Organization of Debt into Currency and Other Papers
by Charles Holt Carroll
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Chapter 13
New Views of the Currency Question, II
(Reprinted from
The Bankers Magazine and Statistical Register, XIII (May, 1859),
833-42.)
The currency of this country, as I stated in your March number, is approximately
two-thirds debt and one-third money; the proportion of debt being greater than in
any other convertible currency in the world. A very large portion of the circulation
is below the denomination of five dollars; one pound notes being the lowest known
elsewhere, and these only in Ireland and in Scotland. This description of currency
is co-existent with the Bank of England, and, with the bank itself, appears to have
arisen from a public exigency. During the reign of the Stuarts the public finances
were in continual disorder: their rapacity and extravagance, coupled with the absolute
needs of the government, were the chief causes of the political complications that
cost the monarch Charles I his throne and his life. On the Protestant accession
of William III the financial difficulties were at their height. At the same time
the war with France required large sums of money, which were raised with extreme
difficulty and at great sacrifice; frequently the parliamentary grants yielded to
the national exchequer but half their amount, owing to the necessity of anticipating
the taxes and to the bad credit of the government. Tallies—notched sticks—then
the vouchers of the public debt, were at 20, 30, and sometimes 40 per cent discount.
Commissions and various extortions of the goldsmiths, who were the bankers
of the kingdom, and of the tax-gatherers, completed the reduction.
In this emergency a Scotchman—William Patterson—devised the scheme of raising money
for the support of the war by taking it from the currency and the country, and putting
debt in its place, through the instrumentality of a chartered bank. For this purpose,
and on this plan, the Bank of England was chartered and went into operation in 1694.
The subscribed capital was £1,200,000, all to be loaned to the government for an
annuity of £100,000 per annum, being 8 per cent for interest, and £4,000 for expense
of management. Six per cent, or £72,000, of the capital was called in, and then
the whole sum of £1,200,000, was paid in to the government exchequer, but
how? Simply by making and passing to the exchequer, in the form of bank notes, promises
to pay money the bank did not possess, in exchange for exchequer tallies—promises
to pay money the government did not possess, nor ever have possessed to this day,
for it was the commencement of the present oppressive and irredeemable national
debt.
This, stripped of all its complications, is the principle of convertible debt banking;
it is borrowing evidences of debt without interest, and lending counter evidences
of debt at interest. In its origin, as here stated, it is plainly seen; but when
complicated with deposits, absolute and fictitious—with the circulating notes and
coin, and the intertwining of debt through the whole system—the public mind is
thoroughly befogged with it. Nothing is created by this operation but debt—no capital,
value, or wealth whatever—but price is added to commodities thereby as
effectually as if so much gold had been produced or earned by labor and added to
the currency, and multiplied obligations of debt succeed —promises to pay value
that never existed, and which consequently cannot be ultimately paid. If the subscribers
to the stock of the bank had paid in the £1,200,000 loaned, it would have been all
right; a value in that portion of the currency would simply have been transferred;
it would have added nothing to the currency—nothing to prices—nothing to the pecuniary
obligations of the people. But as it was, the system was then inaugurated of adding
convertible debt to the currency which should be money, degrading its value, expelling
the money, limiting the exports of merchandise, and transacting the business of
the country with debt.
There is a discrepancy in the early accounts, regarding the proportion of money
paid in to the capital stock of the bank; Francis, in his history of the bank, unaccountably
stating it to have been twenty-five per cent, when he might and ought to have had
access to a pamphlet published in 1695, by Michael Godfrey, the Deputy Governor,
in which the amount is distinctly put down at £72,000. Godfrey says:—
Some find
fault with the bank because they have not taken in the whole £1,200,000 which was
subscribed, for they called in but £72,000, which is more than they now have occasion
for. But, however, they have paid into the exchequer the whole £1,200,000 before
the time appointed by act of Parliament, and the less money they have taken in to
do it with so much the more they have served the public, for the rest is left to
circulate in trade, to be lent on land, or otherwise to be disposed of for the nation's
service.
