The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-12-19
CoMMUNI CATIONS.
SUB-TREASURY- DEposrrp
sCilEME-sTATE DEPosITE BANKS
AND TREASURY NOTES.


Afler the lapse Of more than three wears 5,,i,,
which, as ! gave extracts in nv last 10 sbou, ,hs
deposile banks performed all the duties exacted from
them faithfully and efficiently: upon sudden The Ian
guage OF appreciation was changed, 10 thai Of deem
and loud denunciation, from high quarters; and in
the language Of Mr.. Calhoun, there has bsen vii.
messed, : war against those very banks" waged BY
those, who but few months before were ulerny
unqualified praises TO their merits
The dspositeh banks, and all the other banks in the
| country, had been overwhelmed in one general ca
iamity superinduced by the government itself, BY
The request il made Of the deposte banks TO extend
all the facilities in their power to the communty
their vicinities, upon the public moneys and when
these facilities had been extended so far as TO encou
rage those who partook of them, TO imprudent I'M
dertakings, then by its not concentrating the for
ner request, thereby REFRESHING the dangerous
| spirit OF enterprise, have prevented its reaching
that extent, which ended in a catastrophe. Beside
this other circumstances called for the inerpositoa
of The head Of the Treasury Department TO check
these extravagant expansions when il was first per.
ceived they were progressing TO disastrous extent
/ The reputation of the banks which were empluyej
by the government as It's fiscal agents as we'll as the
character of the government itself were al stake
/ In 1919, Mr., Crawford discovered, that western
blnk employed by the Treasury Department as
public depository, had been imprudently extending
its discounts ON the public moneys deposited with it,
After just Tebnke for its so doing, he remarked II
will also add, that the interest which this Department
feels for the stability and reputation of the banks
which are used as places of depose is not limited
to the amount of public money deposited in such
banks The character Of the government is IN some
degree dependant The prudent mana cement Of bank
irhieh thus becomes its agent"
| Had Crawford been at The head of national
finances in 1856 and have exercised the same in
fexibiliy and frmness, that gentleman did in 1919
| venture to predict that no bank would have been
permitted to extend its discounts wildly as TO have
lost all control Of any part of more than million of
the public money which have seen it stated was the
case with the Agricultural Bank in Mississippi
And that too in the brief space Of about months
after it was first selected Either its condition must
have been unsound when it was selected or its ope
rations subsequently must have been conducted in
most extravagantly imprudent manner
What else could the banks do under the crcum-
stances that existed, but suspend for time they
dida The community, or large portion of it were
debtors 10 the banks. They were borne down BY
pressure which accompanied the revulsion then
listing and which had for some time previous been in
full operation. Under these circumstances, in the
language Of Mr. Crawford, in 1916: At moment
trhen ereesire impoytations Of foreign merchandise
had iarolrcd the mercantile and manxf featuring classes
in the greatest distress and mcnaecd them hcih I'M
pending bankruptcy reason humanity and sound poti-
CO.. all united against the eurtaiimem Of bank dis
counts" This representation of Mr.. Crawfords
was as applicable the state of things which existed
at the time the banks suspended payments, as was
to the period to which il was applied by him.
On former occasion when the banks suspended
specie payments, the course pursued, both by Mr.
Dallas and Mr.. Crawford while at the head of the
Treasury Department, was ever of the most kind
and obliging character; calculated throughout to
sustain them, and TO lead 10 inspiring the commun
ty with confidence in them How directly opposite
the course which has been pursued on the late
sion, even up to the present moment! II appears to
justify the declaration made by Mr.. Calhoun and
as if the object was to make against those rery
banks" which had long been faithful agents, and
which had the time of the suspension nearly thirty
millions of the money of the people in their hands
Human ingenuity seemed to have been directed TO
the height of activity in devising schemes, whereby
to throw dishonor on the late depose banks
though still holding such large amounts ofhe public
money. The first scheme produced by the genius
Of invention, operated like two edged sword 1t
deposte banks, which they should refuse to pay in
specie, after being protested and thus dishonored,
should be received in payment Of all public dues
The operation Of this measure, was, first to prevent
the banks from reducing the balances in their hands
by the payment of these warrants, which, with but
very few exceptions they were able and DESTROYS of
doing; and hen, it led to great portion of the re-
venue which was collected, being paid in these dis
credited warrants, (Which but for this Device as far
as it was paid in Them would have been paid in spc-
Gle } and which were altogether unavailable 10 the
government for any use whatever.
No one can doubt the propriety Of combining the
collection CT the public revenue to legal currency or
its equivalent. ...
Experience showed that until the above measure
was resorted to- the public creditors were perfectly
satisfied to accept the notes Of the banks which
warrants were drawn, in payment of them; and
there can hardly exist doubt they would have con-
tinued 10 do so voluntarily but for the adoption OF
that measure They were intrinsicaly as valuable
after as they were before the suspension They
| would purchase as much subsequently as antece-
IDENTIFY. This is proved by the fact, which have
heard frequently declared such, that the very spe-
Gle which il was vauniingly announced had been
provided to pay members of Congress- at the com
mencement of the late extra session, vas nearly all
Of it. sold by those who received it, to brokers, at
premium in exchange, for inconrcrtibie paper, in
which they paid their landlords and landladies for
their weekly board. Will any one venture to assert,
tina, for this and all other purposes TO which they
wished TO apply their pay, that ten dollars in paper
was not equally valuable with ten dollars in gold or
sver1
The next step resorted TO- was circular addressed
to the discussing agents. directing them to withdraw
the public moneys in their hands, deposited with
the Opposite Banks, from them This was followed
with circular after circular until by the frequency