[From the Evening Post, March, 1834.] In answer to the many objections which are urged with great force of argument against the United States Bank, and against any great national institution of a similar character, there is little put forth in its defence, beyond mere naked allegation. One of the assertions, however, which seems to be most relied upon by the advocates of the Bank, is that it has exercised a most benefi cial power in regulating the currency of the country. Indeed, the power which it was supposed it would possess to regulate the currency, furnished one of the chief grounds of the support yielded to the original proposition to establish a United States Bank, and the same topic has occupied a prominent place in every subsequent discussion of the Bank question in Congress. It is maintained, in favour of the present institution, that it not merely possesses that power, but that it has exerted in it the most prudent and salutary manner. This is made It is the theme of many high-wrought panegyrics. triumphantly put forth by the journals in the interest of the Bank; it drops from the lips of every Bank declaimer at political meetings, and is asserted and re-asserted by all the orators and editors of the Bank party, with a confidence which should belong only to truth. Many persons, indeed, who are strongly opposed to the United States Bank on moral grounds; who view with dismay its prodigious means of corruption; and shudder with abhorrence at the free and audacious use it has made of those means; yet accede to it the praise of having at least answered one great purpose of its creation-namely, the regulation of the currency of the United States. It is to be feared that men in general have not very precise notions of what constitutes a regulation of the currency. If the meaning of this phrase is to be limited to the mere sustaining of the credit of the Bank at such a point, that its notes shall always stand at the par value of silver, then indeed must it be admitted that the United States Bank has, for the greater part of the time performed its functions in that respect. Yet no praise is to be acceded to it on that score ; since such an effect must ; naturally and almost inevitably flow from the self-imposed obligation on the government to receive its notes at their nominal amount, at all places, in payment of debts due to the United States. There is not a bank in the country, accredited and endorsed by the Government to an equal extent, that would not as certainly maintain its pa per on a par with the precious metals. Indeed, most of the well-conducted institutions in the Atlantic cities, with. out the advantage of such countenance from the Gov. ernment, have preserved their paper in equal credit; or, in other words, have been equally successful in regula. ting the currency, so far as the term implies the affording of a convertible paper substitute for money, which shall pass from hand to hand as the full equivalent of silver coin. The doing of this certainly constitutes an important branch of the regulation of the currency; but there is another and more important branch, and in this the United States Bank has totally and most signally failed. What is regulating the currency? It is the furnishing of a medium of circulation, either metalic or convertible at par, equal in amount to the real business of the country, as measured by the amount of its exports and the amount of actual capital employed in commercial business. It is the furnishing of that amount of circulation, which is actually absorbed by the commercial transactions of the country-by those transactions which rest on the basis of the exchange continually going on of the commodities of one country for those of another. When bank issues are limited within this circle, the notes of the bank in circulation are founded on the security of the notes of merchants in possession of the bank, and the notes of the merchants rest on the basis of goods actually purchased, which are finally to be paid for with the products of the soil or other articles of export, The maintaining of the circulation at this point would, in the strict and proper sense of the word, be regulating the currency. It would be supplying the channels of busi, ness to the degree requisite to facilitate the operations of commerce, without causing those operations to be unduly extended at one time, and unduly contracted at another. It would be causing the stream of credit to glide in an equal and uniform current, never stagnating, and never overflowing its boundaries. When bank circulation exceeds this measure, an in, evitable derangement of the currency takes place. The par of value between the paper representatives of money and money itself may still be maintained; but prices are raised, and raised unequally, and the dollar no longer accurately performs its office as a measure of value. The effects of the expansion of the currency are first seen in the rise of the prices of foreign fabrics. This leads to excessive importation on the part of the competitors anxious to avail themselves of the advance. Goods are purchased from abroad to a much larger amount than the exports of the country will liquidate, and a balance of debt is thus created. The payment of this balance drains the country of specie. The bank, finding its paper return upon it in demand for coin, is obliged suddenly, in self-defence, to curtail its issues. The consequence of this curtailment is a fall of prices. Those who had. ordered goods in expectation of deriving the advantage of the high prices, are obliged to sell at a sacrifice, and are fortunate if they can dispose of their commodities at all. Those who had been deluded, by the fatal facility of getting bank favours, into extending themselves beyond the limits of that fair and prudent credit to which their actual capital entitled them, must necessarily be unable to meet the shock of a sudden withdrawal of the quicksand basis on which their business rested, and are thus compelled to become bankrupts. A state of general calamity succeeds-most severe in the commercial cities, and measured in all places by a rule of inverse ratio to the excess of the preceding apparent prosperity. These sudden expansions and contractions of the currency have happened too frequently in this country, and have been followed by effects of too disastrous a nature, for any reader to be ignorant of them. Has the United States Bank never caused distress of this kind? Has it never caused the amount of circulating medium to fluctuate? Has it never stimulated business into unhealthy activity at one time, and with. held its proper aliment at another? Has it never poured out a sudden flood of paper money, causing the wheels of commerce to revolve with harmful rapidity, and then as suddenly withdrawn the supply, till the channels were empty, and every branch of business languished through. out the land? There are few of our readers who cannot, of their own knowledge, answer these questions in the affirmative. For the two or three years preceding the extensive and heavy calamities of 1819, the United States Bank, instead of regulating the currency, poured out its issues at such a lavish rate that trade and speculation were excited in a preternatural manner. But the inevitable conse. quences of over issues did not fail to happen in that case. A large balance of debt was created in Europe, and to pay that debt our metalic medium was sent away from the country. The land was soon nearly exhausted of specie, and still the debt remained unliquidated. The bank, in order to bring business to an equipoise again, exchanged a part of its funded debt for specie in Europe, and purchased a large amount of coin in the West Indies and other places. But it still continued to make loans to a larger degree than the actual business of the country, as measured by the amount of its exports, required, and its purchase was therefore a most ineffectual and childish scheme. It was but dragging a supply of water with much toil and expense, from the lake of the valley to the summit of an eminence, in the vain hope that, discharged there, it would continue on the height and not rush down the declivity, to mix again with the waters of the lake. The specie, purchased at high rates in foreign countries, was no sooner brought to our own, and lodged in the vaults of the bank, than it was immediately drawn thence again, by the necessity of redeeming the notes which poured in upon it in a constant stream in demand for silver. In one year, 1818, upwards of fifteen |