Newspaper Page Text
BY ALBON CHASE.
ATHENS, GEORGIA, FRIDAY, AUGUST 21,1840.
VOL. IX.—NO. 23.
C O N G R ESS.
So that, whether in reference to measures
or men, I have not changed, whilst six of my
colleagues have changed, either ns to men or
Speech of 31 r. Cooper of Georgia,
In the Ifoit.se of Representatives, June. 1840. j measures.
On the lull to establish an independent Here, then, is my apology for this digression.
Treasury. i At a recent convention of those who claimed
Mr. ( OOi’ER said : I rejoice, Mr. Speaker, I to represent the party whose nominees we all
that an opportunity is at length afforded trie to i were, it was thought advisable to proscribe
assign the reasons why 1 support this tnca-j that portion of their delegation who arc now
sure. Convinced ol its propriety and recti-1 advocating this measure. I have searched in
ttide before it was recommended by the present j vain for the political grounds on which, con-
Administiation, I have watched its progress j sistcntly with their former action, it has been
before the country, in the hands of the present done. 1 grant the right to make this measure
rulers, with immense solicitude. 1 look on it ! now a test, though not so made heretofore.—
ns involving directly an issue between the peo-, Hut in doing it, they cannot escape from the
j>le and the batik corporations of the country; conclusion, that it will be because they oppose
whether the former shall k< op their money, so | it, and desire a bank. I know there are some
hs iii •«!I times to use it without danger of detri- who do not desire a bank, and prefer even
Blent to themselves, or whether the banks, by [ this measure to a bank; and yet, by force of
party prejudice, join in the proscription.—
Against such, and such alone, with justice, 1
complain.
Against those who desire a bank, we have
- I
keeping and possessing it, shall dictate to the
country the lime, as well as the mode and man
ner, of using the public money?
'I'ius is an inquiry of vast moment. On its
decision depends the future characteristics of) only tins complaint, that they have subverted
«>nr Government. I»y the adoption of this bill, - the ancient policy of the party, and arc send-
tt may retain the form and substance of a He- ing it adrift into the broad channel of Federal-
public; by the adverse policy, it may for a time ! ism, swiftly pmsning the great idol ofAlexan-
preserve the outward appearances; but in re- dor Hamilton ; and whilst they worship at this
on become an unlimited consoli-! idol's shrine, they are bringing up to the altar,
' ^ | as a sacrifice and peace offering, every vestige
on.in tram Pennsylvania, who j of State rights ; but before doing it, they will
lia> ju.-l taken bis seat, [Mr. Piddle,| al- j have rung the death knoll of the party, and to
the grave have consigned its remains.
A difference, then, on this measure and its
a'nty it will
dation of |
The g. :
necessary incidents, lias separated the present
delegation from Georgia. Feeling it to be a
mournful occasion, 1 have waited to the last
hour, in hopes that those who differ from us
would give me the, benefit of their views, that
I might make available that last hour, as a day
of repentance.
Hut notwithstanding two of ns have given
them our reasons for supporting this bill, and
I have privately requested them to answer our
arguments mid give ns their own, they decline
to tin so, and seem content to sec us go forth in
our way without ail effort to convince us.
always eloquent, promised us in the (utset lie
would ofb-r soni- thing for us, not for ids con
stituent', and would address our understand
ings, not our prejudices. Tins promise, from
oik: so competent to fulfil it, was a pledge that
we should receive light and instruction. It
therefore gave me pleasure. In the discharge
"I this obligation, however, lie has been uu-
mindlul -if bis duty under it. or else has plac
ed an estimate on the good sense of members
by no means flattering to them. A very large
proportion of his speech was devoted to elo
quent declamation, on points secondary to the
questions at issue. The apology for this may
be that Ins distinguished colleague from Phila
delphia, [Mr. .Sergeant,| who preceded him in
an able and very elaborate manner, covered ; no opinion too sacred to be yielded up to the
the whole ground of argument. , force of truth and reason.
