Oxford Democrat. [volume] (Paris, Me.) 1833-1933, 1878-06-25
From the Portland Press.
Mr.. We6ster's Financial Opinion.

I ne says OF banks In general.
IL am sure, Sir, that the advantages
which would at present result from any
bank are greatly overrated. To look to
a bank as a source capable, not only OF
affording a circulating medium to the
country, but also Ofsupplying the ways and
means Of carrying on the war, especially
at time when the country is without
commerce, is to expect much more than
will ever be obtained Banks are not
revenue They are useful to the State in
their proper place and sphere. but they
are not sources Of national income.
The streams Of revenue must flow from
deeper fountains. The credit and circu-
lstion bank proper are the effects rather
than the causes Of a profitable commerce
and a well ordered system OF finance.
They are the props Of national wealth not
the foundations Of them. Whoever shall
attempt to restore the fallen credit of the
country by the establishment ofnew banks,
merely that they may create new pa
per, and that government may have a
chance Of borrowing where it has not
borrowed before, will End himself misera-
bly, deceived
BE denounced an excessive issue Of pa.
per money, and reprobated as transparent
folly all schemes of an irredeemable cur.
rSncy, and of currency redeemable 9TH
erWise than IN gold and silver In the
speech against the bank from which |
have already quoted, he also said:
at Is sufficiently obvious that to pro-
duce any benefit this bank must be so
constructed as that Its notes shall have
credit with public The FIRST inquiry
therefore should be whether the bills Of a
bank Of this kind will not be Immediately
and greatly deprecated think they
will. This effect will be produced by
that excessive issue its paper which the
bank must make in its loan TO the gov
ernment. Whether It's Issues OF paper are
excessive will depend not on the nominal
amount OF its capital, but on Its ability to
redeem IL This Is the only safe criterion.
Very sPecial cases may perhaps furnish
exceptions, but there Is in general no Sc
curity for the credit Of paper but the
ability IN those who emit TO redeem it.
Whenever bank notes are not convertible
to gold and silver 1t the will Of the hold
er, they become Of less value than gold
and silver. All experiments on this sub
Ject have come to the same result 1t is
10 clear, and has been 20 universally sd-
United that it would be waste Of time to
dwell upon it. The depreciation may not
be perceived the first day or the first
week It takes place. 1t will be first dis
ccrned in what Is called the rise in spe-
cle; it will next Be seen in the increased
price Of all commodities
The circulating medium of CONNER
cial community must be that which Is the
circulating medium of other communities,
or must be capable Of being converted IN
to that medium without loss |; must be
able not only to pass in payments and re-
ceipts among individuals Of the same So
ciety and nation, but to adjust and discharge
the balance Of exchanges between different
nations. Ii must be something which has
a value abroad as well as at home, and
by which foreign as well Is domestic
debts can be satisfied The precious metals
alone answer these purposes
They alone therefore are money, and
whatever else Is TO perform tAe Offices Of
money must be their representative, and
capable Of being turned into them at
will. 80 long as bank paper retains this
quality it Is a substitute for money d.
vested Of this Dothing can give it that
character No solidiy of funds, no
suthciency of assets, no confidence in the
solyency Of banking institutions, has ever
enabled them to keep up their paper to
the value Of gold and silver, any longer
than they paid gold and silver for it, on
demand. This will continue to be the
case, so long as these metals shall con-
tinue 70 be the standard of value, and
the general circulating medium among
nations.
How imperitive are these emphatic
counSels Of the great statesman 70 make
the paper circulation Of the United States
real money, by redeening in gold and
silver AL OF it that shall be demanded.
Diyested Of this quality Of convertibility,
nothing can give our treasury notes,
though made legal tender. nor our nation
a. bank currency the value OF money.
By tar implication Mr.. Webster must
be considered 10 have favored the treas
ury note, a. an instrument of currency
and a representative Of money. and he
gives a decided expression Of his own
opinion that the issuing of promissory
notes TO be used as money by banks Gre
Ated by the States is in violation of the
constitution. On the 30th of April, 1916,
Mr. Madison approved resolutions, offered
in the House and advocated by Mr.. Web
ster, that all moneys due the United
States, should be paid in the legal curren-
cy Of the United States or treasury notes
or notes of the Bank Of the United States
or 10 bank notes paid on demand in legal
currency In his speech he said;
"a bank of thirty-fye millions has
been created for the protested purpose Of
correcting the evils Of our circulation and
facilitating the receipts and expenditures
Of the government. | am not so ssnguine
IN the hope Of great benefit from this
measure as others are. Bot the treasury
is also authorized to issue twenty-five