A Confederate Bank.
--Mr. Langdon Cheves
, of South Carolina
, has written an elaborate reply to the late letter of Gen. Toombs
on the subject of the currency.
He is said to be a son of the illustrious statesman and financier whose name he bears, and who was one of the purest and best of the Southern
post revolutionary patriots.
The son seems to be worthy of the sire, so far at least as ability is concerned.
Nevertheless, we feel disposed to criticise some of his positions.
For instance, he says:
"The real danger to the country is, not so much from the Confederate
issues, as the leal struggle or conflict that will arise between the Confederate
currency and the Sate local currency as furnished by the banks.
If peace should be obtained upon its basis of our independence, then the Confederate
currency will be too strong for the lead bank currency, and so many large capititists will be interested by purchase of bands and credits, that they will strengthen the Confederate
currency, even to the overthrow of all local bank currency.
The first great defraud will be for a Government Exchequer Bank, which will submit to no commission from all the local banks.
There will be a strong State necessity to submit to is order to prevent a greater national evil, which would be national bankruptcy, and the management of our vast debt and Government credits exclusively by a Secretary of Treasury
, which would be too much power to place in the hands of any one man, as its exercise would deeply affect the distribution of wealth in the Confederacy
for generations to come.
So, as a political financial necessity, a National Bank in some form will come, and when it comes it will crush the State
Now, there is a law governing this matter of two currencies circulating at the same time — so strong that it might almost pass for a law of Nature.
The more indifferent will always be sure to drive the better out of circulation.
The better will be hoarded or used in foreign trade, or deposited in the banks.
Every man who has money to pay will pay it in the more indifferent currency, as almost everybody has had personal experience.
Unless, then, the Exchequer Bank
in question, buy up the notes of the State
banks for the express purpose of making a run upon them, or refuse to take them on any account, or use other means, direct or indirect, to impair their credit, we do not understand how they are to be overthrown.
It seems to us that a Confederate Bank might be constructed, subject to none of the objections put forth by Mr. Cheves
We are a Confederacy of States.
Each State is a nation within itself.
We have formed a partnership for certain purposes, and each State has the right to leave that partnership when it finds that it is convenient or useful to do so. We have a general agent here in Richmond
, which we call the Confederate Government, and which manages the affairs of the firm.
Now, why not take a hint from the structure of the system under which we live?
Surely a bank, to which every State contributed a portion of its general treasure proportionate to its representation in Congress, taking stock in the same proportion, would not be liable to the objections which can be alleged against an Exchequer Bank.
The States could, each, have its branch or branches, and be at perfect liberty to withdraw from the bank, as, they now are from the Confederacy
They could have a general agent at some one point, as the Confederacy
has now here in Richmond
The check upon this general agent would be too powerful to admit of the supposition that it would interfere with any State banks doing an hoariest and lawful business.
The States would not suffer it.
No Confederate bank, we imagine, will ever be established without taking care to separate the functions of issue and discount.
The immense benefit that has been experienced in England
, from such a divorce, could not possibly be lost upon statesmen and financiers in this country.
A Confederate bank ought to be established, if established at all, principally with a view to regulate the currency.
It ought, indeed, to be so constructed, as to possess the power to restrain the excessive issue of State banks, and to furnish a currency of universal credit.
And therefore it ought to be under the complete control of some power or other.
The ordinary business of banking ought to be a matter of very inferior consideration in the construction of such a bank, and should be placed under the strictest limitations.