The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1859-09-06

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cuse the Mayor with being in cOllusion with all
ruflans, and say that his police stand by and sec
outrages done and then chuck the actors under the
chin, with approJ ing smiles that there is no peace
IN the city, and advise strangers to avoid it dan
gerous place. No city is rancorously attacked by
its own press as is the city of Baltimore If the gen
temen who signed the call to the Reform movement
VIII turn their attention to the newspapers and de-
nounce them in their of villifying the city,
| they will have gone long way to remove the
! stigma which now rests upon Baltimore. Mr.. Da-
| Wis then referring to the course of the American
party, since it came into power in Baltimore said
| that it had been continually reforming the abuses
| which were upon it, when the Democrats went out
! OF power. The last act in this course of Reform
was to the Criminal Court, and cut off the last
rotten limb of the old Democratic clique Immense
| cheering
Mr.. Davis hoped the gentlemen of the Reform
movement, those who had been with the American
| party, would review the past and then decide to
aid the party in its progress with the benefit OF
their conservative opinions He had hoped to have
had an opportunity of reviewing the action of the
Reform meeting, and the resolutions to be offer.
ed; but as unavoidable circumstances prevented
II, he would take another opportunity of doing.
He then referred to his nomination. and assured
his constituents that he would still look to their
interests, although he stood alone of his party in
the halls of Congress; [CheGrs.l
Mr.. Evans came forward, shook his head and hat
and then mingled with the retiring crowd.
BULLION BANKING.
From the NsW England MIgazine Of Industry and
What is the difference in principle and effect be-
tween the bullion specie bank and the debt bank
OF the present system? This is the most important
question for the material interests of New England
that can be presented 1t is the difference between
name and thing, promise and its fulilment, a
fiction and fact, and, finally, between right and
| wrong, prosperity and adversely.
The bullion bank borrows and lends the uaIue
merely
borrowed nor loaned it. The bullion bank takes
| pay for service rendered.; the other for an in.
! jury inflicted Let me illustrate the opera
| ton of the bank of the debt system upon the
business and interests Of the community. | must
| suppose the reader to know enough of polit
ical economy to be aware that the price of things
! Is measured by the volume of currency, with
| due reference to the supply of and the demand
! for each special commodity. 1t is not arbitrary
| No dealer or combination of dealers can obtain
SlG0 for a barrel of flour; the volume of currency
is no; ample enough for that; but nobody could be
compelled, by any combination, to take less than
Sl00 for the barrel of -four, under its present sup
| ply, ii the volume of currency were twenty fold
greater than it is to day. The whole thing is con.
troed by the law of value, which operates with the
| promputude and certainty of the law of gravta
tion. As drops from the ocean, and the addition o
! drop, though unperccived, increases its volume
so the addition ola dollar to the currency increases
the volume of currency, and precisely to the same
extent, depreciates its value; somewhere it will bt
! found that more money will be required to pur
| chase some marketable thing, unless marketable
| things have increased in a ten-fold ratio at the
| same time.
1t is very generally supposed that our bank:
merely borrow, lend and transfer existing capital;
but this is not true. Let suppose that merchants
bring into Boston market 10000 barrels of -four
obviously the measure of the price of the -four will
be in the volume of the currency existing at the
time. They sell the flour and take notes for it;
then they get the notes discounted at the bank;
and the operation creates, say 500 600 o; currency
In addition to all the money currency in exist
| ence before. This currency has the same purchas
| ing power as so much new gold, but what capital
is created? Has labor produced anything? Is
| there ounce of flour, grain of gold, or
fraction of property brought into the community,
or into being, by it or with it? Surely not. What
| then is the 100000 thus created that We call
money? Pure fiction, nothing else. The bank buys
and sells no flour, and lends nothing but promises
to pay dollars that created. There is not
dime Of capital in the discount operation. The
notes given for the -four form the fund out of which
they are themselves diScounted they are not dis
counted oat of existing capital: the -four is capital
but the bank does not hold it, the transactions are
! mere kitng-an exchange of debt for debt-and
| the 100000 is a clear addition to the currency
previously in existence. The liabilities of the bank
are increased equally with the assets and there is
| no capital in the business than merchant
| finds his stock account when his assets and liza
bilities exactly balanced. The real capital the
flour, may be sold again, and another batch of notes
created upon it, and still again for another batch oil
notes and all may be discounted at bank and all will
! produce currency. What then? Is there any
capital in all this? The bank never possessed the
capitalize four-that is beyond its reach. 1t
possessed the debt, and issued the counter-debt in
exchange: it is all fiction.
