The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-11-17

i
1 ing them, ia specie, from the Depositc Banks, and
placed in the vaults Of other banks
The immense accumulation OF The public money
did much 10 derange the fiscal Affairs oil the country
4 Some OF the provisions Of the act regulating the
deposile banks, which caused embarrassments that
/ could not be avoided added to those arrangements
| But, In my humble judgment, the iyadteious manaer
in which that act carried into execution, together
with entire unwillingness on the part OF The head
of the Treasury Department previously, 10 take that
responsibility which the circumstances OF the times
called for did 10 induce 10 the disasters which
| overlook us, and to the embarrassmenls which we
are now experiencing. than every thing else put
together,
The attempt to equaze nearly forty millions Of
dollars according TO the federal representation of
each OF the States in the brief space Of few months,
called for such vast movements and changes OF
money from one place 70 another, as could not fail
TO carry conviction 10 the mind of every sagacious
observer, that il must lead TO revusions and reyoln-
tions In the monetary affairs Of this country not less
disastrous than those produced in the state OF civil
affairs in France, by the Revolution of 1872
From the passage Of the act of Congress of the 23d
June, 1886, TO this time, have never been able TO
discover that an equalization of the public money in
the various States was called for under it,
The 9th section of that act is in part as follows:
And the Secretary Of the Treasury shall not suf-
fer 10 remain in any deposte bank amount OF the
public moneys more than equal 10 three -fourths OF
the amount OF its capital stock actually paid in, fra
longer time than may be necessary 10 enable him to
make the transfers required by the twelfth section of
cases where transfers shall be required for the pur
poses of equalization under the provisions of this
act, 10 consequence Of too great an accumulation Of de-
posites in any bank, the transfers shall be made TO
the nearest deposite bank &c. IS.
The supplemental act Of July 4th, which appears 10
be relied upon 10 justify the transfers made for the
purposes OF eqaattsation, IS as follows, WIZ BE
| enaetsd:d.c That nothing in the act To which this
is supplement, shall be construed as 10 prepet
| the Secretary of the Treasury from making tran
fers from banks in one State or Territory TO banks in
another State Territory, whenever such transfers
may be required, in order 70 prevent large ddlae0n-
repie aeeumniat0as in particular places in order
TO produce due equality and just proportions ac-
cording TO the provisions of this act"
There are twopoins in these quotations for which
| have always conlended-FUa, That the time
within which the excuses in banks beyond three
fourhs Of their capital should be transferred, was
lel entirely discretionary with the Secretary. The
time necessary to make such transfers. to depend
upon circumstances. | never have, nor can now
believe that il the intention of Congress that
these transfers should be made with such rapidly
and violence as TO embarrasS the banks tits own
| agents) and bring ruin and devastation on the best
! interests ofthe people Secoad That the provisions
of the supplemental act having relation TO equality
and rust proportions even if construed 10 mean ge-
neral eqnahsati0H OF the public moneys in the va
rious States, was not nsaRdat0ry the Secretary;
but merely peralissire and left the Secretary in
this case also, TO the simple exercise of his own dis
! erection. a"
| apprehend there is not practical banker or
sound fnancier in the whole country, who will not
unite with me in opinion that The manner in which
| the act of the 23d June, regulating the Deposite
Banks was executed, was fully calculated to pro-
duce embarrassment vexation, and even ruin TO The
| community and many Of the old leading Deposite
Banks as any which could have been devised with
view specially TO the accomplishment of those OBJ
| jects
Maintaining, as do that the act itself gave to the
| Secretary of the Treasury latitude and discretion,
without limit in its execution; !, therefore, have al
ways contended that the transfers ordered by him 10
| be made at short notices and in extraordinary
amounts placed the banks on whom the transfer
warrants were issued, entirely in the power and at
| the mercy of those TO whom they made payable
were altogether inexpedient was upon those that
specie to the amount Of millions OF dollars was called
for; placed in Hdnstu from section Of the coun
try 10 another, leading to alarm and confusion
throughout, This not called for. II should not
/ have been permitted TO take place AT that time l
could only express an opinion. could not then ven
ture 10 demonstrate as had done before. The head
| of the Treasury Department was to execute ianot
Congress for achieh he responsible TO Congress
In lieu Of making the fallacious and runous at
tempt TO place in each state the whole sum nearly
50, of the proportion of the surplus to which each
would be entitled TO have deposited with it under the
act before the meeting of Congress at the succeeding
session in my opinion, Gas expressed at the hmeD
been adopted and pursued.
The transfers called for in the execution of the act
of Congress, should have been made through the
medium Of the commerce and exchanges of the com
| try. The Banks in the large commercial cities,
holding nearly the whole of the surplus, should have
been Informed that the Department would require,
given day. certain sums then in their hands, to
be put at its disposal, in places named and that II
was desirable the operation should be attended
with the smallest inconvenience practicable to the
| community and the banks themselves in complying
with the wishes of the Department and if they could
not BE- done within the period named without caus
ing such Inconvenience, the Department would ex-
tend the period TO the utmost limit in its power
Whether period of six or even nine months was
required for such purpose, the law, in my opinion
would have been not only complied with literally,
but to the letter also. For what purpose was 1t, that
the periods fixed by Congress for making the depo-
sites with the states were so gradual and distant al
Ter the passage of the act The first instament
not called for until than six months thereafler
the second in nine; the third in twelve and the
fourth in fifteen. Could have been for any other
purpose than TO avoid the Inconvenience and cmbar
raSsment consequent on the sudden transition oil such
vast amount Of money as the execution of the act
called for
| Not only, in my opinion, did the Secretary mistake
the intention of Congress, but he greatly erred in
Judgment in carrying the act into execution, under
| any construction whatever which could properly be
given to it. 1t would have been easy for the banks
holding the surplus to have paid it directly to
the states with which it was to be deposited, at the
end of six months to transfer it to newly selected
banks within that time, located in those states. The
clause of the act OF Congress- relating the amount
which any bank could hold in proportion 10 its capt.
tai, would | apprehcnd, have been faithfully COM
piled with, as soon as the banks holding such sur
pusses had been requesedto make the transfers, I'M
der circumstances of convenience TO themselves and
the community, as before described.
In the communication made BY the present Exec
| tive Chief Magistrate to Mr.. Sherrod Williams in
1886, find the following: The Treasury has it
in its power to exercise salutary influence first,
over the deposte banks, rhich tcH Arrays be selected
from The principal banks IN the States, and through
I them orcr the residue. Whatever check was exer-
cised by the United States Bank was done either by
refusing take their notes in deposite if taken,
by returning them quickly for specie If believed
| their issues 10 be excessive. The deposiic banks
riuht Ln do the lhinr and In the Ia