SUBSTITUTE FOR METALLIC CURRENCY 45

their continued use by Great Britain. Charles Francis Adams
came to a like conclusion.!
Of those who denied the very claim that bank notes are a less
costly currency than coins, Gouge was one of the most notable.
Bank notes cost little only to those who issue them, he contended;
those who receive them must give as much for a paper dollar as
for a silver one. Nor does the nation, as a whole, gain. “For a
specie medium, but one mint would be necessary. To maintain a
paper medium, we have from 300 to 400 paper mints.” 2 Furthermore,
 banks discount notes to perhaps treble the amount of their
capital, and thus earn eighteen per cent interest upon the latter,
instead of six. The additional twelve per cent constitutes a tax
upon the public exacted for the support of the banks.?
Amasa Walker maintained that banking operations swell the
quantity of the currency, causing the community to pay interest
““on mere inflation, of no possible utility.” Add this consideration
to that of the expense of maintaining banks, and a bank-note currency,
 he held, may no longer be regarded as inexpensive.
The contention that the currency which banks furnish is, after
all, not an inexpensive one, since bank notes, unlike specie currency,
 get into circulation through loans at interest, was quite
common.’ It was frequently accompanied by the thesis that the
burden of paying the “tax” that banks exact for their currency
falls ultimately upon the laborer.® This was especially true of a
number of writers whose general sentiments were socialistic.
Several writers, like Gouge and Walker, further contended that
the costliness of bank currency is greater than at first appears, for
! Hunt's Merchants’ Magazine (1840), ii, 199.
* Gouge, Short History of Paper Money, etc. (1833), pp. 63, 66. Cp. Vethake,
Principles of Political Economy (1838), pp. 166, 160; Democratic Review (1841), ix,
105.
¥ Gouge, 0p. cit., pp. 68, 69.
* Walker, Nature and Uses of Money and Mixed Currency (1857), p. 43.
5 Gouge, Short History of Paper Money (1833), pp. 84, 85; William Allen, Speech
in the United States Senate (February 20, 1838), p. 5; Duncombe, Free Banking
(1841), p. 134; Hooper, Specie Currency (1855), p. 6; Carroll,“ Money and Banking,”
Hunt's Merchants’ Magazine (1857), xxxvii, 310.
§ “The Paper System,” Niles’ Register (1818), xiv, 242, 243; William Hale, Useful
Knowledge for the Producers of Wealth (1833), pp. 7, 13, etc. Cp. Enquiry into the
Principles and Tendency of Public Measures (1704), p. 76.