Two questions, however, w< re asked by the I [ .Mr. At.roun here interrupted Mr. Cooper,
first named gentleman [Mr. liiddiej very per- and asked him to yield the lloor for a short
tine.it pointing to the me: its of this bill. ! time, and he would briefly state for bis benefit
I- l. “When yon have gotten the specieinto i bis reasons for opposing the bill. Mr. Cooper,
the Treasury, how (lie asked) is it ever to through courtesy to his colleague, consented,
'■nine out. ’ since the paper circulation will be 1 Mr. Alford then occupied the floor for two
b'-s valuable? j hours. After he closed, Mr. Cooper resumed
2d. “ \\ lien, by this operation, the paper ! as follows;]
iihdinm shall be discredited, bow tire you to! Air. Chairman, I would be greatly obliged
i>“'tore its credit ?" These I will, in the se- to my colleague, who just spoke, for the use of
q il l. endeavor to answer. . his lungs.
11 sides these questions the main topics of j When 1 made the digression, sir, I had rc-
tlns gentleman’s remarks were the State banks, lerrcd to the speech of the gentleman from
•an 1 a deft nee of the administration of the late i Pennsylvania [ .Mr. Biddle] and to the very able
i mted States Hank. These points, too, shall j argument of the distinguished member from
wive attention from tr.o. j Philadelphia. To both I shall try to refer a
II- fore 1 proceed, sir. 1 must ask permission j few times more. I will now proreed, without
ot the committee to dtgrrss for a moment or further liberty to depart, and discuss the merits-
two, to touch « matter connected with this of the bill before the committee.
measure, but somewhat personal to myself At) honorable member lias said lie was at a
and colleagues. 1 have postponed an expres- loss to know whether he understood the .sub-
si mi of niv opinions on this measure longer • ject and nature of this measure, because of the
tlian 1 Mionhi have done, for the following ! differing views of members as to its effect and
It does not address itself to the interest
of the shaver and broker, as some, for ef
fect, have declared. They fatten on a
multiplication of credits, and the derange
ment of currency. Hence, in such times,
every bank lias its broker. Reduce the
former, or make uniform the latter, you cut off
their speculations, and make their business and
profits as regular and uniform as those of the
merchant, the banker, or the planter.
If I be asked, sir, bow I arrive at these and
other conclusions, which I shall presently
state, 1 answer, by inquiring into the nature
and objects of modern banking.
First, 1 find tiie object to be to make money
without the use of money. How is this done?
1. It is done by using the corporation credits
to the most unlimited degree, consistent with
the safety of tire stockholders.
2. By getting possession of as much of an
other’s money as possible, keeping it as long
ns possible, making the best use of it for the
time, and finally paving for it in any thing but
money.
Hence, lie who can get hold of the most
money, keep it the longest, make the most of
it. and invent the most ways to return it, with
out giving up the thing itself—maintaining all
the while a reputation for fairness, prudence,
and safety— is esteemed the best modern banker.
The keeping, receiving, and paying out the
public money (independent of banks) is the
subject of this bill. The keeping and using of
the public funds by the banks, or through their
agency, is the policy of the Opposition, to wit,
the Whigs.
The public deposites constitute the hone of
contention. 1 beg the committee to fix their
eyes on this single idea, arid follow it in all its
applications; for startling results will be ex
Total specie to January, 1833, $189,6-15,GS5
Average during the same period, 5,7-10,839
Total from June, IS33, to July,
1S3G > 76,104,812
Average during the same period, 10.872,116
Grand total, ’ 2G5’?50,497
Total average, 6,043,762
Total loans to January, 1S33, $1,251,708,908
Average during same period, 3S,023,303
Total from June, 1833, to July,
398,05G,2S7
Average during the same period, 56,SOS,181
Grand total,
Average,
$1,G52,S25,195
41,320.629
IJv this statement it apnears that from 1S17
to 1833,
The annual
was,
Do
Do
Do
average circulation
do
do
do
deposites,
specie,
loans,
$9,341,240
8,194,925
5,746.839
38,023,303
You will remember, sir, in 1S33, the depo
sites were removed. That was a crisis with
the Dank and the country, lienee our esti
mates are made to that date, and from that date
to the expiration of the charter.
From 1S33, to July, 1S30, time it expired,
The annual average circulation
was, $20,294,903
Do do deposites, 2,639,580
Do do specie, 10,872,110
Do do loans, 50,805,184
Now, Mr. Chairman, the universal com
plaint is the derangement of the currency,
pressure, and hard times. Whence arise
these wailings, and how shall their true causes
shown? ’Tis a vexed question, out of
hibited to some at least, when I shall have fully which politicians expect much profit to arise.
answered the following inquiry:
Why is it that the friends of the banks tire
so hot in pursuit of the deposites, raising a
great line and cry when they are removed,
charging Government with ail the evils rest
ing on the land, induced by superabundance
8ir, my own opinions are my guide, but 1 hold of irredeemable currency ?
