'V.r-;:.,-;? -
-Y-:y k ny 5 :.! pvi1 ?U JLp
. ; i".v----'XA : ::' . JT- ' : -.'.v UnwarpMiy partTiie, to live like
vol.' xxi. -ivir- y -v fR-a-v.oy';:r:i,-t J: ;-
V
xf att AM At , niTPPUKP V . -
NATIONAL; CURRhJN U Y : ,
' -r:V ; v '' -
The Stcreury otT??S C '
'""".r L .V eAii
this subjecwn con ormuy w,u. t - T -
tion submitted to htm nethe
last sess.onorn-rc. - -rr
vould occupy more room tn.n.ctn. oesp-
Dai we ewi'i'H' ir
on substituting- a Xatjonal Currency, in aid
of our slender and uncertajnCoTik oJSpe
cie. They are as follow i '; f.lJ
" Having considered thuffature. and
" extent of thervariations in value, to which
a metallic currency is neceisarilyubject,
it .remains tot ermine, whether it is
practicable to dense a system by which
a paper currency may be ; employed as
the standard .of value with' sufficient se
curity' against variations In its value, and
with" the same certainty of its Recovering
that Value, , Jwhsn; from any. cause, such
vflriatinns shall have been "nroducetl. It
- is distinctly admitted that no' such paper i
currency has" ever existed. . Where vthe j
experiment has been; attempted tbrouGjb j
the agency' of banks, it has invariibljr
failed; In- both 1 cases, instead of being .
used as a mean of supplying a cheap and j
stable currency, invariably regulated by ;
the demand,' 'for effecting the. exchanges :
required bv the Vantsf and , convenience j
of societv, " it has been employed as;x fi . !
nancial fesource, or made the instrument j
of unrestrained cupidity, i In no case has .
- any attempt been made to determine the !
principles upon which 3uch a currency,
to be stable," must be founded. Instead-;
of sariitary restraints being imposed upon ;
the monied institutions .which, have been
employed, the 'vital j principle of whose
. being: is gain, they hAve not 'simply ben t
left to the guidance cf their own cupidity,
out nave oeen snmuiaieu,ip excessive is-j
sues, to supply deficiencies in the public.
revenue. This is known to have been the
, case-In an eminent degree, in the experi
trient which has been atttnded.wuh most'
success! , The issue of the Bunk of Eng.
land, j oh account' of the government,
were frequently so great ts'tp destrcy
the demand for discounts by .individuals.
.,In conseqirence of these; excessive issues
the interest ,of money ftil below ve per
cent, the' rate at which the bank discoun
ted ; the- demand for discounts at the
bank therefore ceased! It is, indeed, not
surprising thaf no sympathetic effort has
. been made to restrdn excessive issues.
In the case of banks, .the experiments
which have been- made were intended to
be temporary ; they ' were the result of
great and sudden pressure, "which left
but little leisurefor the examination of a
subject so' abstruse.'" The e mployment of
a paper circulation," convertible into spe-
'cie, the favorite iystenr of modem states,
having, as has been 'attempted to be
,shewf in a previous part of this report,
the inevitable tendency to produce the
hecessity of resorting in eyery national
emergency to paper, hot so convertible,
imposes upon those, who are called o
adnvnister the affairs of nations, the duty
of .thoronghlyexamuiing the subject, with
a yiew if practicable to avoid that ne
cessity. 'f If the examination does not re-
. suit in the establishment of a paper cur
rency, unconnected w ith specie, it may-
, lead to'the imposition of salutary checks
against excessive issues, when the neces-
sity of suspending payment may, occur. ;
Ithas already, been said, that eyery
attempt which has been mane to intro
duce a paper currency has failed. It may
"also be said, that of all the systems which
during the discussion of this interesting
surject, ootn in .Europe ana tne u. states,
have been proposed, hone are free from
objections. It - is.pdssible that no system
can" be devised, ;.which will : be entirely
free from objection; To ensure the pos
sibility of employing such a currency with
advantageit is necessary : v
1. That the power, of the government
: over the currency be absolutely so--.
; " vereign. ., ' -. ' - ' -
2. iThat its stability be above suspicion!
