The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-04-14

safe TO the extent they have been eonded il, Their
discounts have been In general somewhat incIeas-
ed bat though tempted by the en,erprising spirit OF
the tines mol unusually increased in degree dispro
portioned 10 all their available means. IRsy hare
also in some CAKES been able 10 aid and hare literally
add OLhr hauling institutions IL their hborhood
BIZ as large and long balaaessaad ether iRdgeacss
tv0d generally appear 10 haze been sanctioned BY
rect principles"
How far these balances left with, and other ndul-
gences extended 10 other banks by the deposite
banks with the public money, and at The express So
licladon Of the Secretary of the Treasury, were
sanctioned b. correct principles" the result has
proven.
Iapprehend that 80 far as the rcvulsion that took
place, and the disasters consequent on i, are 10 be
ascribed 10 sttmnlaHts 10 orertradiag, and 10 an
iaiaSicioRs Increase If bank discounts" the facts
which have adyercd to furnish the most irrefrag-
bic proof that The Treasury Department stands con-
spicuousy distinguished for the part Il took in pro-
ducing them. And furthermore do those not con-
clusively show, TO use the Secretary's own words,
the department has participated in "a systea arhich
has6sea eaeOuyagedby person. under the desire
idea that there tcas orertradiag Of any Kind, til
yernls0a las cirsn 10 commerce and credit Hoc rhose
desiraciirs -Fets il may require years fully 10 repair"
Under al. these circumstances respectfully ask
of you in all candor whether il is not wrong unjust
and even wicked to continue the crusade against all
the banking institutions in the country at the head of
which is the Secretary of the Treasury than whom
no one has been more active or vindicliye than
himself
II the proofs to sustain this allegation are wanted
will advert to a few OF them.
In a report made to the House Of Representatives
and addressed TO yourself, dated the 2Slh of Febru
airy last the Secretary says, =" As 10 the amount Of
balances against all banks which have been used as
public repositories, thai is not secured, will pro-
baby be lost adding thereto the estimated loss that
has accrued By taking on public account depreciat-
ed bank notes. would observe, that il is computed
those balances so lost will be about 81 ,0000O0, and
the loss by taking such notes about IS 500 600 max
ing in the aggregate Sc 100000, This without the
addition of any interest the subsequent state
ments If interest was cast on the above sums, the
aggregate would exceed Sl3,00o,000
The data on which the computation rests, arc that
the nominal balances against the banks that have
been public repositories, and in default, are now
though excluding what stands TO the credit of dis
bursting officers about sc, 100000 Ofthis sum, near
81 036,000 stands against the old bank repositories
and the residue against recent The loss to the
Treasury by taking deprecated notes in 1914, Is,
'l6, and II is estimated at quite S., 500, 900"
Who can read the preceding extracts and not per
ceive an oyerstraned effort 10 magnify the estimated
losses TO the prejudice of the banks in the minds of
the pubic1 ..-~.'. ~. ~. .1
But what are the facts, in relation TO the banks, at
the period all these losses are said 10 have been sus
tanned by the Government by its connection with
them1 lpropose TO lay few OF them before you.
First, from the Globe of the "a of June 1884, when
it was the acknowledged organ or mouthpiece of
General Jackson, find the following: The STATE
BANKS OF MOST OF THE STATES, EvINcgp THEIR Pa
TRIoTisM LENDING BEYOND THEIR MEANS TO SAVE THE
SINKING CREDIT OF THE Treasury; AND NOW THE MIS-
FORTUNES WHICH THEY ENCOUNTERED COMMON WITH
THE GOVERNMENT IN ITS FINANCIAL CREDIT IS MADE AN
ARGUMENT AGAINST THEM" The next witness whose
testimony shall quote, is Mr.. Cambreleng. On the
1ith January, 1884, he said: " We tried the expert
ment Of carrying on war without money and OF sup
porting public credit without taxes. Our revenue
from imports ceased-no tax was imposed through
out 1912 and lSl3-we issued no Treasury notes,
and negotiated our loans at lower and lower rates
WE BORROWED THE CREDIT OF OUR LO-
| CAL BANKS AND COMPELLED THEM TO
| SUSPEND THEIR PAYMENTS-eonfdencc 1eas
dsroyed AMI panic secmld 10 a6ect ALI or ou ofhe
| Government" ..... -.
| now come to the testimony furnished by Mr.,
Woodbury. himself He said in 1881 that -" the
losses which have formerly been sustained by the
General Government, through the failure OF certain
State Banks selected according TO the impression of
many persons principally, if not entirely between
1911 and 1916; or between the expiration of the old
and the passage of the new charter OF the United
States Bank have been frequently adduced as objec-
tons the safety Of the present system, and with
out some detailed examination and careful discri-
mination, are, it is freely admitted calculated to
awaken some doubt as its ultimate practical secu-
rity" He proceeds; But il is memorable fact,
connected with this inquiry, though often represent
ed otherwise, that not single selected bank failed
between the expiration of the old charter and the
grant of the one and that none of our losses in
cluded in our unavailable funds happened until some
time in 1917, after the Bank Of the United States
4 was in operation" Again he says: " The truth Of
this much-misundcrstood subject appears TO b. not
only that one failure of selected bank did not occur
within the period while no United States Bank was
! in operation, but that of those which afterwards
stopped payment within three or four years four of
the number have since discharged all their liabilities
aud the residue OF the liabilities of all the others as
depoSitc banks, is less than $4,000"
After various other explanations in relation TO The
depostc banks, the Secretary says: Justice to the
Slate blnkng institutions as body, whose conduct
in some particular has certainly objection
able, BUT WHOSE INJURIES TO THE GOV
| EMINENT HAVE BEEN ALMOST lNCREDI-
BLY, EXAGGERATED, (now as then) and whose
great benefits 10 il, b iii during the existence of our
two National Banks and while neither of them ex-
ised have been almost entirely overlooked, has led
Iii and SIlh1tii is rnStS