The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-09-23
To The Editor Of The Madisoniaa

To The Editor Of the Madisoniaa:
SIR-Exchanges between places remote
from each other, can with difficulty be effected
at any price; and bank notes are every where
below par. with the exception Of those of the
late National Bank, which are in the west
and southwest alleged to command a premium.
Would it be fair, polite, or consistent to aban-
don the currency under such circumstances
During recent debate in the Senate, Mr..
Rives said with no less truth than spirited
eloquence, "thaf all that is ,oanfing to render
our country prosperous. is, confidence" Under
these circumstances, all who concur with him
in opinion must deeply deplore the suggestion
of measures tending to create distrust, than
which under existing circumstances nothing
can be more poisonous TO the commonwealth.
The proposed enactment Of q bankrupt law,
directed especially against banks, and the bill
obliging the banks in the District of Colum-
bia to pay specie for their notes without re-
ference to their ability or the consequent pres
sure upon their debtors, is more worthy of
the government Of Turkey than that Of the
United States
The specie in possession Of the banks not
usually exceeding q fifth of their circulation,
should this be returned upon them for pay
ment, what other resource can they have than
that of calling in the amount due from their
debtors. The persons thus called upon must
consequently call upon their debtors, and these
again upon theirs, and thus there would arise
a succession of calls affecting every member
OF the community, whether creditor or debtor,
since the effort to pay the banks would cause
other creditors to be neglected A money
pressure, vastly more severe than any which
our country has yet experienced, would result
from the measures in question, while not only
these evils might be avoided, but those which
exist might be removed were the government
iudiciously to cooperate with the banks to re-
store confidence pursuant to the views Of Mr..
Rives.
A worthy member Of the House Of Repre-
sentatives has alledged that the banks ought
to buy specie ,ohereUith d pay their nodes
inquired with what could they buy specie?
If for this they issued their notes again, Civ
ing ten dollars for nine Y dealer who would
Immediately after call Upon thom'to redeem
their notes thus issued at par, the amount Of
notes in circulation would necessarily in
crease with every operation. Evidently
therefore, they could not buy specie with
their notes, to pay their notes. Their funds
consist mainly Of the debts due from their
customers, and obviously with that they could
not buy specie. They could only call on
their debtors for payment and thus produce
panic, pressure, and universal stagnation.
conceive that the government might
avoid much responsibility by calling upon the
banks to declare whether under any, and if
any, what action Of the government they
would pledge themselves to resume the pay
ment Of specie Should not sufficient num-
Der Of the banks be enabled to agree upon
and propose any plan of cooperation between
themselves and the government, by which
specie payments could be resumed, the GO
vernment might stand free of blame for not
devising any. Should the administration
adopt any plan proposed by the banks it
would not incur much blame even if ii did not
realize expectations.
To me, however, it is evident that plan Of
cooperation might be devised, by which sue
cess in restoring the currency would be at
tainable.
Itwere to be hoped that the real friends Of
the administration and those who are OPP
posed to its measures only from patriotism,
would unite in petitionng Congress not TO
abandon the currency under any circumstan-
CcS, dHu cSpeCIdlly uLucI tuooO h "AASaA ~
ha 8 been left by recent events.
II must be self-evident that the people Of
the United States in establishing National
Government intended it especially to have
cognizance Of those great interests for the
management Of which, the state governments
were incompetent. Is there more important
interest for the nation than the establishment
Of good currency, and has not the incompe-
tency Of the States to regulate the currency
been demonstrated, both prior TO the existence
Of the present constitution, afterwards during
the war of 1912, and now since the govern
ment abandoned it to the State Banks, with
out due affiIiaiion Let then. the friends of
the administration and the country say, whe-
Their they are willing that the currency shall
be abandoned by the general governmental!
Evidently, there have been but two great
sources Of the failure Of the Opposite System,
adopted by the late administration.
lst The issues Of the banks employed were
not made jointly, or with any reference TO
each other, or to the issues of other banks.
I'd. There was no restriction upon their
loaning the funds Of the government.
Would it not be more consistent with the
public welfare, and the previous policy OF the
Jackson party to make an effort to remedy
these defects in the late system, than by with
drawing the confidence of the government
from the existing banks, increase the depre-
citation Of their paper, and thus augment the
difficulty Of their resuming specie payments:
Whatever tends to lessen the confidence OF .
the people in the present currency, tends TO
procrastinate the resumption Of such pay
ments which is only another name for raising
the real value Of our bank notes to their nomi-
nal value in specie.