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THE REFLECTOR
M1LLEDGEVILLE, G. TUESDAY. JUNE 9, 181H.
-s(/. 31.
1UNKINU.
HOM NILES WEEKLY UEGISTEU.
HU PAPER SYSTEM—NO. II.
-fn the prosecution of this my hon
or taking, I shall endeavor, by the
s of common sens", to keep dear of
eorctiral jargon, by the aid of which
pie of England and the United States,
cn cheated into a belief in absurdities,
othing but. the most perplexing so-
.s could have screened from derision
horrence. Those who cannot elicit
tbs, may sometimes rcndepnld esta-
ones doubtful ; and thus it has often
ed< that the precious lessons <.f Ion. 1
ncc, as well as the dictates of sound
on, have yielded to systems of false
too obscure to enlighten, but so
;e as to baffle all attempts to demon*
heir absurdity. When a people arc
thus hood-winked, nothing is left, but
to plain matters of fact, and an ap-
j their sufferings as the criterion of
My object is plain English. I mean
jnstratc the evils of the present paper
)f banking, by pointing out, in plain
fits pernicious effects on the various
of the community, leaving it to such
! the continuance of the delusion, to
on the subject, and quote authorities,
will.
ay. however, be worth while to trace
sent fashionable paper theories to their
urce in England. It was once the
therefor statesmen to reason firs*
t afterwards. In this case, however,
jversed the usual mode—they acted
first, and then resorted to reasoning
ter up their errors. Thus, when i:
scovered that England was in debt,
I her natural resources—and that it
erssary to anticipate the revenues ol
lion a century at least to meet the exi-
iof the present time—that in fact ar-
moaits, and legerdemain must be rc-
lo,'in order to prevent national bank-
-then it was that patriotism was stim
by pensions, and talent tempted hv re-
to exert themselves. Then all the so
ts of reasoning were put in requisi-
provo that a debt, beyond the power
[nation to pay, was a national blcs-
hat spending every year double one’s
was the certain mode of growing
and that debasing the currency, an 1
lating its value by emitting ten times
It paper as there was silver and gold
em it with, was opening a mine of
inexhaustible and everlasting. The
ople of England behaved as in duty
-for they bad the fear of Napoleon
their eyes. They feared fur their
s, so admirably secured by suspeu-
thc habeas corpus—and they feared
r property, so admirably secured to
y the laws and the taxes ;—-hat. above
feared for their religion, so adinira-
ained by the laws against dissenters,
vs of the clergy, the immaculate pie-
lord chancellor Elden, and the pan
of the famous bishop of Derry. It
hev had but little left of either librr-
erty, or religion—but still it; was in-
t upon them to take the more rare of
left to preserve. And this I take
true reason why the good people of
make sueh a noise about these mat-
lie piety, patriotism and love of li
wever, such as they were, induced
believe whatever they were told was
y to keep Bonaparte and the gullo-
jl England ; and thus it happened
saw the hank of England stop pay-
thoutsuspecting that it was insol-
the government bribed by a loan to
he bank i:i ij* violation of public
bout dreaming that it was only two
s clubbing their wits to cheat hon-
Bull. One cannot help admiring
ish people, and their disinterested
, for the preservation of their reli-
r property, their excellent govern-
above ail their national debt,
ir, is the origin of the pernicious,
us doctrine, that banks may he sol
out being able to pay their debts,
nments rich so long as any body is
enough to lend them money. In
1 course of events this delectable
ind its way across the, water; and
ncy every tiling imported superior
mestie productions, forth with a-
without considering for one mo
her the policy of a desperate bank-
befitting a plain, honest, iudepen-
try farmer. England was cxcu-
was too deeply involved to be cx-
y the ordinary means of economy
chment, ami nothing was left her
h the paper system as far as it would
the United States were prosperous
; their resources, public and pri-
amply sufficient to answer every
private exigency, had they been
uisition ; yet. the paper system was
y the government, arid this adop
tion cleared the w ay for the great paper sys
tem in all its various ramifications. Here,
where the power exists, or lias been assumed
by the state legislatures, of authorising loans
and issuing stocks, and chartering banks, it
was expected that ail would be anxious to avail
themselves of such a mine of wealth. They
have done so, until at length, the crisis has
arrived, when money is nothing but rags, and
neither cash or character is necessary to con
stitute a bank. I now proceed to trace, tin
consequences of this state of things, as they
arc evident at present, and must appear in a
few years—.perhaps sooner ; for delusions
that take a long time to mature, are often
dissipated in a moment.