This ridiculous sophistry lies at the foundation of the prevailing system of banking
to-day. Here were men, by calling themselves and being called a "bank," taking a
clear interest of 8 per cent per annum on their own "bills payable"—the expense
of management being otherwise provided for—6 per cent only of money being used in
the business. That the sum paid down was no more is obvious from the following account
presented by the governor and directors of the bank at the bar of the House of Commons
on the 4th December, 1696:
| DEBTOR |
|
£. |
s. |
d. |
| To sundry persons for sealed bank bills standing out |
893,800 |
0 |
0 |
| To sundry persons on notes for running cash |
764,196 |
10 |
6 |
| To moneys borrowed in Holland |
300,000 |
0 |
0 |
| To interest due on bank bills standing out |
17,876 |
0 |
0 |
| To balance |
125,315 |
2 |
11 |
|
|
| Total |
£2,101,187 |
13 |
5 |
| CREDITOR |
| By tallies in several Parliamentary funds |
£1,784,576 |
16 |
5 |
| By one-half year's deficit of fund of £100 per annum |
50,000 |
0 |
0 |
| By mortgages, pawns and securities |
230,946 |
15 |
2 |
| By cash |
35,664 |
1 |
10 |
|
|
| Total |
£2,101,187 |
13 |
5 |
Mr. Lawson, in his history of the bank, remarks that the item of £35,664 was all
the cash the bank had on hand to pay their notes amounting to £1,657,996 10s. 6d.
The truth is the bank was in a state of suspension in 1696, on account of this preposterous
expansion of liabilities and the recoinage of silver then taking place, which temporarily
removed so much coin from circulation, that, with the amount forwarded to maintain
the war in Belgium, they could not pay their notes. It is evident that 25 per cent—£300,000
of the capital—was not paid down as stated by Francis; if it had been,
every reader acquainted with accounts will see that it would appear in the balance
of the above account, which, including the capital, is but £125,315 2s. lid., just
enough to cover the £72,000 and its gains.
The Bank was making large gains; it was receiving 8 per cent per annum over expenses
on a capital not paid up, and then a further sum, not stated, on the loan of its
notes.* It had paid two yearly dividends of 8 per cent each, and accumulated in
two years £53, 315 2s. lid. beyond the £72,000 of capital called in. It appears
from the foregoing account that the Bank had made an arrangement to pay interest
on a portion of its notes, probably at the rate of 4 per cent per annum. D'Avenant,
a writer of that day, makes it a subject of complaint. He says: "It would be for
the general good of trade if the Bank were restrained from allowing interest on
running cash; for the ease of having 3 or 4 per cent without trouble, must be a
continual bar to industry." He does not observe the distinction stated in the
balance sheet between the running cash and the sealed bills: doubtless interest
was allowed on the sealed bills only. It will be observed that the interest due
of £17,876, as stated in the balance sheet, is precisely 2 per cent on £893,800,
the amount of the sealed bills; being 6 months' interest without doubt. The tallies
bore interest at the rate of 8 per cent per annum. Altogether this must have been
a pleasant business for the stockholders. Their £72,000 invested in 1694 had earned
them in two years, clear of expenses:
| Two dividends of 8 per cent each |
£192,000 |
0 |
0 |
| Surplus profits undivided |
53,315 |
2 |
11 |
|
|
|
£245,315 |
2 |
11 |
A very handsome return,
certainly, for the investment of only £72,000. The holders of the bank notes were
taxed this sum without knowing it, and the notes handed in to the exchequer were
exchanged for coin that was sent to Namur in Belgium, for the prosecution of the
siege of that place, the success of which was attributed to the remittances thus
obtained. A sum of money was thus drawn, under a disguise, from the pockets of the
people, which they would hardly have paid as a direct tax, and the nation was drained
of so much real capital by the substitution of a fiction of capital in its place.
It would exceed the limits and design of this article to pursue further the elaborate
history of the Bank of England. I merely present these early figures of the institution
to show the distinction between the inconvertible currency previously existing,
as described in my former communication, and the convertible currency created by
the Bank, and used as equivalent to money, in their relative effects upon commerce
and wealth. The former cannot long retain the power of money, if the smallest fraction
in excess of the true specie measure of currency is created thereby. It soon falls
below par, and, although it may be employed as a medium of exchange at a reduced
valuation, does not degrade the value of money, because it comes to be valued in
money like any other debt or public stock. The Bank of England notes, during the
suspension of specie payment at the recoinage of silver in 1696, fell to 20 per
cent below par, and again during the long suspension from 1797 to 1821, they were
below par a great part of the time, being an organized circulating debt valued,
according to its utility and scarcity, in gold and silver. The three per cent consols
of England could be employed as a circulating debt in buying and selling at 5 per
cent below par to-day, perhaps, but they could not be money or currency—themselves
the measure of price—without immediately exhausting the coin and bullion of England.
