The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1842-02-23


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
scientlousy they may intend TO discharge their duties
they have not the interest nor the means to provide
for such occasions
Il Individuals interested in, and concerned in, the
management Of banks, are always looking out and
prosiding IN advance Tor any sudden demand upon
them for specie. And with all their interest sagac-
y and vigilance, they not always able to provide
against suspension of specie payments. Will the
officers OF Government be any better able to provide
t against III There might be sudden and unexpec-
ed demand which would drain an agency at once of
its specie There might be systematic operation
and combination, from political other motives, to
accumulate the notes OF an agency and to present
them suddenly and unexpectedly for redemption, and
Tor the express purpose OF compelling it to suspend
J, specie payments. The effect would be not only to
destroy the credit Of the Government but to disgrace
it i'll the eyes of the world. The Government should
not be SO exposed. Its credit should always be be-
You'd any possible contingency
/ The committee, therefore propose that no paper
shall be issued on 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 under any circumstar
ces, exceed the amount of specie holden for its
, dempton.
The paper thus issued is called specie notes as be-
ing currency based on specie, and contradistin-
credit of the Government, not for currency but as
means for borrowing.
These specie notes can, in sense whatever, be
obnoxious to an objection bills Of credit They are
not issued on the credit of the Government but are
issued on specie in deposite of an equal amount for
their redemption They pass by delivery, from hand
TO hand, as currency, and the possessor OF such
note holds it evidence of ownership of the amount
of specie which i represents and to the possession of
which he is entitled at any moment, on presentation
of the note at the agency where issued. Until that
time, the specie remains in the depository of the Go
yernment, 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
la 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 on the part of the Govern
men to expand or contract the cArrency--l power
which the committee think should never be possessed
or exercised by the Government. So far, therefore,
as It's action is concerned, it cannot scarcity
ously affect the business of the country There will
Fbe no imitation of the currency any rise fall in
4 the prices of commodities, through its Instrumental
Iy. The receipts and disbursements of the Govern
ment are SO nearly equal that any expansion
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.
ton, be liable TO the objection which is sometimes
made to the small note circulation Of the banks,
y, 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-
venlent 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 1t Is often rrccoveraby lost to the world. In this
view of the matter the committee objection to
an issue OF specie notes OF denomination correspond
ing to the small note circulation Of the banks Being
free from all possible risk, and in 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 w.t. the small
dealers and day laborers throughout the country.
! They would feel that whilst Government is Pr
Ividing currency of undoubted credit and safety for
the larger business interests of the community is
not unmndful of those of small means and OF more
humble occupation
Under the proposed system, there is to be no power
of discount in any shape whatever. That must be
left to the local institutions To them it appro-
priately belongs Those institutions would feel the
saiutary influence the operations of the Exchequer
in the frequent settlement of balances, and the
quen restraint upon overssues and excessive crcula
ton. It's 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 no danger to the commit
i nifty from their contracons and expansions
i They would be regulated and controlled by the bu
sness OF the country, and expand and contract wi
1T. Their circulation would be increased at that
son of the year when the products of industry &C
ing forward TO market and would furnish the means of
getting there; and II would contract again when
those operations have been performed, and the bus
i ness has been consunmated This would be a sound
and healthy action of the king system and would
he much promoted by the practical operations of the
] Exchequer.
/ Would this system furnish a uniform currency
If by uniform currency 1t is meant that the Gene
aI Government shall undertake to furnish an amount
ot currency adequate to the wants of the whole
try the comalltee answer, no. IL neither has the
power nor the ability to do No measure which
i Congress can adopt, whether it be in the shape of
National Bank or otherwise can supply an hundred
millions more of currency to meet the existing
increasing wants of the community-wants ncreas
ing by the rapid increase OF population and the con
scquent augmentation of the products of domestic in
I dustry 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
tDue to furnish IL Their right to do 50 cannot be
4 superseded by any action the part of this Govern
ment All that Congress can do is TO infuse into
the great mass OF the circulating medium of the
Try currency issued under authority, and OF such
undoubted credit that with the local currency of the
States, when restored a sound condition. shall to-
geher form a uniform currency thr, ush ou the
country.
The currency of the local specie paying banks in
sound condition is as good for all practical purposes
within the sphere of its circulation any currency
which this Government can issue But such circu
aton cannot extend beyond that sphere and maintain
itself alongside OF such currency as is proposed
be issued on the part OF the Government. The expe
Renee and observation of every demonstrates that
local currency however sound, have that uni
versa credit which would attachso a currency of the
General Government, founded on specie basis, and
carrying with it the responsibility of the Government
for The safe custody of the specie which it represents