S. That its justice,vm'oralityi andihtel-
ligence, be unquestionable. i - .
4. ,Tiat ihe issue of the 'currency be'
niade ntit only ltct depend upon thie
. demand for it, but that an equivalent :
b actually received.
. 5. That h equivalent can only!' be
! i -.1. - j "-- I
, iuuiiu m ine ueuverjr oi an- equal a- i
mount of gold or silver,' or of public ;
. StOCR..' . , J ! " ' ; .c.
6. That, whenever 'from anv cause it '
may become redundant, it may be
4; funded at an interest a fraction below';
thit' which was surrendered at itsf
issued v . .. V-
1. This proposition needs no elucidat
tion. Coinage and the regulation of mo
ney have, in : all nations; been considered
one of the highest acts of sovereignty. , It
may' well be doubted, howe'vef, whether ,
a sovereign power over the coinage. ne:
cessarily gives the right to establish a ,
paper currency. e power taekiapiisn
such a currency oiigm'; not only to be un -vquestionableV
but unquestioned. Any
doubt, of the legality, :of the exercise 'of
such iaiy authority . could r not fail to mar (
:dsvise.. .V , ,.'s-;- ;f k . ' ;
2. A metallic; currency,: having an in
trinsic value; independent of that which I
is given to it by, the sovercigu autlionty,
" .; ' ".., 'i : . ". ' '
. does not aepera upnn uiciaun;
I mpnt :fftr ?ts -value; devolutions
mavarW: insurrections av menace the
SSSSnitn. : a metallic !
currertcv:rtse& in value nnoersucn c?re"-.t
,, - - - i k ,va1nhlf.. com-
pared .with ;eyeiy speciej of
M- : :vaKip. ;
pro-J
f t V- V"-" r. vy
Dortion . to tne instaDiiuv,; oi tne
govern-
ment: Not sn with k enrrencyv; its ere
dit depends, in a great degree, uppnihe
confidence, reposed in; the- stability of the
authority by which.it was issued. Should
that Authority be' overthrown )by foreigi
force ror . intestine commotion, an i m me
diate, depreciatibrfe if noti ah absolute ah-
i J ? & u ii j "j
v" -ca- A,ick.,c nVdfofj the nation is pledged for, ;ts redempn
pies that' are calculated to inspire th! j l (Whenever ;
Lfidence. ; V I nce during die revo, W T J
lution whfch hust, terminated,- the r n,,tvh 1 rt ,uWff Sn ?
public-debewas' reduced to cue-third of V inamiethat ,t; should not,,Sj
rtsatrVountTsamerule waappl
ffthe public dcbjroFthe- Dutch Rjfpuhjic, i r?cutn of J ''V feJ
when it feliuod?rXFrench' dominitinX-! ever, eq.ial; tcj the whole.4 . he credit
In the suco sslve political changes to j 'ny mdividut. , or association of -mdi-which
France hasVsince ti ferjod,been ! ; vidnalscaniioJie equivalent; to tha ,of
subjected, the pyblic debt an I the pu! c : U.e :nau?, vf whr crmi a part
enjfigemehts have been mhintaJned with ',' "JiX bo a.d, that although .the
the "strictest good faith. In HoUand.ihat i1 cn-dit tf inrti vidHal iS not equivalent to
portion of i he public debt, which Mao fjeen
abolishen ov the French governments nas
been restored. In the opinion of well in
formed men, howeve the coditHms con
nected with that restoration er'.sone
rons as, to' render it.alfnos? "'nominal, -r In
deed, the public debt irt that cpuiith had i
become so disprpur' innate ;;to;t?.mrlhs.j
of the nation when deprived , of he resour.-:
ces it enjoyed when the debt was contract
ed; that the reduction which it underwent
S ml. - ' ' ' ' t . Vl '
wnue tne couniry was .annexeti. vio
French rempii-e wasruot generally consi
dered an evil. "The reduction of. the na
tional debt of, France during the. revulii
tion, was perhaps equ dlv indispf ns d) '.
