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ble manner. These bi..s have Mined, fii y
last few years, a large proportion of m Iml are
termed the domestic exchai ges of the conntij,
serving as the means of usurious profit, and
constituting the mast unsafe and precarious j
paper in circulation. This species of trutic, ,
instead of being uphold, ought to b:- mscoun
-tenar.ced by the Gover; mm t and the people. ;
In transferring its iui.us from place to p...ce,
the government is on the same tooting wit.i
the private citizens, and may resort to Um same .
Icrnil means. It may do so through the modi- |
urn of bills drawn by itself, or purchased from .
others; and in these operations it may, m a :
manner undoubtedly constitutional and Icgiti- j
mate, facilitate anil assist exchanges of indi
viduals- founded on real transactions of trade.
Tim extent to which this may be done, and the.
best means of effecting it, are entitled to the
fullest consideration. This has been bestowed |
by the Secretary of the Treasury, and his i
views will be submitted to you in his report. ]
But it was not designed by the constitution
that the government should assume the man
agement of domestic or foreign exchange. It
authorized to regulate by law the
commerce between the States, and to provide
a general standard of value, or medium of ex
change, in gold and silver; but it is not its pro
vince’to aid individuals in the transfer of their
funds, otherwise than through the facilities af
afforded by the Post Office Department. As
justly might it be called on to provide foi the
transportation of their merchandize.—These
are opervtions of trade. They ought to be
conducted by those w ho are interested in them,
in the same manner that the incidental difficul
ties of other pursuits are encountered by other
classes of citizens. Such aid has, not been
deemed necessary in other countries. ,1 hmugh
out Europe, the domestic as well as tne foreign
exchanges are carried on by private houses,
often, if not generally, without the assistance
of banks. Yet they extend throughout distinct
sovereignties, and far exceed in amount the
real exchanges of the U. States. I here is no
reason why our own may not be conducted in
the same maimer, with equal cheapness and
safety, Certainly this might be accomplished,
if it were favored by those most deeply inter
ested; and few can doubt that their own inter
est, as well as the general weliare of the coun
try, would be promoted by leaving such a suo
ject in the hands of those to whom it properly
belongs.
A system founded on private interest, enter
prise and competition, without tho aid ot le
gislative grants or ‘regulations by law, would
rapidlv prosper; u would be free from the in
fluence of political agitation, and extend the
same exemption to trade itself; and it w'ould
put an end to those complaints ot neglect, par
tiality, injustice, and oppression, which are
the unavoidable results of interference by the
Government, in the proper concerns of individ
uals. All former attempts on the part of the
Government to carry its legislation, in this res
pect, further than was designed by the Consti-
tution, have in the end proved injurious, and
have served only to convince thb great body of
the people, more and more, of th,d%gsfli.iin dan
gen of blending private interests dMfflhe oper
ations of public business; and
son to suppose that a repetition now .
would be more successful.
It cannot be concealed that in ■
our community, opinions and feelings on this j
subject indirect opposition to each other. A ■
large portion of them, combining gj&nt iatclli- ■
gence, activity, and influence, are no doubt
sincere in their belief that the operations of]
trade ought to be assisted by such a connection; I
tjjsy regard a national bank as necessary for ;
“this purpose, and they are disinclined to every ;
measure that does not tend, sooner or later, to
establishment of auch an institution. On
oilier timid, iv majority of’ the peoph. nro 1
sieved to be irreconcilably opposed to that i
pleasure: they consider such a concentration ,
of power dangerous to their liberties; and ma. 1
ny of them regard it as a violation of the Con
stitution. This collision of opinion has,'
doubtless, caused much of the embarrassment
to which the commercial transactions of the
country have lately been exposed. Banking
has become a political topic of the highest in- !
terest, and trade has suffered in the conflict of 1
parties. A speedy termination of this state of j
things, howerer desirable, is scarcely to be j
expected. We have seen for nearly half a
century, that those who advocate a national ,
bank, by whatever motive they may be influ
enced, constitute a portion of our community
too numerous to allow us to hope for an early
abandonment of their favorite plan. On the
other hand, they must indeed- form an errone.
ous estimate of the intelligence and temper of]
the American people, who suppose that they
have continued, on slight or insufficient grounds
their persevering opposition to such an insti
tution; or that they can be induced by pecu
niary pressure or by any other combination
of circumstances, to surrender principles they
have so long and so inflexibly maintained.
