The reflector. (Milledgeville, Ga.) 1817-1819, June 09, 1818, Image 1

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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.