The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1838-10-17
ron THE MApIsosIAN.
THE CHEAT.


The special depose system would be cheat. Is
aim would be TO prevent use OF the deposited re.
venue for banking purposes. Its aim cannot be ac-
complished under any plan OF bank note receipts in
revenue collections, without insuPportabe injury TO
the deposle banks Any plan that would inJure and
cripple the depose banks, the friends OF this special
plan would themselves oppose. They support II I'M
der the belief no doubt that il would not injure the
banks in the strict observance Of its interdct. To
show, then that the nerdct OF the plan, fonch not
The deposited for banking purposes cannot be
observed without injury to the banks undertaking
the trust make good the charge that the plan is
cheat The proposers Of the plan would enlist the
people in its support, while II holds out promise
and labors under incompetency to comply with it.
The beneficial purpose of creating bank note is
TO put IL in circulation and when il returns upon it,
10 reissue IT, Let a bank established In the city Of
Richmond, be selected and appointed deposite bank
Let it have capital in specie OF $4,000. II issues
notes to the amount of Sl50OO0. II is indebted to
the public in an equal amount. To pay this debt
WITH il has, in addition to It's specie the promissory
notes Of individuals TO an amount greater by the
discount, than that Of It's notes issued. When the
whole amount of its Sl500OO in bank notes has been
thus put in circulation by means OF an exchange Of
them for the promissory notes of individuals, ten
thousand Of its notes get into the hands Of the fede-
raj officers charged with the collection Of the revenue.
This ten thousand is placed with the bank on special
depose, or in other words, under the nerdict that
it shall moi be used for banking purposes. From the
moment Of the deposite, until this amount of the re-
venue, subsisting in the notes Of the bank Is dis
bursed nay longer until, having been disbursed,
It is returned to the bank through some other chan
mel of its transactions, the bank will have only
$4,000 in notes, for the conducting of its opera
tons. Suppose, while the ten thousand is dead un-
der the interdct, the 900 being in circulation
the promssory note Of an individual with good en-
dorsement, is offered to be discounted The ten
thousand is in the vaults on special deposite. The
bank complies with its engagement with the govern
ment-touches not the ten thousand-the note offer
ed for discount, is rejected. Will it be said this is
no injury to the bankl Is il deprived of the use
of so much of its issues Such must be the effect
supposing the bank has reached the chartered limit
Of its issues unless ii exceed that limit and create
an amount of notes equal to the estimated average
amount of government depoSites
This case is put merely for exempifcation. Any
case that might be put with whatever exact con-
formty to ordinary banking, would bring about the
same result that no bank can observe the nterdict
Oh TINS specal Sysle without injury 10 tSeI, In the
prescribed extent Of legitimate business.
But why Ito take another view Of the subject)
should the friends Of this special ard specious sys-
tenn persist in their endeavors TO enlist in its support
those who do not examine the subjectl Do they de-
sign practising cheat? Is it from pride Of opinion,
having espoused it themselves before it was demon
srated to be deceptive and mbecie2 Are they ig-
norant that the possession of certain average
amount of deposites is equivalent simply to much
money borrowed by the bankers, Gas vethake has
it0 which money they have it in their power to dis
pose just they have of every portion of the CAPT
tai of which they are the owners? Will they con-
tend that the mere calling Of deposite, special,
superadds new obligation to restore it, when de-
manded? Ifnot, why do they no, rely on that uni
rersal lam, embodied in the answer of the oracle,
when consulted by Glaucus: that it is criminal
even to harbor thought OF Withholding deposited
goods from the owners, who claimed them !" and of
which the Arabian poet, as Sir William Jones
CITES made fine application, in saying, that life
and wealth are only deposited with by our Crea-
tor and like all other deposites must in due time be
restored" PuBLIUs.