Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-24
From Hunes Merchants Magazine.
BANKS AND CURRENCY.


OH OF BANKS BANKS OF DEPOSIT, DISCOUNT
OBSERVATION-DISCLOSURES CURRENcY-ITs NATURE
MIXED CURRENCY BANKS THEIR ORIGIN.
Many expedients have, at different times and
in different countries, been adopted to secure @
temporary and partial currency, but so far as We
know, from the days Of Abraham, who paid 81 fom
hundred shekels Of silver, current money with the
merchants, for the field Of Ephron" to the present
time, the money used in commerce between differ
ent nations, has always been composed of gold and
silver These, and these only, have formed the
uHtVersSt medium of exchange and standard OF
value.
The use of these metals as money arises from
nothing conventional. No international agre m mt
or treaty was ever made respecting them, yet lney
are everywhere, and without hesitation, received
in exchange for whatever any one may wish to dis
pose Of.
These facts lead us to inquire what peouliarities
these metals possess, which render them thus
universally acceptable as money.
LIST. They possess UaLue; that is, cost labor, and
are objects of desire. We have endeavored pre-
Tiousiy TO show that the article used u standard
of value must of necessity, possess absolute value
in ITSELF since we can only measure value with
value. Gold and silver have this indispensable
requisite.
I'd. These metals stable IN UaIUe; that is
the most SO Of all known commodities. This is a
great desideraum for the standard of value should
be as inVarIable as possible. The e1changeable
power Of no commodity can be absolutely fixed in
relation to all others, for the relative quantity of
each Will vary from time to time to say nothing of
those differences in the cost of production which
may arise from many causes. all we can attain
Of perfection is, TO take that article which, on the
whole, and in the long run, maintains its relative
value with the graetest uniformity. Now the pre-
ciOus metals do this more satisfactorily than any
other commodity il existence; for, although the
value, or exchangeable power, Of these is greater
IN one age than another the changes that do take
place sre so general as to be nearly imperceptibe.
The discovery Of the western continent which
opened TO the commercial world the accumulated
treasures Of Mexico and South America, caused the
greatest change In the value of the precious metals
that ever has, probably ever will, take place
From 1892 TO 1850, period Of about $50 years, it
has been calculated that gold and silver fell in value
as compared with other commodities about IS per
cent But this fall was only equal half of one per
cent per annum, that even this change must have
been gradual have inflicted but little injury
on individuals, and would only be appreciated at all
IN the case long annuiues and other obligations
OF a similar character.
All other commodities are subject to great and fire.
quent changes, equal sometimes TO % 50 per cent
in a single year Such great fluctuations never have
and from the nature Of the case probably never will
occur in the value Of gold and silver and therefore
they form the best possible material for money so far
as stability ofVatue is concerned.
Sd. They are conveniently portable One pound
weight OF gold is equal in value about 900 pounds
Of iron, ,2O0 pounds ofcopper. No other srticle
existing in adequate quantity, has equal portability
as compared with its exchangeability. On this ac-
count, therefore, it is Of all articles best adapted to
the desired end
The power Of gold in exchange in proportion to
Its weight, may be further in the fact that ONE
POUND OF is, on au average Of prices throughout
the United States, equal to $4,000 pounds Of wheat
10000 pounds Of Indian corn, five of rice, or
One-and-a half tons of cotton.
4th. These metals are Huiled5lD. They can be
wrought into any shape, will receive and retain any
impression that may be put upon them; they may be
divided into the mnutest quantities, and again uni
ted with the smallest possible loss. Hence they are
peculiarly adapted to coinage, and may also be con
yerted TO great variety OF alternate uses act
ing as ornaments of the person, now performing the
functions Of money.
9th. They are of uniform quality. This is an i'm
POrtant fact. Gold silver is always the thing
precisely Other metals may vary greatly in quail
~, but gold or silver never. Found in the san Is of
Africa in the quartz Of California, the mountains
of Russia gold is always and everywhere gold
nothing less nothing more The iron Of Sweden, OF
England and Of Pennsylvania, vary in essential par
ticulars, but not so Of gold or silver.
9TH These metals may be readily alleged refined.
