The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-02-03

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on, which was introduced by the voluntary consent
of the people. l d. not pretend 10 propose q new
syslem but 10 suggest reforms for the consideration
Of the ightened ia the old andtred onr, BY means
Of which this people have risen form weakness Penu-
~ and obscurit with rapidly and s,eadiness with
out parallel in the annals Of the nations to The
present exalted state Of strength and wealth, and re-
'nown am equally jealous TO expose the defects
OF this old system so prolific Of prosperity and to
retain and heighlen lis cxcelIencies; being deeply
impressed with the sentiment that sincere and
genuine attachment to It's excellencies will imPel
every ingenious mind 10 candid investigation, and
unsparing correction Of its defects.
Having insisted that repeated lapscs OF the sys-
tenn strongly admonish the nation, that the system Of
State banks comprising large number in each
State is inadequate alike TO the furnishing Of
uniform national currency, and to successful CON
Quoting Of the fiscal concerns Of the General Go
demonstrating srenuously urged The opinion,
fortified by facts and reasoning, that very small
number of the State banks with enlarged capital
stock would be adequate to the efecnal performance
Of each Of those indispensable services; that they
would be able, in the reduced number and enlarged
means enter into, and carry out arrangcmentto
receive anothers notes. though at great distance
apart, and TO credit them cash and that then The
people engaged in trade in each Stale would have Cat
least ia better chance Of becoming familiar with the
name and condition Of the bank Of every other State
and with lis issued paper in important particulars;
namely, with the signatures Of the officers and the
engraving lis face familiarity essential 10 the
credit and free currency of every kind Of bank paper
money: having Unlimited method by which the
reform may b. now most adyantangeously super
induced upon the present unusually vicious stale Of
the currency and having indirectly indicated
raj minor defects in the system, by freely suggesting
new guards; for instance, TO make the stockholders
responsible TO the holders Of noics and depositors
a summary manner, in threefold the amount Of their
stock for their proportion of the debts the bank may
at any time having done this in my poor way,
purpose now 10 cnumerac some ofthe cxceencies
and advantages Of the State bank system.
l. As It respects the General Government, clothed
with the coinage power, which is prohibited to tile
States. The power of the States to create paper
money convertible into COMA power not granted
TO- and therefore not possessed by, the General Go
vernment- beautifully divides (between that Go
vernment and the Sates) the exercise Of the imror
ant attribute of sovereignty tocrcatc and regulate The
circulating medium. And the bare mention of it,
inparts the idea fully, and brings in review before
the intelligent mind I'll the momentous conse-
quences. T..
2. The power TO create bank paper not being in
the General Government, the exercise Of il by the
States confers on commerce the muform and i'm
mense advantages Of paper over a metallic cur
rency.
3. The benefits resulting from the substitution Of
paper money by means of State banks, for the pre-
cious metals, to constitute the circulating medium
Of the country consist chiefly in these items, to wit
lst The utility Of banks, as institutions of dcpoSt--
Their utility, in this respect, consists in the saving
of the labor Of transportation, of counting, and of
vigilance: with all which every is familiar.
ID The utility Of banks institutions Of discount
and Loan. Whilst, in this respect, they do not
tually add TO the existing capital of the country,
consisting OF the materials which industry ope-
rates, the instruments with which it operates and
the means of sustentation; they are, nevertheless,
capable of rendering the existing capital much more
productive. And, Sd, the utility of banks, nsi-
uons of circAataon; which consists in substituting
cheaper for d,arcr circulating medium, whilst the
greater convenience of thai, abundaniy compensates
the community for the less liability of this to luc-
tuation each being liable TO forgery and fraud
A. In addition 10 these excellencies, on which
deem it wasteful to expatiae the State banks
not be liable to occasional arrangements and una
vodable as the system now is and co-extensive with
the multitude ofthem now existing; for il by their
great number, by their contiguousness by their fret
ted competition in prosperous reasons, in counting
the public favor at the expense of their sodty and
b. their consequent unfriendliness and, in some
cases. when friendly disposed by their positive ina
blity to extend TO one another aid in times trouble
| -. ~
organization ha, they are all occasionally forced,
in quick succession, almost simultaneously 10 sue
cumb, and to suspend specie payments, under the
public dstrus produced by the Stoppage Of few of
the weakest and worst managed Of them. In May
last, when they all suspended, most Of them held as
large specie fund as they have generally held and
many of them larger one II is evident that the
reform in the system best adopted to to these
Institutions, in time Of public dstrust the timely
aid of the largest fund Of the current coins in the
country, that can b. scared consistently with con-
venient distribution of State banking capital, will be
the reform best calculated to secure uniform ma
tional currency BY means of state bank paper To
require bank to keep constantly on hand specie
fund equal in amount to its paper emission, would be
requirement utterly homogeneous with the chief
utility of blnks to w.t. 10 render the existing capt.
tai more productive
Such requirement not b.ing proper 10 b, made,
and unacceptable-t being evident that to secure the
chief utility of blnking, the paper emission must
exceed the specie fund kept by the banks, and that in
such case, blnk can have capacity any time to
redeem with coin its whole emission, il is equally
evident that the proposed modification Of the system,
b. reducing the number Of banks to one in each
State, with branches would be most apt to exempt
and fortiiy the system from and against the occa-