, 1840-10-03

fault OF the department., OF any chance Oh
prevention, it may, in a single month, fall
into hands, who shall conduct in on the
Mississippi plan.
This applies especially to the State Bank
deposite system. There is not the same risk
Of profligate management in the case Of a
United States Bank. Yet we very much
mistake, if we imagine that there is any mag
ic in the name, which insur;s either pru-
dence or honesty. The majority OF the
directors in the late United States Bank,
were men entirely irresponsible either to
the People or to Congress,-placed there
and continued there by the private stock
holders. And if it be asserted that they
never did manage recklessly, then | turn 10
"Niles' Register" of June 26, 1919, and ex-
tract, from an editorial article on Exchanges,
the following account of its very first pro-
ceedings, when re-chartered in 1916:
"When the Bank of the United States
started, discounts were granted to almost all
that asked for them-one million TO one, half
a million to another, and so on, by hundreds
of thousands; until the amount came down
to one and two thousands, which sober and
productive people were enticed to borrow.
Why, very boys had their twentles, thlrtles,
ank fifty thousands. Bank bills could not
be signed fast enough; and Congress was
bored to permit the Bank to employ about
twenty men for the purpose-they could
not, without some such relief, fill up the de.
mand for their currency. They wanted
nothing but the means, through signing OF
notes, to give the People a wholesome me
dunn. But in hey-day of the times, the Bank
seems to have forgotten it was possible that
payment might he demanded for these notes!
and when they began to come in, there was
a n necessity for diminishing the amount OF
their discounts. The small accommodations,
by ten times the safest and most profitable
of any which the Bank had, were first re-
morselessly thro wn out, to the ruin OF many
good men. and great distress of Others
Niles Register, vol. XVII, p. 289.
This il the statement furnished to US by
that matter-of-fact, dispassionats, respected
old politician. Hezekiah Niles. No wonder
that, in 1919, when Mr.. Cheves took the
management from Mr.. Jones, the Bank was
on the verge of ruin!
Alhthis goes TO prove the wisdom OF the
second principle Incorporated in the indie
pendent Treasury BiI-that the public non
ey should be entrusted to the custody Of
public officers. not of mOneyed corporations
The officers are responsible, and can be
controlled, and are liable to punishment; the
corporations are irresponsible, are beyond
control, and may set the government at de
fance.
But there is 4 stronger reason yet behind
why the public money should not be used fol-
!, private purposes, especially by moneyed
, corporations.
, Ii is this. To use money is a great privi
/ lege: a privilege eargerly sought AFTER;
privilege worth six, or eight, or sometime
fen per cent a year. If the average amour
4, of public money in the Treasury be tw
: millions, the privilege Of useing it is wortl
t from one 10 THO hundred thousand dollar
yearly. Uuder the State Bank deposit,
1 system, the President had the power of con
ferring this privilege on any banking cor
t porations he chose to select. This was
a very dangerous power.very liable to abuse
A President, with such a power TO bestov
moneyed privilege, might, If so disposed
: make his own terms with the Banks. Nay
more; he might this pleasure, to a considera
, bic extent. make money scarce or plentiful
, in any section Of the Union he pleased, b,
, placing more or less of the public deposite
( in one State or in another. This was pa
1 tronagc and moneyed power of the mos
| dangerous and influential kind.
: Under the United States Bank system
5 the danger and the patronage were less
But still, at particular times, the patronage
was very great. In the same communicative
, of Mr.. Cheves, from which | have already
quoted, he says, speaking Of the time HI
, took his seat as President ofthe Bank March
1919 when the danger Of suspension wa
A., imminent:
: "a correspondence with the Secretary o
, the Treasury was opened. entreatiRg hi
forbearance and his aid. To this officer
should be ungrateful if ! were not publicl,
10 acknowledge my obligations and those of III
, Bank, for the countenance and support he al
!, Eorded TO both, in the struggle"
], Here is aid and forbearance entreated b,
! the Bank. and countenance and support al
1 forded by the government. What is that
, but patronage in its most dangerous form?-
, And what security hive we against such
: crisis recurring at any timer None what
ever. 1t depends upon the good manage