Richmond daily Whig. [volume] (Richmond, Va.) 1842-1861, 1860-04-04
srBsrxScE or TIE REMARKS OF NR. ARM
STRONG

and an sections Of the act passed 4pdI I'd, 1888,
entitled an act: 40 progide for more H9or"
currency.
M. ARMSTRONG said:
Nr President-The deep interest that my constituents
have in the question under consideration, must be my
excuse for occupying the attention OF the Senate lot
short time.
The Senator from Augusta, Mr. Suarl,) who has
preceded me- t)sed his remarks in opposition to the OIL
ny saving that he considered it question between the
quantity and quality of the currency, aud that for bis
part he preferred having of good quality rather than
in such abundance
too want it of good quality, but, at the same time
desire TO have il in such quantity that there may be
ENOUGH 10 supply the wants of the community IL would
be OF but little service suffering from hunger 70
place before him the tempting viands, he was not
permitted to taste them And ii will be OF but little
benefit 10 the people % make currency most excellent
in quality it, by your laws regulating it. you so restrict
and limit the quantity put it in the power OF but
few to enjov IT, And this in my judgment, Is the effect
of the existing law 1t stimulates and encourages the
return upon the Banks OF their notes TO such an extent
as force them contract their issues and very mate
rally 10 diminish the quantity Of the circulating medium
and prevents them from extending 10 their customers
the accommodations essential carry the usual busi-
ness operations Of the people Nor do consider that
the quality has been much improved by the operation OF
this law.
The Senator has compared the loans and discounts of
the banks and the of their notes in circulation in
October last with the corresponding period OF 1858 and
has stated that they about the same now or little in
excess of what they were then From this he has drawn
the conclusion that the objections to this law as tending
10 diminish the circulation, are wholly uniOunded.
do not think the comparison is proper one II you
wish 10 arrive at correct conclusion TO what amount
of discounts and circulation the of the State re-
quire
The suspension of specie payments it will be recOec
ed took place in the fall of 1851 and for some time pre-
viOu the banks had been curtang their loans anu draw"
ing in their circulation.
In the session of 1878 the Legislature passed the
law requiring them resume payments on the LIST May
1858. Thus the suspension continued but ior snort
time and tue banks apprehensive that the confidence OF
the country which had been seriously impaired by the
monetary crisis would not be fully restored very pru
IDENTIFY preuared for resumption by keeping their circu
atio and ige of discount down TO low point as pos
sbe At the same the law, now sought 10 be re
pealed was passed. TO go into operation on tue ISL OF
April 1859 this also had effect in influencing the
banks not 10 enlarge their discounts From the period
of RESUMPTION I'LL the present law went into operation
the banks had very cautiously and to limited extent in
creased their loans and since then down TO October last
they have been ourtng and in some parts OF the State
very rapidly.
standard Of comparison OF great depression IN
e pecunary affairs OF the country, when every KIND oil
business was checked and the enterprise of our people
almost paralyzed and does not in my opinion, afford
air criterion of what is Just OF loans aud cir
cuatiOn.
The statistics therefore exhibited By the Senator only
show that the effect Of the redemption law hes been TO
keen the circulation and bank accommodations down to
what they were in the period Of greatest pecuniary en-
barrassmeut that we have had Tor many years.
l submit If we desire 10 have correct standard OF
COMPARISON that ought not 10 select period OF I'M
usual sngeucy, but one when trade and enterprise OF
every kind we're active and hourishing
Since 1855 the business Of the country generally has
very much revived.