Do not the people believe that hank notes
arc based on, ami their circulation governed
The paper money has been aptly styled the
circulating medium, from analogy to the blood
in the tinman system. The expansions and
contractions of the former correspond in effect
with the diminution and stagnation of the lat
ter. As you would place the fingers on the
pulse to test the superabundant action in the
arterial system or approaching state of collapse,
so you may now place your linger on the col-
by, the capital or money ot the banks, a rea-j umn headed circulation, and tracing its action
settable portion ot which is supposed to he : trout year to year, mark the coincidences,
specie? They do. lienee the universal idea 'I'he experiment will prove what I have
with the mass that a bank is a strong, a sale j said — “ That the average annual circulation of
thing. Hence the planter or farmer who has the United States Dank for the time it held the
reason ;
Wlnm the present delegation from Georgia
took their scats in Uongms, they were affilia
ted members of one political family. Wo then
dni -red, as we still do on this measure. Dy
consent, our friends at home agreed it should
not lie cause of quarrel or mutual elimination ;
but that either should carry out his views in
the most consistent and conscientious way.
In the progress of a faithful discharge of
these obligations to lho country, and to those
who sent us here, wc have found it itulispeti-
sahlc to dilfer in the choice of the. men who
shall !>e used to carry out our respictivc views.
(tn ns who advocate the Sub-Treasury, the
necessity of choosing a Democrat, became as
imperious as that which commanded my coi-
1 agues, who opposed that measure, to elect
a Wliitr .'•ml n ii.mli man. Tills T foresaw
before i came here. It was known that every
Whig was opposed to the Independent Treasu
ry, and the party as a body were advocates of
t'ie bank system ; that system which the dis
tinguished gentleman from Philadelphia [Mr.
Sergeant| has so truly and sncessfully traced
to Alexander Hamilton, and which tiie same
gentleman to triumphantly and so boldly an
nounced as Hamilton's favorite scheme.
Would you expect me to fee the bank note
engraver to shoe my horse ? Tn ask a blind
in m to distinguish between tiie fixed stars
and the planets; to invite the moon to slime
without the sun. or to apply at midnight for
ili- light of noon day? il 1 should act t Inis,
wonld yon not justly say, that man is cither a
al or a knave ?
Sir, so long as my colleagues desire to op-
| 1 '-'o this measure and take a United States
U.nk in preference, equally foolish would they
•i i to take a Democrat to do the work.
Poivsi'i i.i.r all this, 1 told my constituents
'"•fore they elected me, what rule would gov-
mi iw. and that this rule would make it my
'htyand their interest to elect “Van Dtiren
1:1 preicronce to Clay or Webster; and that as
<’•" Ibirnson lie could not be thought of under
i,: y circumstances.”
no borrowing to do, puts bis mouey on de-!
positc for safekeeping.
What will le the- surprise of this confiding
portion of community, when I assert, and
prove, that the entire circulation of the Union
is based on, or governed, not by the specie in
the vaults, not by the amount of capital paid in,
but by the average deposites held by the banks !
deposits, was governed by. and based upon,
the public deposites;” not by its capital, not by
its specie.
How stands the case ? The circulation was
nine millions, the deposites eight millions, and
the specie was five millions, iti round numbers.
The amounts, therefore, of (he two first most
nearly correspond. But, it may be asked, can-
That this is not only true of the United | not five millions of specie sustain nine millions
o] < ration.
'I'iie objects I have in view, which com
mend the bill to my support, may be reduced
to two.
First. A limitation of the revenue to the
economical wants of this Government.
Second. To keep the Executive and Legis
lative Departments within their limits, as de
fined and prescribed by the Constitution, both
in regard to the nature and purpose of its poli
cy and powers.
