Morning herald. [volume] (New York [N.Y.]) 1837-1840, 1837-10-03

From our Correspondent RotAscAiid, No xXxvllLl
~. 1907

WAsnINGToN, Oct. J. 1887.
+ Mr. Calhoun proposes TO destroy the present bank
ing system in order TO establish upon us remains
in all the States and in the federal government BANKS
of being reasonable and practicable Putting assoc
all political influences sach system may exert, let
as look al it calmly and with a philosophical eye.
IL is well known 10 every general reader, ihat me
Swedes and the Genoesc were the founders OF BANKS
and that their banks were repositories of specie,
certificates of the amount deposited beng gwen 10 The
owner. In order 10 compensate Tor The tronDe Oh
keeping this treasure and 10 meet the necessary ex-
penses incident thereto, various methods were resort
ed 10. The most satisfactory system was, inat Inc
specie deposited could be drawn out az any moment,
by the original deposiior # he presented me onginal
certificate uniransferred. No charge was then made
But such ransactions did not amount a hundfedih
of the business in a year. The moment the original
certificate transferred in payment OF deDt wnlch
was sgnihed by a proper endorsement, the specie II
represented IN the bank was untouchabie, and the
bank boand for the final redemption OF the cer'
ficate. This certificate could be converted INTO cur
rent specie at any moment a, slight d cunt below
the bank specie Generally speaking the dgO 0! DIFF r
ence between bank and current CON- was fiveper cent
The broker would cash the certificate for perhaps
three per discount Evenln this way the holder
OF the certificate realized per cent over the current
coin. Upon the specie appropriated by the bank II
loaned its credit 10 moderate degree and without
fear oil being run upon. lis great care was 10 Keep
the dgio high possible, as this was the criterion
by which 10 Judge of the proper management OF Ike
bank.
No institution Of this description has survived its
esta bshment but that OF Amsterdam. The safe and
management OF this bank for nearly two CEN
tures n1ay be attributed more TO the moral integrity
of the Datch and their stad, sober habits than 70 any
superiority in the system.
To this system, them MIR. Calhoun proposes 10
como. He does not consider Bank OF the United
States, upon modern principles, constitutional. He
deems such institution dangerous 10 our liberties.
BE 1t so. He thinks that The power 10 lay, collect
and disburse the taxes uniformity may be eXerted by
means Of bank OF SPECIE iOunied afon The revenues
of the general government Now Tor carrying this
system into operation. We mast always have a
starting point.
Private capitalists started The Bank OF Amsterdam.
The federal government IS 70 start the bank OF the
treasury. To procure the necessary bullion for It's
basis Mr.. Calhoun proposes that for The year 1888,
hreefourhs OF the revenue shall be collected IN spe-
Gle paying bank notes, and the remaining fourth IN
coin. That is, the banks IN existence are 10 sup
Div the coin for The new bank if there be any paying
specie for the Secretary Of the Treasury will take
good care 10 pay the pablo creditor by dra! upon
the treasury which being based upon specie will COM
mand an dgio above current specie and will not be
presented Tor redemption. Indeed Mr.. Benien's
mendment gives the power 10 the Secretary 10 pay
all his drafts when and where he may please, II not
presented in stated period. Ii the state banks DO
no. resume all the revenue is 10 be collected IN coin.
Commerce can never flourish TO the extent il has done
under such regulation and hence the amassng Of
the public revenue will 90 on very slowly. But 40
mater the policy must be carried olt and II the peo-
pie continue these in power, can be carried out
but 10 the utter destruction 0! all the state banks and
merchants now N business
BY degrees private banks OF specie VIII spring up
the ba sig, for they VIII look 10 the gam 10 be
made by trading the credit OF CON, IN Their strong
chests. There can be no doubt but thai ms descrp
ton Of banks is safe than the present system,
bat much will depend on their management
There was no difficulty in establishing bank OF
specie in Holland, because the circulating medium
was entirely com. Deposites II tne bank were nade
by weight, and hence the real difference between
bank money and current money the latter beng esil-
mated by tale. Tbs difference vas increased by the
commercial convenience arising from the banks GER
lficatGs
In this country we mus, first drive out Of existence
all cepreciated bank paper, and then the new system
will work smoothly. The circulating medium mus,
first be reduced 10 coin, before the full benefit of the
Treasury Bank will be realized This the object oil
MIR. Calhoun's amendment.
do net care how many Banks may exist, If they
keep on hand an equal amount Of specie TO Their CIR
culaton. They can never pat out a dollar beyond
the coin they have under Inc operation o.; Mr.. Cal
houn's policy. IL is not presumablc that the stock
holders viii lei then money remain IN such con-
strained condition unless the debts Of the Banks are
all collected. Then they may slide into Banks q
specie, cooperating with the Government Bank, and
loaning their credit as the verninen VII upon ne
coin IN their chests always taking care 20 keep the
ago up.
repeat, there i nothing Improbable IN Mr. Cal
houn policy, II ne looks 10 q Bank 81 specie lot the
government. That such Is hls object, no man can
doubt, unless he would pat him down for fool
This paper issued by The Government Treaaury
would TO all in;ents and purposes be inconvertble
for IL would be based upon com and by keeping ur
The ago il would neve' he escned FOR redemption.
And this must be the meaning ct MI. Cs argument
when he advocates inconycrible paper. Let the
Government put out paper that will command a pre-
mum above specie which i can easily DO, and my
word for it, il will 10 the Treasury for
the coin il calls for. The holder will 90 the broker
when he wants specie, and get current coin for II at
premium.
The amendment provides that after 1912, nothing
shall be received IN payment Of revenue but gold and
silver, or such government paper as may be declared
by law receivable Suppose, that the whole revenue
should be paid in government paper, after that time
the treasury easily prevent the ago from falling
by oeasing 70 lend on It's credit, by offering 10 re-
deem It's certificates. 1t has the power keep IFS
credits far above current coin ]! IL ch9ose.
This Will be the operation oi TIC new policy, # We
are willing first reduce all values 90 per cent. de-
stroy all the banks to ruin every merchant IN the
country, 10 stop IN our march to prosperity lill We
can begin dc moro. Are the people 10 DO all this
think not.
fFroa oar Conespondent Mol.0e-So. SLN1
WAsHISe-oN, Sept. 29th 1887.
had the curiosity 10 visit the House during night
session tins week. The hall was as usual, brilliantly
lighted up with candelabras, lamps and spermaceti's
and had an imposing effect. The genus of history
ernod m no oh in tha m