Imagens das páginas

March 20, 1832.]

Coins and Currency.

[H. OF R.


2. Loss from the insolvency of banks issuing small stood in 1826, their circulation was to cease in April,

1829. This law did not extend to Scotland or Ireland. 3.' Loss by forgery. of both these an estimate would In 1828, it being found that the Scotch notes under £5 also be submitted. They, too, fell most heavily on the took the place in the North of England of the English poor and ignorant.

small notes withdrawn, an act of Parliament was passed to 4. Sulden and extreme changes and revulsions of the prevent their circulation in England. The small note curcurrency

rency might, therefore, be said not now to exist in Eng. These operated on the whole community, and their ex. land, though it was still allowed in Scotland and Ireland. tent and the degree to which they were increased by a It was true the returns for 1830 showed about £300,000 small note circulation, could only be collected from a long of Bank of England notes outstanding; but, he presumed, and close examination of the vicissitudes of commerce and unless there had been some alteration in the law, with currency. That they were great evils, would not be de- which he was unacquainted, they were only nominally nied; and that, if they were not in some degree produc. outstanding, having, in reality, been lost or destroyed. ed, they were at least greatly aggravated, by the small The effect of suppressing the small note circulation in Engnote system, was a fact resting upon the authority of almost land, it was believed, had been highly salutary. The all the best writers on money, and confirmed by the expe- amount of the metallic money in use had become equal to rience of the first commercial nation in the world. An that of the bank notes of every description. act of Parliament was passed in 1819, proliibiting the cir. It consisted of gold,

22 millions. culation of small notes in England after a certain period. Silver, receivable in payments under forty In consequence of the agricultural distress, they were al shillings,

8 lowed again in 1822; and the increase of small notes of the Bank of England, the country banks, and specie, soon

30 amounted to an addition of forty per cent. on the whole currency. To this cause, principally, some very ingenious He hoped to be pardoned for a short statement relative authors had attributed the overtrading and extravagant to the extent of the English small note currency. The speculations of 1824–5. The amount of country bank Bank of England notes under £5 stood, from. '1804 to notes of all denominations in circulation in England for 1809, at about

41 millions. some time prior to that year, as far as could be estimated 1810,

5 to 6 millions. from the stamp office returns, was about twelve millions. 1819,

7 millions. In 1825 they had risen to between eighteen and nineteen The amount of English country bankers' notes under millions. £4,400,000 sterling of gold was exported in one £5 were, in 1825, £7,800,000, which, in 1828, had been year: part of it to South America, the country from which reduced to £2,150,000. Previous to 1795, the number usually supplies of gold had been received. Prices of of bankers in England and Wales was only 250 or 300. course rapidly advanced, on some articles doublect, and, In 1808, they had increased to about 750. Between 1812 with the advance of prices, increased the spirit of specu- and 1814, to above 900. In the four succeeding years, lation. Then came the reaction, the panic, as it was still they were so much diminished, (chiefly owing to failures,) called; the week when seventy-three banks failed, and that, in the year 1818 to 1819, the whole number was only the Bank of England itself was in danger, and saved only about 600. . After that, they increased so much, that in by an accident; the state of things described by the 1825 they were above 750, and in a very few months late Mr. Huskisson, which, as he said, “if it had lasted since that time about 100 of them failed. a week longer, must have put an end to all dealings be The circulation of Scotch notes under £5, (in Scotland,) tween man and man, except in the way of barter.” from 1815 to 1825, varied from a million and a half to two

