Daily Richmond Whig. [volume] (Richmond, Va.) 1861-1862, 1862-02-17
OF BANKS AND BANKING.
To the Editor of the WRig:

causing runous fluctuations In the values Of property
As that Bank ia the most potent moneysd institution In
the world, and through s control over the commerce
and finances of England exerts drec. ithuence upon
the credit and currency Of other nations In relation to
the extent in which their commerce and system Of
finance and currency are blended WITH dependent
on the commerce. the y and the finances Of Fog
land, It is to be appreheuded that commerce,
our currency our finances and credit wi upon the
restoration Of peace be made subject to the regulating
and controlling power Of the Bunk of England The
first inquiry In the discussion of the questions Of money
and currency in the Confederate States should be- how
the management Of the Bank Of England will Affect our
monetary system whether injuriously, otherwise
and il uriously then whether it be possible to organ
system which will be free from such iralepcsS
What then is the princt which regulates the man
agement Of the Bank Of England Mr.. Ward, one Of
Directors of the Bank, witness before a conmitte
Of Parliament said individually as Director of the
Bank do not presume to alter the Kings currency
but endeavor always to bring the paper as nearly as
"possibe to what the currency would be no bank eI
listed, and the currency all gold"
Mr. Norman as quoted by Bonsanquet, says: "on the
whole il would that paper currency is perfect
practically speaking If 1t be convertible, free from risk
of commercial discredit, and little liable TO political
dscredt a. the peculiar circumstances Of the country
permit and IL in addition It be sraety the sas in value
at every moment, could be the amount Of the coin
chose place IL supplies; and he therefore proposed
that the amount of bank notes should "oscilats pre-
essly in the same Gay natalie currency NOuia Ose
late, did they not eri'i."
sam'l Jones 10y now Lord 0Versone, in his ceebrs.
ted pamphlet on the subject Of the currency, said
1.-THE one simple duty which the managerial the cur
rency have to perform is that Of making the amount OF
paper circulation vary precisely the amount Of the
circulation would have varied, had Il been sreuiiVsly
ms,alie.D - ITO attempt to limit the fuetua
tiOns of the paper money to narrower bounds than
those within which metallic currency would have osc
lated Is an empirical procedure founded upon sound
principles and which would lead to but the most
dangerous results" The Bank suspendend specss pay
msnts in 1897, and did not resume until ls25. and, d
the resumption, Il so managed the currency as to
cause such frequent monetary revusons that the ques
ton Of the modification OF its charter in reference to It's
control over the currency ably and frequently dis
cussed in and out Of Parliament Mr. Loyd's II huence
prevailed and BY the Of 1874 the issues Of the Bank
are regulated by the amount Of bullion 10 is vaults 10
addition to It's capital 6l5 O00l which IL invested 10
the funds Thus in 1882 Ii had upwards Of one hundred
lions Of dollars In specie and its issues Of Bank notes
we're upwards Of hundred and seventy millions Of
dollars and interest but too per cent In 1857 the
specie was reduced TO less than thirty Ave millions Of
dollars and the interest charged by the Bank ten
per cent 10 1882 money was abundant and cheap and
there vas an extraordinary stimulus given to enterprise
and industry. In 1857 money scarce and dear and
there extraordinary pecuniary embarrassment and
dsress-causing rulnous prostration OF private credit
and paralysis Of Industrial enterprise
Ii will BIO seen that az the Issues Of the Bank are regu
lated by the amount Of bullion in It's vaults II from any
Cause there may be extraordinary demand for bullion
which diminishes the quantity held by the BauE the
Bank Is compelled contract its circulation in the same
proportion; and that inasmuch there are several
causes which may create this extraordinary demand
over which the Bank have 10 control the principle
OF regulating the issues by the quantity Of its buon
compes the Bank to aggrsyate the evil effects Of none
isy crisis whatever the cause by which !. Is produced
may be. One Of these is demand for foreign
breads.uH II there be deficient harvest the foreign
wheat must be paid for in goli foreign war creates
an extraordinary demand for gold. threatened revo.
luton creates e psnic and people hoard the precious
metals Each and all Of these causes may occur With
out any agency fault Of the Bank Of the people Of
England aud yet either of them may under the rsgu.
ation Of the Bank cause so grea. coDrac ion of the
currency and great destruction Of private credit as
to overwhslu the public with ruin aud bankruptcy.
The Bank Is the agent Of the Government for the col
lection and disbursement Of the public revenue, which,
in 500, was upwards Of fous hundred aud eleven mil
ons Of dollars To facilitate the payment Of taxes tho
Bank from time to tne makes advances EIche quer
bills 80 that the payments Of the public dues tend to
keep the circulation full and thus supply the means o.
payment and diminish the burden Of taxation As the
Bank, at all times, holds args deposit in Erchequer
bills which can be exchanged for the notes of the Bank
the quantity in circulation then be reduced-but as
the purpose Of the Biak regulated by the act Of 1874
Is to comp. return Of specie the purchase Of lis notes.
By exchanging EIohtqler bills for them will no. accom-
pish this therefore, the Bank refuses TO renew toe dis
counted commercial paper and throws upon the com.
merce Of England the Of recruiting the bullion for
its vaults commerce OF England then ceases to be
an exchange Of the surplus products Of her industry for
the surplus products Of the industry Of other commercial
counires The want OF the Bank Is SPECIE and the turn
OF the Bunk puts the precious metals Ia motion
and causes them to a,v towards the Bank from all coun.
tries with whom Eagsnd has commerce; and this aow
having been once put in notion continues long after the
wants Of the Bank have been supplied and necessarily
creates large redundancy, which, in time, flows back
from whence it cams aud from whence Il should never
have been Withdrawn. will be that, as the pur.
Pose Of the is to compel r,sl1 of specie it mist
act with greater "a ct upon those foreign nations who
nearest to England aud the Of will be 10 the pro.
portion Of their commerce and the affinity bstReen
their several systems of Blinking and currency That il
has heretofore acted with crushing effect on the credit
and prosperity Of the Uaited Saes 10 proved by the
frequent suspension Of specie payments by their Banks