I atn not so sanguine as to expect this sin
gle measure will guaranty these results, in de
fiance of a wilful propensity to pervert, com
mon to nil parties. This would be, by the
potent energies of a single proposition, to make
this Government all that our forefathers desired
ami iis enemies deprecated. No, 1 should he
a perfect enthusiast, and overlook all the trail-
ties of our nature. No measure you car. adopt,
however potent or conservative, possesses such
sanative properties. The. yearly perversions
of our invaluable Constitution, so plainly writ
ten and fully expounded, warns me against
the disappointment that might follow such an
ticipations of Lliss.
My biightest hopes are, that this measure,
honestly and faithfully administered, and un
trammelled by obstacles unnecessarily and
wilfully interposed by those opposed to it. will
by its legitimate operation, tend at nil times to
secure these two great objects; whilst every
antagonist policy will render their attainment
less and loss hopeful, and will be productive of
evil, and that continually.
This policy is not only the most effectual to
limit the revenue and avoid a surplus; but—
It will operate to diminish the indirect pat
ronage of the Executive, without increasing
the direct. Tiie former is more to be dreaded
than the latter, because it is more hidden and
less understood.
The bill supersedes the agency of all banks,
and keeps the Government funds at command
oftlie people’s Representatives, to be used when
they order it, without danger of a spasmodic
effect on the currency.
States Bank, but that its aggregate annual cir
culation, during the twenty years ol its exist
ence, was governed by the aggregate amount
of public money llClil by it.
This, sir, is literally true. And the average
deposites during the period of that Bank’s ex
istence, was ns true an index to the circula
tion as the dial is to the sun’s course, when no
cloud obstructs its shining— as just, sir, as the
thermometer to indicate the heat—swelling as
they increased, and contracting as they dimin
ished. I will prove this by witnesses not to
lie distrusted, the Bank’s own confessions,
which tire to be taken always most strongly
against itself.
This will furnish a true developement of the
real cause of all our distress and suffering, and
may serve to suggest the appropriate remedy.
Now for the proof. It is taken from the
Bank returns exhibited in the public docu
ments. in Senate doc. 2d. sess. 23th Cong.
No. 128, p. 208.
The proposition is, that the circulation of
the United States Bank, from 1817 to 1830,
was governed, not by its capital, not by its
specie, but by the average amount of public
money on iluposito.
Here is a semi-annual statement of that Bank
for January and July of theseveral years, taken
from that document, under the respective heads
of capital, specie, deposites, circulation, loans
and discounts:
STA TEMEXT of //:.• semi-annual returns if the
United Stutes Hunt: circulatiun, deposites, specie,
loans and discounts, and capital.
I appeal to my colleagues whether 1 have ] It will tend to make the paper money soun-
! > ,; t stated truly. Having truly stated, 1 appeal, j der. by removing from the banks the pretext
s >. to this committee in proof that in what 1 | or most fruitful cause of irredeemable issues;
1 ive done and said here, I have said and done consequently to that extent it will prevent
idler more nor less than I proposed to do convulsions in money matters, changes ip the
1 'ore my election. j relations of property aud its owners, and will
My colleagues and myself, at this very mo-1 produce more uniformity in prices, and sound
'• at, have the same difference in reality which ness of pay to labor and its products.
■ brought with us here. If there be any dif- It cannot injure any of the State banks, l>e-
it-nce now, which did not then exist, it is as cause it can only takeand withhold from them
1 men, not as to measures, From this remark, what is not theirs, and deny them the power of
‘"light to except two oftlie six, who arc op-! abusing what they ought never to use—the
i’ v «d to this measure. Those two have now public money. For tiie same reason it can
: 'Mu-rence from me in regard to if, which did never injure the prudent and honest merchant
1; liu ii appear. But 1 have not changed. or trader of any description.
bi regard to our opinions of parties also, the The benefits of this measure are not ad-
5 !'• two agreed with me once in that wherein dressed peculiarly to any leading interest whnt-
' ia\v disagree. We then thought it would’ever. They arc diffused more especially
'! ■' do to amalgamate with the Whigs. On j amongst the planters, the fanners, the day la-
point we now differ. 1 have not changed, borers, and mechanics; because the perma-
■ regard to men, I thought and said it would ! nont circulation rests habitually in their pock-
' -better to choose Van Burcn rather than liar- i ets. Every loss on it is their loss, and the
|; S0I: - All my colleagues thought, and so said saving of a loss is their gain. Whatever, therc-
1,: I m 'ty,ihat they would vote neither for liar- fore, diminishes the use of the article on which
1 M, u not Y an Burcn. Six of my colleagues they must lose, and substitutes that by which
'bink they will vote for Harrison. They they cannot lose, is interesting to them. This
hive changed, not 1. ■ measure docs that.
