The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1843-10-26
TREASURY NOTES AND SPECIE CLAUSES

ra,ive clause Of the Sub Treasury to be now,
as ever. 10 full force. There are just as many
preyentives against official delinquencies now
as before the repeal of the act just as severe
punishment for convicted malefactors because
The great moving principe Of the whole act. Is
su in ccmpleie operation.
W ncw propose few remarks upo. the
b sp-cs n t,se of lis celebrated Bill Tie rrac-
tlcsof the Government before and since.
BY vote of both Houses in the Congress OF
1916, the Secretary ofthe Treasury was required
and directed to adopt such measures as he might
deem necessary to cause all duties, &c. accruing
or becoming payable to the United States, to be
collected and paid in the legal currency Of the
United States, or Treasury notes, or notes Of
the Bank of the United States, as by Law provi-
ded and declared, or in notes of banks which
were payable and paid on demand in the said
legal currency of the United States, &c.
By this resolution it will be seen the Secretary
ofthe Treasury is authorized to receive Treasu-
ry notes in payment of Government dues-a
practice that has existed, with some modi6ca-
tons, ever since. W.
Mr.. Woodbury., when Secretary of the Trea.
sury-lhere being deficiency in the revenue
accruing from customs, public lands, &c. to meet
the expenses Of the Government-was author
lied by an act Of Congress to issue Treasury
notes; to procure loan sufficient to liqudate
the engagements of the Government. These
notes, of course, were receivable in payment of
duties and sales of the public lands; and the
debt thus contracted has not wholly yet been ex-
tirpated.
These Treasury notes bore interest, and were
Immediately seized upon by capitalists as desi-
rable investments of surplus moneys thus bene-
fitting The People only by the temporary accom-
mediation they afforded GOVERNMENTAL accom-
moda,iop, by the way, for which The People paid
an interest of 6 per cent. The consttutionality
of the issue of these notes was not doubted at the
time; nor the tax upon the People of the 6
per cent supposed necessary to find purchasers.
These notes, it is true, became no circulating
medium" "no Government currency"-not,
however, from any legal restriction, but from
the fact they mere husbanded by the banks,
who paid out their own notes TO the People for
a currency, by which they realized profit
double in amount-one half from the legal and
natural interest upon The Treasury notes they
held, the other from the circulation Of their own
notes substitute currency
Thus, certainly, the banks were fostered, and
at the expense of the People.
Sec. l9h of the "Sub- Treasury" bill mod-
fled the resolution of the 30lh June, 1916, of
which we have been speaking, as to cause all
duties taxes, &c, accruiug to the United
States, after 30rh June, 1910, TO be raid in the
legal currency; after 3Olh June, 1S41, one other
fourth; after 30th June, 1912, one other fourth
and after 30th June, 1S43 the remaining fourth
OF the policy or spirit Of this clause, we do
not purpose speaking at length. Some sup
posed IL the most obnoxious of the whole bill ;
others, the only obnoxious and some as honest,
the great reedeeming feature.
We can imagine a state of things, when
such law, if not absolutely necessary, might
have been remedial of many existirg abuses
and preventive of much threatened evil
Such state the author of his clause may have
supposed existing al the time he so fervently adj
vocated The passage of the bill. Between the
years of 1880 and 1885, over three hundred
banks were chartered, with amount Of CAPT
tai almost Incredible, and with facle tendency
10 discount entirely so. This banking bubble
broke immediately it reached its natural inha
ton and in 1886 suspension of all the banks
occurred, TO The ruin of thousands. Bot the
evil though great would not have been so dis
astrous or fatal in its consequences, had honest
legislation compelled immediate liquidation
Such course was not pursued; on the con-
trary, a pol cy was undertaken which, in pro-
tracing the system, strengthened the disease
sale of State stocks, and in 1S35-'39 an enpr-
nous amount was manufactured and sent over
for sale, the proceeds of which enabled Ameri-
can Institutions to recommepce their extensive
career OF folly and CRIME. In 1899 imitation
had done its worst: and, in the fall Of that year,
private and public credit were alike ,ngulphed
IN the dreadful collapse that followed the rash
and fraudulent exten sion.
The defalcatIons and attendant dscredit. had
reached their possible height at the commence
menl of the /" dark year, of 1910, and while this
same "Sub-Treasury"b bill was maturing, the orr
ginaor Of the "specie clause" might have sun
posed it expedieni, because no paper, whether
of private individuals, of incorporated compa-
MES, or even of States, was safe to receive or
hold. He therefore wished the Government
dues and the Government funds, receivable and
retainable in specie, that he people, for whose
ben, fit Government was Instituted and its ne
cessary expenses Incurred, might not suffer the
more from the objectionable extravagance OF
spectators, or the criminal conduct of de-
hulIers.
But such period has passed away. The
banks in existence are obliged TO pay specie,