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a treasury-bank, created by federal legislation, for this purpose, is a very essential, direct, and positive interference with the banking business of the country, inasmuch as gold and silver are the only legitimate basis of banking, and inasmuch as when these are taken away, all the power of banks for usefulness, on the American system, in the supply of a currency, is broken down. In such a case they can not issue to the extent designed, and which the necessities of the public may require, except by a fraudulent act. It is immaterial, so far as the principle, and so far as positive mischief is concerned except merely in the amount of the latter—whether this effect be entirely sweeping and comprehensive, so as to shut up the banks; or only partial, to embarrass their operations, and thereby to prevent their supply of an adequate currency for the business and trade of the country. It is certain, that, if the federal government claim and exercise the right of drawing into its vaults thirty millions of specie a year, in a time of peace, and fifty or a hundred millions in a time of war, it must necessarily have nearly or quite an entire control over the banking institutions of the country, to contract their issues, and thus to embarrass trade, and cripple the commercial operations of the people. The Subtreasury is compelled to rely on the bank-vaults for its supplies, as the specie of the country is not tangible in large amounts anywhere else, so that, virtually, and in every practical effect, under a treasury-bank, of this description, all other banks subsist for its accommodation, and not for the accommodation of the business public, of the people, for which latter purpose they were undoubtedly created. In the most prosperous times, and for a season, both may go on together without great inconvenience. But the moment there is a pinch, the Subtreasury draws on the banks, and the banks of necessity curtail their credits and call in their dues. They are pinched by the Subtreasury, and all engaged in trade-what man, rich or poor, has not an interest in trade?—all so engaged are pinched by the banks, not as a first, but as a secondary cause. The banks are compelled to this course by the operation of the Subtreasury. Thus, when the trade of the country wants money the most, it gets it the least. It is wrested from the business public by the allabsorbing Subtreasury demands. Instead of having three dollars of currency for one of specie in the bank-vaults, as is usual in prosperous times, the business public can only have one dollar, when they want three more than they ever did. They are pinched, they are distressed, and thousands come to ruin by this single cause;

whereas, if the banks were not compelled to refuse discounts, and to call in their debts, by the action of the Subtreasury, they would and could accommodate the business public, and, peradventure, save the country from a commercial revulsion.

Nor is it a sufficient answer to say, that this specie all comes back again from the Subtreasury, by the disbursements of the institution. Some of it may come back, to be taken out again in the same way; but it will not accommodate the business public, which comprehends all persons, in every condition of life, even the poorest, who will feel a pressure of this kind much quicker than the rich. Besides that the secretary of the United States treasury, under this law, always has his hand on the banks, and is ever thrusting it into their vaults, he has continually in his charge and under his control, a sufficient amount of specie-rarely, if ever, less than millions, often tens of millions-the want of which, as a basis of the common currency, is sufficient, at any ordinary time, to embarrass trade and cripple commerce. The importation of specie, in large amounts, from Europe, in 1846-'47, in consequence of short crops there, which relieved the money-market of the United States, and enabled the country better to bear the operation of the Subtreasury, was a providential event which, in the case of good crops in Europe, can not be relied upon. Such extraordinary events would be alike an imprudent basis of legislation, as of confidence for the future.

What, for example, will be the state of things, when our foreign exchanges shall be reversed, and specie begin and continue to flow out of the country, as must, sooner or later, be the case? Even under this extraordinary influx of specie, the banks were obliged to keep an eye on the demands of the Subtreasury, rather than on the wants of the business public. They could not in prudence enlarge their issues, by extending their credits, because they were ever liable to have their paper presented for specie by the agents of the government-bank, who were continually drawing upon them by their paper already out; so that the people were not only barred. from getting money, as they might want for business, as "tools" of trade, but they were constantly being deprived of what they had.

This government institution, therefore, thus becomes an interfering power with the banking operations of the country, to disturb and embarrass them, and to hold the banks in such a constant state of uncertainty, as to the demands that may be made upon them for specie, 'that they really exist, under such a system, not for the accommodation of the business public, for which they were designed;

but for the accommodation of the officers and for the uses of the federal government, for which they were not designed. The effect is to subvert the banking system, to disappoint its aims. Thirty millions of specie, in a time of peace, and sixty millions or more in time of war, are annually drawn into the vaults of the Subtreasury, part as revenue, and part as loans; and the vaults of the banks are the only places where this specie can be obtained. Thus, in a time of scarcity of the precious metals, the banks can not issue money for the business public; for if they do, the operation of the Subtreasury might at any moment render them liable to drafts on their vaults, so as to force them to suspend; not because they are insolvent, and have not assets for all demands; but because there is a lack of specie in the country. To avoid this result, they can not, in prudence, at a time of money pressure, and under the operation of the present United States government-bank, venture on issues of paper in excess of their specie deposites; nor usually even to that amount. The very time when the business and trade of the country would be most cramped, and even distressed, for want of money, is the time when the natural operation of the Subtreasury would greatly aggravate that distress. For example, there was not specie enough in all the banks of the country, that could possibly have been spared, to answer the necessities of the government in 1847, independent of the extraordinary importations from Europe, for the reason above named; and it is as certain, as figurescan make it, that, if Providence had not smitten Europe with famine, we should have been smitten, by the operation of the Subtreasury, in 1847, with a widespread bankruptcy, from the effects of which the government itself could not have escaped.

