The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1857-11-11
TIL Il DISPATCH.
"LDNEoUA1 MUHNINu-...NUVEMBER m Is5T
- .oS''
Fian OF a Single Department. OF Issue
Tor Furnishing State with Cur.
rency.

WEDNESDAY MoRNING.-..NovEMBER II. 1851.
Plan OF Single Department Of I..ns
Tor Furnishing State with Cur.
rency.
We have been requested to publish the following
views, submitted by Mr.. VIM. b. Reynolds. at a
late meeting of the Boston Board of Trade and
which are published In the Boston Courier.
l. That while banks of discount and deposit. n
established on sound principles, may be multiplied
10 any extent with advantage TO the public IL is
advisable that the business OF issuing notes naxa
bic on demand, should be entirely separate and
distinct from other general banking business and
that the power OF making aud issuing pa Der money
business is to loan money.
III. mat the power of furnishing the State with
currency, should be exercised by the State for the
peheht OF the public at large, and that the profits
taiter dedncting expenses attendant upon the is.
sue, towards a reduction Of the public taxes
III. That In lieu Of the one hundred and seventy.
Mfe NV banks oil issue, now existing in the State of
massachusetts,, each acting for itself and each fur
hishihg its portion OF the currency, there should
De out one bank or department. OF issue managed
Ny directors or commissioners appointed by the
State TOT account of the public aud that the busi
nss VI snese onicers should be confined to the is
suing OF notes against public securities and gold
bullion, without any banking or discounting priyi
leges these to be left where they now are w;tb
the banks and with individuals.
~. That In establishing the relative pronortions
uct"een the issues of bank notes and the securi-
ues and bullion held by the issue department for
,belr redemption, the perfect convertiblity of the
oa'k hoie INTO specie at all times should be Sc
peyohd shadow OF doubt, which, it is gene
faiy admitted. may be done by holding two-tbir,Js
OF nndoubted securities aud one-tbird of bulIion
Iof the amount OF notes in crctlation The bank
note should be legal tender anywhere. except by
the issue department.
v. That the banks of discount and deposit. instead
otlssuIng their own notes as at present shcnId ha
furnished with notes by the departments of issue
against deposit of public securities and builon i'm
.he proportions already mentioned, or such others
Us may De hxed by law, and that, to coppen.ate
the banks In part for the loss of the profits on their
circulation, they should he relieved from the state
TAX oi one per cent. on their capital
vi. That the usury laws, which are so penara,Iv
Glsregarded as to be almost dead letter should h
abolished entirely, and the banks AS we'll as ind;
Vluuas, be at liberty to raise or lower the rate of
discount according TO circumstances as is done hy
.he bAhks OF England aud France the legal rate Of
interest to remain As heretofore, at q per crnt
When no other is stipulated N'
VII INT the acci mutation ofthe public revenue
III ,l1 nahds oiuoVerhment, whereby large amounts
"a Uu'oh are inole 10 be abstracted from the usual
chauheis of trade. tends to produce contracton nj
the currency, pressure upon the money morLet
ana "a hlSh rate ot interest, resultip" in th, n,s
aisast'ons consequences To those who are Tins Il.
pi'ed OF the usual facilities for Carrying on their
optrdt o.s. " ~
kEMAkKs:-The plan Of a single denar,p.ent .,
issue lor furnishing State with currency is nather
mover OF str'het' lor 1t has been sanctioned y the
ihIs' eminent authorities in political economy and
Is now IN course OF practical aupIicatinn hy ,h.
Bank OF England, that being the leading f.atnre in
the new bank act of lSif, introduced into parIi.
ment by Sir RI bert Peel, and passed under hi. aJ
nlhiattatioh- PREVIOUS to the passage of that act
MCtullOch, writing on the subject saws: ..riil the
sole power of issuIng paper money be rom,nitted r
some one body, the country will necessarily he ex
posed to those perpetualy recurring Huctuation.
in the quantity anu value of money that ,r. pro
ductive of the most pernicious consequences and
which go lar Indeed to impart to ali Industrial ui
dritdl 81 sort of gamh!i z char C er st
Prefe the currency is supplied by hundreds
nstltu,i u.s. all actuated 10y different and frequent-
y conflicting views of interest,"
10 illustrate the operation of Tie Bank or De-
ment Of issue, let us assume twenty millions of
dollars as the lowest point to which tie circuI,-
tlou of notes in the State of Massachusetts could
lail, under the most unfavorable circumstances IN
has not been lower than that during the present
crisis) Now, if the Department Of Issue holds
public securities for that amount aud gold for all
Its Issues of Hotss, over aud above that amount
there can be no doubt of the perfect convertible
" oi It's circuiatlon but II against all reasonable
probability there should be a run upon the de-
partment. and its stock of gold should he exhaust.
