The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-10-05

Of circulation would, in that case have been, win
gold and silver and the quantity OF bunk paper com
paratively small, the banks oil this country would,
in the lae pressure have been compelled 10 suspend
specie paymenlsl
The system of policy, then proposed by this bill,
IL carried into fi execution, would secure 10 The
country sound stable, convenient, and substan-
TALLY uniform curreney-consisiing nearly one-haH
of coin for the daily and ordinary transactions Of
life and the residue of sound convertible paper Tor
large operations and commercial purposes With
out depriyng the community OF any Of the real adj
vantages OF the banking system Il would obviate The
danger and cure the evils incident TO that system
But the Senator from South Carolina, (Mr. Cal.
houn1 while acknowledging the high import .nce OF
the reform contemplated by this BILL objects that the
means proposed for lis accomplishment are nell
cienL Ii that gentleman be right in supposng ihal
the credit of bank paper Is owing to lis receyapiy
in payftnt OF the public dues, which, he says, ope-
rates as general endorsaiion of il by the govern
ment then surely The means proposed by the Dill are
not Inefficient What more powerful inducement
could be addressed 10 the banks TO conform their Is
the provisions Of the BILL than the annuncia
ton that ifihey did not do so, the government would
withhold from them that which, according TO the
opinion of the Senator from South Carolina, alone
gives credit 10 their paper But, without agreeing
which ne carries his views OF the credit of bank
paper being solely derived from its recevabiity by
the government still believe that the sanctions OF
this bill, tho have never supposed them sufficient
of themselves TO fully accomplish the object, would
exert very considerable influence on the conduct
of the banks Unjust not be forgotten that the means
proposed by this bill are the very means employed
by the joint resolution Of 1876 to bring the banks
back to specie payments on that OCCASION and which,
Notwithstanding the previously declared detefmina-
ton OF the banks to the contrary, did bring them
back 70 specie payments the day fixed by that re-
solution, The same means, too, were employed with
by the Secretary OF the Treasury in 1873 TO
induce the banks 10 receive Treasury notes (Which
had sustained considerable depreciationO al par,
tho they had before refused TO receive them either
in payment or on deposite.
But my reliance Is not SO much on the direct ope-
ration of this measure on the banks themselves, as
the moral influence 1t is calculated to exert upon
the policy of the states which have full and complete
power to carry its object into effect. The public
mind is now universally awakened to this great
common interest of the currency, and is anxiously
looking 10 Congress for the adoption OF some common
system to be acted upon and carried out by the states
SO far their action may be necessary to supply he
defect of federal power. The states have heretofore
shown no backwardness in seconding the poncy Oh
Congress on the subject Of the currency; but on the
contrary, have promptly and jealousy co-operated
in the reforms which have originated here, under the
auspices of the national representation The promp-
tude with which a majority of them have already
prohibited the issue OF bank notes under the denomi
nation of five dollars, as soon as this government
adopted, in its fiscal policy, the principle of dscon-
tinuing those small issues, is an encouraging proof
of the patriotic cooperation Of the states. may
add to this proof the recent example of my own
state whose Legislature, being in session at the time
of the passage of the currency bill by both Houses of
Congress, during the last winter, Immediately re-
sponded to the policy announced by that BILL by the
enactment Of a law prohibiting, after an early pc
Rod, all bank notes under the denomination of TWEEN
ty dollars. There is no fear that the states will
abandon the General Government in this wise poll
cy of reforming the actual currency of the country
if the General Government do not abandon them
Let Congress persevere in the policy so earnestly
inculcated by the late administration and so warmly
embraced by itself at the last session. and that policy
cannot fail TO be carried on by the cooperation of
the states To a triumphant and beneficent consum-
nation. Public opinion, in our republican system
especially is the mistress of human affairs of go
vernment and legislation as well as every thing else
Let US by the example of our measures here, awaken
that opinion TO the importance OF the reforms which
needed in the currency of the country, and if il
approve them, have every reason to believe il
will it will not be slow in finding, in some branch
or other Of our system efficient, as well as aPpropri-
ate organs to work out its decision
Besides the reform contemplated by this BILL there
are others of high Importance, in regard TO the
soundness and uniformity of the general currency,
which an adherence to the policy Of the late admins
traon, with regard to the empoyance of State banks
in the fiscal operations Of the Government would
afford the means of accomplishing In what did
the boosted power of the Bank of the United States
to preserve the soundness Of the currency consist
Was il not in checking the issues of the State banks,
when tending to excess by periodical and frequent
settlements with them, SO as to keep them, to use
the language of the president of that institution in
the habitual presence of accountability" The same
practice has long prevailed in Scotland, and consti
tutes by general acknowledgment, the distinguish
ing excellence and chief security of the eminently
successful system of banking in that country. All
the banks have agents in Edinburgh, who regularly
exchange their notes twice week. and The balances
are paid by bills at ten days date on London By
the currency Of that country though consisting al
most entirely of paper, has been preserved in
condition OF constant SoundneSs. Nothing would
be easier than to incorporate this same regulating
princ nj of ito m
be made the duty of each of them, as a condition OF
their employment, to have frequent and regular set
Elements with all the banks with which they main
tanned relations of business and to CALL If necessary,
for an adjustment of the balances in specie. This
would be an efficient check upon over-isSues; and
administered by some twenty or thirty depose banks
in different parts of the Union, would exert far
more powerful and extensive influence the gen.
eral currency of the country than the check in
the hands Of the Bank of the United States could
have done, inasmuch as the aggregate capital and
business of these deposite banks would in all proba
bility, much exceed that of the Bank of the United
States. Here, them is an object of the highest i'm
portance, in regard to the preservation Of sound
currency for the whole country which might be
easily and certainly accomplished by perseverance
in the policy of the late administration Ii to that
added, as there is reason to believe might easily
be done, an arrangement among the depoSite banks
TO receive and credit each others notes as cash,
wherever offered in payment OF public dues, you
would secure to the country the advantages of con-
venient circulating medium of equal and dffusive
credit throughout the nation, and possessing every
useful attribute of the paper of the late National
Bank without its unconstuonality. BY thus ac-
commodatng the practical wants of the country, in
regard to currency, you would put an end for ever
TO the bitter and recurring struggles for a national
moneyed institution, and would give that stability
and repose to the social and business relations Of
the community which are so much needed for its
prosperity.
But all these high considerations 1t seems, are
now to be disregarded, and policy, announced with
the most confident promises of success, and prose-
cntcd for more than three years. with signal fulfil
ment of those promises, is to BE-, all at once aban-
doned, for new and untred expedents. And why
this sudden change of policy? Because the suspen-
sion of specie payments by the banks has occasioned