The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1842-02-19
CURRENCY REPORT.


an also the letter the Secretary of the Treasury
accompanied by draft of bill for the establishment
of Board of Exchequer at the seat OF Govern-
ment report, IN part -
The Committee have bestowed, on the subjects COM
mitted 10 them all the deliberation and anxious con-
sheraton which the Importance OF those subjects de-
mands.
|, became their duty to inquire as to the wsest and
hes, method of keeping the public moneys ofthe nj
ted States; the material in which the should he
collected and disbursed and the power and oblga-
ton of the Federal Governmental regard to the cur
rency and exchanges of the Union.
They entered upon the scharge of this duty at a
period when, in conseq uence of the magnitude and
pressure OF he public debts of many of the States OF
the nion the condition of their banking lnstitu-
tons and other causes the currency and exchanges
of large part of the United States were involved IN
calamitous disorder; at period, when the pecunary
disasters of the countryside extreme differences SO
long existing among eminent statesmen as 10 the ma
ture and of those disasters and the proper re-
medy for them,-and The uncertainty and instability
of the financial policy of the Federal Government =
had conspred to render sort OF anarchy OF opinion
characteristic of the times.
Hinder these circumstances the Committee felt them
selves called by the highest claims Of patriotism
and of honor endeavor look steadily and calmly at
the facts surrounding them,-to emancipate their
minds far possible from the dominion OF all pre-,
great questions before them the benefit at least OF un
committed judgments and unshackled freedom of de-
cision-to inquire, not mel ely what might be best IN
the past or present view of each, but also what was
the best of things now practicabe and having thus,
without fear or favor fully discharged their own duty
to their country and themselves, TO submit, unhesa
tingly the result Of their deliberations to the candor
and wisdom of the House
They were the strongly impelled to the adop-
ton of these incipes of action in consideration
IL
on them by the command of the House, not sought
nor desed by themselves; and that, under subsstine
political relations, for the of measure they
might PROPOSE they must, of necessity, Iely on Its
intrinsic proprety and the impartial sense of the LIE
gislature.
The Constitution of the United States empowers
Congress " to lay and collect taxes, duties and i'm
posts and excuses, to pay the debts and provide fol
the common defence and general welfare of the Uni
ted States" And it recognises the existence of the
Treasury Of the United States" But it does not pre-
scribe the organization of that Treasury, sci
forth the mode in which its personnel shall be constu
ted its business transacted, otherwise than as II
provides that the President, with the advice and con-
sent of the Senate shall appoint the principal officers
of the United States But the Constitution further
provides that Congress shall have power to make al
laws I" necessary and proper for carrying into exc
cution" all other powers vested by it in the Fedora
Government. And under these constitutional provi
sons is the Treasury of the United States to be or
gained by legislation. and its concerns conducted
the President being empowered and enjoned to 'takt
care that the laws be faithfully executed"
Besides this, Congress has power I" to regulate
commerce with foreign nations and among the seve
raj States !" powerto coin money, regulate the value
thereof and of foreign coin, and to fix the standard
of weights and measures and power 'to borrow mo-
ney on the credit of the United States"
And on the other hand, while comforting these
powers on the Federal Government, the States have
expressly forbidden to themselves and to each other
to emit bills of credit to make any thing but gold
and silver coin tender in payment of debts, or to
pass any law impairng the obligation of contracts.
By the act to establish the Treasury Department
passed on the second day of September, 1885, it was
provided that shall be the duty of the Treasurer to
receive and keep the moneys OF the United States
and to disburse the same upon warrants drawn by
the Secretary of the Treasury but the plan ane
mode of so keeping the moneys of the United States
were rot specifically prescribed unlimited scope O.
choice being left to the Treasurer in this respect
.lbject always to the authority of the President tc
Gee to the due execution of the laws, and in his
Niltive capacity to guard the interests of the Govern
ment
Under these provisions of law the fiscal opera
tons of the Federal Government, as now constituted
commenced, and proceeded until the 25th of Feb
ruary, 1871, when the Bank of the United States
was Incorporated for period of twenty years.
Prior to which, there existed in the United States
three incorporated banks, namely-that of North
America, in Philadelphia that of New York, in the
City of New York ; and that of Massachusetts, il
Boston; all of them established before the adoption
Of the Constitution Each Of these banks was Stat,
corporation; for, though the Bank of North Ameri
originally established by Congress in 1891 ye
it had since accepted and now acted under char
ter from Pennsylvania.
These banks it was thought were unfit, or incom
petent to perform the fiscal business of the Govern
ment; besides which, they could not absorb any
amount of the public debt, be relied on for ad
yances of money to the United States.
The incorporation of the Bank of the United
States originated in an order Of Congress calling or
the Secretary of the Treasury to prepare and repor
a proper plan for establishing the public credit; il
obedience to which, the Secretary presented two re
ports in of them, recommending that the public
debt be funded and additional taxes raised to pay thu
interest it and, in the other, recommending thu
incorporation of a National Bank as being of prma
ry Importance to the prosperous administration of thu
finances, and of the greatest utility in the operations
connected with the support of public credit" or,
forth in the preamble of the act as tending to Civ,
facility to the obtaining of loans for the of thu
Government to which, in the same preamble, wa
added the further of advantages to trade ant
industry"
This bank answered Immediately three purposes o
the Government, namely /. OF its capital of tel
million dollars three-fourths composed of fund
ed debt 2. 1t made the fiscal agent of the Uni
ted States and g. Its notes legaliZed curren
cy being receivable in all payments at the Treasury
And the system of the Government was completed
by the act of the second of April 1892 establishing
mint, and regulating the coin of the United States
upon the basis of the dollar-unit previously pre-
scrbed by the Continental Congress.
The incorporation of this bank was resisted in the
outset considerations Of expedency and of const-
tutionality which considerations led to the refusal OF
Congress to its charter On the expiration OF
its charter it does not appear to have been deemed
necessary expedent to legisate further either
the means of collecting the mode of keeping the
mt w tn ont he all
thority vested in the Treasury by the act of 1885,
receive and keep the moneys of the United States.
Meanwhile, the number of banks, incorporated by
the several States had been increased previous to- or
at this time to hundred, and in 1912 about TWEEN
ty were incorporated, with aggregate capital
In the whole of unxards of