such event, it is evident that the same $1000 would appear twice as swelling the currency to that amount once in the form of notes in circulation, and once in the form of deposites, whereas it is equally evident that the currency could only have been augmented one single $1000. It follows, from this view of the subject, that in making out an aggregate statement of the circulation, there must be deducted from the aggregate amount of the notes in circulation, the total amount of notes reported in the different bank statements as "notes of other banks on hand.".

It may, however, be said, that these banks did not come into possession of these notes by means of deposites as above assumed, but that they were exchanged for notes of their own. Granted, but this makes no difference in the result. The banks which received them, would report an increase of their own circulation to the extent of $1000, and if "the notes of other banks on hand" were not deducted, there would appear, as in the first case, a double augmentation of the currency to the extent of $1000.

But it may be further said, that these banks did not obtain possession of these notes in either of the two modes specified, but that they were paid to them in discharge of debts. Is the nature of the case changed by this fact? Not at all. An issue of bank notes to the amount of $1000, can not possibly augment the currency to the amount of $2000, and if we regard the banking system as one whole, just as if it consisted of a principal bank and branches, we can easily see, that if any of its members were in possession of any notes issued by any other of its members, they would be in possession of itself. It would have been absurd to call the notes of the late Bank of the United States in possession of the New York branch, notes in circulation, and to have included them in the amount of the currency.

So also, in estimating the aggregate amount of the currency, must the amount of specie in possession of

all the banks be omitted in the account, seeing that that specie having been derived from deposites, or in exchange for notes, already appears on the return of the banks in one of those two forms.

That the truth of these positions may be made manifest, I will make a practical application of them to a table found in the report of the secretary of the treasury of 4th January, 1837, on the condition of the banks. We are there told, in document A. A., that as near to the month of December, 1836, as could be ascertained, the condition of all the banks in the United States was as follows:

As the account does not balance, it is probable that some of the resources of the banks have been omitted.

Now from this statement it is proposed to ascertain what was the extent of the currency of the United States at the period mentioned, in addition to the amount of the coin in the pockets and strong boxes of the public, which there appears to be no correct

means of ascertaining, and for this purpose, I would state the account as follows.

Such would appear to be the actual amount of the currency as furnished by the above table. But inasmuch as no distinction is made, between notes or deposites payable on demand, and post notes, or deposites payable at a future period; the account is deficient in a very important element of exactness. For it can be seen, that if the deferred liabilities should have amounted to thirty or forty millions of dollars, the true amount of the currency would have been diminished precisely to that extent.

In regard to the two amounts expressed, by the terms "due by other banks," and "due to other banks," standing on opposite sides of the account, it must be obvious, that they are quantities neutralising each other, for the amount due by all the banks to each other, must be precisely equal to the amount due to all the banks by each other. The difference between these two amounts in the table before us, arises no doubt from the fact, that owing to the distance of the banks from one another, there must always be on the route between them, funds in transitu, which although charged by the remitting bank to the account of the one to which they were remitted, cannot have yet appeared on the books of the other as a credit.

CHAPTER IV.

ON THE IMPOLICY OF ADHERING TO OUR PRESENT MINT PROPORTIONS BETWEEN GOLD AND SILVER.

Ir may be assumed as a principle that will hardly be disputed, that the soundness of a mixed currency of coin and paper such as we are likely ever to have in the United States, does not depend upon the fact whether gold or silver be the basis. A currency may be quite as sound where silver is the only or chief metal that circulates, as where gold is the only or chief metal. This is evident from the well known fact, that the currency of France which is of silver, is not more liable to fluctuate than that of Great Britain which is of gold. I might even argue that it was in point of fact less fluctuating, but as all I wish to establish is equality, it is not necessary that I should take that ground.

It would seem that the great object of our act of June, 1834, was to establish a gold currency, under the belief that the tendency of gold to drive paper out of circulation would be stronger than that of silver; and on that account the mint proportions were changed with the professed object of drawing gold into the country in preference to silver, when the course of trade should lead to the importation of the precious metals. There can be no doubt, that had congress possessed the right of prohibiting the circulation throughout the United States of bank notes of a less denomination than ten dollars, a gold currency could have been introduced in the place of five dollar notes; but as it possessed no such power, and as there was not the slightest probability that all the state legislatures would have co-operated in bringing about such a result, the measure was, to say the least of it premature.

But even admitting that all notes of a less denomi

nation than ten or even twenty dollars could have been proscribed, I would ask, whether such a measure would have exempted the currency from all liability to fluctuations? This question can perhaps best be answered by referring to the experience of Great Britain. In that country, no note is issued by the Bank of England, or by any joint-stock or private bank, of a less denomination than five pounds sterling, equal to upwards of twenty-four dollars, and yet England has been subject to many great fluctuations in her currency, one of which, that of 1797, brought all her banks to a stoppage of specie payments; and another of which in 1825, was very near bringing about the same result. It is not then the fact, of a mixed currency having gold or silver for its basis, which determines its stability. Our own experience of forty-five years out of fifty-one since the establishment of the government, during the whole of which time silver was almost the exclusive metal that circulated, is sufficient to settle that question, and no one, it is presumed, will maintain the proposition, that the interests of the great mass of the people are not as well promoted by the right of demanding silver for a bank note, as of demanding gold. Indeed, if we take into consideration the universal knowledge which prevails as to silver coins, the familiarity of every body with dollars and half dollars, the vast number of persons who seldom have five dollars in money on hand at a time, the less liability of being cheated with silver than with gold, and the additional fact that many existing ground rent deeds, bonds, and mortgages, expressly call for payment in silver dollars, it would not be hazarding too much to say, that silver is a more convenient coin for the people of the United States than gold. If then it can be shown, that the possession of a gold currency in preference to a silver one, would be not only productive of no positive benefit to the community, but would be attended with positive mischief to the great interests of the country, all parties ought to unite in abandoning the project.