(Mr. HUBBARD, of New Hampshire, here inquired of millions. Mr. Wilde whether he would not prefer finishing his In Ireland, the average circulation of the Bank of Ire. remarks to-morrow, and Mr. W. professing an entire in- land notes under £5, from 1820 to 1825, was about difference, Mr. H., who was anxious to proceed with the £1,600,000. pension bill reported by the committee of which he was The average of the Irish country bankers' notes under chairman, moved that the House proceed to the orders of £5, in circulation, from 1820 to 1824, was less than half a the day, which was carried. On Wednesday the 21st, million; in 1824, it rose to nearly one million, and in 1825 when Mr. WILDE was about to continue his remarks, Mr. to upwards of a million. In 1826, it fell to about £663,000. CAMBRELENG, who was obliged to leave the city that Scotch and Irish notes, of small denominations, did not morning, as one of the committee of inquiry on the affairs appear to have entered into the circulation of England, of the United States' Bank, begged leave of Mr. W. to until after 1826, when the Scotch small notes made their suggest an amendment, and offer a few observations on it. appearance in the North of England, and occasioned the Mr. W. yielded the floor for that purpose, and Mr. C. act of 1828, as before stated. suggested a modification of the resolution, so as to direct Mr. W. apologized for the length and dryness of this an inquiry into the expediency of making gold a legal array of figures, which, however, was, in some respects, tender in large, and silver a legal tender in small payments necessary to a proper understanding of the subject. only; the propriety of which he enforced by some appro- Whatever, he continued, might be the other inconve. priate arguments. Mr. W. adopted the modification, and niences and expense of a small note currency, which had then resumed.]

already been in part adverted to, and would, by and by, A brief sketch of British legislation on this subject might be more minutely stated in reference to our own country, not be useless.

the sudden and violent fluctuations which it caused or agThe issue of notes under £5 was prohibited by law, at gravated was a capital objection. He was aware that the suggestion, it was said, of the justly celebrated Adam there was a difference of opinion as to the influence of a Smith, from the year 1772 to the period of the bank re- small note circulation upon those ruinous revulsions to striction in 1797. From 1797 it was permitted until 1819, which a paper currency was peculiarly subject; but it was when arrangements were making for the resumption of a difference of degree, rather than of principle. The specie payments, and among them the prospective prohi. voice of almost every respectable writer on political ecobition of small notes. This policy was unfortunately de- nomy, from Adam Smith to Mr. Senior, and of nearly parted from in 1822, when the period of their circulation every politician of sagacity, from Mr. Burke to Mr. Gallawas extended. It was resumed in 1826, after the expe- tin, was decidedly against them. The difference of opi. rience of their evil consequences in 1825; and as the law nion was only as to the extent to which the fluctuations of

H. OF R.]

Coins and Currency.

(MARCH 20, 1832

price, overtrading, the spirit of insane speculation, and largely. The demand was accordingly improving, and by the occasional widely spread destruction of trade and cre. degrees the prices would have risen as the gold came in. dit, so frequent of late years, was to be imputed to the use But the issue of small notes increased the demand suddenor abuse of paper of low denominations.

ly and surprisingly; this, with the further augmentation He, and some of the writers whose works he had con- in the currency, raised! our prices and increased general sulted, might seem inclined to overrate their effect. But production, which, by giving employment to a great numit must be remarked, that whatever might be the cause to ber of persons connected with our manufactures, (who which different authors were disposed to impute the had been only partially employed,) caused a further extengreatest degree of energy and consequence, nearly all sion of demand. Had the currency been left to increase agreed in believing that a circulation of small notes was an by the natural importation of gold, prices would have risen important accessory. Thus, Mr. Tooke, in his able and more slowly and to a less extent: as it was, they rose from popular work on high and low prices, while imputing an undue degree of depression to the opposite extreme, mainly to the seasons the deficiency or anticipated deficien- and this led to a violent reaction.” cy of crops, the consequent advance of price and spirit Mr. Yeates, therefore, insists, in another part of his of speculation, the increase of private bills of exchange work, that “where a large part of the currency of a and promissory notes, the overtrading, further increase of country consists of bank notes, of such small amounts as prices and subsequent revulsion, did not by any means to supply the place of specie, the quantity of money, as omit the influence of the country banks in mischievously well as the rapidity of circulation, will fluctuate more freswelling the circulation at one period, and ruinously con- quently and extensively than if it consisted of the precious tracting it at another. Mr. Yeates, in his essay on currency, metals only.” And he subsequently asserts: “On this did not think Mr. Tooke attached sufficient importance to subject all are agreed. It is, in fact, one of the most this latter cause,

