Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1862-01-15

tpTOScCt4Sn VI particular l0uerectS OF tue ptO-
pie. may be admitted, and its exercise un-
tier peculiar circumstances expected, but
the right to discriminate against a specific
interest, and to levy = tax graduated to the
declared purpose of object of its destruc-
ton, is a pawer which, once conceded, may
prove to be ar engine Of crushing force to
any local or, State interest, or State insttu-
ton.
The Secretary suggests two plans for
furnishing a paper currency as substitutes
for that now furnished by local or State
banks, both of which are liable to serious,
and. as l think fatal objections. 1.-The
first contemplates the gradual withdrawal
from circulation of the notes of private
corporations, and for the issue, in their
stead, of United States notes, payable in
in coin on demand. in amounts sufficient
for the useful ends of a representative cur
rency," To this plan serious objections
presented themselves to the mind of its
author, that be ahandons it, and dismisses
it BY saying he contents himself with OBJ
serving that, in his judgment, these pos
sible disasters Incident to the plan) SO
far outweigh tbs probable benefits of the
plan, that be feels himself constrained to
forbear recommending its adoption. 1t
may, therefore, he dismissed from further
consideration.
The second plan Of the Secretary Is sim
ply the system Of local banks, as now in
existence, with q circulation based exolu-
sivcly on United States Stocks. IL differs
in no essential particular from the stock
bank system, now in use III this State. ex-
cept that it excludes the stocks Of the
State, and requires those Of the United
States SIS the sole basis of security for the
circulation.
To- the objection already stated to this
system of banking; namely its want of i'm
mediate availability as distinguished from
ultimate security, the plan proposed is
liable to. other sobjections, among which l
may. euumerate the liability of greater
fiuctust;en an the market value of United
,Stases than in Ohio bonds; the establishing
of a paper currency for all the States upon
one basis the depreciation of which, aside
from ats ultimate security, would effect and
damage the entire system; the discredit of
State bonds, as q basis of security, and
thro1ing large amounts upon the market
in order to effect the proposed changes.
Such a currency, moreover, would IN no
sense be a national currency, notwithstand-
ing Its common impression and common
Authorization" for the issue Of each local
bank would be co2vertable into coin only
at the bank issuing the same, which fact
would fix its character and standard, as G
currency and medium Of exchange, and moi
the security on which it may be based, OIL
Its common impressionoT authorization.
These considerations, aud others which
might be adduced, compel my dissent t
the expediency of the proposed radical
changes in the banking systems and cur,
reney Of the country.
But independent Of all objections to the
proposed plan of the Secretary as a system
of banking, and waving all the doubts
difficulties and dangers Of undertaking t.
displace existing systems as established il
the several States, BY the substitution Of
that proposed. undcr any, and certainly
under the existing condition of the country,
| consider the measure impracticable, as
one of relief to the Government.
1t is presented as furnishing a market OF
demand for the stocks of the Government
equal to the, requirements of the Govern
ment to meet its expenditures. These tn
Secretary estimates as fellows
For HE nscal year ending June 30. 1859 ss7s $1,000
Dor The nscHl Gear ending June 30, lT6J 27sSoe 90
Making = total of ss55,OOO.oJ
The practical question then comes VI
and must be met; Can these sums be sup
piled as a basis Of bank issues, within tn
time required? If all the banks of tai
loyal States were at once engaged earnestly
in the work of converting their presen
means into money, AID investing it il
Government stocks as fast as realized
would it produce the required amount o
S275,5 500, 600 in six mouths, and $3.50,
600, coo in eighteen months9 1t seems t
me only necessary to state this to show 1t
impractieability. The coin held by tn
banks would be required as the basis o
these new issues That could not be part
ed with. Tie State stocks held by som
of them might be converted into money a
a heavy loss, but this would supply a vcr.
small portion of the sun required. Tn
main dependence wonld be the rapid col
lection of the bills receivable held by tn
banks. The aggregate amount of the bill
receivable held by all the banks Of tn
country was on the first of January. 1850
1856, l6l, 900, about two-thirds of whic
was held by banks in the loyal States
The sum required is, therefore, create
than the sum of all the means from whic
it is to be made, aad the plan is imprac
ticable, as means Of providing funds, froI
ia cause alone.
The plan of providing relief to the Cox
eminent is fraught with other dangers
The entire banking circulation within tn
loyal States is stated by the Secretary I
he $3.50. 600, 900 on the first day of JanU
ary, 1861. The effect Of the propose
plan would be to create a bank circulatio
within eighteen months of S755,00o,oO(
This would be independent Of the Govern
ment's issue of demand notes, making Il
gether, perhaps one thousand millions
dollars as a substitute for the existing OIL
hundred and fifty millions.
Who can estimate the consequences
-Eu,h an expansion? Pricts OF all scr
would greatly enhanced; tue eAPorLatioi
of <be country diminished. while the IN
portation of foleign goods would be increa
ed; the exchaIlei now in oui favor
turned against US. our gold currency supe
oeaed By paper issues. and sent abroa'
aud all existing values derangcd.
L Invite your attention to the Act
Congress of August last. Ito provide Ii
creased; 1eyenre from imports. to pay il
terest on the put lie DEBT, and for otht
purposes"
BY this Act d direct tax Of twenty mi
rli3ns Of dollar. is annually laid upon Il