The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-03-17
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COMMUNICATIONS.
ron rHE MApIsosIlN.


COMMUNICATIONS.
ron rHE MApIsoEIAs.
PuBLIus, No. XXV.-Being No. VIII. enlarged
"Hrtuc hres, bt truth shall stand"
propose to make few comments on the following
extract from speech delivered by Representative ~
Congress, from Kentucky at The extra session IN 1887
il the substance oil all the exceptions that have
been taken TO. and urged against the State Dahk
system:
"But, Mr.. Chairman, let US suppose the Presidents
nb-Treasuries III complete operation, and that good
and good crops have enabled the people to settle
old debts and that tranquility aud prosperity are again
prevailing throughout the land ask you u II be pos
sble TO Keep up any thing hike uniform national cur
rcncy with the paper OF State banks The voice OF
experience and proclaim that be done
How the people OF Kentucky, for instance, to know
the names, the number the creation and character OF
hundred Of banks chartered by the other States How
they to know the officers their signatures the cap-
tai and duration OF a thousand banking corporations
How is il possible for them TO have confidence ~ tho
sovency of the institutions that they know nothing Of
whose debtors and OF business they know not
And how you make them give credit where there Is
no confidence! Why, sir a life devoted 10 the study
of banks aud banking statistics can hardly keep with
the multitude of State banks existing aud when
States extend to the Pacific, it will be utterly i'm
possible. How them can the mechanics, manufacturers,
and farmers Of the country know what paper good
and what good for nothing The people IN one State
have control forming the banks in another
State" &c. &c.
COMMENTS.
!. No man can with success contest these PROPOSE
lions II is strange that persons who hold these opn-
ions. and act on them IN opposing thy Sob.Ifeasury
scheme, do not admit and maintain, the reasons,
that it would also he impossible, United States
Bank in complete operation, to keep up Uniform ma
tona currency with the paper Of the State Banks. 1t
is true the late United States Bank, that thrice slain
monster" did furnish the country with uniform cur
rency, the full OF its issues But il is also
true, that at the fullest tide OF its success the paper
issued by the State banks Of the debtor States
greatly below par, always, and often uncuent, in tho
creditor States II is also true the issued paper Of that
bank and its branches, formed but small part Of tho
currency of the country Ii is equally the Presi-
dents Sub Treasures would furnish the country with
uniform currency TO the full amount OF the gold and
silver necessary to the conducting the federal finances
under this scheme. 1t is also equally true that the
uniform currency used in this hard money system Of
finance, would form but small part Of the currency of
the country And It's also equally that under this
scheme in complete operation, with the multitude of
State banks existing the notes of the banks Of the
debtor States would be below par, always, and often
uncurrent, in the creditor States
2 Why is it, with the multitude Of State Banks now
debtor States has been and will be below par or incur
rent in the creditor States The fact that the balance
Of trade against State, cannot Of itself, reduce the
current value OF the OF its banks below their
mnal value. That may not be Inexperienced, it
may be well state expressly that this OF the sub
Iect OF finance and currency, though nearly allied TO-
taken not being identical with, that view Of it which
relates particularly TO the exchanges The
OF trade controls the course of the exchanges. When
the currences OF two States, consisting Of State Bank
notes, blending governmental and individual control,
uniting public and private stock held in the Bank ssu
ing such curences in perfectly sound condition,
10 other words, convertible into coin, circum-
stance but debt be discharged by OF such States
TO the other, produce variation from the par Of
exchange between them. If their debts and credits be
balanced. the rate Of exchange will depend the
dcn oil the currency in each and If either be in debt
10 The other, and, at the time the currency OF the
indebted State be deprecated, the depression OF the
change will exhibit the combined effects oil the debt and
Of the depreciation Of the currency Of the indebted State
II one OF such States, occupying the relations of debtor
and creditor, have sound currency and be the indebted
while the currency 81 the creditor State deprec
atcd the course OF exchange will only exhibit and truly
the difference between the eoBcndng effects Of the de-
tenoraon Of the currency OF the and the indebted
of the other. But while the balance OF trade against
Stale viii depress its exchanges it cannot effect nlu
riousy The current value oil lis bank notes circulating
the creditor State, such be known, the cIcdi
tor State, to the genuine issues and 10 be convertible
Into coin, IN the debtor State. In fact, the currency
OF a creditor State consisting OF State Bank notes, may
be so deprecated as to be below par in debtor State
and more the currency of debtor State, may be pre-
MUM in the very State 10 which the debtor State is
indebted Then, is the mere fact of indebt-
cdness which has caused the paper issued by the Banks
OF debtor States, be below par, and often uncurent,
in the creditor States The Of the effect in
winch the fact consists, pointed in the foregoing
extract And in truth, the effect has had greater extent
than TO the States standing in the relations Of debtor
and creditor IL has often happened with States, the
debts and credits Of which we're balanced while the
bank paper of each has freely circulated within its
limits, aud Without any variation from par an exchange
for the lawful COINS that the Bank paper of neither
current, at the nominal value, in the other.
The important and legitimate inference which /
draw from the two preceding comments, is that while
the State Bank system shall remain present organ
| lied, whether the Sub-Treasury scheme, or a United
States Bank Incorporated, be put in complete operation,
the large proportion of the currency Of the country,
sstng Of State Bank paper, will continue to want uni
forny OF value everywhere with which character Of
nationality 1t is desired by all the whole currency of the
country shall be invested And
A, How is this 10 be Effected What corrective nea-
sure which will dispense with and supersedc the pro-
posed Sub Treasures and tho supposed necessity OF
United States Bank can be resorled to, with the best
prospect OF success! II the foregoing extract has truly
told why is impossible to keep uniform national
currency with the paper OF iae State Banks, the
receive measure IS manifest and cannot be mistaken IL
says: with tho multitude of State Banks existing"
and likely TO be larger, unless radical change of policy
be inerposed, it utterly impossible for the mechanic,
the manufacturer and the farmer, become acquainted
with the names, the number the creation and the cha
racter or with the signatures of the officers, the amount
OF capital and the duration OF n thousand Banks. il
says those classes Of men will not nor will the mer-
chants who have better opportunities OF acquiring that
knowledge, have confidence in institutions with which
they are unacquainted, many important PARTICULARS
nor viii they give credit and currency to telr issues If
It be true that this want of capacity in the State Banks,
Gas the system is at present organzcd) to keep up
uniform national currency, is owing to that want Of