If the intelligence-of the, age, and .the in
fluence, ofpublic opinion,3 even, in states I
"where the reightfl w was puf'imperrect-
ly established, have been sifTcie,nCto Jn
duce the grtverhmen's,? whic have alter
nately succeeded each other for the last
twertty-five years, in France '.iml Holland,
to respect the public engage TsvUic
had be"efW previously contracted, .well !
grounded "expectations may be cherished 1
that the period israpldlv passing away i
ynen tne puoucxaiin. oi nations can oe
violated with impunity. ! ! - ' "v
" If public engagements, under such cir
cumstances, have beh considered obliga
tory upon those, who have successively
administered the aff .irs- of those, nations;
a r asonable confidence nviy e i reposed
in the fulfilment o the bbiigiti hs which
maybe contract d by j existing govern
ments, where the reign of l iw is firmly
established. ' It is'not" denied that a pa
per currency furni-hes strong tempta
tions to a Duse. Million mav be issued in j
a few days; .and the; deficiencies; in tle !
revenue promptly supplied, if the. condi- i
tion of receiving an equivalent is abai-j
daned. The hioment the curency - shall
be issued as a financial resource, depre- ;
ciation will follow, and jail ,the relations i
of society will be disturbed. v If the i gov
ernment of the nation, i in which a paper
currency has been es ablished,. shall be
deeply impressed with this? truthi willfit
not be restrained from the apprehehdeH;
abuse ? Currency of every kind is liable
to great abuses. The history of the coin
age ' of ' every ,. nation whose annals 'are
known, is little more; than a detail "of the
frauds which have been practised by go
vernments 7 upon the people ; mitil the
t wentieth year of the reign of Edw ird the
III. of England, a poundtrov of silver
of standard finenesss, and "Ja pound steiv
ling, were synonimous terms: twenty
snunngs sterling Deing, -in tact, .a pound-
troy 'ohstanuard -liver. Chanee" follow
ed chatigevJn rapid succession , untir in
the reign of Elizabeth, a x'mnd-troy of
stanuara suvei" was directed to.be coin
ed into sixty-two; shillings. Thus im
mense cnange in the value of currency
was effected, in' the space' of abt?ut tw
centuries. In other modern states, dur
ing the same period, changeTnot less ihi-
portant occurred ' in the- coihgei Fre
quently, these changes were', effected bv
deteriorating the standard fineness of the
Coin. For mere than a Century wast, the
coinage, of the civilized'wofld has inder-
goue no materml chanc'e with a view to
tne practice oi traua upon the people.
vv netner.cuis lurucarance is to De attri
buted to an improvementCni the morality
of modern governments, or to a more cor
rect understanding of ( the principles of
currency- ana ot the consequences; that
mustresult from, every change bv which
the i relations pf s -ciety are affected, it
furnishes jusi ground ot ex Wctation that
they will not hereafteibejatiempted. No
thing' more is necessary tuisecure nn unal
tefable , adherence to the maxa.s.ui)on'
which it is" manifestly ijecessurv: that a
paper :' currency must be founded in order
to pre-fVrve. an unifcrmiiy of viiuet1thah
the Vanie mprali;ty and the- same'inteiii
gence. Without a'ssumin'e- theT in incinle
of the perfectibility ot human haturethe
hype may be intlulged that, the 'nature of I
currency, m continue to command . the
attention; of statesmen; and that the. abu
vesw hich haveVresultetl ; from ; improper
c h anges in I tne'vcurrency ' will not .xigaln
fiCCur in the sameldegree '
:';.4.i When the .currency is metallic, no;
addition -can "be jnade -M it without givirig
ah equivalent, ttiidispensable' that
thj condition I should be annexed, to the
?t?julsi;ion of the paper currency; preli
minary to its' entering into circulation. If
it CHii be put in circulation, onlr onpay
intr. its noiJimfil amount in thati Which has
agenej-aihd.fixvd value, determined byj
tne consent or o.tner naiiir ji ; w ni vyiui -
n le ta p reserve tnat yaiue auring tne
time1 ! it ' circulates, unless1 the p relation
Which if . bore, at the tinfeof its issde, to
,wh ch iti is ?desv ned to pertorm; snau oe
, " ,rV-lyy.i
lept (or a pVvucular porti-jn7 of that cre
dit; m iy mi i in:d m the pledge or, mort
; Spge.f property ofpjjuaL or greater va-
hie than the currency issued uphn t This
i hiay be true ; Iwt theralue!,o'f property
. has' !r 'ehcontinu:illyffluctUatihg : .-it 'will
tontiiiue to fluctuate, after giving to the
fadvt .cntes of a'paper, currency full credit
vfo the sU;)enf-stiibHity;whiCh.fthey sud- i
J)ose will-attend its 'substittitioh tor gold
and silver, as the standard, of' Value. 'But
jthis --IsVi'iot' the.'pnly', objection to the ac
ceptance of proper)' as a plelge for the
paynjent, byiiidjyiduals of fan equivalent
for the paper currency which may be ad
vitnfed up.m such pledge! frauds will
be practised by pledging. property which;
is encumbered, which it would beexf
tiemely difTiciilt to detect. The govern
ment wih be involved in endless litigation,
with inclividntsl who are interested in the
incumbrnnceSvbV which its riarhts to the !
