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claims for paper, s equivalency to specie; and all acknowledge the necessity of some check upon the perpetual tendency of our banks to excess of issues ;—and this brings us directly to what we intend as the main point of the present Article—which is, that Congress will be most culpably and fatally false to a most imperative duty, if it adjourn at the present session without adopting the specie policy of the Administration, for the futnre fiscal operations of the Federal Government.
There was a certain degree of plausibility in the objection here. tofore made to the “Specie Clause," that the moment for its introduction, during the suspension of specie payments, and the prevalence of a general alarm and distrust. was at least inauspicious. That the action of Congress ought rather to be towards the revival of “confidence" on the part of the people in the banks, which then, in their prostrate and critical position, stood in such urgent need of it,-instead of adopting a provision of law which should presume a distrust of bank-paper medium. This objection, in connexion with other motives which were satisfactory to the majority of the House of Representatives, prevailed, at the first and second sessions of the present Congress, notwithstanding the long prospective operation which was given to the proposed priociple in both the bills which passed the Senate, extending gradually in the one case through four, and in the other through six, years. But the question now recurs again, under an aspect totally changed. The resumption has taken place. Business has revived, and is reviving, far more rapidly than, from the severity of the revulsion, could have been anticipated by any one. Not only is “confidence" restored, but it appears, from the general disposition to coöperate in the return of specie payments, and from the manifest. ation which the country has witnessed of the omnipotence of the bank interest over legislation, to have acquired a renewed elasticity, a renewed vigor. The disposition to "confidence" in the use of paper money has never appeared stronger than at present. The danger is not only great, but already imminent, of the tendency in the opposite direction. After the agitated and uncertain state of the currency during the suspension, now that the same nominal "specie payments" which have always before existed are restored. no greater disposition appears to exist than before, to make that professed “convertibility” a reality, instead of the mere delusion which, in point of fact, it is. The paper bubble is again expanding, and rapidly. Confidence in it is running as high as ever. new mode of inflation has recently been brought into operation, which is working in every direction with prodigious activity-that of the free-banking laws. Within a very short period, half, if not a large majority, of the States will have adopted them. Founded as they are on false principles, and applied to the existing artificial and vicious system, and unaccompanied with any effective check upon excessive issues, we regard the operation of these as perni. cious in the extreme. The institutions created under these laws are certainly as sound as those heretofore existing under special charters of monopoly. Their notes will no doubt be as safe, and therefore as readily current, as those of other banks, resting still on the artificial basis of a quasi-public character, and the presumed foundation of ample pledged and mortgaged security; so that the only effect of these laws is to remove the restrictions heretofore existing on the increase of the currency-issuing institutions, and to permit their multiplication to any extent. We repeat, that the paper bubble is again rapidly expanding, and as rapidly preparing for another explosion. No man in his senses can shut his eyes to this fact; and its bearing upon the question of the “Specie Clause" is of immense importance, presenting it on ground entirely distinct from that which it has before occupied, and to which we most earnestly invoke the attention of Congress and of the country.
The question now is—which this Congress has the responsibility of meeting-shall the currency continue in this state without any regulator to moderate its irrepressible tendency to excess ?
The advocates of a National Bank have always been right in one respect, namely, that some check was indispensable upon the issues of the State banks, which, acting separately, without concert, but in competition, and all under the common impulse of an inherent tendency to over-action, were constantly liable to run into excess of issues. The nominal check of “ convertibility,” it is perfectly understood, amounts to little or nothing, being, in the actual state of things, but an empty delusion coming into play only after the mischief is completed. This unquestionably sound idea has been the principal strength of the opinion in favor of a National Bank. The mistake consisted in regarding such an institution as an effective check-and, if it were so, as a desirable one-upon this general tendency to overaction. It was supposed that through so vast and widely extended a business, in case of excessive issue by any bank, so large a quantity of the notes of such bank would come into its hands, that their return for redemption would compel the curtail. ment requisite to restore the proper equilibrium; while its great power would enable it to regulate and check at pleasure every minor institution whose proceedings it might have reason to distrust. In this reasoning there was a double error-in the first place, that of not taking into account, that the proposed regulatora itself is organized on the same principles which in the others produce the very evil to be guarded against; and that therefore its operation is more likely to aggravate than to remedy the disease, as experience has in fact repeatedly demonstrated, especially in the
case of the last two expansions and contractions ;-and in the second place, that it is entirely unwise and unsafe to delegaie so enormous a power of practical sovereignty over all the moneyed interests and general value of property and labor of the country lo any set of individuals, acting naturally on the same principles of self-interest that universally govern human action, a common law from which bank-directors are certainly not specially exempt. These were the leading errors of the reasoning,--the premise, namely, the necessity of some effective and omnipresent check, was, and so long as our “credit system” exists must be, unquestionably sound.
The revival of a National Bank, under a Federal charter, is, for the present at least, impossible. The opinion against it has been growing stronger and stronger. Its own friends in various quarters have even been seen to yield to the manifest will of the majority, and to disown its advocacy. And of all those former members of the Democratic party who, under the title of “Conservatives,” now form part of the Opposition, chiefly in reference to the financial policy of the Administration, the greater portion profess theinselves still opposed to a National Bank, and are too strongly bound by the pledges of their whole political lise to be ever able to support the revival of such an institution. Ineffective and pernicious, then, as such a “regulator” would be, even that is out of the question. Shall there, then, be none at all? Shall the elements which are now so actively at work to bring about another and a more severe convulsion, within probably the space of two years, be allowed free play and scope, without an attempt to apply such moderating check upon their over-action as may be legitimately within the competency of the Federal Government? This is a question which, in all friendliness, we warn members of the Oppo. sition not to make light of—and especially those few individuals on whom rests the responsibility of controlling the action of Con. gress.