and insisted that the increase of private serious inconveniences attached to the use of such a bills of exchange, promissory notes of individuals, or even species of paper currency as is supplied by the country bank bills of large denominations, would be inadequate bankers of England, that it is extremely apt to be, on the to affect, to any dangerous degree, the retail trade of the one hand, suddenly and unduly contracted, in periods of country, and that the greater portion of the rise in prices revulsion, or when the price of any large class of comin that trade was to be imputed to the small notes. modities is on the decline; and that, on the other, it is

Mr. W. begged permission to read a short passage from very apt to be as unduly enlarged in periods when conthis author, in illustration of his peculiar opinions. fidence is high and prices generally on the advance."

“ There is every reason to think that, at the end of the The revulsion of 1824-1825 was not, by any means, year 1822, or the beginning of 1823, the quantity of cur- confined to Great Britain. Similar causes procluced rency in Great Britain was extremely small; it had gradually similar effects in this country; and extravagant speculadecreased since 1818, (when it was very bigh,) and it was tions, the increase of paper, and rise of prices, terminated at the lowest about the latter end of 1822. From that time, here, as they did there, in bankruptcy and ruin. Their it increased so rapidly during the next two years, that operation in the cotton trade came more immediately there was an increased circulation, on the whole, including within his knowledge. In the spring of the latter year, specie and bank notes, of about 40 per cent. By the returns, he was in one of our largest cities when the rage for specu(Appendix C,) it appears that the increase of country lation was at its height. He conversed with some of the bankers' notes was from £12,000,000 to £19,000,000 or most prudent and intelligent merchants who had been £20,000,000; these consisted of £1, £2 and £3 notes, cireuseized with the general frenzy. They attempted to lating almost entirely amongst the consumers, shopkeepers, persuade him, by a series of ingenious arguments and and small dealers; the metallic circulation was increased in calculations, that nothing could be better founded than the the same period, probably from £7,000,000 or £8,000,000, adventures they were carrying on; that the advance of to £14,000,000 or £15,000,000, after deducting the quan- prices rested on the most solid grounds, and large profits tity exported again. The Bank of England notes were at were infallible. Fifty, eighty, one hundred, two hundred the same time increased about £3,000,000 in notes of £5 thousand dollars, mace, or certain to be made, on cotton, chiefly. It therefore appears that the whole currency were spoken of as familiarly as possible. Nothing was which circulates the retail trade of the country increased wanting but to realize it. He endeavored in vain to imabout 40 per cent. in two years.

press his own conviction on some of his friends that the “Now it would be impossible for this extravagant in- whole was illusory, and that the violence of the recoil crease to take place if our currency had been metallic; would be proportioned to the overtrading and expansion of we could not have obtained the specie requisite for this the currency. Both parties, as is common, continued in purpose, without exporting £10,000,000 or £12,000,000 their own opinion. Some of them would probably still more of manufactures and other goods than we did, which remember the conversation. would have been out of our power; we did actually export Mr. W. embarked in May for home, and on his arrival more in 1824 and 1825 than the usual quantity, and, in or. there found all the external signs of most extraordinary der to make such large additional exports, prices must have prosperity. Every one had grown suddenly rich. One been lower than they were, and new markets must have had made sixty, another ninety, another a hundred and been found. If, therefore, the small note act of 1822 fifty thousand dollars. Some of his mercantile friends, had not been passed, our circulation in 1825 would pro- young men just set up in business, with a small capital, bably have been not much above £45,000,000 altogether, had become independent in one winter. No one ac(about five millions increase on that of 1822,) instead of knowledged a profit of less than twenty thousand dollars. about £55,000,000, which it appears to have been. The Every one had his project for the enjoyment of his newly prices of goods would, with such a small increase of mo. acquired affluence. One intended to buy a plantation, ney, adapted to the retail trade of the country, have risen and retire. Another had made his arrangements to travel much less than they did; for commodities cannot be raised over Europe. The least fortunate or ambitious looked 10 in price by the will of the producers; the dealers will not a neat country box and an equipage, or a family trip to give them advanced prices, unless the consumers can give Saratoga and the lakes. Mr. W. almost began to doubt a corresponding advance. In 1820 to 1823, indeed prices his senses, and to blame the folly which had kept him unof most goods were so low, that the producers did not ge profitably delving in the gloomy depths of law and politics, nerally realize fair profits, and there was every motive for while fortune had been showering down her gifts on all the dealers to increase their stocks, and for the customers, around him. In one little month, he lamented to say, all both in the foreign and home markets, to consume more their delightful visions were destroyed. Consternation

