The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1840-07-11

- 'hc occdslUn, he now dfueHuy supports INT
plan he so warmly condemned, and is exertine
every faculty of body and mind TO keep its au-
thors IN power. Sir, if that wonderful character
John Randolph, Of Roanoke, were here striding
across this floor, with whip in hand and spur on
heei as IN days gone by, he would point TO that as
additional evidence, if il were needed, 10 show
The truth of what he once said, that Mr.. Richie
was man OF seven principles to wit five loaves
and two fishes
when individuals or communities are inclined
TO change long and thoroughly established ha-
bits il is well to consult their own observation
and experience, and the lights of history too,
mat they may see the dangers Of the path they
propose to tread, if any there be, and perhaps be
induced thereby TO avoid ii altogether.
Biy report Of Mr. Secretary Woodbury. made
TO the House of Representatives Dec II. 1894,
Il seems that, under the confederation, what
little money Congress had was deposited wher-
ever the finance committee directed, depending
upon accidental circumstances. When the
Bank OF North America, the first in the country
was established by few wealthy citizens of Phi
adelphla, at time when the public credit was al
IFS lowest ebb, and, through the instrumentality
OF which, funds Were provided 10 enable Con
gress to prosecute the war at the South with
vigor, goriously terminating it by the capture OF
CORVALLIS at Yorktown, the public money was
deposited in IT, Subsequently, as the three
/
land, were successfully established, they were
made repositories. In 1871 the first bank Of the
United States was chartered and in that were
the depostes made, by order Of Gen Hamilton,
Secretary of the Treasury We have heard
much lately Mr.. Chairman, in this debate OF
Hamtonan iederalists, and this Gen. Hamilton,
! understand, was the founder Of the sect, and
his name is TO live in that connection so long as
there are demagogues to pirate about federalism
| "A m rchu nc nt,It hat
must be, ! suppose, as long as the Government
stands.
| Well, sir, it seems by late discovery in the
other wing of this Capitol, that the world has
been entirely in error for half century in the
estimate it has placed upon the mental capacity
OF this Gen. Hamilton for it has been fooiishly
believed that he was man of transcendant
abilities, especially in matters of finance--at any
rate we know, sir, that he created our treasury
system out Of chaos, and gave it form and coml-
ness, and breathed into it the breath Of life, and
stamped the impress of his own genius, what
ever II may have been, upon every feature so
! effectually that 1t has never been effaced, and
hence, SIR, IN the apparent success and brilliancy
| OF his career il is not singular that mems minds
lost that balance so essential TO preserve order
ITO arrive at just conclusions But now Mr.
Chairman late as II is, the verdict and Judgment
| OF the world, unanimously rendered, and sane
toned BY the lapse of Fifty years, is to be set
| aside, reversed, and altogether held for noughtn
by virtue OF a discovery Of an honorable Senator
whose constituency ard mine are in part the
same, that Gen. Hamilton was at best but
third rate man thus most conclusively showing
day-s sun rolls o'er us anu mat M. r. d each
not so much mistaken as has sometimes ueen
pretended when he said that "error of opinion
may be safely tolerated when reason is left free
to combat IT,"
But, sir, pardon this DEPRESSION, and will re-
turn to my historical "reminiscences
In 1909 was the rstlegislaton on the subject
Of the deposites of the public money-Congress
then requiring the discussing officers Of the Gov
eminent "to keep" the money under their con-
| troll in some neighboring bank whenever prac-
ticable In 1911 the charter of the Bank Of the
United States expired, and Mr.. Gallatin, then
Secretary of the Treasury, selected State banks
| as repositories and so the law and usage re-
manned till 1916, when the late bank was char
tered, and made, by the terms of its charter, the
depository of the public funds, though State
banks, in some portions Of the country remote
from the branches of the United States Bank,
continued to be used. OF the banks so selected
between 1911 and 1916, but continuing dcposi-
tories for some years thereafter, none failed till
1917, when there were seven, owing collectively
s lbs, 1000, of which they paid all but SIC, 900
During that most embarrassing period in our
financial and commercial relations from 1917 TO
1921, four more failed, three of which paid in
| full, and the amount due by the other was small
The following extracts | read from the report
referred to, which indicates great research and
labor by Mr.. Woodbury..
Extract from Mr.. Uoodbury's Report, December IL,
| 1884
Justice to the State banking institutions, a
body whose conduct in particular has certainly
been Objectionable, but whose injuries to the Govern
ment have been almost incredibly exaggerated, and
whose great benefits TO it, both during the existence
of our two national banks, and while neither of them
existed have been almost entirely overlooked has led
me To make this scrutiny and submit its results under
hone that it will in degree, not only vndicate
them from much unmerted censure, but justify this
Departmcnt for the confidence it formerly, and in the
great Improvement of their condition and of the inan
cal affairs of the Government has recently reposed in
them.
| "Under these circumstances, so very favorable with
the new security and examinations provided for, If
our former small losses by them in keeping and pay
4 inp over the public revenue, under circumstances so
! yeTy adverse are compared with large losses,
either in collecting or dsbursing that revenue, their
present safety to be great is consistent with
the usual operations of the paper system, with the
credit which must always be entrusted by Govern
ment in way other, to agents OF some kind,
in keeping the public money"
Extract from Mr.. JPoodbuy's Special Report, De
i cember ID 1884
II is gratifying to reflect however that the credit
given by the Government whether to bank paper or
| bank agents, has been accompanied by SMALLER
losses in the experience under the system of State
banks this country, at their worst periods and un
der their severesi calamtics than any other kind of
credit the Government has given in relation TO
It's pccuniary transactions" Thus the
truth on this much misunderstood and misrepresened
subject appears to be- not only that failure of a
selected bank did not occur within the period while
United States Bank was in operation, but that of
those which afterwards stopped payment within three
or four years chiefly from the before mentioned