ed, 1t would be the duty of the Directors to sell
portion OF their securities for gold and thus con-
tlnue TO redeem their notes. and, the sale of se-
curltles might be attended with some sacrifice at
such a period Of d:strast Il reserve tuud might bc
provided to meet sucn loss, by allowing the inter
est OF the security to accumulate for two or three
years, before the Dep rtuIent commenced paying
the came into the State Treasury.
If twenty millions should be fixed AS the maxi
mum upon which the department could issue its
notes, based upon public securities, then il should
hold ten millions more in bullion. lug in ali
thirty millions of dollars and be allowed to issu..
notes for thirty millions. The Department would
IN the first instance have 10 prepare these thirty
million OF Bank notes or promise to pay on de.
mand, i'll the name OF the Commonwealth of Mas
sachusetts, and the Banks of discount and deposir
to provide themselves with these notes for thri.
would have to bring the public spcur,
ties and the bullion in the proportion pointed out
hen all the exchanges were completed the De.
partnent OF Issue would hold in public securities
twenty millions OF dollars. and in bullion ten mil
lions, against thirty millions of notes in crcula-
ton. If the Banks wanted more notes they
would have toAring gold for them. dollar for dol
lar. Supposing The puUuc securities to gam ,
per cent. interest, the Issue Department would re
ceiVe 81 100000 per cent as profits the circua-
tion, against $4,000 the present annual bank tax
which it is proposed TO remit, leaving "a balance
Of $6O00Ue out Of which the expenses of the De-
paitment would have To be pald but there would
still remain probably $5DJ.UUJ to be paid over
the state, and 10 that extent the public taxes
might be reduced.
Let us what would be the operation OF
the new system upon the l73 banks now existing
in the Stale-they would lose the profits on tweut,
millions Of CT. cJiatun-amounting to 81 30 O93 but
they would be exempt. from the tax of per cent
IN their capital: say 100000 and they would be re-
leased from the OF Grafton of the usury laws, which
would enable them to raise the rate of discouut
whenever the demaId for money warranted it. as
the Bank of England does, and if by so doing they
average per cent, on their capital, instead of /
per cen'. they would be fully compensated for the
loss OF their circulation; besides which they would
still retain the profit their deposits which mis sht
be made sure and certain source of revenue by
the rule that every customer should
have always permanent deposit in the hands OF
his banker TO compensate him for keeping his &C
count, or allow him small fraction of per cent
on the yearly amount of his bank business, as is
the custom in Hamburg The abolition of the usu
~ laws would enable the merchant to charge the
current rate of interest in account current t. his
instead of per cent as at present
by which he is generally loser, the average cur
rent rate OF interest throughout the year being
from to per cent,
If 1t be made an objection to State Department;
OF issue, that such power in the hands of politi
Il ms III It perverted y unworthy ends, il may
be stateu IN reply that the plan may be so arranged
rs to be almost selfacting and mechanical IN ito
operation, without giving the government of the
day any control or connection with it; and the
commissioners or Directors themselves would have
no other discretion than that of determining at
what point during the period Of contracting cur
rency, It would be necessary to sell q portion OF
their securities held against tho twenty millions of
notes. 80 as 10 prevent the possibility of an exheus
fior cf their bullion; and. when again they should
these securities; never, however, ex-
,eeding the original amount Of twenty millions of
tollars."
As for the oid, anti luated, impolitic ~ law.
Which are disregarded by ever, body, snd which
iefeat the very object they were intended to ac-
'omplish (that of keeping down the rate Of inter
,st TO . per cent? the sooner they are stricken
rom the statute book, the better.
The accumulation Uf large amounts of bullion In
he National Treasury is an evil which must be ap.
parent to every body, and perhaps TO no one more
han the present Secretary of the Treasury, whose
udicious action in the actual crisis in disbursing
he funds under his control far prudence |
would admit, has no doubt alleviattd very much |
he pressure and entities him to the gratitude OF |
he community. 1t may easily be imagined how |
much more aggravated might have been the crisis !
instead of twenty millions there had been forty |
millions in the SubTreasury with a Secretary of |
llIierent callbre to control vast q and with