The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-03-30

10 bankruptcy 4 and the fortunate few who were 10 pos
session Of the liens, the mortgages and deeds Of trust
or iutle ready cash. would inncdaieiy become me
lords OF the ascendant Ia the meantime, this very de-
preston would turn the tide Of the metals into the
country, as we lately after the removal Of the de-
posies; this would Gil up tho vacuum; and then
should there come order from ioyernineni 10 DIS
bnrse the boarded tressnre yon woad have Saoooo
900 poured suddenly into circuaiion which would IN
sianily blow up The bubble Of speculation by sudden
rise Of prices be followed again by another revul-ion
Mr. Calhoun, In a speech on the subreasury Dill
affirmed that The re-establi>hmen Off United States
| Bank would produce demand Tor S20OO0,OO0 IN
specie; which would probably break The whole bank
ing system of the United States. II Is astonishing
thai be should not have reflected, how powerfully
that asse ion must initiate against the subreasuy
scheme. During the late crisis, IL the subireasury
had been in operation, there would have been de-
mand for forty millions OF dollars 10 be boarded in
The shape Of specie Il requires no ge To tell how
completely the banking system would have been
Frustrated by such demand. This Is view Of The
subject, which vary law OF the snb-ireasury advo-.
Gates whom have met with, can look full IN The face
They cry out instantly that The administration plan
Is TO guard against surplusi Then may We not tax
them with most Unfair dealing ia their argument
when they 20 against the whole Stale bank deposite
system, because OF the failure of what Is called The
petbink system, although under circumstances Of
management which make II livery unsatisfactory
experiment, and nnder the influence Of enormous
surplus revenue, which have no hesitation In say
ing would, with the sub-treasnry in full operation
have inflicted wound on the body polite which il
would have required more than the wisdom OF
other generation 10 heal. But the advocates Of this
scheme cannot expect always revenue exactly pro-
portioned TO The exigencies Of government Every
revenue deriyabe from the customs and sales of pub
lie lands, must auctuae, and that too between widely
separated limits Just look 10 the history Of our
| venue for the last Two three years We have seen
u rise, and our Golfers filed to plethora then
ly reduced revenue; then comes revulsion in com
MERGE the sources Of our revenue suddenly dried
/ nn. .lnt...
like the ball under the juggers cup TO have disap
/ peared as BY enchantment and exchequer bills must
be issued TO discharge the public dues With these
| tremendous fluctuations in the revenue, can con-
| ceiye OF no scheme so well calculated TO keep the
currency OF the country in an eternal as the
| snbtreasury plan. II will become sort of hoeus
pocns system, which will produce endless revolutions
in the condition and ownership Of the property ofhe
/ country.
Ihave some idea of writing on this subject and of
trying 10 show the effect which The boarding of spe
Gle in the ancient world and during the feuda ages
of Europe, has produced. have no question bu! The
strong box system has been one cause OF the frequen
CIV Of wars among the ancienis, and among half CT
vilized nations For boarding In time Of peace, On
the principle have just explaisd, would produce
most intoerable pressure which war would relieve
by its rapid disbursements OF the boarded treasure.
The effect produced during wars, by spt ndng hoard
ed treasure and by borrowing money 10 pay troops
and procure all The instruments OF war, generates
decetful kind of prosperity, which makes war APP
pear to be beneficial and peace disastrous. Sir VIM.
Temple, in his account OF the trade of Holland in
the 18th century, has described, in clear and com.
| prehensive manner, the general stagnaon in the
mercantile world which Immediately followed the
peace Of Weslphalia. A similar fall of prices took
place after the peace OF Utrecht in l7l3 The same
thing was observed in Europe after the general pa
cihcation IN 1883, consequent on the termination Of
j our revolutionary war. Ia the same manner during
The continental wars against the French Republic,
and afterwards against Bonapare, such an inflated
prosperity in the midst of the heaviest expenditure
that had ever been known was observed In England,
that even the clear head of Arthur Young was de-
ceived by it, In his writings he boasted that war
had made England the emporium OF the world, and
that "such scene OF wealth and prosperity filled
every eye, the sun before had never shown upon"
P siw the deusive character OF the prosperity and
foretold that awful reaction which did ensue at the
termination of hostities; reaction which lasted
more than twenty years, and brought down prices to
such an extent as, in many instances, 10 lessen the
incomes and property OF whole classes oil society
more than one-haif intend, in a few days, writing
10 Henry Hallam, author oi the /" Middle Ages,
and Constitutional History Of England" TO ask for
some information on he point to which have been
adyerling. II is one of The most curl us connected
with the history OF nations, and one unfortunately
which II requires deep penetration To develope clear
". Few Of the temporary historians of past ages
have known any thing Of political ECONOMY, and con-
sequenly have not been enabled 10 trace GU the eff
fees flowing from this system. Noo we can only
trace out The connection tween cause aud effect BY
an accurate observation OF all the facts which have
| come down 10 Us, however scanty they may be.
II Is said by some, that this scheme OF collecting
the revenue in specie, will have tendency to check
the b INKS, and consequently will prevent entirely
those oscillations in trade, which will &
| dundant revenue one year, and deficient one the
next; and that this effect viii flow from the artificial
demand created for specie. To this answer, first
that believe the banking system would be in a state
OF constant insecurity which would either break the
INKS or prevent them from attaining the great tnds
OF their establi >hnent For we must rever forget,
that all banking depends on m ,ral probability, re.
sntng from confidence; annihilae the latter and
tn system perishes. Hence one of the dangers re.
suns from the Legislation Of half enlightened men,
in regard to this subject They to think that
every restriction, every clog, which can be devised,
should be thrown upon the banks; not rejecting, that
when they are thus tied down and trammelled, they
cease TO produce good. But, in the second place,
suppose the banks could stand against the operations
OF the subtreasury scheme; then let how they
would be effected. Intimes of high prosperity when
confidence was great, government would collect in
spece this specie would be deposited with the sub
treasurers or be exchanged for notes by those Off
GERS, agents, etc, among whom II was disbursed.-
Now, the moment there should come revusion in
trade and confidence should be destroyed, the stream
would continue to flow |rom the banks, but oouid not
return. Thus suppose the revenue $40 600 600. In
times OF inflated prosperity, when the system ought,
POSSIBLE to check the banks, they would be but lit
tie affected, because of the general CONFIDENCE
Twenty millions of dollars would be poured out, and
twenty millions of dollars would return. But let
pressure come and twenty millions would be poured
OUT not TO Return until confidence was restored And
what, let ask, would be the chance of restora-
ton OF confidence, with SO awful drain the sys-
tenn Thus you see that tins system would affect
the banks least when the spirit Of speculation
highest; and would fall on them with an irresistible
gravity when the hour Of pressure came. Every
man, who knows any thing OF banking, must know
That This result sgreatly 10 be deprecated.
You may ask, whether do not consider that all
these evils would not flow from the special deposite
system? answer, that do not rightly comprehend
that plan. If the deposite is be made in the notes
OF specie paying banks and the identical notes are
again TO be paid OUT then, say that although the
system would be greatly preferable to the sub trea-