Now, the relative circulation of currency and
property being ten to one, the dollar circulating
! ten times as rapidly as the property, each dol
lar serving to exchange ten dollars of property, on
the average, it follows that this $4,000 of fiction
first added to the currency, will create 81 ,000 00C
of
any ualue whatever, and this price will surely be
| shared by the imports. The advance in price will
stop the export of all commodities that stood be
fore at the exporters limit; at the time it will
attract articles from abroad that were below a pay
ing price BEFORE and increase the import of such as
were paying satisfactorily at previous prices and
the whole of 81 900 600 will be unnecessarily Y
added to the aggregate debt of the people, which
| must be discharged principally in bankruptcy
when the currency falls, it must, to its original
measure. The initiation of currency and the false
prices resulting, must turn the exchanges against
until we part with 100000 of gold in exchange
for fiction of the same amount when
the currency will return to its former vol
ume, and the ten-fold amount of price falsely
! created, will fall to its former normal position.
| This turn Of the exchanges cannot be suddenly
| checked; the reaction by the contraction of bank
! loans, and the out-howing of specie, always re-
| duces the volume of currency temporarily below
the measure OF pure metallic currency; that is be-
low the amount that would circulate if there were
| balances
! ence among us. The indsputabe fact is, that not
dollar of bank notes bank credits called ''de-
posts" be created in of the coin held in
reserve against them, without an absolute loss in
! gold and silver to the community employing them,
dollar for dollar, of the excess so created. Their
creation should be guarded against with more rigor
in the law than that of counterfeit notes, for they
are the more dangerous and destructive of the two
and equally valueess from first to last 1t mat.
| tiers not that Adam Smith, Say, Ricardo, and the
! other economists of Europe, have not discovered
this destructive effect of fiction in the currency; il
is practically demonstrated in the operations oil
banking in this country, and it is incontrovertby
! true herein stated.
| So much for the system which we have copied
from the Bank of England. But what of the Bull
LION BANK? 1t owns or borrows true value only,
| and lends nothing else. As the merchant buys and
! sells commodity, so the bullion bank buys and
! sells, or if the term be preferred, borrows and
| lends gold and silver If the borrower prefers for
| convenience, to circulate the money by checks, or
by certificates of deposit, he may do so, but the
bank must hold every dollar of coin nviolably on
deposit against every undrawn loan payable on de-
mand, and against every circulating or outstanding
certificate. In the case above supposed of 20 O0C
| barrels of -four, sold in Boston, the bullion bank
! would discount the notes of the buyer out of pre-
| existing capital, in solid money without any in
crease of currency, with its resulting degra-
dation of the value of money in the rise OF
! prices. The fonr having been at exporta-
! BILE price before, would be exportable afterwards
| and the money would remain to prevent the in
crease of debt, and maintain the obligations of the
community. The -four being exported, the business
of Boston would be increased 100000 in replacing
it: all interests would be promoted, and none
harmed by this moral condition of trade.
The currency produced by the banks of Massachu-
setts, over and above the coin they hold, amounts
to S50,000,O00, which is an enormous obstruc-
tion to the business of the State. The whole of this
would be replaced by specie, if the banks would
abandon the system of fiction in their business
Bullion banking would cause the purchase of gold
and silver by the sale of goods out of the State for
the whole amount, and it would supplant debt
to the amount of $5OO,OOO,OOO within the
circle of its traffic From the moment this sys
TEN is inaugurated, the dollar begins to be
worth more in Boston than in New York, and il
must come to Boston; no power can keep it away
and no power can prevent Boston from selling the
goods necessary to buy it. But, somebody will
exclalm, there must be an enormous fall of prices
to bring about this state of things How muci
does the reader suppose? If staple article O
cotton CLOTH well known to be worth ten cents pel
yard in New York, should fall to nine cents in Bos
ton, do you suppose it would lack customer TWEEN
ty-four hours? Would -four lack an exporting pu-
chaser in Boston, lift could be bought there 20 cent
per barrel less than in New York? Surely not
AvnI fvx~Nf he H. A. l. r