The Jeffersonian. [volume] (Stroudsburg, Pa.) 1853-1911, 1859-01-13

banking system has been one OF the mos'
prominent. The value of the precious
metals-the prices Of property the
wages of labor--are always affected by
the abundance or scarcity of the paper
medium received as substitute for gold
and sil.er cola. The power OF the State.
TO auiho&e paper currency, through
the agency Of baaks, has been so long ex
crciscd, and Acknowledged throug hou
the Ubion, that il is 10 longer an oper
question. But it must be acknowledged
that the power has been greatly abused
The delegation Of this attribute of soye
rcignty to a number OF irresponsible cor
poratjons, without proper checks TO Limit
its exercise, and without providing any
security whatever for the redemption o'
the issues thus authorized, has teen at
tended with evils Of the most alarming
character. These corporations are prac-
tioally made the cxclu-ive judges of The
amount of paper currency to be furnished
to the people, and haze exclusive power
to contract or expand their circulation al
pleasure. Dcpositors and other ordinary
creditors of banks, need 10 legislation
for their protection. Every one who has
direct dealings with these institutions, ei-
tber as depo,itor or otherwise, enters in
to such engagements voluntarily, for his
own advagtsge, and may be safely left to
bis own vigilance, and the ordinary rem
edics of the law, for his protection. But
the millions of people engaged in indus
tFiOus pursuits, the farmor-the mcchan-
ic-the nerchant-aud the laboring man
are under an imperious necessity to re-
ceive for their merchandise and their la
Dor, the ordinary paper currency of the
country. 1t is impossible for persons OF
this description to investitage the con-
Germs Of every institution whose notes are
in circulation. But no investigation could
save them from the losses arising from
the defaults and frauds of bank officers
and the insolvency of bank borrowers.
The note holders Of banks have pecul-
lar claims to the protection of the govern
ment. They are involuntary creditors,
who are forced to receive the notes au-
thorizcd by The government. They have
10 direct dealings with the banks. They
do bot trust the banks from any hope Of
gain. They have no profit in passing the
notes which they have bad in passing gold
and silver coin. They constitute almost
the entire community, aud the humble
and ignorant are always the greatest suf-
ferers when a bank fails to redeem its
notes. The whole people are, therefore,
deeply Interested in the security of the
circulation allowed by law although many
of them may never have had share Of
bank stock, or been within hundred
miles Of It's place of business. The gov,
ernDent that authorizes the issue of a
paper currency is under high moral
obligation to require ample and aVaila
bic security for its Tedcmption.
The certificates OF loan issued By the
Grncral Government, or by The Common
moUwealib, at value to be fixed upon,
with the power to require additional ce-
posits Of security, from time TO time, as
the loans deprcciate iu the market, would
be a. safe and available as any guaranty
which could be provided.
4 law requiring all issues Of Banks
hereafter organized, to be sec ured By the
pledge Of these loans, would enhance the
value Of the present loans, and thus give
the bo!acrs premiom lot contemplated
when they became the purchasers. aud
for which they never gave any valuable
consideration. This enhanced value
would he derived from privilege by the
State, and The State ought therefore, to
have tie benefit OF it. as far as this may
be scared by legislation. The recent a,
menLmcnt TO the Constitution circum-
scrites the rower Of the Legislature iu
creating State debts, with an exception in
favor of debts contracted ITO redeem the
present outstanding indebtedness of the
State \ law authorizing new State
loans for the purpose Of redeeming the
present over due debt, would be within
the constitutional exception, and would be
free frcm objection On constitutional
grounds.
The new loans, thus authorized, re-
deemahle at the expiration of twenty years
with the banking privilege attached to
them, would undoubtedly sell alta high
premium. The proceeds of their sale
should he applied 20 the payment of the
present State debt now overdue, amount
ing to more than seventeen millions Of
dollars, Under this system the State loans
would 10 longer be held by foreigners. .and
the semi-apnual sbipue pts of specie, to
pay interest, would therefore cease.
AS the currency would be limited to
fhe amount actually secured, the danger
from expansions, which have heretofore
stimulated the ineautious TO embark in
ruinous enterprises, in osertrading, and
IN extravaganza ia their expenditures,
would he greatly lessencd, if entirely o.
sercoDe. As the securities would be 10
the hands of high and responsible officer
of the State, with authority to sell them
for the purpose of redeemiDg the circula-
tioD, the power Of the banks to arrest
specie payments, at their owD pleasure,
would be at an end. The system propos-
ed is as near aD approach TO a specie ba-