532 



THE FARMERS' REGISTER. 



further the designs of the ultra irredeemable pa- 

 per partizans. It is by these, our honorable and 

 patriotic but mistaken opponents, that we are 

 most anxious to be heard. And if our arifuments 

 and statements fail of all effect in changing their 

 course, we would beg leave to suggest a mode bj' 

 which they can maintain their prmciples and yet 

 oppose what they deem the too hasty exaciion of 

 specie payments. All such persons are in lisvor 

 of the banks resuming specie payments at some 

 future time — and very lisw would now agree to an 

 extension of more than (ihe always needed) 

 " one more year,"' They would then sustain their 

 position and principles, oppose our greater preci- 

 pitancy, and at the same time test the sincerity of 

 their leaders and allies, by putting lorih another 

 petition to the legislature, to extend the permission 

 to the banks to suspend and withhold specie pay- 

 ments to such certain named time as may be now 

 deemed ample — but to make the resumption, at 

 that named time, certain, and under sufficient le- 

 gal penalties in case of tiiilure. If oar proposed 

 limit to suspension is deemed too short, (though 

 fixed by the law and by the banks,) let the other 

 petition fix any more distant lime for resumption. 

 Let 6, 12 or even 18 months be added to the 

 limitation which the present law fixes, and which 

 our petition asks to be held sacred. But what- 

 ever be the extension of the limit, let it b& final. 

 If acting on this plan, our opponents upon pa- 

 triotic and disinterested grounds would then find 

 that many of their present allies would desert 

 them, and will either never advocate resumption 

 of bank payments at any certain time that can 

 be named, or, otherwise, will change their lan- 

 guage and their position before any such time 

 shall arrive. These our well-meaning opponents 

 would* then see that they themselves had been 

 placed in a (alse position; and that to support 

 their own principles and desired public policy, 

 they ought to be on our side, instead o\', by op- 

 posing us, subserving mere banking and borrow- 

 ing inierests. And all sincere and true advocates 

 for resumption ot payments, in general, might 

 easily compromise upon the mere matter of the 

 proper time. For though we hold, with the law, 

 that the existing limit is remote enough, yet it is 

 comparatively of little importance whether (he 

 limit be then, or 6 or 12 months later, provided 

 when the time shall arrive, that then specie pay- 

 ments shall be surely resumed and maintained. 



The general deficiency of specie in the United 

 States not the cause of the bank suspensions — 

 but the continuation of suspension a cause for 

 a continued decrease of specie. 

 One of the sundry fallacies which are continual- 

 ly assumed and set forth as if they were axioms 

 in banking, is that there is not enough specie in 

 this country to serve the banks to resume pay- 

 ment — and that it could not be procured Irorn 

 abroad, except at much too great a sacrifice to 

 the people at large. It was not because of the 

 deficiency of specie, in the United States, that 

 the banks all suspended payment in 1837, and that 

 they still continue their suspension. It was be- 

 cause their circulation of paper was enormously 

 expanded in proportion to the specie kept lor its 

 redemption ; which disproportion was caused, 

 and always will exist as greatly as the laws will 

 permit, by the simple operation of the universal 



rule,' that the more paper a bank keeps in circula- 

 tion, and the less specie it keeps on hand for re- 

 deeming the paper, the greater will be the profits 

 of the bank. Besides — ihe banks of Virginia, as 

 generally elsewhere in this country, by their long 

 continued and repealed acts of bad faith, have 

 justly Ibrleiled much of the confidence of the 

 country which they formerly enjoyed, and there- 

 lore a much larger stock of specie is now necessa- 

 to meet the expecied demands of note-holders 

 than would have been previously. These difficul- 

 ties have been entirely caused by the misconduct 

 of the banks — and the longer they continue to 

 suspend the perlbrmaiice of their just obligations 

 Ihe more will these difficulties increase. The 

 banks cannot possibly return to doing justice, and 

 at the same time continue to receive the full pro- 

 fits of their injustice, and course of violation of 

 moral and lesral obligations. The general sus- 

 pension in 1837, we repeat, was not caused by 

 the general deficiency of specie ; but the certain 

 eHect of bank suspension and the consequent re- 

 jection of the use of specie as currency, 's to cause 

 it to be sent away to countries that still use it as 

 currency. There is no rule more indisputable 

 than that two kinds of currency, of different rates 

 of value, cannot circulate or even exist (as cur- 

 rency) in any community, at the same time. 

 This, one of the most important truths and prin- 

 ciples of political economy, is susceptible of such 

 (iinuliar illustration for each particular case, that 

 it can be made perfectly clear to every one. 

 Suppose the currency of a town (say Pe- 

 tersburg) and its trading country lo be of irre- 

 deemable bank notes, depreciated in value 5 per 

 cent, below the market price of specie; and sup- 

 pose, by some extraordinary circumstance an 

 individual becomes possessed of a sum in specie. 

 What will he do with if? Will he use it, indis- 

 criminately with his paper money, in paying his 

 ordinary deite of account, or in making purchases 

 for cash ? Certainly not. For these, and every 

 other ordinary expenditure, he will use his depre- 

 ciated paper money, which was the kind of cur- 

 rency charged for and expected to be received 

 by those with whom»he dealt. He will not spend 

 a dollar of his specie for any thing for which pa- 

 per will serve as well. This is the first, imme- 

 diate, and universal effect of suspension of pay- 

 ments by banks, and of their paper being de- 

 preciated below the value of specie. And as 

 every individual would have the like strong in- 

 ducements so to act, there would be an almost in- 

 stantaneous disappearance of specie throughout 

 the country. It would only be seen to form that 

 small part of circulation for which paper money 

 would not be received at all, or could not serve; 

 such as for change smaller than the smallest 

 denomination of the current paper money, or for 

 duties lo government, or any other payments for 

 which specie only would be received. But, on 

 the supposition just made, the specie thus hoard- 

 ed would not remain in the first hands, useless 

 and profitless. As it would sell for a premium 

 of 5 per cent, over the general currency, it would 

 gradually but certainly be sold, and sent by the 

 purchasers to places ivhich used specie for curren- 

 cy, and where therefore only there was an effec- 

 tive demand for specie. The non-specie paying 

 banks here would not buy it, of course — for that 

 would be just the reverse of their actual and 



