The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-07

observation when say they stopped not from choice
but from ihe most imperative necessity In the city
OF New York, they were amply prepared 10 meet all
the demands OF bill holders but they could not an
swer the demands Of alarmed depositors--alarmed
not 10 their eventual responsibility but lest in
OF suspension, their funds should be put be-
yond their control until the liquidation Of the con-
Germs OF the banks in the hands of receivers
Sir they held out till the last moment that prudence
dictated, and when they suspended, il was with the
appreciation of every class OF the community. The
legislature of the state which was then in session.
by an almost unanimous vote in both Houses, sane
TONED the suspension, and relieved the banks, for
one year, from the forfeiture OF their charters
MAINTAIN then, that these banks suspended Spe-
Gle payments from entirely beyond their
troll and without fault ON their part II they have
oyerbanked, they have been stimulated TO il by the
action OF the government, and by the unusually and
exraordinarlylarges surplus in their possession the
evil effects OF which were intended TO be remedied
by its gradual withdrawal under the Deposite Act.
They were urged by the Secretary of the Treasury
to be liberal in their accommodations TO the mer-
chants, and through them TO benefit every class in
the community. The public deposes were the
means by which these accommodations were to be
made. They were used as the Secretary of the
treasury desired until the banks themselves be-
came alarmed at the consequences which might
suit from an oyer-extenson, and from the political
agitation which would FOLLOW it, The evil effects of
this large surplus and which was constantly ncreas-
ing, were seen by the banks. They were DESTROYS
Of ayerting them. And when the question of depo-
sitting il with the states was before Congress some
OF the principal ones were in favor Of the measure.
In the course pursued, acted under the advice of
some Of their principal otfcers-and the very propo-
stion which submitted to the Senate in the shape
of an amendment, and which was adopted with great
unanmity, was suggested by one of them. He said
that as long the monied concerns OF the country
We're made the subject OF political discussion, so
long would the business and mercantile community
b. in constant agitation and alarm--that this surplus
ought to b. disposed of and thus restore peace and
harmony in our money matters, which could mo- b.
Is
The proposition for dSpoSng of il was that of bu-
siness man. 1cas 10 dcPosu IL ruth me states IN tie
ratio Of representation 10 takc their cerfcaes Of de-
p0Site in The nature Of a stock, redcemabte al their
pleasure; and ntat The Secretary Of The Treasury
sh0utd al any tms, for rant Of othCr at0uey in the
Treasury 10 e appropriations made by Congress, be
aHiori:ed 10 sell these eerifcates in The market and
IN TIE hands Of he purchaser they M0ntd tear dHRe-
rest of fire per cent This would have been regu-
lar business transaction. II would have required
no legislation on the part OF Congress or the states
to reach the money. IL would have been always
within the power and control of the Secretary OF the
Treasury The states would have had the benefit OF
il without interest until il required for the wants
of the government, and then would have merely pro
vided for the FIVE per cent. interest on thai which
sold, and redeemed the principal at their plea
sure. 1t in this shape that the bill passed the
Senate 1t amended in the House for reasons
familiar to all who were here al the time, and which
it is not necessary for my present purpose to repeat
Had the bill passed as it went from the Senate,
should not now be called to repenish an exhaust
ed Treasury The Secretary would, at this time,
have at his control the three insalments already de-
posted with the states amounting TO some twenty
eight millions of dollars These certificates could,
at any time have been sold and once in the market,
would have gone very far towards iquidating our
foreign debt
Sir, am aware, that the execution of the Depo-
site Act was a source of Inconvenience, and in some
instances of embarrassment at those points from
which large sums 10 be transferred. But much
of this Inconvenience and embarrassment arose from
he ms nnprp nj |
TO say how far the Secretary of the Treasury, under
the provisions of this act and under the general au
thority of his department. could have made the trans
ters other than he did.-But, will say, II they had
been made as a mercantile man would have made
them they would have materially aided the domestic
exchanges of the country and would have promoted,
instead of deranging, the regular business OF the
community i am aware, too, sir, that some were
opposed to this act of the necessary with
drawal Of portion of these funds from places where
they had been loaned out by the banks. Such, do
not reflect, that if this law had not passed in 1885,
thus giving year to the banks to make their ar
engagements TO comply with its provisions, that the
next Congress would have made similar dispose
ton of the surplus, which proved TO be much larger
than MANY had predicted OF anticipated. The incon
veniences of such disposition of il, after the banks
had used the accumulated fund for another year,
would have been much greater than those which
were experienced under the law as 1t passed. But
do not intend TO go into the merits of that measure,
have merely alluded to il from its connection with
the banks and show that if the use of this surplus
one cause of the suspension OF specie payments
by reason of any alleged over-issues on their part,
they were stimulated to il by the action Of the Go
vernment itself The suspension, therefore, was not
the result of eachery or bad faith on the part OF the
banks but was the result of circumstances over
which they had no control and OF the destruction OF
confidence produced by no fault of theirs.
These banks are now as able, with the aid and
confidence of the Government, 10 perform all the du-
ties required of them as they were before. We
have the testimony OF The President and of the Sc
arata off hp Vrpn n
well as the Bank of the United States. They are
capable OF doing the same again, in the same way.
am not, therefore, prepared 10 say, that on account
Of The calamity which has bataen the country, the
experiment has failed, and they ought not TO be EN-
ployed second time. No, Sir-Such catastrophe
may not occur again in the course OF century One
assigned for il now was the existence OF an
enormous surplus in the Treasury This cause is
not likely 10 exist hereafter for every man is willing
bring down our receipts 10 the measure OF our
wants, and under that as general rule, such ca
tastrophe might never happen again. The banks
have abundance of means 10 meet all their engage
ments such being the all that is necessary is,
TO create confidence, 10 restore confidence; and they
will be found able to perform all that is required of
them. Lei that confidence be extended TO them by
the Government in good faith, and let them be placed
on their former footing. Let the Government pur-
sue system which has been tried, and which we
know will prove eilectua instead of attempting an
unlried eXpedient" the disastrous consequences OF
which cannot be anticipated, and which fear ina
gination can scarcely depict 5s.k -."
This new experiment consists in Divorce Of
Bank and Stac.o This is mere catch phrase which
was originally introduced by artful and designing
politicians to impose upon the credulity and honesty
Of the people. Many have adopted il without reflect
ing nquirng TO its import, or lis consequences.
First impressions favorable to 1t it summons TO
recollection our early impressions OF divorce
Of Church and State" But, il is the duty Of wise
statesmen and discreet politicians to consider well
the evils which must follow the adoption of any sys-
ten heretofore untried and OF doubtful policy,
however euphonous the phrase may be which de-
signates its character before the people.
The proposition contained in these few catch