The daily Evansville journal. (Evansville, Ind.) 1862-1863, 1862-12-10

,arrot then. be successfully maintained
~ tbo circulation Of United States
80 80 i excessive. When extended TO
VIC limits authorized by existing laws 1T
=, IN he no larger than the wants OF the
,,eonle and the government imperatlvely
demand,
Ifthere be a considerable redundancy
then; if there be considerable real de-
preciation of the circulaton-wmch IS
bv no means admitted-what has caused
the redundancy and the depreciation?
The cause Of all that exists is easily
foEnd in the statements of the banking
CORPORATIONS. The circulation of cor Dor
ate notes increased during the year end
ing on the lst Of November, 1862, from
4l3O,O00000 to $167, 100000 During
the same time the volume of deposits,
which answer very many Of the purposes
of circulation, had swelled from e264,-
100000 to $344, 100000. The greater
portion Of this increase took place with
in the last seven months
The augmentation of deposits always
accompanies increase of circulation. To
gether they estimate loans, and are, in
turn, estimated by the desire of the in
terest derived from loans As might
have been anticipated, loans increased,
though not equally, with the circulation
deposits. From SCOT 100000 on the LIST
day of November, 1861, they had grown
to $677 100000 on the LIST day of Novem-
Der, 1862
DEDUCTION OF BANK CIRCULATION RECUR-
RING INCIDENTALLY.
Here is an obvious and sufficient ex-
PLANTATION of whatever undue expansion
may have taken place. The Secretary
has already expressed the opinion that
the circulation is not greatly redundant,
and that no considerable depreciation of
currency has actually occurred. He
thinks it sufficiently proved, however,
that whatever there may be of either is
fairly attributable not to the increase of
United States notes, but to the increase
of bank circulation and deposits
1t is to be observed that no law COM
PEELED, and no public necessity required,
any enlargement of the volume of cur
rency by the banks. On the contrary,
there are, in some Of the States, positive
enactments by which the increase of cir
culation during suspension is prohibited
and the principle embodied in them is SO
manifestly just, that well managed instr
tutions, when obliged to suspend, almost
invariably, without the constraint of any
law, reduce their circulation instead O
augmenting it, In obedience to this
principle, a reduction Of bank circula
ton actually took place after the sus
pension in December TWAS only whel
United States notes, having been mad
legal tender, were diverted from thei
legitimate use as currency and mad
the basis of bank circulation, and tn
great increase of the latter began.
was purely voluntary; prompted, doubt
less, BY the desire Of extending accom-
modations to business as well as by tn
expectation of profit. No practical limi
upon this increase has as yet been pre-
posed by the parties interested in it.
The Secretary has already shown tbs
the case was far otherwise with the eli
culation Of United States notes. A col
dition had been created by the suspel
sion which made loans of coin imposs
BILE. Loans of corporation notes, obje
tionable in themselves, we're positive
prohibited by law not likely to be T
pealed. The extension of the Unite
States note circulation, until sufficient
amount to enable the Secretary to obtai
it from holders, by way of loans, W;
equally inevitable A practical limit
its increase is imposed by the judicior
legislation of Congress, which makes Il
notes receivable for loans, and requir
that the interest on bonds for loans shi
be paid in coin.
Under these circumstances, the pa
of tCisd0m and duty seems Uery dear.
leads to the support Of a United Stat
note circulation, and to the reduction
the bank note circulation. A compaI
lively small reduction of the latter W
allow ample room for the whole increa
of the former, authorized by existil
laws; and as the reduction proceeds, t
increase may be extended never, no
ever, passing the point which admits t
negotiation of loans at reasonable rat
The Secretary has heretofore advis
the imposing Of a moderate ta1 on c.
pOrdte circulation, and RO1c reneICs
recommendation as the best means
reduction and gradual substitute
Such tax involves no hardships Not
circulating as money cost nothing
you'd the expense Of production and
pervision, and yet form highly act
mulative species of property. The
cessities of the war have caused I
taxation of almost all forms of val
Can there be sound reason for exem
ing that which costs the proprietor lie
and brinus him most2