326 



THE FARMERS' REGISTER. 



in the rise and the subsequent I'all of prices, there 

 must be an enormous amount of value iransler- 

 red without equivalent, Irom ihe rightlul proprie- 

 tors to 01 her person?. But peciiniary losses, nu- 

 merous and great as they would be, and the en- 

 tire ruin of thousands ol the honest and laborious 

 classes of society, to enrich the " knovvmg ones,'" 

 would not be so injuiious to the country as 

 the moral evils which will as certainly follow mad 

 speculation, as the spirit ol speculaiion will pre- 

 viously be the effect of such abuses of banking, 

 and depreciation of bank paper. Not one of the 

 community would entirely escape the contamina- 

 tion. So many would seem to be growing rich 

 by the rise of property and fortunate purchases, 

 that the rewards ol labor and of ordinary business 

 would be deemed poor and contemptible in com- 

 parison. All would be in has'e to get rich, and 

 would become speculators (t<r ihat purpose; and 

 when awakened from the delusive dream of 

 wealth to be acquired vviihout labor, they would 

 be far Jess fitted than belore to return to labor, 

 ■and to submit to the then much increased priva- 

 tions of poverty. 



We leave to every reader to estimate for him- 

 self the amount of losses to be suffered by the 

 whole community, both in the immediate and 

 remote efieci of a depreciated and exclusive pa- 

 per currency. The highest and the lowest esti- 

 mates of loss may vary by many millions; but 

 the lowest rate of this one iiem ol the cost of the 

 sysiem, fixed by any unprejudiced and judicious 

 calculaior, would exceed all its possible benefit 

 to the banking interest, as well as to the public. 



XVI. The farther operation, by insolvent banks. 



But, enormous as are the evils and losses, to 

 the public, which have been considered, they 

 have been only those of what are deemed solvent, 

 and such as may prove ultimately responsible 

 banks; of such as, by the long_ continued exer- 

 cise of their exclusive privileges, and obtaining the 

 Enormous profits thence derived, are enabled to re- 

 pair previous losses, and even renew entirely 

 squandered capitals, and thus, in course of time, to 

 return to specie payments, and to the discharge of 

 all other then current obligations and legal de- 

 mands. We have not noticed, directly, the far 

 worse results, vi'hichhave been so extensively and 

 ruinously felt in a large portion of the United 

 States, of banks avowedly or undisgiiisedly bank- 

 rupt and insolvent, and by which the public, as 

 note-holders and creditors, suffer all the continual- 

 ly increasing steps of depreciation, down to the 

 entire extinction of all the credit, as well as all the 

 value of the notes. In Virginia, as yet, such 

 evils have not been experienced, merely because 

 the government has always sustained the banks 

 in their greatest straits, against their creditors, 

 and in defiance of right and justice ; and has thus 

 enabled the banks to recover Irom disasters and 

 dangers, which would have produced bankruptcy 

 without that efficient support. But numerous 

 banks, elsewhere, have become avowedly bank- 

 rupt and insolvent, and the holders of their notes 

 have not only been cheated in gradual deprecia- 

 tion, but also in the final extinction of all value of 

 their whole amount ; and by which greater ex- 

 tremes, losses have been suffered by the plunder- 

 ed country to the amount of hundreds of millions, 



over and above all such as we have had under 

 consideration in the Ibregoing remarks. For, 

 whenever such complete results of fraudulent 

 banking occur, they indicate always the greatest 

 possible previous expansion of paper currency, 

 and its necessary effects in altering the standard 

 of value, and translierring the possession of pro- 

 perty Irom the rightful owners to other hands ; 

 and therefore the loss ol all the nominal amount 

 of the paper circulation, though complete, is not 

 in magnitude a tenth part of the previous losses 

 by real depreciation of money, fancied apprecia- 

 tion of property, general banking speculaiion car- 

 ried to the utmost extremes, and the consequent 

 evils to all concerned, except to a few arilui or 

 lucky players at the great laro table of banking, 

 and other speculation, in which the interests, or 

 profits of every individual are staked, by compul- 

 sion of law and other circumstances, if not by 

 the choice of the possessor. 



XVII. Recapitulation of the particular benefits 

 and evil effects of solvent banks ; and the parties 

 to whose share they respectively fall. 



And now let us re-state concisely, and place in 

 one view, the several points of gain and of loss, 

 and both the benefits and the evils, caused by 

 the banking system of this country. 



The benefits are — 



1st. — The most important gain, and which is ex- 

 clusively for the profit of the banking or stockhold- 

 ing interest, consists in t he creating of paper curren- 

 cy, to an amount much greater than their capitals 

 or specie, and, by lending it out, drawing inter- 

 est upon all the excess of issue beyond their capi- 

 tal so vested ; which profit will be less according 

 to the moderation, prudence, and honesty of the 

 banks — or greater, according to the deficiency of 

 all these qualities. 



2d. — The benefit to the class of traders with- 

 out capital, and other needy borrowers, who can, 

 from the carelessness, and indulgent disposition, 

 or interested favoritism, ol' bank directors, obtain 

 loans which would be difficult or impossible for 

 persons of such doubtful responsibility to obtain 

 irom any more cautious individuals, managing 

 their own private property. These adventurers, 

 if successful in their speculations, and lucky in the 

 risks of trade, make fortunes out of nothing ; 

 if unlucky, they become bankrupt, and are not 

 then much worse off than when commencing ope- 

 rations; and their creditors or sureties, and not 

 unfrequently the banks, have to bear the loss of 

 the debts thus incurred. 



3d. — A benefit to the public, or general in- 

 terest, is the economy of dispensing with (and 

 exporting, to exchange for commodities.) the 

 costly currency, gold and silver, and using in- 

 stead the cheaper substitute of paper currency. 



4lh. — Another advantage to the community is 

 the undoubted greater convenience of paper over 

 metallic money, for keeping, handling, and espe- 

 cially for transmission, or distant transfers. This 

 latter convenience, however, for large sums especi- 

 ally, is now usually and still belter attained by 

 means of bills of exchange than by the use of bank 

 notes; and other means might be used, in addi- 

 tion, and which will be adverted to again here- 

 after, to secure this great convenience, without 

 resorting to the circulation of ordinary bank pa- 



