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. Iagree fully with the committee
that Sour 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-
tions 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 aot eblige the people to borrow and invest
as they do, in reckless speculations, from which
they are 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, III the
bankruptcy, prostration ofcommerce, demorail-
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
as well. ltsf
| Banks have in themselves no power of expan-
sion. Who ever heard of compulsory clause
in 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
bright 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 legislate wise heads and honest hearts
Unto men. Right thinking must precede right
action, and there must be radical, widespread
ichange in mems views on this subject, before
\ any beneficial reform can be effected.
/ Ifyou would legislate all the banks out of
existence you would not cure the evil. There
would be no more propriety in legislnting
against banks, because one occasionally breaks,
than there would be in legislating against the
use OF steam, because boiler occasionally ex-
plodes.
4 5sIncompetcncy 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
4 by banks where the officers were competent
and honest.
The suggestion that banks should issue only
once and a halfthe amount of their capital is q
good one.
i 1t would be good rule for all business men
to retain always surplus of forty to fifty per
a, cent beyond their Indebtedness. This was
| Amos Lawrence's rule, by adhering to which
he declared that he was always able to with
stand all financial pressurcs. If this rule was
, lgenerally 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
4 action of the people? Set the people right and
the banks will follow them, as inevitably as their
tshadows
Legislation can do something; but it is not q
panacea for all the arrangements caused by the
errors Of judgment and misguided action of the
Z community.
J 1t can give the currency q real value We like
the proposition to discontinue the circulation of
small bills, but we would go farther than. the
committee, and recommend the suppression Of
jail bills under twenty dollars.
We live in gold.producing country; and
there is abundance of it. We produce fifty mill
Z lions of dollars annually, and it is as much a
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
syearly production perform the duties of the cur
rency. Let all the smaller business of the cou n
) 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
5 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 a firm specie basis, and
disseminating the circulation of all bills under
twenty dollars, thus putting the gold where it
should be, in the hands of the people, would
be as beneficial to our manufacturers as an ad-
iditionnl tariff of ten per cent with the present
lcurrency.
:, This legislation can do, this it ought to do.
4 Let the people do the resi-; and the banks, like
II obedient servants, will soon do their work in
the right way.
New York, November 26, 1858.