Wheeling daily intelligencer. [volume] (Wheeling, Va. [W. Va.]) 1852-1859, 1858-11-30
The Report on the Currency.

The Report ON the Currency.
I have read with interest the report adopted
by the Association for Promoting Reform in
Currency. agree fully with the committee
that "our system of banking" as at present
conducted, Contains some inherent deep-seated
defect" That ''our country is, at irregular in
terVals, subject to violent paroxysms of contrac-
lions and expansions" is too palpable and APP
parent fact to be denied or doubted; but that
the fault rests with the banks is not SO apparent
In my opinion, the people are quite as reSpon-
sible for these paroxysms as the banks. The
reckless borrowing rather than the 'reckless
lending" is the primal cause of the mischief.
The mere. fact that, banks have money to lend,
does not eblige the people to borrow and invest
as they do in reckless speculations, from which
theyare unable TO realize any moneyed returns,
and, consequently, totally unprepared to meet
their bank obligations as they mature.
When the people borrow beyond the limits of
prudence, and for doing which they alone are to
blame, then occur those paroxysms of currency
which result, as the committee say truly, i'll the
bankruptcy, prostration of commerce, demorali-
zation and frauds, which have been developed
and passed before US in such frightful array du-
ring the last financial crisis; and that of 1887
us well.
Banks have in themselves no power of expan-
sion. Who ever heard of compulsory clause
in a bank charter, obliging the people to bor-
row? All do indeed agree that reform, radical
reform, lasting reform, is needed somewhere.
But all will also agree that, when reform is
attempted, the effort should be directed to the
right point. -
A spirit of prudence and discretion in the
management of all business, is the reform which
is needed. Legislation will not do this. You
cannot legisate wise heads and honest hearts
into men. Right thinking must precede right
action, and there must be radical, widespread
change in mems views on this subject, before
any beneficial reform can be effected.
If you would legislate all the banks out of
existence you would not cure the evil. There
would be no more propriety in legisating
against banks, because one occasionally breaks,
than there would be in legislating against the
use fsteam, because boiler occasionally cx-
plodes
EsIncompetency in the managers is the cause of
disaster in both cases. Stockholders may some
times lose money in banks properly conducted
but the community generally have never lost
by banks where the officers were competent
and honest.
The suggestion that banks should issue only
once and half the amount of their capital is
good one.
1t would be good rule for oil business men
to retain always surplus of forty to fifty per
cent. beyond their indebtedness. This was
Amos Lawrence's rule, by adhering to which
ne declared that he was always able to with
generally adopted and strictly adhered to, we
should soon cease to hear of financial pressures
and panics. and Something like stability might
b eattained in commercial life.
After all, what the banks, but the outspoken
action of the people Set the people right and
the banks will follow them, as inevitably as their
shadows.
Legislation can do something; but it is not
panacea for all the arrangements caused by the
errors of judgment and misguided action of the
community.
1t can give the currency real value Weliko
the proposition to discontinue the circulation of
small bills, but we would go farther than the
committee, and recommend the suppression of
all bills under twenty dollars.
We live in a gold-producing country; and
there is abundance of it. We produce fifty mill
lions of dollars annually, and it is as much
product of labor as corn, cotton or any other
commodity. What VIC waut of legislation is,
to put this amount into circulation; to have this
yearly production perform the duties of the cur
rency. Let all the smaller business of the coun-
try be transacted with it, and not with paper
as now, while it is horded and locked up and
paper issued in its stead three or four times its
value-thus producing imitation, rise of proper.
ty to an unwarrantable degree, and expensive
living, the results of all which are SO disastrous
to the community.
BY the use of steam and telegraph we have
been broutht into such close proximity to the
old world, that it is important our currency.
should bear some relative value to that of En-
rope. Placing it on firm specie basis; and
disseminating the circulation of all bills under
twenty dollars, thus putting the gold where it
shonld be, IN the hands of the people, would
be as beneficial to our manufacturers as an adj
|ditional tariff of ten per cent. with the present
currency.
This legislation can do, this it ought to do.
Let the people do the rest and the banks, like
obedient servants, will soon do their work in
the right way.
New York, November 90, 1858.
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