MARCH 20, 1832.]

Coins and Currency.

(H. OF R.

and ruin took their place; failures for immense sums were circulation, was that arising to the holders of small notes, of daily occurrence, and he was perpetually obliged to from the insolvency of banks issuing them. This Mr. W. sympathize, as he did most sincerely, in the distress of estimated at one and one-eighth of one per cent. per anthose who, but a little while before, he had as cordially con- num, which, upon a circulation of ten millions, for a gratulated. Nor was this a solitary instance. In the hundred years, amounted to eleven million two hundred years 1818–1819, something of the same sort, and from and fifty thousand dollars. The grounds on which he similar, in some degree, took place. Gentlemen made this estimate were these: From 1811 to 1830, (ninemight remember it, and the shades of difference. He did teen years and a half, being from January of one year to not feel justified in detaining the House by an enumeration July of the other,) according to Mr. Gallatin's table, one of them; but would pass to the most curious, and, per- hundred and sixty-five banks failed. The capital of one haps, the only original part of his subject-an attempt to hundred and twenty-nine of these amounted to a little upestimate the comparative expense of a small note and wards of twenty-four millions. This would give for the specie circulation.

whole a capital of thirty millions. Every one who heard him was well aware that the great If it were supposed that they issued notes to the amount recommendation urged in favor of a paper currency was of their capital, thirty millions, and the loss by their failits cheapness. By using it, a large proportion of specie ure was fifty per cent., or fifteen millions, allowing onecould be dispensed with, and, by being exported, might fifth of this to fall on the small notes, it would be three be added to the productive capital of the country. Mr. millions. Three millions, for twenty years, would be in Gallatin estimated the annual saving by the use of paper a hundred years fifteen millions, or one and a half per money, instead of specie, upon a circulation of one hun-cent. per annum, on a small note circulation of ten mildred and nine millions, (inclurling deposites,) at five millions lions. per annum. The notes of five dollars and under, in cir If it were supposed that they issued notes to only half culation in the United States, were estimated by Mr. the amount of their capital, and the loss on their failure Gallatin at one-fifth of the whole paper of the banks, or was fifty per cent., then the loss on small notes, arising about ten millions. This estimate was certainly not too from insolvency, would be three-quarters of one per cent. bigh-perhaps it was rather below the mark. The amount per annum, or seven million five hundred thousand of bank notes in circulation, at present, was assuredly dollars. greater than when Mr. Gallatin wrote; since the returns A medium between these two calculations gave one and of the banks of four States only added to those of the one-eighth of one per cent. per annum, or eleven million Bank of the United States, showed a circulation, including two hundred and fifty thousand dollars loss on a circuladeposites, in round numbers, of about ninety-four millions. tion of ten millions for one hundred years, which had been Taking the small notes, however, at Mr. G.'s estimate of adopted. ten millions, the saving by them could not exceed four to In confirmation of this estimate, he would add that the five hundred thousand dollars, upon the principle of Mr. returns to the Parliament of Great Britain showed the Giallatin's computation. Mr. W. had been led into a minute failure of two hundred and seventy-four banks in England calculation on this subject, and attempted to frame, from 1790 to 1818. If the loss by each were estimated at upon the best data he could collecl, an estimate of the twenty thousand pounds sterling, this would be, per ancomparative expense of a circulation consisting of coin, num, one hundred and ninety-five thousand seven hundred and one consisting of small notes of the like amount, viz. and fourteen pounds, which, on a circulation of fifteen ten millions, and maintained for the same period, one millions of notes, about the average of that description of hundred years. This, to be sure, was a long time in the paper, was more tban one and a quarter per cent., giving, life of an individual, but not in the existence of a nation. for three millions of small notes (that is, one-fifth of the He was not apprised that the length of time, however, whole) one-fifth of £195,714 or £39, 142. This would made any material difference in the calculations, except to make the loss on ten millions of small notes, for a hundred render them more striking.

