Year: 1859

the people during the financial pressure of the
past eighteen months, suggest the necessity of
preventing their recurrence Although many
causes may have combined TO produce these
disasters, it is too plain to admit Of doubt, that
our banking system has been Que Of the most
prominent. The value of the precious metals
the prices OF property-and the wages OF


abor-are always affected by the abundance
or scarcity OF the paper medium received os q
substitute for gold and silver coin The power
OF the states to authorize paper currency,
through the agency of banks, has been so long
exercised, and acknowledged throughout the
Union that it is no longer an open question
But it must be acknowledged that the power
has been greatly abused. The delegation of
this attribute of sovereignty to q number of
irresponsible corporations, without proper
checks to limit its exercise, and without pro-
viding any security whatever for the redemp-
ton Of the issues authorized, has been attended
with evils Of the most alarming character
These corporations are practically made the
exclusive judges of the amount of paper cur
rency to be furnished to the people, and have
the exclusive power to contract or expand their
circulation at pleasure. Depositors and other
ordinary creditors of banks, need no legislation
for their protection Every one who has direct
dealings with these institutions, either as de-
positor or otherwise, enters into such arrange
ment voluntarily for his own advantage and
may be safely left to his own vigilance, and
the ordinary remedies of the law for his pro-
lection But the millions Of people engaged
in industrious pursuits the farmer-the me.
chanic-the merchant-and the laboring man
are under the imperious necessity to receive
for their merchandise and their labor, the ordi-
nary paper currency of the country 1t is impos-
Sibe for persons of this description to investi-
gate the coacerns Of every Institution whose
notes are in circulation. But no investigation
could save them from the losses arising from
the defaults and frauds Of bank officers and
the insolvency of bank borrowers.


The note holders of banks have peculiar
claims to the protection of the government
They are involuntary creditors, who are forced
to receive the notes authorized by the govern
ment They have no direct dealings with the
banks. They do not trust the banks from any
hopes Of gain. They have no profit in passing
the notes which they would not have had in
passing gold and silver coin. They constitute
almost the entire community, and the humble
and ignorant are always the great test sufferers
when bank fails to redeem its notes. The
whole people are, therefore, deeply interested
in the security of the circulation allowed by
law, although many of them may never have
had share of bank stock, or been within q
hundred miles of its place of business The
government that authorizes the issue of pa
per currency is under high moral obligation
to require ample and available security for its
redemption.


The certificates Of loans iSSused by the Gen.
eral Government, or by this Commonwealth,
at a value to be fixed upon, with the power to
require additional deposits of security, from
time to time as the loans depreciate in the
market, would be as safe and available as any
guaranty which could be provided


law requiring all issues of banks hereaf.
ter organized, to be secured by the pledge of
these loans, would enhance the value of the
present loans and thus give the holders pre-
MUM not contemplated when they became
purchasers, and for which they never gave any
valuable consideration This enhanced value
would be derived from privilege granted by
the State, aud the State ought therefore, to
have the benefit Of it, as far us this may be
secured by legislation. The recent amendment
to the Constitution circumscribeS the power of
the Legi,lature in creating State debts, with
an exception in favor of debts contracted "to
redeem the present outstanding Indebtedness
of the State" A law authorizing new State
loans for the purpose of redeeming the present
overdue debt, would be within the consttu-
tional exception, and would be free from ohjec-
tion on constitutional grounds.


The new loans, thus authorized, redeemable
at the expiration of twenty years, with the
banking privilege attached to them, would un-
doubtedly sell at a high premium The pro-
ceedS of their sale Shonld be applied to the
payment of the present State debt, now over
due, amounting to more than seventeen millions
of dollars. Under this system the State loans
would no longer be held by foreigners, and the
semiay uual shipments Of specie, to pay interest,
would therefore cease.


AS the currency would be limited to the
amount actually secured, the danger from ex-
panSiOnS, which have heretofore stimulated the
incautious to embark in ruinous enterprises, in
overtradng and in extravaganza in their ex-
pendltureS, would be greatly lesSened, if not
entirely overcome. As the securities, would
be in the hands of high and responsible
officer of the State. with authority to sell them
for the purpose of redeeming the circulation.
the power Of the banks TO arrest specie paw
mehts, at their own pleasure would be at an
end. The system proposed is as near an APP
proach to specie basis as the condition and
and habits of the people are at present pre-
pared for. The duty of securing the com
munty from losses continually arising from an
unsafe currency cannot be longer delayed, with
out manifest disregard Of the public interests.
The subject is therefore commended to your
early attention


The report of the commissioners appointed
to contract for and supcrintend the erection of
moment to the memory of citizens of Penn
>ylvania, who were slain or lost their lives in
the late war with Mexico, viii inform the
Legislature of the proceedings had on that
SnhIprt fer rnreivincr nrnnnSalc Enr thn