EXPANSION OF THE BANKING CURREN-

 
{"newspaper_name": "The Arkansas banner.", "edition": "01", "page": "p4", "byline": ""}
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V I

 Abundance of paper currency is u7naily regarded as q flattering indication oi prosper ity. No test of National prosperity could bt adopted which Is more delusive. Ii may b( set down as universally true, thai every sud, den and excessive expansion in the volume of paper currency of the country IS produced by unnatural causes. The laws ot tfade OF crate silently but uniformly, and never oflns about a sudden and excessive amount oi elf- culating currency. But these laws are eon- sianlly infeflered with by the speeaaihg policy of incorporated FaPef-HoHeg hla1efS, We make these remarks n yle# ol the aa= naHciatiaH which #e see i'll the Money Artl- ele of the New York Herald of the 2lst De- cemher:

 We have noticed, ia reports from nearly every bank, that gradual expansion is going on throughout the country, and in time Il must reach an extent equal to, and perhaps greater than before experienced, untH al length the expansion of business keeping pace with the banks, will lead to expectations, and, without doubt, to anather explosion We have nof seen in any of the bank reports from any one section, a contraction sufficient to offset all expansion in another quarter, bal a simultaneous increase in all the depart ments appears 10 he the prevailing movement This is to be be regretted on account of the effect on trade ! natural healthy increase oi business cannot be so rapid as the increased movements of the banks would indieate-and as the banks create, by an expansion, af inflated, illegitimale state of trade, Ii Is noi safe, but on the contrary, is attended with many daugers,o

 These are important luets, and deserve to be closely studied by all commercial men Why is there gradual expansion now goiaa on2 Or Is t confined to the eily of New York Let il he borne n mind lhat the pub- lie money is now, and has beeiF for several years, deposited in BaHksi Three-tonfiAs.o the public money is collected at New Ak and an immense deposit has been diyfdet amongst few of her banks They are au- thorized to use the eposites--they are temPt ed to venture upon an expansion with SC much government money as is kasis-ethel banks follow Inc example, The contagior spreads from the centre of Commerce unti the expansion becomes general. 4 wild sPi- Tt ol speculation Is generated and the enc soon eomes--5aulfapfcg and ruin II tht public money could be taken ont ot. the bank. and its use in banking be prevented, the dan ger could be avoided We triist that the evi may seod he corrected.

 Ne see t stated in the Money Article o the New York Morning News o' the 3lsto December, that 'smoney is to-day very scarce among bank customers. These institution. are rigidlY reducing their loans 10 close thi yearo The real cause of this contraction no doubt, is, that five millions are required e the Deposit Banks by the Treasury to be ap piled to the public debt This willeheel lht expansion III New ofk ut IeastfoFa season but we have our fears so long IS there IS tht power given 10 the banks 10 Ioaa oatthe pub lie money. The immediate and eternal sep aration of banks and public money, Is thi only sure remedy. .N6S6eais Uaj0H.