The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-07-26
s5,Ooo,OOO
55,0N,000
100000


Depostes 55000000
Specie In circulation 100000
$4,000 0O0
Specie in the vaults of banks S22OO0OO0
You see that the basis of ! 10 millions Of issues and
credits, only %, 100000 Of dollars yet il is i'm
possible 10 imagine currency answering oil lis egiti-
mate ends more peri, city. aid at the time, in
every respect safe and stable ], is manifest that
every dollar sddcd TO the stock Of gold and silver then
on hand III the vaults Of banks would have been Just
much dead loss the communy--besides lowering
prices, and so far. dlscouragng industry. And here
will take notice Of another fallacy very general here IL
TO suppose that the proportion Of to three main
tanned rather aimed at (or il is seldom effected by
the Bank Of England, is fundamental, universal rule
of sound banking. Not at all. What this proportion
ought 10 BE-, is matter Of ioeai experiment, aud
cannot be settled prom. Ia this country the expo
rience of half century has established beyond doubt,
that nothing approaching h,,d required-a sixth,
or less, has been ahuncantly sufficient Our peculiar
situation, habits Of business, and the character Of
the people have made il In England, were il not
that the bank is obliged to keep hand specie enough
to support not only its circulation, hut that of the
Try, aud the Scotch banks too (nr Of
upon them, they oil have recourse 10 1 less propor
ton would be required Mr.. Horsely Palmer says so
expressly in his examination ciore committee OF the
House OF Commons in 1882 I
While on this subject, viii state, that have been
very recently brought to doubt the soundncss OF Of
my opinions the history OF American banking taken
a whole a litl'e volume already referred tot
TO show that. ii New England especially, the system has
been the safest, cheapest, ,s effective and in all
spcc,s the mos, useful and beneficial that could have
been devised. This being merely practical question,
10 be settled by experiment. every thing depends upon
the true state Of the facts Scotch banking has been
immense blessing TO that country, whatever may be
thought OF applicable to others take this occs-
sion Of calling public attention III The South 10 yo-
lume, which, If its statements should Lc found he
quite accurate, viii have placed this whole subject
new and striking point OF view.
Now, sir, we come 10 the question: what will be the
effect Of the Sub Treasury scheme with the hard money
feature upon the business OF country, boitomcd npon
system Of banking thus conducted Suppose i, should
require only 10 additional millions Of spece-this
we have seem is as much the rhole amount that Gil
cuaied throughout this vast country in 1890 1t would
absorb every cent OF It, II is nearly half The treasure OF
all the banks at the time. Is i: not obvious that
should be violently disturbing all the settled pro-
portions Of things, and threatening the business Of the
country with perpetual disorder But what guaranty
have you that the amount will be only what has been
stated The country is Immensely progressive, twenty
FIVE years double its population aud resources, aud
consequently, its revenue levied is almost exclu
sNely, on and the public lands, which
continues TO be favorite mode Of investment in pros
porous times. 1t is absurd 10 lay any stress
present enbarrassmcn.s they are merely temporary,
thought. They will pass away though they had never
been, in the Of few years, if the Government
will only Gas now think i, shows disposition to do.)
inspire the community with confidence this great
subject Of finance The reduction Of the tariff in AZ is
just as insufficient guaranty against an abundant
and large surplnsses in the Treasury-or should
these be taken of by Proportionay large expenditures,
as they probably wlaganst high average balances on
hand. Every body knows. that low duties increase
consumption, and consequently revenue. and should
in few years Should it prove So ard should
plusses OF thirty or forty millions accumulate in the
Treasury, as IN 1886, the arrangement Of our whole
business, both by the effect of the withdrawal Of so
much specie from circulation and the fall OF prices at
home and abroad, would be fghtul But even without
any such extraordinary accumulation, and supposing
future appropriations always equal the raised
still the effects Of this scheme Of boarding are likely
to be quite bad enough II must be remembered, that
it is not merely what will be lying in the Land Offices
and Custom Houses, and the hands OF dsbursng off
that would be distracted from circulation. The
merchants and purchasers OF lands would be compelled
to demand Of the banks amount Of specie sufficient
to meet current disburscments-andt this amount, what
ever 1t were, would be just completely lost TO the
uses OF currency. locked up in Of The safes de-
scrhcd in the bill
The quantity of gold and silver which would be
required by this change of policy, would be much
greater here than in England, for instance where
almost all payments are ultimately made in London
ne vast extent OIL our county; The independent ex
istence and organization of The State institutions
the great dsproportion between the revenue raised
and the disbursements made by The Government at
different points OF collection the consequent neces-
siy Of frequent transfers of the public money from
one part Of tile Union 10 another, would expose US
in very peculiar manner TO arrangements of bust
ness and circulation from such system As 10 the
inequality Of expenditures, II has been as you know
theme of eloquent complaint and denunciation TO
your Representatives here for years past. One of
my colleagues in the House MIR. Thompson has in
very able and argumenatve speech at this very
session treated that topic fully TO supeTSede the
necessity of my saying any thing more Of il here II
is sufficient to mention the general result only which
is, that there Is even now, that import trade Is
far less than il has been, and is likely thrust soon
10 be again, large balance annually paid over by
South Carolina into the Golfers Of The nation which
returns no more--and this balance, under The new
policy, is TO be RENTED in gold and silver per
petual drain is T. be made upon our little stock OF
those metals, for The benefit OF the very parts of The
country already so much favored By the operations
Of the Government. In addition 10 their present adj
vantagcs they are 10 gather specie for Them
We are not only 10 pay much more than we shall
receive as heretofore, but to make orr burthens
lighter, II seems, TO pay il in gold and silver
confess, sir do not exactly comprehend this; but
il the result be not 10 make New York, more than
Thoughts currency and banking 1881.
minutes OF evidence, No 90.
C,oJ,, nf Enol,nd nj No Init "A