The credit system in France, Great Britain, and the United States

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1838 Excerpt: ... currency 50 millions. There would be a strong tendency to an increase in the amount of issues, and an increase in the rate of profit. A further portion of the gold would go abroad. Affairs would now stand thus: Capital,--70 Loans,--100 Paper circulation,-45 Gold in bank,-15 Gold in circulation,-5 Gold in circulation, 5 120 120 Five millions of circulation, being rendered unnecessary for the performance of exchanges, in consequence of the further increase of confidence and of the increased number of banks, may now be converted into the capital of new banks, with a view to obtain a share of the profit resulting from this increase of loans, and the account will now stand thus: No 7. Capital,-75 Loans,--100 Paper in circulation, 40 Gold in bank,-15 Gold in circulation, 5 Gold in circulation, 5 120 120 Here we have a constant improvement in the security and in the economy of the currency. In the first there are 60 millions of liabilities with only 10 millions to meet them, and this insecure currency is maintained at the cost of the wear and tear of 40 millions of gold. In the last there are 45 millions of liabilities, with 15 millions of gold to meet them, and the total cost of this secure currency is the wear and tear of 20 millions. In the first, the state of the currency is dependent upon a few men, directors of the Bank of England, who have, on various occasions, proved their total incapacity for performing the duties of regulators, while in the latter it is regulated by the laws of nature. In the first, a departure of half a dozen millions from the true course of policy might take place without being marked, except by the few who study the returns of the bank, while in the last it would be marked by all those who possessed capital and desired to invest it,...