The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1858-02-25

We copy from the New York Times of Yesterday
the following letter on the currency question The
subject which it treats is one ST vital interest to
the mercantile community
In compliance with your request shall endeavor
10 write down for you the views upon Currency
nave lately expressed TO you in conversation.
l. As regards the medium to be used by any ma
ton or State for the convenience of the every -day
business OF life, think prove that paper cur
fency, properly secured is the only safe and conve-
nlent medium that can be used | shall not say eco
nomic al, as that would be short of the truth.
1t IS necessary to have common measure of value
to which all articles of commerce can be compared
Sold, for many reasons which it is not necessary
1or me to state, let acknowledge to be the best
commodity to adopt the standard of value A
nation placing gold in this all important position
ought naturally to use every precaution against in
nuenclng the supply and demand unduly. Unless
PROVISION Is made to supply by paper the requisite
working currency, the supply of gold will inevita
ply be unduly influenced A very moderate increase
OF wages and general activity in business will absorb
millions, and thus invidiously thwart all ordinary
calculations in business The process when operat.
ing at the rghtpoint is the natural check to correct
overtradng but if it is allowed too wide field the
result is fatal to commercial prosperity. Let us
look at Its operation in England, where it certainly
mas too wide field, and has led every few years to
disastrous financial embarrassments.
Sir Robert Peel by his act of 1874, authorized
the Bank OF England to issue fl4 900 of notes with
reservlng specie to meet them, assuming that the
drawn from circulation. Beyond ETA 900 the Bank
requires to reserve gold for every note issued Ex
Perence since 1S44 embracing the crisis of ls47 and
1901, mas established that the amount is well within
limits, as the circulation has not on any occasion
been within Els, 600 000 The principle is sound to
some extent but BY restricting the issue of notes To
the minimum denomination of f5, the real working
circulation OF the country is not supplied by paper.
Inc increase OF wages and the business of the
Try have absorbed many millions of gold, exceeding
the increased accessons from Australia and Califor,
mia, uselessly and mischievousy
IL mas leo to bankruptcy and demoralized trade by
placing lis results upon foundation, the workings
of which cannot be foreseen or calculated The GOLD
absorbed In trade is of use and cannot be recoy-
cred, unless extension of paper issues of small
er amount than f5 is resorted to. If FL notes were
allowed, 1t Is estimated that between $50 900 600
and ESQ 900 would be at once redeemed II
should never have been so sunk, and has cost the
nation much more than the figures denote in the
evils 1t has created By continuing the restriction
tne history OF commerce in England will continue
TO run through few years of feverish speculation
terminating In season of general prostration to be
followed by term of distrust and absence of lepiti
mate enterprise and energy in business.
Individuals and corporations of very large can't
tai VIII grow in wealth, but the man of moderate
capital In trade will inevitably meet ruin sooner or
later and the seasons of trial will bear their whole
weight upon the working man, until time comes
When the burden will prove too heavy and the
physical power of the nation will become dangerous.
Panic regarding paper money is not probable in
England, but the want of circulation to carry ont
the business OF the country must be felt periodical
~, and Its danger at time of bad harvests cannot
be overestimated.
In this country distrust in the paper currency /,
likely to arise periodically as the foundations upon
which the issues are made are not sufficient to main
tain its credit at all times Even the Banking law
OF the State of New York does not afford sufficient
security for the notes, such was designed BY its
adoption. In season of embarrassment the stocks
deposited security for the notes could only be
a0ld RI INIT tod md fha holo 81
The notes could only be redeemed in stocks. 1t is
not my object, however, to present an argument
against any particular system now in operation,
tturther than the amount of error in all that may
pe oeduced from the broad principles necessary to
lay down. ~
ftrst.,,-Nations can only buy abroad with what
tney produce at home
Second.-Gold is the hest maasuro Of ro,na nh a.,
- anowed TO How freely as an ordinary article of
.Iaae from Its sources of supply to its points of
Thrd.-There is extreme danger in nations ra-
quirng large amount of their ,,ons ff
nm to be gold, as the natural supply and demand Is
thereby affected, so as to make il off oil art;oIas
the most fiuctuatng, instead of the most stable,
be the measure of value. - "
fourth.-lssuing paper money and banking shonld
not be united. SNo1'u
FVh-Paper currency should be based unon Ma.
uonal credit alone, directly and not bv tbe 80
vention of Stocks. The notes should be a iaral
tender for all payments, and while they are main.
tanned as such, they can never be dstrusted in an
industrious country. If nation goes backward
what may be safe amount of notes at one time
will be found to be at another but no law
beyond the virtue and intelligence of the people car
guard against that contingency. 1t is impossible
for laws to protect the individual in the event of
national downfall.
Sisth-The rule of issue should be based upon the
population or taxable value of property, and be in
such amount as experience will show can maintain
itself at par with gold Men want no more security