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present time, to the surrender of such vital public authority to a private corporation, whose power shall pervade the whole United States. It seems to be overlooked, by those who employ such arguments, that wealth cannot be created by any human law. When property is granted by law to one class of the community, for the purpose of affording them exclusive facilities, and increasing their profits, a correspondent amount of property must be taken from other classes. The mode by which this may be practically effected, has been shown, in too many forms, by the operations of the late Bank of the United States, to require further elucidation.
If the public service is strictly conducted by the constitutional standard of value, agreeably to impartial justice, no difficulties of a permanent character can occur in those between individuals. Of the manifold conveniences of a commercial paper medium, were it possible to confine it within the rigid limits of a representative of coin, into which the whole might be at once converted, at the option of the holders, no reasonable man can entertain a doubt. It not only facilitates large operations, by saving the delay and trouble of weighing or counting the coin it represents, but the ease with which large sums may be transported from place to place, is a strong argument in its favor, as a laborsaving process. But these undoubted facilities, furnish also means for grievous abuses. The secrecy and rapidity with which fraudulent transfers of vast amounts of property may be effected, is one strong objection to its use, even could its representative character, as a commercial equivalent, be rigidly preserved. A curious person has recently stated, that, had the Directors of the Bank of the United States posted a person, rapid and expert in the counting of cash, in front of their banking house, when they commenced the great expansion at the close of 1834, for the purpose of flinging into the street silver dollars as fast as they could be counted, he could not have thrown away the amount of the losses of the Bank at the time of its final stoppage, by many millions. Such an operation would have probably attracted the notice of the stockholders, before their whole property had been squandered. When an individual is enabled to make way with millions upon millions, without exciting the slightest visible grounds of suspicion, the comparative importance of convenience, on the one hand, and security on the other, becomes worthy of consideration.
The proper office of paper currency is shown by the ordinary interchange of commodities, which is familiar to all who are conversant with the course of trade in the great emporium of the commercial world. Most of the staples brought to the port of London on sale, are lodged by the importers, for safe-keeping; in the immense warehouses belonging to the dock companies, and are represented in market by dock warrants and samples. These warrants are obligations to deliver to the legal bidder the specific article described therein. A warrant frequently passes through the hands of a dozen parties, through as many purchases and sales, without one of the individuals holding it; seeing the article it represents. In the case of most commodities, the conveniences, both to sellers and buyers, of conducting transactions by such representatives, is much greater, than though the physical delivery attended every transfer of the legal title. The system is substantially the same with that of the tobacco warehouses established in some of the States, from which the idea was probably derived originally, and which has been partially applied among us to other staples. In London, it comprehends most foreign commodities, for such are the labor-saving facilities which commercial enterprise, left unshackled, always cóntrives for its own operations.
What would be the effect on the commerce of London, should these dock companies, after the principle to be legally recognised in the two bills before us, on the receipt into their warehouses of any commodity of known value---say of a thousand barrels of flour;—issue their warrants to the importer for this quantity, and at the same time issue warrants for two thousand barrels besides, to themselves or their friends, and put them into the market for sale, under the belief that the whole quantity would not be called for? The nominal stock of flour in the market would be increased three fold; under such a general practice, but would confidence be promoted, and security in the transactions in the article he advanced ? Such, it is contended. would be the consequence of a similar increase of money. Both are commercial equivalents, exchangeable against each other. There is quite as much reason for this factitious increase of flour, as of cash, if their comparative value is to remain free from artificial disturbance. Can more grave and practical objections be urged against the issue, by the warehousekeeper, of his obligations to deliver on demand three times the amount of the real quantity of any article deposited in his custody, than against such issues by a banker? Both may relieve the people, by creating an imaginary abundance of flour or of money, and conduct their business in high credit until the period shall arrive when either are wanted. But when scarcity shall produce an effective demand, the disastrous consequences, upon all who rely upon such delusive sources of supply, becomes too apparent, from the unsatis fied cravings of hunger in the one case, and the discredit which at once overtakes the pecuniary obligations of the community on the other. The commercial morality of these two cases cannot be distinguished, except by the depressed standard which has long been sanctioned by the prevalence of pernicious notions on the subject of Banking. As regards the security of property, and the inviolable faith of contracts, the result of such artificial increase of currency is incalculably more injurious to the highest interests of society, than such an increase of any other equivalent.
