The Madisonian., 1840-01-04

PaShJ lnoSr then IN puoiS uu'ii W .tJ
cial neglect on the part OF those who were men
either accounting officers OF possessed oil 'he power
10 appoint and remove uniaithful agents.
Thus in 1881, 1882 and 1888, prosperous ou. ho'
specializing >Fcars, i1Ske interior scarcely single
los is SUPPOSED to have Unopened among receivers,
though some were then reported for suit on previous
deiaus and the same may be said OF collectors lhen,
and in 1885 prosperous but not specializing years on
the seaboard But In more caamiious periods OF
trade like 1877 and l795 1903 1873 1918 10 1921,
and 1881 some times succeeding others OF rash spe-
culatiou the defaults multiplied among collectors, as
well as discussing agents. So, IN similar periods IN
The Interior like 1918 TO 1921, and 1886 and 1887
they increased among the receivers and the banks
much in ration with The nordnale thirst for hazard
Gus investments, and The overwhelming disasters
which ensued from them and oyer-isSueS oi paper
money.
Another very strong illustration Of this is 10 be
found in the periods OF the greatest losses mer-
chants bonds, compared with the whole amount Of
duties collected. These losses the highest
from ISIS 10 1929, OF any term since the commence
ment OF the Government doubtless in great mea-
sure growing OUT OF the excessive mercantile specu-
laons and failures OF that period and The next
largest were from 1921 TO 1925 resulting probably
from like causes; while from 1929 10 1888 period
Of comparative regularity in trade, the loss was
smaller than in any other term since 1909 and less
than even from l7g3 10 1897 and 1897 10 1901
On the other topic as 10 the feasibility and utility
OF additional checks and penalties against deialca-
lions, the illustrations referred 10, as drawn from
Governments, in respect 10 which accurate stale.
ment have been obtained, and which include almost
every important civilized country in the world
iwenty-sx seem TO prohibit any private use OF the
public money, either by collecting or disbursing
agents In six cases only do The deposile agents APP
pear 10 be allowed The use OF public funds, and that
Is only when those agents are banks, and the money
is placed with them in general deposite. In great
majority OF these governments, the employment of
public funds for private purposes by any agents what
ever is not only prohibited but punished BY severe
penalties, such as Imprisonment or the gaeys, the
peniteniiary, and, in some instances, death. More
minute checks and guards also are introduced in
most OF them, and less Is le TO discretion or fegula-
tion, even in monarches Than here.
That course Of making full and explicit Statutovy
provisions on all these important points, and duly
restricting Executive discretion. liable 10 degene-
rate INTO yrrnny, has before been repeatedly urged
by the undersigned, from regard as well 10 correct
political principles as 10 an increase OF The public
security, and dmnuton of the difficulties and re-
sponsibiites he has Of late years been compelled to
pass through in period OF such immense collections
and disbursements, accompanied by SO severe re-
yulsions in commerce, and such harrassing bank
suspensions.
Dwelling no longer now on this topic, he is con-
vinced, not only that the measure for increased
ry IN the collection aad disbursement of the public
money, but all the other provisions heretofore
commended in the establishment of an independent
Treasury for keeping and transferring H. should be
early adopted. Prominently among these last, is The
separation between the banks and the principal fiscal
operations OF the Government. That would be likely
To produce many advantages, which have been ex.
planned SO fully on former occasions that only few
OF them need here be adverted TO- and this very brief
ly 1t would render bankruptcy of ,he Treasury
impossible, by wide il not general suspension Of
specie payments. To thr loss yexaon and dscre-
dit OF this, the government has already been more
than once sub ected, and United States Bank,
Judging from experience abroad and analogy at
home, would form no etfectua guarantee
against Il than State Banks during periods Of extra
ordinary convulsions in trade, administered under
the present imperfect system OF banking; or, in other
words, under similar defective charters and occa
sionally similar false banking principles Such
separation would relieve both the banks and The Go
yeinment from any further exposure TO mutual ir-
portunities, embarrassmens and examinations. Both
and doubtless benehcially to boh would be lett more
TO their own resources and less TO dependence on
each others favor whether inStigaed by cupidity
the one hand or political ambition on the other In
stead OF increasing, it would diminish, Executive
power; for the latter would be stripped OF all bank
influence, and be allowed in its stead neither the
nor possession of the public money, except under
agents not selected by itself alone, rs in case Of the
banks; little increased in number, guarded by addi-
onal securities and forbidden by the severest penal
lies TO dollar OF il for any private purpose 1t
would tend to check improvident paper issues that
in some degree deteriorate the exchangeable value
OF specie itself as well as OF paper and II would Sc
The best possiblecurrency IN the present state OF
the Constitution and laws 10 fine, il would remove
all inducements 10 hoard what could not be used for
profit, to delay payment Of what could not be other-
wise employed, to augment taxes or tariffs for depo-
sites that can yield no emoumenis, and TO indulge in
repfoaches or suffer Inconvenience, as banks now
do, at being deprived by public drafts, of funds
which, under the proposed system would only add
10 the risk and responsibility ofthe depositary instead
of his gains, and would therefore BE- gladly parted
with.
Coaditlon of banking Institutions generallv and The
kiHd 0t money Yeeeired for pubfic dues.
The condition OF he banking institutions general
~ in the United States is always topic Of some
financial interest. But il now possesses less with the
General Government than it did when the connec-
ton between Them was more intimate and exien-
slve.
Ii is regretted that space remains on this occasion
for but le more, concerning their condition, than
reference to the special report which will soon be
submitted from the last authentic returns that can be
obtained.
In the mean time, however, it may be inferred
from returns not very extensive and from some ge
neral data, that since the first OF January last the
circulation OF those banks paying specie has
probably, on an average, been curtailed quite one
third, or between sixteen and twenty millions; that
the circulation OF most OF The others had not been
increased al the lime of their late suspension That
the aggregate amount of specie in all ol them is not
reduced more Than eight or ten millions; aud that,
since the fail in foreign exchange these institutions
with a lew exceptions, originating in gross depart
ureS from correct banking principles, by embarking
in trade and by making large investments and long
loans, often not to business men nor for common
business purposes, are as able AS ever to sustain
specie payments provided they fell dispose TO exer-
else their iormer iorbearance and indugenceS to-
wards each other, and The community towards them.
Ii is source Of much satisfaction To add that the
recent Suspension has caused far less embarrass-
mcn, delay, and probable loss 10 the Treasury,
whether BY deposites in banks the possession OF
their notes, than have occurred heretofore ON SINH
lar occasions
wo reasons exist for this. The banks have of
late been employed and their notes taken 10 less
extent than was before Customary and the stSpen-
sions among them have been less general, by not
reaching il IS computed over one hird OF the whole
number in the United States, though including, per-
haps, more than hall Of the whole banking capital.
o. those suSpending, fortunately only three OF four
L.ll -, A. 4