« ZurückWeiter »
dens of unpaid-for purchases, under which they were staggering. The originators of the scheme started with an oblique and deceptive intent, and succeeded in deceiving their more patriotic associates into the support of an act which is any thing but what it professes to be.
The scheme is intended to enable the holders of other property than money to put it in such a shape, at their own fictitious valuations, as to give it the facilities of loan and transfer, and lead the community to be satisfied with its use and circulation as a substitute for money. The owners of unsaleable property are at the same time to have the income to be derived from it, and the use of a legalized paper representative to an equal amount for the pur. poses of speculation. The public is to be furnished with their bonds and certificates of stock, to be mingled with all the operations of exchange and commerce, and to be based upon real estate or securities in the honcst hands of the speculator, at his own imaginary estimates of its value. It is a measure of the same stamp and tendency with the notorious unconstitutional mortgage law, passed by the legislature which legalized the suspension of specie payments, and lent the protection of public law to the grossest violations of commercial contracts; a measure no more to be justified by morality or public policy, than the bankruptcy of the French Government in 1797.
The law is an attempt to give to real property the transferable qualities of personal property. The substance is forever to be attended by a shadow, with which the public is to be imposed upon, and amused-like Turnus in his contest with the imaginary Æneas and the dimension of the shadows in the hands of a skilful operator will bear about as uncertain a proportion to the reality it represents, as the illusory figures of the magic lantern bear to the glass drawings which produce them. By this alchymistic process, the vitality of landed property is to be extracted in the shape of a bond and mortgage, wherewithal the speculator may practise his mountebank slights of hand, while to the nominal owner of the soil there remains the caput mortuum of an equity of redemption. The apparent and real ownership of property will be separated; and the beautiful farms of our western valleys will have their sustenance extracted from them by the vampyres of Wall street. The independence of the substantial country yeoman will be destroyed; farmers will be tenants at will instead of free holders; a system of monied federalism and vassalage will take the place of individual proprietorship, and the whole agricultural interest, except so far as it may have the firmness to resist the temptations and lures of the money lenders, will become subservient, in the most favorable event, to the control of commerce, and in the VOL. V. NO. XV11.-MAY, 1839.
worst, and most probable event, to the despotism of bankers and jobbers.
In short, the facility afforded by this system, of involving landed property in the shackles of money lenders, and transmitting its fixed qualities into negotiable instruments, will eventually bring the real estate of this country into the same condition it is subjected to in England, by the national debt of that country. The titles of small estates and farms, now held in fee by independent cultivators of the soil, will be accumulated in the hands of immense corporations, and finally, by mutual transfers, brought into such juxtaposi. tion as to form extensive manors and baronies, yielding a yearly tribute of seventy per cent to the wealthy city proprietor. The loans and interest will soon accumulate beyond the value of the mortgaged premises, and the equity of redemption be surrendered. The former independent proprietor will then become a mere tenant, holding at the pleasure of a Lord paramount.
Indeed, this alarming tendency of the law is openly urged by the friends as one of its strongest recommendations, though not in the form we have exposed it. We are told by them to observe the facilities afforded in foreign countries to the operations of business, by the large amount of the public debt. The convenience of public stocks, for the adjustment of balances, the investment of floating capital, and the general purposes of commerce, is warmly commended to our attention; and it is speciously argued, that since the sturdy Democrats of this country cannot be convinced of the blessed advantages of a public debt, an equivalent mass of private debts may, by this scheme, be accumulated, representing the landed wealth of the country, and equally convenient to the stock-jobber and capitalist, with the public securities of foreign countries.
Our limits forbid the full examination of this branch of the subject, by opening to view the melancholy and degrading vassalage of the English tenant, as compared with the republican independence of the American farmer. God grant, that independencethe last hope of republican institutions--coupled though it be with honest poverty, may never be exchanged for the golden chains of the Irish or English peasantry!
There are some evil tendencies, of minor importance, inherent in this act, with a brief allusion to which we shall close our remarks.
By constituting the loan of money upon bonds and mortgages, a leading operation of these associations, their commercial character is taken away. Banks of issue should be restricted in their operations to the discounting of business paper. It is for the private capitalist to make long loans, for the purposes of permanent investment, as capital for manufacturing or commercial operations, or the construction of public works. This is among the elementary principles of banking, and is wholly disregarded in the provi. sions of the act. Hence the trivial relief hitherto afforded by these institutions to the wants of commerce. They are absorbed in illegitimate speculations; and the furnishing ephemeral accommodation, to the merchant, is a troublesome branch of their duties, with which they will never comply any farther than the importunities of the business community compel them.
The scheme is another attempt to give credit and currency to bank bills, without a specie basis. No such scheme has ever been permanently successful. The omnipotence of Government, if admitted to the extent of the Whig faith and practice, cannot effect this object. The Parliament of England attempted it, from 1797 to 1821 ; and although nearly isolate during that period by her wars with foreign countries, and strongly sustained by the patriotic feelings of the nation in a period of national excitement, the attempt was futile. The irredeemable notes of the Bank of England, though guarantied by the faith of the British Government, depreciated twenty-three per cent., at the very doors of the Bank; and a recourse to a specie redemption was the only remedy against their becoming utterly valueless. Securities may be multiplied - the faith of Governments may be pledged—but bank bills, not redeemable in specie, can have but a short-lived existence.
