Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1859-03-24
Written for the Fayetteville Observer.
BANKS AND BANKING.


universal opinion among the people,
that there are numerous evils exist
ing in the Banking System Of the /
present day. Yet, whilst all admit
this, there are those who contend that
these evils may be remied, and the |
system so modified as to be produc-
tive of great good to the country.
1t is true, no doubt, that some OF
these evils might be remedied; but
most of them are radical defects--in-
herent in the system and cannot,
therefore, be cured.
The principal among these iDhe-
rent evils are the following:
lst. It drives out of circulation.
a steady and uniform currency, and
substitutes in its stead, one which IS
constantly .fuctaatlng IN quannty
and quality.
I'd. 1t, at one time, stimulates the
business of the country to an unnat-
ural degree Of aetiuity, and CORES.
pondingly depresses it, at another.
Sd. 1t expels the specie from the
country.
4th. 1t subjects the people to in.
calculable losses, by frequent saspen-
sions Of specie payment, and the con-
slant breaking Of banks.
5th., 1t cannot be relied upon, by
the business community.
9th. 1t counteracts the influence Of
protectire duties, and retards the nat
urd growth Of domestic manufactures.
! shall examine these propositions
in the order in which they stand.
LIST. 1t drives out of circulation, a
steady and uniform currency. and
substitutes in its stead. one which is
constantly fuctuating in quantity
and quality.
Gold and silver, on account other
uniformity in quantity and quality,
are admirably adapted for a circula-
ting medium. II is this quality which
has caused them TO be adopted, uni
verSally, as the circulating medium
! Of the world.
The only change to which they are
subject, is that they are constantly
and gradually increasing with the
growth of population and the expan-.
sion of commerce.
From the best estimates, the gold
and silver coin in the United States
at the present time. amounts to about
l240 millions Of dollars. A very
small fraction Of that amount is used
as circulating medium. What has
become Of it? The banks have about
IA millions locked up in their vaults;
and the greater portion of the re-
t mainder, they have driven into the
hands of the brokers, there to be
bought and sold as an article OF COM
meree.
| Now how much of their own cur
rency have they given US for this
$40 millions?
! According to the report of the
Sod oary of the Treasury of the T.
nited States, in 1858, there was in
1857 paper circulation of GA mil
lions of dollars; the largest amount
which has ever been 10 circulation
since the organization Of the govern
ment. Thus it appears that our
bank-note circulation has never
reached an amount equal to the gold
and silver 10 the country; but 10 many
instances it has fallen below half that
amount. One would naturally sup
pose, that in exchanging such a large
amount of specie, for smaller one OF
paper. that the latter ought to be SUI
perior to the former as circulating
medium. But we shall see that such
| is far from being the case. One or
the most essential requisites OF a good
circulating medium is that it should
be uniform in amount. But paper
money, on the contrary, is constantly
fluctuatipg. AT one time the coun-
IL t,nsn