Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1858-01-21
ACcommo daiion Paper.

Eur value received | promise to pay, IS.
either n fact or fiction. When fact, 1t
records the transfer from one man ~ anOther
Of an actual consideration. This oonsiderh-
ii n is something which, for mercantile rur-
r,sas. will remain in existence long enough,
IN some form or other, T. make the record OF
t3e transfer reliable. In this mode, genuine
mere Lntile paper represents property. Ii
notes are given for articles Of consumption,
those articles are converted into cash, or It's
equivalent. The transaction is Legitimate,
and the more such actual notes are ahoat
the better is the evidence Of business.
But when John Jones gives John Smith
his note, and Smith gives Jones his IN re-
turn. though each has received 'cOnsIdera-
ton" equivalent, 20 far as the two are con
cerned. yet t. everybody else those NOES are
without q proper basis Of value. They are
NOT the lkeus Of any business transactions,
EXCEPT such as are known by the phrase
"kitc-hyiug" And when Smith gets JJnes's
paper done, and Jones puts Smiths through
the bank where be has a friend q, the board,
the oreration sums up in this: that the banks
have made loan to John Smith and John
Jones on their individual security. Two
nothing behind this paper TO give It value
|; represents uOtliug bat the tact that SmItA
and Jones, wanting money, have helped
each other to the funds of third partles.-
And whether the exchange Of the notes Is
Simultaneous, or tue Recommendations are
care ully separated by days, weeks or months,
makes 10 difference in the actual character
Of the operation. 1t is irregular, and un-
business ike. We DO not say THAI there are
/ no cases in which friend may not lend his
name, or man whose means are admitted,
and whose solvancy s understood, may not
make himself responsible for an Their, IT he
chooses t. incur the risk. But We do say,
that the exception % sound rules never
/ should become the custom, and that no coup
/ Ing of two ciphcrs can give them value.
Among the DEBTORS of the Western Bank
of Scotland reeently suspended, Is man
who owes the Institution between one and
two millions Of dollars on paper which was
made purely II lie discounted. The bank
mas no recourse except upon the skIliul
tiaaucicr, or, more properly speaking, rogue,
who cOntrived, under the pretence ot bust
ness, II carry on course OF paper-makIng
morally no better than forgery. His actual
business sales were at reckless sacrifices,
ana bank accommodations were rasorted to,
both to cover his losses in trade and to SUP
port a most e2trava can't style Of living y.
curse, when settling day came, aud he
cJuli get no further accommodations to post
pJue the catastrophe, ne was compelled to
. suCcumO.
Tnerc is now evident return TO the eau
non and diSt-uSt with which II was once the
fashion 70 look upon all paper which does
mt represent actual business. Very many
modes Of fnanciering not po'tiSely wrong.
bur OF questionable eXpedIency, have pre-
vailed all over the world during the recent
years Of over excitement IN business, and
cuu.euueat embarras, mrnt. Parties have
sigen their notes in exchange for others,
signed by people of less credit, taking upon
themselves, for consideration, the guaran-
tee Of tie nut"s thus withdrawn. The paper
deposited in this way as collateral has Ueen
endorsed. and. with this additional strength,
negotiated. Thus one transaction has pro-
CURED from the backs or money-lenders dou-
Bile the amount OF the property bought and
sold Such operations OF unsOuOd hnancIer-
ing are Inconsistent with a healthy state OF
trade As We have alreudy said, irregular
transactions may be allowable in occasional
instances, but TIER frequency, OF late years,
was on Of the causes which created alarm
among capitalists and business men. And
when once doubt begins in the commercial
world, panic il not lar oh.--Phttd. inner.