Y ear.
Cin uin- |
tinn.
Deposites
Specie
LoansanJ
Discounts
Capital.
1817. Jan.
1,1*11,200'
0.170.272
7.724,10(
3,485,194]
35,000,000
Julv
4,7£!*.$G1
24.746.641
2.129,36.*
20,235,536
do
818. Jan.
8,339.118i
7.369,911
2,517,941
11,191.750
do
Julv
9,015,210!
7.967,775
2,357.1.37
i 1,458,985.
(lo
1919. Jnn.
0,503.7501
2.856.312
2.666.69*
15,796,26.3
do
Julv
5,2 i 3.040!
3,670,38!
2,954,26*
40,949,662
do
1820. Jan.
3,589,481|
.3,560,7! 1
3,592,7 3.
il, 101,158
do
Julv
4.005,3021
2.925.802
5,821.49
40,207,579
do
1821. Jan.
4,507.053;
2,928,821
7,643,140
40,905.199
do
July
5,551.910
2.94 1.203
5.876,53-1
-9,396,916
do
192’. Jail.
5.578,782
2.617.554
4,761.299
29,061,169
do
July
5,020,900
3.388,24*.
3,350,4 43
31.795,700
do
19-23. Jju.
4,361,058
4,275,330
4,124,874
30,736,432
Ho
July
4,620,319
7,733,239
4,910,434
31,803,929
do
19-24. Jnu.
4,647,077
10,181,864
5,813,694
33,432,081
do
July
6,393,647
9.159,749
5,588,000
32,694.09*
do
1825. Jan.
6,06«,3D 1
6.702,413
6,746,95*.
31,812,617
do
July
9,540,694
7,992,713
4,048,178
33,531,692
do
182G. Jan.
9,174,997
5,769,795
3,960,158
33,424,621
do
July
10,210,412
.9,783.161
6,194,275
35,020,490
do
1927. Jan.
9.549.409
9.992.241
6,457,161
30,937,860
do
July
10,198,760
9,448,989
6,381,225
34,191,166
do
1828. Jan.
9,855.677
8,385,223
6,170.015
33,692,905
do
J uly
10,893,343
11,554,413
6,621,734
39,506,410
do
1929 Jan.
11,991,656
10,696,961
6.099,138
39,219.602
do
Julv
13.691,7£3
11,657,41$
6.641,958
13,019,132
do
1930. Jan.
12,924,145
9,654.777
7,608,07 *
40,663,805
do
July
1831. Jan.
15,346.107
10.137,(Mil
9,131,60-
10,252,325
43,239,16C
do
IG,251^267
10,809.047
44,032,057
do
J uly
19.195,817
7,655.80:
1*2,175,476
56,562.044
do
193-2. J.m.
21.355.724 12.538.36:
7,038,92:
.6,203,707
do
July
20,520,068
11,872,10.
7.519,08.
•7,416,081
do
1923. Jan.
17.51.-, 217 1-2,75-2,54:
8,951.8
• 1.695,913
do
July
13.366,55:
6,511,50-
10,098,81'
;3,3C9,817
do
1931. Jan.
19,009.37:
4,030,50?
10,031,23
•4,9 i 1,46!
do
J ulv
10,611.997
2,075,49-
[12,823,99
do
1835. Jan.
17,339,797
| 2,621.14(
M ,808,739
do
J uly
25,332,82t
1 1,686,110 13,429,32*
35,197,692
do
1930. Jan.
23,075,42*.
6J7,-!
8,417,991
>9,232,44f
do
Julv
2l.109.35C
I 324,2501 5,595,07
J2.M 1.091
do
Aggregates.
Total circulation to Jan., 1833, $303,260,974
Annual average to the same date, 9,311,240
Total circulation from June,
1S33, to July, 1S36, 142,074,322
Annual average during the same
period, 20,294,903
Grand total to July, 1835, 450,335,290
Total average, 11,258,882
Total deposites to Jan., 1833,
Annunl average to the same date.
