The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-09-06


The difficulties experienced by the mercantile inter-
est in meeting their engagements induced them to APP
DIV 10 me- previously 10 the actual suspension OF specie
payments for indulgence upon their bonds for duties
and all the relief authorized by law promptly and
cheeriuly granted. The dependence of the Treasury
upon the svas OF these bonds TO enable 10 make the
depostes with the States required by law. led me, in
the outset limit this indulgence 10 the LIST Of Sep
ember but il has since been extended TO the LIST Of
October that the matter might be submitted to your
further direction.
Questions were also expected TO arise in the recess
in respect to the October instrument Of those depostes
requiring the interposition Of Congress
A provision Of another act passed about the same
tme and intended to secure a faithful compliance with
the obligation OF the United States TO satisfy all de-
msnds upon them in specie or its equivalent prohibited
the offer OF any bank note, not convertible the spot
into gold or silver at the will Of the holder and the abb
lily Of the Government, with millions deposite, to
meet its engagements in the thus required bv
law, rendered very doubtful by the event to which
have referred.
Sensible that adequate provisions for these unexpect-
ed exieencies could only be made by Congress- con-
yinced that some of them wonld be indspensably ne
cessary the public service before tho regular period
Of your meeting and DESTROYS, also, 10 enable you to
exercise, at the earliest moment your full constitutional
powers for the relief Of the country, could not with
proprety, avoid subecng you TO the inconvenience OF
assembling at early day the state Of the popular
representation would permit. | am sure that have
done but justice your feelings in believing that this
Inconvenience viii be cheerfully encountered, in the
hope Of rendering your meeting conducive to the good
Of the country.
During the earlier stages Of the revulsion through
which we have Just passed, much acrimonious discus
sion arose, and great diversity Of opinion existed to
its real causes. This not surprising. The opera
tons OF credit diversified and the influences
which affect them so numerous. and often so subtitle
that even impartial and welnformed persons are sell
dom found to agree in respect to them. To inherent
difficulties also added other tendencies, which
by favorable TO the discovery OF truth.
II hardly to be expected that those who dsappov-
ed the policy Of the Government in relation to the cur
renew would in the excited Of public feeling pro-
duced by the OCCASION fail to attribute to that policy
any extensive embarrassment in the monetary affairs OF
tie country The matter thus became connected with
the passions and conflicts Of party opinions were more
or less affected by political considerations and differ
prolonged, which might otherwise have been
determined by appeal facts, by the exercise Of
reason or by mutual concession. II IS, however,
cheering reflection that circumstances Of this nature
cannot prevent community so intelligent as ours,
from ultimately arriving at correct conclusions En-
couraged by the firm belief of this truth, proceed to
state my views, far may be necessary to clear
understanding Of the remedies feel It my duty TO pro-
pose, and Of the by which have been led to
recommend them.
The history Of trade in the United States. for the
last three four years, affords the most convincing
evidence that our present condition chiefly to be at
trbued to overacon in all the departments OF bust
overacton deriving, perhaps, It's first impulses
from aneccdent causes, but stimulated to its desruc-
tive consequences by excessive issues oil bank paper,
and by other facilities for the acquisition and enlarge
ment Of credit. At the commencement Of the year
1884, the banking capital Of the United States, ncud
ing that Of the National Bank then existing, amounted
to about two hundred millions Of dollars; the bank
notes then in circulation to about Dney-hve millions
and the loans and discounts of the banks three hun
drol nd hat tme and
the LIST of January, 1886, being the latest period to
which accounts have been received bank
ing capital increased to than two hundred and
ffy-one millions our paper circulation, to more than
one hundred and forty millions and the loans and dis
counts, more than four hundred and iltyseven mil
lions To this increase to be added the many
millions of credit, acquired by of foreign loans
contracted by the States and State institutions, and
above all, by the lavish accommodations extended by
foreign dealers to our merchants.
The consequences Of this redundancy OF credit and
Of the spirit Of reckless speculation engcndered by IT.
were foreign debt contracted by citizens estinat
ed March last than thirty millions OF dollars
the extension to traders i'll the interior OF our country OF
credits for supplies greatly beyond the wants of The peo
Pile the investment of thirty-nine and half millions
of dollars in unproductive public lands, in the years
1885 aud 1896, whilst in the preceding year, the sales
amounted to only -four and half millions the creation
OF dehts almost countless amount, FOR real estate
in existing anticipated cities and villages, equally
dsproportonae to their real value the expenditure Of
immense sums in improvements, which, in may cases,
have been found to be runously mprovident; the d.
version to other pursuits OF much OF the libor that
should have been applied to agriculture thereby con-
tributng to the expenditure Of large in the impor
taton Of grain from European expenditure which,
amounting in 1884 to about two hundred and fifty
thousand dollars was, in the first two quarters Of the
present year, increased to than two millions Of
dollars and finally, without enumeratng other njurl
oil and
pecaly in our great commercial towns, OF luxurious
habits, founded too often merely fancied wealth, and
detrimental alike to the industry, the resources, and the
morals of our people.
1t was impossible that such state Of things could
long continue that the prospect OF revnsior was pre-
sent to the minds of consderate men before it actually
came. None, however, had correctly anticipated its
severity. concurrence oil circumstances, inadequate
of themselves to produce such and calamt
embarrassments tended so greatly to aggravate
them, that they cannot be overlooked considering
their history Among these may be mentioned, most
prominent, the great loss of capital sustained Ivy our
Commercial Emporium in the fire OF December, 1856
a loss the effects Of which moderated at the
time, because postponed for season by the great IA
cies Of credit then existing the disturbing effects
commercial cities Of the transfers Of the public
moneys required bS the deposite law Of june 1885;
and the measures adopted by the foreign creditors OF
our merchants to reduce their debts and to withdraw
from the United States large portion Of our specie
However unwilling any of our citizens may hereto
fore have been to assign to these the chief in
srumentay in producing the present state of things,
the developments subsequently made, and the actual
condition of other commercial countries, must, as it
seems to me, dispel all remaining doubts upon the SUBJ
ject 1t has since appeared that evils, similar to those
suffered by ourselves have been experienced Great
Britain on the Continent, and indeed, throughout the
commercial world; and that in other countries well
in our own, they have been uniformly preceded by
an undue enlargement of tho boundaries Of trade,
prompted, with us, by unprecedented expansions Of
the systems of credit 4 reference to the amount Of
banking capital and the Of paper credits put in
circulation in Great Britain, by banks and in other
ways, during the years 1884, 1885, and 1886, will
show augmentation Of the paper currency there,