Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1857-10-28

4AAA1t
For the Memphis Appeal
ready and decisive answer can be made to
TIE argument of the writer Of the two recent
articles in the APrEAL against Banks. Evil
IDENTIFY those articles are ths work Of one who
has read and thought much on banking, and
who handles a prsctieed pen. Quite as evil
IDENTIFY, too, are they ne product Of one who
has more Of theoretical acquaintance with the
subject, and little Of practical and definite
knOUiedgeO of the agency and necessity OF banks
in the operations Of trade.
The writer appears to think, as DO most I'M
informed persons in this regard, uhat II banks
were extirpatsd an equal amount Of coin would
take its place; OF If not an equal amount, at
rany rate an approximate amount, sufficient to
conduct the trade Of the country.
Very far from this would be the result, as
may be shown. The amount Of coin would be
= largely greater than it now is, and largely less
than the amount Of currency in circulation
here al those seasons of our trade, when the
z largest amount Of it is in circulation The sea
sons in which we have the largest amount OF
currency in circulation, are when the crop is
, coming in and being sold, in the fall and win
ter. The season when, in the ordinary course
Of trade, the smallest amount Of currency is in
circulation, is after the crop is sold and the
proceeds bave been applied to pay the domestic
and foreign debt, which season is in the sum
mer. Everybody knows here, that money is
the scarcest in the summer. It is always 80
here. The reason OF the scarcity is, that the
money which has been issued in the crop sea
son, and which has been employed in the Pur-
chase Of the crop, has returned back to the
banks in the-purchase OF Exchange whsrewith
to pay the debt which the merchants Of the
couatry W. at the North, for the goods and sup
plies brought into the country from abroad.
Thus it is, while the crop is selling the banks
put out their issues, and money is plentiful.
After the crop has been sold and the currency
has flowed back into the banks, money is
scarce, 50 much only remaining in eireula-
tiOn as is equal to the excess Ct the value Of
the crsp over the debt which the country
owed, and has paid abroad. When the people
bsye bought largely of goods and thus a heavy
foreign debt is contracted, and the crop is
shot or the price is low, then it is Il that money
] IL scarce AlANAA 4I-AAN AEGA Va III ENaAAAN
was too large for its ineOme-it owed more
than it made, or as much or nearly so; and to
nav that debt, exhausts the proceeds Of the
crop. The whole country, in this regard is
yerv much like an Individual; when he is selling
his crop be has a plenty Of money. But be
owes debts, and By the time be has paid them,
be finds his pile much lessened. II his crop
be short or the price low, and be has bought
too much, contracted too large a debt Of
course BY the time be has paid bis debt, a very
small surplus remains to lay up, or perhaps
no surplus at all. Money is then scarce with
him. The money which be keeps is The ex-
cess. if any, Of bis crop over his debts. And
so it is as to the whole country, the aggregate
of all the individuals who cons dtate the country.
The money which it keeps. which does not 90
into the banks or out Of die esantry, which re-
main in circulation, Is the excess OF the pro-
eeeds Of the crop, oVer the debt it owes abroad
for its goods and supplies or other expendi-
lures OF eounse there is something more
than this ex1rt excess in circulation, because
many PEOPLE keep over a portion of proceeds
Of tor.her years not however to any eompar-
atfsely large amount, for few people keep much
money long in hand idle. They convert it
into property, or dispose Of it in some other
5 way. If they loan it, the borrower converts
D it into property, which is all the same thing.
It is thus obvious that the regular and per-
manent amount Of money belonging to the
, country, is the excess of tue annual crop Of
the country over its debt. While the process
of selling the crop and paying the debt is gOing
e on, a much larger amount gets into circulation
BY the agency of the banks in the shape Of
! bank-notes AMI other credits, which ordinarily
answer as money. But so soon as this process
is through, the amount remaining in ~cireula-
y ton and which can be kept in circulation, is
the excess Of the proeeeos Of the crop over the
! debt.
( Keeping these views in mind, it is now ready
to become very plain, that if banks be abOl-
! ished and paper currency be expelled from cir
b ~culatioa, and coin be substituted in it's stead,
the total currency of the country, its entire
amount Of money will be the lowest amount
We DOW ordinarily have in circulation, will be
t TIE excess Of the annual crop over the debt Of
, the country the amount which we noE usual
Is have Ia July and August the amount We
nave in the time Of our summer scarcity.
Isay-.hat the regular amount Of money in
circulation after paper currency is expelled,
: will be only the difference between the crop
! and the debt of the country difference rare
: ly large and often very small. 1t will then
all be coin; that is, the money Of the country
viii all be coin. Coin will not come into the
country to buy the cotton, as bank notes are
now issued for that purpose. Or, if it did come
: from New Orleans, or elsewhere, to buy cotton,
it would pass on to New York and elsewhere,
= 70 pay our debt. 1t would not remain here. In
! fact, it would not come. A vain and useless
/ trip it would be, to bring it here from New Or
b leans to send it on to New York. The transport
Of coin costs freight aud insurance. Our crop
at Memphis varies from twelve to eighteen
millions Of dollars. Freight and in suranee on
, half Of that amount, would be 10 trihe. Much
less is the present cost of aecOmP fishing the
same end, the remission of funds, by postage
on letters.
The thing is absurd. It would hardly start
a dollar Of coin to this country, af tier the nor
MAJ amount of coin had been bro ought here to
supply the displaced paper currency, which
amount, as before shown, is the small excess
or difference between the crop ano the debt OF
the eouBtry.
The coin would not come. But the crop
would be sold and bought and sent out of the
eoprtry-the proceeds wouldbe a pplied to the
payment Of the debt of the country If the crop
produced an excess over the debt, that excess
would come in coin and increase { be amount OF
the eurreney-if She crop prOdu ed less than
the debt, the deficiency would be paid by send
inc coin to the creditor country, an thus lessen
the amount Of the money OF this country aud
produce a sc arcity, a contraction, a pressure,
a crisis, a CONFUSION.
The coin would not come to buy the cotton,
but the cotton would be bought and sold and
the proceeds applied to pay the debt owing
abroad by the country. Some prOces IS of doing
/ this would be devised, and upon a system of
credits. Brokers and private bankers would
arrange it, precisely how, it may Dot be easy
to f~Oretsll; one thing is certain, millions Of coin
are not going to be brought to Memphis and
carried away every year, while mails run to
carry letters, and men eOnfae in and trust each
other, and brokers and bankers and dealers in
exchange are allowed 20 follow their business
and invent modes Of creating, balancing, ad-
jus,ing and paying debts, without the actual
handling and counting, in their dealings, the
hard coin.
III argument draws to a close. The selling
and buying Of the products Of the country, the
buying and paying for the commodities We get
from other countries, the business ana trade of
oar people will not and can not be done in hard
money-it can aud viii be done upon some
mode Of crsdit-upOn some s. stem which re-
poses trust and confidence between man and