By alloy they made harder so as to resist more
the abrasion incident to use as a circu-
lating medium. If desired, they can be again re-
lined and assayed with the greatest accuracy, and
little or no loss. Of what other commodities the
same be said
9TH. ImperiShdble. Fire does not consume them.
changes cause no decomposition. Sunk
IN the bottom of the ocean. they do perish and
The flames which reduce a city TO ashes leave the
gold and silver essentially unframed. The precious
metals which ornamented the Temple of Solomon |
may, and probably do, at this moment part OF
the currency of the world.
Sth. Beautiful 1t is certainly a remarkable fact |
hat in all countries whether barbarous or civilized,
The precious metals esteemed objects Of great
beauty.
In the palaces Of the great and the cabins of the
owly, IN the wllds of America, the steppes of
lartary, wherever man is found whatever his color
condition, whatever in other respects, his tastes
Or aspirations, gold and silver are esteemed as OBJ
ects of beauty. From the ordy AnglO-SsxOn to /
The most degraded Patagonian savage, the desire for
these metals COR ornament othe person household
exists, and the desirableness an object is ele
ment OF its value
9Th. CHiOesGiiy difassd This fact is also worthy |
Of notice In every principal section ofthe globe the
precious metals exist in such quantities as be OBJ
ects Of attention. Europe, Asia, Africa North and
South America, Australia, all produce gold and sill
yer.
10th. Lastly these metals are sutfcienty plentiful
10 furnish currency for all the wants of commerce
This We argue from two considerations: first from
The very nature Of money itself; secondly from the
TACT that according TO the best esmations not more
han two ttths Of the gold and svernow in existence
is used money. the balance being in plate or other
objects of ut ity ornament. In our lasl article
we endeayored TO establish the fact that increasing
The quantity Of money only reduced ITS value or
power IN exchange by increasing prices and extend
ing credits. Ii that point is clear land nothing Is
more demonstrable more in accordance with facts
Of every days observation then cannot be denied
bnf hg rfrpa ,frc mat a.15 .,y,-t g..
for use as currency throughout the world.
In TINS connection, II may be proper to add tina: |
The adaptation Of these metals to great variety of
uses, other than for money, is a matter of much i'm
rortance; for as, both in the manner in which they
are produced, VIZ, by labor, and in the demand
which exists for them, viz for great variety of the
ordinary wants Of mankind, they are brought within
the influence Of precisely the same laws as all other
values, they always maintain their legitimate po,i-
ton in the aggregate wealth of the world As soon
rs there Is real redundancy Of gold and silver A.
required for money, they are once converted into
Plate Je"elry' &c. &c. Money being plenty and
cheap men can afford TO the precious metals for
other purposes, and they always have done 50 But
it is further worthy of remark that as general fact
The precious metals only toa limited extent u.ed
in such amanner that they cannot be read " brought
back into currency If desired and hence the pla,e
which ornaments the table Of the spcnithrif 10 day.
NAV be found IN the Golfers of the banker TO morrow
We are aware that il is denied that these metals
10 exist in sufficient plenty to meet the wants of
commerce. il is, we know. a disputed point on !
vhich great and important theory rests and there
fore deserves more extended examination than we
nave given il in this place, can advautageously
rive it. until we have taken into con liberation the
rarious substitutes for actual money which have be
come from time to time, introduced save the use
If the precious metals. We not prepared to de-
,de in full view Of the whole ground until We have
Examined in detail the entire financial machinery Of
commerce; have considered the effect Of credit book
accounts, promIssory notes. bills Of exchange, and
,ther similar inslrumentaties, by which great part
# the Otherwise necessary Of money is dispensed
With. They demand a separate chapter, and more
appropriate place.
ORIGIN OF BANKS.
If we 60 back TO a primitive condition Of society,
re may suppose that in given town or city there
re 900 persons engaged in trade, each OF whom
/ wing occasion t pay audreceive money every day
hey must, of ,-sty. have constantly on hand an
IN uni OF coin greater or less according 10 the ma
ure and extent Of his business, and have q safe, or
"a Il was called in olden time, ga strong box, IL
Thich 70 place it for security. There must have