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


usefulness and efficiency. frefer TO the memorable
struggle of 1884, when the Bank Of the United
States enfaged BY the loss Of the public deposiies
and stimulated BY The desire OF regaining them,
waged open and violent war ON these State inStin-
some OF the State banks themselves,
coereed on subsidised by the Bank Of The Uniled
States lcsned in the unnatural and fratfieidal con-
hct--when the eloquence OF this body was thunder
ing upon the system and the artillery Of the press, al
the same Tine poured in its unrelening and desrnc
tive fire. Did not these abused institutions, then,
give triumphant evidence, alike, of their strength
and their fidelity, and bear the country and them
selves harmless through the conficti There can
be but one answer TO the question.
In reference 10 the stirring and important events
Of that day, will say thai no one more heartily APP
proved the conduct Of the late Executive, In remoy
ing the public deposites from the Bank Of the United
States, than did believed that the bank had not
only failed in the prompt and faithful discharge OF
It's fiscal dulles TO the Government but, in in
stance particularly that il had banked and coun-
teracted the execution Of great measure Of public
policy. II had, moreover manifested dangerous
spirit of ambition by an active interference in the
politics of the country, held, therefore, the con-
duct Of the late President, in the removal of the
public deposites from the Bank Of the United States
perfectly unsuitable; and viewed Il with the more
satisfaction because, believing the institution itself,
to be unconstitutional, saw in the measure OF the
President the most certain means OF preventing Its
recharter But while considered the removal of
the public deposites under the circumstances Of the
case lawful ustifable, and proper, II wis evidently
bold measure and not without hazard Of disturbing
for a time, the business and pecuniary interests Of
the country II was the firm, udcious, and patriotic
conduct OF the selected Stale Banks, sustained as
they then were by the prudent confidence of The Go
vernment that mitigaed, and in great degree,
obviaed the threatened pressure, and ultimately re-
conciled the public mind TO this bold and decisive
measure of State policy. little supposed, while the
Government was thus leaning on these State lnsti-
tuons for cooperation and support thasthey too in
their turn destined for the sacrifice, and that
the only favor they were to expect was the Cycops
boon 10 Ulysses--lhat Of being last devoured.
But sir, not to dwell in particular on the success
and services of the Deposite Banks in that peroi Of
trial and danger let us inquire what have been teir
general conduct and efficiency. Have We not seen
the satisfactory manner in which they have dis
charged their duties fiscal agents OF the Govern
ment, year after year made the subject OF the wam-
est euogies in the annual Messages Of the Presidt
and the Reports Of the Secretary OF the Treasury,
and put in striking and advantageous contrast with
the operations Of the Bank of the United States In
the very last Message of the late President, lin De-
cember ast) in bearing his testimony TO the promp-
titude and regularity with which the transfers OF The
public moneys had been made by the DepFite
Banks, he shows that the amount of these transfers,
during the preceding year about forty millions dol
lars,) was more than double the largest sum which
had ever been transferred during an equal period,
by the Bank of the United States and all this had
been effected without the smallest expense or cost
the Government. AT the same time he states, tha
an amount OF domestic exchanges had been neg@
tiated by the Depose Banks for the public, exceed
ing than three times the operations OF the Bank
of the United States, in the same way during IA
equal period of time, and generally at rates beloy
those charged by that institution. What more couH
be expected desired and what does the Secretar1
of the Treasury n0ic tell us as TO these Deposit,
Banks? That their condition in regard TO the great
elements of soundness never better than at pre-
sent; that, in comparative view of their means AM
liabilities both immediate and ultimate, the propo-
ton of the former to the latter Is considerably IL
creased, and is now much greater than has been
customary with the banks of this country, or ever
with the Bank of England; that, since the suspension
of specie payments they have paid the drafts and
warrants of the Treasury upon them, to the amount
of between fifteen and twenty millions, in manner
acceptable to the holders; that there remains now
but comparatively small sum due from them to the
Government and that Of that sum there is no reason
to apprehend the loss OF single dollar
In the presence of these facts with what proprety
can il be said that the State Bank Deposite System
has failed If temporary suspension of specie pay
ments under most extraordinary circumstances, con-
stitutes failure of system, then the National Bank
system and the hard money system, have equally
failed. ! say the National Bank system, because
the Pennsylvania Bank of the United States (Which
we all know, suspended specie payments al the
same time with the Opposite and other State
Banks we have the authority of its President for
saying possessed all the strength and real ,dvnn-
tages under its charter from the State of PenIsylva
mia, that il did under its charter from the United
States II il had been National instead Of State
institution, il would equally have suspendedspeci
payments under the extraordinary circumstances of
the crisis. And has not the hard money system, If
we apply the same test, also failed2 Wher, now,
is all that boased abundance Of gold and silver
which, were told, was to overspread and rejoice
the land Do you see a dollar of 1t in circulation,
performing its true office of effecting payments in
the business OF the country? No, sir; all, all has
disappeared.
IT, then the State Bank Opposite system has failed,
the other systems, proposed by party or another
TO be substituted for it. equally demonstrated TO
have failed. But, sir, this system has not allied
The banks have been embarrassed and monentariy
obstructed in some of their functions by sircum-
stances which have embarrassed and deraIged the
whole commercial world If they have beH, for a
time, beneath tornado, which has swept over the
globe, il is only that they may rise again, andresume
their erectness and vigor when the fury of the storm
is spent
But superadded to these general causes ofsmbar-
rasspent there have been peculiar and extraTdina-
ry causes, operating here (most of them originating
in the errors of our public policy, which havoman-
ly contributed to the recent disaster and which, be-
ing such as will not occur or may be guarded against
in future, prove nothing against the system itself.
Some of these anomalous and disturbing causes Twill
briefly advert to- and first to that enormous surplus
venue which we permitted to grow up, under our own
improvident Legislation. Forty millions o. public
money were thus thrown into the banks, upon which
they were not merely authorized, but invited, to
iouiiu nc" uiSeouutS anu W 'nS
public. II was virtual addition of so much to the
capitals of the banks by act of the Government it
self which naturally led to an increase and danger
Gus expansion of their business. But sir, another
disturbing cause, not less mischievous in Its opera
tion has been the Fictitious importation of gold and
silver into the country duringthe last three or four
years. 1t is estimated that the quantity of the pre-
cous metals in the country has been increased in that
time, under the various provocatives administered
in one way another, nearly another sum of forty
millions, This enormous augmentation Ot The
cious metals has been the subject Of much ncon-
siderate exultaton. But in truth, sir it has been
one of the most efficient causes OF the present de-
rangement in our currency. What became OF. all
this gold and silver it was brought into the corg-
try II could not enter into circulation, because
the channels of circulation already occupedy
the smaller blnk notes, which, we have seen, Will
invariably exclude coins of the same denominations