The collection and disbursement of the public revenue in specie is the only efficient check now within the power of the Federal Government. The great evil now is, that there is no practical de mand for and circulation of specie. The currency of paper-money rests upon the confidence of the community in its convertibility," and upon that alone. If there were a circulation of specie along with it, side by side with it, to any considerable extent, it would serve as the most efficient, moderate, steady and uniform check upon it that could be devised. If a steady demand is created for specie, paper may safely be left to gain what circulation, side by side with it, its credit may enable it sustain. The one then serves as a constant balance to the other. Any considerable depreciation of paper by excess makes itself immediately apparent by the comparison which must be every where sensible to every eye, with the uniform unfluctuating level of this standard. A comparatively insignificant amount of specie circulation will suffice for this function of a “regu. lator," provided it be but regular and constant in its action. The quantity of the ballast that steadies the ship is insignificant in comparison with the bulk and mass of the whole, and the wide expanse of canvass which it spreads to the breeze. The amount of specie required for the fiscal action of the Federal Government, it has been conclusively shewn, will not exceed from five to ten millions of dollars. It cannot be more than a third or a fourth of the whole revenue, since by disbursement pari passu with collection it must perform the circuit three or four times within the course of the year. Even assume that it will require ten millions—there can be no pretension that there is not enough in the country. Why, that amount is not one-sixth of the addition to our stock within the period of the last Administration-and probably not one-half of the addition already made within the first half of the present.
What rational objection can be made to this measure? It will not impair public “confidence" in the banks: that is already strong enough, and too strong. It will, on the contrary, exempt their credit from all the vicissitudes inseparable from a connection with Government and with politics; and by placing all on a com. mon level of exclusion from the transactions of the Government, it will deprive the Executive of the dangerous power of discrimination between different kinds of paper and different institutions. The amount of transactions of the Government is altogether insignificant in comparison with the business transactions of the community,—so as in fact to bear no proportion at all to the latter. And it will place the affairs of the public treasury on the only solid and safe basis which will exempt it from liability to a similar derangement, in the approaching convulsion, to that of which the effects have been seen to be so deplorable to every sincere patriot. of whatever party, in the last one.
We repeat that this question is a very different one at the present session, from the character it wore at the last. And a necessitya most urgent necessity, growing out of the progress of the free banking laws, and the ranid inflation that is taking place in "the credit system "-exists now for the immediate adoption of the specie policy in the affairs of the public treasury, which has never existed in a similar degree bei ore.
In the former Divorce Bills which have been rejected by the House of Representatives, the introduction of this principle was made very slow and gradual, out of regard to the sensitive state of public credit, and the immaturity of public opinion, at the time. It ought now to be made, in our opinion, speedy and total. The country is amply prepared for it; and the evil hour which this pol. icy will avert, from the sphere of the public affairs at least, and which it will greatly mitigate for the community at large, is rapidly approaching
We hope at least that this argument, unanswerable and overwhelming as it appears to our calmest judgment, will be urged home in the debates on the subject before the close of the session. Let every man, and let the country, understand fully the high responsibility which rests upon every vote given on this questiou. And if the public treasury is to be compelled to cooperate with the general delusion of excessive confidence in paper issues, by the practical exclusion of specie from its transactions—if it is to be left exposed, as before, to the approaching danger of which so severe an experience has already been felt-if the morbid inflation of credit, through the fatal agency of paper-money, is to be suffered to continue, unregulated by restraint or check, even of so mode. rate a character as that proposed-let the responsibility of the inevitable consequences rest where it belongs. The voice of warning is raised loud enough, and long enough in advance. Wo to those who shall disregard it, and shall sacrifice on the unhallowed shrine of party passion, prejudice, and interest, the solemn duty to their country which that warning enjoins. The day is not far distant when they will be called, by the righteous indignation of a great people, to a retribution which will be a total and crushing political annihilation.
What will Congress do on this subject? No indication has yet manifested itself. Something must be done. We hear no voice raised in advocacy of a re-union of Bank and State. No one appears bold enough, or far enough behind the onward march of opinion, to venture it. Will a majority dare assume the responsibility of shrinking from the question, and cowering, as before, behind the inglorious position of inaction? A few weeks must decide.
We will suggest a compromise which may bring together the conflicting opinions on this vexed subject of the Sub-Treasury Divorce. The presumed control which that measure will give to the Executive over the currency, the increase of patronage it will vest in its hands, and the danger to the public funds in the custoly of individ. uals, are the only arguments (if we may so misapply the term) which we ever hear against it. Futile and absurd as they have been over and over again proved to be, they have had a sufficiency of a certain popular ad captandum plausibility, to serve as a basis for partisan opposition and agitation. Now, we care very little for this question of custody. The practical divorce is the great princi. ple involved. We have very little doubt that if the Opposition will unite with the friends of the measure on this ground of collection and disbursement in specie alone, the latter will readily give up that of custody. The money may be kept in special deposite in the vaults of banks, or incorporations of any kind, that may be