The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-02-28

l..y,e Mr. DfongOole,) o. the lac. soss'o~
s,g,mso proves TOO mu.h il il proves that mo uosen
20, ha. NO constitutional power 10 employ State
Banks as repositories ii also proves thai y mas no CON
stitutious power 10 employ any agent wna'esei -.
70 how and where the public money snA' ~ asp'' w
constitution 10 entirely silent Inc constructor has
impaired TO The Government INC power 70 eSnses ~
nue. but has not prescribed the place or mode OF keep
inc that Is Left 10 the discretion oil the Government
itself In the exercise OF this unlimited discretion, the
Governments must not be guided by considerations OF
safety convenience. economy, snd punctusiiy alone,
and may a. well select so lar as the constitution Is con-
ceoaed State Banks any other repositories; this is
necessary incident TO the power Of collection, and Is
not limited except by . sound discretion.
g. As 10 safety This is question TO be decided
more by facts than argument; and whether individual
agency banks be the safest repositories Of the public
money. can only be decided by comparison Of the
Losses sustained by each since their employment Ac-
coding q statement furnished in the report Of the
Secretary Of the Treasury Of the i7th Of January 1888,
No Ill, the whole amount Of balances due the CO.
venmenr from the deposite banks employed duringth
repositories is Si,o75,933 80, Of this, accord
ing the notes appended 10 the report by the Secretary
OF the Treasury, there have been paid and secured
1916 ,203 81 leaving balance OF 1888 729 4S this
IL the whole loss sustained to the Government by these
banks as repositories. From the Deposite Banks. Sc
lected during the administration Of General Jackson II
is stated BY the Secretary Of the Treasury in his last
annual report that not cent will be lost. The loss to
the Government from notes Of broken or insovent
banks from the foundation of the Government to the
present time BY the reception OF their notes Is OO0
only.
To these losses sustained to the Government by the
use Of State Banks, fiscal agents, honorable mem
Der from Kentucky (Mr Murray) who addressed tho
House some days ago, has attempted to add $500.
600, sustained by receiving and passing deprecated
notes during the years lSa-I5-l6 and IL this is but
the renewal Of the charge made by the Secretary
OF the Treasury in OF his reports during the last
session. Sir, the charge is unjust and unouDded and
to prove it, need only refer TO the Secretarys report
OF December, 1884, in which he not only clearly de-
monsrated that this charge unjust and unfounded,
bat most ably argued aud conclusvey proved that the
State Banks were the safest most convenient and most
economical fiscal agents which could be employed. But
will not rely upon the report Of 1894 alone VIII also
prove this charge to be groundess by facts II admitted
on all hands, that the Government neither had nor could
procure specie during the twas compelled then to
use It's own credit or bank notes. and the economy OF
the the other depended entirely upon their value In
the market The greatest depreciation Of bank notes
during the years 1914 10 and IL at New York,
was about IS and Philadelphia 10 per cent Accord
ing TO the reports Of Mr. Gallatin and Mr. Dallas, Tres
sury notes and certificates OF loan were, according TO
Mr.. Monroe at about twenty per cent discount.
Now, sir, the Government had the power to issue
Treasury notes to any amont and u their use had been
economical than the of bank notes, they would
have been resorted to. But they were not, and the
Government the average, prevented loss OF about
five per by using bank instead Of Treasury
notes. certificates Of loan Ifany further proof were
necessary, the following facts will be conclusive Ac-
cordng the report OF Mr. Dallas, OF February Gath,
1918, the old public debt $39, 905, 1873 66debt
contracted during the funded debt temporary loans
and Treasury notes, S6S, 7S3, 1872 l3-Toal $685.
6ss305 %. The principal amount Of which, accord
ing 70 the Treasury reports was In the hands OF the
banks Thus, sir, have the facts that in the last
war; the Golfers Of the Government supplied, and
your soldiers and sailors fed and clothed by the patriotic
aid afforded by many Of the State Banks and yet the
very sacrifices which thew made to sustain the Govern
ment in that arduous, doubtful and bloody struggle, is
brought up judgment against them and imputed as
vice. The real losses, then. which estimate
in comparing the losses sustained by bank and ndlv
dual agents, from the notes Of insolvent banks,
$4,000, and banks as repositories, Ss759, 729 As.
The losses from individual agents are, according to
statement Of the member from Ohio, (Mr Duncan,) no
doubt furnished by the Treasury Department, from old
dsbursing officers, $4,250000 From receivers on
public lands, ST. AL SO. Collectors Of CUSTOMS
$l437, SIS %, making in all So .020 ~; TO this
be added, 207 0O0 for deiscaions. the LIST
Of October. 1887, besides Sl,2500O0 which lies be-
tween the latter collector and the district attorney for
New York From, these TO be deducted, 1926 S07,
collected. secured reduced since the LIST Of October
1887 aud $500 900 for suspended vouchers, leaving
balance in favor Of banks Of ,627 yet, sir. is
gravey contended that individuals safer deposito
ries OF the public money, than banks Again, compare
the promptude with which the banks have paid up the
public deposiles and the slow lingering process by
which defaung agents have paid them On the lst Of
Janusry, 1887 the public deposites S42 900 0O0
the 10Th Of May 1897, when the suspension took
place, S2s 900 900; the LIST January last, only 49,,
100000. The debts due from individual dcfduers SO
far from diminishing in amount, has largely increased
What commentary in favor Of the State Bank System
But, sir, independent Of all this, the whole commu
nifty by its action which is infinitely stronger than all
the ingenuity and sophstcation has afforded
the most conclusive testimony upon this point Every
extensive money holder. who deposics his money for
safe keeping, deposits in banks This fact outweghs
every argument which can be adduced.
But, sir recent developments should not be lost upon
us-explosion upon explosion Of these Sub-treasurefs
day after day. astouRd ears, the repeated shocks
OF volcanic eruption Scarce do from the
establishment which produces before another breaks
uponus. The lists constantly sdded to, and there
is telling when and where they will stop; many,
many. fear the wing and will shortly burst upon
us. Yet sir, in spite Of these daily demonstrations,
how little the most honorable and high-muded among
us are to be relied upon-we propose to plunge deeper
and deeper into the system--place still more of the
public money in the power Of these agents. under the
vain hope that he who he restrained by the high
obligations of his official oath, will be restrained from
plumber by the errors Of Imprisonment Sir will not
do; be assured Of it, it will 10, do trust that the
Developments Of the last year. will carry conviction to
the mind of every American citizen Of the hollow pre-
tension Of this scheme to superior safety There
danger in any system which the wit OF can devise
but there dangerous and less to be trusted
as thls.
3. The independence Of The Treasury
Bot, Mr.. Chairman, it is said that this measure is
necessary make the Federal Treasury "independen
Of State institutions. To this argument, have only
to reply that independence of the State institutions
only begcts dependence individual agents; which,
have already argued not TO be relied upon Tho
public money must be kept somewhere and there is
qualified dependence for its safety and punctua return
whether it he kept by banks individuals and the
Treasury will be most independent when lis funds are
III the hands Of the safest and most punctual agents
these experience has proved TO be the banks II banks
suspend payments for time, Sub-tressurers away
and never pay; that The wheels Of Government are
more likely to be DISTRACTED by individual than bank
failures But, sir here refer to a remark Of Mr. Van
6uien upon this subject Of the independence of this
GONG[nment of tho hich Lii