MODERATING THE CYCLE 215

But the idea of a modern central bank, with the function of caring
for the surplus reserves of the entire banking system, was almost
wholly lacking.! A few writers advanced the view, which was to
become prominent during the period of the National Banking
System, that the independent treasury furnished a favorable
agency for providing such reserve lending power. It sufficed for
most of the Jacksonian critics of banking to point out that the
sub-treasury system removed part of our resources from the baneful
 influence of the institution they opposed. The signing, ‘by
happy coincidence, on the anniversary of the Declaration of
Independence,” of the bill establishing the independent treasury,
was hailed, with much florid rhetoric, by “An Oration, Pronounced
 in Castle Garden, July 27, 1840, by Hugh Garland, of
Virginia, in Celebration of the Second Declaration of Independence,
 or the Passage of the Independent Treasury Bill.”
It was left, however, for Gouge, who was for thirty years connected
 with the Treasury Department, to give later secretaries
of the Treasury the cue for claiming a positive benefit from separation
 of the fiscal operations of the government from the banks.
He sought to show the shortsightedness of those who regard
money lying in the government’s separate vaults as wasted in
unproductive idleness. “In a country such as ours there ought
to be somewhere a reserved fund of gold and silver, and no more
appropriate place can be found for such a reservoir than the
May, 1837. The association resolved by unanimous vote that debtor members
unable to settle their daily balances should give the creditor banks such security as
the standing committee of the association might determine. The contemporary
newspapers give no clue as to how much use was made of this provision, or concerning
 the report of the committee which was instructed to consider ‘the expediency
of making arrangements forthwith for the settling of daily balances.” See Niles’
Register, iii, 195, 106.
Something of a pooling of reserves seems to have been practiced in Philadelphia
twenty years earlier. In August, 1817, the banks of that city, having found it difficult
 to put into actual effect the resumption of specie payments for which they had
voted, “agreed, instead of settling, to pay interest on the balances they owed each
other, this continuing until June 20, 1818, when they were able to resume actual
specie payments of the balances due.” The Philadelphia National Bank, p. 66. And
concerning the banks of the same city during the suspension of 1821, we are told:
“The scheme was at this time adopted of marking checks ‘good’ instead of paying
them.” Ibid., p. 97.
t See above, pp. 165-167.