The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-01-12
UNJUST ABUSE OF THE DEPosIrE


since the commencement OF the present session
we have heard il frequently asserted, that the ruin
Gus expansion OF loans and consequent depreciation
OF the currency that took place in 1885 and &c. and
ended In catastrophe in 1887, was ascrbabe alio-
seher to the deposile banks loaning the public
money in their hands, for The purpose Of profit to
henseiyes-that II was their avarice alone that led
10 all these misforunes OF the country.
such was the ground taken on Wednesday last by
Mr' Taylor, OF New York, in speech condemna-
tory OF the banks and Mandatory ofhe Sub Treasury
scheme II is much TO be regretted that legislators
do not inform themselves Of the facts, before they
venture TO make such unqualified and sweeping as
sertions. If the public money was loaned out in
1855 and &c. prior the deposite act of June Of the
latter year. IL the fault Of the Deposite Banks,
but of the Secretary Of the Treasury himself. In
the annual report OF that officer In December, 1885,
he said: "Their [the Deposile Banksl discounts
have been In general, somewhat increased, but,
though tempted by the enterprising spirit Of the
times not usually increased in degree diYroporton-
ed 10 all their available means. They have also in
some cases been able aid and have literally aided
other banking institutions In their neighborhood by
as large and long balances and other ndulgences
would generally appear TO be sanctioned by correct
principles" This was in December, 1895 Will
any one doubt that The facts were as stated by the
Secretary II they do not, then there existed no
thing up to this time to charge against the Deposite
Banks.
We will show that II was the Secre-
tary Of the Treasury who caused the ex-
trayagant loans TO be made by the banks with the
public money, and consequently he was the author
Of all the mischief that ensued. Not satisfied with
what the Deposite Banks could loan out he sought
out to devise modes whereby other banks might as
sist. In House Document No l93 I'd Session, Oath
Congress- al pages GA and 626 will be found cor
respondence between the Secretary ofthe Treasury
and the officers of the three Deposite Banks at New
York
On the 3lst Of December, 1885, Mr.. Woodbury.
writes that, under the policy he was then pursuing,
the public money would continue TO increase in New
York; and he said | request the aid and advice OF
the present selected banks make the surplus use
full !" and he enqured Is not proper that the pre-
sent banks should agree with others, on such secu-
rity as may be deemed iudicous to hare The balances
Nth them" till Congress made some disposition OF 1t
He added, "the balances, allowed TO stand in other
banks, should equal in amount all which the present
banks cannot benefcially for the community other
wise employ" Here was distinct proposition
made by the Secretary to the three deposle banks 10
place in the hands Of other banks, TO be loaned out,
all such sums in their hands beyond what they could
loan out under the Limitation OF their own charters.
The proposition was assented of course, by the de-
posite banks, as the correspondence VIII SHOW
What the public money on hand at that time amount
ed to- we do not know; but in the same document at
page 377, is table showing that the amount in the
hands Of the three banks, in the month OF Septem-
Der previous, was four millions and half-and in
.cA oroh nav ha ahp arr
had been completed, the amount was ten millions
and half Of dollars is shown by table at page
39l, same document, embracing that at the credit Of
the Treasurer and OF public officers. Whose fault was
it that all these ten millions were loaned out in the
early part Of the year 1885, in which the mad rage
for gambling and speculation reached its acme
Things went on thus till the passage of the deposie
act of June, 1886. Soon thereafter, the number of
deposite banks in the city of New York, was in
creased from three to fifteen and the whole num-
Der from thirty-fve to about ninety.
There began a new system under that act All
these banks were required to pay interest on great
portion of the money in their hands. They were,
therefore, obliged to loan II out. This would have
served TO have added to the already inflated cond-
ton Of the currency, had not the movements Of the
Secretary operated to counteract it. He Immediately
thereafter issued transfer warrants upon every quar-
ter of the country in favor of every other quarter
He ordered il up the Mississippi and dorm the same;
from the Soath 10 the North and from thence to the
South In some instances it was ordered to be trans
ferred 10 great distances with but short notice. for
instance, transfer warrant issued in Washington
on the l2th July directs 100000 to be placed in Phi
ladelphia on the 2lst August following, from Gin
cinnati, Ohio. The whole country by these opera
tions, in few weeks became convused throughout;
and by the middle of November the strongest banks
cried MERCY! Senate Doc No. %, I'd Sess., Oath
Congress- gives detail Of all these transfers ordered;
which, between the 9th day of July and The 18th day
of December, amounted to s3s 039, 1886 IS OF which
sum ss25 $780, 1886 65 was actually paid during that
period The remaining $l29l0,O0O was payable
subsequently,
These are facts the people ought to know, when
the Secretary and his partizans are carrying on
war against the banks, and charging them all the
disasters that have befalen the country.
If it shall be asked what object the Secretary had
in view we answer, he made the attempt to place in
each State the full amount they would be entitled 10
Of the surplus before he would have dollar to pay
THE NEW YORK DEFALCATION.
The mean and pitiful attempt TO throw the re-
sponsibility of Mr.. Swartwouts default, on the
shoulders OF the Conservatives is be resorted to by
the leaders of the Loco-foco-SubTreasu -Van-Bu-
rem party in the House Both Messrs. Cambreleng
and Thomas have taken that ground, declaring that
Mr. Swartwout Conservative, and the latter
gentleman produced the proceedings OF the great
Conservative meeting in New York last spring, to