Dayton daily empire. [volume] (Dayton [Ohio]) 1850-1865, 1860-01-17


bodying the views Of our "leading capitalist"
Ifeioiee At seeing this matter thus brought be-
fore the public. II is an important question
aud ought 70 be dispassiOnately discussed In
all It's rami6calions. II is necessary not only
that bankers and capitalists, but also that the
people at large should fully aud completely up-
derstsnd it. There is - variety Of Interests Rf>
fected by it. The capitalist, the sPeeulator.
the stock >iobber. the merchant, the mnnufactu~
Ter. the retailer, the farmer. the mechanic and
laborer. each and all are In some manner
touched by il. Affecting all, il should be, u
possible, thoroughly eOmprshended by all
With this view I ask little space in your walls
uable paper, 70 offef some suggestions in an
sver 10 those contained 10 the communication
to the journal, referred to above, And may
say, BY way Of introduction, that In reasoning
4pon the question Of Banks aud Banking"
Iaaopt that admitted aud just principle as
starting point; "Ths greatest good for the
greatest number"
In the article which gave rise 70 this CON-
municstion il is said; "If any kind Of a banks
lug law is needed, il is one whiehi First, amps
ly secures The people from loss, which. Second,
furnishes 70 the Commercial community sddi,
tiObal facilities for moving the produce Of the
country, and. Third. gives capitalists an Op.
portunily to use their means as pro6,ably as
they could be employed in other branches Of
trade"
The word "bank" alone does not express
fully what the writer Of the above quotation
means. Banks are classified. There are Banks
Of Deposit and Dlscount.--among which may
properly be elassed Saving Banks and what
is termed in European mercantile phrAseolOgy;
Giro Banks,--and Banks Of Issue, which, in
the United States at least, comprise also in
themselves the character Of Banks Of Deposit
and Discount. believe it is this latter class
Banks Of Issue, which the writer quoted is
speaking Of; it is Of Banks that issue promi-
ses to pay certain amount Of money on de
maud, which promises circulate among the
people as money" and 10 distinguish it from
money which it is not, the paper is generally
denominated "bsnknotes" or currency"
That from such institutions there a great
danger Of loss to the people, the writer in the
Journal himself admits. by mentioning as the
first characteristic Of good banking law, that
it ought amply secure the people against loss.
believe with him, that such is the first requi.
site Of good banking law. But l believe
also, aud here we probably differ never to
agree, that the people can only be eseeured from
loss 10 any and every contingency by denying
to individuals or corporations the establishment
Of Banks Of Issue altogether. That we shall
never agree upon this proposition, take for
granted. For, the writer in the Journal pro-
ceeds upon the hypothesis, that Banks Of Issue
by multiplying their promises to pay, increase
the capital Of the country and thus benefit the
community, and Il believe, that this hypothesis
is in direct opposition with all sound doctrines
of political economy. Capital consists in la.
Dor and the product Of labor. Money-not
cunency-is only the representative Of the val~
ue of labor and its product, the representative
of the value Of the capital and not the capital
itself,-promises to pay, and to these belong
the curency,-are representatives Of neither
but only of the amount Of faith 10 be put iu
those issuing them,-hence these paper issue:
of Banks do not increase the representative o
capital-money-nO the capital itself, which
is, as stated, labor and its product. But, say
the advocates Of paper currency, these issue,
Of Banks increase the circulating medium o.
the country and thus furnish greater facilities
for trade. This is fallaey as has been so Of
ten shown that it is hardly necessary for me
extensively to refer to the arguments. by which
the above statement is completely refuted.-
For even taking the illusory assertion, that cur
Tency represents money, as true, which it is not
our agreement lie not in the least degree affected
Suppose you issue paper dollar for every golC
dollar in your Vault,-you then claim. tha
you double the circulating medium. BY n
means. For il your paper dollar is to be tru
representative Of 4 gold dollar. that is Of money
that gold dollar must remain 10 your stron
box. ever ready to redeem your promise to pay
whenever payment is demanded. Then, in
stead of the gold, the paper circulates. and 20
might just as well have left the gold in circu
lation, for by Withdrawing /. aud putting ou
paper in its stead as its representative, 20
have not increased the circulating medium
But II. on the other hand, you do not keep ths
gold dollar in your vault as long as your pape
representative is out unredeemed, then your pa
per dollar ceases to be a representative of NOR
ey, it is then merely representative Of credit
it is not dollar, but worth Just so much an
no more, as you are able or willing to pay 70
it when presented for redemption. Il then as
sumes the condition OF note made or bill Z
exchange accepted by merchant, which !
worth Just so much as he may be willing b
pay, either one hundred. fifty, or twenty fiv
per cent And no man has yet asserted, tha
such notes and bills of exchange increase tn
circulating medium Of the country, although
when they are what is called "business paper,
they represent to some extent. the value OF th
product labor, that is merehantable goods
while your paper issues do not represent eve
that much, but simply your good faith to re
deem them. And circulating medium, whie
is based. not upon the capital Of the country
that is upon labor and its products. but mere
upon good faith, which has no value in itsel
but whose value is derivstive only from III
credit of an individual or Of number Of indi
viduals, and is ever huetusiing in the same ra
tio as this credit rises or falls, is unsafe an
dangerous and presents but weak and treach
erous basis for community to build its trad
upon. The many commercial crises. thIoug
which this country, though yet young, has al
ready passed, were but the inevitable result
of the instability Of this paper circulating me
dium.
The second and third points. the writer i
the Journal mentiOhs as being essential in