The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-01-14
In SENATE U. $. DEC. 30, is4l.


Mi. RIvES sail he had no wish to participate IN
the present discussion, which seened 70 nun oo.h IRE
IT, mi premature and certainly should not have
go 40 hut for the absence of his honorable friend
from New York, (Mr. Tallmadge) who had made the
motion which has given rise TO this unexpected DIS
cussion and who had been compelled by indlsposon
10 withdraw from the chamber On behalf OF that
friend and in slme sort representing HIM, II he
might presume 10 say So from the intimate personal
relations which had long subslsted between Them he
felt himself called on by the xpecied ronge when
the discussion had taken to make few observations
His honorable friend, in submitting the motion to re-
fer the report of the Secretary Of the Treasury to Sc
lect committee lad expressly stated that he deemed
all remarks on the merits OF the particular plan pro
posed by the Secretary as at that time, out OF place.
as the paper TO go into the hands OF committee
by which its shape might be materially changed and
the scheme be thereby freed from objections 10 which
il was now liable. And yet the honorable senator
from PENNSYLVANIA Mr.. Buchanan) has thouSht
worth his while in the very inception OF TINS process
of inquiry and debeation, TO pronounce an elaborate
argument against the plan propose to be ref red, IN
The yery shape in which now stands, even to It's mi.
nutest details and in this he has been followed anu
sustained by the Senator from South Caroline Mr.
Calhoun AdmiIing, as always do, said Mr. H.,
the display Of and ability which both of these
distinguished Senators have made on this OCCASION
vet cannot but think that they might have spared
themselves good deal of trouble and not little gra-
tutous if they had been content oawalt
the action of the committee and see in what shape
the measure will then be presented for their conslde-
ration Sure am that nothing will ever be present
ed to with the concurrence OF my honorable friend
from New York, which shall be justly obnoxious TO
the denunciaton of being great Government Bank
II does seem to ne then with all Difference to The no
norabIe Senators, that it would have been better m
every respect both as regards economy OF time and,
vet more that temper OF sobriety ana concniatoh
which is so necessary to the success OF legislation un-
der existing circumstances if they could have reserved
their re marks until defntye and practical question
shall be to them by the report OF the commit
tee to which the plan othe Secretary is now proposed
TO I've referred
Mr.. RrEs said that, although the Senator from
South Carolina MIR. Calhoun had very warmly ex-
pressed his concurrence in the objections taken by
the Senator from Pennsylvania MIR. Buchanan) 70
the plan of the Secretary Of the Treasury he could
not but be struck with remarkable incongruty be-
tween the views seyerally expressed by those two
Senators The Senator from Pennsy wanna IN de-
nouncing the scheme great Government Bank,
seemed to justify the mputation OF that character 70
it mainly on the ground that the proposed Board OF
Exchequer was, under certain limitations, 10 De a.
lowed to issue convertible paper currency, to
fixed amount. But this power of issue the Senator
from South Carolina has just told us is thing entire
y distinct from the proper function OF banking and
congratulates himself and the country that tins prin-
ciple first laid down by him, he seems to intimate,
in the discussion Of 1897, is acknowledged by the
Report of the Secretary of the Treasury The prin,
cipie is no novelty sir it in 1897 for II had
certainly been announced and ably developed by one
of the most celebrated writers Political Economy
in England, (Mr. Ricardo,) long ago as 1924, IN
his plan of National Bank. 1t has ever since been
fructifyng in the public mind of that country, and
has produced new and important views OF the subject
of currency among her abest theoretical and pract-
cal writers such Mr.. Samuel Jones Lloyd, Mr.,
Torrens, and Mr.. Clay member of the British Par
lament who has devoted himself with particular zeal
and success to this branch of financial science -
During the past year committee was raised by the
House of Commons, consisting OF the then Chancel-
nor Of the Exchequer Mr. Francis Barring, OF the pre-
sent Prime Minister Sir Robert Peel, of MIR. Hume,
of Mr. Goulbourn Of Mr.. Herries MIR. Clay, Mr..
Ellice and divers other leading members of Parlia-
% mt, charged to inquire into the effects produced on
the circulation of the country by the various bank
ing establishments issuing notes payable on demand.
1t is remarkable fact that out of the nine witnesses
examined before that committee, Gall of them distin-
gushed bankers and practical fnanciers,) seven ex-
pressed the strongest conviction OF the necessity and
expedency Of effectualy separating in practice, as
they were distinct in theory the faculty of issue from
the business Of discount, banking proper. They
reason thus To issue paper currency Is to create
money which is the rghtful province of the State,
public authority, while the appropriate function OF
banking is to distribute money when created,
in carrying on the business Of society. These. two
functions alleged to be not only separate and dis
tinct in their nature but often conflicting and ncom-
patble in practice The interest of the banker is to
obtain the largest profit he can by extending his
cuation to the utmost limits consistent with the pro-
bable security of his loans while the duty of the is
is often to combat and resist the solicitations of
private gain, and to govern the amount of his issues
sternly by the consideration of the public safety, and
the preservation of sound and stable currency
Functions, thus distinct in their character and oppo-
site in their tendencies, it is insisted, should not be
united in the same hands, but should be kept sepa-
rate and apart and the arrangement proposed by al
most all the witnesses who were examined before the
committee, for cfecng this separation, is to provide
for the issue of convertible paper currency, by pub
lie authority not however, through Executive agents
dependent on the Crown but by commissioners act
ing under the control of Parliament.
refer to these proceedings (sad Mr. Rives) to il
lstrate and enforce the position of the Senator from
South Carolina that issue and banking not only
separable but intrnscally distinct, and to show the
Senator from Pennsy vania that the limited power of
issuing convertible paper currency which is pro
posed to be exercised through the Board of EXche-
quer, in the plan of the Secretary of the Treasury,
does not of necessity, make bank. | will not UNI
derake to say that the idea which is rapidly gain
. ing ground in England from the imperfections and
abuses of the banking system at present organized
that it expedien to effect complete separation be-
tween the power of issue and the business of bank
ing is in all respects suited to the condition and cir
cumstances of this country 1t has been carried out
with signal success but under the essential guard of
constant conyertibility of the paper issued into
specie in Prussia the country which, of all Others in
Europe, enjoys, at this time, the best constituted
currency. How far limited application of the same
principle, modified according to the character of our
institutions, might be ventured upon here, is ques-
ton which, it must be admitted, after the disastrous
experience we have recently had of the dangers and
evils Of the present system, is at least fair subject
for enlightened inquiry and consideration
No person (said Mr.. Rives) have greater
horror than fhaye of Government paper money,
properly called, resting basis but the general
credit Of the Government, representing real value,
and issued ad libtn, to supply the place of bona
fde tangible revenue. Such paper money, from
the tempting facilities which attend it, requiring
outlay but the wages of the manufacturer and en-
graver create il in ilimitabe quantities. has been
Justly pronounced to be ga sed,lcng and dangerous
expedent." But when the paper issued is made inn
mediaely and Internationally convertible into specie
at the will of the holder, and the Government iscom-
pslled to provide real funds in advance to redeem
cry dollar of its paper liabilities it very different
affair. The danger of abuse ceases, and the nation