The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-02-20

or VIRGINIA.
i, f..o.i,oa 10 Ae SAB Tisasnry Hi and in Support
a. 4, Ssbsffais. Dsissred ia che Sssais Of tAs
Uaiisl STATES, STA aud Ga February, 1885,
(coScLupED)
What system Of policy. then, il will be ask
ed, would pursue The same great auiho-
ri,v, whose words | have already quoted,
saws, an good patriot and true politician
viii always consider how to make the most OF
the erisiiag materials Of his country" This
is the foundation principle on which would
build. Experience has shown, in the lam
guage used by the present Secretary of the
Treasury in 1884, that banks are the most
Irresponsible. safe, convenient and economi-
cal" fiscal agents for the government. The
State Banks are institutions now e1iSting.
would . make the most" Of them for the pub
lie service. There is no national banking in
sti,ution in existence and the condition the
country, already surcharged with banks, the
state of public opinion, the known sentiments
and pledges of those charged with the public
administration, all conspire TO render il very
unlikely that there will be any such institution
at least for years TO come. ! say farther-in
my humble opinion, there ought to be no such
institution; first, because there is no constitu-
tinnal authority TO create il, and secondly, be-
cause its political dangers, in any form in
which it has heretofore existed, have been
found to more than concordance its suppos-
ed advantages, in other respects. Then, as
10 the Sub-treasury scheme, II is novelty
utterly unknown TO cur laws aud usages,
which could not be brought into existence
without violating all the habitudes of our peo-
pie, deranging the operations of business, and
hazarding the mnst cherished principles of our
political institutions. What, then, ought TO be
done ! Recur TO the "eaistiag materials OF
the country" the State Banks" make the
most" them for the convenience of the go
yernment. as well as for the general good
reform their abuses, correct their defects and
adopt every precau,ion which may be neces-
sary to ensure their fidelity and efficiency.
These institutions, it is true, have recently,
il common with every Other interest in the
country and with the whole commercial world,
been subjected To serious embarrassments.
All agree, however, though differing as TO the
particular causes which produced them, that
those embarrassmenis have been the result of
very peculiar and extraordinary circumstances
The banks, too, which were employed as the
repositories and fiscal agents of the govern
ment, have, for the most part, amid circum-
stances of the greatest difficulty, actually dis
charged all their engagements TO the govern
mem, enormously heavy, as they were, in con-
sequence of the large surplus revenue; or the
few who have not yet done So have satis-
factorily secured the comparatively small ba-
lances due from them, 10 be paid at short pc
RODS, according to an indulgence voluntarily
granted to them by Congress The past,
therefore, candidly considered, furnishes no
ground against the renewed employmentof the
State Banks as fiscal agents OF the govern
ment Experience may have, and doubtless,
has, disclosed defects and errors in the patti
cular plan upon which they have been hereto
fore employed. Correct, then, those errors
supply those delects-but do not reject their
employment altogether. This, sir, is the ge-
neral principle on which have bottomed the
proposition | have submitted as a substitute
for the bill reported by the honorable Senator
from New York; and will now proceed to
explain, in detail, those provisions Of the SUBJ
stitute which distinguish it from the state bank
deposite system as heretofore organized.
1t is now generally acknowledged that one
OF the principal circumstances which contr-
buted to embarrass the operations of the late
Deposte system, was the large number of
banks employed as repositories amounting,
increase of number, in part, was rendered ne
cnssary by that provision in the act of June,
1896, which required that. where the amount
ofpublic deposites in any bank exceeds three
fourths of its capital actually paid in, the sur.
plus should be transferred to some other bank.
In the execution of the act, however, (from
considerations which am not able to explain)
there was still farther increase in the number
81 al Il h. H.,
ments OF this provision. 1t is obvious how
the whole play Of the machinery must have
been weakened and INSTRUCTED by this need
that twenty banks, judiciously selected and
properly located, would be competent to do
the whole business Of the Treasury Depart
ment, with much less danger Of embarrass-
ment to the Banks, and a far more easy and
efectual supervision on the part Of the Secre-
tary. The substitute, therefore, provides that
the number of Banks to be employed as pub
lie repositories shall, in no case, erceed tcea-
ty.fue, to be chosen from among the most So
lid and respectable banks in the respective
States, and their location, as well as number,
to be determined solely with reference to the
wants and convenience of the Treasury in
conducting its fiscal operations.
The substitute also proposes an important
change in the mode of selecting the deposite
banks. Heretofore they were chosen by the
Secretary Of the Treasury, at his will and
pleasure alone. This sole agency of the Exc
cutiye will, in designating the repositories of
the public money, exposed the late system to
suspicion of lavoriiism and wait of con
fidonce in general, which greatly impaired its
moral force, and admitted a possibility of
abuses, which, il is certainly propcr should