No doctrine of political economy is better established than that of Adam Smith,
that no community having an open commerce can maintain a volume of currency, in
relation to commodities, exceeding that of any other community accessible to a direct
or indirect trade. It follows that if the public stocks of England were available,
or used, as currency, amounting as they do to nearly four times the currency of
the kingdom, all the coin would be exported or retreat into hoards, and the stocks
would fall to about one-fourth of their nominal value. In truth, therefore, inconvertible
paper promises to pay, unless the whole volume of currency of which they
form a part is less than the relative proportion of specie to commodities existing
elsewhere, do not act as money or currency, but when they do not cause the currency
to exceed that volume they do so act. Thus there was a considerable period during
the suspension of the Bank of England, between 1797 and 1821, when, the issues of
both notes and credits being carefully restricted, its notes were at par with gold
and silver, but the moment the specie measure was exceeded by those issues they
fell, and the curious position was taken by many intelligent writers, that the trouble
was in the rise of bullion and not in the fall of bank notes. This also explains
the condition of the debt currency of New York at and after the suspension of specie
payments in October, 1857. By the previous severe contraction, the whole volume
of currency was reduced below the true specie measure in proportion to commodities;
consequently its value was maintained at par; specie rushed to New York, as the
creditor city of the country, from all directions, along with our domestic products,
which were abundant all over the country, and were exported to Europe in double
the quantity sent forward in the same period of time the previous year, notwithstanding
the abundant crops there. Exchange ruled for a time 8 to 10 per cent in our favor,
and gold commenced to return rapidly from Europe, but all this did not suit the
dividends of the banks; they immediately ran up their loans, checked the export
of commodities, piled up the flour and other products till the warehouses of the
city broke down under the weight, turned the rate of exchange against us—of course
stopped the inflowing of gold, and turned the stream outward again. So we returned
to our old folly of selling our money, keeping our merchandise, and living in debt.
Now, this is the distinction between the two sorts of currency we are considering.
An inconvertible debt currency may be used like a convertible one, to the limit
of the specie measure without degrading the value of money, and without checking
the export of commodities or causing the export of specie; but when increased it
will reduce its own value, or price, just in the proportion that the whole currency
exceeds the true specie volume. On the contrary, the convertible currency, by being
equivalent in use to gold, degrades and expels specie by adding itself to, and exceeding
the specie measure at once. It adds itself to the price of things, checks the exports,
attracts the imports, and causes an absolute loss of its whole amount to the country
or community that employs it. The inconvertible currency only degrades itself, while
the convertible degrades the value of gold and silver until it displaces them, and
occupies their place.
It is owing to the prevailing and fallacious notion that money is a measure of value,
fixed and absolute, that its degradation is not perceived, but when the power of
money to purchase commodities declines, by reason of the increase in the volume
of currency offered in exchange for them, it is the value of the money that falls,
and the price, not the value of commodities, that rises. We continually
waste our gold by not comprehending this operation of the law of value. I have demonstrated
this in your pages before, but the subject is so important that the demonstration
will bear repetition.
