|
Main
- books.jibble.org
My Books
- IRC Hacks
Misc. Articles
- Meaning of Jibble
- M4 Su Doku
- Computer Scrapbooking
- Setting up Java
- Bootable Java
- Cookies in Java
- Dynamic Graphs
- Social Shakespeare
External Links
- Paul Mutton
- Jibble Photo Gallery
- Jibble Forums
- Google Landmarks
- Jibble Shop
- Free Books
- Intershot Ltd
|
books.jibble.org
Previous Page
| Next Page
Page 78
Such are the facts. Let me now proceed to detail the causes of these
remarkable results. The first element in the success of any Minister of
Finance is the just confidence of the country in his ability, integrity,
candor, courage, and patriotism. He may find it necessary, in some great
emergency, like our rebellion, to diverge somewhat from the _via trita_
of the past, and enter upon paths not lighted by the lamp of experience.
He must never, however, abandon great principles, which are as
unchangeable as the laws developed by the physical sciences. When Mr.
Chase, in his first annual Treasury Report of the 9th of December, 1861,
recommended his system of United States banks, organized by Congress
throughout the country, furnishing a circulation based upon private
means and credit, but secured also by an adequate amount of Federal
stock, held by the Government as security for its redemption, it was
very unpopular, and encountered most violent opposition. The State
banks, and all the great interests connected with them, were arrayed
against the proposed system. When we reflect that many of these banks
(especially in the great State of New York) were based on State stocks,
and in many States that the banks yielded large revenues to the local
Government;--when we see, by our Census Tables of 1860 (p. 193), that
these banks numbered 1642, with a capital paid up of $421,890,095, loans
$691,495,580, and a circulation and deposits, including specie, of
$544,469,134,--we may realize in part the tremendous power arrayed
against the Secretary. This opposition was so formidable, that neither
in the public press nor in Congress did this recommendation of Mr. Chase
receive any considerable support. Speaking of the _currency_ issued by
the State banks, and of the substitute proposed by Mr. Chase, he
presented the following views in his first annual Report before referred
to, of December, 1861:--
'The whole of this circulation constitutes a loan without interest
from the people to the banks, costing them nothing except the
expense of issue and redemption and the interest on the specie kept
on hand for the latter purpose; and it deserves consideration
whether sound policy does not require that the advantages of this
loan be transferred in part at least, from the banks, representing
only the interests of the stockholders, to the Government,
representing the aggregate interests of the whole people.
'It has been well questioned by the most eminent statesmen whether
a currency of bank notes, issued by local institutions under State
laws, is not, in fact, prohibited by the national Constitution.
Such emissions certainly fall within the spirit, if not within the
letter, of the constitutional prohibition of the emission of bills
of credit by the States, and of the making by them of anything
except gold and silver coin a legal tender in payment of debts.
'However this may be, it is too clear to be reasonably disputed
that Congress, under its constitutional powers to lay taxes, to
regulate commerce, and to regulate the value of coin, possesses
ample authority to control the credit circulation which enters so
largely into the transactions of commerce and affects in so many
ways the value of coin.
'In the judgment of the Secretary the time has arrived when
Congress should exercise this authority. The value of the existing
bank note circulation depends on the laws of thirty-four States and
the character of some sixteen hundred private corporations. It is
usually furnished in greatest proportions by institutions of least
actual capital. Circulation, commonly, is in the inverse ratio of
solvency. Well-founded institutions, of large and solid capital,
have, in general, comparatively little circulation; while weak
corporations almost invariably seek to sustain themselves by
obtaining from the people the largest possible credit in this form.
Under such a system, or rather lack of system, great fluctuations,
and heavy losses in discounts and exchanges, are inevitable; and
not unfrequently, through failures of the issuing institutions,
considerable portions of the circulation become suddenly worthless
in the hands of the people. The recent experience of several States
in the valley of the Mississippi painfully illustrates the justice
of these observations; and enforces by the most cogent practical
arguments the duty of protecting commerce and industry against the
recurrence of such disorders.
'The Secretary thinks it possible to combine with this protection a
provision for circulation, safe to the community and convenient for
the Government.
'Two plans for effecting this object are suggested. The first
contemplates the gradual withdrawal from circulation of the notes
of private corporations and for the issue, in their stead of United
States notes, payable in coin on demand, in amounts sufficient for
the useful ends of a representative currency. The second
contemplates the preparation and delivery, to institutions and
associations, of notes prepared for circulation under national
direction, and to be secured as to prompt convertibility into coin
by the pledge of United States bonds and other needful regulations.
Previous Page
| Next Page
|
|