The herald. [volume] (New York [N.Y.]) 1835-1837, 1837-01-07
extracts from Governor Marcy's Message.

the course of legislation generally anticipated in rela-
ton to subjects connected with the currency seems ~
require of me me further views on this topic .nah
those presented in my former messages Ing eAPe
renee of the last year has given much aear pougn'
instruction, 1t must now, think, DC geneIav ooli
ceded that the increase of what IS caieu oaig cap
ita has no agency in preventing anu ssly ' Snn,
moving pressure in the money market ouCn
pressure "a ordinarily the result OF overt adding Tins
is undoubtedly the principal cause OF our recent ana
present difficulties, but they have been greatly aggra-
vated by the combination of other causes the Chief
OF which is The operation of the deposte law of Con-
Sress A large amount Of the surplus revenue had
accumulated in the city of New York The use OF II
Mad been required by the exgencles OF commerce.
The deposte banks, yielding to the public demand,
and fulfilling the expectations OF the government had
accommodated the commercial community, to the ex
tent Of the means IN their possession After the mo-
new had thus been loaned the collection and transfer
Of any considerable portion OF It, or even the mea-
sures preparatory to such transfer, would at any
time and under any circumstances have disturbed the
business relations of the country, and never could
there have been unpropltlous CONJECTURE IN our
pecunary affairs for such operation than that which
existed when became necessary to execute this law
In prosperous times men too frequently forget to
proportion their business transactions TO their means
Wherever there system OF credlt-and one OF some
kind other must exist IN every commercial state
that system will be occasionally overweight, and
for least, become more or less dsordered
1t the of Business and not the character OF me
system that produces this result, but all systems OF
credit are not, therefore, equdlly Soou' hoi -
feet of legislation upon them matter OF pubhc un,
concern Laws may force things out OF Their natural
channels and obstruct the free operation OF tnose
causes which must be mainly relied on to administer
relief in seasons OF general embarrassment. ! 40 no'
expect in any state of things that the occasional re-
currence of such seasons will be avoided; Dut when
all useless and injurious restraints are removed, spe-
culators and men OF business who III their ardent
pursuit of wealth. have transgressed the limits pre-
scrbed by prudence to their operations will be left to
struggle with the difficulties they have created ior
themselves as well as for others without pretence
for imputing the laws of the land the effects OF their
own unwise conduct. Banks offer tempting facilities
to those who in easy times, are inclined to use them
toe freely. They than lend not y their capitals out
their deposites and the amount OF bills which can De
kept in circulation Being debtors to the amount OF
their circulation and deposes' ana the more exposed
as this amount is payable on Demand they have to
provide for their own wants in times OF pressure and
panic and cannot therefore afford the usual accom-
mOdatons TO their customers, when the necessity lor
such accommodations IS most urgent, pohcy
which make those institutions the main resource OF
the community in such emergencies, does not seem 10
evince the highest degree of wisdom. Their ability, IN
no expands but generally contracts, as the pub
lie wants increase.
In every country where banks, with the exclusive
privilege offurnishng the circulating medium, are nu-
merous and particularly where the business OF lean
ing money is embarrassed by restraints imposed on
other associations, and individuals It IS reasonable
10 expect that pecunary pressures will be frequent and
severe; and if not more frequent they VIII propaDly
be more severe and continue longer than in countries
where all sources of relief are left entirely open and
competition is permitted 10 operate IN adjusting the
relation Of equality between demand and supply. In
this respect the operation of the statute usually cal
led the restraining law far at least as denies to
individuals and associations the right OF receiving de-
posites and making discounts is PROFESSIONALLY inlu
Ilous.
Ii is the essential characteristic of private property
that the owner should not only have the right OF ex.
elusive possession, but the liberty offree Use, modified
~ - Il -. thntrn
properly and the public right to provide for the gene
raj welfare The reasons, therefore, that should IN
duce he Legislature to enact or continue any law CIR
cumscrbng the rights ofndvlduals IN reat on TO their
private property must from strong ana clear
necessity of providing for the wellbelng OF society.
have not been able TO convince myself that any such
consideration be adduced in support OF that part
of the restraining law, which interdlcts TO the comm-
nifty at large the right of receiving depostes and ma
king discounts II il originated, generally belle
we'd in desire give this kna of business exclusive
ly Incorporated banks, and subserves no better
pose than 10 carry out this design, anticipate ready
disposition your part 10 repeal II.
There is nothing, believe, IN the history OF the
times when this law was first enacted which IS cal
cuated to inspire high degree of respect Tor IT. or
from which sound arguments for It's continuance can
be fairly deduccd.
The restraint in respect to dcposites and discounts
being regarded injurious the public, and devised
spec al favor of the banks, the law that imposes
II is not efficiently sustained by the moral sense OF the
community and IS constantly evadcd with lInPunty
the efficacy OF laws depend, in great degree upon
The concurrence of public opinion in their favor and
when for the want of this SANCTION particular enact
ments are great degree imperative, they should
be repealed that the evil example of disregardmg them
may not weaken the force of the s.lutary sentiment
which all should feel-that obedience To laws, without
regard to individual opinions TO their expediency,
is high moral duty.
While am decidedly ofopinion that the restraining
law ought to be so modified as to permit individuals
to receive deposites make discounts and keep Offices
for such purposes, feel bound by strong sense of
duty, to urge upon you the necessity OF restraining
that part OF II which prohibits the issue of notes
other evidences of debt T. be loaned or put IN crcua
ton az money" To some extent thus clause may
perhaps, be safely modified, but not 50 far as to ex
pose the public the evils of unsound paper clrcu-
lating medium. II persons, either in their individual
capacity or associated partners, are permitted TO IS
sue such Kind Of notes will be likely To be used IN
the ordinary transactions of business, the soundness
of our currency will inevitably be impaired. In my
opinion, no supervision by public authority that
be devsed-no regulations short of a prohibition to
issue such notes, would constitute a sufficient safe
guard against the evils 10 be apprehended
The claim to make the paper currency of the coun-
try, stands upon foundation very different from that
which the right to private property in any
and all kinds of business transactions There is n
broad distinction between free trade in money. and
the unrestricted privilege of making fictitious repre-
sentative of money. Ii all have the right to use their
money in any way they please they can have no
cause TO complain that they have not also the liberty 10