Let us suppose that the United States possess an exclusively metallic currency amounting
to five hundred millions of dollars, and adopt one commodity as the representative
of all the others—wheat, for example. With this volume of currency wheat is saleable
for export we will suppose at $1 per bushel, that being the exporter's limit, because
at the same or a trifling higher price he can buy it in the ports of the Baltic
or Black Sea. Now, if we go into the debt banking business, and by exchanging notes
and credits with the banks, add one hundred millions of convertible dollars to the
currency, without increasing the supply of commodities, we shall infallibly stop
the export of wheat by raising its price in the ratio of the increased currency,
i.e., 20 per cent; wheat will be $1.20 per bushel. We must pay for the imports,
and, as wheat can no longer be shipped, the exporter will ship $1.20 of gold instead,
with which he will buy in the Baltic 20 per cent more of wheat than he can buy here
with the same sum of money. The 20 cents of currency thus added to the price of
the bushel of wheat is not value, for no property was created with or by
the additional currency; it is price—a mere fiction of value; but it is
no fiction in its effect upon gold; it is a depreciation of its value, and what
we have done is to sell $1.20 of gold for the value of $1; for one dollar is the
true value of the bushel of wheat left in its place. This operation will continue
upon the average of commodities, some of which, like cotton, owing to our natural
advantages, may still be exported, but lessening in degree until one hundred millions
of gold is expelled, and the one hundred millions of bank debt fixed in the place
of the gold, when the volume of currency will stand in amount as before, but different
in character, four hundred millions being money and one hundred millions
debt, and prices return to their normal position. Then, the demand for
gold to export having stopped and merchandise furnishing our means of paying debts
abroad, the banks, by the law of their existence, must inflate again; they can make
dividends only by lending their debt; they add another one hundred millions of debt
to the currency, which again adds price without value to commodities
accordingly, stops the export of merchandise to the amount of one hundred millions
of dollars, increases the import of commodities attracted by our high prices, many
of which come into competition with our home labor, expels another one hundred millions
of specie; and, after the usual fall of prices, revulsion and bankruptcy, we fall
back again upon the natural volume of currency, now still more unnaturally constructed
of three hundred millions of money and two hundred millions of debt. This operation,
stimulated by the competition of the banks for dividends, will be repeated as money
is earned and brought into the country, until it is restricted to the narrowest
limit that will maintain specie payments. This limit depends upon no law, but so
much upon the uncertain forbearance of creditors, that it can never be accurately
determined and guarded against in advance; it is continually being exceeded by individual
banks and they break: three times it has been so generally exceeded by all the banks
in the country, as to cause a general suspension of payment, namely, in 1814, '37
and '57. In 1837 the average of specie to their immediate liabilities held by the
banks was as nearly as can be ascertained $13.70 to the $100, and in 1857, $13.60
to $100; yet in New England, so great is the preference for debt and the competition
of the banks in organizing it into currency, they frequently hold but 10 per cent
of money to their demand liabilities on the average, and in Rhode Island alone sometimes
only 4½ per cent.
But there is still a large amount of specie in the country beyond the reach of the
banks, and yet within the limits of the currency; that is, not in hoards. I think
this rarely amounts to less than one-third of the total currency of the country.
No doubt this is the more sluggish portion, the most active part of this being where
it is least suspected, namely, in the reserve of the banks, where its ownership
circulates rapidly without the removal of the coin itself: from this it varies to
the slow-moving stocking deposit of the Dutch farmer and the uncertain confines
of the hoard.
In the argument I now have to offer upon the most destructive principle of our mixed
currency, I propose to assume this money portion of it to be one-third, not inferior
in activity to the debt portion of two-thirds. We had in 1857 four hundred millions
of bank circulation and inscribed credits, and two hundred millions of money, making
altogether six hundred millions of currency in the whole country, and we shall soon
have the same amount again.
Everyone knows that the money of every nation constitutes but a small portion of
their property; the currency, however constituted, is always the same in volume,
permanently, as the circulating volume of money would be if the currency were all
specie. The proportion of currency to the whole property of this country and of
most commercial countries is and must be approximately as 1 to 25. I consider this
ratio so well determined by natural laws, that if I would estimate the whole amount
of the property of the United States I would rather know the sum of the currency,
and multiply it by 25, than to have the most elaborate statistics otherwise prepared.
But Secretary Guthrie's estimate in 1855 confirms this ratio. With great labor he
collected statistics from all parts of the country, and concluded that the whole
property of the country then amounted to $11,317,611,000. This is nearly the sum
of the currency of that year multiplied by 25; but the estimate is a little too
low, as Mr. Guthrie thought himself.