In Nh, States around u.s. North aud South the circu
ton and discounts of the Banks have mere used and APP
roSnate 10 what they before the crisis OF 1881
This il seems 20 me- would be the natural result from
revival Of trade and confidence, and is what We had
gbt 10 expect in this State. As the business opera
ions of the State resumed there would he great
er demand tor capital and confidence having been re-
stored the uks would he able 10 enlarge their accom-
rod,tious Instead OF this we fad in this Safe that
the discounts and circulation remain about the same "a
ia lS5S Aud this fact which is relied by the friends
Of The redemption law prove that has not operated
uiuriou,ly 10 me 70 prove the contry-it SHOWS
thar its effects have been retard the business opera
lions of the people and many parts OF the State, TO
produce a condition OF financial embarrassment rarely
gqulled
do not admit however that the Senator is correct in
MI, statistics. From the examination have made am
satisfied the circulation in January 1889 was less thann
1885 by several hundred thousand dollars.
think January 1857 much nearer a correct stand
ard of comnarca than October 1895. IL Is true, the
general suspension OF the Banks took place in the fall OF
that year but t was admitted by ALL believe, that this
was not occaSoued by msmanagemeni or over Issuing On
the part OF our banks /, conceded that they were
in sound condition, and their suspension was proper
measure of siefeuce rendered necessary by the refusal
on the part OF the Banks North of Us to pay specie.
On comparing the circulation and discounts Of the
nrDcpt Banks in October 500 with January ls 1887,
find the circulation has been decreased about three mil
lions OF dollars and the discounts very materially.
Mr. BEALE How do they compare ia January 1857
with January ls5tf
Mr. ARMSTRONG The circulation January 1851 wcs
several hundred thousand dollars less than in January
1886 and considerably less then than IN 1888 and lo1i
It's said that effect Of the present law has been to
reduce the price OF exchange this mas be partially true
out not 70 the extent claimed.
fud upon inquiry, that exchange between Richmond
and Baltimore the present time ranges from IA 10 S-s
of Que per ceat aud in January 1851 II ranged from
10 - OF per cent-ony ls OF one per cent differ
Mr.. STUART-That is in Richmond. know that in
Stanton before the present Law wcntinto operation
Northern drafts sold ct premium OF from to :
per cent.
high al Stanton The Bank laid before Us
show that al various points in the State at that time, II
ranged from SIS to IL OF one per cent
Ii NAV be true that the OF exchange is more uni
form And there reasons why the existing Ia" does
not operate as Oppesivey in tins part OF The state and
ern ard estern parts.
Richmond has become the centre Of very cOnsdcra-
BILE trade aud there accumuates here large quantity Il
tobacco and other products sold AT the North by which
means YOUR bauks are supplied with Northern funds
The mode of doing business is also very different Here
but small portion OF the amount borrowed is taken out
in notes The merchant pguter vino gets loan from
the b4uk has the amount passed 10 bis credt--if he
wants 20 use the money in the North he obtains North
ern draft-if he wants it pay debt 10 his or dtor
h,v shr Hp M ID
creditor So that probably OF thousand dollars
borrowed uot one thousand will be drawn out in notes
and nut in circulation Thus, law whose tendency Is
10 curJa the circulation does not so materially affect tins
portion of the State The banks, here, by substituting
system CT checks and credits, transact large bust
ness with but it,e circulation Our banks aud those III
the Western part of the State TO do much business, must
have large circulation With tor every ten thousand
dollars borrowed probably nine thousand will be taken
ont in notes.
The Banks here have a large amount of deposits and
but little circulation. With they have large crcu-
atiou aud small amounts of deposits.
This results from the different manner in which, from
different circumstances the business operations must be
carried on.
10 see how great difference there is in this respect
let us compare the circulation Of Western Banks with
Eastern.
Take for instance the branches of the Bank OF Vr-
gina located az Union, Buchanan and Chareston-these
hree have capital Of three hundred and httyhye thou
sand dollars 555OlDJ and bad in October last crcu-
lation of four hundred and twanty-one thousand five
hundred and twenty dollars aud their loans amounted
to seven hundred and thiryone thousand two hundred
and thifty-Jhsec dollars.
While the Bank at Richmond and the branches at Nor
folk Portsmouth and Fredericksburg, with capital OF
one Million five hundred and sevcnysiS thousand, two
hundred and fifty dollars have q circulation OF only
$500 326, and their loans amount to S2,63S,29'
The circulation of the first named, is than their
capitol and more than half the amount Of their loaus-