The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1840-05-12


al those evils attributable to other causes.
In consequence Of combinations among men of
wealth, opposed 10 the war, the requisite loans OF
money could not be procured-dsasters overlook our
arms, Tor the want of necessary supplies Of funds
and others threatened II patriotism ever ac-
tuated banks, il felt in the operations OF many OF
the local banks at that gloomy period AT the hazard
OF their erisenee they furnished the Of raising
armies and maintaining them in the field; and was
IN their Efforts to sustain the Government thai they
80 far crippled themselves be obliged 10 suspend
the payment OF specie. Ii the Bank OF the United
States had then existed il must have done as the
State banks did, or il would have effected nothing N
support OF the Government. Ii IL had not joined the
combination against the Government, it could not
have furnished the funds which the erigenccs OF the
country required without suspending the payment OF
specie Instead of hostility and persecution the 10
vernment owed the State banks gratitude and support
Their credit during the whole good as It's
own and without their aid, the Treasury must have
stopped payment"
might quote further from this celebrated cor
respondence, but il is unnecessary.
Now what is the whole case? Why, the
Government being engaged in an arduous and
bloody war with one Of the most powerful ma
tons on earth, had no money OF its own, nor
sufficient credit to obtain il. II tried Treasury
notes; but they deprecated TO SO great an ex-
tent that they had become unavailable. In this
extremity the banks rushed TO the aid OF the Go
vernment, and so expanded their issues as TO
compel them TO resort TO a suspension. with
this suspension hanging over them, like a mass
OF dense Clouds their notes were worth more,
and were more available TO the Government
than its own notes. In proof of this, | cite the
following testimony Of James Monroe:
| 81 well remember, however that when was called
by the President to the Department Of War, the
3ls Of August, 1874 the certificates Of the Treasury
were selling a, $50 in the 500, BY which, $40 were
Lost i was evident that if reliance placed
the sale of certificates only still further decline
would ensue, and that the consequences might
| be apprehended. The country was invaded through
the whole inland and maritime frontiers, and power
full squadrons at the mouth Of every bay and river
leading to our principal cities which were threatened
with attack and ruin The metropolis of our Union
had been forced and public buildings destroyed
Such was the state of the country and the funds when
entered the Department of War Under such cir
cumstances, appeal made to the patriotism and
interest of the cities and the banks within them, by
the Department Of War with the sanction Of the Pre-
sident for loans of money necessary for their own de-
fence for that of the maritime frontier and the Union
For the first loan that obtained million OF
dollars from the city of New York which took place
a few days after entered the Department price
was fixed. As Treasury notes were selling for $50
in the 800, that claimed, but not acceded to-
left for subsequent adjustment to be settled on fair
principles. Several millions of dollars were obtained
from the District of Columbia, and principal cities
throughout the Union and, according to my recolec-
tion at par"
charge as loss to the Government, by the use
Of deprecated bank notes, was in reality a
saving because, if the Government had used
its own notes, they were more deprecated and
less availing than bank notes. Why is it that
the accurate investigation and lynx-eyed sagacity
of the Secretary of the Treasury did not discover
this immense and notable loss TO the Govern
ment by the use of deprecated bank paper
when he made his celebrated report in 1884
when the whole truth was important? Why is
it that he could then ascribe this bank depreca-
ton to the caamities of lrar but now, by inu-
endo at least, to the curses of the banking sys-
tem2 The object to be effected now is the
reverse of what il was then. That's all.
| The loss of $780, 900 which have stated, ac-
crued to the Government from bank repositories,
arose entirely from those failures which were
produced by the operations of war; and the ex-
| ertons Of the banks to aid the Government.
Since that time not one dollar has been lost Of
the $28,0OO000 on deposite in the banks at the
suspension of 1897, every cent has been paid but
$S05,0OO; and that is well secured What be-
comes, then, of all the predictions of immense
| losses TO the Government by the insolvency of
| the banks ?-all vanished into thin air-all falsi-
| fed
| The reliance upon fine and imprisonment, and
| bond and security, for the safety of the public
money in the hands of individual agents, is too
| uncertain to be trusted Human nature is so
frail, and the seductions of temptation so strong
that have no faith in these means of security
We have had too many melancholy proofs of
their insuficency Immediately under our own
eyes, to try il again, and have no wish to. see
them multiplied. agee in sentiment with the
judge of whom the poet says:
q He sent the thief who stole the gold away,
And punished him who put it in his way'
believe the Government is only adding to the
causes of decentralization which now so extern
sively prevail in the country, by opening so many
new sources of temptation TO poor fra human
nature as this system will do. believe that
decentralization and defalcaton will only be in
creased, and that what has been the history of
the past will only be confirmed by that of the
future.
The advocates of the Sub-treasury scheme.
for the purpose OF exciting public prejudice
against the banking institutions of the country.
and through that fundamentally, securing the |
adoption of their pet scheme, have uniformly |
ascribed the severe revusion which overlook the |
country to the overaction of the banks few |
simple facts will falsify this charge. General
Jackson was inaugurated on the 4th of March.
1929. On the first Of January, 1880, there We're
800 State banks, with capital of $l45, 49,, POS, |
and circulation of Sol ,323,S9S. In 1882, Ge-
neral Jackson vetoed the bill for rechartering the
Bank Of the United States, and earnestly recon-
mended the use of the State banks as fiscal
agents The policy of General Jackson was to
use State banks auxilaries in his operations |
against the Bank of the United States and in |
September, 1893, he withdrew the deposies of
the public money from that institution and en- |
ployed the State banks as public repositories |
He also, for the purpose Of avoiding the distress
which the withdrawal Of the circulation of that
bank would produce, and the speedy collection of
ITS loans, urged upon the State banks to expand |
their circulation On the Isl of January 1885, |
under the influence Of this policy, the number
of State banks had increased to SIS. with a
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