pnpertyj plelged; is 'lembarrassedIa
such contests, the fn'tere of t lie .govern
ment U always endangered, even where
right is on its sidv". tit b not qualified to
enter into such j:tigations, with an equal j
chance of success. The feelings of the t
commuuiiy.areal ways, except in flagrant
c:4ses of fraud, upon the side of an indivi-
dual supposed to be struggling with the
nVF-rvvhelminir infli , n e. fVn f unt-KAritu R t i
sides, in all contestVrf this nature, sowe -
t-hin.r nt lh l-esnprtr tnr Hip crniprnmcnt
iV
'J , . . Xmf ' .
zens
I
ihn
i-crnmePt ifealous of its die-nitv and du-
rity ot character, it is
national currehtv cannot
oelieved that a
bejssued with
le'prospept of
safetv. with a reasonab
prospept
success.-anti; wi n sutncient
security a-
gainst redundancy, but int exchange for
gold and silver-ot a dehnite standard, or
for the public stock at Certain fixed rates.
When issued. in exchange for them, and
for them 'alone; there j is though not -the
sa me, vet perhaps an exijuicilT security a-
I g.ii'Vs redundancy as in the case of a me
tallic cMrrehby.i ,' Wlient it is issued in ex
change'for coin, there is no, addition made
to the currency. When jt is issued in ex
change for ublc stock,commanding,pre?;
viously to the exchange, its. par value in
boinr, the party who acquires the curren
cy par s with that which' was equal to
specie; and is deprived 'of the annual in
terest. Which it produced. Unless r tlie J
interest bf the . currency, , resulting from
Its scarcity, should exceed that paid upon
therjstock, it i would not be . demanded in
exchange for the stock. In either case,
the fdaitger of- redundancy Vis extremely
remote. , By the exchange of specie for j
currency, tne active capuat n "hwj
try Will be increased to the amount ot the
currency ; and the, capacity of the1 nation
to redeem it, whe iieverit shall, y any
circu. 'istance whatever become expedi-
ent,,yill be unquestionable, i .;.-
But jt; may be doubted, wnether, und6r
suelv contlitionsVa piaper currency ieyejr
can be put in circulatiou. Under a gov
efnmeht firmly established, conducted by,
upright and 't 'enlightened councils Jahd
possessing absolute power over! thecur ;
a cncy, i is Utjicvtu M'Ci c jpst. nsa-
, son to apprehend a difficulty of that "na-ture-
; If ; m. such a gdvernUient, bahks.
kxisted deriviifg theirpj wersfrom pt.
i ue specie in tiieir ? possession woma pe
gradually exchanged for the paper cur
firency winch would !: beCofnelthe Jbasis of :-
jh ir opersitiphSj''? onlyi- thersj)eie1
wmca inyyj pfissesseu; wouiu uu inus.ex-
( changed, bur exertious would, from time
totiuu be fn adeto" acquirethe Sn his ne-
K
ChaiigeU.'. Whilst' siJtcie formed the ba
sis of. f lieoprationts of Fank,its iinpor
tatltir c"uiu nut fail to be jpr&iuctive4(i
USi EucV Mi b'or;atKm it ih y P?k! nc
ed the iVcessity of audiUoiuii laiportu
hich rtught to be cherished by the citi- ' c4Ud," iMuclui.u,u wCAW.tM uc
. especially oi a iree . state, win be w'""v M i ,,vywg" jyirrfi.
