Preble County Democrat. [volume] (Eaton, Ohio) 1857-1859, 1858-01-07

deposits than is now required, and 9TH
er additional securities obtained against
suspension.
The act of 1851, under which the
other Banks are a~orgahized, is amenda4
BILE at the discretion of the Legislature.
Their circulation is secnred by the de-
posit of equal amount In State or Fed
eral bonds. 1t is plain that in a inan-
cial crisis, when bonds of all descrip-
tons are deprecated, this security be-
comes inadequate. 1 recommend the
provision of adequate guards against
such a contingency by an increase Of
the proportion of bonds to circulation,
and by a prohibition of the deposit of
any other bonds than those of the State
or of the United States.
FOREIGN NoTEs-CI EARRING HOUSE RE-
COMMENDED.
The experience of the last few years
has demonstrated, however, that the
greatest financial disasters in Ohio have
not been occasioned by legally author
lied banks of issue. Most of the cal
antilles which have recently fallen upon
the business community of this State.
have originated in the failure of private
bankers, and of the Trust Company, is
suing no notes for circulation. Many
of these bankers, and perhaps the Trust
Company also, however, were borrow
ers, from banks outside of the State, of
foreign notes, at low rates of interest.
to be circulated in Ohio, and redeemed
when returned to the issuing banks, BY
Tho -. rrn Ill., - -
rangements was-teeiatroduce into the
State "a mass of foreign bank paper
which expelled from circulation not on
ly nearly all the coin, but also neatly
all the notes of our own banks, and ex-
posed the community to great ~inconye-
nience and loss. l suggest the expedi
ency of SO modifying the Act of Febru-
airy 9th, 1913, relating to the circula-
ton of unauthorized bank paper, as to
prevent effectually this mischief. Ad-
d~itional protection to the business com
munity, as we'll as substantial benefits
to the sound and strong banks them
selves, would result from the establish
ment of a Clearing House in Cincinna-
ii for the banks of Ohio, Kentucky and
Indiana, either through the voluntary
action of the Institutions concerned, or
by the concurrent legislation of the
States. T- II H. "
In a former communication to the
General Assembly, while admitting the
convenience of a mixed currency of
coin and convertible notes, and the i'm
probability that a currency entirely OF
coin will soon be adopted in the coun-
try, l expressed my own opinion in ia
vCr of u currency of coin for ordinary
transactions, and of large notes for the
convenience of commerce, and at the
same time urged the necessity of the
most stringent Legislative guards against
suspension of specie payments, and
against a mere paper money system.
Subsequent reflection and observation
have confirmed me in these views.
A leading object in all regulation Of
currency should be to secure the inter,
ests of the masses Of the people by such
provisions as will ensure to labor just
compensation in actual value. This
cannot be affected while the laborcr is
paid in paper, subject to continual fuc.
tuation, and exposed to all the hazards
of financial disorder.
Whatever can be constitutionally eff
fected by State legislation, towards the
exclusion of the smaller denominations
of notes for circulation, and the substi
tuition of coin in their place, should be
earnestly attempted. Tie quantity Of
coin in the coin in the country is now
so great, and so steadily increasing, that
no injury and almost no Inconvenience
could arise to any interest from judi
cious legislation for this object. On
the contrary it seems to me certain that
the increased circulation of coin which
will thus be secured, cannot fail to re-
suit in most substantial benefits to all
interests, by additional securities against
huctuatiun and revulsion. These ben
efts seem to me so obvious that | should
hope for the assent of the banks them
selves to the legislation necessary to Sc
cure them.
ULTRA HARD MONEY DOCTRINES.
The existence of this decision alrea-
dy referred to, the uncertainty of OBJ
tanning the assent of the banks to the
necessary legislation, the fact that we
are surrounded by States whose banks
issue such notes, and the practical diff
Guilty of excluding the notes of these
banks from circulation in Ohio, created
the apprehension 1 have heretofore ex-
pressed, that comparatively little can be
accomplished in the direction of the
proposed reform by State legislation
These apprehensionsions yet remain.-
The e%ffectual remedy is with the Fcde-
raj Government. Looking at the man.
itest intent of the Constitution to pro-
tect the people from the evils of a pa
per currency, as we'll as to the specific
powers granted to Congress, I cannot
doubt the power of the National Legis-
lature to prohibit the circulation as
money of any substitutes for coin. Nor
can L doubt that the exercise of that
power by the gradual prohibition Of
notes of the smaller denominations, un-
der twenty dollars, would be wise and
salutary. The denial of this power vir-
tually submits the regulation of com
mercei in its most Important instrumcn-
tality to the variable aud conflicting pol
icies of t%hirty-one States, and defeats
one Of the main purposes of the Con-
stitution.