268 



THE FARMERS' REGISTER. 



Jones.— Yes, and I was amazed at the frightful j 

 power it is represented to possess. The account 

 I saw staled that a ball weighin<r not more than 

 eighteen pounds was sufficient to blow the strong- 1 

 est fort into atoms. 



^._When I read the statement. I was struck 

 with the similarity between this tremendous phy- 

 sical agent and the equally tremendous moral 

 agent with which we are all fiimiliar, the present 

 banking system. The one annihilates men's 

 hves vviih the greatest certainly; the other, 

 annihilates men's properiy with equal certainty. 

 It is true that one is quick and the oiher is slow. 

 It is also true that the destruciion wrought by 

 the one is accompanied by noise and by ocular 

 evidence, whilst the other works quietly auil un- 

 seen. But they are equally destruciive. They 

 are both "death dealers," in the true sense of the 

 term ; for it matters little whether a man loses his 

 life, or the means of sustainincr lili^, as tens ol 

 thousands of persons in ilie United States have 

 done within the last five years. 



J. — Very true. Your figure is rather strong, 

 to be sure ; but is there no mode-of ridding the 

 country of an engine of such a destruciive cha- 

 racter ? 



S. — [t can never be accomplished but by one 

 process. 



J. — And what is that? 



S. — By the community's coming to its senses, 

 and abandoning the idea that the public prospe- 

 rity requires monopolies and special privileges 

 to be conferred upon any one portion. There lies 

 the whole seed of the evil. 



J. — Explain your meaning more fully. 

 S, — I will endeavor to do so. You are aware 

 that in every trading community what is called 

 credit is a necessary auxiliary to the creation of 

 wealth. Credit, as every body knows, is the 

 power of obtaining temporary possession of ano- 

 ther man's property under a stipulation that pro- 

 perty of greater value shall be returned lor it at 

 some future day. This temporary possession of 

 another man's property, whether it be by buying 

 things on credit, or hiring houses or farms, or by 

 borrowing money, is what enables people who 

 have no property of their own, or not enough to 

 answer all their purposes, to turn their labor to 

 account. It is by means of credit, that the mer- 

 chant who possesses a capital of ten thousand 

 dollars can import or export goods to the amount 

 of twenty or thirty thousand dollars. Ft is by 

 means of credit that the manufacturer can supply 

 himself with raw materials upon which he can 

 exercise his labor and skill, and thus derive a 

 profit from what might oiherwise be wholly un- 

 productive. It is by means ol' credit, that a vast 

 number of houses and ships are built, many me- 

 chanical trades carried on ; and it is by means of 

 credit that industrious and frugal men olten be- 

 come the owners of plantations. 



J- — You are then, I perceive, a believer in the 

 benefits of " the credit system." 



S. — Undoubtedly, 1 am, and so is every person 

 who has taken the trouble to examine the sub- 

 ject. But mark me. By the credit system, 1 

 mean the legitimate operations of busine'ss pru- 

 dently conducted, and arising in the natural 

 course of trade, and not the wild, indiscriminate 

 abuse of credit which springs up under an ill- 

 conducted banking system, and which by some 

 is confounded with the other. 



J. — But are there not risks connected with the 

 best possible credit system that can exist, which 

 sometimes occasion loses to creditors ? 



5. — Most certainly there are, but as no human 

 prudence or foresight can guani against calami- 

 tics of every sort, so is it impossible that credit 

 can exist wiihont losses. Still, as the advantages 

 of credit, properly conducted, to the community 

 far outweigh all the disadvantages, it has been 

 introduced into every country where there has 

 been the smallest accumulation of capital. 



J. — Do you consider that a well conducted 

 system of credit can be benefited by legislation 7 

 S. — All that legislation ought to do, or can do 

 advantageously, is to atl'urd creditors the facility 

 of compellinir th?ir debtors to com[)ly with their 

 contracts, and to punish them if they are guilty 

 of fraud. Legislation destroys the whole basis 

 of credit, when it conlers upon any set of men 

 the special privilege of exeynption froin personal 

 liability to the whole extent of their property I'ov 

 any of their engagemenis. 'I'here is the whole 

 pith of the matter. If limited liability were to 

 be tolerated by the laws in the transactions of 

 individuals, or oi' all the parties \o a limited co- 

 partnership, we should have a race of swindlers 

 springing up in all parts of the land, who would 

 act upon the true gambling principle, of risking 

 a part of what they possessed lor the sake of the 

 chance of making great profits upon the exercise 

 of their credit. 



J. — Then you consider that the proper remedy 

 for a vicious banking system, is individual lia- 

 bility. 



S. — I can conceive of no other. With full and 

 complete individual liability, the trade in money 

 and paper credits might be leltjust as Iree as 

 the trade in shoes, hats, coats, wigs, mutton, beef 

 and bread. We want no laws to regulate car- 

 penters, bricklayers, painters, masons, and the 

 various other mechanics who carry on their bu- 

 siness by the laws ol' competition. It' people 

 should pretend to manufacture money for sale, 

 those to whom it was offered would exercise 

 their discretion in judging of its quality as they 

 now do in judging of nutmegs, whether ihey are 

 made of wood or are the genuine fruit of a tree. 

 None but men of known wealth' would be able 

 to keep notes in circulation, and such men would 

 be cautious not lo issue too many, inasmuch as 

 ihe whole extent of their properly would be lia- 

 ble for their payment. 



J. — But have we not had some examples of in- 

 dividuals of doubtful character and credit too, 

 putting notes in circulation to a large amount? 



S. — Only in times of bank suspensions, when 

 notes were payable, not in money, but in other 

 notes. The Spanish proverb says, " all cats are 

 black in the dark." So it is with banks or bank- 

 ers, when they do not pay their notes in coin. If 

 there were no notes in existence but those issued 

 by parties individually responsible, there could 

 never be any geveral suspension of specie pay- 

 ments. Individual bankers, like individual mer- 

 chants, might fail, but the community would at 

 no time be liable to great expansions or contrac- 

 tions of the currency, and the evils to which it 

 would then be subject, would only be such as 

 are inseparable from the existence of credit, and 

 which no human sagacity or skill can prevent. 



