them, and it is under no obligation to enable him to fulfil them. The only remedy for these evils manifestly is, for both parties to be willing to grow rich more slowly, and thus to assume less formidable risks. When a whole community has run into transactions beyond its means, and has become embarrassed, there is very little gained by the abuse of banks and of bank directors.

But, whatever may be the advantages or disadvantages of a paper currency, one thing is certain, that it has, in all actively commercial countries, taken the place of a specie currency. This is a sufficient reason to believe that it is the more convenient circulating medium. It would not be so universally chosen, unless it were found to answer a better purpose than specie, and if it be found to answer a better purpose, it ought to be chosen.

If these remarks be just, there will follow several very obvious conclusions.

1. That to lend money is just as necessary to the good of the community, and is, therefore, as innocent and as honorable as to borrow it.

2. That an institution, organized for the purpose of lending money, is, so far as its object is concerned, as beneficial to the community, as innocent, and as honorable as any other institution.

3. That a lender of money is liable to be dishonest and unskillful; but that of a borrower of money is also liable to be dishonest and unskillful.

4. And hence, that the one, as much as the other, is entitled to all the benefits of equal laws, and the fair and unbiassed execution of them. If a bank conduct itself dishonestly, this is a reason why it should be dealt with according to just and equitable law; but it is not a reason why all the capital of the country should be oppressed, and every capitalist insulted. A carpenter may be dishonest; and this is a reason why he should be dealt with according to just and equitable law; but it is no rea

son why every carpenter should be oppressed, and his calling made a cause of opprobium. The principle which applies to the one case, applies equally to the other.

SECTION IV.

OF THE AGENCY OF SOCIETY, THAT IS, OF GOVERNMENT, IN RESPECT TO A PAPER CIRCULATION.

I have already remarked, when treating of specie circulation, that coin was employed as a circulating medium, not in consequence of the act of a government, or of the stamp which it bore, but simply in consequence of its adaptedness to be employed for this purpose, and of the universal desire of the community so to employ it; and also, that the whole agency of the government is properly limited to the making of those arragements which would enable it to accomplish this purpose the most successfully; that what substance a community should employ, is none of the concern of the government; its only concern being, so to prepare the substance employed, that it may be used with the greatest common advantage.

Now the same remarks manifestly apply to whatever may be used as a circulating medium, whether it be gold and silver, or paper. Hence,

1. A government has no right to interfere with this question, and enact any law, or take any measures in regard to it. If the people choose to use a paper currency, instead of a metallic currency, they have a right to use it, and no one, either individual or associated, has any right to control that use. If I present a check to a bank, and they offer me in payment either specie or bills, and I choose to take their

bills, it is a matter wholly of my own concern. I ask permission to make this choice, of no one on earth. If I have a thousand dollars to pay in New Orleans, and I choose to take the bill or the draft of a bank, and send this in payment instead of the thousand dollars in silver, and my creditor receive it in payment, if both he and I are satisfied, no one has a right to interfere. And if any one, whether individual or society, whether government, judicial, legislative, or executive, see fit to interfere, my only and sufficient reply to each and to all of them is, that it is, distinctly and particularly, none of their business.

2. But, although a community may choose a paper instead of a metallic currency, and although they have a right to choose it; neither any community, nor any individual of a community, chooses either a worthless or a fluctuating currency. While, therefore, a government has no right to enact, that a currency shall be any thing else than the people wish it to be, they have a right to take all proper means to make it such as the people wish it to be. Hence,

1. They have a right to take such means as will be likely to give all reasonable security to a paper currency. These means have respect, in general, to the liability of directors and stockholders to redeem their bills. In what manner this security can be best effected, it must be left to practical men to decide. In some cases, all the property of all the stockholders is rendered liable for the debts of the bank. This would commonly be a perfect guarantee. In other cases, I believe, the property only of the directors is held liable. In what way soever security can be best and most equitably effected, I think a government has a right to effect it.

2. A government has a right to take all reasonable means to diminish the fluctuation of a paper currency. We have seen that, inasmuch as the banks promise to redeem their bills in specie, the amount

of paper which they may safely issue must always depend upon the amount of specie in a country. Fluctuations in the amount of paper must follow fluctuation in the amount of specie. This fluctuation will always be less, when the proportion of specie to paper is great, and vice versa. One method, therefore, of preventing this evil, is, so to construct the currency, that the proportion of specie to paper shall be too great to be effected by any thing but large and long continued exportations of the precious metals. This result may be in part effected by the prohibition of the issue of small bills. This will, by necessity, place in the hands of every individual, specie for every amount which he may hold of less value than the lowest note issued. Were no bank in this country to issue notes of a less denomination than five or ten dollars, most of the sums held by individuals, in notes of one, two, and three dollars, would be in silver. If every individual of the twelve millions in the United States, possessed two dollars more in specie than at present, this would amount to twenty-four millions more of specie than we now possess. This would, of itself, be sufficient to prevent the evil arising from any ordinary fluctuation.

In addition to this, I suppose that an exact account should be kept, and at short periods made public, of the amount of specie imported and exported. This would give to the banks, timely notice of the danger, and, at the first intimation of excessive issues, they might curtail their discounts, in season to avert the evil before it became excessive and remediless.

So far as I can discover, the power of a government over a paper currency, is conferred solely for the accomplishment of these two objects; and, of course, it is restricted to the accomplishment of these two objects. A government has no right to interfere with it, for any other purpose. It has, for instance, no right to interfere with the currency, because the people import too much, or because they import too

little, because they buy too much land, or because they buy too little land, because they over-trade, or because they under-trade. Its power was conferred for no such purpose, and to use it for such purpose, is usurpation. To all such interference, the proper answer to be given by the individual to the government, is, that all this is none of your business.

But, other grounds for legislative interference with banking institutions are assumed, which, if correctly assumed, are of a very extraordinary tendency. Some of these, it may be proper for us briefly to consider. For instance, it is said, that banks are the creatures of the legislature; and that bank directors are the agents of the legislature; and, therefore, that a legislature may rightfully exercise over them any authority which it chooses; and may impose upon them such laws as it sees fit. Such an assumption as this, deserves at least a passing notice.

1. It is asserted that a bank is the creature of the legislature; and, therefore, that a legislature may rightfully impose upon its creature such laws, and subject it to such jurisdiction, as it pleases.

The assertion is somewhat figurative. What is meant when it is said that a bank is a creature of the legislature? In what does a banking company differ from a banking individual? The only difference, that I can discover, is, that one is incorporated by a legislative act, the other is not.

What, then, is an act of incorporation? It is merely a power granted by a legislature, to several individuals, to do, as a society, some innocent act, which they may thus do more conveniently, but which any one of them might, if he saw fit, do without any act of the legislature. I say some innocent act, for what is not innocent, should be allowed neither to individuals nor to societies.

The necessity of such a provision is manifest. Many innocent purposes can be accomplished, only by many persons associated together. Such are purposes of charity, of science, of internal improve