The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-08-19


cd for the business Of life Il will be suppressed
II 10 in vain the Government 70 attempt bring il
into circulation by demanding in payment OF the pub
lie dues BY doing 50, the public debtor may be SUBJ
ected 70 hardship, the banks may be exposed To runs
upon thom for specie and the business Of the commu
ni.y may be crippled and dersnged But gold and sill
iver will never circulate while bank notes Of the same
denomination permitted TO occupy the channels Of
circulation "You may call spirits from the Vastly deep,
but will they comet"
will not only not avail bring gold and silver into
circulation, but il insisted on, while gold and silver yet
form, comparatively hut small part Of the actual
rency OF the country will inevitably have the effect
Of diminishing their circulation. While bank paper
forms the great Of the currency Of the country. If
the Government refuse 10 receive payment Of pub
lie dues, and demand specie exclusively the necessary
consequences will be enhance, to greater less
tent, the value Of gold and silver in relation paper
That being the gold and silver will no longer CIR
euiate freely. Those who have specie will be unwilling
to part with it, except at premium; and those who
have notes will be anxious TO convert them into specie
Hoardtng Of the precious metals will then commence,
and but little Of them DO in circulation No one,
presume Mr. President, attaches much importance TO
the collection Of the public revenue IN specie as an u,
male object If it can BIO made equally safe by other
means II 10 only an instrument OF purifying and
correcting the currency that it deserves the considera
ton Of practical statesman The great object not
specie in the public treasury or in the vaults
the business Of society," and bring it into active cir
culaton among the people This can only be effected
by the previous suppression OF the small notes ana
any attempt by the Government, before that DONE TO
collect its in specie instead OF promoting and
extending the circulation gold and silver, tends direct
" to narrow and diminish their circulation.
The indiscriminais refusal Of bank paper in payment
Of the public dues might, in the present condition OF The
country, be attended with other serious hazards, We
have heard great deal recently Mr. President of the
nj alln in
Ireland and Of extensive commercial embarrassments
felt there. These embarrassments I'm Ireland espe-
cay,) to have arisen mainly from this very CIR
cumstance OF refusal to receive the paper OF solvent
banks in collections Of the public revenue appears
that Of the collectors Of the customs had arbitra
riy refused the bills Of the Provincial Bank OF Ireland
Thereupon, q run upon the bank immediately com
menced, which, nevertheless, weathered the storm
The panic spread in regard to other institutions, which,
though solvent, were compelled to stop payment and
general Of confusion, alarm and embarrassment
ensued. But will give the details in extract from
an English paper which has been republshed extensive
ly in all of our principal Iournals. Here il. Is
1.-THE pressure yet severe, not only throughout
England but Ireland In the latter country there had
been apanic, attended by several disasters This
panic commenced by the collectors of the customs
newry and some other places refusing the bills OF the
the inevitable and immediate consequence The soluecy
Of the bank, ho,eere had been questioned and f.
naiy dftesed BY the result The panic spread respect
other institutions, and the Dublin Agricultural Bank
stopped payment on the 18th Strong efforts were made
BY its friends to sustain it One gentleman, Mr. Gre
sham, sent in 250O0i The liabilities OF the bank are
stated at 240 00Oi; its assets ut 6sOOOOL
This bank was established in 1884, by 10 partners
It has 5000 partners, and branches scatter
ed all the country, all Of phh stop Of But,
notwithstanding The soUeney Of nc institution us suspension
sOiR operate Jea.fL injury"
All this pecunary suffering and distress, widely
ramifed it afterwards became, originated in the
fusal, by officers Of the Government, receive the
nf Iant If tho, ,,f
nue. II, Mr.. President, we SHALL by sweeping law,
refuse to receive the paper Of all banks however sound
in discharge OF tho public Dues will there not be danger
of similar Consequences Might it not operate, to
certain extent discredt Of all bank paper, exposing
the Institutions which issue 1t TO severe runs and the
community at large to consequential pressure and
barrassmenti At all events there would he heavy
demands upon the banks for the specie requisite in pay
ments to the Government, which the limited metallic
circulation of the country would be wholly inadequate
supply. Would it be just wise in the Government
in the present condition of the currency, with Shyock
severity demand its pound Of flesh Would not such
tend produce. instead of averting the
trophe which appears to be dreaded by some
should be as little disposed, Mr. President, any
member Of this body to hazard the safety of the public
by undue laIity in regard to its collection.
The proposition have had the honor to submit, pro-
~des sudiousy for the security Of the 1t
only does not allow the notes OF any hanks to he
ceived, but such promptly redeemed IN specie
subject to important restrictions regard to their
ACKNOWLEDGEMENTS it expressly declares that no notes
whatever shall be received which the banks in whic!
they be deposited shall not agree pass
to the credit of the United States cash. This qua
ranty of the deposte banks converts the whole of the
public collections virtually into specie and when it is
recoeced that the Secretary of the Treasury mpew-
cred, whenever he thinks necessary, obtain from
them special and supplemental security for the public
deposes, the soldty Of the guaranty may be reposed
upon with confidence.
Ii objected to this provision, by gentlemen,
that puts the power Of the deposlte banks say
what SHALL and what shall not be received by the
Government in payment of is revenues The absolute
responsibility of the deposte banks for the notes depo
sited with them on public account is deemed funda-
mental principal in the fiscal code Of the Government
without it, the practice Of special deposes must be
vived, which formerly subjected the Government to
heavy osscs and the origin OF the unavailable funds
still borne the books Of the Treasury. But if the
depose banks to be absolutely responsible for the
notes deposited with them, much cash. they ought
certainly to have reasonable discretion to the notes
they shall receive deposlte This is no new prnc-
pie in the practice Of the Government it has been
standing instruction from the Treasury Department to
the public and collectors for than twenty
years. receive but such the depose banks
would credit TO the United States cash 10 satisfy,
however far possible the jealousy which has been
expressed this subject, and guard against any
bltrary wanton abuse Of their discretion by the dcpo
site banks, have, by modification of my original
solution, placed them, in this regard, expressly under
the supervision and control of the Secretary Of the Tea
sury
While the proposition have had the honor to submit
provides, believe, In the amplest manner, for the
security OF the public revenue pays due regard TO
the interests Of the great body of the community An
nhe1ibe exaction Of gold and silver in payments the
Government in the present condition of the circulating
medium il seemed to me, would involve necessary
and serious arrangement 10 the whole business and
Of the country. These interests believe 10
be more or less common TO all. | am OF those
who a natural cnmy and inherent incompa,iblllty
between the interests of different classes Of men do
not belong to that school Of philosophy which divides
society horizontally the upper portion pressing upon the
lower with the weight of its incumbent mass, while the