The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-10-16

editor says, was prepared by gentleman
well yersed in the present and past condition
Of our monetary affairs. At the same time.
we extract from the New York Times an
article, to which we commend the public at
tention.
SUSPENSION OF SPECIE PAYMENTS.
This step on the part Of the banks OF Philadelphia,
calls for full exposition Of the which have
rendered this step necessary.
These causes and their operation viii be treated
In national point Of view merely, and without spe-
ca reference 10 either OF the political parties into
which the nation is divided. To this end il will be
necessary to take retrospective glance.
The peace of 1915 found the country involved in
national debt Of about one hundred and twenty mil
lions Of dollars some Of IL held abroad bui by far
the greater portion at home This was regarded as
burhen, and the policy Of the government was
sIrenuonsly directed to its exinguishment. To ae.
compish this object, a surplus revenue, derived
wholly from the fruits OF foreign commerce and the
proceeds Of the public lands, was the sole reliance
Credid, which has contributed SO largely TO the adj
vancement Of the prosperity OF the country, was
greatly extended the Banking Institutions fosiered
and the whole policy Of the General Government
see red directed TO the expansion OF commerce and
the increase of the tribute which it should pour into
her Golfers.
The first day OF the year 1885 exhibited to the
world the unparalleled spectacle OF nation Tree
from debt That proud distinction belonged 10 these
Uniled States. The heavy obligation which had
been incurred by the prosecution OF two successful
wars had been extnguished, chiefly through the IN
strumentalily OF the credit and commerce OF the
country, enriching both the nation and individuals
Such an epoch well calculated to cause jubilee
TO be held the occasion, ii did, al the Meropo-
lis, by the dignitaries of The COVE rnmenf.
With the extinguishment Of the public debt a new
era was opened but the accumulation Of revenue be-
yond the wants Of the government did not cease nor
diminish with the dmnuiion Of these wants The
stimulus that had been so abundantly administered,
caused The revenue to coninns 10 increase in an ex-
lraordnary ratio when il was no longer called for,
and could not be legilimaely used. Under the en-
enlargement which had thus been given for the pur-
pose OF raising revenue from sales Of the public do
main and from imports, The amount derived from
the former was increased between 1884 and 1886,
from IS 099 0SI to 1913 983 1872, and the amount of
foreign imports from $l26 52l 1892 TO SlS9 $50 035
and the surplus revenue accrung therefrom in the
short space of two years amounted to but little less
than forty millions OF dollars. That surplus, Con-
gress, with the sanction OF the Executive, directed 10
be distributed among the States.
. In July, 1886, measures were commenced by the
head of the Treasury Department. to carry the law
into execution OF the manner in which this was
done, or Of the skill or judgment exercised on the
OCCASION II is deemed unnecessary here TO offer
opinion, but with the beginning Of the execution OF
that law the previously seeming prosperity that had
existed received severe and sudden check, and
difficulties and enbarrassments both 10 the govern
ment and people rapidly succeeded
The monetary affairs OF the whole country were
convulsed-millious upon millions Of coin were in
traRsitH in every direction, and consequently with
up and down the same river, and from and to the
South and North, and the East and West at the same
time: millions were Withdrawn from their usual and
natural channels, and forced against the current OF
trade in literal fulflment Of the distribution law to
points where public money had previously never
been either collected or expended, except 10 a very
limiled extent. The consequences were obvious and
inevitable. The duties which were imposed on the
Banks, acting as agents Of the government al that
time, become so onerous that many OF them were
obliged, in the space of a little more than three
months to appeal 10 the Treasury Department for in
diligence in the fufment Of the. acquisitions i'm
posed upon them. The fidelity with which the banks
performed the duties enjoined upon them that
casion, under the most trying circumstances and the
transfer Of nearly sixty millions of dollars Of public
money, in the period of little mure than six months,
ELECTED from the chief magistrate Of the Union, in
his annual message of December 1886, the award of
the highest encomiumS .,
1t was not these difficulties alone which had be-
fallen the country, and against which the banks had
to contend. The impulse which had been given 10
enterprise, and which had produced spirit of i'm
provident speculation had led to excess of foreign
imports beyond our exports in the year 1885, of
$2l 202 l65, and in 1885, OF SCI, 3l6,995, making
aggregate Of excess Of imports over the exports in
two years OF $3.50 $40 l6a This created direct de-
mand on the metallic medium OF the country, and 4
draft the vaults of the banks. In their operation
these difficulties became so oppressive on the coun-
try its business and the banks that the latter sought
10 give relief by suspension of specie payments in
May, 1887, which was nearly simultaneous through
out the Union, without any preconcert of action
whatever.
We now pass over the interregnum between the
suspension and resumption Of specie payments,
which took place generally in August, 1888. That
period il is well known most of the banks in Phila-
dephia believed at the time to be too early to under
take successful resumption with benefit TO the
country Events have confirmed The justice Of that
view. But public opinion seemed strongly in favor
OF the measure, and the banks acquiesced in il,
though but lily prepared and indebted in large ba-
lances to other places which had accumulated during
the period of suspension, and were sub Jet to be
called for on the instant and were so called for TO
large amount on the very day OF resuming in spe-
Gle. ~.
Intimately connected with the subject which has
called for this exposition others, the most pro-
mnent OF which is the system of creating state debts
to vast extent for the purpose OF prosecuting pub
lie works Nearly simultaneously with the great
increase and accumulation OF the public revenue,
there arose an extensive spirit for internal improve
ments This was the signal for the creation Of debts
BY many of the states of the Union in the adoption
of the measures for which party divisions were tor
gotten, and all united in their advocacy. In addi-
tion stocks 10 a large amount were created by seve-
raj OF the states to provide capital for banking pur
poses. The stocks thus brought into existence
found for time, ready sale abroad, an invest
ment BY foreign capitalists. This seemed TO encou
rage the spirit Of enterprise and to augment the
number of projects calling for capital TO carry them
out To the encouragement thus given to the states
10 persevere in this policy the General Government
has been a contributor as well as foreigners and our
own citizens, by the investment OF several millions
of dollars of trust funds held for the aborigines in
the stocks most recently issued by some OF The new
est and least populous Of the states. The policy oil
these extensive undertakings IL rs not now our pro-
vince TO question or defend That must be tested by
the productiveness of the improvements, or the bur
thens which they may impose upon the states. One
thing however, is certain, that mainly through their
;ns ~ the rannirv has eYchanped nation