The Madisonian., 1840-02-08
COMMUNICATIONS.
FoR rHE MApIsoNIAN.
TO THE PRESIDENT OF THE UNITED
STATES. NJ. III.

Having settled 10 your satisfaction, that II would
be unsafe and unwise to depose the public money
in the banks, where, presume, you have always
deposited your own, you proceed 10 show that The
Government ought not 10 receive bank paper for lis
dues, nor any thing but coin.
agree with you that 50 far as the banks are liza
bic 10 insolvency The same objections against trust
ing money with them on deposit apply 10 receiving
their notes. They are no more liable nor able TO
pay their bills in circulation than their deposits and
when they can pay The one they can redeem The
other. So long, too, as The Government receives
their notes, it can't make much difference either 10
the banks, as class in their prois or 10 The com
muniiy, in The substitution OF cheap for dear cur
rency. As have venlured 10 give slight quaif-
cation to your principle, beg leave TO be little
more explicit on this subject than you have been
The amount which bank can safely discount,
depends, We know, on the proportion between its
circulation and It's specie, which proportion varies
under different circumstances, and which nothing
but experience determine Though The crcu-
lation comprehends the deposits, as well as the notes
the bank has issued, yet when il has found that of
the sun deposited BY the Government, ceriain por-
lion is never Withdrawn ii may safely venture to
enlarge its discounts TO that amount for such part
OF the de posilS So long as it remains undemanded
does not increase The demand for specie. II, how
ever, The public revenue should remain in he cuslo
dy Of iLe officers OF the Treasury and the same
amount should remain, as before supposed unem-
ployed, in The form Of bank paper the banks who
had issued it could, without doubt, then ais safely
enlarge their discounts to the same amount, for
although they w ould not have the same certain
means of knowing this fact, as when they were the
deposaries of the revenue yet they would arrive at
the same beneficial result by the greater extension
Of their circulation in proportion 10 their cash.
Thus, the profits made by the banks from the unem-
ployed funds Of the Government, would BE- the same
nearly the same, in both eases, and The only diiie
renee would be that, what had formerly been confn-
ed to the Deposite Banks, would now BE- distributed
among them all.
The preceding parallel assumes that, the portion
OF the public revenue not needed by the Govern
ment, actually remains in the offices of the Treasu-
ry, for if the Sub treasurers should any part OF
it for their own purposes, TO The same extent would
the means of discount by The banks be abridged
But in this case, as well as the former, the crcuat
lug currency of the community is as great as was
when the public revenue deposited in the banks.
IT, then, your purpose be TO lessen the currency Of
the country, and to lower the profits of the banks,
Government, ii is clear that your purpose cannot be
consummated, except by refusing TO take the notes
Of the banks, and requiring all public dues 10 be
paid in specie. You have, accordingly proposed
this measure and its policy will now proceed TO ex-
anime.
The first objection to the scheme, which strikes
every body, is lis expense. II must greatly add TO
The amount OF specie which the business of the coun-
-, Al
obtained either by adding our foreign debt, area
dy inconvenienty large, or by lessening our means
of reducing it. You say that The sum which "woud
be employed at any time in the receipts and dis
burscments Of the government, even if the proposed
change were made at once, would not it is now, af-
ter fuller investigation, believed exceed four or five
millions" Surprising your estimate we'll founded,
this sum is better saved than lost can remem-
ber the Time before the prodgal days OF your admin
stralion and that which preceded it, when one
hundredth part of the smaller of the sums you men
ion, or $4,000, was thought beneath the notice
ofthe government; and when an expenditure of less
than the tthe of that could not always escape The
censure of the guardians of The peoples money
But, sir, the additional quantity of specie that your
scheme will require is limited to the amount, at
any one time, on hand Large sums besides, are al
ways on the way from the Treasury and to it, in nu-
merous streams, like The veins and arteries branch
ing from the heart. The difference between the ad-
donal sum required and that which you have men
toned, wonld be as great as the whole amount of
provisions brought 10 market in day. and the ave.
rage amount al any one moment. Instead therefore,
of four or FIVE millions, in addition TO your present
stock, you may require ffteen or twenty.
This scheme is, after all, question of expense or
economy. To avoid, then the chance of loss by the
insolvency OF some blnks and the suspension of
others, which, under good system OF finance, would
be insignificant, and, under bad one has not been
very great, you willing TO incur much greater
loss, by buying gold and silver TO do what can be
done by paper. Have you not occasionally met
with some overwise people, who have gravely main
tanned that the use of plate in their household was
cheaper than porcelain, account Of It's greater du
rabiy though the interest of the money required to
buy servite OF plate would buy service Of china
twice year Such sir, seems 10 me the po2iticat
economy of those who would restrict the govern
ment in lis receipts and payments TO the of gold
and silver
II is but justice TO admi; that you do not suppose
fur,he importation Of The precious metals necessary
and that the quantity required Tor your specie expe-
riment may be abstracted from The quantity already
in The country, without serious Inconvenience. But
this suppoSilion is repugnant to the known laws of
supply and demand Ii a general order to be
issued that every ofcef OF The army should hereafter
wear an ostrich feather in his hat, can you doubt
that, although most of them might be Immediately
furnished by the supply on hanu, further quantity
would be imported adequate 10 the demand
Indeed l understand you, in subsequent part OF
your message, TO admit this undeniable principle,
that the supply OF the DrecouS metals will he ado
quale to the uses for which they are required"