The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-05-22


selected which at the time were most unjustifiaby
and dangerously extended in their business. men
ton one instance Of bank, with Sl07 900 Of specie
only in its vault and with circulation of 81 $50 0O0
and debt owing TO other banks Of 100000 This
wasihe first bank that gave way in May; and when II
did il had in its possession more than million dol
lars Of the public money in Its hands. Many banks
were selected the lowest standing and respectable
ty among the other banks, In the places where they
were located. II seemed to have been entirely over
looked that, to use the words of Mr. Crawford when
writing to bank in 1872 "he character Of the Go
vernment is in some degree dependent on the pru-
dent management of bank which thus becomes its
agent"
But Il was not In the selection Of banks only, that
the evils contained in the act were aggravated they
were increased in degree wholly ndescribable in
The manner Of transferring the public moneys from
banks to banks, and from one section of the Union
to the other. Transfer warrants were issued with
unwarrantaby short notice and length of time al
lowed, within which, to comply with the order For
instance twelve days only was allowed for making
transfer of 100000 from Cincinnati to Philadel-
phia, after notice of issue of the warrant re-
ceived Transfer warrants were issued on the same
bank, at different times, without regard TO the peri
DDS fixed for payment of those issued previously;
so that the payment of each fell due about the same
period thus In two cases, the aggregate amount re-
quired TO b. transferred in one month by the same
bank, reached three-quarters Of q million dollars
Many of the newly selected banks were called on to
increase the specie in their vaults. This was uni
ormy effected by drawing specie from the old banks,
on which they had been furnished with transfer
warrants and some Of them went SO far as TO require
the banks on which the drafts were drawn to trans
port specie at their risk and expense and place
il in their vaults. This was the case with bank in
North Carolina towards the New York city banks.
In many other cases a disposition was INDUCED in,
the part Of some of the newly selected banks, 10
incommode and harrass the others. Transfers Of
money, which had been sent to New Orleans from the
Western States, were ordered from thence after the
season Of business had passed by, payable at the
North, before the next season Of business came
round All men, at all acquainted with the business
of the Southern cities, know full well that between
the close Of one business season and the commence
ment Of the succeeding one exchange on the North
cities is not 10 be had except limited sums and
at high premiums. This was peculiarly the case in
1885, in New Orleans during the last six months Of
the year; and specie was so scarce that the banks
tHcIt, WcIe CoHipcucu 10 Stuu W 4NCW ioih ciu
Philadelphia for supplies TO replenish their vaults,
This is but brief outline Of the manner in which
the act was executed.
BY the month of November, 1885, the banks in
almost every direction complained most loudly,
Even the three deposite banks originally selected in
New York called out for quarter. The monetary
affairs Of the country were convulsed from the
centre to its remotest borders. The wealth and
credit of England could not Withstand the shock such
operations as have described must vitality cause
Such is the history-such are the facts attending
the financial history OF the times as admitted by you
in your report, and furnished by myself.
ask you to answer in all candor whether the
statement" is " fair" one, made by you, that the
connection which had existed between the Govern
ment and the State banks" chad become dissolved
by the action of Lebanks themselves? 1t appears to
me no one can in fairness say SO.
Where is there to be found proofs TO justify the
sweeping denunciation that the banks had acted riM
pcrfdy and treachery totcards tie Gorcrnmcnt that
was Illuminated against them shortly after their sus-
pension from higher quarter would like to see
them pu, forth. None have ever yet been exhibit
ed .'..1,..... ... .1. ~.
do not hesitate to make the assertion, that the ca
tasirophe which befel the country in May, 1887 and
all the evils which both preceded and succeeded it.
have been brought about for the want of action and
by the action of the Treasury Department in con-
nexon with the public moneys, and the operation of
the provisions of the depose act and the manner in
which it was executed by the Secretary of the Trea
sury challenge the production of evidence that
can show the contrary to be the fact
Up to as late period as December, 1886, Presi-
liant To, IL pIa tba
deposite banks Said he, "Erperienee continues to
realize e expectations entertained 10 the capacity of
the State hanks topertorm all The duties of fiscal agents
oftte Government at the time of Tie remoral Of the de-
positcs." ..+..
The Secretary of the Treasury in his report Of
the same month, said " The money IN the Treasury
has been safely kept during Tic gear 1886. Until July
last during the oo prerioas gears, IL placed
the State banks selected according TO The discretion of
this department. on account Of their high standing and
Favorable position for fiscal purposes and regulated in
a manner considered most secure TO the Ireaeurg and
Convenient 10 community as eH as 10 aUeoncermed
Hisa source ofhgh qualification TO be able to adj that
rhilcso selected and empoyed not single dollar aras
lost TO the Government By any of them, single
failure occurred to transfer promptly, and pay cut sa
hsactorily The public money inrnsted to their custody
NOR IS 1T BELIEVED THAT THE DOME.S-
TIC EXCHANGES OF THE C COUNTRY WERE
EVER LOWER OR MORE REGULAR THAN
DURING THAT PERIOD"
Your report admits that, all the elements for re-
vulsion were in full action long before this period,
yet notwithstanding, these testimonials of the high
est officers Of the Government, you allege that the
connection which had existed prior to the catastrophe
Of May last, between the Government and the State
banks was dissolved "byt action of The hanks them
sclresF The facts in my opinion do not sustain the
statement. 0... ..