Total deposites from June, 1833,
to July, 1836,
Annual average daring the same
period,
Grand total to July, 1S26,
Total average,
$270,432,517
8,194,925
IS,177,060
2,639,580
288,909.577
7,222,738
of circulation 7 It may he. But who knows
but the five millions of specie is part and par
cel of the eight millions nf «lopn®itoo, «\r.u o».
far is identical ? 1 do not say it is, but have
very little doubt, because, in addition to the
eight millions of Government deposites, the
bank had an average annual private deposite
of five millions during the same time. But
this is wholly immaterial. I do not deal in
surmise, for i will now show by the tabular
statement, that the circulation expanded as the
deposites increased, and contracted as they di
minished ; whilst, in reference to the specie, the
circulation expanded when the specie was low.
and contracted when it was high. This will
prove, beyond the power of contradiction, that
the public deposites governed the circulation
of th is Bank.
The Bank started cautiously. In 1S17 the
range from ten to twenty-four millions was so
wide, as to furnish no criterion. During this
and the next year, the circulation ran up to
9,015,448, on a specie basis of 2,500,000. The
practice of the Government during these two
years authorized a belief that it would have an
average deposite ofat least ten millions—hence,
ill July, 1319, the circulation was over nine
millions. But it turned out that the deposites
fell below eight millions—hence, yon see, in
the next six months, there was a contraction
ot near three millions; and, for the next six
months, a further contraction 1,500,000; and
by July, 1S‘20, it was reduced to 3,500,000.
During this time, only eighteen months, there
was a total contraction of near 6,000,000. The
deposites decreased 4,400,000; but the specie
increased 1,000,000.
Ilcrc, yon perceive, the deposites governed
the circulation.
After this collapse, the effects of which are
in the recollection of many, specie rose, in
eighteen months, to 7,600.000, without any
corresponding increase of circulation. Here
you see 4,300,000 added to specie, and but
500,000 to circulation. The reason was, de
posites stood firm. Yon see, also, the increase
of specie did not govern the circulation.
In the next two years specie came down
again by precisely the $4,300,000; but this did
not reduce the circulation—on the contrary, it
increased by one million. The reason was,
the deposites were rising.
You here perceive, from Jan. 1820 to July
1S22, $4,390,000 came iu and went out at a
great expense, and did not vary the circulation
$300,000—hence, specie did not govern the
circulation.
From July 1322 to Jan. 1824, deposites
ranged from 3 to $10,000,000. Circulation
and specie stood firm; almost identical. Dur
ing this year and a half, specie did govern the
circulation. The reason was, it was on the
eve of a Presidential election—the contest was
warm, the issue uncertain; and it could not
foreseen what would be the policy of the
successor.
But Mr. Adams was elected. Now mark
the succeeding four years, and observe bow
well a Federal administration co-operated with
its favorite Hamiltonian system. From Jan
uary to July, circulation rose two millions—
specie stood firm.
From July, 1824, to July, 1825, circulation
rose near three millions, making near five mil
lions in eighteen months. In this time specie
fell $1,800,000.
By July, 1826, circulation rose to $10,000,
000,' depos ; tes $9,700,000, and specie only
$6,000,000-
From July, 1826, circulation rose to $13,-
600,000. The reason was, deposites increased
to $11,600,000—specie stood firm at $6,000,
000.
Here you see that for five years, from July,
1824 to July, 1S29, the circulation rose $«>,-
000,000; the deposites from 4 to $6,000,000;
whilst specie did not rise or fall $500,000 oti
an average. For these five years, then, the
deposites governed the circulation.
t rom July, 1829, there came into power an
administration of this Government opposed to
the Bank—Gen. Jackson. He assailed this
Hamiltonian system with all the force of his
energetic character and unrivalled popularity.
The Bank defended, by the power of its ex
pansion and contractions. The policy oftlie
Bank advocates was to increase the revenue
and expenditures, to give the Bank the depos
ites. The more revenue and expenditure, the
more deposites and the more power.
From July, 1829, to January, ’30, deposites
fell to $9,000,000. The circulation decreased
also; but specie increased $1,000,000. The
deposites still governed.
The Bank now discovers it must fortify it
self for a bold effort to retain the deposites—
or a surrender, without loss of credit. It pre
pares for both events. And from January,
1S30, to January, 1832, the circulation ran
up to almost double what it ever bad been ;
deposites fell to little more than half what
they had sometimes been ; whilst specie swell
ed $5,000,000 above any previous example.
