Letters to the Honourable Levi Woodbury: Secretary of the Treasury of the United States (Classic Reprint)

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Excerpt from Letters to the Honourable Levi Woodbury: Secretary of the Treasury of the United States

The cupidity of the bankers, and employ all the paper which they can persuade them to issue. Experience has ever shown, that there is no foresight, either in those who manage moneyed institutions, or in those whose extravagance they stimulate and sustain, sufficient to restrain the most ruinous excesses. An increasing currency occasions in creasing prices. These react upon the spirit of trade and manufactures, and by their mutual inﬂuence, engender the utmost excesses. A circulating medium on a par with specie, and which costs nothing but the work of the engraver, is a manufacture too precious to be monopolized by a few moneyed institutions; and the legislatures of the several States must be plied with continual memorials for acts of incorporation. Thus banks become multiplied, their competitions sharpened, prices raised, overtrading and speculation cherished, and imaginary fortunes acquired and the necessary consequen ces of this factitious and unnatural state of society must soon be expected to follow. But no artificial state of the currency can be long preserved. The quantity of the circulating me dium of any country, while its general standard value is pre served, cannot be permanently augmented beyond the natural quantity allotted by the laws of 'trade, nor can its value be increased by any artificial expedients. No attempts to ac complish either have ever been successful, even when made by the most despotic monarchs. All laws relative to tender, or prohibiting exportation, or adulterating win by a mixture of the baser metals, or augmenting the whole mass by a con vertible paper currency, have proved utterly impotent. The last expedient - that of convertible paper money - will in crease the relative value of the currency for a little while, until it finds its level in the market. This renders it more mischievous than if its decline were instantaneous; for, as there must be a change of prices, in the progress of its de preciation, without any change of values, all contracts fixing on a stipulated sum to be paid at a future period, must ope.

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