The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-06-05
REMARKS or MR. DAVIS,

IN SsSatr, May IL, ls3S.--On the bill 10 extend the
charters Of certain of the District Banks.
Mr.. DAVIS remarked that he had risen chiefly
10 correct an error He had been informed than an
expression which Cell from him the other day in the
debate respecting the banks Of this District had been
misunderstood He had expressed some surprise
that the Senator from Missouri MIR Benion) should
condemn the Bank Of Washington because II paid
specie for It's bills, and gave him understand
was difficult 10 please one who was neither satisfied
with nor without redemption of notes in specie
The Senator said this did not do justice to bis views
for he complained that the bank did not put out lis
bills, and therefore had nothing TO redeem, and its
declaration was mere pretension. Mr. ID. in reply
said he well knew that, SO far as regarded active
banking business, il was substantially a huinbug
BY the use OF this phrase il had been supposed that
he concufred with the Senator in condeinning the
course Of the bank Nothing could be further from
the truth and he thought he explained himself so
fully al the time that one could miSarprehend
him, for he affirmed that the bank did all il could
do, II was lis duty % redeem its bills and it
had done So This was Just rs 1t should be !;
but he added further, that in the existing state of
things no bank pursuing this course could keep its
bills out for paper was less valuable than specie BY
several per cent. The Bank of Washington could
not therefore, safely issue dollar Of its paper
less it had dollar Of specie 10 redeem it. No
bank could do business in that way without, loss for
II as much money must lie idle In the vaults as is
equal 10 all bills aaoa the loss OF interest is exactly
equal to the gain, and nothing IL le indemnity for
risk or 10 delray expenses. The Bank Of Washing
ton had not, therefore, kept Its bills because IL
could not work impoSsibiliteS and moreover il was
difficult 10 how as jealous for specie circu-
! lation as the Senator could be anxious 10 have
bank Withdraw il from circulation 10 give The pub
lie only dollar for dollar in paper. With his views,
| one would think il better 10 have The specie aaoa
| than to make This Substitution OF paper All this he
had said in substance, and supposed Of course every
one would understand what lie meant by humbug
namely, that payment of specie was under such cir
cumstances, merely nominal, as the bank could not
| do business. '.
Now that he was up he would add few words
more in regard TO this bank for he thought remarks
unjust in their character had been made in relation
to il. Its embarrassments in 1884 had been advered
to with great disapprobalion and urged as
for Withholding confidence from il, and refusing TO
renew its charter. IL was true il had been embar
rassed but, he thought even that could be explained,
without leaving upon the corporation any stain Of
dishonorabe reproach. He would, however, content
himself with looking AT its subsequent conduct and
whether afforded evidence that il possessed the
public confidence, and whether il had given proof
of design rather 10 stand fair with the Public than
to make money. had made no dividends for five
years not a farthpg had the stockholders received
during that time, but il had been sedulously employ
cd in repairing and restoring its credit 1t then had
S2l 900 of deposites; II now has S3I2 1000 an
amount actually greater than its capital He had
before him statement Of its affairs then and now,
both as TO its liabilities and resources by which il
was manifest that, by prudence and economy II had
repaired lis losses, and had Justly entitled itself TO
| the high confidence Of the Pubic which il now pos
seSscd. twas the last among the banks to suspend
payments, having redeemed over $4,000 of its cir
culaion before ityeldcd tohe pressure times.
Atthe moment of suspension il had about Si3oOO Of
| bills in circulation. This event occurred in May,
1887, and, i'll August following, IL resumed the re-
dempon of its bills in gold and silver, having Sus
pended for about three months And, sir, there is a
striking fact connected with this illustrative Of the
great confidence felt in the ability OF The bank. Dur
ing this period oithrce months il went on, like other
banks, receiving is bills in payment OF debts, on de-
poSite and in exchange for the bills of other banks
and how much of their circulation, think you came
| in 7 Did the holders Of bills rush upon them
| Could those who owed the bank buy them up AT a
heavy discount, and thus pay their debts All It
was able 10 collect in, during that time amounted 10
about rs 600, leaving in circulation, when u resunl-
ed, over $35 600 which has since been reduced 10
$4,000, or to a nominal sum, for il sprobabe most
OF this will never return. i not this triumphant
refutaon of all the ISLANDERS about its having dcirRud-
4 ed the Public? Has il not forSaken its own immc-
date interest and sacrificed all present advantages
to the stockholders 10 strengthen itself Has II not
promptly met its iabiliNesl What has II omitted
| 10 do which il ought 10 have done, or what has II
done that it ought no, 10 do II any institution can
present itself with clean hands does not this do IL
II any institution can atone for losses or errors IN
business has not this done II II stands in shape
wrong unless we exact impoSSibiiities. y.
Mr.. ID. said, having now done this act OF justice
10 the Bank Of Washington and its officers he would
notice some misapprehcnSions which gentlemen
labored under respecting the banks IN Massachusetts
He then proceeded to show that, from the manner
of conducting business in that State the banks were
necessarily made the collectors of the bills II each
other, and when thus collected in, they were with
drawn from circulation and exchange, 80 that the
circulation on paper always appeared much Target
than il really was for the bills thus held, on az
average, he considered as canceiling each other u
the different banks He then proceeded 10 prove
from the returns taken in this view, compared
with other States, that the banks Of that State wcr
in condition beyond disirust; and be believed d
bank could comply with the laws Of Massachusetts
and fail to be sound. The system was guarded VIII
great caution but frauds will sometimes occur.