The Washington union. [volume] (City of Washington [D.C.]) 1857-1859, 1857-11-10
THE PRESIDENT AND THE BANKING SYSTEM.

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THE PRESIDENT AND THE BANKING SYSTEM
The banking system, and the currency question
generally, have for some time occupied large por-
ton of public attention; and the people of the whole
country have, by the saddest lessons of experience
been made to feel the evil consequences which the
present system has entailed upon them We have
been laboring to anayze this system, TO point out it's
defects, and illustrate its evils The present mode
Of banking is inherently defective And, if contn-
ued will again and again result il has heretofore
done in ruinous losses and endorsements to the
people of the country. And whilst we are discus
sing this subject, and advancing opinions
we desire to fortify and sustain them by the expe-
rience of the past and the opinions and judgment of
some of the ablest statesmen OF the country Fore
most amongst these stands present Chief Magis-
trate, and we shall proceed to draw upon him for
whatever OF argument reasoning we may find
cessary to sustain the objections which we have been
urging against the present mode of banking in this
country.
In a speech which was delivered by Mr.. Buchanan
in the Senate of the United States the 18th of july
ls4l, against the project Of Fiscal Bank, we find
system as then and now organized. We shall con
rnue these extracts from time to time, as may
find them necessary to sustain our position
Buff the banks should oil pay specie tomorrow we
have no security whatever that they would not organ
are two restrictions which, if imposed upon them, would
always insure sound bank note currency to the people
of the United States and prevent future suspensions
First you would render them able at all times to pay
specie you must require that they shall at all times keep
on hand at least dollar OF gold and silver for every
three dollars of their deposites and circulation combined
But this alone might not prove sufficient They might
possess the ability to pay without the will To secure
this You must impose another restriction which will
prove 10 be an intaible preventive Of suspension De-
clare in the charter of each bank by sefexecung pro-
vision which nothing arrest that the moment it
ponds specie payments it shall die the DEATH 'In the
day that thou eatest thereof thou shalt surely die Rem
der il the iTeveisble organic law Of each bank exist
that suspension Of specie payments shall produce
its civil death and the instinct Of seltprseryation will
then compel 1t to perform its duties in such
to preserve its life Upon this principle bankrupt law
applied to banks would do in securing sound
rency for the people Of the United States than twenty
national banks scattered over the whole country could
accomplish il they disposed to exert all THEN
power When it was first proposed to apply bankrupt
law to banks, felt strongly Inclined to oppose IT, But
not OF those who pride themselves In their uni
form consistency throughout life Live and learn is my
maxim trust am wiser this year than the last:
and that If live shall he wiser next year, twenty
wears hence, piehcut Inc HILL VINO Tlues
himself upon having changed opinion proclams
himself to have been nallbe from the beginning, and
thus himself bockhead Any senator, there
FORE has my entire permission to ranck the old journals
and prove that voted many years ago any subject
differently from what should do at present have
changed my opinion in regard to bankrupt law APP.
piled to banks and this because most soemny believe
that it is the only remedy which reach the root of
the evil and to the people at all times and in all
places paper currency convertible into gold and silver
But the committee say that this bank twill powerfully
contribute to the resumption of specie payments How
will 1t produce such an effect 1T Is not sufficient that
declaration of this kind shall be made caya in order
to command faith. Will it be by producing
and greatly increased demand for specie in order to fur
nish capital for the bank Ask Mr. Cheves, who is
believe the ayowed author of those able numbers which
have appeared In the Charleston Mercury above the sig
nature of Jay, whether the late Bank Of the United
States contributed essentially to the resumption of specie
payments when it first went into operation and he will
answer decidedly in the negative He ought to know
this fact IL it existed because he saved the bank from
ruin at an early period OF its
The millions of gold and silver which the char
ter requires to be paid by the private stockholders before
the bank can go into operation must be chiefly drawn
from the vaults OF speciepaying banks In addition to
this the large amount which will be taken by
citizens Of the sixteen millions and hals OF the bank
stock loan, TO say nothing Of the twelve-mon loan
must be principally derived from the The
probability is, that the which this must occasion
the speciepaying banks will compel them to suspend
The banks already suspended will hold fast what specie
they have got Self-preservation will compel them to
pursue this In this manner, then, the establish
ment of the bank, 30 far from promoting resumption
of specie payments will procng the suspension and
may, in all human probability render IL universal If
the existing solvent banks should be able meet the de-
mand for specie which will thus be made upon them it
will be by such sudden curtaimen Of their loans and
issues will produce ruin and distress throughout the
land Never never, there inauspcious
men than the present for establishing Bank Of the Uni
ted States and trust that its friends will take this view
of the subject into their deliberate consideration and
postpone the question at least until December Let the
general business of the country be restored and then
and not till thcn let them begin to think seriously
the subject of establishing Ban of the United States
But even II specie payments had been universally re-
stored and business were again prosperous deny that
this bank will regulate the State banks in such
to prevent the runous expansions and contac
tons in currency which have afflicted the country
throughout s history, secure against future
pensons This bank would not thus restrain the State
banks if could 1t could not if it would On this point
shall be brief possible, having already occupied
of your time than had intended
And in the first place. this bank will feel no disposition
whatever to restrain the issues and loans of the local
banks within reasonable limits And why7 Because its
duty regulator of the currency ia in direct opposition
to the interest of its stockholders you desire to cre
ate power for the purpose of restraining another you
must make them antagonstcal either in point Of In
torest Of inclination of both But will you change
the nature Of these nine directors and make them better
than other men, by placing them at the head of
tonal bank you cannot work this miracle they will
then feel the same interest and te inclination with
the directors of the State banks to expand the currency
to accommodate their favortes and friends-to make
money plenty and to increase the profits of the stock
holders.
Nh IL,