My own views of the subject are unchan
ged. They have been repeatedly and u ;re
servediy announced to my fellow citizens; I
who, with full knowledge of them, conferred
upon me the two highest offices of the govern
ment. On the last of these occasions, I fell it
due to the people to apprize them distinctly,
that, in the event of my election, I would not
be able to co-operate in the re-establishment :
of a national bank. To these sentiments, I
have now only to add the expression of an |
increased conviction, that the re.establishment i
of such a bank, in any form, whilst it would [
not accomplish the beneficial purpose promised
by its advocates, would impair the rightful I
supremacy of the popular will; injure the char
actor and diminish the influence of our politi- I
cal system; and bring once more into exist. !
eace a concentrated moneyed power, hostile to
i the spirit, and threatening the permanency, of
m our republican institutions.
■ Local banks have been employed for the
B deposits and distribution of the revenue, at all
i times partially,and on three different occasions, i
first, anterior to the establishment
of the first bank of th : United States; second
ly, in the interval between the termination of j
that institution and the charier of its successor; j
and thirdly, during the limited period which
has now so abruptly closed. The connection
thus repeatedlyjattempled, proved unsatisfacto- j
ry on each successive occasion, uotwithstand- i
ing the various measures which were adopted ;
to facilitate or insure its success. Ou the last
occasion, in the year 1833, the employment of
the State banks was guarded especially in |
every way which experience and caution
could suggest. Personal -security was re
quiredfor the safe-keeping and prompt pay
ment of -the moneys to be received, aud full
returns of their condition were, from time
to time to be made by the depositories. In
the first stages the measure was eminently j
successful, notwithstanding the violent oppo- ]
Bition of the Bank of the U. States, and the I
unceasing efforts made to over throw it. The ■
select banks performed with fidelity, & with
out any embarrassment to themselves or the
community, their engagements to the Govern,
merit, and the system promised to be penna
nently useful. But when it became necessary,
under the act < f June, 1830, to withdraw from
them the public money, for the purpose of
placing it in additional institutions, or ot trans,
ferring it to the States, they found it, in many
cases, inconvenient to comply with the de.
mands of the Treasury, ami numerous and
pressing applications were made for indulgence
4>r relief, As the instalments under the depo-
site law became payable, their own embarrass
ments, and the necessity under which they lay
of curtailing their discounts and calling in
their debts, increased the general distress, and
contributed, with other cutises, to hasten the
; revulsion in w hich, at length, they, in common
. with the other banks, were fatally involved.
Under these circumstances, ii becomes our ■
1 solemn duty to inquire w liethur there are not. !
in any connection between the government and ;
; banks ofissue, evils of great magnitude, itiher-
■ ent in its very nature, and against which no
precautions can effectually guard.
I Unforeseen in the organization of the. Gov.
• ernment, and forced on the 1 reasury by early
necessities, the practice of employing banks,
was in truth, from the beginning, more a mea
sure of emergency than of sound policy. V< hen i
we started into existence as a nation, in adui- J
j tion to tho burdens of the new government, we I
assumed all the large but honorable load of i
I debt which was the price of our liberty ; but
we hesitated to weigh down the infant indus
i try of the country, by resorting to adequate tax
! ation for tho necessary revenue, Ihe facili
' tics of batiks, in return for the privileges they
I acquired, were promptly offered, and perhaps
i too readily received, by' an cmbariassed 1 lea-
S ury- During the long continuance of a Na-
• tional debt, and the intervening difficulties yf a
foreign war, the connection was continued from
; motives of convenience; but t.iese causes have
long since passed away. V» e have no emer
gencies that make banks necessary to aid the
> I wants of the Treasury; we have no load of na
, tional debt to provide for, and we have on ac
. trial deposits a large surplus: No public iuter
: est, therefore, now requires tho renewal of a
i connection, circumsttfhcft have dissolved.
• j The. complete organization of our government,
1 the abundance of our resources, the general
, i harmony which prevails between tho different
. j States, and w ith foreign Powers, all enable us
t now to select the system most consistent with
> the Constitution, and most conducive to the pub-
> lie welfare. Should we then, connect the
i Treasury for a fourth time with the local banks
1 it can only be under a conviction that past fail
, tires have arisen from accidental, not inherent,
■ [ defects.
- ! A danger, difficult, if not impossible, to be
■ ' avoided °in such an arrangement, is made
■ j strikingly' evident in the very event by' which
■; it has been now defeated. A sudden act of
the banks intrusted with the funds of the peo-
• pie, deprives the Treasury, without fault or
• agency of the government, of the ability to
1 pay its creditors in the currency they have by
■ law a right to demand. This circumstance no
» fluctuation of commerce could have produced,
1 if the public revenue had bee:: collected in the
- currency, and kept in that form by the
3 officers of the Treasury. The citizen whose
3 money was in batik receives it back, siry.e
- j the suspension, at a sacrifice in its amount;
3 j whilst he who kept it in the legal currency of
- the country, and in his own possession, pur-
- I sues, without loss, the current of his business.
