The Madisonian., 1840-01-30


be in,erd cIed to banking system bu still they are
not responsible for this evil The corn laws oi Eng
land the rains during the hafvesls Of 1888 and 80
aud the pecnarities Of our cotton trade-lhese are
the true causes The operations Of The banks are
but their cxponenls, and he who would propose to
remedy these evils, by striking at the banks alone,
seems TO me 10 reason with no more wisdom than
the phanihropist who would propose to remedy all
the evils OF wars by abolishing the use Of gunpow.
der As the abolition of gundowder would only
lead 10 other and more disastrous modes of killing
one another; so the abolition OF banks would only
lead TO some other agency in bringing about these
commercial results, which would be much more
ruinous in the end to nations. Suppose sir, there
had not been bank in England or America, whilst
precisely the same events had happened ia the two
countries, do you suppose for moment that Eng
land would then have been enabled TO continue her
former prices for cotton, while she was paying high
for breadsiufS certainly not. The action oflrade
would have been somewhat different The i'm
portation OF breadstufs would have produced the
same favorable balance against England. The alb
ssraciion OF currency, 10 satisfy the demand pro-
dn, ed by this balance, would have len diminished
amount Tor other purposes and consequently, prices
would have fallen; that Of cotton among the rest
suits must always follow from similar causes. No
one, who understands this matter, can blame The
Bank OF England for her system Of contraction, or
her unaccommodating spirit towards her customers;
that course of conduct has been forced upon her by
the events Of the imcs and whilst the law Of self
preservation thus urges her to this action, why she
Is, in fact acting the guardian OF public interest,
and pursuing the only course which could conduct
tha lima
Great Britain has been forced BY the DEGREES Of
providence TO make an extra purchase of millions
Of dollars worth OF breadsuIs and neither the wis
dom OF The philosopher, nor the juggling OF the po-
iican can settle the account without making the
nation feel it. And if this misfortune Of England
has in turn, inflicted calamity on us, it is through
the influence Of the cotton trade that the effect is
be explained. Ii is this great trade, and not our
banking system, which has hung up the barometer
of American credit at the British exchange.
| will now, sir, close with few remarks upon the
general conclusion which the President draws from
he present crisis in favor of his cherished system,
the Sub Treasury scheme. The country is now
plunged in great commercial distress, unparallel-
ed pressure exists in the money markel--lhe banks
south Of New York have almost all suspended spe-
Gle payments-a general gloom hangs the future.
sophy, seized these circumstances for the purpose
of throwing the popular ndium on the banking sys-
tenn, and enforcing the policy Of the Sub Treasury
Now, sir on the contrary, il does seem 10 me that
the present crisis, when properly understood exh-
bits the dangerous tendency Of the Sub Treasury in
light which should make the patriot shudder at its
establishment If the explanation which have
given of our cotton trade be correct il shows that,
dar tha - 80.
liable TO the visitation Of the severe commercial
revusions and the British corn laws, as long as
they stand unrepealed will increase this liability
and aggravate the result. The President admits
that in country so commercial as ours, banks, in
| some form, will probably always exist II, then we
are always TO have banks will be readily admitted
that we should, il possible, in all financial arrange
ments, adopt such policy as will enable them 10
operate with most advantage to the country, and, at
the same time, preserve them in those Limits both OF
expansion and contraction, which may insure the
greatest uniformity and stability to our currency
amid all the vicissitudes of our commerce We
must, then, guard against all measures which will
spare them in their seasons Of prosperity and fall on
them with irresistible gravity in adversely The
operation of The State debts as explained by The Pre-
sident, will most appropriately illustrate this posi-
tion. The States Of this Union have within few
years past, principally for purposes of internal i'm
provement borrowed capital 10 The amount of about
S2o0,OO0,O0O large portion Of this money has
been borrowed in England, and in mos, cases under
an obligation to pay the intees, in specie Now, The
President informs that, in ordinary times, when
the flow OF credit between the two countries is un
disturbed this specie stipulation has no unfavorable
influence on the banks "but, as soon as is check
! ed anv Sitatip abr h,,a
make payment there in our productions the evils of
the system are disclosed. The paper currency
which might serve for domestic purposes is useless
TO pay the debt due in Europe; gold and silver are
therefore, drawn in exchange for their notes from
the banks. To keep up their supply of coin, these
institutions are obliged 10 call upon their own debt
ors, who pay them principally in their own noes
which are as unavailable 10 them as they are to the
merchants to meet the foreign demand The calls
of the banks therefore, in such emergencies. of ne
cessity exceed that dema 3D. and produce cores
pondIng curtailment ftheir accommodations and of
the currency at the very moment when the state of
trade renders il most inconvenient TO be borne
These very just Remarks of The President constitute
most important admission, and furnish to his op-
ponents, in my opinion, an invincible argument
against the Sub Treasury policy.
II must be perfectly evident TO every mind, upon
the slightest reflection that the operation OF our State
debts on The banking system is precisely similar to
that OF Subreasury, with The exception that in
times OF difficulty and pressure it will be infinitely
more harsh. 1t is evident TO use the expression of
the President, that "when the flow Of credit is un-
disturbed, the specie clause in The Sub.treasury will
produce the bca possible effect on the banks. Ii will
produce necessary drain from them, it is true
But the President says The money is mo-, to be hoard
ed II then is spent as fast as draw wn the general