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facilitating exchanges, and, indeed, in assisting the operations of the Treasury, and the deposit banks themselves, by affording a medium of universal credits. The present system, therefore, still rests, substantially, on the Bank of the United States.
It is the credit and the circulation of the bills of that Bank, which still sustain the accustomed operations of internal commerce; and the Bank still exercises all that wholesome control over the currency of the country, which it has heretofore done. But the Bank is about to expire. These eighteen or twenty millions must be gradually withdrawn from circulation, though they may come in very slowly, and be drawn very reluctantly, from the hands which hold them; so that the circulation of the bills may more or less continue for a considerable time after the charter shall expire. In this way I have no doubt of its continuance to do good, for some time after its legal existence shall have ceased. There will be no rush for payment of its notes and bills, because there will be no doubt about the sufficiency of the fund. There will be no haste to get rid of them, because they will be better than any other paper, and better than gold and silver.
But the Bank must wind up its affairs; its debts must be collected, and its circulation, after a while, entirely withdrawn. And when this takes place, or begins to take place, then, and not till then, the existing Government "experiment" will begin to be put to the proof. At present, all is fair weather: the question is, How will it be, when it becomes necessary to fill up the void occasioned by withdrawing the bills of the Bank of the United States, by notes of the deposit banks? When these banks shall be brought to rely on their own means, their own credit, and their own facilities; when the substantial succor of a universally-accredited paper currency of twenty millions in amount shall be withdrawn,-then the "experiment" will be put on trial.
It is known, Sir, that I am one of those who believe in the impracticability of an exclusive, or of a general metallic currency. Such a currency is not suited to the age, nor to commercial convenience. The return of the golden age is a dream. There will continue to be banks; and the mass of circulation will be a paper circulation of some kind; and the question will be, whether State institutions, associated together as deposit banks, can furnish a sound and universally accredited circulation.
At present, they are not proved capable of any such thing. If a gentleman here wishes to remit money to New England, or to the Ohio river, he certainly does not send bills of the deposit bank of this District. If a single individual has done that, by way of trying the "experiment," he probably does not repeat the trial; and, at any rate, the example is not generally followed. The deposit bank pay specie, which is, so far, very well; and a person with 61
a check on one of those banks can obtain specie, and with that specie he can obtain bills of the Bank of the United States; and this is the process he will go through, if he wishes to remit money, in the shape of bank notes, to places at any considerable distance. In fact, that is well known to be the only practice. How this is to be effected, when there shall be no longer notes of the Bank of the United States to be had, remains to be seen.
I have said, Sir, the day of trial has not come, and that all as yet seems clear weather. But I have recently learned some symptoms of approaching squalls. Some little specks of clouds, at least, make their appearance above the horizon. I learn, from authority not to be questioned, that, within the last week or ten days, a Treasury warrant was drawn on a deposit bank in one of the cities, payable in another city. The bank on which the warrant was drawn offered to pay in a check, on a bank in the city where the warrant was payable; and when the check was presented, it was found to be made payable in current bank notes. Here, I think, Sir, there is, as I have said, a small cloud darkening the early dawn of the new golden day of our currency. Even so soon as the present hour, Treasury drafts are thus offered to be paid in current bank I have very good reason to believe, Sir, that other deposit banks draw their checks, in like manner, payable in current bank
notes. And I have called the attention of the Senate to these occurrences, not merely to expose the practice, but to correct it also. I wish to stop it at the threshold, by declaring it illegal; and I have prepared a section, which, I trust, the Senate will see the importance of inserting in this bill.