in
circulation would be enlarged by its employment in the public
collections and disbursements, and the banks themselves would in
consequence be found in a safer and sounder condition. At present State
banks are employed as depositories, but without adequate regulation of
law whereby the public money can be secured against the casualties and
excesses, revulsions, suspensions, and defalcations to which from
overissues, overtrading, an inordinate desire for gain, or other causes
they are constantly exposed. The Secretary of the Treasury has in all
cases when it was practicable taken collateral security for the amount
which they hold, by the pledge of stocks of the United States or such of
the States as were in good credit. Some of the deposit banks have given
this description of security and others have declined to do so.

Entertaining the opinion that "the separation of the moneys of the
Government from banking institutions is indispensable for the safety of
the funds of the Government and the rights of the people," I recommend
to Congress that provision be made by law for such separation, and that
a constitutional treasury be created for the safe-keeping of the public
money. The constitutional treasury recommended is designed as a secure
depository for the public money, without any power to make loans or
discounts or to issue any paper whatever as a currency or circulation.
I can not doubt that such a treasury as was contemplated by the
Constitution should be independent of all banking corporations.
The money of the people should be kept in the Treasury of the people
created by law, and be in the custody of agents of the people chosen by
themselves according to the forms of the Constitution--agents who are
directly responsible to the Government, who are under adequate bonds and
oaths, and who are subject to severe punishments for any embezzlement,
private use, or misapplication of the public funds, and for any failure
in other respects to perform their duties. To say that the people or
their Government are incompetent or not to be trusted with the custody
of their own money in their own Treasury, provided by themselves, but
must rely on the presidents, cashiers, and stockholders of banking
corporations, not appointed by them nor responsible to them, would be
to concede that they are incompetent for self-government.

In recommending the establishment of a constitutional treasury in which
the public money shall be kept,