years, one and a quarter per cent. per annum, or twelve He presented this estimate with some confidence in the million five hundred thousand dollars. correctness of its principle, but much diffidence in the It would be recollected that the United States had susaccuracy of its details; though he had spared no pains to tained a loss, in the collection of their revenue, arising collect information. His errors, liowever, would be harm- from insolvent banks, of one million of dollars. This loss, less, since he should lay before the House the whole of it was believed, might be said to have occurred within the the data on which his computations were made, and every five years from 1814 to 1818, both inclusive. The regentleman who thought proper to investigate the subject ceipts into the treasury, during those five years, were upcould, therefore, detect them.

wards of one hundred and ninety-eight millions of dollars; The first reflection that was apt to strike us in relation the loss, therefore, over one-half of one per cent. on the to a small note currency, was, that the people paid an in- whole period, or one-tenth of one per cent. per annum terest on these notes, which, on ten millions, at six per on the whole receipts. But if it were considered, as cent. per annum, amounted to six hundred thousand dol- doubtless it ought to be, that of these receipts sixty-eight lars annually, and in a hundred years to sixty millions. millions and upwards were from loans and treasury notes,

There was no doubt of the fact; the banks received the and ninety-three millions from the customs, on the notes interest, and it was precisely for the sake of that interest received from none of which sources was any loss sustainthat the small notes were issued. But, on the other hand, ed, then the whole loss was incurred upon the paper reit was to be considered that, if a specie currency of the ceived in payment of the public lands, direct taxes, intersame amount were to be used for the like time, the in- nal revenue, and other incidental receipts, amounting, in terest upon ten millions of specie must be lost: or, to all, to a little above thirty-six millions, upon which amount make the matter plainer, let it be supposed we should be the loss of one million makes more than one and threecompelled to borrow this ten millions of specie from a quarters per cent. per annum. if such were the loss to foreign nation: in that event, we must pay interest for it. the Government itself

, in spite of all its opportunities of so that the interest paid to the banks, though it must be information, its priority of payment, and the vigilance and estimated in their protits, to show what they gained by the sagac.ty of its officers, could it be doubted that the loss to small note system, could not be taken into account as part the poor and ignorant must be much greater? of the loss or charge to the public on a small note cur Upon all these facts taken together, he had estimated rency, that being equal either way.

the loss to the public, arising from the insolvency of banks The first item of loss to the public by the small note issuing small notes, as equal to eleven million two hun

H. OF R.]

Coins and Currency

[MARCA 20, 1832.

dred and fifty thousand dollars upon a small note circula- small notes before the legislative proh:bition, showed the tion of ten millions continued for one hundred years. loss to be nearly what he estimated it. The heaviest loss,

