The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-05-22

4 Dy TWO bosion pdnhsi ne IePoftSu Al 9'us' NNs~
facts would hardly seem TO justify the sweeping
statement that the banks "eannot pag," having re-
ference, Ipresume, TO money held by them at the
time of suspension thai had been "adraaced" them.
This construction strengthened by the follow
! ing statement contained in your report, that,
"The drafts OF The Treasurer for the moneys held
on deposite by the banks at the time OF their discon
tnuance repositories were consequently protested
for nonpayment and returned and little or nothing
realized from the means hand, at the time oil
the suspension to meet the current expense OF the
| Government"
This statement is not borne out by the facts A
report made by the Secretary Of the Treasury TO the
House OF Representatives, dated the 18th Of January
lS38-shows that large sums were paid on the war
rants of the Treasury by the banks In nearly livery
direction; and, particularly in the large commercial
cities, Immediately after the suspension; and, that it
not until after the iranscendent skill in finance
OF those who manage the public moneys, was en-
ployed 10 depise mode 10 dscyedit their agents.
that a single draft of the Treasurer protested
The same report shows that, but a small portion OF
the whole number Of drafts drawn were protested
but were paid on presentation and also, that not
single drafl drawn on many Of the banks, was pro-
| tested at all.
The report errs most deeply in the statements con-
tanned in the following extract:
Previous to the month of October 1888 all the
connection which had existed between the Govern
men of the United States and the banks chartered by
the States, for term Of nearly eighteen years, had
been prescribed formed, and conducted by and
through the Bank Of the United States acting as the
fiscal agent of the Treasury OF the United States.
The committee in former part Of this report, have
shown what that connection was and how far IL ex-
tended II consisted in the reception by the Bank Of
the United States and its branches :" in payment of
the revenue Of the United States" of the notes OF
such State banks as " redeemed their engagements
with specie" and "located in the city or place"
where the receiving bank or branch was located, and
OF the return of those notes TO the State bank which
issued them at least once in every week" TO De re-
deemed 1rih specie This was the character and ex-
tent Of the connection between the public Treasury
and the local banks, under the fiscal management of
the Bank Of the United States To prepare for the
expiration of the charter of that bank, and for the
winding up of its affairs national bank, an insi-
tuition which public opinion had clearly indicated
was not TO have existence in this country after the
expiration Of that charter"
The connection between the Treasury and the
State banks did continue for many years, after the
establishment Of the Bank of the United States.
Bank notes, other than those Of that bank were re-
ceivcd in payment of the public lands; and further
more, that bank received the notes Of other banks
also These facts are proved by the following ex-
tracts from letters written by Mr. Crawford. Under
date Of the Sd February, 1921 he wrote follows:
"As The office Of discount and deposite Of the Bank of
the United States at ChiHieoe reccire Rece:rers on
bcha1 Of The Treasurer of The United States the same
bills that arc receivable at The Bank Of CAiHieothe,
there appears to be sufficient reason to Justify the
employment Of that bank depository Of the public
moneysa
In 1920 in entering into arrangements with State
n IN 1np arip
of the public money, Mr.. Crawford required of them,
that they should take from the Receivers, and place
to The credit Of the Treasurer of the United States
cash. the notes of the following incorporated banks,
viz Those in the cities of Boston, Nc,c York, Phil
adelpAia Baltimore and Richmond, and in The Dis
triet of Columbia, Except the City Bank of Balt-
more, and the Merchants and Farmers Bank of
Alexandria, and, all those specie paying banks in the
State in achich the bank is situated"
The statement in the above, respecting the policy
pursued by the Bank Of the United States in the
receipt Of the notes of State Banks and requiring
specie payment of them at least once week" in
SPECIE appears TO have been founded the 24h and
18th articles Of the rules and regulations for the go
vernment Of the branches. To my own knowledge,
they were obsolete, almost soon as enacted They
were not acted on at all. The above quotation from
MIR Crawford's letter relating to the practice of the
Bank at Chilicothe proves it. House Doc. No. SOB
at lst session of Odd Congress- and Senate Doc No.
IL, I'd session 23d Congress, both contain official
tables showing that year after year, the balances
owing by State banks (incuding their notes on
handy to the Bank Of the U. States and Branches
averaged fully one-haf the whole amount of the
public money which il held on deposi'e. They also
show that, these balances increased and diminished
with the amount of public money which itheld. So,
it with the deposite banks, prior to June, 1886
/ have extended this address to a much greater
length than intended when commenced lhave
touched but small portion Of your report which
had marked for comment.
My sole object has been deal withplain factsonly,
and with the use of them TO protect the banking in
situations Of the country as far as my feeble effort
will CO. from the serious injury which the fair
statements" and "conctsiue arguments" contained in
your report is well calculated to do them, by mis-
leading the public mind.
am respectfully, &c,
r. M. WHITNEY.