The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-09-29
.FALsE CREDIT sYsTEM..

The Globe, short time since, published an ex-
tract from Mississippi paper depicting in most
glowing colors the condition Of things there, owing
10 some of the inhabitants having voluntarily bor-
rowed money and involved themselves in debt. II
gratuitously remarked, "a pretty commentary this
upon the vaunted credit system Of Messrs. TALL
MADdE and whitney"
The official organ has shown that its editor and
all those who speak through its columns are opposed
TO the credit SYSTEM They are for annihilatng
all credit For that purpose they are striving TO
establish the Snbtreasury system, which would
place in the hands of the Executive an engine as po-
tent for the accomplishment of that object, as the
lever of Archimides itself.
We have ii from good authority that, the State
Department is carrying out the Snb-t,easary, hard
money system to the fullest extent is said that De-
partment has drawn from two Banks in the District
the whole Of the balance of the contingent fund,
(amouning to many thousand dollars,) in gold and
buried il in its own Subreasury, Of iron chests bars
bolts, locks, &c, to be paid out hereafter il may
be required. Whether they have in use the hydros-
tatic balance and sliding drawers "a la Goage) We
know not.
1t is reported that, while the head Of the State De-
partment thus carried into practica, operation The
Sub-treasnry system on the one hand, he was the
patron of the false credit system" on the other
One of the banks from whom this gold had been
drawn being unwilling to encourage the false sys
tenn, said gave the hon. gentleman notice, that he
must pay up debt Of some six or eight thousand
dollars when 1t became due in gold All systems
should operate reciprocaly between in their bu-
sness operations. Any bank or individual who per-
mits any advocate of the Subtreasury system TO OBJ
tain any loan, or derive any facilities on credit,
~ III 81. cf
encouraging the false credit system"
We will tell the editor of the Globe what " the
vaunted credit system of Messrs. TALIMADoE and
WHITNEY" is. II is that which Messrs. Gallatin and
Crawford were the advocates of; and which they
enforced during their administration of the public
finances 1t is that system which "MAKES 1T
THE PARTICULAR PROVINCE OF THE
TREASURY DEPARTMENT OF THE UNIT
ED STATES TO DIRECT THE MoNEYED
OPERATIONS OF THE PUBLIC TO THE
PRESERVATION OF CREDIT"
That such were the principles of those two emf
nent statesmen and fnanciers, which they enforced
in practice, the following facts will fully prove.
On the 27th of May, 1913, the acting Secretary of
the Treasury (who was then VIM Jones) wrote 10
Stephen Girard thus: "The arrangement made by
Mr. Gallatin, relative 10 the deposite of the public
moneys drawn from your bank, in favor Of the pub
lie agents. to shield you against the attacks Of
the incorporated banks, TO whom such moneys would
otherwise have been transferred and the magnitude
of your contract might thus have been rendered
highly proudieal to your institution 10 tho Part
cular province and il has been the practice of the
Department Of the Treasury of the United States to
direct the moneyed operations of the public tothe
preservation of credit, by maintaining the equi-
brium between the moneyed institutions Of the coun-
try and it has protected your institution, by the
arrangement alluded TO, SO will guard those inst
tutions against any undue pressure which the public
funds in your vaults may enable you TO direct
them am informed that you have made some very
heavy and unnecessary drafts of specie from seve-
raj banks, particularly from the Pennsylvania, and
Farmers and Mechanics Banks, with indications of
disposition to persevere, which has excited consi-
derable apprehension therefore deem il necessary
to inform you that continuance of that system will
induce the prompt application of specific remedy"
Mr. Crawford remarked on this extract "From
my personal intercourse with Mr.. Gaatin, know
he entertained the sentiments communicated in this
letter, and presume they have been entertained by
all OF his predecessors and successors in Office and
acted upon whenever cases occurred which rendered
ii necessary" See State Paper Cd Sess., 18th Con-
gress, Doc. l05, p. 176.
| HON. MIR. CASEY.