This would lead us to a consideration of the proper functions of a paper circulation; but our limits forbid the discussion of a subject which we shall take occasion to resume at another time. It may be sufficient here, to state the broad principle in which we trust every Democrat already has full faith ; that paper substitutions for moneywhether book debts, bonds and mortgages, bills of exchange, promissory notes, or bank bills-ought to be employed only in the extended operations of commerce; while the proper circulating medium of the country-the money employed in the ordinary transactions of life, in the payment of labor, or in adjusting the balances of isolated, individual transactions--should be wholly gold and SILVER. All the above mentioned evidences of debt have the same essential qualities; they are not money; they are proofs of a balance due between parties who have bartered merchandize of unequal values ; they do not pay that balance, but leave it open with a view to its adjustment by some subsequent act of barter. The transfer of a bank bill is no more the payment of a debt, than a promissory note or a credit, in account. The former differs from the latter, simply in being an acknowledgment of indebtedness, in a form more conveniently assignable from hand to hand. This quality, the bank bill, payable on demand to bearer, possessed in a higher degree than the promissory note, payable on time, to order; and the promissory note is more easily transferable than the book debt, which requires a more formal and cumbrous assignment. But neither of them are money; neither pays the debt in acknowledgement of which it is transferred. And where the parties to the transaction contemplate further intercourse, directly or circuitously, a postponement of the actual payment of floating balances is a great convenience, and the performance of this function, in a commercial community, is the proper sphere of bank bills, bills of exchange, and all other evidences of debt.
On the contrary, where the parties contemplate no further transactions, and a balance arises in a single act of barter or purchase, that balance should be paid at the time; and it can only be paid in GOLD or SILVER. To substitute a mere evidence of indebtedness, like a promissory note or bank bill, is to force upon the creditor the debt of some person or corporation, of whose solvency he can have no certain knowledge; and thus to involve in danger and insecurity all the ordinary concerns of every day life; an insecurity of which the curse alights on the poor man, and the advantage aecrues to the banker or speculator.
Hence, the pernicious effects of small bank bills, which by their general diffusion postpone all actual payments, drive gold and silver out of circulation, and accumulate a mass of unadjusted balances in the community, which it is never expected or intended shall be paid, except by an act of bankruptcy.
The General Banking Law of the State of New York is a new scheme to force into circulation these evidences of debt, in the place of money, with a credit which will enable them to supplant the use of Gold and Silver, in every day transactions. And inasmuch as the bills are better secured than ordinary bank bills, and are equally convenient in the transfer, they will more effectually postpone all actual payments, by remaining longer in circulation, without being returned for redemption, and thus serve a worse purpose in excluding specie and pampering the “great credit system," than even our present bank bills. So far, therefore, as the bills of the new banks are of a small denomination, and fitted to supersede the use of money in the ordinary transactions of men not engaged in commerce, they are fatally pernicious. The additional security with which they are invested only adds to the evil in this respect; and, like other bank bills of a small denomination, they should be avoided, denounced, and opposed, with unflinching sternness and severity, by every Democrat, and by every man who truly regards the public morals, or the benefit of the masses of society. And the first act of a Democratic Legislature, when it regains—as it soon will—an ascendancy in the Empire State, should be to restrict all issues of bank bills below the denomination of ten dollars, forthwith; advancing to higher denominations as rapidly as the danger. ous nature of the disease will admit of more forcible remedies,
The difficulty of obtaining suitable securities to deposite with the Comptroller, will, under the influence of the present act, raise
up a clamorous horde of advocates for a perpetual State loan and national debt, to supply the demand for public stocks. The present Whig administration of New York foreseeing this demand, and eager to commit the credit of the State, in furtherance of political purposes and their party "credit system,” have already advanced propositions for schemes of internal improvement, involving a State debt of more than forty millions of dollars! And one argument, openly advanced in favor of this dangerous exercise of public credit, is the means these stocks will afford for the easy organization of new banks. This subtle and dangerous influence of the new law requires close watching, and prompt exposure and resistance. The aggregate of State debts, throughout the Union, as mentioned in another paper in the present number, is already immense; and if it continue to increase, as it has within the last five years, will soon bear a near relation, in its amount and oppressiveness, to the pational debt of Great Britain.
It is, moreover—as a question of local concernment, largely, however, affecting the rest of the Union-much to be regretted that the immense responsibility devolved upon the Comptroller, by this law, has been transferred, by a temporary political fluctuation, from the able financier, who has for several years past so much distinguished himself in that department, into the hands of a man whose capacity is yet to be discovered, if it exist, and who does not possess the confidence of men of the most judgment and experience. The present Whig comptroller has already, as his friends admit, been led into some mortifying blunders, by the sinister influence and counsels of a certain clique of bankers on the northern side of Wall street, whose interests are at variance with a similar clique on the south side of the same famous avenue. The channel of influence is admitted to have been a new member of the Board of Canal Commissioners; himself heavily engaged in railroad and land speculations, and deeply in the interests of the first mentioned Wall street operators. When, owing to such an intrigue, the credit of such a State as Arkansas is brought in question, as it was in the transaction alluded to, the influence of designing brokers over responsible public officers, through the machinery of the new law, is placed in an alarming point of view. If it be necessary, we shall probe some of these sinister operations, on some future occasion, with a less gentle hand.
We may properly bring these protracted remarks to a close, by suggesting a remedy for this corrupt state of things, begotten by the legislation of Whig politicians and speculators. It is at once simple and effectual.
Let the business of banking-by discounting bills, notes, and other evidences of debt; by receiving deposites ; by buying and selling gold and silver bullion, foreign coins, bills of exchange; and