The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-04-05

can such men want! What do they meant lAeyca
want nothing SIR but enjoy The fruits OF other mems
labor They can nothing, but disturbance and
disorder the diffusion OF corrupt principles, and The
destruction OF the moral sentiments aud moral habits Of
society A RIGHTEOUSNESS OF feeling and OF action Is
sometimes Produced by prosperity itself Men cannot
always resist the temptation 10 which they are exposed
by the very abundance OF the bounes Of Providence and
the very happiness Of their condition as the steed,
fill Of the pasture will sometimes throw hlmsei against
its enclosures, break away from lis confinement and,
feeling now free From needless RESTRAINT, oeake himself
to the moors and baTrens, where want ere long brings
him 10 his senses and starvation and death close his
career,
Having said SO much sir on the general condition Of
the country and explained What understand by credit.
proceed 10 consider the present actual state OF the
currcncy.
The most rccen, Treasury estimate, which ] have
seen supposes that there are eighty millions oil metallic
money now in the country This believe, however,
to be coed deal TOO high cannot believe II exceeds
sixty, most and supposng one-half this sum 10 be
in the banks, thirty millions in circulation, or IN Pm
waite HAMS We have hundred banks and branches
with CAPITALS assigned for the security of their notes and
bills accounting TO two hundred and eighty millions
The amount Of bank in actual circulation IS sup
posed % be hundred millions; that whole cir
culaton is about one hundred and thirty mllons. The
arnotn Of debts due the banks, or the amount Of
teu loans and discounts may be taken at four hundred
aud fifty millions
Now sir, this very short statement exhibits at once
general outline Of our existing system OF currency and
credit. We see great amour, OF money or properly
in banks, their assigned and appropriate capital and
we great amount due to these banks. These bank
debtors generally belong the classes Of active bust
ness such have taken up credits Tor purposes
Of lands or merchandise, looking TO future
proceeds the means OF repayment II we compare
this state Of circulation OF bank capital and bank debt,
with The things IN England important dtirrences
will not fail 10 strike us.
The whole paper circulation OF England, by the
latac Il 10Th mil
made up Of eighteen millions OF Bank OF England
notes. and ten millions of the notes of private bankers
and oint-stock companies bullion in the bunk, nine
and half millions deb's due the Bank of Eng
land twenty-five and half millions. The amount
OF loans and discounts by private bankers and joint
stock companies is not usually stated, believe, in
the public accounts. II bear the same proportion
TO their NOES in circulation as in the case of the
Bank OF England, il would exceed twelve millions.
We may, therefore, take The amount OF bank debts
in England TO be thiry-fve millions. But | sup
pose that, of the securities held by the Bank OF Eng
land, exchequer notes constitute large part; in
other words, that large part of the bank debt is
due BY government. The amount OF coin in actual
circulation is estimated to be thirty and half mil
lions. The whole amount of circulation in England,
metallic and paper IS usually stated, IN round num-
bers, at sixty millions which, rating the pound
sterling al IA 60 is equal 10 two hundred and eighty
eight millions of dollars.
II will be seen, sir, that our paper circulation Is
onehalf less than that Of England but our bank debt
hpGs sterling amount 10 only one hundred and sixty
eight .ilons @. ,iaars and this sum, too, includes
the amount of exchequer bills, or government debt
in the form of such bills, which the bank holds
These facts very Iterialto any Just comparison
of the state of .hilss In the two countries. The
whole or nearly the whole capital of the Bank OF
England, Is lent 10 government, not by means OF ex-
chequer notes, bat on permanent loan And as 10
the private banks and joint stock companies, though
they issue bills for circulation they have no as
signed or appropriated capital whatever The bills
circulate on the private credit of the individual
banker OF those who compose the Ioint-slock com
panies. In the United States, an amount OF capital
supposed 10 be sufficient TO sustain the credit OF the
paper and secure the public against loss is provided
BY law, in the act of incorporation Tor each bank,
and is assigned as trust fund for the payment OF
the liabilities Of the bank And il this capital be
fairly and substantially advanced it is proper Sc
curity; and in most cases, doubt il is substantial
" advanced The directors are trustees of this fund.-
and they liable, both cvy and criminally, for
miSmanagement, embeZZlement, or breach of trust
This amount Of capital thus secured, is the basis
Of loans and discounts and this Is the reason why
permanent or al least long loans are not considered
SO inappropriate to banking operations, with US, as
they are in England With us it is evident that the
directors agents, holding fund intended 10 be
loaned, and acting between lender and borrower;
and this form Of loan has been found exceedingly
convenient and useful in the country.
In some States il Is greatly preferred to mortga-
geS, though there others in which mortgages are
usual. Whether exactly contormable 10 the true
notion Of banking, not the truth is that the object
and operation OF our banks Is 10 loan money and
this is mostly on personal security. The system
doubt, is liable TO abuse, in particular instances.
There may be directors who will loan too freely 10
themselves and their friends. Gross cases OF this
kind have recently been detected and exposed, and,
hope, will be suitably treated but considering the
great number of banks, these instances, think, are
remarkably few. In general, the banks have been
we'll conducted and are believed 10 be solvent and
safe.
We have hear much sir, in the course of this
debate of excess in the issue of bank notes for cir
culaon. have no doubt, sir that there was very
improper expansion some years ago When Pfesi-
dent Jackson, in 1882, had negaved the bill for con-
nuing the Bank of the United States, (Which act |
esteem the true original source of all the diSor-
ders of the currency vast addition was immedi-
ately made TO the number of State banks. In 1888,
the public depositeS were actually removed from the
Bank of the United States, and placed in selected
State banks. And, for the purpose Of showing how
much better the public would be accommodated
without than WITH Bank OF the United States,
these banks not only encouraged, but admo-
nShed to be free and liberal in loans and discounts,
made on the strength of the public moneys, TO mer-
chants and other individuals. The circu! ar letter
from the Treasury Department, addressed to the
new deposite banks, under date of Both September,
1888, has this ignihcant clause which could not
have been miSu derStood.
The depoSites of public money will enable you
to afford increased facilities TO commerce. and to ex-
tend your accommodation to individuals and as
the duties which are payable to the Government
arise from the business and enterprise of the
chants engaged in foreign trade, il is but reasonable
that they should be preferred in the additional ac-
commodaton which The public deposites will enable
your institution 10 give, whenever 1t can be done
without injustice 10 the claims of other classes OF the
community"
Having read this letter. sir ask leave to refer the
Senate 10 the 20th section of the bill now before
There we find that, if any officer, charged with
the safekeepng of the public money, shall loan the
same, or any portion thereof, with or without inte-
rest, such act shall be deemed ENLIGHTENMENT and
high miSd -neanor and the parY convicted thereof