The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-06-14


What argument could make this palmer By
the issue Of Treasury paper, as proposed, you
impose upon the revenue the duty Of redeem
ing the notes as fast as they come in. The
committee complain OF this feature in the law
Of October. The Secretary tells you, that.
under its operation, while the expenditure Is
| from two to three millions month, the cash
receipt does not exceed one-quarter Of mil
lion; and yet, with theory and practice both
united against il, we are required now to re-
enact the very same law.
But, sir, without the light Of such expe-
rience, should be against this mode of rails
ing money, except under circumstances OF
such imperious necessity as left no other al
tentative.
cannot consider this as party question,
although by no means one Of those who pro-
Tess freedom from all party restraint yet
on occasions where such restraint would over
rule my own sense of right, cannot and will
otregard it. concur fully in the necessity
Of raising this supply. am prepared to vote
for it cheerully, and without stint, and with
out any rebuke upon the administration; for
do not believe that It is justly responsible.
trace its diminished revenue to causes over
which il has, and ought TO have, no control;
TO those causes which have operated to impair
the revenue Of all alike, whose resources are
implicated in the trade and business Of the
country.
Until that trade and business shall revive,
and be again in a condition to make its wonted
returns to the public Golfers, money must be
raised upon The public credit in some FORM
10 this all are agreed; and our plain path Of
duty IS, to obtain it on the most economical
terms within the pale Of our authority.
Looking to the former practice Of the Co
vernment, am taught 10 believe that an issue
Of Treasury notes has been looked upon
rather as the alternative Of an unembarrassed
fnancier than the choice Of undoubted credit.
In the first war loan Of 1912, Mr.. Gallatin,
then at the head Oft the Treasury, (whose abili-
ty and knowledge Of this subject none will
question: reported TO Congress that, of the
eleven millions authorized to be raised by loan,
but little more than six millions had been
taken, leaving deficit Of nearly five millions
Of dollars. Speaking of this deficiency, he
says:
:" It is confidently believed tina. the amount which
remains uhsubscrbed for will thus be filed early
the money may be wanted for the public service. III
order, hoioeper 10 prepent the possibility Of disappont
ment, and TO romoye doubts and erroneous expecta-
tons beg leave submit the proprey Of authorizing
the issue OF Treasury notes on the following principles,
viz. . ..
4" LIST. Not to exceed in the whole the amount which
may ultimately not be subscribed to the loan that is to
say that the amount received on account Of the loan
andthat Of the Treasury notes, shall not altogether
coed 81 600 600 IS
I'D To bear an interest" &c,-Gattatin's Report
on The Finances May IA, 1872
Here, then, we have proofs that the first issue
ofGoverRtnent paper, since the old continental
money, (thc history of which we all know,)
was not recommended or feserted to until
loan had failed and then only and strictly as
auxiliary to loan direct. So far from being
treated as an ordinary resource, MIR. Galatin
asked the power, in his own emphatic lam
guage, only :" to prevent the possibility Of dis
appointment if the loan should fail. 1t was
considered by him as the very medicine Of
state," to be administered only in the last re-
pire. Under such auspices, we had amr f sx.
issue Of Treasury notes, amidst the emDaa,allsss
ments Of u war, and under the pressure of inn
paired credit The necessities and difficult
ties Of the times forced this measure into use
upon sltilfu though reluctant financier. His
sagacty doubtless loresaw the consequences,
though from them there was no escape. The
emission was continued from time to time, at
Increased interest, until they were deprecated
at the doors Of the Treasury as low as seventy
five for the hundred.
Mr.. Dallas, who came after Mr.. Gallatin
in the Treasury, was opposed to the continue
ton Of this policy. But Mr.. Eppes, then
chairman Of the Ways and Means in this
House, espoused the opposite. His purpose
was to create and continue Government pa
per TO supply circulating medium for the
country, to take the place Of the paper of the
State Banks, then dscredited by the suspen-
sion OF specie payments.
"The want Of some medium" says Mr.. Eppes,
(which resting firm and solid basis, may unto
public confidence and have general instead Of local
circulation, is now universally acknowledged" and,
after recommending further issue Of Treasury notes
for this purpose, he continues:
"To receive their circulation, it would be neees-
sary, ..
- LIST. To issue them in small sums
"2d To aiioto holders 10 fund them at pleasure in
per cent. stock
I'D. To make them payable 10 bearer and pass by
delivery. M. .t.....
"4th To make them receivable in al pubic dues
18th The United States, to prevent redundant cir
cua,ion retain the power OF redeemng them at plea
sure or of funding ihem."-Report Com. Ways and
Means, Oct. TO- 1914.
Such was Mr.. Eppes's idea Of the true uses
and intent Of a Treasury issue. But even he
was obliged to rest it for support on the fund
ing system. Regarding n permanent debt as
the lot of our country, in common with all
others, he looked to that as the Legitimate and
only support of his scheme Of Government
paper money, 10 be funded at The pleasure Of
The holder, or at the ,ciH Of Government, in
permanent 8 per cent. stock
Mr.. Dallas, however, in letter to Mr..
Ctar ro1