The second item of loss to the public was forgery. Small however, it might be remarked, would not be sustained notes were generally the subject of forgeries. They were upon the notes of city banks, for which, when worn, spe. more readily passed, were taken with less examination, cie or a new note might be readily demanded, but upon and circulated among a class of persons less competent to those of distant institutions, to which a return of the mutidetect them. The injury, of course, fell most heavily up- lated note could not be easily eflected as soon as it be on the laboring class. Mr. W. estimated the loss to the came uncurrent. He would not enter into the details of public, arising from this source, at one-fourth of one per calculations which the returns from these banks exhibit. cent. per annum on ten millions of dollars for one hun. ed. He had trespassed too much in that way already, and dred years. This amounted to two million five hundred it was the less necessary, as they might be seen by referthousand dollars. He admitted that this item could not ence to the statements and estimates which he should ask be very exactly calculated. The only authentic informa. to have printed by order of the House. One other piece tion he had met with, was in the report on forgeries made of testimony he had obtained through the kindness of the by a committee of the Commons House of Parliament, of Speaker. It was a statement of the issues of corporation which Sir James McIntosh was chairman, in 1819. Ac-notes by a neighboring city, with the amounts still outcording to the testimony of Basil Montague, Esq. given standing, their circulation having been stopped in 1820 or before that committee, the number of forged notes of 1821. This was also among the documents he wished one pound in circulation, was

printed, and exbibited a loss much more considerable, In 1814,


amounting indeed to four per cent. per annum on the 1815,

14,000 and upwards. change bills, and one and a half per cent. on the small notes. 1816,


One-fourth of one per cent. per annum on a circulation 1817,


of ten millions of small notes, for one hundred years, would The forgeries were almost all of Bank of England notes, be two million five hundred thousand dollars. These three and the notes of the Bank of England under five pounds, items of loss, by the insolvency of banks issuing small in circulation in 1816 and 1817, did not exceed eight and notes, by forgery, and by the destruction of genuine notes, a half millions: twenty-eight thousand pounds, on a circu- made up the direct loss or charge to the public on a small lation of eight and a half millions, considering all below note circulation of ten millions, maintained for one hunfive pounds as one pound notes, would be more than five-dred years, and constituted an aggregate of sixteen million sixteenths of one per cent. He supposed the proportion two hundred and fifty thousand dollars. of forgeries might be somewhat less in this country. It The loss, or rather charge, to the banks issuing them, was probably somewhat more in England, as the re- must next be considered. To keep ten millions of small turns of forgeries were only of one pound notes, and of notes in circulation, the banks, if they regarded their own these, le presumed, such only as had been detected at credit or the public safety, should keep at least three milbank or prosecuted, while the circulation of eight millions lions and a third in specie in their vaults, to answer any and a half was that of all the Bank of England notes under call upon them in consequence of their issue of small notes. five pounds, no distinction being made in the returns be- It might be true that the banks very frequently did not tween one and two pound notes. It was true, however, do this. It was one of the evils of the system that they that by far the greater part of the Bank of England notes did not. If they put out ten paper dollars in dollar bills under five pounds were of the former description. Every for every silver dollar they had, when the excessive issues thing considered, he had thought an allowance of one- produced an unfavorable state of exchange and conse. fourth of one per cent. per annum, for loss to the public quent demand for specie, they must call in ten dollars of by forgeries, on a small note currency of ten millions, their notes for every dollar of their silver which was ex. would not be far from the truth, and this, for one hundred ported. The degree to which the evil was thus aggrayears, amounted :o two million five hundred thousand vated must be perceived and appreciated. Supposing dollars.

them to keep the due proportion of silver above indicated, The next item to be taken into the account was the loss or one-third, which would still impose upon them the neor destruction of small notes. This he had reason to believe cessity of calling in three for one, they must lose the was generally overrated. He himself, when he began the interest on three and one-third millions of specie at six investigation of this subject, certainly regarded it as much per cent for one hundred years, which was two hundred larger than it proved to be on closer examination, and thousand dollars per annum; and for a hundred years, such he found the prevailing opinion among those with twenty millions. The next item of charge to which the whom he conversed. The loss arising to the public from banks were subjected, was the cost of issuing the small this source he estimated at one-fourth of one per cent. per notes. These notes lasted only from one to three years. annum, after a careful consideration of the different facts At first, when a stamp duty was imposed in England on he had been enabled to collect.