osr. The situation-is mvidi-us, and 8001 and; consequently , aepreaate-.
gut not voluntarily kro;Qe assumea oy a . z- V - " , ;
cciiy; to support jtneir ; oaiiKing opjeca
tions specie would be importtu- even at,
ith Expense; for the purpos p f belhgex
j j tions, but atan iincjeased ,expih&. But,
1 1 wheu importatihs shall ;be made for! the
;thr
purpose of ehg.ex.id for -theiChrr;
reucythertioh
importea wii noc aneci-tne operations,or
the banks;' -It l
oftheurrencyhallfcomm
they- -will be'a6ishedt6esistfroTh
further : impof tatipns : t Individuals and
banks VouUlf like wisexchan'pbJiC'-'
stock at the rates prescribe liV the. sysS
tern for the paper currency. WheneveKl
the . dem and, for currency should beBuch
beryeh;frt exchange Jbp the cutricy
But tMifacilityWhich :ibeexistehe;oflai'
publidebtfurh?shes;in procuring the pa-J
pen currency, as counternaiancea Dy tpe
difficulty of complying sivith the, public
engagement to hscharge such debt in
metallic, urrncy . Aftea paper cifcu
latjkm ; shall be substituted ifof gold tihtT
silver.rthey war be found in the codntry:
only In the quantity demanded for ttianu-.
tacturesi and for such branches orconl-
merce?, , as ate entirely dependent iopha
. i a " . ' ,- ..'-'.. n . .
tnem.' v. consiaerapie aemana tor goia ;
silyer by the goverpmient, to meet its en-'
grige.ments, previohsiy Contracted would
raise their price in; the market, (and ren
der the obligat i6n to discharge those en
gagements in the precious metals not on
ly extremely onerous, but, perhaps.&omei
times impracticable. In such astate; a
compromise with the public icreditors
would see:ni to be a preliminary mea.
sure. ? rrhjs: under 1 any circumstances,
would bjd ameasure of great delicacytan d
difficulty, and; jrt isbme cases,.r would pro
bably be utterly impracticable. f
6. Wiieneyer, from ah v-'cu' the.car-.
rercy should become redupdaht; the re-
dqndancy may be funded af a rate of in-"I
terest a traction oeiow tne rate oi legal
interest. '.rJ" Mv'K"S'7t:
In determining the rate at which'it may
beN funded, due regard should be paid to
the rate of interest previously existing in
the state; The, rate of interest, it is con-
i ceivedV ought not to depend, and where a
metallic currency prevails awnoioej.
pendVsfely upon the amouat pf cur reric)',
necessary to - perform, with facility,'' the
exchanges required by the. waiits and con
venience of society. 1 Ih at i hewlcohhtry;
where there is but a slight .accumulation
of capital, the interest of rtpoey?swJll be
high, notwithstanding thdre 'may beyen
a redundancy of currency beyond What is
necessary to eiTcci itsexcnanes.- iuucu
4 country. Viil the objects upon which ca
pital may be employed;"' except those of
the mos m pie k,ihq, are unoccupied:--The
currency necessaiK to effectthe ex
clianges of its property; moveable and im.
j moveable, will ' be entirely insufficient to
j;1?
