Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1840-10-09

us Suuucu COutraCtOn, DOtn teurfullv
deranging the affairs of the country. proceed to
prove this. To go back no farther than 1882, when
the Veto settled the point that the United States Bank
would not be re- chartered VIC will take ycarsby series
of tens and hvcs, and trace the creation of banks
During the ten years from 1920 to 1880, only twenty
two new banks were chartered in the United States,
with an aggregate capital OF eight millions During
these years the Bank of the United States was in
operation. and no one doubted that it would be re-
chartered In the ten years from 1890 to 1910 not less
than 348! banks were chartered against y in the pre-
ccdng ten years, and they added 269 millions to the
previously existing banking capital, instead Of mil
lions as in the preceding ten years
This remarkable expansion of banking capital was
during the charming and successful reign of the FIX
pertinent But it was not only by the means OF bank
ing capital that expansion was encouraged 70, after
the extraordinary proceeding of removing the dcpos
it's it was made the duty of all depose banks to lend
the money freely to the merchants Secretary fancy
IN Sept. 1883 told the banks il was their duty to dis
count freely, and that the money of the government
should be applied to mercantile SO far was
this pursued that cashier in this street said he hard
ly Knew what TO do, for he was ordered by Govern
ment to lend more money than he knew how to get
security for" 1t was then from the multiplication of
Banks and of discounts by order of the Treasury,
that the expansion ensued 1t may be said there were
expansions and contractions under the u s. Bank
No one denies il; tho administration of that bank
not always perfect but take the half century during
which we had National Bank and it was more free
man whom have already quoted (Mr. Senator
Wrght) said in his speech here he could not 20 back
to the first United States Bank. Why mott He
finds two three instances under the several banks
in which evil occurred but he docs not attempt to dis
prove that during the existence Of the bank were
more free from fuctuaon than since
Blu, in the midst of the expansion just explained
cumc the specie circular, which with other measures
OF the government produced violent reaction in the
country. Now TO rccur TO what ! was speaking Of
under what circumstances and nj whose recommend
alton, did the states commit the imprudnce of getting
into debt You hear now of 200 100000 of sn,a
md hu ,Nl, ip,li, cpf1
Look OF the facts. From 1920 to 1925 the debts
were about Is millions--lS25 to 1890 about 10 mill
ions more--lrom 1850 to 1885, 40 millions added
But the expansion of the state banks and the accun-
laon of capital placed in their hands developed their
consequences freely in 1884 and 1886 As already sta
ted. 40 millions were added the debt of the states in
1919; and from 1885 to 1910 100 millions
added. So that this vast amount of debts con-
tracted when currency was redundant here at home,
and the depostc banks were dashed lend to all
who would borrow.
Tho whole people were excited by this extraordinary
redundancy, brought about about nv the action of
government, to all sorts Of spcoulatons and to the
contracting of those debts for which states are now
rcved by the party IN power, from the head Of the
government down to ITS lowest agent. One half of
the whole amount of those debts was created from
1888 to 336,--lO0 millions in the glow and flow Of
the Experiment: IN two years 100 millions of debt
was ths contracted The creation of state debts kept
pace with bank expansion, and bank expansion with
creation OF banks-and the creation Of banks
| with government experiments and government ex-
pcriments with the most extraordinary decisions that
ever mised nation. While on this topic must say
something OF one analogous to 1t. One of the char
yes OF the day, wholly ia Sc and unfoundcd, is, that
the opponents ofthe administration have out, or
desired to come out for the assumption of these state
debts by the general government. This charge began
in the Senate of the United States last year. Let us
look at this have said that government encouraged
the states to incur debts and issue bonds BY making
money so abundant Bat they encouraged this in
another mode. 1t was favorc project after the
noval Of the dcposites, with certain persons in and
about the government to invest any surplus unused
revenue of the United States in these very state bonds
ito not mean to say this is assumption, but to prove
that the general administration stimulated states to
lssue bonds md cndcavorcd TO give them all the
dit they could.
