Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-09-26
BANKS AND BANKING.

we commend the IouOWInS sOunu anu SenslDle
views, from the Cincinnati Commercial, to the
careful consideration of our readers Its applica-
ton is general:
A day or two since, in article glancing at our
present financial condition, we intimsted the opin
ion that of the principle causes of the unsouud
state of the currency among US, and the doubtful
credit of money concerns here and elsewhere, was
to be found in the consequences Of the attempt,
the part of legislative bodies, to legalze a paper
currency-to confer upon that which is, in itself,
of no value, the character of money. To those
whose philosophy does not 60 far enough to include
the principle that for every event that OCCURS there
is or has been somewhere an adequate cause, we
may seem to be talking enigmas; but We are fully
convinced that among the intelligent and thought
full there are few who will find it difficult to trace
almost every admitted disease in the monetary sys
tenn of the country, and almost every shock IN
financial affairs, directly back of a cause among
the natrual consequences of the legalzed manufac-
ture of paper money.
That there is consciousness among the masses
to this effect, we do not entertain doubt. Of the
drawing and progress of such consciousness, the
people of Ohio have, for a number of years, given
testimony which, although for a time owe looked
by the advocates of paper money banks, it folly
to ingore. The vote of last year upon the bill, to
establish banks, submitted 10 the people, and the
absence of anything like feeling eff solictude for
the fate of the that is pending-destined, with
out doubt to the same fate-should be sufficient to
convince all who feel any sympathy wi the move
ments of the popular mind, that the time for such
institutions as responsive to any express implied
demand from the people, is past. If banks are to
be chartered-if the machinery for the manufacture
of paper money is to obtain a legal existence--it
will be in obedience to the desires of the capitalists
as s mode of investment suited to his tastes and
habits, or of the speculatOr, a means to place
within his reach the implements of monopoly
There may have been time when banks of issue
served the people, and were of service TO the people
bit Il at time is past The occasion upon which
such service is rendered are too few to supply the
basis of decent pretence The object Of a banker
is-always in greater or less degree, and in many
cases exclusively-to the people for his own
beneft-that benefit being, not the legitimate
profits of a banking business, but the irregular
successes of hazardous speculation in commodities
which held to be desirable for the purpose IN
proportion their prices are uncertain, and their
| value subject to fuctustion.
1t is fact that is worthy of reflection, that about
in proportion as the precious metals increase in
quantity, is also the increase in paper money and
in an equal degree is also augmented the spirit of
speculation 1t was thought by many and nationally
| enough that so huge tide of gold and silver was
of late years being poured into the channel of trade,
| that paper money-whose existence was supposed
! TO be owing TO an actual want of the precious
| metals, would disappear. This has not proved to
| be the case On the contrary, gold and silver are
only the basis for the issue of paper that they were
before and the basis expands, so-is the shaky
and unsound structure enlarged. This is TO be re-
GREETED. The stimulus of regular and gradual in
crease of money in a community gives an admirable
liveliness to trade, vgor to industry reality to the
transaction of business, and soldity to the general
condition labor is well rewarded; the enterprsing
and careful grow rich, and the poor live better and
| more easily. But in the human system SC in
the body polite, there can be nothing produc
tive of dangerous irregularities than an excess of
| stimulation. Had the issues of paper given way
before the tide that flowed in from California, we
should have been enjoying, at this time sufhcien-
cy for every business purpose of money whose char
| acter no bank failure can effect, instead of a
| trashy currency which men fear to hold from one
day to another, and concerning whose value, the
only thing of which they are convinced is that it
| is doubtful
There was never a more absurd idea, and yet
scarcely one that has been made generally prevalent,
than that banks of issue can create capital We do
| not know how many times we have been informed
that if Cincinnati could have eight ten millions Of
| bank capitGJ-by which meant banks authorized
| to issue eight ten millions of paper dollars
| its prosperity would be secure Looking at past
events and present conditions, have the right 10
| believe that while that eight or ten millions of
bank capital would not have been represented by q
single million employed in regular business of any
| kind it would have been the occasion of annual
fifty millions of speculation and at least its own
| bulk in bankruptcy. In fact the present mercsn-
tile sOuudness of Cincinnati is the result of not hav
| ing had that same eight ten million of bank
capital and it is true that the repute for solvency
and sOlidity which this city enjoys abroad, well
in Europe America, is not only attributable, but
is actually attributed to the fact that have been
in great destitute of those bank facilities
| whose service to the business community are at
once specious in their promise, and so dangerous
/ in their consequences.
Whatever may once have been the case, it is GER
tain now that speculation and paper money banking
60 together and that one is the inducement for and
| probably, a very accurate measure of the other.
| Now it would require space than we have to
| enumerate all the mischiefs that spring from the
indulgence of a spirit Of speculation To say that
in great majority of the Spectator ends by
impOverishing himself is to begin with that which
is of the least Importance. 1t is the public that is
thesufferer and if we could only get total amount
of the tax that is annually paid by the people of
this Union in consequence of speculation in articles
| of necessity, the would apear enormous
that would be willing to part with all the con-
veniences that spring from the use of bank paper
credit, we're they so great they have been
represented, if whit could get rid Of the effect
of those mischievous operations of which they have
been ever, and now than before, the ORR
| gin and exciting cause.