But a mere subversion of the banking system, by such a measure, is not the worst effect. It becomes a positive tax, a heavy burden to the people, in many respects. It is a tax in reducing and rendering insufficient the circulating medium. A thing that is not, and never has been, can not be exactly measured. A man may know and feel, that he has been deprived of a great contingent benefit, by being deprived of the means of acquiring it, though he may be unable to estimate exactly the amount of his loss. But if it were a benefit to which he was entitled, and being robbed of it, the deprivation is a tax, unjustly imposed, to the amount or value thereof, whatever that may be. In this way, all the contingent wealth of which the people of the United States may at any time be deprived, by the operation of the Subtreasury, in subverting the

banking system of the country, reducing the circulating medium when it is most wanted, embarrassing trade, and circumventing commerce, is a tax-and a tax, which, if it could be told, would be startling. But the positive expenses of the machinery of this treasury-bank are more palpable, and constitute no inconsiderable tax. To this should be added the risk and cost of transporting specie from one point to another, examples of which are presented on page 244.

But the people may well ask, why should the federal government have this power? Is not the currency, which is good enough for us, good enough for them? What is this government of the United States? Is it not flesh and blood, as we are? Does it not eat, drink, wear clothes, and live in houses, as we do? Are not its wants the same as ours, and will not the same things satisfy them?

This, indeed, is rather a singular spectacle presented by the people and government of the United States, in their relations to each other. It might well be said, if the currency of the country was good, why was it not good enough for the government? And if it was not good, what reason can be given, why the government should be better served than the people, all at the expense of the people? But there is something more in this treasury-bank, than an interference with, and a subversion of the banking system of the country, in the manner and to the effect above described-something more than the tax of supporting it. There seems to be an instinct in the federal government, which teaches it, that it can not be disvorced from banks. It has, therefore, stolen one of the worst kind, and set it up in a shape to have it pass for a yo-bank. It was made by those who had unmade the old bank, and being professedly committed to a no-bank system, yet finding they could not do without a bank, they were forced to get up an anomalous institution. But it is a bank, as we have seen-a government-bank-a bank of deposite, and a bank of issues. Certainly it is a bank of deposite; and that it is a bank of issues, look at its paper, going the rounds of the country to the amount of tens of millions, as a currency. Is not that a bank? It would seem, that the federal government can not, by any possibility, keep its hands off of banking; and that, when it professes not to have one, it gets one with a vengeance. An open and frank assertion of the right of banking, as derived from the constitution, would be, not only more honorable, but more safe, than to disclaim it with the breath of the mouth, and usurp it with the hand of power. Besides the commercial evils of the Subtreasury bank, monopo

lizing the precious metals, in a time of scarcity, as already indicated, there are no limits to the political power of such an institution, in the hands of the national executive, to subvert the liberties of the country. It is a union of purse and sword, such as was never even dreamed of by the most sagacious vaticinations of the far-seeing framers of the government. It is a power not only to control the currency, while professing to have nothing to do with it, but to draw into its hands all the gold and silver of the country, to pass through, only in such a way, and for such purposes, as may please those who have charge of it. It is absolute power, and may be used at will. If it does not, at some future day, perpetuate the will of one man, and impose it on the country, for ages, perhaps for ever, it certainly will not be for want of ability, with such an engine of power in his hands.

With the evidence which we now have of the tolerable adequacy of the state banks to furnish a currency, there could be no urgent necessity for the re-establishment of a national bank, unless the state of things brought about by the operation of the Subtreasury system, should create that necessity in its abrogation. That the state-bank system will be materially unhinged, and its operation more or less deranged, by the Subtreasury, can not but be certain. The federal government, by this measure, has resumed the powers of banking with a stronger hand than ever, and instead of doing it by proxy, through a corporation with limited powers, it has taken the business into its own charge, with unlimited powers, and made a treasury-bank. In falling back from this high-handed measure, it may be a question, as to where will be the best stopping-place, and whether the state banks, after such a derangement, will be fully competent, and well fitted, to discharge the functions which they might, perhaps, otherwise have done. It is an instinctive quality, and a natural right, in every nation, to regulate its own currency, by the national authorities, and it may well be doubted, whether it can ever be properly done, without such an elevated supervision. The return of the federal government to banking, in the Subtreasury mode, is proof of its propensity that way; and when the Subtreasury can no longer be endured, to remedy the evils which it shall have created, it may possibly be found necessary to readopt the usual mode of all nations, which has been approved by universal experience. Certainly, it will never be pretended by those who have made the treasury-bank, that there is no banking power in the federal constitution.

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