In 1886, took up, in the senate the bill for the
distribution OF the surplus revenue This was not tho
| measure of the administration, but rather carried
against its wishes As early as May, 1896, Mr.
Wright, then as now, the ablest and mos; effective
leader o! the administration in that body proposed as
an amendment, that the surrlus then in the Treasury
be invested in state bonds, and that whenever any
| snm accumulated beyond the immediate wants of the
Treasury, 1t be in like manner invested. Again, when
the law regulating the deposte banks passed
and the famous 18th section, which provided for the
distribution OF the surp u.s. added to that bill the
same distinguished gentleman moved to strike out tina
section and to insert IN lieu thereof provision that
| the whole 40 millions should be invested in state
bonds and when the first subreasury bill was nlro
duccd, that too had provision for investing any sur
plus in the treasury in such bonds. There are other
funds under the control of the general government
| when are thus invested the Smithsonian legacy
some half million about, is all but small sum in.
vested IN state bonds; and large reserved pro-
vide for stipulated Indian annui,es have been invest
| ed in the same way
Hence it will be seen, that the administration itself
wherever it could make interest by tan interest
| mean with the peope--was foremost in cncoura g.
my and fostering state bonds and Mr. Wright sad
there was no fear that these bonds would be scarce
Tor states had so many motives for public improve
| nentS, ana OtnerWlSc TO contract debts that the
would produce bonds as fast wanted them.
repeat that while do not charge this as practical as
SUMPTION, DO maintain that il holding up these
securities to Europe and the world, worthy OF oil
| credit And what n pretty piece of business it would
have been, II Mr. Wrights proposition to invest &C
millions at once IN state bonds had succeeded Ii Mr.
| Noodoury--consrcntlo and scrupulous he is
known to be--had been charged with thus investing
this sum--what do YOU think would have been the
rule Of selection If Massachusetts, had almost said
Name but that s settled or Pennsylvania, the states
tnt nave ana those that have not voted had bonds 10
oiier would It not have been beautiful business to do
on the evc" election, 10 buy such bonds!
But revert TO the charge that desire or aim a,
an assumption of state debts, and pronounce 1t 10 be
without particle of foundation do not know that
man IN congress that entertalns the belief that the
constitution permits the payment ofhe debts Of states
by the United States, without a consideration, any
more thnn the debts of individuals. Such an assurup-
uoh as MI Benton resolves against and Mr.. Grundy
reports against in an intermnable string Of common
places, was never heard of in Congress- and this
brnGs me 10 another point. You have all doubtless
heard tina, systematic plan Of operations was set on
foot, in which was to take part TO bring about such
an assumption for the benefit of English capitalists
and that went TO England in pursuance of such a
plan to get up an interest there to bear upon Con
gross. will tell you all ! know about this. left
here in May, 1890 and at that time had never seen
nor heard the suggestion OF such scheme. That
was, ms you all remember, period of deep gloom
ana despondsncy for American commerce, and it
was natural sho Id be spoken and inquired of by
| those who were Interested in American credit and
American securities, as to the ultimate value thereof
but assure yon upon my honor, that no English or
European holder Of State debts suggested to me-
or in my hearing, the rcmotcst alusion the assump-
lion or guarantee by the United States of these State
debts. Once only was it mentioned to me, and then
by an American, and replied him al that such
a scheme ndS unconstitutional, and could not be ac-
| 'ompi'shed nohout change in that instrument On
the contrary the inquiry was always us to the right OF
the states individually 10 debt and their pro-
liable ability 10 redeem It, 1t was, as have said be-
fore, gloomy period for American affairs in England
and much of the qualification of my visit was impaired
by the common feeling fdespondency, which could
not but share with my countrymon but the States
had bonds in the market and anxious to sell
| and concerning them was constantly Intercepted
NV own State, Massachusetts had some bonds