The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-10-19

win have occasional revulsions banks or no bank
Whenever the trade Is between the merchant and
the farmer with little or none OF that HAZARDOUS
branch which may realize millions to-day, and spk
them to morrow, there you have but few reyuisons
| in trade whether you have banks or not u there
has not been single failure in our lille village,
Is not because have banks, but because we are
engaged In trade altogether between farmer ana
/ merchant Scotland had more banks than any coun,
try In Europe, in proportion TO its population anu
/ wealth; and yet where In the world shall you npu
greater stability In the whole monetary system
And whyi Simply because The trade d sSo seale
is altogether safe trads-trade on iimitea scale.
| The whole of Scotland exports only one-h.h "
wha, is exported from the single city oil Liverpool
| You have revulsons in London, Liverpooi, anu
New York not because Of the banks, but because OF
the great and fuciuaing trade which they are car
j rying on When the stake Is great, you must en-
| counter great hazards. When you are playing Tor
the great prizes in The loi cry, you must expect 10
draw occasional blanks You have, II is true, lever
| revulSions in France, Spain, Italy, DC, ne aafa
money countries, than you have in England and The
| United States; bul is the difference owing 10 the
fact that England and America have so far exceiled
all their competitors in The great struggle Tor the IN
ternational commerce of the woridl ii itwere pos
i sibe TO throw The immense trade OF London, Liver
pool, and New York into HavIe, Cadiz, and Venice,
you would soon have occasional overrading and re-
vusions: but imagine those cities would thank
fully receive the boon with all IT'S attendant evils
/ have made these general remarks on banking be-
is impossible disguise the fact that this Sub
scheme 10 notnlng more IMAM VI
war upon the banking system. The cry now Is Tor
divorce Of the government from banks. Such divorce
cannot take place without mischief To put down the
banks is impossible, unless scheme is devised to
ruin them all That being the case, we are bound to
act in which will best the interests and
harmony Of ALL The Sub-Tressury scheme will not
answer the purpose-frst. because il would, as has
been conclusiyely shown make specie merchantable
| commodity. by giving u premium, and thus forever
prevent the resumption OF specie payments or keep the
hank fhpu Ryp
pay specie. Secondly, because believe the Snb-Irea-
sury system would produce much greater fluctuations.
in the currency than the Bank Deposite system. So
far the depose Of The General Government operate
IN producing fluctuations, It must arise from the stmu-
los given to the banks to expand the currency What
is there to correct this tendency Evidently the great
check which Is the only true and safe regulator OF the
banking system, the unfayorabe influence on the ex-
changes through the operations Of deprecated cur
Tency. This produces a demand for SPECIE laud that
demand The banks Of an over ISSUE and Of the
necessity Of curtament. Hence you cannot infer that
the expansion will always be in proportion to the mag
nitude OF the deposites because the moment the banks
issue, the uufayorabe exchange will produce de-
mand for specie and that will Immediately correct the
evil by forcing contraction II then you have small
revenue the deposes in the banks will not stimulate
an expansion First, because Of the smalness OF the
deposites; and secondly, because Of the short time
they remain with the banks II the depostes great
then they will stimulate to expansion but under the
restraint above designated. Now, let us look mo-
ment the operation OF the SubTreasury scheme If
the revenue be small and dsbursed regularly, the mis-
chief Of the system will, Of course, be minimum.
But in this Of things the extra demand for
gold and silver will keep the currency state Of con
slant insecurity But let us suppose, for moment,
that the SubTreasury scheme shall DO tested by
what has already happened 10 the banks that by an
enormous surpes revenue for time unapproprated.
Imagination scarcely conceive Of tho calamity that
would then ensue. Our whole circulating medium,
mean the money, both paper and specie, does not at
this time much exceed $I2000000O Now, if there
should he surplus Of $40 900 900, you would
suddenly abstract one-thd OF the whole from circua
ton Upon the principle Of supply aud demand, prices
would fall one-thlrd But when take into conside.
ration the shock that would be given confidence,
the consequent dstrust and sagnaton trade and the
boarding that would take place throughout the country
the consequence would be awful There would be
revolution in the country surprising any thing which
the exaggerated fables Of the East have ascrlbed to
Aladins lamp. debt Of some thousands might bring
the millionaire to bankruptcy; and the fortunate few,
who possession OF the liens, the mortgages and
deeds Of trust little ready cash, would Immediately
become the lords Of the ascendant In the meantime,
this very depression would the tide Of the metals
into the country, lately after the removal of
the depostes; this would fill up the vacuum; and then
should there come an order from Government to dis
burse the boarded treasure, you would have $40 000,
600 poured suddenly into circulation which would in
stantly blow up the bubble Of speculation by sudden
rise Of prices to be followed again by another revui
sion.
Mr.. Calhoun, in speech the Sub Treasury bill,
affirmed that the establishment Of the United States
Bank would produce demand for $50 600 900 in spe-
Gle; which would probably break the whole banking
system OF the United States. IL is astonishing that he
should not have reflected how powerfully that assertion
must initiate against the Sub Treasury scheme. Dur
ing the late crisis, if the Sub Treasury scheme had
been IN operation there would have been a demand for
forty millions Of dollars be boarded in the shape Of
specie; 1t requires sage tell how completely the
banking system would have been Frustrated by such
demand This is view Of the subject, which very
few Of the Sub-Treasuy advocates whom have met
with, look full in the face. They cry instantly
that the administration plan to guard against the
plus Then may not tax them with unfair
dealing 10 their argument, when they 90 against the
| whole State Bank Dcposte system because OF the
failure OF what Is called the petbank system, although
under circumstances Of management which make it a
very unsatisfactory experiment, and under the influence
OF an enormous surplus revenue which have hesi-
taton saying would, with the Sub Treasury in full
operation, have inflicted a wound tho body polite,
which it would have required than the wisdom Of
another generation heal. But the advocates OF this
scheme cannot expect always revenue exactly pro-
poroned to the exgencies Of government. Every re-
venue dervable from the customs and sales OF public
lands, must fuctuae, and that too between widely
parated limits. Just look The history OF our revenue
for the last two three years We have seen il, rse
and Golfers filled to plethora then vastly reduced
| revenue; then comes revulson in commerce, the
sources OF our revenue suddenly dried up, and
the accumulated revenue itself seems like the ball
der the jugger's cup, to have disappeared by
chantmen and exchequer bills must be issued to dis
chafge the public dues. With these tremendous fuc-
uatons in the revenue, conceive Of no scheme so
well calculared to keep the currency Of the country
an eternal see-sain as the Sub-Treasury plan It will
become sort Of hocns poeus system, which will pro-
duce endless revolutions in the condition and ownership
OF the property Of the country.
have some idea OF writing this subject, and of
trying to show the effect which the boarding of specie
in the ancient world and during the feuda ages OF Eu
rope, has produced have question but tho strong
box system has been of the frequency OF
wars among the ancients aud among hafcivlized ma.
tons FoI boarding iinnn If he