The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-12-31

thor the serious and searching inquiry which az"
1S *. a s nS Man.
chester Chambers Of Commerce will be made we know
not We venture TO think-and our second correspon-
dent Mr.. Proctor, supports opin0nthst the memo
rial Of the Manchester Chamber Of Commerce pro-
duced with so little elaboration and knowledge as
sons are the resources Of governments and the
COMPLIMENTS persevere they viii probably secure their
the letters Of our correspondents themselves that an
qury would add nothing TO knowledge, and would
simply result In the publication Of blue book contain
which have been over and over again rcfuted.
No inquiry indeed, into the operation Of the Bank
Charter act would add anything material 10 our know
ledge Of the facts Of the case Upon those all dlspuanis
sufficiently agreed. Some persons might learn TO
distinguish between the facts which essential 10
knowledge OF the currency and those which are acct
dental but tins can scarcely justify comm ssion or
analysis OF bills OF exchange in sixteen classes which
Of assistance whatever his argument Mr. Proctor
apparently recent student OF the subject since
find him speaking OF mortgages, Stocks funds aud
bills OF exchange as part Of the country's capital
makes Il an accusation against the Bank act that II
wholly beside its object In each case we reasoner
embarrassed by what we may venture TO Call an excess
dental and proceed to the heart Of the
question The accusation brought against the Bank
act Is not ga e has falsa 70 :s'e ne saue,tey s
for By Of Is proieHoshs prevention Of pdaicshds
not been ochiered The act is, indeed, charged Min s
alton Of dtics and the three occasions OF lS47 1857 and
1866 cited when the permission to suspend the ACT
deemed necessary and was found sufficient to alsy
natural deduction that The panic which ceases on the
suspension OF act must be due to its existence but
il would be as Wise to say that water causes thirst and
IL is not difficult to show that pancs the result
of causes ws0ity beside currency ,d,cs and
would only arise in more intensified form were the
Bank Charter act forthwith abolished The demonsra-
ton has been made so Often and is itself 30 simple
tnat it ought by this time be thoroughly understood
but error onasts all inquiry and 1t Is much easier TO
jump to conclusion for oneself than to follow the rea-
onng Of another that the Bank Charter act will poba
bly, always remain stumbling block
The Bank Charter act makes the Issue Department
hranch OF the government worked by machinery ~
allows TO be issued TO the extent of fourteen now
fifteen millions the national security but forbds any
issue beyond that, except against an equal amount
OF coin or bullion. One common charge against the
act Is adopted by Mr. Proctor that limits the crcua-
ton Of the country which ought to be much greater
than lS4t since trade has increased al least three
fold This accusation is founded on complete msun-
Outstanding. The act no more limits the currency
than IL limits the quantity Of sugar in tho king
dom Gold and silver are freely imported according TO
our need pass into circulation directly indirectly,
In the form OF the notes which received against
them when deposited In The bank cellars Tae currency
is Hus i,,vycad dimiuihrd according 10 natural lar,
aud the stock OF and bullion in the Issue depart
ment apparently living dormant, but really circulating
or the OF tho currency at any time. II in
creased trade had made 1t cssary to have larger
amount in circulation, tina, stock would have shown
corresponding increase In point OF fact 1t has
varied bnt lutte, and may conclude that the de.
velopment OF banking in the last twenty years,
the greater use Of checks the formation OF the
country and the Increase Of the Town. clearing
house have econolized the use OF money to
terbalanee the influence OF a multiplied trade "X
does no. complain that the act limits the currency but
that II sanctions its debasemeni. II understand him
right he would not permit the issue OF any bank NOES
except against gold in other words, he would reduce
the Issue Department the condt Oh OF The old Bank
OF Amsterdam making mere storing house for q,d,
Ggnsaa ckih meter U0U,d Le Issued simply certificates
"a i.posed for safe kepiag. This machinery would
prev ent pancs as little as the present bank act Sup.
pose the Issne Department thus transformed and 70
Bank or England 10 somerset house or Downing street,
The Bank OF England would hen become formally what
IL is 10 fact merely the Oldest established o. the
jont stock banks and, in order 10 complete the
snppostion let transferable notes be ssned except nj
the new fsslo ofnc. Banking AMI discounting would
20 on az before Csdt coud b. 0rsa; bisof erchangs
,could be IN circulation; baies haciag money b lend
rod co,n,e Gr 6ifis and speculation ,rouid resume rs
ordisa Suddenly II IL found that speculation
has been allowed run nio excess; sm reckoned
above snsp cion suspends payments others dist listed
deposors anxious nri cali IN their deposits fear
agravates fear and The rate OF discount rises. Here
have all the wei! known successl,e stage, Of panic,
and n,s,rtch. ~ S.,sef ho.s Do,rni.g Nyset there
'coad b. some iy miass ~ god rspre e@t'ny NE same
c cn. soon, ., would h.pn, r...r rn way any
he nut upon The government 10 oUor this O1rs to
lend o, rs god, Which % the tsisg.
D. adroace son. yes crsdd he boaLs hardly
pressed Jy dnand for dic nst; the panic would abate
ami he phenomena OF this Year would be reproduced
under other The course OF events would be
essentially different, IL by the side Of the automatic
is.ue Office, gold storehouse the other hanks now
bayin The privilege were allowed 20 Issue NOES 10
linlted extent credit now, II any other banker
allowed n issue ~ many notes as he cold. The
only effect would be that another mode or modes Of
credit would b. crcaled 10 become at the lime or
another Of dstrsisi, and AT last there would
DO raid upon the national so-chonse before And
this leads 10 what If practically the only real alter
native 20 the present system. II alteration - 10 be
made 10 not be sought Mr. Pr,cor would think,
in increasing the limit OF fifteen millions 'sX.n
wond apparently desire Ia making note dock war.
rant Cor gold, bnt In absolute freedom Of issues. Any
what would be the consequence of snch
system. We should not have periodic suspensions
the Bank al, but We shouG have periodic Suspensions
Of payment. There would be reserve Of coin
credit al hand 10 slay panic when II 10 fever
height and the inevitable result would he temporary
but universal insolvency.
Ii IL not plain, their own showing, that
the amendment must be the consequence Of something
wholly differently II must not be looked for from any
alteration OF the law, bat from reform OF banking and
mercantile praoiiCetrom return, in short, those
elementary principles oi financial management which
have OF late years been wholly iisFegsrded.