Excerpt from Speech of Mr. Rives, of Virginia, on the Currency of the United States, and the Collection of the Public Revenue: Delivered in the Senate U. S., January 10, 1837

As the general principles he has laid down on the subjects of banking and currency continue still to be appealed to bythe enlightened writers who have followed him, as affording the soundest exposition of those subjects, whatever modifications of subordinate points may have been made by sub sequent inquirers I will give to the Senate, and principally m the words of Adam Smith himself, an ooutline of his system of currency After speaking of the advantages to be expected from a judicious and properly conducte system of banking he says expressly, that the commerce and industry of a country me not so secure when suspended, as it were, on the Daedalian wings of paper money, as when they travel about on the solid giound of gold and siljger. He says, therefore, it is the policy of wise Governments 4' to guard, not only against that excessive multiplication of paper money which wins the very banks which lssue it, but even against that multipli cation of it which enables them to fill the greater part of the circulation: Of_ the country with i.t He then proceeds to show that the circulation of every country may be considered as divided into two different branches. The circulation of the dealers with one another, and the circulation be; tween the dealers and consumers His next position is, that paper money may be so regulated as either to confine itself very much to the circulation between the different dealers, or to extend itself likewise to a great part oi that between the dealers and consumers. This regulation IS effected by fixing the denomination of the notes permitted to be issued. It were better, he adds that no bank notes were issued in any part of the king dom fo1 a smaller sum than five pounds. Paper money would then con fine itself to the circulation between the diffe1ent dealers; and where this is the ease, he says there is always plenty of gold and silvei. But Where it extends itself to a considerable part of the circulation between dealers and consumers, it banishes gold and silver almost entirely from the country. The system of Adam Smith, then, resolves itself into this: that the circulation between deals; and dealer may be of paper, but that the circulation between dealer and consumer should be of the precious metals; that this result ought to be secured by prohibiting the lssue of bank notes for a less sum than five pounds, and that if such a restriction be adopted, there will always be plenty of gold and silver ln circulation, performing all the offices of exchange 111 the 'ordinary transactions of society, while the use of paper would be confined to comme1cial operations of a larger scale. Instead of being the advocate, far less the founder, of an unre stricted paper system, he urges the necessity of confining it to commercial accommodation in the larger transactions between dealer and dealer. He is in favor of the suppression of all bank notes under five pounds; whereby gold and silver will fill the ordina1y channels of circulation, and become, in fact, the common practical currency of the country.

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