uuiwa-i u suyuiu uv;jiHmuum.uw,f.,
consequence or issuing trie currency upon
individual credit, or upon the; pledge of
jproperty as a rate oHn
fexistfl;e te. Any
change of the interest of money by law,
previous to its having -taken, place in in
dividual transactions, in con sequence of
'-( the accumulation of capital, would be un-
just; ana couiu. not iau 10 proauce cnous
inconvenience to-the mmunity Admit
ting; the";ate; pf;mteireft in a state about to
make the experihient; to be six per cent,
then . the ci.rrehcy should be isscedj only
in exchange for specie or sic per cent,
stock, or other stock, accordihg. to -that
ratio. It the' currency should- when
by . any means;1 a reduriBancy existed, be
fundable at Ave and a half percent, inter
est; the utmost depreciation to ,whiclrat
could be subject would be . eight and one
third per. Cent. But it is probable that
the real depression in its value would not,
at any time, be more than half that a
hiouut. Before funding would com mence,
the public stock, receiyable -in exchange
for theiiational currencyvwould be above
the rates at which it Was recej Vable.Its
Issue upon the exchange of tock Would,
therefore; iave ceased. -There are in 'e-'
Very coin munityVi capitalists, who would J
- ' .:-. i ..dm,';
rather" lend .to tne government at nve
and a half per CehU than to individuals at
six. The fuhding of the currency would,
therefore; ' beVih before the: redundancy
Would dffeiaiy ; Veneral inducement to
that mode pt reaucing u. , i ne .variauon
to whiich its vail ne; jwouM,TC''jecU'wouM
therefore be less than eight and one third
per cent; 4 It ,wpuhi be the interest of the
verntnent toreserve the" right of ' 'reV
deeramg the;stock create
its par value d uiider;the condition, howe
ver, of redeeniing it according to the or-
derof time in- which ithvas created. Con
nected with thiteh should be a; er-''
missiph to. the, bahkiito purchase public
stock' but not ' to dispose of it, except to
the govern ihent, at its, parjor current
lue, when under pr,' unless, the govern.;
tant should decline the.,, purchase..' T he
curreiicy,.;upoii, being Tunded, shfAild be
invariably cancelled. Under) "a system of
this kind, if no other paper Was" permitted
to circulate than the national currency , a
redundancy which wtmld Effect its Value,.
fcouJd only occur by. a temporary dtminu
tioii oi the articles, which were to be ex .
thahge'dL through ;it$ mrumentahty.
thiL eveut the piice of tarticles would;
'T'fr.j.X'X''-
be. enhancedso as to reatiire a greater a
I mrunt of Chriency ; to effect their exchange.f
pnouia tne price notrbe enhanced in pro
portion the dinriingtiori in the - quantity:;
of thertjcles that portioh of the current
(cyhicttQidyruuder sich circumstan.'
;. uc icn wummt. employment, would be
funded..-vA just relation i between the a
mount of currency, and the demand for it
would be promptly restored without af-'
fecting, injuriously, the relations between!.
indj viduals On t he other hand, should a v
greater quantity of exchangeable articles " 5
be produced, the J demand for currency
would exceed the supplf, ind lead imme- ,
diately.to additional issueintil'jthe ner '
Cessarv supply; should be)olUined.V j
But ina state -where banks ialreayV- . .
1st: d, - which derived their charters, frnm
rie sovejeigniyanat reguiateq tne xurren- -
cy ; where the people were; t.tcustbinedt' ,
to bank notes, and m the habit of receiv
trig theniv the agency of, these' institutions r
might be.admitted in supplying a porfcioni
u uic -vunqutwy. a uey migiu oe permit ;
tea ip . issue, uicir ntes, pay auie on ae- )
ihahd, jn the natjoha currency; Tlieir
taKs:fw'6qld,' p edtrrsej. bp issued on per- ;
sonal security. , Ih this cast the currency :
might become redundant! by
I theisstitis of-
m U ,!.... J L . A v
the banks. Whenever this
Should hap-
pep,, the national currency) wculd tfcfde-
fnauueu of iiiem ior tne purpose ot oemg,.
funded : the banks would beicompeiled to " f
..curtail their discounts, t.f relieye them
selves, from the prejre;4and the'-aduount
of the currericy5 Would be promptly reduc
ed to the legitimate xlemand ;f Whtrever ,
the agency of banks sh ull be emphiyed ' "
in furnishing art pf the cit cuhitioni a rcJ':
rusalqr omissipn; to dischrgejhetr hotei- ...
cn demand; ffirjt'i, the .naUDijal currency, y'
should bettreated as an lev pt oaw ki uptcy.