During these two years, circula
tion rose to $21,000,000
deposites fell to 7,000,000
specie rose to 12,000,000
This was a preparation for the contest for
a re-charter, and against the removal of the
deposites. It also prepared the country for
the disasters that followed.
To sustain this unusual circulation, the de
posites arc made to rise, from July 1831 till
January 1833, to $12,700,000; whilst specie
fell near $4,000,000. So that in January,
1833, the circulation was §*17,000,000
do ilo deposites 12,700,000
do do specie 8,900,000
And this state of affairs is brought about by
the Bank with a full and fair intimation that
the deposites would be soon demanded. With
what view the committee may judge.
After being deprived of the deposites in 1833,
the Bank was driven to supply the defect of
basis consequent upon their removal. This
it did by an increase of specie up to July, 1S35
—six months before the expiration of its char
ter. This was effected by drawing on the
State banks, or by putting into market some of
its stocks—that being the next most available
means to supply a power to redeem its notes.
Drawing on the State banks produced a con
traction oftlie local banks, and a panic around
them, whilst the negotiation of its stocks re
sulted in an importation of specie.
From July, 1S33, to July ’35, the circulation
rose higher than it ever was, to $25,000,000
do the deposites fell to 1,600,000
do the specie rose to iQ.ann/mn
was mere ever such a state, of things known
in the administration of this Rank from the
beginning, in 1837, to this time? Nothing like
it. Here arc 15,000,000 specie and deposites
to redeem 25,000,000ol bills, and this brought
about at the very close of the charter—whilst
at no former period was the circulation permit
ted in any material degree to exceed the amount
of the two, but most uniformly made to corres
pond with one of the two. * *
You will remember that this bank’s capital
was $35,000,000. It is therefore evident that
this did not govern its circulation. Hence my
proposition is established, that the circulation
of tiie United States Bank, from 1S17 to 1833,
whilst it had the Government funds, was based
on and governed by that fund, and not by its
capital or its specie.
I ask yon, sir, do the people understand
this? The intelligent merchant, banker, or
broker may; but the unsophisticated and hon
est planters, farmers, and mechanics, where 1
live, do not. 1 hope they will put their fin
gers on this, and feel assured they touch the
key that unlocks the grand secret of modern
banking.
From it wc shall illustrate several proposi
tions, interesting to all who arc concerned in
what you call currency—pressure, hard times,
hard money, &c.
The proposition I have thus proven in re
gard to the circulation of the United States
Bank and the public money, is true of the ag-
gregatclocnl banks of the Union and their de
posites, public and private. This will appear
by an examination ofthe facts set forth in a ta
ble of the condition of the hanks, which I hold
in my hand, taken from your documents, and
published in the 1st volume of Hazard’s Sta
tistics, page 167. I now give you those facts,
to wil:
CONDENSED STATEMENT
Of the condition, at different intervals, of all
the banks in the United States.
[For the years 1S38, ’39, and ’40, the nett
circulation only is given, as taken from the
Treasurer’s report of 1840.]
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Anterior to 1S20, the deposites are not given:
At that date they were thirty-five millions, the
circulation was forty-four millions, and the
specie nineteen millions.
In 1830, the circulation had increased near
a third, and the deposites over a third, whilst
the specie did not increase more than one-
ninth.
In 1S35, the circulation rose to 103,000.000,
and the deputes 83,010,000 ; specie to’ 43,-
000,000.
The next year, and the year after, circula
tion rose to 140,000,000 and 149,000,000, de
posites to 127,000,000; whilst the specie was
reduced from 43 to 37 millions. This brought
about the suspension and all our distress, pres
sure, hard times, &.c. The reasons why, £
shall soon explain, if they are not already
made manifest.
Here yon perceive that the circulation rose
to a ruinous height, being carried up by the
deposites at the same time that the specie was
diminished. We expect to show hereafter,
that ot the 1 19,000,000 of circulation then out,
from 30 to 40,000,000 was issued on a false
basis, or m other words, on the fund of the de
positors.
From 1837 to ’39, 43,000,000 of the depo
sites were used. This produced the contrac
tion and pressure now felt. For it reduced
the circulation in one year 58,000,000. This
was not produced by a reduction of the specie
basis, since it was diminished that year, only
$2,500,000.
