The Columbia herald. [volume] (Columbia, Tenn.) 1850-1873, 1869-12-17

noninally redeemable; and, II the legal.
tender notes were ont of the way, would
re actually %, and, being issued b msti.
buttons in sympathy with trade, would
contract and expand in obedience to the
law of supply and demand, 20 that they
would 70 possess the element Of elias
ITCHY. -.,--re-F.,
. As to the comparative merits Of the
two different kinds of currency, an impair
tial consideration would probably decide
in favor Of bank circulation, principally
because it would possess the power Of
adapting itself to the exigencies of trade.
III government issues could be made to pos
sess the same power Of sdaptation, the YER
dict would be in their favor A candid
investigation, however, cannot fail to de-
velop the fact that there is no branch of
the nscal service adequate to the direct
issue and care of such currency a. the
country requires. The Treasury system is
30 arbitrary in its collections and disburse-
ments, so little in harmony with the bust
ness interests of the community, that It
frequently absorbs large amounts of cur
rency at most inopportune seasons, and dis
burses them with just Is little regard TO
the wants of trade
So long as the collection Of revenues Is
| liable to be q process of contraction, and
their disbursement a process Of imitation,
the agencies through which collections
and disbursements are effected cannot be
| regarded as suitable agencies for furnish
| ing sound currency to the people.
The argument that the government
should furnish the currency in order that
it may realize the profit upon its circula-
ton is q common one, but will not bear
scrutiny. There is no profit to the govern
ment on the circulation of an inferior cur
rency. Only sound currency will pro-
mote the material prosperity of the people;
and the government can realize no profit
from anything detrimental to their inter-
ests- As currency, therefore, govern
ment issues are not profitable. As loan
without interest they are equally unproft-
able, because they are injurious to the ma
tional credit, and add enormously to the
expenses of the governpent
IT. however, it is impossible for thegov-
eminent to comply with the conditions
necessary in order to furnish sound cur
rency, it can at least provide for the with
drawal of its own notes, and prescribe the
conditions upon which, and the agencies
through which, better currency may be
provided. As before stated, there should
be but one paper currency In the country,
and that should emanate from . source that
is influenced by, and is amenable to, the
laws of trade. No check or limitation
should be imposed upon it, other than the
law of supply and demand.
FREE BANKING.
A selfadjusting currency is the only one
that is adapted to the exigencies of trade,
and to the wants Of the country and it is
q vital question at this time, whether this
result can be reached before the return of
specie payments II possible at all, it is
only possible through the agency of the
National Banks. The machinery of the
government is not adapted to such ends.
And further, il possible, it is only upon
the adoption of policy which will tend
gradually but surely to resumption OF
specie payments. 1t must be the gradual
development of process which shall alb
sorb legal tenders, and putin their ,plaae q
paper currency which shall at all times
and under all circumstances be exchange
able for coin, either of paper, illegal tenders)
or OF gold--a paper currency which shall
gradually increase, while the legal tenders
for its redemption shall gradually decrease,
in such a ratio as a healthy demand for
banking facilities may determine.
| Where banking facilities were already
abundant, there would be no inducement
for the establishment of banking institu-
tons for the issue of currency upon con-
ditions that would inevitably diminish the
volume of lawful money applicable to its
redemption, and 80 gradually, but surely,
hnr fhn .f
while in other sections destitute, in whole
or in part, of banking facilities for the
legitimate demands of business, the neces
sity for banks and currency would Justify
the increase of bank circulation, notwith
standing the fact that by such increase
the burden of its redemption would also
be enhanced
The entire South and many portions Of
the West are very much in need of the
facilities and advantages to be derived
from properly organized banking institu.
tons, and their necessities would Justify
them in deliberately adopting measures to
supply their wants, the direct tendency OF
which would be to hasten the return Of
specie payments in the manner indicated
to wit, by the increase Of bank notes, and
the absorption of the legal-tender notes
As the former increased, the latter would
diminish. As lawful money became
scarce, its value would be enhanced, and
would gradually approximate to par with
gold. Thus specie payment may b.
reached through the agency of the Ma
tional Banks, and by the operation o.
natural causes. The process will not b.
rapid or spasmodic, because it will in al
its stages, and in all its details, be governed
by sound principles and conform to estab
lish laws. At the same time, the benefit.
and advantages of the National Banking
system would gradually become more
equally diffused, until all sections would
: at length get their just and equal share
J apportioned beyond cavil or objection be
cause regulated by the actual requirement.
of business.
While free banking may thus be estab
lished with safety, anterior to specie pay
, ments, conditioned only upon the with
, drawal and cancellation of legal tende
dollar for every dollar of bank currency
issued, free banking upon q specie basi
may also be permitted, with equal salty
and without delay. With details properly
} adjusted, banks may be established witt
authority to issue and put in circulation
gold notes-limiting the amount only by tn,
J ability OF the banks to comply with tn,
necessary conditions, and to redeem thei
, issues. Some provision of this kind i
probably necessary in order to supply tn,
Pacific and gold producing States with
paper currency. A circulating medium
cheaper and more convenient than coin
J has long been q necessity in those States
and would undoubtedly do much to pro
mote activity, enterprise, and develop
| ment. Experience has demonstrated K
} them that a currency composed exclusive
ly of specie is not exempt from the fluctu
: atoms to which money and trade every
where are subject, which may lead to th,
introduction of paper money, If the Cd
J portunity, is offered.
: By the establishment of banks on
, specie basis. the resumption of specie pay
J Inents is only anticipated; and familiarity
with gold values will do much to reliev,
the subject of the mystery with which Il
} is associated in the minds of many. Look
ing forward to the day when uniform
values shall again prevail, it may be, BY
wise legislation now, q banking system
can be established, truly national in it.
character and scope, which will furnish .
sound currency of uniform value in every
State of the Union. Respectfully submit
ted. HILAHD r. HULBURD,
Comptroller of the Currency