The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-09

10 the country all the benefits they are capable Of confe
ring without the accompanying hazards OF wild speouA
tons and ruinous revulslons.
In closing my observations this subject it proper
to state that these recommendations not formed IN
any spirit OF hostility TO these corporations and companies
nor am insensibe Of their vast Importance in the
mercal ystem of the United States. Nor have any dis
position denounce any punishment nor to subject them
10 any loss present conjunction of their affairs NJ
object to place them i'll subsection TO wholesome laws
that. while the benefits they yield to the community
be preserved their or errors Will be coun
tcracted or prevented
The details of any act formed the principle have
suggested should be adopted after an enlarged inquiry
into their condition, and should embody the most bera
provisions for the security Of the rights Of the persons in
terested in them reasonable time should also be al
lowed TO the corporations which default "
establish themselves before this act becomes operative
During this financial crisis and general arrangement a
the currency the collection and disbursement Of the pub
lie revenue have proceeded without loss embarrass-
ment The operations Of the independent treasury sys
tenn in ordinary times, had been found by experience
emmentiy successful The danger of from unfaithfA
and inefficient officers the expense Of conducting its ops
rations without the Intervention Of bank agencies its dele
ferrous effects upon commercial progress and the gener
business Of the counryall Of which apprehendoA
by the opponents OF the measure at the time Of its adop
on-have been demonstrated to be unfounded II only
remained to encounter commercial crisis like the pre-
sent to vndcae the justice and wisdom OF the policy
against all Of complaint apprehension brief
comparison OF the operations Of the Treasury Departments
during the suspension Of 1887 and the present time win
place the subject before the public mind in the most sa
factory manner
On The sOth june 1887 Immediately .afer the general
suspension the deposit banks held to tho credit Of tbs
Treasurer Of the United States and subject TO his draft
the sum of s24 994 1853 ga larger amount proportion
the receipts and expenditures OF the government than
there the treasury at the time Of the suspension
by the banks the present year. The funds a
the being then under the control Of the bans
and they either unwilling or unable TO pay, the govern
ment placed in the anomalous condition Of having
Overlooking treasury, which was seeking to depete By
distribution deposits with the States and yet unable To
meet its most ordinary obligations II had either TO make
its payments and deposits in the deprecated currency
pone their pay men until from its credit or other ordina
ry resources it could command the means for that pur
pose is unnecessary TO detail the expedents to which
the government forced TO resort at that time The
embarrass consequent upon this state of things VII
be remembered by those who participated in scenes
OF that day will be realized by every from this
brief presentation Of it, The effort Of the government
withdraw its deposits ana get control Of its funds eN
additional blow aimed at the banks Every dollar
which could thus be drawn from the vaults of the banks
diminished to that extent their ability to afford to
their Their loans had to be contracted and
the demand made by them upon their debtors for settle
men increased the pressure already felt in the money
MARKET and thereby added to the general panic and
want Of confidence which are the usual attendants
| of q monetary crisis The government not
only embarrassed for the want of its money,
noxious TO the charge Of adding TO the general
distress, which many persons thought was its duty to
relieve. To avoid recurrence Of these difficulties, the
plan of separating the government from all connection
with the banks was suggested, and IN 1916 was perma
nenty adopted The result is before the country in the
occurrences of the last few weeks. TIC banks, in
1887 have suspended specie payments, but the analogy
there so far The Operations Of the Treasury de-
partment in its disbursements are concerned The &C.
vcrnment has lis money in the hands Of its officers,
and in the only currency known to the constitution
has met every liability without embarrassment Il has
resorted TO expedient to meet the claims of its credi
tors but with prompness pays each upon presenta-
ton. the contrast between the operations of 1887 and
the present time stepped here, would be enough
dictate the policy OF the independent treasury system;
but does not The most remarkable feature distinguish.
ing the periods has reference the effect upon the
commercial and general business interest OF the country
produced by the present operations OF the independent
treasury is the relief which has been Afforded 70 the
money market by the disbursements in specie Of the gene
raj government In 1887 the demand Of the government
for its funds, with which 10 meet It's obligations, weaken
ed the banks crippled their resources and added TO the
general panic and pressure In 1857 the disbursements
by the government Of it, funds, which kept in its own
vaults supplied the banks with specie streng their
hands and would thus have enabled them afford RELIEF
when II was so much needed, If they had been in .
condition TO do IT, Their inability or unwilling
ness TO do so, under such favorable crcum
stances, only shows how much worse the
embarrassment would have been IL the government
was now demanding payment from them, instead Of fur
| nshing them the means Of relief.
