The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-12-25


WIZ be surely attended with less difficulty when
bank notes are again redeemed in specie,
lndeed, cannot think thar serious objection wonld
any where be raised 10 The receipt aud payment Of gold
and silver ~ all public transactions. 1t not from
apprehension that surplus Ia the Treasury might with
draw alarge portion VI II from circulation and lock il
Up unprohtaby 10 the public vaults. II would not, IN
my opinion be difficult TO prevent such an Incouyen-
ence IRON occurring; bnt the authentic statements
which have already submitted TO you in regard 10 tho
actual amount IN the public Treasury at any one time
during the period embraced in them and the little pro-
liability Of different stale of the Treasury for at least
some years TO come 10 render il unnecessary TO
dwell upon IT, Congress moreover, as have before
observed, will IN every year have an opportunity to
guard against It, should the occurrence of any circum-
stances lead 10 apprehend injury from this source
Viewing the subject IN all its aspects, cannot believe
that any period will be suspicious than the present
FIR the adoption Of all necessary to maintain
The sanetlty OF our engagements and TO aid IN se-
curing TO the community that abundant supply of the
precious metals which adds much 10 their prosperity,
and gives such increased stability all their dealings
In a country SO commercial ours. banks 10 some
form will probably always exist but this only 10
render II the incumbent US, outstanding the
dsconragements OF the past to strive M our respective
stations 10 mitigate the evils they produce--to take
from them rapidly the obligations Of public faith,
aud careful consideration Of the immediate interests
Of the community will permit, the unjnst character OF
nonopoes 10 check, SO fur as may be practicable by
prudent Legislation, those temptations OF interest," and
those opportunities for their dangerous indulgence,
which beset them every side, and TO conhne them
strictly to the performance OF their paramount duty,
that OF aiding the operations Of commerce. rather than
consulting their exclusive advantage. These and
other sautary reforms may, II is believed, be accom-
pshed without the violation OF any OF the great prnc
pies Of the social compact, The observance Of which is
Indispensable TO It's existence, or inf&rng IN any way
with the useful and profitable employment Of real capital
Institutions so framed have existed and still exls,
elsewhere giving to commercial intercourse all necessa
nv facilities, without initiating Of depreca:ing the
rency or stimulating speculation Thus accomplishing
their legitimate ends, they have gained the sures guar
antee for their protection and encouragement the good
will OF the community Among a people Just
ours the results could not fail attend similar
course. The direct supervision Of the banks belong,
from the nature Of Government to the States who
authorize them II to their Legislatures tina, tho peo
pie mainly look for action that subject. But
as the conduct Of the Federal Government in the man
agemeDt Of its revenue has also powerful though less
immediate influence upon them. it becomes duty to
that proper direction is given to IT, While the
Keeping of the public revenue in separate and nde-
pendent Treasury and Of collecting 1t in gold and s
YER will have sautary influence the system Of pa
per credit with which all banks connected and thus
aid those that sound and well managed. it will at
the same time senshly check such otherwise by
at once withholding the means Of extravaganza afford
ed by the public funds, and restraining them from
cessve issues Of notes which they would be constantly
| called upon to redeem. ".~
/ am aware il has been urged that this control may
be best attained and exerted BY means Of National
Bank. The constitutional objections which am we'll
known to entertain would prevent me, in any event,
from proposing or asserting TO that remedy; but in ad
diton TO this, cannot, after past experience bring my
sell TO thuk that 1t can any longer be extensively
garded as effective for such purpose The history Of
the late National Bank, through all its mutations shows
| that it was not SO. On the contrary, it NAV, after
careful consideration Of the subject, be, Think safely
stated that at every period Of banking took the
lead that in 1917 and 1915 in 1923, in 1891, and in
1884, its vast expansions, followed by distressing
fractions, led to those OF the State institutions. 1t
sweed aud maddened the tides of the banking system,
hui. seldom allayed, safely directed them Alta few
periods only a sautary control exercised but
eager desire. the contrary exhibited for profit the
first place; and IT. afteward, Its measures severe
ards other institutions because its safety
compelled 1t TO adopt them. 1t did not differ from them
III principle or in form its measures emanated from
the same spirit OF gain. 1t felt the temptation 10
overssues; it suffered from, and totally unable
avert those inevitable laws Of trade by which it was
itself affected equally with them and, at least
OCCASION, at an early day, II saved only by extra
ordinary exertions from the fate that attended the
weakest institution 1t professed TO supervise. In 1887
it failed equally with others in redcemlng its notes.
though the years allowed by its charter for that pur
pose had not expired, large Of which remains
TO the present time outstanding, 1t true, that having
vast capital and strengthened by the Of all the
revenues Of the Government. possessed power;
bu, while it itself, by that circumstance freed from
the control which al! banks require lis paramount object
and nducenent left the same to make the most
for its stockholders not to regulate the Of the
country Nor has It, as far as we are advised, been
! found to beI6featly otherwise elsewhere.
| The nNonal character given to the Bank Of Eng
land has not prevented excessive fluctuations in their
currency and proved unable to keep off suspension
of specie payments, which lasted for nearya quarter
of a century And why should we expect it to be
otherwise? A national institution, though deriving
its charter from different source than the State banks
is yet constituted upon the principles; is con-
Quoted by men equally exposed to temptation and is
liable to the same disasters; with the additional dis
advantage, that its magnitude occasions extent of
confusion and distress, which the misnanagement of
smaller institutions could not produce. 1t scarcely
be doubted that the recent suspension of the United
States Bank OF Pennsylvania of which the effects
are felt not in that State alone, but over half the
Unon--had its origin in course of business COM
menced while It was national institution and there
is good reason for surprising that the conse-
quences would not have followed, had it still derived
its powers from the General Government 1t is in
vain, when the influences and impulses are the same
10 look for difference in conduct results. By
such creations do therefore, but increase the mass
OF paper credit and paper currency without checking
their attendant evils and fluctuations. The extent of
power, and the efficiency of organization which we
give, so far from being beneficial, in practice posi-
lively injurious. They strengthen the chain Of de-
pendance throughout the Union subject all parts
certainly to common disaster, and bind every bank
ecctually, in the first instance, to those of our
commercial cities, and, in the end, to foreign power
In word, cannot but believe that with the full I'M
derstanding of the operations of banking system
which experience has produced, public sentiment is
not less opposed to the creation of national bank,
for purposes connected with currency and commerce.
than for those connected with the fiscal operations Of
the Government.
Yet the commerce and currency of the country are
suffering evils from the operations of the State banks
which can not and ought not to be overlooked. By
their means we have been flooded with deprecated
paper which twas evidently the design Of the trainers
OF the Constitution to prevent, when they required
Congress 10 coin money and regulate the yaun of