The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe.

  • Combe, George, 1788-1858.
Date:
1856
Catalogue details

Licence: Public Domain Mark

Credit: The currency question : considered in relation to the Act of the 7th & 8th Victoria, chap. 32, commonly called the Bank Restriction Act / by George Combe. Source: Wellcome Collection.

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    them to receive and pass them from hand to hand as equivalent to gold; and the public, many of whom are working men, professional men, agriculturists, and women, have no adequate means of judging whether they are equal in value to gold or not. Parliament, there- fore, which allows the notes to be issued, is bound to help these classes, and all others of limited knowledge in this emergency; and to place such restrictions on the issues as shall give them a reason- able security that the notes shall be redeemed. The Bank Restric- tion Act contains the best regulations for accomplishing this end which we have yet seen proposed. Our American brethren have tried the experiment of unrestricted issues also. They make bank notes payable in specie, but leave each individual to receive' or reject them as currency at his dis- cretion ; and what is the result ? Any reader of the New York Journal of Commerce, or other American commercial newspapers, will find a list of bank notes in actual circulation in currency, printed in small type, and a foot or a foot and a half long, specifying the actual specie value of the notes of each bank in the State • and the values run from par to J-, f, or 1 per cent, discount, to 5 or 10 per cent, discount, according to the credit of the bank ! It is as difficult to master the specie value of the notes of all the banks in a State, so as to be able safely to buy and sell with them, as to learn a science! And people are forced to carry these lists in their pockets, and consult them when unknown notes are presented to them. This is felt to be so great a nuisance, and such innumerable bank failures occur in these States, that their legislatures have resorted to every possible mode of imposing indirect restrictions on issues. For example:—The law requires all duties on articles im- ported (and these constitute the chief revenue of the United States’ general government), to be paid in specie. This forces the bankers at the seaports constantly to hold a stock of gold, and also to limit their issues, so as to preserve a safe proportion between the specie in their vaults and their notes in circulation. In the State of New York, the banks are required also to publish their circulation, de- posits, discounts, and loans, and stock of gold weekly; and any errors in their statements, which ordinary care might have enabled them to avoid, are declared to subject the bank officers to imprison- ment for a period of years in the State prison ! Moreover, the banks are prohibited from making a dividend beyond the amount of profit actually realised in the year, under the same penalty. Ex- perience has led the freest, the most acute, the keenest and most enterprising people on earth to resort to these indirect means of placing “ restrictions ” on bank note issues—and shall this expe- rience be lost on us ? The opponents of the Bank Restriction Act, who represent the contraction of bank note circulation as the cause, instead of the effect, of their embarrassments, clamour for extension of paper issues in proportion to the efflux of gold. If this were a sound and serviceable remedy for their evils, certainly the acute Americans, who have no Bank Restriction Act like ours, would have found out