far from being beneficial, are highly
injurious to the permanent happiness and pros
perty of a. nation. Their defects are innate and
nseparable from the system and cannot be eff
fectually corrected by all the wisdom of Legislators.
But even if their wisdom sufficient their virtue
is not proof against the temptations by which they
are assaed. Every reform is calculated to restrain
the action and diminish the profits of the banks,
which will assuredly combine to oppose it. They
will rally an influence which extends through every
vein and artery of society they will employ log
rollers and buyers and sellers of to deal with
the Mattesons to be found in every Legislative body
and hence it s that when efforts made to prevent
correct, OF punish the mafeasances of banks, expe
rence has clearly shown that it is either impossible,
or, if possible that legislative bodies will never
resort to those radical means which indispen-
sable to hold the eel by the tail In short the effect
ual correction of these abuses would be fatal to the
whole system for it would render banking unproft-
able.
But it may be asked "Would you abolish banks of
issue altogether?'' Not all at once altogether,
for that would occasion only still greater present
evils with nothing to mitigate them but the hope of
future benefit. The remedy would, possibly, be
worse than the disease. But it might be done by
degrees, and by simple process-that of gradually
increasing the denominations of bank-bis, and pro-
hibiting the issue and circulation of small ones. The
circulation would thus imperceptibly become metal
lie by process which is uniform as the laws of
Nature There would be less and less occasion for
paper money, and thus by degrees we should, with
out encounterng what is called crisis, pass from
paper to specie circulation 1t is only sudden and
violent changes and rash reforms that derange socie
ty, and create widespread distress. Reform should
come like the gradual approach Of spring, which qui
city brings the benefcent powers of Nature into life
and action; not like sudden tempest, which levels
alike the wheat and the tares
But we greatly fear that all such speculations are
idle and useless, nasmuch there seems ration
al hope of their ever being carried into execution.
There are thrty-one States which have (shall we
say y usurped the power of issuing "bills of credit
and whose united action would be indispensable in
checking the manufacturing of shin-plasters There
is people to deal with who either misrepresent
ed by their legislatures have been persuaded that
promise to pay is as good as silver and gold that