Now, should any cause operate by which confidence in the solvency of the general banking system of the country is shaken, it will naturally, nay, inevitably happen that a run will be made on the savings institutions. These can only meet their engagements by drawing on the banks. But, if these have all their resources strained to meet the ordinary wants of the business community, how can the drafts of the saving banks be met? How can currency be supplied for this extraordinary demand? This question can only be intelligently answered by reference to the condition of both these kinds of institutions. We will, for this purpose, take the currency of Massachusetts as it stood in 1860: This is exhibited in Currency Diagram No. 6. Here, then, are legal immediate demands, upon the currency banks, of fifty-five millions; and, upon the savings banks, of forty-five millions. Suppose there should arise some dissatisfaction, or public uneasiness, which should prompt to a run on both these kinds of banks. It certainly is possible, not to say probable. Suppose that the institutions for savings are called on for only one-fourth of their deposits. They must look to the banks for eleven millions of currency at once. The banks begin to pay out their bills; but the specie is at once demanded, and of that they have but six and one-half millions against their own immediate liabilities of fifty-five millions. They could not stand a run of two days, because their own deposits would be drawn in specie just as soon as the real state of affairs was discov What ered. The banks must, therefore, suspend at once. It is not enough to evade this, by saying that such an event has never happened, though the banks have several times suspended. That is quite true; yet it does not follow that it never will. Previous suspensions have originated in commercial causes. Suppose, on the other hand, a run were made on account of political or social disturbances; that the laboring class-factory operatives, railroad gangs, the servants in our families were incited to demand their deposits in the savings institutions. Could they not prostrate the entire currency in twenty-four hours, by merely demanding their just dues? Whether such a probability is remote or uncertain, it does not seem wise to maintain a system which can, by any possibility, produce results so disastrous; especially, if there are no advantages whatever in such a state of things. Premonitory symptoms have not been wanting of such a catastrophe as, under aggravating circumstances, might overthrow all the moneyed institutions of the country, and even endanger the government itself. We are not the homogeneous people we were. We have elements of weakness and discord that did not exist in earlier times. We have, especially, a large foreign population, as much interested as any other in the funds of our savings institutions, which might, at any moment, if provoked to do so, throw our whole banking system into suspension. It cannot be wise to ignore these palpable facts, or the consequences that, in the natural course of things, are likely to come out of them. The danger can only be removed by a change of system. II. A mixed currency has a demoralizing influence upon a community, industrially and socially. 1 If what has been said in regard to this kind of currency is correct, such an influence cannot for a moment be questioned. If it excites to wild and extravagant speculation at one time, and plunges its victims into bankruptcy and ruin without fault at another; if it excites hopes and expectations which must necessarily come to disappointment and distress; if it increases to an enormous extent the natural risks of trade, and exposes all business operations to an incalculable hazard, then the mercantile character and the general tone of morals cannot but be unfavorably affected. The influences that hold men to strict probity, steady industry, and a strong sense of honor, are feeble enough, and have enemies enough, without the discouragements and embarrassments arising from such causes as we have described. Society should place its premium on virtue, and not on vice. Those who have witnessed the terrible convulsions occurring in the United States within forty years, know but too well how sad has been the effect on individual and national character. It is unnecessary to dwell upon a point so evident, and so generally admitted by all who understand the matter; yet its recognition could not properly be omitted in the examination of the mixed-currency system. III. A mixed currency endangers the national safety in war. With the existing ideas and institutions of society, and while no preparations are made in time of peace to prevent the recurrence of war, but every effort to meet it, and thus, of course, to strengthen and perpetuate the war system, it becomes a matter of great interest to inquire as to the effects of a mixed currency on the safety of a nation in the event of war. We have already shown that a mixed currency is greatly affected by a demand for specie to send abroad. Hence, as war must always call for an extraordinary importation of foreign merchandise and materials, and as such extraordinary importation must require the shipment of specie, a contraction and panic, or speedy suspension, must be the certain consequence. Again, since so great a part of a mixed currency usually consists of credit, and since credit rests wholly on confidence, any thing which impairs the latter compels a contraction or withdrawal of the currency. Now, war generally, we may say uniformly, does this: for how long it may last, how great may be the demand for money, how large the destruction of capital, and what the final issue, must be a matter of doubt; and therefore its occurrence always impairs public confidence to a greater or less extent. These two causes, then, are at once brought to bear upon a mixed currency with fatal effect. The result has always been, and always must be, that, under such circumstances, the mixed-currency banks suspend; because their circulation cannot be withdrawn at the time without producing universal bankruptcy, annihilating their own capital, and stopping the wheels of government. It was so in England during the war with Napoleon; in the United States during the war of 1812, and in the time of the great Rebellion. What comes in consequence of all this? The nation is obliged to carry on its vast pecuniary operations with a broken-down currency. This, of course, involves the finances in great embarrassment, vastly increases the public expenditures and the national indebtedness. The whole financial system of the country is crippled, and becomes as weak as its currency. No better illustration of the truth of this statement was perhaps ever afforded than that found in the experience of the United States during its great struggle. The country was suddenly involved in a stupendous war, -technically, only a civil war, but, practically, a great international struggle, so vast were its dimensions, so strictly was it sectional; a conflict between two different civilizations, on different though contiguous portions of the American continent. At the commencement of the struggle, the currency, as we have before said, amounted, circulation and deposits, to four hundred and sixty millions against eighty-three millions of specie. Upon the mere threat of secession, so greatly did it impair public confidence that the banks at the South began to suspend; and their example was followed until most of the Western, and many of the Eastern, were in a state of suspension. After the first shock had passed by, most of the banks in the loyal States resumed specie payments; but the large demands of the government, in the course of about a twelvemonth, compelled a universal suspension by both the national treasury and the banks, and the whole country was thrown upon an irredeemable paper currency. All this happened, not because the currency was so redundant, but because it was so unsound. Had it been based in full on specie, this disastrous result would have been avoided. Now, if it ever could be supposed politic or safe to send away the real money of a country and live on credit, if this could ever be regarded as good economy or statesmanship, when should it be done? When the nation is in prosperity, and does not need this little gain, or when it is strained to agony in the struggles of war? If this is really a resource, should it be spent in time of peace for extra imports of wine and silks, or reserved to the great trial of life for the people, when it may bring back the munitions of war? If we were to dispense with three hundred millions of gold that form our material currency, was it wise to send it off in years of quiet and prosperity, instead of reserving it to the decisive hour of our nationality? In time of war, a mixed currency always becomes an un |