I. To be uniform in value throughout all portions of the country.

II.  To be perfectly reliable at all times as a medium for the payment of debts.

III.  To be issued in limited amounts, and under the control of the Government only.

IV.  To be convertible, at the pleasure of the holder, into gold or silver.

It must be conceded that these requisites do not belong, and never can belong, to paper issued by joint stock banks, which are governed with a view to the largest profit, and which are but little known beyond their own immediate localities.

Recent history assures us that abuses have been practised in reference to the bank circulation of the country, which have led to violent revulsions and severe loss.  England experienced the same results between the years 1790 and 1840, and to such an extent that in the year 1844 her statesmen devised a system whereby no further expansion of paper money should occur.  The amount then existing was assumed to be a minimum of the amount required for commercial transactions, and it was ordered that all bank issues beyond that sum shall be represented by a deposit of gold.

If the Bank of England had been governed by considerations of public welfare, and not by those of private interest, it would not have reduced the rate of interest to 2-1/2 per cent. in 1844-’5, thus producing violent speculation, and leading to the revulsion of 1849.  Nor would the bank have established low rates of interest only in the year 1857, thus leading this powerful institution to the verge of bankruptcy, and to the clemency of the British Cabinet in November of that year.

England has checked the paper circulation of the country, but has not withdrawn from the bank the power to promote speculation by extravagant loans at a low rate of discount.

The Governments of France and England have both assumed control of the paper currency of their respective countries.  This is sound policy, and it is one of the prerogatives that must be exercised, in its full force, by the Government of the United States and by all other governments, if stability, permanency, consistency are to be observed or maintained for the people.  This is obviously necessary in a time of peace and prosperity; it is perhaps more so in a time of rebellion or war, like the present.  Circumstances may arise where it will be the course of wisdom and safety to suspend specie payment; and, in some extreme exigencies, to forbid the export of specie.

This position was well explained by Mr. J.W.  Gilbart, manager of the London and Westminster Bank, who, in his testimony before Sir Robert Peel, in 1843, said, ’If I were prime minister, I would immediately, on the commencement of war, issue an order in council for the bank to stop payment.  I stated also that I spoke as a politician, not as a banker. * * * I came to the conclusion that, under the circumstances of the war of 1797, a suspension of cash payments was not a matter of choice, but of necessity.’ (Vide ‘History of the Bank of England,’ New York edition, p. 130.)