On this ratio, the volume of our currency being six hundred millions, the whole
property of the country in and out of market amounts to fifteen thousand millions
of dollars. Of this about two-fifths is constantly offered for sale, or, in the
language of political economy, "in circulation," to be exchanged against the whole
sum of currency. The relative activity of currency and property is therefore as
10 to 1, every dollar of currency performing the average circulation of ten dollars
of property; thus we have on the average six thousand millions of property constantly
in circulation reciprocal with the currency. It is perfectly obvious that the two
hundred millions of money circulates, or may circulate, the average amount of two
thousand millions of property without debt, and its function being thus employed,
the other four thousand millions of property must be circulated through the medium
of the four hundred millions of bank debt. However these two portions of the currency
may mingle in their operations, it is quite certain that the average effect must
be to distribute two thousand millions of property in sales for cash, and four thousand
millions in sales on credit, and that four thousand millions of dollars in obligations
of debt must exist, depending for the means of discharge upon the wholeness of the
four hundred millions of debt currency, that can only be maintained by continual
renewals of debt and discount. Now it is utterly impossible to maintain the integrity
of this portion of the currency; it will expand with the forbearance of creditors
to demand specie to the utmost limit of the safety of the banks, and it will contract
five or ten dollars for every dollar of specie withdrawn for export, according to
the proportion of specie to the immediate liabilities of the bank that may happen
to be drawn upon. Every dollar of its expansion will add ten dollars of price
without value to the aggregate of property and to obligations of debt accordingly,
that must rest upon it for the means of discharge; and every dollar of its contraction
will destroy the ten dollars of price before created, and stop the payment of that
sum of the money obligations of the people to each other.
In August, 1857, the total currency of the United States exceeded six hundred millions
of dollars: I think it was six hundred and ten millions. This was reduced by the
curtailment of bank loans one hundred and sixty millions in two months, from the
middle of August to the middle of October. I have not any doubt this stopped the
payment of one thousand six hundred millions of debt in the fall and winter of l857-'58,
much, probably most, of which was among small traders and producers all over the
country who are unknown to banks or mercantile agencies, it being for the interest
of all parties concerned to be silent upon the subject, and large amounts were compounded
without open defalcation. This sort of curtailment is very different from that produced
by the export of specie. Specie cannot be taken from us without being bought—a value
takes its place that will command specie in a re-exchange with another nation or
community. It is entirely impossible to go far in reducing the currency by merely
exchanging specie for commodities, because every step in that direction tends to
equation; commodities fall in price and money rises in value—things come to a level
directly. But the curtailment of bank loans is a mere exchange and offset of one
debt against another; no value remains; it is the annihilation of so much of price
with so much of the currency. The most prudent man is liable to be ruined in this
way if he happens to be in debt when the curtailment takes place. A man may be worth
$10,000, owing $20,000, and having $30,000 assets. A contraction of the currency
that reduces general prices one-half sinks not his net estate merely, but the means
of his debtors, and his whole assets of $30,000 to $15,000; he is now bankrupt $5,000,
without any fault or imprudence of his own. I knew several as severe and honestly
unfortunate cases as this in the winter of l857-'58.
There is another mischievous power in the debt currency that is seldom considered.
Commodities pass through five exchanges from the raw material to the consumer on
the average; the continual loss of debts by our expanded credits compels the traders
to charge a large percentage on each sale, to cover the risk this system entails
upon them. This charge by wholesale and retail dealers is believed to average not
less than 4 per cent on each transfer; thus commodities reach the consumers burdened
with about 20 per cent of price to cover this abnormal risk: producers must be repaid
this change, and of course add it to the cost of their productions, which thus come
into the world's market, greatly at disadvantage, in comparison with those of every
nation possessing a more valuable and stable currency. The obstacle to our export
trade created by this is very great, but has never been estimated. These five exchanges
from the raw material to the consumer, going and returning, complete the circle
of ten that I assume as the average relative activity of the circulation of currency
and property.
The popular cry against a bullion currency exclusively is "the fall of prices" that
would result therefrom: this is a groundless conceit, scarcely creditable to the
intelligence of our bankers and merchants. How long should we retain flour, wheat,
beef, pork, or any other product if it would pay five, or even one per cent more
profit or less loss than gold in balancing the account of our imports? Not a moment
longer than the time necessary to disclose the fact. Commerce is lynx-eyed in this
matter, and never permits gold to leave the country, when it is appreciably more
valuable here than merchandise, and never detains it when its value is appreciably
less. London being the centre of commercial exchanges, the exchange on England determines
whether our prices are above or below the specie measure, and the rate of exchange
is the true exponent of the deviation. One-eighth of one per cent difference of
value between gold and the average of merchandise will at any time determine whether
gold or merchandise shall pass either way between Boston and New Orleans, or between
London and New York. There is a singular delusion in the minds of men on this point,
in the face of facts of daily experience. What we do with our debt currency is to
degrade the value of gold and silver only so far as to make money cheaper than merchandise,
expel the money, keep the merchandise, and thereby prevent the accumulation of wealth
in the creation of more merchandise to the same extent, substitute debt for money
in our exchanges to the utmost limit, extend credits to 8, 10, and 12 months, and
forever; keep a stream of bad debts in the current of trade that gather at times
to a torrent, and sweep the fortunes of the enterprising and industrious into the
pockets of capitalists, and spread anxiety and wretchedness broadcast among the
people: but as to the aggregate wealth of the country, it makes only the difference
of about $50,000,000 yearly loss in the export of specie, with the profit that
so much capital would earn. Mostly the operation is to plunder the debtor, and give
to the creditor, by a transfer of capital in our own country, making no difference
in our aggregate wealth in this respect, excepting so far as the general embarrassment
suspends production.
