Daily Richmond Whig. [volume] (Richmond, Va.) 1861-1862, 1862-02-19
RICHMOND. MORNING, FEBRUARY

bills in specie il required.
we are correct In these estimates and We challenge
contradiction, Il follows that IL the cost of the be
only $500 900 0UO and the plan of free baking pro-
posed conased with the present system, will create
annual demand for Treasury notes. for payment e
and the redemption Of currency equal to s24O 900 900
aud thus reduce the funded debt from $500 900 Ooo
1850 900 oOO and IL the interest be per cent vii
reduce the annual interest the public debt from t64
OOOO 900 to s2s,OOO.OOO.
That this reduction will to the people Of the Con-
fedeate States in fifty years. the Of ~ 0sG 1855
that being the difference between the interest on t64
compounded at the rate of eight per cent for
fifty years. and the interest SIS OoO$oo compounded
AZ Ave per cent = :. - -. - ,.lsst .-sf
Who are 10 pocect this immense sum Of 81 0ss III.
755 which the present system Of finance aud bAnkirg
would levy upon she people Of the Confederate State
to be es;imstsd permanent tax the industry and
resources Of poseriy Will II not much Of il flow
into the pockets Of the holders Of bank shares und,r
the present system who Issue their notes without inter-
est in exchange for bonds Of the government bearing
per cent interest. The extra profits Of the Bank Of
England during the suspension from 1897 to 1877 on
capital of S5s, $4,000 hat being the capital At that
uIhetD loO Aio ouE nuoPcnucu uhhhs W
be permitted to fleece the pso 10 Of the Confederate
States in the same way? If SO, viii not combirs-
tous be made with 4 view to reconstruct foi iegu
commerce on the old basis giving few leading London
bankers with their associates in New York and few
Southern cities, the control Of foreign exchanges
aud would not large part Of the $500 900 Of public
debt fad its way to Londoc and the accrung in
erest be used through the Bank Of Euglsnd create
large commercial balance against to be paid n peci
thus renewing our commercial vassalage TO New YorL
and London. II So what will we have gained by secef-
sion There will not even be 30 much a, change Of
masters and the burden of the yoke will be increased in
the ratio Of the public debt Oh my country who can
rave thee from this worse than Egyptian bondage'
WHAT WOULD BK THE EFFkcr UPlS THE VALUE OF PRcPIR
rY BY rHE PROPOSED SYSTEM OF YRIr BASKIsag
The issues Of the free bank, will be great
the public debt-and Treasury notes are now used
currency is dsmonsrable that the system will tend 10
prevent that depreciationthe effect will therefore be
to sustain the value Of property.
Mr.. Norman, quoted by Bosanquet, says chat Il
amount OF bank notes should oscate precisely in the
way metallic currency would osclate did they
no; exist and NJ Lloyd s,ys "the simple duty which
the manager Of the currency has to perform is that Of
making the amount OF the paper circulation vary precise
ly the amount Of the circulation would have vared
had it been excla,ively metallic. And upon this b
pohesis the Of 1874 regulated the issues Of the
bank OF England by the sum Of specie in its vants-
And hence whenever from any Gauss, there Is extra
ordinary demand for goll, IN England or elseuhei
.ich diminishes the quantity, the bank refuses to ti
count commercial paper and raise the rate Of interest
unt the pressure for moley becoms so Intense as TO
compel the gold 10 aow back to the bank Tue red 4
takes Place not because gold is worth more than bank
notes. for under the pressure bank Lotes may
be worth as much gold TO pay debts to purchase
property, but because the purpose Of the bank Ia by
bs pressure make the demand for bank notes as well
gold such to render bank notes of greater value
in Engaud than the value Of gold may be 10 tho coun.
try to which it taken Thus 1t will BE- seen that tte
fluctuations in the quantity Of currency 10 England does
not depend upon the required for the propr and
legitimate business operations Of the country but upon
tho casualties which may create foreign demand for
gold As the bank at the time an extra.
ordinary demand for money, by refusing to discount
commercial payer and intensity that demand by refusing
the usual facilities it is apparent that the eject OF such
pressure s not the proper test by which to determine
thu proper quantity of currency or the ell ct Of the
quantity of currency upon prices.
Bosarqu,t quotes Mr. Tooke, aud "a entitled to
greater respect who asked before the Parliament
~ committee in lsiO "Wl not the variations in the
l,ntity OF the circulating medium affect pricess" Ans
wer, No. "Will it not ifabdudsn be at the dspo.
ss of individuals for purchases than when |. is scarce "
Answer |: will be more easily disposable bu. It will
not necessarily be 30 disposed Of believe that the a.
mount OF circulating medium is the eso. Of and not the
eause Of the variation of prices. "W the prices of com
uoditiss undergo variation in proportion to the in
crease of bills of erchangeS" Answer No. The in.
b Ia of exchange would not be the cause of any
riss Of prices or vice Circumstances affecting the
articles or the opinion Of houses dealing ia the arcles
would anec, prices "Will the prices Of commodities
vary in proportion to the increase Of deposits in Bank
ers handsg" Answer. Not in the slightest degree
Now we do no. understand Mr.. Tooke say that such
contrsc.ons Of the discount Of commercial paper as are
made by the Bank Of England for the purpose Of coer
cling reauI Of gold will not affect the prices ofcomnCd
i,ies We understand him to that when there Is
NJ disturbing cause, aad the currency permitted to sd
lust itself to the business operations Of country the
quantity will be such these business operations require
and will be regulated like other des by the de.
md indcaed by the rate Of interest givIn fo it,
For We fad that Mr.. Harmsn, OF the Directors Of
the Bank, in his examination before the commaee 10.
ing to state what he considered to be he crtsr
lon of issue sid "rhs criterion of su
perabundAut issue Ia when money will ut produce srE
elm. interest think when in fec. there is no demand
for money, it will very discover it,sfn the money
market, whether there Is q supsrAbuadarce or not"
Add being asked "in what manner, he said 81. will
be, If may the phrase, haWked about at lower
rate Of interest than is USUAL"
And Bosanquet, in work written 10 refustion of the
principle Of regulating the currency by the quantity Of
gold in the Bank, urges the necessity OF adopting
principle Of selfregulaon prevention agarst eI-
cess or deficiency in the quantity Of money iu circus
ton Interfering with its value" and urges that this can
be done by the rate Of interest.
Now, in the plan which we propose, this principle is