The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1837-09-12

have been Influenced by the large temporary
deposites of public money made with banks
and States, and by the causes before alluded
to, has happened in some foreign countries, as
well as here, during the same period, from
other great commercial and monetary inn
pulses, that are permanently connected with
all paper systems not founded entirely upon
specie. These impulses have operated in
some measure independently OF several tran
silent and local causes, whose effects have, by
many, been much exaggerated. II is proba-
BILE that they never can be properly controlled
under such system Of expansive credit
while the individual directors of much Of that
credit have SO little separate Legislative re-
straint placed over their conduct, and have
private interests at stake, which, in the pur-
suit Of immediate and large profits, must usual
ly possess a strength so superior TO that of any
sense of general duty to consult the public
security.
The amount Of circulation, which existed in
the early part of the last year, had increased
$30,000,O00 or $40,0oo,000 in only three
years. 1t continued to expand for some months
afterwards, and in The last annual report was
considered likely TO prove r,iinous TO steady
prices; to surround with danger every species
of sound trade; and not to be susceptible of
that reduction to proper dimensions, which
was necessary; and soon inevitable, without
probably producing some of the widespread
sulierings which have since happened. The
constitutional power of the General Govern
ment to check such evils, except as before in
dictated, and except incidentally, through the
kind of money it can and should permit to be
employed in its revenues and expenditures, is
apprehended TO be limited. Through the lat
ter, it may useiully discourage, as Of late years
has been attempted by Congress as well as
the Executive, the dangerous issues of small
bills, and, indeed, paper emissions Of any kind,
which are not "paid on demand in gold or
silver coin at the place where issued, and
shall not be equivalent to specie at the place
where offered, and convertible into gold or
silver upon the spot, at the will of the holder
and without delay or loss to him." For the
like purpose, it may likewise continue inlexi-
bly, to countenance for smaller payments, and
in the business of society not particularly COM
mercial a metallic currency which is not
liable like bank paper to sudden fluctuations
and great losses. A further wise step would
doubtless be, to refrain to make, by its own
acts, any addition to the amount of bank CAPT.
tai, already too great; and to rely on bank pa
per as little as practicable, when authorized
in the improvident manner which has often
prevailed, and exhibited so much feebleness
and insecurity, as well as produced so many
Inconvenience and losses.
1t appears TO the, undersigned that, all be-
yond this, which can be benefcially accom-
plished, in connexion with the last cause of
the present endorsements, and without an
alteration in the constitution comforting on the
General Government direct authority over
every kind of banking, must be effected through
the State Legislatures, and the commercial
habits Of the community Much improvement
can, doubtless, be introduced, if the I.egisla-
lures will impose those additional regulations,
restraints, and securities, which have been
before enumerated. Much more will also fol-
low, and substantial relief be afforded to the
people at large, if, in addition to the other
measures recommended, individuals will ex-
ercise the wisdom to place greater reliance
on real capital, active industry, frugality, and
well-grounded credit, than on that inflated
system which of late has contemporaneously
prevailed TO such a ruinous extent, both in
this and some other countries.-A system,
which has been encouraged by some persons,
under the delusive idea that there was no
overtrading of any kind, till a revulsion has
occurred almost without parallel, and has
given to commerce and credit blow, whose
destructive effects it may require years fully
TO repair.
All which is respectfully submitted.
LEVI WOODBURY.,
Secretary Of the Treasury.
To the Hon. JAMES X Polk,
Speaker ofthe House of Representatiues.