Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1857-10-25

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Essex ~
Bristol "a
The Suffolk Bank Of Boston is not included in the
above II held at that tine a considerable amount
| Of specie belonging TO the country banks We have
taken these facts from the Massachusetts returns,
not because they peculiar extravaGant as COM
pared with those Of other States but because they
are convenient to our hands, and because they pre-
sent probably neither of the extremes Of high or
low circulation.
Statistics like the foregoing might be indefinitely
extended, but enough has been presented to prove
cur position that mixed currency is constantly hue
tuating both in quantity and quality. Fixing our
eye steadily on this great fact we are enabled to
account for all those frghtful commissions in the
monetary world which We know take place, those
disturbances Of trade, that spirit of Overtrading
speculation and gambling that fearful reckessness
and disregard of mercantile obligations, so rife
among rs. If no true faith can be placed in the
currency, no true faith ought to be expected any
where; If the standard of mercantile obligation is
destroyed, what is left? This is the characteristic
and most important fact in relation to such a cur
reucy. 1t IS fact on which every other seems to
hingeand 1t cannot, therefore, be too deeply fixed
in the mind Of every one Eha wishes 10 comprehend
the various phenomena Of a mixed currency system
We proceed TO examine in detail che consequences
which We should naturally infer would, and which
we find actually do, take place wherever such cur
rency exists.
1. i mixed surrrency stimulates credit at one
time rnd depresses it correspOndingly at another
While the banks are expanding the currency;
that Is, increasing the xuantity of credit money
they are very DESTROYS to make loans, and all who
apply with fair paper good notes. &c, are sure to
get accommodated, even if the paper they offer
has five, SIX, or IN many eight months TO run.
Money is thus made plenty: everything advances in
price; business men feel willing to give their own
notes, because it is easy get money with which
to pay them, and they are willing to give credit and
long credit too, because the they take are so
readily cashed at the banks. 1t is now good times
Everybody can pay, therefore all only ready
but anxious to sell on credit. In this manner, and
for these reasons, credits increase with the most as
tonishing rapidly; men to lose all sense of
lear, and confidence is universal.
Now comes the reverse of the picture The banks
from necessity commence a contraction: they have
Overtraded well as their omers; many of them
owe ten, twenty thirty dollars payable demand to
every dollar they have IN their vaults; they are
called on for specie and Jhep at stop all lorns
This they must do or fail. Business men 90 to the
banks usual to borrow money, but can get none;
they call on their debtors TO pay but money is scarce
aud geJlng scarcer every day; the abest Of their
debtors can pay but little, the weakest none The
money market grows worse and worse. and country
merchants, city merchants, manufacturers, AMI
Jradesmen Of all kinds begin to feel the pressure
The wheels Of business are clogged; conf lence |
once so high and general, is nearly annihiated |
most transactions are made for cash men are now
as unreasonaby suspicioos, they were before
ndly cOuhding-all in the expressive language of
trade Is. ''stagnatIOn" How many times has this |
game been played over in Great Britain and the |
VI ed States And how cerain is it that il must
be again and again repeated while sdch currency
exists.
IL. These fluctuations Of mixed currency cause
numerous bankruptcies.
This We have il tact already seen. The bankrup- |
In kp nj 10 i'm
proportion to the expansIbi and contracubility |
Of It's currency. This Is fixed law-it must be so !
in the nature Of thiugs-facts show il to be So OF
all COUNTRIES which have mixed currency France, |
from 1913, when the Bank of France establish. |
ed, up 10 lS4S, had the most uniform and safe-the
SMALLEST proportion of credit money Its general |
average from 1909 To 1888 according TO official |
statements, was 20 dollars in specie to "a in bills
Or i've sixth OF Its currency was value money, max
ing an average adulteration of only one-sxth.*
In France we find, during that period, the fewest
failures Of any country which has mixed currency.
England mas far more fuotuating currency than
France. Scotland has a currency sun more vascilla-
.ng Than that of England but as we have not been
able ind any StGttScs from that country, can
not the proportion Of its credit money. From
he suddenuess aud violence of its contractions how
ever, have the most conclusive evidence that the
Of Scotch currency Is much greater than
that of England In the United States the cur
rency Is more insecure and unstable than in any
other country in the world. It's elasticity is such
thai j, ,xpaI Is and contracts many times its aver
age lengtu, as we have alres ly shown by official
statistics We have it asserted, but do not now
'ecoect upon what authority, that the comparative
bankruptcies among business men in the different
countries named was as follows:-In France, 10 out
IF every 100; England IS; Scotland, co. United
States, so.
or the general correctness of these estimates
here Is little doubt. 1t has been demonstrated by
The many examinations that have been made, that
Inc bankruptcies in this country among merchants,
manufacturers, and business men in general, who
Eve and take credit to any great extent 80 out
oi every 100 And it is presumed that the obser-
'aIloh OF all acquainted with the commercial history
ol the inherent countries above named, will confirm
inc general correctness Of this table of bankrupt
'les anu 60 lar to prove, if any proof be wanting,
ha the failures and the dangers which attend bust
lesS oPerauohs IN any country are ceterts paTTjus
as the proportion Of its credit money to its value
money we are well satisfied of the correctness of
he principle.
When the process Of contraction commences. the
first class on whom 1t falls is the merchants Of tbo
arge cties--they find 1t difficult TO Get money IN
pay their notes The next class is Iha no,n,fac-
urerS-the sale Of their goods at once falls off The
abOrerS and mechanics next feel the PRESSURE tb,,
ire thrown out Of employment; and lastly the far
ner finds dull sale and low prices for his produce
md all, unsuspicious of the cause, have a yacno |
dea that their difficulties owing to 'shard
ines" And not only does this system, by its great
ssue of credit money-dsturbing the laws of trade,
destroying all careful business calculations and
xcting the widest pitch Of frenzy, overtrading
ne-sided over-production and speculatiOn-cause |
II these extraordinary fluctuations of trade and $
redit but the banks often head the long list Of
bankruptcies, and give the fatal blow to great COM l
lercia houses staggering in very drunkenness I'M
er the stimulus of expanded paper The slightest '
uspieion Of its ability TO meet demands will over i
urn any tank but the frmest and surest. L
Periodical reyulsiOns in trade of frightfu! char