The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1857-10-13
BANKS AND BANKING CONTINUED.


BANKS AND BANKING CONTINUED
In discussing the evils of paper currency we
have desire to injure individuals or associations
We illustrate its consequences by holding up to view
what occurs before the world and it is not
our fault that in doing we refer to those
engaged in the manufacture and issue of prom
Uses which they suffer to deprecate, and do not,
when called upon, redeem with specie. When
we the word bankruptcy" it is in its Iegiti-
mate sense ''the state of man unable to pursue
his business and meet his engagements in conse-
quence of the deranged state of his affairs" Those
who have taken exception to our language should
learn the difference between bankruptcy and insol-
vency; and that man may be bankrupt while per-
fecfy solvent, and may be insolvent without having
committed an act of bankruptcy and that there may
be great losses bills that are ultimately redeemed
at par.
When bank Tor indiyiduaD stops payment, there
is state Of bankruptcy, and the natural presump-
ton is that cannot pay, from which even insoven
cy may be inferred. Where the refusal is because
it cannot pay, injury to creditors and the public nat
uraly follows; but where coupled with professed
ability to do SO, then there is only bankruptcy,
both classes exist among us here and elsewhere we
fully believe. We have referred to some. In the
attempt to screen themselves from being called bank
rnpt, many have volunteered facts which prove that
they are So and also, with means in abundance to
raise money with which pay their debts have failed
seasonaby to apply them to that purpose, and thus
have money in hand to pay their debts but have left
their creditors and the public to suffer for having
placed confidence in them Our object is not SO
much to show up fash establishments as to illustrate
the fatal consequences of pernicious principle
which is largely the basis of ruinous action in re-
laton to currency. Until the evil became intolera
BILE the country would not listen to those who ure y
the government to cut loose from paper currency
and banks, and have treasury of its own and use
real money
The year 1887 exhibited the spectacle Of millions
OF paper money belonging TO the government in the
hands OF Tanks, without its being able to command
a dollar Of real money to pay its current expenses.
congress was convened to furnish the needed relief
which they did by authorizing the issue of treas
ury notes and borrowing on loan. The banks then
sold specie which they would not use to redeem
their bills or pay their debts. At their leisure
large snare OF them paid but still the government
lost an immense sum by the banks
This fthlessness of paper issuing institutions led
10 uie independent treasury, which, though once re-
pealed at the dictaton of the enemies of the demo-
cratic party, is now firmly established as the con-
stitution, and serves to small extent as regua
tor 10 commerce and financial matters. though Incl
dentaily 30. Without it the crash would now he
worse than in 1897. 1t has been the great ipstr,,
ment of preserving specie, which it now pavs
ou'' renewing the pressure Congress-, in passing
TINS law has efectnaIly protected the govern
lnent nom the c;rse of issuing paper credits in
i's everyday business. But the people at large are
sun subject to the evil which the government has
wisely escaped. In refusing bank charters in this
Distriaf, and leaving the old restraining laws in
force. Congress did all it could to rid il Of
paper currency with all its fluctuations. losses |
and corrupting consequences upon the public,
and especially with bank officers and clerks by en-
oezz'ements. But the States have inflicted the evil
upon the country and private individuals are veing
WIN corporations in deepening and spreading it. |
Every State, except Arkansas in some form charters
panFs to perform the high function of making cur
rency which is alone delegated to Congress and for
hidden to everybody else. Even foreign coin can
not be made tender to pay debts without Congress
sanctionng it by law. The 10th section OF the first
article of our national constitution provides that mo
STATE SHALL COIN MONEY EMIT BILLS OF CREDIT MAKE
ANYTHING But SILVER COIN A TENDER IN
PAYMENT or DEBTS" Although people in North Car
DINA and California have furnished bits of gold worth
q dollar, and perhaps larger ones, no State, we be-
heve, has attempted to coin money. Since the rev.
oution, when most if not all the States issued
bills OF credit, no State except Missouri has
done so. Under a law of 1921. she emitted |
bills in this form This certificate shall be
receivable at the treasury of any of the loan Offices
in the State Of Missouri in discharge of taxes or debts
due to the State for the sum of - dollars with in
terest for the at the rate of two per cent per
annum from this date" In Crags and in Byrnc's I
the United States Supreme Court held these 10
be bills of credit, and their emission prohibited by
the constitution. But although prohibited from in |
ficting evil severely felt during and after the
revolution by their act, all the States except
one have created corporations, and conferred upon
them the power to do so. When the State is re-
strained by distinct act to avoid specific evil.
we cannot understand how she can constimtonay