Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1857-12-24

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It tinue to recur at successive interva
: SO long as the amount of paper Gu
rency and bank loans and discoun!
of the country shall be left to L
! discretion of fourteen hundred irr
sponsible banking institutions viii,
from the very law Of their 5patu
!, will consult the interest of their stocl
t holders rather than the public we
fare. % - as,v sfsa...:..is
The trainers of the Constitution
when they gave to- Congrsss the poV
) er sto coin money and to regulat
the value thereof" and prohibite
the States from coming money, emil
ting bills of credit, or making any
thing but gold and silver coin ten
der in payment of debts, suppose,
they had protected the people agaics
The evils of an excessive and ire
deemable paper currency, They ar
not responsible for an existing anon
ally that a government endowed will
the sovereign attribute of coming
money and regulating the value there
of should have no power to prevent
others from driving this coin out ol
the country and filling up the chan.
nels Of circulation with paper which
does not represent gold aud silver
1t is Que of. the highest and most
r saonsible duties of the government
to insure to the people a sound circu.
laiing medium, the amount of which
ought to be adapted with the utmost
possible wisd(& and skill to the wants
of the internal trade Fand foreign sex-
changes. If this be- either greatly
above or grt atty below the proper
standard !, the marketable value ofev.
ry mans property is. increased or di-
minished in the same proportion,
aud injustice to individuals as well as
Iincalculable evils to the community
are the consequences.
Unfortunately, under the construc-
ton Of the Federal Constitution,
which has now prevailed too long TO
be changed, this important aud deli
cate duty has been discovered from
the coming rower and transferred to
more than fourteen hundred State
banks, acting independently Of each
other, and regulating their paper is
sues almost exclusively by regard
to the present interest Of .heir stock
holders. Exercising the sovereign
power of providing paper curren-
cy. instead Of coin, for the country,
the first duty which these banks owe
to the public is 10 keep in their vaults
a sufficient amount of gold and Sill
yer to insure the convertibili.y of
their notes into coin at all times and
under all circumstances. No bank
ought ever to be chartered without
such restrictions on it's business as to
secure this result. All other restric-
tions are comparatively vain. sH
This is the only true touchstone,
the only efficient regulator of a pa.
per currency-the only one :which
can guard the public against over is
sues and bank suspensions. As a
collateral and eventual security it is
doubtless wise, and in all cases ought
to be required. that banks shall hold
an amount of United States or State
securities equal to their notes in cir-
culation and pledged for their redemp-
tion. This. however, furnishes no
adequate security against over issues.
On the contrary, it may be perverted
to initiate the currency. Indeed, it
is possible by this means to convert
all the debts of the United States
and State Governments into bank
notes. without reference to the specie
required to redeem them.
However valuable these securities
may be in themselves, they cannot be
con nverted into gold and silver at the
moment Of pressure. as our experience
teaches. in sufficient time to prevent
bank suspensions and the deprecia-
ton Of hank notes. In England,
which is to a considerable extent a
paper money country, though vastly
behind our own in this respect, it
was deemed advisable, anterior to
the act Of Parliament Of 1914, which
wisely separated the issue Of notes
from the banking department., for the
Bank Of England always, to keep on
hand gold and silver equal to one
third Of its combined circulation and
deposits. IS
II the proposition was no more
than sufficient to secure the conyerti-
bility ofits notes, with the whole q