The people, and particularly the middle
and lower classes of the people, of the United
States, feel that there, some where or other,
exists a cause which saps the foundation of
their prosperity, that entails distress on some
and beggary on others. They are starving
in the regions of apparent plenty, and the
more plenty paper money becomes, the great
er are their distresses. Some tell them this
is owing to the general peace of Europ ,
whidi has caused the decrease of the demand
for our supplies ; although ever since that
peace the demand lias been made greater by
the failure of harvests m many countries—
and the revival of manufactures in all, thus
ailing for an additional quantity of our
grain, and our cotton, the two articles of ex
port. Others tell them, this distress is ow-
to the want of national encouragement
to our domestic manufactures ; and, in short,
there is no end to these reasons, for the want
if employment to so many laborers, and the
impossibility which even tli iso who get em
ployment find in procuring for their families
the common comforts of life. 1 will tell
hem the simple honest truth. It is the effect
if the paper tty stem—the r.inltiplL'Uy of banks.
I’iie great capital of the nation is diverted
from those objects which give regular luid
wholesome employment to the laboring class,
iito the hands of the brokers and specula
tors, who use it to create artificial scarcity—
to monopolize the necessaries of lit , and to
foster that distress which makc3 them flour
ish—while the poor become paupers. Now
et the pampered broker, the shaving hank
director, and the prosperous speculator,
laugh at this, if it shall so please them. If
they will only accompany me in this letter, 1
will venture to predict, that if I do not con
vince them, I will at least spoil their laugh
ing, even though they belong to the sect of
Democritus.
Let us first enquire how this assertion is
supported by the operation of the paper sys
tem, on the merchants. It ought to he un
derstood, that the hanks were originally al
most exclusively devoted to the purposes of
this class of the community in all countries.
Until of late years, neither the fanner or
the. mechanic, ever thought of ruining tun-
self, by borrowing money, except on bond,
or mortgage, in which cases the loan was al
ways for a length of tim", proportioned to the
slow yet certain nature of their gains. They
were too wise, or the happy simplicity of
those times prevented their being duped in
to sixty day a’ 1 sans, that might lie sudden
ly resumed, to their complete ruin, by forc
ing them into the sacrifice of their property.
The merchant, on the contrary, by the pro
fits of liis trade, by the, quick returns of mo
ney for his sales, and by the power of anti
cipating, the proceeds of distant shipments
by drawing bills of exchange, it was sup
posed, though I think erroneously, could af
ford to trade on a borrowed capital to a cer
tain extent, without incurring the certain ru
in of the mechanic and farmer. I say I be
lieve the idea was a mistaken one, since 1
cannot bring my mind to suppose, that loans
for sixty days, liable to bo withheld at the.
will of two bank directors, can be ultimate
ly beneficial to any class of the people what
ever, except shavers, who give six per cent,
for their loans, and take—as much as
they can get—conscientiously, always con
scientiously. He this as it may, however,
it is certain that if the paper system can he
of benefit to any honest class of the commu
nity, it is the merchants. Let us therefore
see what is the nature of these supposed be
nefits.
By creating an enormous redundancy of
paper, bearing no kind of proportion to the
solid wealth of the. nation—nor to the real
wants of the people, it is certain that at least
two consequences will result, cacli highly in
jurious to the merchants. The price of the
staple commodities of the country will neces
sarily he enhanced at home, to such a degree,
thatthc nations abroad, which are not blessed
with a paper system, caiinot afford to buy
them at this rate, and will look elsewhere for
a supply. This, and this alone, in a great
degree, is the cause of that diminution in our
proper export trade and employment of ship
ping, which istfelt so seriously by the mer
chants of the Uj^Btatcs.
Again, sir—this depreciation of money, or
in other words, the high price, which is the
result of the.great plenty of paper rags, filthy
to the touch and abominable to the smell, has
another effect equally pernicious to the mer
chants. It overstocks the exchange with mer
chants who interfere with each other’s busi
ness so that in fact the ordinary quantity is
not suificient to keep them from starving, and
they become brokers, shavers, speculators,in
other words blood-surkcrs of the community.
