The daily union. [volume] (Washington [D.C.]) 1845-1857, 1846-09-11
POLITICAL.
Prom the pankers, hIagaline.

~ "uo CtItdluiy not III inc hOpc VI Soh'ihN"6 yDu
that we locofocos are right ! know you too well
for Thar All aim at is, 10 give you clearer ideas
than you present appear 70 possess OF our reasons
for the course we are pursuing.
You say that various great men have given their
sanction to the system Of depositing the public
are the provisions Of the constitution, plain and
palpable. Are these men above the constitution
To use the language which Daniel Webster once
used:
"The trainers of the constitution were HARD
MONEY MEN. They had teh, and therefore duly APP
preciated, The svis Of paper medium. They there
fore sedulously guarded the currency Of the United
States against debasement The legal currency Of
the United States ID GOLD AND SILVER COIN" nf
Now, whether we are right or wrong, is not here
the question. You have your opinion, and let us
have ours. am only telling you what we believe
giving you motives for action. We believe that
the connexion Of the State paper-money banks is
unconstitutional, and such we mean TO put an end
10 il as soon possible. We may be defeated
again and again but We shall persevere till we ae-
complish our purpose. You may as well give up
first as last, for we nepe will. We know too well
the ground on which we stand. .. .. .
Our second reason for separating bank and State
10 founded on srpedi.ney. Even if the eonsttu-
ton sanctioned this pernicious alliance, we should
be opposed to II. We believe that by separating
bank and State, we shall give our paper currency
more stability than II at present possesses.
A notion was once entertained that so long as
the banks pay specie, the notes they issue only dis
place an equal amount Of coin, SO that the total
amount Of currency 10 about the same as il would
be II there banks Of issue in existence
Experience has so fully shown the fallacy of this
notion, that formal refutaton Of il is unnecessary
In $780, the issues OF the banks amounted TO sixty
one million dollars IN 1884, TO ninety -four millions;
IN 1886, TO one hundred and forty millions; and ia
the beginning Of 1887, to one hundred and forty
H.. L.. .k1I. ~ T.. IL.
banks were paying specie. In the short period OF
six years the circulation more than doubled
Under hard-money system, our currency would
have increased just In proportion to the increase Of
wealth, population, and business, but il would have
undergone no percePtble variation OF value. Thous-
ands Of men, who are bankrupt, would then
have been In prosperous circumstance. We should
have had none of the intoxicating prosperity we
experienced in 1885 and 1887 but neither should we
have had the disastrous reverses have since suf
fered.
"The constant tendency of banks" said Nicho-
las Blddle, sis TO lend too much, and TO put too
many notes in circulation" Now, this "consianl
tendency requires constant check and this we mean
TO impose. At present there il no effective check
on our banks, except the demand for specie from
abroad. To this we mean TO add demand at home
II will be moderate demand, but il will be always
acting and far will be effective. Il will widen
our specie basis, and even you bank men ought to
admit that this will do no great harm. "There Is
no fear, ;" as Mr.. Walker has said, "that we shall
never have too few bank notes. too much specie.
Under this system, II it is brought fairly into ope
ration, we shall have no such bank expansions as
we had in 1885 and 1886; but neither shall we have
such contractons as we had in l642 and l643.
Now, the prevention Of such great variations in the
amount Of our currency must be as beneficial to the
banks it will be to the people. II is during times
ofgrcat expansion that the banks make most of
their bad debts and great eontractions ruin thous-
nnds who would otherwise remain solvent. The in
dependent treasury system will act as a balance
wheel in the system, and every intelligent banker
will admit that some regulator Is necessary
We are far, however, from supposing that this
measure will give all the stability 10 our bank cur
rency that is desirable The evils Of the system are
simple measure as this. But this il the first step
towards a reform. W. eNg
We hope, moreover, in this way to impart a more
healthy action to the banks All intelligent writers
on this subject concur in declaring that the credit
operations of banks, or those resting on their de-
poses and crculation, ought TO be restricted to bu-
siness paper So long this is done, the notes is
sued rep esented by the bills discounted which,
In their turn, represented by merchandise which
may be used to redeem the notes issued and there.
by redeem the bills discounted. But let the banks,
In addition to issues for commercial purposes make
others for the payment of taxes, and the due pro-
portion of currency TO commodities is no longer pre-
served. Intelligent bankers will see the force Of
this argument; have not time to dwell upon it.
Recurrence to historical records will show that
that there have been few, any, great revulsons
either Europe America, that have not been caused
by the connection of bank and state.
twas the connexion that caused the Bank of
England to suspend specie payments in 1897, and
to continue in state of suspension for twenty-one
years.
il was this connection that caused the suspension
of specie payments in this country in 1914. The
hsn nf as
ness paper, and sustained payments. The banks
ofNew York, Philadelphia, and Baltimore made
large loans to government As necessary conse-
quence they suspended specie payments, and, Git is
only one link lower down ia the chain of conse-
sequences,) compelled the southern and western
banks to suspend also. @ @ ...af. .s...
The pecuniary troubles of 1918, lSl9 and SUISSE
quent years, were, VIM. Jones, first president of
the United States Bank, being witness, caused
by the banks acting agent for the government.
In 1926, the banks Of both England and the
United States were on the very verge Of suspendng
specie payment. In England the efficient cause was
the Bank of England's being employed as agent in
efecting reduction of the interest on part of the
public debt In the United States, the efficient cause
was loan by the United States Bank to the United
States government
All the great revulsons we have had since 1899
have been caused by the connexion of bank and
state. What was "the removal Of the deposites,"
but the cutting of one governmental connection with
banks, and the establishing of another,
If the late banks had not had the public deposites
in 1895 and 1896, they would not have suspended
specie payments in 1897.
If the principles of the constitutional treasury
system had been adopted in 1882, 1888, we should
have escaped the imitation of the currency that oc
CURED in 1885, 1886, and VIC should also have es-
capped the revulsions we have since experienced.
II we wish now that specie payments shall be
permanent, we must return to the principles Of the
constitution. 4p5
There will be no such difficulty as many imagine
in carrying out these principles so far as regards
public receipts and payments. Five and ten dollar
pieces are quite as convenient FIVE and ten dollar
notes. When the sums are of larger amount, re-
course may be had to weighing. Any gentleman
who will try how much American gold he can hold
in a canvass bag in his right hand, will be convinced
that il will not be necessary for him to take wheel
barrow along when he goes to pay custom. house
dues. iTrn. a..
But this is not all. Whatever system we adopt
whether United States Bank, pet bank, or indepen-
dent treasury treasury drafts must be used Under
constitutional system, the most rigid hard-money
man could not with object to their use, for