The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-11-28


being directed to lis political and party aspect There
was an omnipotent President welding an acquescing
Congress- ever ready TO record either his passions
his principles, and his passions were excited at the mo-
ment, into fury, which hope for the honor OF the
country, history will forget He pronounced sentence
Of death against the United States Bank, by his own
will he confscaied lis property he seized upon the pub
lie treasure, and when Congress assembled here we
behed with and terror. the President stand
ing upon torn charters and constitutions and holding in
his hands the money Of the people, which he had snstched
from the custody Of the laws The popular branch or
Congress acquiesced the people, regret 10 say acqui
esced This omnipotent President seized upon the
State Banks, promised to better currency than the
world had ever SEEN and ordered these institutions TO
relieve the wants Of the people by dscountng literally
upon the Government money, which the President had
added TO the banking capital The National debt was
paid oil, the income Of the Government beyond all
former precedent, there enormous surplus reve-
nue., and irrtaed and furious executive dashed up
the banks to effect larger and larger discounts
The supervision and restraining power OF the United
States Bank had just been removed. All the States
created new banks to supply the place Of the abstract
ed capital and in their eagerness aud rcckessness quad
rupled It. In the midst Of this flush and plethora the
Government found itself in possession Of 40 millions
OF surplus revenue, aud this also converted into
active bank capital. Much has been land most proper
y) attributed to the agency Of this surplus revenue in
producing the present state Of things II is political
phenomenon without prototype in oil history and
could not but exercise disturbing influence upon the
politics, finances and currency Of the country. What
the Of lis accumulation il were per
haps useless 10 inquire The immediate cause was the
unreduced duties upon increased commerce. BY the
compromise act Of $685. it provided that the duties
should be reduced by fixed ratio, neither TO be accel
Grated retarded and this act esteemed and most
Justly esteemed TO be sacred in its character and
objects, OF such binding well healing efficacy that
Congress willing to brave the terrors Of surplus
revenue, rather than disturb its provisions loosen the
obligations Of good faith and honor well as interest
which were pledged to its maintenance But for this,
the obvious method Of evadng the crisis diminish
the taxes and thus prevent the surplus which my col
league then foretod would be the fruitful causes Of
financial disorders and difficulties. do not know Mr.,
President how the United States Bank If it had been
IN existence, would have got with this surplus Of
forty nilons-but it is udicrous to think how, with
your proposed system you would have been counting
revenue by the chaldron--you would have had two
millions and half averdupoise Of silver-you might
have laughed to scorn the Dey Of Algers, with his
eighty bushels Of coin.
1t was a capital error of the late administration to
destroy the United States Bank without having provided
in its stead some restraining power upon the banking
system Of the States very great perhaps the main
advantage Of that bank was, that while it performed its
appropriate functions with unsurpassed wisdom and
integrity, also acted regulator Of the State banks,
keeping them, by sautary check within the legitimate
bounds Of banking. Each moved in its appropriate
sphere regularly and tremendously, producing the
happiest possible results. We had the best currency
and the best condition Of exchanges ever known in the
world, and SO firmly they fixed, both by the or
ganzaon Of the banks and in the public confidence,
that they could not be disturbed by the Executive and
his party, until by nearous act Of open the Presi
dent showed that the laws could not protect his victim
from his fury. Then at the whole organization
broken in upon and derangcd opposing forces ami
whose well adjusted cOmbina-
ton had resulted in such harmonious action, and rea
tons disturbed and MISREPRESENTATION, violence,
and excentricy of course the result But it was
not only by removing the restraint upon overbanking,
by the banks then existence, but what has been
productive evil, the unresiraned cence given to
the States to create redundant banking capital AS
soon the United States Bank had received its death
blow, and while yet it lived, the States had created
many times the bank capital which It had used and
both the old and banks rushed into the market with
unbridled impetuosy. For this obvious and inevitable
state Of things nothing had been provided The ten
dency Of the States to creation OF bank capital,
and Of the banks to oyerbank unless checked and re-
strlcted is the great danger OF our condition. My col
league whose monitory voice was unfortunately unheed
ed predicted these results in 1884, and proposed the
Of avoiding them, re-charcr ofaU S Bank, with
such provisions supposedwould ascertain by slow
and cautious experiment. how far the country could
ought to be Aabanked the restriction upon our
over tendency to banking ought finally to be fixed The
the danger down with brute force the barrier which
had been erected against the overflow Of bank paper
and the country Inundated This is the great diff
Guilty which the Senator from Virginia has to encounter
No doubt the States and the State institutions will have
received sautary lesson in the present state Of things
No doubt that the stern admonltons Of disastrous
perience will produce decided effect, still, that very
experience us, that without restraining pow
upon the bank system, there is imminent danger;
without such have great dstrust OF the perma-
al. III
(Mr Rives) see the perils to which it is exposed
His project excies aarm-that Of the administration
despair His project may succeed that OF the admins
tratlon cannot.
constitutional restriction upon the States in regard
to the extent Of bank capital to be created by them,
ought to be obtained by constitutional amendment,
The pressure Of the present difficulties would go far to
induce the States to consent to the limitation OF bank
capital upon fixed ratio amongst them, and II their
wisdom and patriotism required to be stimulated to this
prudent act OF sefdenial, that stimulus might be found
in the fact that the administration project makes the
alternative to the States, bank restriction or dcsfruc
ton
i, obvious that the evils Of redundant banking at
present. much the result OF indiscreet legsla
ton in the creation Of capital than OF indlscreet
banking in the use of old. document furnished from
the Treasury Department. shows that the bank capital
now more disproportioncd to what it four years
since than the bank issues discounts. There is in
regard to the latter present. though sometimes
sluggish principle Of restriction to be found III the pecu
mary interest of the institution itself Over issues
danger bank and therefore degree Of caution and
hesitancy may be expected in venturng upon them
But the discretion Of the Legislature is not aroused by
any such necessity and its prudence is apt to be over
come by the urgent solicitations Of private interest, or
the still more dangerous spirit Of competition with
neghboring States. Indeed the extension Of bank
pta in State imposes sort Of necessity for equal
extension amongst its neghbors Its worse currency
supercedcs their better and takes possession Of their
cla,nels of circulation II has NIL the ADVANTAGES of