That men, highly intelligent on other subjects, should resolve to shut their eyes to the consequences of such factitious increase of a commercial equivalent, which necessarily enters into all the transactions of business, seems to be mere infatuation. Their characters for solvency are placed in continual jeopardy, by revulsions which sweep over the whole length and breadth of the land, with the desolating fury of a tropical hurricane. Unless it were possible to suppose, that a simultaneous increase of such equivalent shall take place in every part of the commercial world, these revulsions are inevitable from the system. As this never can occur, the community subjected to its influence is exposed to the destruction of its own industry, by the competition of the products of all other countries where currency is dearer, and the cost of production lower. At the same time, its means of payment for the foreign commodities attracted by this inflation of prices, are lessened by the increased expenses of bringing its own produce to market, where it must compete in price with those of other countries. There has been no period of five consecutive years
since paper currency has been generally employed in this country as the measure of value, while it has professed to represent a commercial equivalent, that this process has not been repeated, with more or less intensity, in proportion to the previous expansion. The principal excuse for reconstructing the machinery for inflicting these calamities permanently on the present and succeeding generation, is precisely that urged in favor of the paper money of the States at the period of the adoption of the Constitution,--that there is not specie enough in the world for the purposes of currency. No data being given, either at that time or the present, for this opinion, we shall not offer any counter opinion, as our endeavors to elucidate some of the complex questions relative to currency do not require it. We will readily admit, that should the aggregate amount of the speculative bargains made in 1835 and 1836 be taken as the accurate measure of the trade of this country, silver enough for the payment of these obligations could not have been found, if the mountain of Potosi, with all its original wealth, had been placed in the city of Philadelphia, instead of that huge manufactory of factitious currency which was so long the fountain of delusion and suffering to the commercial world. As to the ordinary interchange of commodities, which constitutes the commerce of the country, whatever amount of specie is found requisite to carry it on, will not fail to be forthcoming, whenever it shall be found necessary. If our merchants choose to expel gold and silver from circulation, by employing cheaper substitutes in all their transactions, they must get along without using them, as they best can. The description of currency recognised by common consent as the measure of value in any community, unless the laws interfere, is entirely a matter of option with the parties to the contract. When left unshackled by monopolies, commerce always finds efficient means for the exchange of equivalent values. We have alluded to facilities afforded by dock warrants to the interchanges of London. The most enterprizing and wealthy of the producing regions of England, Manchester, and the manufacturing country around it, conducted, for many years, the immense commercial transactions which flowed through that centre of British industry, almost entirely without the use of money. After the great panic of 1825, which very nearly destroyed the Bank of England, the British Parliament, in its wisdom, au
thorized the establishment of Joint Stock Banks, with power to issue paper currency:
Previous to the creation of these banks, at Manchester, the general medium of payment in the mutual transactions in that neighborhood was, the bills of exchange of individual houses. drawn for commodities purchased. A great manufacturer sold goods to a merchant for his bills at perhaps three months, payable in London or Liverpool. In purchasing cotton from another merchant, he endorsed this bill in payment. The cotton merchant endorsed and paid it away in his turn, and so on, until it reached its maturity, when it might, probably, bear forty or fifty different endorsements, of the several houses through which it had passed as a medium of payment. Cash, or bank notes, were seldom employed in the ordinary transactions of that prosperous community, except for the payment of the wages of the operatives, and the re. tail dealings growing out of them. This circulation of bills of exchange, based upon actual transactions,—and it was a point of honor to circulate no others, possessed the most important of all attributes of currency ;--they were always exactly as abundant as the wants of the trade required, for they were the creation of the exchange of equivalent values. It was consequently the most stable and secure currency that could have been devised, excepting gold and silver. The disastrous change which has come over the manufacturing interests, of which Manchester is the
great centre, within a few years past, and from which the producers of our great staple have suffered so severely, is attributed, in a great degree, to the substitution of the paper currency of the numerous Joint-Stock Banks, several of which have failed, after deranging the transactions of that community by profligate issues, instead of the previous currency of bills of exchange. Security, in this case, as in many others, was disregarded in the ardent pursuit of larger profits and greater convenience.
We mention this instance of the facility with which commerce always adapts its instruments to practical use, not by way of recommending such currency to communities placed in different circumstances, but simply for the purpose of illustrating the general principle advanced,--that, among intelligent people, permanent difficulties in finding adequate means for the exchange of equivalents can never exist,