The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1842-02-26

Their. Hence the proprety OF giving the Exchequer
the power of purchasing bills of exchange with the
the transmission Of the funds Of the Govern
ment to the point of expenditure. With this power,
it must be apparent, to the minds of all disnterested
persons, that this institution will powerfully tend to
effect equalization of exchanges, and relieve peo
pie of currency of uncertain value-to furnish them
with paper medium to be well known TO all and me-
gOtiable every where without loss.
Again it is urged that the issuance of specie notes
by the Exchequer would convert it into bank This
is purely visionary. There is not the semblance o.
reality in it. 1t neither could grant loans dis
counted notes. deal in any other banking business
The limited extent of its issues would create THAI
extent what would answer the necessities and wants
of the country better than coin. Now, why such
compromising opposition to this kind Of paper the
part ofthose who much opposed to the exacton
of specie in liquidation of the debts of the Govern
ment, when it is most manfesty obvious to all reflect
ing men, that it would supersede the employment Of
specie at the Treasury? These specie notes would for
remain above par, long it should be the po
Icy of the Government to collect annually amount
of revenue sufficient to absorb them.
Such is the plan of financial reform which, after
the maturest deberation, Mr. Tallmadge has thought
proper to propose to Congress, and recommend to the
country, and if it be examined with GOODNESS and i'm
partially, every previous prepossesson being dismissed
from the mind, it is apprehended that it will be found
to contain nothing nimca to the spirit and principles
of the Constitution nothing resembling the wild Chi
merical notions imputed to it by is opposers nothing
from which the sober and dspassonae friend of his
country derive the smallest ground ofapprehen
nd n, Is, tho; ,,pr
duced on our minds, after the closest examination of
the plan, and Of the proposed for carrying it
into execution. Let it be examined in its relation to
the general interests of the nation and it will suf
fer in comparison with the most avorite of the acts
that have been adopted under any Of the preceding
administrations. So long, therefore, as principle il
maintained, precedent is respected, its claim to the
support of Congress cannot be resisted the ground
ola Want of authority to establish it.
Now, dealing in the purchase and sale of bills ofex-
change is often expressly given to banking corpora
tions and the fact that is expressly given, is evil
dence of the general understanding that without it is
given bank would not have the right or power Of
dealing in exchange, and that is, strictly speaking,
| part of the ordinary business Of bank When we
| speak of bank, institution invested
with the power to discount bills notes. and other evil
dences of debt receives deposites buys gold and sill
yer bullion, bills of exchange, loans money &c. To
constitute bank, it must possess all of these facu
ties. This examination of the Exchequer, it is conf
IDENTIFY believed will show that it does not possess the
powers of banking institution, and that the priv-
lege of purchasing bills of exchange is an important
feature in this system Although this appears
plain and palpabIe not to admit of contradiction or
| % :..,Jo -
be time i'll spent, to illustrate it by example. Fol in
stance, the officers the Government collect half
million Of dollars of revenue in New Orleans in the
local bills of specie paying banks, and deposte them
| with the agency in that place. There funds
wanted at Philadelphia Baltimore City, and as
| the notes of the banks of New Orleans, although
convertible in SPECIE will not answer there the agency
in New Orleans instead of mourning the cost of TIE
transportation Of the SPECIE purchases bill of
change, of undoub,ed solidty, founded real mer
camille transactions, and payable at fixed and not dis
ant dates By this process the wants Of the Govern
men are anticipated, and its engagements liqudated,
not by draining specie from the point at which the
collection is made, but less expensive, and economi-
cal mode, by the employment of the instrument of ex
change The section of country, thus periodically
drained of its specie, could not maintain its prospe
rty or preserve stable and sound circulating ed
um As well might the blazing orb ofday when
bless us with its genial rays absorb, it does, the
moisture of the soil, and the Providentia dews of
night restore it, and yet the qualification of the
earth, and the gathering of its fruits be hoped for as
to expect banks to retain specie basis, whilst under
going such an exhausting process
Let us take another view of this question. 1t is
said that the power to issue drafts and certificates is
one ofthe attributes of bank These drafts and certf
Gates are wholly dissmilar from the notes issued by
the banks. These drafts not only promises to
pay. They promises to pay and recoverable in pay
ments of debts and taxes due to and by the Govern
ment. This is not an mmateria distinction for the
objections apaper medium are, that its value depends
upon mere national faith. But this certainly is bet
Ter dependence the public debtor who purchases hem
may tender it in payment. They drafts, drawn
upon specific fund set apart for their redemption
There is a material and well known distinction be-
tween draft drawn upon fund, ard bank note
upon credit. A bank note may, therefore, I've consi
dered note drawn, and resting merely upon the
credit of the bank, conlradstinguished from
fund constituted pledged for the payment or re-
dempton of the draft If the fact of the Exchequer
drawing upon its funds, to pay its debts, the
debts of the Government, will make it bank, every
man is banker But this, migrated upon the bill
has powerful tendency to equalize the exchanges.
By means of these drafts or certificates our Northern
merchants will be enabled to obtain funds in the
South for the purchase of the cotton. By means of
these drafts and certificates the merchants of the
South will be enabled to purchase goods in the North
By of these drafts certificates the manufac
turers of the North will be enabled to receive remit
tances from the South, for the articles shipped and
sold there. These drafts specie notes would stand