1 appeal to the merchants of our great trad
ing cities, if this is not the truth, the honest
truth. I ask them if there is half, nay 1-fourth
regular business enough to keep them from
stan ing ? The market is overdone—the faci
lity of borrowing money of the banks, lias
multiplied the race of merchants to such an
extent that the business is not worth follow-
; and accordingly that high and re
spectable class of people, once the ornament
and the boastof this land, is dwindling by de
crees into a contemptible motley collection
of money brokers and speculators.
The foregoing are the inevitable results of
the paper system, even admitting that th"
banks in general conduct their business fair
ly and honestly. There are others equally,
nay more fatal originating in the pernicious,
wanton, air', cruel conduct of these institu
tions towards their debtors. These, tho’ not
the inevitable, are the natural consequences
of placing so dangerous a power in the hands
of men, to be examined, not according to
the laws of the. land, but directed by the in
terests, the passions and caprices of our
nature.
By granting large loans to themselves, tha 1
is to say, the respective directors, they ena
ble themselves to monopolize—to create arti
ficial scarcity—to stop the regular course ol
business which must always depend on are-
guliiMfcmand and supply—in short, to tak>
titiilue^ilvaiitage of distresses of their own
creation. The moral effect of such transac
tions is, that the great monopolizers inak •
enormous gains, while tho miserable dupes,
who believe, this artificial scarcity a real one.
finding at length the article depreciating eve
ry day on their hands, and pushed for money
send their goods to auction, where not (infre
quently they are purchased at half price, by
the same monopolizers. Were it not for this
paper capital, such things could not take
place, because, the silly merchants arc ena
bled to buy of each other, the very same ar
ticle, over and over again—in fact to consum
mate their own ruin, by bank discounts. I re
member a game of this kind played in New
York some years ago. Goods were purchas
ed, under tiic influence of this mania, six.
eight, ten times over, without ever being re
moved from the place where they were origi
nally stored. It was computed that these
very goods were pledged in effect, to the banks
for accommodations, by their respective pur
chasers, for at least six times their value !—
The banks hereupuh took the alarm—drew
in their discounts when every body was in
ilelit, and the consequence was a sacrifice of
goods at auction that mined hundreds, aye,
thousands of people. But, my masters—you
see, sir, I wish to make friends in time with
the future rulers of the nation—my masters,
the money brokers, hank directors and spe
culators, wax rich, and flourish beyond all
former example $ and a race of miserable
reptiles aspire to the dignity of men.
And here permit; me to say a few words on
the righteous fraternity of money brokers.
which by its power, wealth and numbers, has
become of such consequence as to influence
the value of money,to direct the course of ex
change ji'om one part of the continent to ano
ther, and to establish the relative rates of
hank notes in every market. In the present
filthy state of the national currency, these
animals are generated “ like maggots in a
dead dog,” and actually crawl about in such
numbers as to keep each other in countenance
ami diminishing our abhorrence by the fre
quency of their appearance. It is not long
since money brokers and money changers
were held in a Contempt,inherited from father
to sun, from generation to generation, even
since their great ancestors were driven from
the temple at Jerusalem. I am one of those
sir, who are tint in the habit of branding a
whole class of people with disgrace: but in
this instance, as in most others,! am satisfied
that the universal opinion of makind in all
ages, is founded in strict immutable justice.
—Universal feeling is truth ; and though
mankind may not always be able to assign
reasons fer their belief, yet do they believe
correctly. The maxim, that “ what every
body believes must be true,” like all other
homely sayings, is the result of the combined
experience of mankinil.
It is certain, that the man who enters on the
business of making the most of his money,
by lending it out at illegal interest, must
live not only in the habitual violation of the
laws, but likewise in the habitual disregard
of every feeling of humanity. Distress,
which to other men is motive for relief—to
him is only a temptation to more bitter op
pression. He must begin by shutting bis heart
to the first duty of a citizen, ohedienco to
tho laws—and to the first duty of a man, hu
manity to hts fellow creatures. He trades
in the miseries of mankind, and their want*
are his wealth. If any one comes to him witl
t story of desperate distress—of most disas
trous misfortunes—he must pause, not to see
how lie can soften his misery, but how lie can
make the most, of his wretchedness—how lie
can but strip him of the little yet left from
tho wreck of his fortunes. So far from this
distress, or that misfortune, being considered
as giving claim to compassion, they are only
motives for demanding a more exorbitant
premium, far his temporary accommodation..