;l he national currency peing a leg ii len-'
der in the payment of d;hts to iiKliv dn'als .
ti)U IU inc uvci mucin, wuiijiu, hi iciauun
tP the banks, perfornxj th, functions of.
specie where.bank notes are cohveriibfe
into CQinBut ih iorde to jthose a salu-
taryclieck; against yexcesiye ''.jtssiies "6,
bankhptes, the ,ntic4alc
alone be receivable in, all pdlyments to the
goverment,; ;v: '
iln an attempt to, trace ttu? prouaoie re- ,
suits or a papt-r cerrency fbunchd upon , ;
the pihcjp!e whichave been devdop
ed in thipretedingya.' the - ihiiUetce: ,-
which itiwjll have upon foreign exchange
requires investigation
Kiliiir 'mnMlinT rfBl intolli&'.'iirp i ill'
JfmWJ , JF mill IIU.I' MW
governnleht,Which naay r kinde;w)ake . to
substitute a: papery uMt aj metallic fturi en
ey, are the objections whiclj have already
beefr considered .T theel accoi ding to ;
common dnihioh. is' to be added, the iniu
riousefftot which it is Supposed, it will
have upjOjrij .foreign ex hange . In a coun
try Where the cunehcy metallic, an.
unfavorable. state . of foreign . exchange
will jptrobabiy have the ;fbliowing effects :'
1st. fTo raise1 the ': prce of exportable
. ' . articlesT;as muchvi above that, whch
they ohgh t to. bear; as! ithe premium:
v paid, upon - foreign bills, until it t x
ceeds - the expence jof exporting spe
..cie to the foreign market ,
'2d.rWhen this rise exces.ihe expence
of such exportation thje price of ex
: . portable articles will jfall gradually
below-what they ought to command, '
iM tb the exteht of thatekcess; - c
Vtd; Uiftil this fall hi ft hir: price shall '
be'effected, specie Willi be exported ,;
Rafter which itvU cease. . ; !
4th. This falL in their price, by increa s
:f ing their consumption in the fo reigln,
markets ultimately ptovides fpytlie ;
; return of the specie which had been, -
il" exported; ' J : ;
5th; During the second
and third sja
e .'price of "all
ces of this process; th
articles not exportable, is affected in
a greater degree ; enterpf ize s damV '
ped, and distress prevails. :; ' J
: Such are the necessary effects of aa-' '
unfavorable state of foreign , exchange, - ,
jKw thiiftTnrv i metallic. 'A.i tht
vital principle. of contmerce is gain, it H '
Trokble'thaty'geAer9.lly pnee of ex
portable articles Would, in fact, be rather
higher than, is statedih Uiti preceding de-( V
ductions f the timid npght export specie, t
beforeithe preihiuniupon exchaugeex-' :
ceedea tne expense or us exponauoa ;
but timidity is not the predominant cha
- .- ..... r m .-. j ...
racteristic of commmerci' enterpmci
On the other hand, the sanguine ahd eu-
terbrisine. relvinc: uiioh f he chance of bet-'
ter roWrketswpuld givei higher prices ra
ther than submit toHxrjtairji loss upon tlie
exportation of specie or tt c, purchase of
bills above par. Y t. s
In ta -country where -a paper currency
has been adopted, anil the' principles , by '
Whicii a redundancy way be ; pr; vented,"
have been enforced, an untavoraoie state
exnortable articles, tas mucih above -ht
rhev nn-hr to bear aseouali the prt-muiai
upon foreiffa oiltsr Bui ih (this, case, oid
nd silver being cxp riabt4 aifMcjie
will
1 foreign exchange ,wm prooauiy nave
the following effects'jf-.tiJ'-- ' v '
Ist.-The effect ofj raisi the' price nf
rise in the saie pr -portiuaas all .tiief ar- v ;
ti!Cle'ii'A".'.-r,vii-VjM--. . .;;.
2 ; When thepfice of ti irtieles is rafied' - .7
so hih" diat a i ss wdl be Huurred" by tneir
s le in a tortigu nruriet ibo ijivJid bve no r e
itUice to make, will fwuhdr-iW nWim,-iie
competit in It -proli-abief
'iktier entcronzes ;caiwt be
of tue curreucv at'their dipoiiuua .wjJU ,
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