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

II
ton down TO the present day. What new
light. then, has broken IN upon Us, that we are,
all al once, grown so much wiser than our
fathers In England, the practice Is, and has
been invariably the same; and here take
upon me 10 confront a statement which
have repeatedly seen made TO the contrary
to wit, that the balances Of the public moneys
in the hands Of the Bank OF England were not
discounted upon, but we're regularly and ha-
bitually applied to the purchase Of Exchequer
Bills, on behalf Of the government. The fact
is otherwise-the Bank of England has the
use of these balances, for banking purposes
and this use of them is SO well understood and
avowed that in some instances, where the ba-
lances have risen 10 very greaf amount. las,
for series of years after 1906, they did to be-
tween ELL 100000 and 9l2,0O0,0o0, equal
to near $50 100000 of our money! the bank
has been required to pay special compensa-
ton to the government for that use
/ But the ordinary balances Of public mo-
ney in the Bank of England range from
gi,000,O0o to 95,000,000 pounds sterling
about twenty millions Of dollars OF our money
tho pse of which is permitted TO the bank
without any compensation. In like manner,
the balances public money in France, which
are occasionally transferred TO the Bank OF
France, are permitted to be used as source
of extended discounts, and am informed by
an enlightened correspondent in that country,
were actually so used TO the great relief OF IN
dustry and trade, during the late commercial
crisis.
Shall less beneicent use be made OF the
public moneys, not called for by the necessi-
ties ofthe Government in this Republic ofours,
than in the monarchies of EuropeI Shall
we alone, Of all the great family of modern
civilized communities, revert to the barbarous
practice Of boarding (and that, too, in sPecie,)
the occasional surpluses, which, from the ma
ture Of our revenue system, can neither DC
foreseen nor guarded against A most able
and eloquent friend in the other House, Mr..
Legare) has justly characterised the process OF
taxation as species OF confscnfion. IL Is
so. sir. Is il not incumbent upon US, them
when by so harsh process, we have unde-
signedly levied upon the people more than Is
necessary for the wants of the Government,
to mitigate the exaction as much as possible
by restoring the oyer-plus to their use through
The channels OF business and commerce. Why
should the Government play the dog On NE
manager, neither using its idle boards itself,
nor permitting any body else to use them.
.
tice Of dscounting upon the public depostes
odious, by representing it as thing for the
benefit of the banks alone. But is It so !
Does not every class oithe community expe-
rence the benefit, and none more SO than the
great agricultural class, the price OF whose
products depends mainly on tho facilities OF
sound credit, and the abundance Of active ca
pital diffused among the merchants--the more
~ hax, he
1t has been sometimes said, also, that the
practice of discounting on the public deposltes
adds to the fluctuations OF the currency. But
the reverse is demonstrably true. When
large amount Of revenue is collected by the
Government, and is neither disbursed in the
public service, nor returned to the community
through the medium of discounts, sudden
and distressing contraction of the currency ne
cessariy ensues. If, however, that portion of
the public money, not required for the public
service, is permitted TO be used in the way Of
discounts for short periods, by the banks, the
circulation, through the double process Of
| Government disbursements and bank issues,
is maintained at an uniform level, without SEN
sible contraction or expansion. The banks
being enabled to foresee at what periods the
funds issued by them will be required for oc-
casions Of public expenditure, call them in as
they are wanted for disbursement--what is
drawn in by the hand ofthe banks, is immedi-
ately let out by the hands ofthe Government
and thus the current Of circulation is kept stea-
dy and full.
These truths have, until lately, been uni
versally felt and acknowledged and by none
more emphatcally, or with greater weight Of
authority than the distinguished individual Sin
whose footsteps" the present administration
was expected to tread. II is, doubtless, recol-
lected by the Senate, that, on the occasion Of
the removal Of the depostes from the Bank of
the United States, President jackson, in the
able and memorable paper which he presented
to his cabinet, stated that the funds thus re-
moved were not to be !" annihiiated'--that
they "woud be again issued for the benefit Of
trade" by the institutions to which they were
transferred. This was, then, considered a
trait of liberal, benefcent, and statesmanlike
policy, on which the Chief Magistrate and his
net were trumphantly sustained and vindicnt-
ed by his friends before the people. The same
distinguished individual, in his very last mes
sage to Congress, declared it was contrary
to the genius of our free institutions to lock up
in raulis the treasure of the nation" Now
the highest ambition of craftsmanship seems
to be to contrve these self-same raulis," in
which the funds of the nation are to be sent to
their " long repose," as dead mems bones;"
for once there, all that remain, beyond the
wants of the Government, arc to be buried,
annihilated, destroyed, to every purpose of
useful existence. What has produced these
sudden ana singular revolutions of policy and
doctrine Is it because an extraordinary and
accidental state Of things, the result Of pecu-
n ko. tl,