The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1842-02-24

sue TO circulate as currency The committee think
not The officers OF Government cannot provide for
contingencies and emergencies individuals, or as
banks controlled by individuals, can do. However
faithful and honest they may be, and however con-
scentiousy they may intend discharge their duties
they have not the interest the means to provide
for such occasions.
Individuals interested in, and concerned in, the
management of banks, are always looking out and
providing in advance for any sudden demand upon
them for specie And with all their interest, sagac-
ty and vigilance, they are not always able to provide
against suspension of specie payments Will the
officers of Government be any better able to provide
against it? There might be a sudden and unexpect-
ed demand which would drain agency at once OF
its specie. There might be systematic operation
and combination, from political or other motives, to
accumulate the notes of agency, and to present
them suddenly and unexpectedly for redemption, and
for the express purpose of compelling it to suspend
specie payments The effect would be not only to
destroy the credit of the Government but to disgrace
it in the eyes of the world The Government should
not be exposed, Its credit should always be be-
yond any possible contingency.
The committee therefore, propose that paper
shall be issued the credit of the Government to cir
culate as currency; but that paper may be issued
for that purpose based upon specie hand dollar for
dollar and that the amount of such paper in crcula-
ton shall not in any case nor under any crcumstan-
ces exceed the amount OF specie holden Tor It's re-
demption
The paper thus issued is called specie notes, be-
ing currency based on specie, and contradstin-
gushed from Treasury notes, which issued on the
credit of the Government, not for currency, but as
means for borrowing.
! These specie notes can in whatever, be
obnoxious to an objection bills Of credit They are
not issued on the credit of the Government but
issued on specie in deposite of equal amount for
their redemption. They pass by delivery, from hand
to hand, currency, and the possessor of such a
note holds it evidence of ownership of the amount
of specie which it represents and to the possession Of
which he is entitled at any moment presentation
of the note at the agency where issued. Until that
time, the specie remains in the depository of the Go
vernment is guarded by its authority, and the holder
of the note has the responsibility of the Government
for its safe custody
These specie notes. issued upon the public revenue
to the public creditor in the disbursements of the Go
vernment and upon the deposites of individuals,
would form currency of the most perfect character
"a currency combining all the conveniences of paper
with the value of COIN They would every where be
preferred to coin They would be preferred by the
public creditor, as well as by the whole community,
because every one would know that the specie was
resting in the Government depository for their re-
dempton, and, with it, the guaranty of the Govern
ment for its safe-keeping.
The issue of such paper, equal only in amount to
the specie held for its redemption, will neither in
crease nor diminish the currency Consequently
there will be no power the part Of the Govern
ment to expand or contract the currency-a power
which the committee think should never be possessed
or exercised by the Government. So far, therefore,
its action is concerned, it cannot a scarcity
or abundance of money, and of cannot njuri
ously affect the business of the country There will
be no initiation of the currency, any rise fall in
the prices of commodities, through its instrumental
ty. The receipts and disbursements of the Govern
ment so nearly equal that any expansion con-
traction will be regulated by the business from which
revenue is derived, and will only be healthy action
of the system.
Neither would the specie notes OF low denomina-
tion be liable to the objection which is sometimes
made to the small note circulation of the banks name
ly, that of driving specie out of the country On the
contrary, the specie would remain under the safe
tody of the Government for their redemption; and
whilst these notes would form more active and con-
venient circulating medium for the People than the
specie they represent the specie would remain at rest
and not be exposed to the casualties of circulation by
which is often irrecoverably lost the world In this
view of the matter the committee objection to
issue Of specie notes of denomination correspond
ing to the small note circulation Of the banks Being
free from all possible risk and way obnoxious to
the objections which made to those notes, they
would be peculiarly acceptable and beneficial to that
most useful and respectable class to wit the small
dealers and day aborers throughout the country.
They would feel that whilst Government is PIC
vidpg currency of undoubted credit and safety for
the larger business interests of the community, it is
not unmindfu of those of small means and of more
humble occupation.
| Under the proposed system, there is to be power
OF discount, In any shape Whatever. nat must De
left to the loo institutions TO them more appro-
priately belongs. Those institutions would feel the
salutary influence ofthe operations of tie Exchequer
in the frequent settlement of balances and the
quent restraint upon overssues and excessive crcula
ton Its tendency would be to confne their discounts
to business instead of accommodation paper-the only
safe rule in fact for banking operations. Under
such rule, there would be danger te the commu-
nifty from their contractions and expansions.
They would be regulated and controlled by the bu-
sness of the country and expand and contract wi h
it. Their circulation would be increased that
of the year when the products of industry 60
ing forward market and would furnish the of
getting it there; and it would contract again when
those operations have been performed, and the bus-
ness has been consummated This would be sound
and healthy action of the banking system, and would
be much promoted by the practical operations of the
Exchequer.
| Would this system furnish uniform currency !?
If by uniform currency 1t is meant that the Gene
al Government shall undertake furnish an amount
of currency adequate to the of the whole
try, the committee answer no. IL neither has the
power the ability to do So No measure which
Congress adopt, whether it be in the shape of a
National Bank or otherwise, can supply hundred
millions of currency to meet the existing or
increasing wants of the community wants ncreas-
ing by the rapid increase of population and the
sequen augmentation OF the products of domestic in
dustIy. From the adoption of the Constitution to the
present time, the States have furnished by far the
greater portion Of this currency, and they will con-
nue to furnish it. Their right to do SO cannot be
superseded by any action the part of this Govern
ment All that Congress do, is to infuse into
the great of the circulating medium of the coun-
try currency issued under its authority and of such
undoubted credit that, with the local currency of the
States, when restored to sound condition. shall to-
geher form uniform currency throughout the
country.
The currency of the local specie paying banks in
sound condition is as good for all practical purposes,
within the sphere of It's circulation any currency
which this Government issue But such circu-
ation cannot extend beyond that sphere and maintain
itself alongside of such currency proposed to
be issued on the part of the Government The expe-
rence and observation of every demonstrates that
local currency however sound cannot have that uni