AT the time and subsequent TO the passage Of the hide
expressed and doubt felt by opponents the
effect Of such policy The accumulation of specie the
vaults OF the government the distress would occasion
the collection OF the public dues in specie partcu-
lary its operations In monetary crisis regarded
certain sources Of inevitable evil The idea that would
afford relief ut such time looked upon wild and
visionary by ts opponents and not very confidently
cipaied by ts friends The success of the policy should
be gratifying as unexpected to those who resisted
It's adoption with so much zeal and ability.
Whist the opponents OF tho system apprehended from
the most ruinous effects upon the banks and the
cy, its friends looked confidently TO operation for
wholesome check upon excessive issues by the banks
prence has shown that the apprehensous of the oue
groundcss and the antcpatens of the others were
well founded 10 limited extent The increase OF the cir
cuaton Of the banks at the time they pub
lie repositories, compared with their circulation other
periods and particularly since the adoption OF the nde-
pendent treasury system, affords the satisfactory
evidence Of the restraining influence Of the system upoa
the tendency OF the banks their cred, and in
their issues II impossible TO estimate with accura-
the extent Of this influence. There many eemens
which enter into the financial operations Of great and
extended country like ours, that pretend Ia
analyze the many causes at work with view Of assigning
10 each It's separate and legitimate effect No one doubts
however that the effect Of collecting the public revenues
in the notes 81 the banks and deposns the funds when
collected with them would be an extension Of the
Of the bank and addition 10 their circulation proper
toned 10 this increased demand tor the Of their notes.
To the extent that this stmuan u crcdt has been with.
held TO that extent certainly has the restraining in
nuonce OF the independent treasury upon excessive bank
| issues been felt The collection annually OF about
$40 600 600 IN the notes Of banks, and large al
all times remaining IN their vaults deposits, would
afford facilities for extending their credit, which the past
history OF these institutions sow they would hestats
20 avail themselves Of H such system had prevailed
for the last ten years the strong probabilities thai
the present crisis would have been much reached,
and the effect would have been disastrous because
more extended, aud with fewer sources o. relief
II the beneficial effects 81 the independent treasury
system in restraining the banks from extending their
credits have not been estimated, and confidently
believed that they have not ~ respectfully submitted 70
principle by the respective state governments would
not complete the work Of reform and prevcutoa
against bank suspensions, SO happily inauguratcd
and successfully practiscd by the general gov
eminent The various State government collect
Dually about &50000ou0 THIS amount Is collected mainly
IN bank notes, and, when not Immediately dsbursed "
either kept IN the form Of bank notes the vaults OF the
state asures, deposited directly with the banks
let the several states collect their specie and
thence s withdrawn from the banks smuant over
banking 10 the extent Of the facilities Afforded them
/ by this cf their notes.
The remarks already made connection with the inde
pendent treasury Of the general government APP
plcabie to the effect that would be produced by such
Icy. The collection and disbursement specie OF the
revenues o both the general and State governments, noe
20 speak 81 the various city town and county corporations,
would constitute such demand Tor specie at all times
to require lis retention the country The banks know
ing that they liable 10 furnish their note holders
this specie would regulate their issues accordingly aud
would consequently be restrained from excessive
issues which render suspension of specie payments by
them inevitable when crisis comes which requires them
10 do what they ought always % be ready 10 do-pAy
their debts The apprehension that such requirement
by the state governments would operate oppressvey