The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-01-09
COMMUNICATIONS.
SUB-TR EASURY- DEPOSITE
SCHEME STATE DEPOsITE BANKS
AND TREASURY NOTES.
NO. TX.
, n. M

Toihc Publisher OF The Mddis0niaH
1t may be thought by some, who have read my pre-
ceding numbers, that have been exceedingly guard
ed as to the supervisory powers with which would
clohe the deposite banks, under The system which
have advocated that is true, and it was intentional.
have proposed that in case the system shall be es-
tabshed which am the advocate OF, the depoSite
banks shall require frequent settlements with all
other banks, with which they have business inter-
course; and, as often as may TO them appear requ-
Site for the purpose Of checking disposition towards
an unwse extension where II is discovered TO exist,
they may call for payment of balances due them in
specie 10 sufficient extent TO effect that object; pro-
yided however that such demands for payment Of
balances due the deposite banks shall not be made
without the sanction of the Secretary of the Treasu
ry consider /, would be both impolitic and impro
per- to leave in the hands of few banks employed,
at their discretion for the purpose Of expressing the
other banks il they choose such tremendous power
as the collection and keeping of the public revenue
furnishes This power was for a long time left IN
controlled in the hands of the President Of the Bank
OF the United States 1t was through the means Of
the public revenue, that the power was possessed by
that bank, which enabled its President in 1880 to say
to The chairman of the Committee on Finance, that
there nere5sa fre banks in he country hichae United
states Bank could not crush IL chose 10 exercise its
po,ecrs. How far it ever called those powers into
operation, shall not stop here TO examine. That
such commanding powers accompany the collection
and keeping Of the public revenue, no one acquaint
ed with all the facts of the case, will, apprehend
dspue. Therefore it is, that wish to guard its ex
ercise from the control of any man or set OF men,
who might do so under feelings Of excitement or Of
capricious resentment. 1t would be better for the
hanks employed TO collect ard keep the public revc-
nue, and extend greater security to all the other
hanks that the exercise of this power should be con-
trolled by one, who must be supposed to be infu-
enced BY no other consideration than the general
good 49,.
Itmay be asked, why not give the deposite banks
the authority to call for the payment of all balances
in specie The reply is, that would be not much
less obnoxious and disastrous the other banks and
the community than the Sub Treasury scheme.
The collection and keeping of the public money
should b, so conducted, as to control the currency
of the country 10 preserve it sound, and secure
reoulariy to it, II should never be conducted 50 as
10 lead to frequent expansions and conractions in
the circulating medium and business Of the country,
in which are laid the foundation of ruin and dis
aster.
One of the important elements in securing sta
bly to the currency and business OF the country,
is that the public shall not be regularly col
lected together into one mss, in any description of
currency, by the fiscal agent agents of the Fedc-
raj Government But, that so far as il can be done,
without leading 10 improper expansions OF business
upon such balances, that they be left with other in
s,itutions until they are melted down by the dis
bursements of the public money by the fiscal agents
employed to collect and keep it. Whenever 1t Is
discovered there exists disposition on the part OF
those owing these balances to extend their business
upon them then the controlling check should be
employed Of calling on them 10 pay part of those
balances in specie. In the city Of New York, where
half of the revenue in ordinary times is collect
ed, ii has been found, at periods when the public
money held by the fiscal agent OF the government
there amounted TO FIVE or six millions and the ba-
lanccs the other banks in debt TO IL three or Tour
millions, that a demand for two or three hundred
thousand dollars in specie on account OF those pa
lances led TO an immediate curailment oil their ous-
ness in consequence.
To illustrate the operation Of the plan OF leaving
balances with other institutions by the hScal agents
Of the government and al the same time using them
to check unwise expansions, have referred TO
| official tables and documents for the means.
On the first of January 1882, the balances due TO
the Bank of the United States, including notes
was 6ll6,O0O
Specie on hand : 7035000
TOTAL, l3l5iOOO