A n*noy broker, sir, if lie had a heart like
other men would be ruined instead of grow
ing rich ; and here it is, that without, enquire
ing particularly into his character, weset hint
down ex tempore, a hard unfeeling man, and
we arc right in so doing. The profession
ought to he—and it has every where, and
until lately, been held disreputable and con
temptible. The people who follow it, have
'■very where lost their caste, except since tho
corruptions of the paper age, whose influence
has raised them not unfrequently to situations
where, a combination of them could mine the
credit of the public funds, and thwart the
most important measures of government.
It will be generally found, sir, i hat in each
of the honorable—perhaps I should say right
honorable banks, that there is an animal of
be species I have just delineated, who by Ida
busy impatience, low cunning, and want of
principle (not always, but sometimes, a re
commendation among certain people) mana
ges to obtain a mighty sway over th" delibe
rations of the dignified body of which he is a
worthy member. He has moreover a great
command of money—to lend or refuse to lend
and even bank directors notwithstanding the
liberal allowance they receive from alma ma
ter,* sometimes want money. Moreover, sir,
i speak openly—because I speak with ample
proof of the fact—many, I will not say a ma
jority of bank directors, are leagued with
these brokers, and employ the discounts they
receive in his very dirty shop, in shaving
notes through his agency ; thus escaping the
odium, while they receive the gains of such
vile degradation.
In truth I am heartily sick of this part of
the subject, hut, 1 must and will explore this
comm »n sewer of human turpitude, from be
ginning to end. A moment’s reflection will
show us the natural and inevitable conse-
quen. c of a person of tho true broker stamp,
exercising a sway over a monied—I beg
pardon, a p iper institution. Let us see what
it is the interest of this man, and his coadju
tors to do—what they leave the power of fin
ing—for this they assuredly will do, until
rouges cease to be without principle, and bro
kers arc governed by every other lie than sim
ple—or compound interest. The principal
business of the money broker is discounting
notes—shaving them, as the phrws is—tout
to say, buying them at as great a dis.-.i ait
as possible—no matter what the laws say on
the subject. I am told that in ordinary < ..srs
where the security is good, and the paper un
doubted, they don’t charge more than 2 p r
cent, a month’s discount.; but this is really a
piece of moderation I think quite creditable.
The more people want money, of course
the more the broker flourishes. Other men’s
prosperity is ^identified with the prosperity
of the country; but the broker is like the
grave digger, who grows rich in time of pes
tilence—tlie more people are distressed the
better for the one, and the more people lie
the better for the oilier. It follows then that
the broker will cndtSvorto create this want
of money, this public distress, so far as lies
in his power. The shortest, and most usual
way of doing this extensively, is to discount
freely to the merchants, until they are over
head and ears in debt, or at least to the. extent
of the means of payment, possessed by draw
ers and endorsers, and then suddenly refuse
to renew the notes of accommodation thus dis
counted. This of course puts the merchants
upon their resources—forces them to raise
money at any sacrifice, and the short and the
long of it is, they go to the worthy broker,
with the very notes thrown out of tlie banks,
and which both he and his fellow shavers
know to be good notes. They however take
advantage of tlie distress thus created by
themselves, and the unfortunate deluded,
swindled merchant pays as much forgetting
his note discounted for sixty clays by the bro
ker, as he would in better times, for a two,
nay, five or six years’ loan. Again I appeal
to the experience, the better experience, of
tlie merchants, to say whether these arc not
solemn truths l
But it may be said, that such acts are be
neath honorable men. I grant you, sir, but
however it might have been in times past, I
do seriously, yet with due deference, suggest
that bank directors and honorable men, are
now no longer synonymous. I see nothing in
the conduct of many of them, which justifies
a single, doubt, that they would not descend
to these acts, or indeed to any of tlie dirty
acts of money making. I know, sir, that
• 1 understand this allowance for shaving*, speculating*,
&c. in the respectable city banks, averages about, to each
of the director** three thousand dollars a week.