bank notes, they were required to be cancelled every The whole amount of the issues of the late Bank of the three years. But, some time afterwards, the law was United States might, according to very satisfactory infor. changel, Parliament, upon full investigation, becoming mation, be safely estimated at eighty millions of dollars, satisfied that the small notes did not last more than three and its average circulation during the twenty years of its years. The corporation notes of Washington, he had existence at something upwards of four millions. The heard, did not last much if any thing beyond a year. He total amount of its notes of every description now out- estimated the average existence (if he might be allowed standing, he had ascertained to be two hundred and five the expression) of small notes at two years and a half. thousand dollars. This would make the loss upwards of The ten millions of dollars in small notes of different de one-fourth of one per cent. per annum on a circulation of nominations would, in number, be about seven million five four millions. It was to be observed, also, that the late hundred thousand notes. These requiring to be renewed Bank of the United States issued no notes below ten dol- every two years and a half, rendered forty emissions ne. lars; but, perhaps, from various causes which would im- cessary in a hundred years. Forty emissions of seven mediately occur to the House, the loss now would be million five hundred thousand notes made three hundred somewhat less than it was then. The loss on notes of five millions of notes. The cost of making these notes, acdollars and under, it was admitted on all hands, would be cording to the best information he could obtain from greater in proportion. Information, obtained from re. banks and artists, would amount to at least six millions, spectable banking institutions in Philadelphia which issued and was calculated from the following data: Ten thousand

MARCH 20, 1832.)

Coins and Currency.

(H. OF R.


note at two cents.

impressions might be taken from a plate. It would then porting six and two-thirds millions of specie at three per require to be retouched. This, he understood, could be cent. would be two hundred thousand dollars. The whole done only once. Twenty thousand impressions, there-cost or charge to the banks of maintaining a small note fore, were all one plate would furnish. The plate concurrency of ten millions for a hundred years, therefore, tained four notes. The engraving of each note on copper was twenty-six million two hundred thousand dollars. The cost fifty dollars: that was two hundred dollars a plate. loss to the public, by the same currency, was already The retouching was fifty dollars a plate. Each twenty shown to be sixteen million two hundred and fifty thouthousand impressions, therefore, required an expense in sand dollars. These two sums, added together, gave the plates of two hundred and fifty dollars. Steel plates cost whole loss and charge of keeping up a small note circulaabout three times as much as copper, but lasted nearly tion of that amount, for that period, which was, if he had ten times as long. The bank note paper cost from twenty committed no errors, forty-two million four hundred and to thirty dollars per thousand sheets, each sheet contain- fifty thousard dollars. ing eight notes; that is, at twenty-four dollars, the cost of To institute a comparison between the two kinds of curpaper for twenty thousand notes, which would require rency, in an economical point of view, it was necessary, two thousand five hundred sheets, would amount to sixty next, to compute the cost of supporting a metallic currendollars. The printing cost sixty dollars per thousand cy of ten millions for one hundred years; which he had sheets, viz. seven dollars and fifty cents per thousand done, as follows:

Each lwenty thousand notes, therefore, would Loss by abrasion, one-tenth of one per cent. cost four hundred and sixty dollars; each million, twenty per annum on ten millions for one hundred three thousand; and the whole three hundred millions, six

$1,000,000 million nine hundred thousand dollars. This, the House Lost pieces, and counterfeit coin, one-twenwould perceive, was exclusive of any portion of clerk tieth of one per cent. per annum, or one hire, or any of the other expenses of management. It in two thousand,

500,000 was exclusive, also, of another expense incident to a small (Interest lost on six and two-thirds millions of note circulation. Now and then it became requisite, in specie, which might have been exported, 40,000,000 consequence of a well executed forgery, to call in and Cost of recoinage, one per cent.,

