The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-09-28

a. - 49, XMZ
s~ecisted These cieumstsncss Always furnish strong
fa<bly recenmend the employment Of State banks in
perencs % Bsnk Of the United States with its
msrous and distant branches"
Mr. fancy did not in this or any of his re-
ports hint at the propriety Of adopting the Sub
treasury scheme.
The present Secretary Of the Treasury, in
his supplementary report Of December, 1884,
discussed at length and with more than ordi-
nary ability, the two systems or individual and
bank agency. In relation to individual agency
he came TO the following conclusion: "Indi-
vidual agents DiH probably be found less RE-
sPoNsIBLE, SAFE, coNvENIENT, and EcoSo-
MIcAL." In the same report the Secretary Of
the Treasury, referring to the possible con-
tingency of the Government being compelled
TO resort 10 individual agencies, and that the
Government could get on with these agencies,
expressed his decided opinion, that these
agencies should be avoided, if possible, and
the Bank system adopted. His opinion is
thus expressed:
AFTER the charter shall expire, no difficulty 10 anti
cipated 10 having any Of these duties which may then
remain, discharged by state banks But il any should
occur, il will become necessary to devolve these duties
on some responsible Receiver Collector already in
Office, safe agent, not now in Office, ss has
been the practice for years in this country in paying
pensions at convenient places which there
State bank branch Of the United States Bank and,
has long been the usage IN countries IN Europe,
by having the public in certain districts chiefly
received kept and transmitted through private agents
and brokers. This hind Of personal agency hopeper,
Al. II H.. L. n
all practicable aud safe eases, under preseat System
Of selected banks. Because Uonh render me sysfem
less c0npeHienf, iess aud complies, II not
expensive Hence, u kasn0t yet been Yesorisd TO-
But, il considered proper 10 mention this con-
tngency in order that It's effect, anticipated
may. beforehand be duly weighed in the examination
Of the whole subject and TO add, that, II this contin
gency be extended TO the whole establishment of state
banks, rs well as Of the United States Bank. on the
possibility they may all cease 10 exist or may refuse 10
receive and manage the public deposites, however I'M
probable the occurrence of such event may be- the
fiscal operations OF the Government could undoubtedly
still proceed through the personal agencies before mem
toned Il is admitted however. that il would be at
some Inconvenience and ofexpense, unless
remedied in manner that may hereafter be developed,
and would not the opinion Of this department, and
the present condition Of things, be eligible system
the present Because banks, though exposed TO
dangers and evils, and though not believed 70 be
Necessary for the fiscal purposes Of any government and
much less in the present happy financial situation
of ours, frankly acknowledged to be in many re-
spects class Of agents, economical convenient and
useful.
In the same document he points out, in
forcible terms, the advantages Of the State
Bank system. He says:
l. In regard to the convenient situation Of the
ccted banks whether looking to the accommodation Of
the public officers Of the public creditors, is be-
eved to be fully equal to that of the United States
Bank and its branches Some banks have been chosen
in places in (which none before employed,
and this respect facilities for deposites and payments
have been furnished nearer TO points, where
collections and disbursements very considerable In
this way, is established rule long practsed
in most by this department. and revised and re-
published in 1927, make payments generally at the
banks nearest to the residence Of the public officer
creditor to be paid, to the place where his services
were performed the payments under the present sys-
tenn have been made equally and sometimes near
than formerly. The departures from this usual course
never occur without the consent and indeed the request
Of the persons interested So far as these departures
may any cases be deemed fayors to those persons,
they formerly granted on application 70 the de-
partment, under such circumstances as the public nte-
rests the assignment OF satisfactory reasons, ap-
peared to permit. The same course OF indulgence 10
pursued-it is that most convenient to the public
in general well the Treasury, and the only one,
feasible under any system, without mourning the unne-
cessary and announcement expenses Of furnishing funds
enough, at every different point Of collection and dis
bursement, to meet, merely the ordinary and usual
expenditures in the neighborhood Of each point but all
the drafts which caprice, speculation or high rate Of
exchange might induce officers creditors to draw
places greatly remote from their residence, from the
theatre Of their public services.
O. The safety Of the newly selected banks the next
subject Of inquiry. The chief change in this respect
der the present system has been procuring the sepa.
rate responsibility Of several institutions for separate and
smaller OF money, instead Of the single respon-
sibty Of one institution for very large and in
having the guarantee Of State laws AMI Site supervi-
sion over the conduct and solvency of these separate
institutions combined with the information and cog
nzance Of the department and Congress as to their
condition and prospects, by Of their weekly re-
turns and other general Of intelligence. instead
Of the guarantee Of the acts Of Congress and the
pervision Of the United States Government over the
single institution, formerly and chiefly employed.
aConsidering these differences, coupled with the
fact that the selected banks, without dsparagement
Others ought TO be- chosen from the flourish
ing and that they may be changed whenever any
circumstance may indicate change TO be prudent and
that collateral security be required whenever the
depose large to seem TO render it judicious
that the Government possesses advantages superior
of their embarrassment and that the whole capital
stock be lost before the deposte debt will become
desperate; there certainly be very dsadvanta-
geous comparison, in theory between the safety to the
under the present rather than the former
system.
In practice, thus far, no loss whatever has been
sustained by any Of the newly selected banks does
any particular exist for anticipating loss II is
due to them to remark, without derogatng from the
putaton Of other banking institutions whose condition
is less accurately known to the department, that the
weekly returns Of the selected banks show all Of them
to be in secure and most Of them to be in very
ourshng condition. and that the whole Of them united
the st Of July last possessed specie in proportion to
their notes in circulation greater than did the Bank
the United States or the bank Of England, the LIST
Of July last and that their immediate available
to meet all the immediate demands upon them, includ
ing the whole Of their large public and private depo
sites, have since been constantly improving, and
quite equal to those Of most banking institutions in