The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-24

ofelng Uniform, AT least varying very little from
yeartoy year, be permitted to luctuate extremey-if a
great surplus like that of which you disposed last
year Is 10 be allowed ever and anon 10 accumulate
and then to be Withdrawn from one depository and
scattered among many others, to be again suddenly
wIthdraWn from them, and ultimately distributed
without reference to the wants OF commerce and the
course OF business, but merely arbitrary princi-
pies, among the states-if such financial plumbers are
to be repeated often in future policy, we should
do well TO confne the effects Of them within as mar
row limits as possible, and even system OF hoard
ing might in such case perhaps, do less harm than
all this vexaous irregulariy, and uncertainty. But
In the hrst place, whose fault that Whose le-
giSlaon occasioned that prepoSterous accumulation
Whose unequal and oppressive Tariffs extored from
commerce the vast sums which were afterwards 10
be layished upon il with such Intoxicating effects I
Yours sir-this House, this Congress is responsible
for whatever mischies grew out of that strange
anomaly Let the blame light upon the heads Of the
guiliy. trust in God we are not destined soon 10
see another such surplus-and il we should, most
certainly should expect proper precautions TO be
adopted to prevent its operating again so powerfully
to derange the business of the country. But what
sort oil argument Is 1t against the comparatively
moderate deposes made in the ordinary course OF
things by the government, TO recompense the banks
for their services fiscal agents. and make taxation
less oppressive, that an enormous accumulation like
atreerred to- so caprciousy disposed Of oviolcn
y transferred from one place OF deposite TO another
produced much evill And here sir | beg To ask
gentlemen whether il has ever occurred to them to
imagine what would have been the effect what would
always be the effect, of such an accumulation if ii
had been in gold and silver} What if our revenues
should ever again amount TO what they were in 1915
VIII any man undertake to say, that the abstraction
from the circulation of the commercial world of so
large sum as forty or fifty millions OF specie, would
not at any time occasion serious arrangement OF
business and fall of prices abroad attended with all
the usual evils of such an event2 shall Gdvert here
after, more particularly to the important subject of
SUNNY
of commerce. but here call the attention OF the
mittee to view of it, that is entitled their profound
consideration. II do not greatly err in all the
illusions TO which | have been brought by my re-
searches in this matter, calculation can be made
ofthe effect which the adoption will not say of the
"hard money system" but of any system whatever
calling for much greater demand Of the precious
metals might have upon the state OF trade.
Sir, | have said that the importance Of these
fluctuations in the paper currency of country have
been very much overrated Some people seem to
think an expansion in the circulating medium, must
always be attended with sudden rise in prices and
spirit of eStravagant speculation. But II is not
MIR. Tooke has shown that these two things have in
fact very seldom conceded speculation depends
in the first instance upon moral causes wholly uncon-
nected with the state of the currency and although
an abundance of money may and does aggravate
the evil where ii exists yet by itself it never leads 10
any excitement Take any example OF commercial
crisis you please and you will find that there were
traordinary circumstances which acted on the ina
ginaonS of men-horid pictures of general proSperi-
ty bright visions of possible success in channels
Of trade and adventures as yet mtred. There is
remarkable proof of this in the terrible convulSion in
England in 1925 the most serious perhaps, that she
has ever passed through In 1922 there was most
depressed state of prices below the cost of produc-
tion. The lowering of the interest on an immense
amount OF government stock in 1923 and "A, en-
gendercd an impatient desire of more profitable in
vestments Then came the acknowledgment Of the
independence of the South American States, with
hopes of advantageous loans to the new govern
mens, of great mining speculations, and of a vast
extension of all branches of trade upon which, that
great political event, it supposed could not fail
to produce sudden and incaculable effects. The
spirit Of adventure thus awakened soon spread it.
self abroad over every department of commerce, and
a moral epidemic, as it has been well termed broke
out such policy of governments, Of free govern
men at least, could possibly control But the same
excitement would have occurred had the circulation
of England been metallic, and sir proof it is be
found in the fact that owing to long series of good
harveStS, and to the preparations which the Bank of
England had been making to substitute gold for the
small notes which still circulated in 1924 her trea-
sure was unusually large, (semething like f IL mil
lions, instead of tl0 its regular maximum and SO
far as her issues had any thing to do with exciting
the spirit of circulation it not deficiency but
an excess of bullion that occasioned the mischief
just the case in this country during the last
two years. say sir, this spirit of speculation is in
cident TO the adventurous operations of commerce,
and il makes no difference whether those operations
be carried on in specie or in paper. The gentleman
from Pennsylvania who sits near me (Mr SergeanD
anticipated me in citing the example of the famous
Bubble year in England Q72l when, as he Justly re-
marked the circulation of that country might be
considered as almost exclusively metallic for the
issues of the bank what they had been for
years before, only about f2 Millions and not more
than half what they were few years after in state
of perfect calm. But will add another instance,
most memorable and instructive one from our
10 hoo, kan,
blessed with purely metallic currency it
shortly after the peace of 'S3, and from that
epoch, until the establishment of the first Bank
of the United States, and, sir, if a man were
called point out that era in its history in which its
pecuniary condition was most deplorable he would,
without hesitation, name that. There was want OF
money even to transact the ordinary business of
life good portion of the little trade left us was
carried on by barter industry was languiShing for
want ofhc means ofexchanging its products nobody
had anv credit, all was embarrassment deSponden-
CIV and gloom. In the midst of all this distress,
there was cry not for hard money, as in the pre-
sent criSiS-thcy had enough of that, in one sense,
at lcaS-but for the good, old fashioned paper money
issued BY the StatcS-and the disconentS of some of
the boldest and most active spirits of New England
broke out into open revolt against society, and
riouslv threatened its overthrow. Sir, never since
we have been people, have we passed through
period so full of perls of all sorts! Never the
morality Of the nation put to severe trial its
peace and its Institutions and its destines brought
near TO the very edge Of precplcc, And what was
the immediate of all this intense pccunlary dis
tress Speculation srfar wilder, in proportion, than
any that has since occurred. We had imported in the
two first years after the peace, large amount $780,
100000, against exports of some eight or nine millions
Look into Pitkins Statistics. And yet with fact from
our history important, authentic so full OF
instruction all the points involved in this discussion,
you hear able and leading speak Of the spirit OF spec
uIaon, something inscparablv connected with paper
money alone No, sir it results from what is called the
course Of trade" in its perpetual round Of qniescencc-
mprovement-ncreasing confdcnce-prosrerlty-
in quiescencea gain Nor by
bank issues, where banks most abound, that 1t is
supplied with the means of comprising its object In
1925 it is said that mercantile paper to the amount OF
near S600,000000, negotiated in London, MIR