100,000 cancel a whole impression. This would require an extra number of new plates; but as this expense was an irregu- Cost of a specie circulation,

$41,600,000 lar and contingent one, he had not inserted it in his esti It seemed, then, if there was no mistake or delusion in mate. It might occur once, perhaps, in ten years. He the principle or detail of these calculations, however surhad received another estimate, which computed each small prising it might at first appear, that a small note circula

This made the three hundred millions tion was as expensive, or nearly as expensive, as a metal. of notes cost six millions of dollars; and, being some-lic one. Perhaps it would be strictly correct to say more what less than the other, and a round nuinber, he had expensive, but he desired to avoid all propositions which adopted it, though probably less accurate. That he had were so startling as to seem paradoxical. The banks, to not over-estimaied the cost of these notes, the error he be sure, for the cost and charge which they incurred, of was most anxious to avoid in all his calculations, would, be $26,200,000, were more than indemnified by the interest thought, be apparent from a comparison of his computa- of 60,000,000 which they drew from the people upon the tion with the actual cost of the treasury notes issued by small notes. the United States. Through the politeness of a most They indeed gained by the operation $33,800,000. But intelligent and valuable officer, the Chief Clerk of the the people obtained no indemnity whatever for the Treasury Department, he had obtained a statement of the $16,250,000 which they lost by insolvency, forgery, and actual cost of treasury notes. It was as follows:

the destruction of notes, before stated. The result of the For engraving plates for a note of each deno

small note currency, therefore, was that the banks gained mination,

$150 00 by it 33,000,000, while the people lost by it 16,000,000:

aid the effect and operation of it was to tax the people For retouching do.

75 00 16,000,000, that the banks might make thirty. It might,

indeed, be said that what was gained by the banks, was For printing, per thousand,

30 00 gained by the individuals who were stockholders, and, as For paper, per thousand,

37 00 an addition to the wealth of individuals belonging to the For trimming and filling up, per thousand, 20 00 nation, must be an increase of the national wealth. WithFor signing by commissioners, per thousand, 12 50 out pausing to inquire how far a pation might be said to

be richer in consequence of bank dividends drawn by one

99 50 portion of its citizens from another, for the interest or hire A plate would print 10,000, 1-10 of $150, 15 00 of paper money manufactured by the former and borrow.

ed by the latter, let it be conceded that the gain of the Cost of 1,000 notes,

$114 50 banks was a national gain. Then the loss by the people Which was nearly eleven cents and a half a note. But was also a national loss. The whole amount to which ihe na. this included the trimming, filling up, and sigving. Upontion was benefited was the difference between 33,000,000 the whole, then, with every disposition to make a very low which the banks gained, and 16,000,000 which the people estimate, be thought six millions of dollars for the cost of the lost. 17,000,000, therefore, in a hundred years, or notes as little as any one who had examined the subject $170,000 per annum, was the utmost, which, upon any would say was reasonable.

calculation, could be made out as the saving or profit arising The list item in the cost or charge of a small note cur- from the use of small notes. And for tliis paltry gain, it rency to the banks issuing it, was the expense of import. bas been thought worth while to subject the country to ing or reimporting the six and two-thirds millions of specie the hot and cold fits of an intermittent currency; or, to which would be required for the redemption of their notes borrow his simile from a newer and more dreadful epi. at the end of the hundred years.

demic, the spasmodic contractions of the paper cholera. According to the whole train of reasoning pursued on But even this gain, small as it was, must be rendered still both sides, this sum, in coin, had gone out of the country, smaller if there were charged upon it a due proportion of or its use had been dispensed with, and its place supplied the expenses of the banks, such as rent, fuel, clerk hire, by the small notes. When the small notes were to be and incidental expenses. But if it were possible to estipaid off, the specie must be brought in. The cost of inn- mate the degree to which commercial distress was aggra.

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