The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1844-08-19


judgment hestates TO yield sent when grave, en-
ghtened aud patriotic Senators have deliberately
announced TO the public, ia recent report that our
system OF money is in the main excellent, aud N
most Of its great principles no innovation can be made
with advantage"
But glance at the history of the late Bank is
sufficient to show the folly Of regarding any inslitu'
ton 20 organized as a regulator OF the currency
The Bank, as every one knows, commenced It's ca
reer by mpositlons and depredations upon the com
neutrality-suspicious. because il protested 10 be do
ing business upon capital actually paid, and dePre-
datons, because when the imposiure was discovered,
the loss fell upon innocent holders of the stock The
losses Of the Bank in Baltimore alone, from bad
debts, and highhanded frauds, estimated at the
sum of more than million and half OF dollars
Mr. Cheves thus represents the condition OF the
Bank on the lst of April, 1919, when the institution
had been little more than two years In operation;
The specie in the vaults at the close of the day,
the LIST of April, 1919, only l26,7 As dollars,
% cents, and the bank owed TO the city banks de-
Quoting balances due to it, an aggregate balance OF
70, l25 dollars 50 cents.
1t is true that there in the mint 26I ,97o dol
lars cents, and in fransiiu from Kentucky and Ohio
over laid 100000 dollars but the Treasury dividends
were payable on that day to the amount OF near
the day more than one half Of the sum subject TO
draft, and the greater part OF the sum which had been
drawn during the day, remained charge upon the
bank, IN the shape OF temporary depostes, which
were almost Immediately withdrawn Accordingly,
on the 18th Of the same month, the bank had IN It's
vaults but II 500 dollars AZ cents, and owed TO the
city banks balance of 1885, l4S dollars Al cents ex
ceedng the specie in lis vaults l24 1896 dollars 10
cents. Ii must again be remarked that II had yet the
sum before mentioned in The mint, as well as the
sum in hansitu from Ohio and Kentucky this last
ESQ 900 dollars) arrived very seasonaby the
next day, or a day or two thereafter. TLe bank in
this situation tie office at New York little bet
ter, and the Office al Boston great deal worse. At
the same time the bank owed to Barring, Brothers &
Co. and Thomas Wilson & Co., nearly 100000 dol
lars, which 1t was bound TO pay Immediately and
which was equivalent 10 a charge upon its vaults TO
that amount Ii had, including the notes of the Off
ces circulation of six millions of dollars 10 meet
to which were 10 be added the demands OF deposit
oTs, public and private, at time too, when the scar
city OF money called forth every dsposaole dollar,
and therefore created demands upon the Bank for an
unusual portion Of the ordinary deposites aud crcu
laton."
Such wusthe Inundated and PROSTATE attitude of
an institution which is fancied by some TO possess an
inherent magical power Of regulating the curren
cy. Instead Of being check upon the local banks,
even in the city where the mother Bank estab
lished, it was at their mercy. II is evident that the
local banks which kept themselves sound must have
done in pite Of the Regulator, and of its evil ex-
ample and what they could do then, they may as
well do at any time. We have had recent and salts
factory experience that general resumption of
specie payments may take place, and be successfully
maintained without the agency Of Bank Of the
United States.
AZ a.. r
fairs of the Bank retrieved and it continued in
comparatively safe and prosperous condition un il
the year 1881 But the real character Of the nation.
al currency during that period has been well de-
scrbed in the extract from Mr. Whites letter,
which we have quoted and the true history OF the
Bank is chronlced in the records of the reverend
ing and harassing fluctuations of the N. York money
market
In the year 1890, the impression became general
that the existing administration entertained views
hostile to the existence Of the Bank and those who
bad the control of the institution to the deter
mnation Of giving the community convincing proof
Of its power
On the l.t Of January, 1881, according TO the re-
turns furnished 10 the Treasury Department and
communicated to Congress the loans and discounts Of
the Bank amounted TO S.t032057 on the LIST Of
May, 1892 the amount was $40 2,039, being an in
in sixteen months OF SOC, AIS, 952. The in
crease in twelve months from January, 1881, TO JAM
uary 1882 500 26 $50, whereas the creates, in-
crease or expansion during any previous year was
(from January l. 1928, to Jaouary l. 1929 s. $780,
697 the expansion in 1881 being therefore just four
times great the greatest expansion of any previ-
Gus year of its existence. From January, 1880, TO
January, 1892 its circulation increased from Sl2,-
924 Jas TO sol 1855, 1914 while its specie dmin-
ished than half million, that is from ~ $685..
076 in 1880, to s7,O35, 1923 in 1882.
In order to conceive the true character and effect
Of this movement, Of the Bank, il should be consid.
cred that the average capital of State Bank in the
year 1880, was less than s35000G The addition,
therefore, Of 500 9S2 to the amount Of loans and
discounts was equivalent TO the creation, without
wauan, Of law, Of more than eighty new banks, be-
log one fourth many then in existence.
The whole banking capital Of the States Of New
York. Connecticut and New Jersey united at that
time amounted to only s26 555, $50 Blu, the effect
was far more pernoious than would have been the
creation Of so many new banks for new banks
would not have been created without some addition
Of real capital, seeking investment in the banking
business whereas this expansion by the Bank Of the
United States having taken place without any addi
ton whatever TO its capital, was Of course mere
straning Of its credit The effect was 10 deprive
il Of all control whatever over the local banks,
and worse than that to set them an example which
they were but too ready to initiate.
No we'll informed man will now DENY that this
movement Of the Bank Of the United States was the
origin Of the expansions and speculation which cha
racterized the succeeding FIVE years, and which ter
minated in the bankruptcy Of the nation. To con
tend that the increase called for y the
wants Of the trading community is prePosterous 1t
was purely political movement, though both the
fact and the motive al the time steadily and i'm
rrI lie dontnh