In 1839, the banks made a powerful effort
to reinstate the circulation to what it was in
1S37. To effect this, they added 10,000,000
to their specie in one year, and carried it 45,-
000,000, far beyond what it crer bad been.
They were tumble, however, to expand be
yond 107,000,000. For the deposites did not
rise above 90.000,000 anrl a sinntl frariinn
Tins dibit'resulted in a further contractic.ri
in the circulation of 21,000,000 from ’39 to
1840. Hence the deposites fell from 90 to'
75,000,000.
Hence you perceive, sir, that what was triio
of the United States Bank as a manager of
your funds, proved to be true of all the hanks,'
particularly after the removal of your money
from the former to the latter.
One fact let me call your attention to here:
It is this: From 1S34, the time the transferor
public money commenced from the United
States Bank to the pet banks, to 1837, the time
when the transfer was fully made, the aggre
gate expansion was 55,000,000. The amount
of deposites transferred in this time was 52,-
900,000.
Again, from 1837 to 1840, the whole of the
deposites were taken away, distributed, and
used up: so that this year we have an empty
Treasury. The aggregate amount so used,-
and taken away, is 52,000,000 in this period,
(precisely the same that was put there from
lour »- 5r,) and the rnntmction was 03,000,-
000, a little more Oimi the cApausii n, as uiigui
have been expected.
Here, sir, is a vibration in the circulation, ill
six years, from 94 to $149,000,000, a corres
ponding one in the deposites, whilst specie did
not go to greater extremes than from 37 and
15,000,000 in five of those years.
Do not all these facts conclusively establish
tiie proposition l have laid down? They, do;
What, then, has been the effect of this policy
of the banks?
1st. An expansion and contraction of $55,-
000,000 from 1834 to 1810. The expatisiori
put forth $55,000,000 of Bank credits, bear-:
ing no interest, issued on the faith of the depo-.
sites, to be substituted for the like amount of
individual credits, hearing interest, and made
payable to the banks, but resting, in sevelt
cases out of ten, on the uncertain results of rt
speculation on any subject that might promises
a speculation.
2nd!y. The contraction sent the bank notes
borne for redemption, which, being deprived of
the public funds on which they were issued,
were thrown for support on the notes of indi
viduals received in exchange. These indi
viduals having failed to realize the specula
tions, for the sake of which they bartered bank
notes substituted for their own, failed to pay.
A suspension was the consequence. Tbd
85,000,000 of bank paper thus issued was dis*
paraged; the order of things was reversed;
the banks first interposed to advance and prop
individual credit. Now individual credit is
the sole support of bank credit. Why Is this?
1 answer, it is because the banks have issued
and put in circulation, as money, that which,
not being money, is based upon, and governed
by, something that does not belong to them,
and which they were bound to surrender at a
moment’s warning.
3rd. The individuals upon whom rested the
redeemable power of the 55,000,000 ot issue,
rose up ns one community and petitioned the
banks to suspend. Why? Because it was their
own case. Ail extension to the banks was an
extension to themselves. It was their case in
a tenfold degree. It was virtually a case be
tween these bank debtors and the community,
who hold bank bills as money—a casein which
the hank debtor had this advantage: If the
banks should suspend, he might gain, but could
not lose. The community were certain to
lose, and could never gaiii. He might buy at
discount, bank notes, with which, at par, he
could pay his own. Community lost the dis
count, but never shared the premium. It is
more than equivalent to a voluntary act of
bankruptcy, for it enabled a man to stop pay
ment, keep his property, and pay his debts at
25 cents in the dollar. It was a copartnership,
in which one of the firm was bound to share
the loss, having no portion of the profits.
4th. Another effect was, that in the excite
ment of this expansion, you created an artifi
cial demand for money, which tempted out of
its proper channels that capital which, being
needed, was habitually used iu the regular
course of trade, and consequently kept on de-
positc with the banks. The abstraction of
this and its diversion, to unwise, uncertain,
hopeless, helpless, and useless speculations,
tended, like the “ removal of the deposites,”
primarily to embarrass the banks, to test the
soundness of their issues, and Jo make-manifest
(what existed before, but was unknown) the
derangement of the currency.
5th. One more effect 1 will speak of. In a
crisis like this, in which the bank debtor had
• the decided advantage of community, and com-
{Continued on fourth page.)