the Gouge solution to bankingSubmitted by 789 on Thu, 04/19/2012 - 14:36
Twaddle.-- To talk of "regulating" Banks. So long as they exist, they will regulate every thing around them. --[Mississippi Free Trader, 1842]
"The fault is in the system. Give the management of it to the wisest and best men in the country, and still it will produce evil. No new principles of action were introduced by the early administration of the United States' Bank.
It was not, surely, to be expected, that men who associated with the professed design of making profit for themselves, and who admitted the Government as a partner, should trammel themselves with restrictions which the Legislature had, either through design or oversight, failed to impose."
The one and only true hard-money man, Mr. William Gouge's solution to the banking problem: only allow full-liability discount houses to operate, and no banknote circulation, whatever
"Restore the natural order of things, by abolishing money corporations, and, in those parts of the country where there is little population, little wealth, and little commerce, there will be little Banking: while in those parts of the country where commerce is extensively carried on, Bankers will rise up in proportion to the wants of the community.
"In most villages, all the call there is for Bankers could be answered by the Postmasters. Offices of deposit, of transfer, and of loan, are not necessary in villages. The only call there for a dealer in money, is to collect debts due to persons at a distance, and transmit the money to to whom it is due. The publishers of periodicals now collect great part of what is owing to them on account of subscriptions through the medium of the Postmasters. Many of the debts due to merchants might be conveniently collected in the same way, if Government were careful to appoint none but solvent and trust-worthy persons to be Postmasters: and if it should make a rule to remove them on proof being given of their having neglected to pay over money which they had collected.
"But it would not be necessary for Government to go even this far, for us to have a good Banking system. The Postmaster, in most small towns, would stand the best chance of becoming collector of debts for persons at a distance, and the commissions he would receive would, in many cases, exceed the amount paid to him as a public officer: but if he was found untrustworthy, or incapable, the business would be transferred to the storekeeper, or some other respectable inhabitant of the village.
"In the larger towns, and even in the small towns which are centres of wealthy districts, the business of dealing in exchanges, and of acting as an agent between lenders and borrowers, would become a distinct profession."