Who would discover a difference of price, more or less, in commodities of 1/8 or 1,
or even 5 per cent in the average, caused by the alteration of the volume of the
currency by the change from money to debt, or debt to money, where every commodity,
being affected by its own variation in supply and demand, is continually varying,
from one to one hundred per cent in price? Flour is sometimes $5, and sometimes
$10 per barrel, and all other commodities are more or less affected by the law of
supply and demand, without regard to the exchange value of money.
The fundamental error of our financial policy lies in the attempt to create wealth
by creating currency: it is putting the servant before the master—the wrong power,
in advance. We can create wealth only by producing commodities. The nation that
pursues this policy will have, not only the most wealth, but the most money; they
will have the least debt, and of course the least embarrassment; they must sell
commodities and buy money: this is the present policy of France, whose currency
now consists of about 1,000,000,000 dollars of gold and silver coin, and 100,000,000
dollars of bank debt in excess of the coin. She sells her products to England and
the United States at our paper prices, and takes our gold in exchange. Of course
there is almost no debt among her people; her home traffic must be conducted according
to her currency about one-eleventh with debt, and ten-elevenths with money. Every
trader and producer in the interior of the empire is said to be in possession of
a bag of coin for his smaller traffic, and the larger operations are made through
local bankers. New Orleans, notwithstanding her sickly climate, is, with her improved
currency, according to her means in commodities, obviously getting the advantage
of New York in commerce, and New York, with a better currency than Boston, is getting
advantage of Boston. The State of Arkansas, having had nothing to do with debt banking,
since the embarrassments created by her two banks about 1842, from which she is
not fully recovered, passed through the late financial crisis wholly unscathed,
and is now thriving beyond any former period of her history.
I am very much gratified to find the Bullion Bank of New York has become a fixed
fact. It is an evidence of a change of system soon to follow the present, and of
sounder views of currency than have hitherto prevailed. I wish it all success. It
cannot be doubted if that bank succeeds by charging a fee on its deposits, that
it will become manifest another may succeed with an increased business, by paying
interest on deposits borrowed on time, and lending at a profit on the rate
of interest paid; lending deposits when they are deposits, but not while
they are undrawn loans; that is, by keeping always coin or bullion in reserve, dollar
for dollar of its demand liabilities. With a reasonable capital such an institution
would be a far safer depository than the present Savings Banks, for they have no
capital at all, and are liable to great changes of value and consequent risk, from
the long period covered by their loans. The increase of deposits in Savings Banks,
and the enormous entanglement of debt produced thereby, are in my opinion charging
a mine under the property of this country, that a spark may explode while we are
in the enjoyment of fancied security.
We must look to the bankers and merchants for this improvement of bullion banking.
Neither this nor any other improvement in banking or currency will ever come, in
my opinion, from State legislation, for the reason that a sufficient number of disinterested
men, of intelligence enough to understand the subject, cannot be found in any State
legislature in the country, with the exception of that of Arkansas, where they have
learned wisdom from painful experience, and from the lessons of Mr. Wm. M. Gouge,
who has been occupied laboriously in Arkansas for several years in clearing up the
rubbish of their two broken State Banks.
An institution of this character brought into activity in the full channel of trade,
with a controlling capital, will speedily put a stop to debt banking in this country,
for the other banks must then follow the same course or break, and it will place
New York infallibly at the head of the commercial cities of the world.
*McCulloch says:—"The Bank discounted
private bills at 5 per cent, during nearly the whole period from her establishment
till 1824, when the rate was reduced to 4 per cent." The credit of the government
was at first inferior to that of individuals.
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