The Government, placed in the situation ofthe
{ former is involved in embarrassments it could
not have suffered had it pursued th • course of
i the latt-.r. Thes- embarrassments are, more
] over, augmented by those salutary and just
■ la"ws which forbid it to use a deprecia'ed cur
' rency, and, by so doing, take from the Gov-
! ernment the "ability which individuals have of
accommodating their transactions to such a
catastrophe.
A svstem which cam in a time of profound
i peace, when there is a .arg- r--v,mu ■ laid by,
i thus suddenly 'prove; t the application and the
i use of the money of the people, in the manner
] and for the objects they have directed, cannot
i be wise; but who can think, without painful
■ reflection, that, under it, the same unforeseen
events might have befallen us in the midst of
! a «-ar. and taken from us, at the moment when
I most' wanted, the use of those very means
I which were treasured up to promote the na
tional welfare and guard our national rights?
j To such embarrassments and to such dangers
' wid this Government be always exposed, whilst
j it takes the moneys raised for. and necessary
! to, the public service, out of the hands of its
I own officers, and converts them into a mere
i right of action against corporations entrusted
j with the possession of them. Nor cun such
j results be effectually guarded against in such
! a system, without investinglhe Executive with
a control over the banks themselves, whether
State or National, that might with reason be
I objected to. Ours is, probably, the only Gov
i ernment in the world that is liable, in the man.
! agement of its fiscal concerns, to occurred -s
I like these. But this immiee t risk t h
! only danger attendant on the surrend :r of the
I public money to the custody and control ot lo
cal corporations. Though the object is aid
to the Treasury, its effect may’ be to introduce
into the operations of the Government, influen
i ces the most subtle, founded on interests the
' most selfish.
The use by the banks, for their own benefit,
I ofthe money deposited with them, has receiv
j ed the sanction of the Government from the
! commencement of this connection. The me-
I ney 7 received from the people, instead of being
kept till it is needed for their use, is, in conse
quence of this authority, a fund, on which dis
counts are made for the profit of those who
happen to bo swners of stock in the banks se
lected as depositories. The supposed and of-
! ten exaggerated advantages of such a boon will
} always cause it to be sought lor with avidity.
II will not stop to consider on whom the patron
' age incident to it, is to be conferred; whether
| the selection and control be trusted to Con-
I gress or to the Executive, either will be sub-
I jected to appeals made in every form which
the sagacity of interest cau suggest. The
banks, under such a system, are stimulated to
make the most of their fortunate acquisition,
the deposites are treated as an increase of cap
ital; loans and circulation are rashly augment
ed, and, when the public exigencies require a
return, it is attended with embarrassments not
provided for, nor foreseen. Thus banks that
thought themselves most fortunate when the
public funds were received, find themselves
most embarrassed when the season of payment
suddenly arrives.
Unfortunately,too, the evils of the system are
| not limited to the banks. 11 stimulates a gene
ral rashness of enterprise, ai d aggraiates the
fluctuations of commerce and the currency.
This result was strikingly exhibited during the
■ operations of the late deposite system, and, es
pecially in the purchase of public lands. The
order which ultimately directed the payment
of gold and silver in such purchases, greatly
checked, but could not altogether prevent, the
evil. Specie was indeed more difficult to be
procured than the notes which the banks could
themselves create at pleasure; but still, being
obtained Horn them as a loan, and returned as
a deposite, which they were again at liberty to
j use, it only passed round the circle with di
minished speed. This operation could not
liavo beet; performad, bad the funds ofthe Go
vernment gone into the Treasury, to be regu
larly disbursed, and not into banks, to be loan
ed out tor their own profit, while they Mere
permitted to substitute for it a credit in account,
In expressing these sentiments, I desire not
to undervalue the benefits ofa salutary credit to
any branch of enterprise. The credit bestow
ed on probity and industry is the just reward
of merit, and an honorable incentive to further
acquisition. None oppose it who love their
country and understand its welfare. But when
it is unduly encouraged—when it is made to
inflame the public mind with the temptations of
sudden and unsubstantial wealth—when it turns
industry into paths that lead sootier or later to |
disappointment and distress—it becomes liable I
to censure, and needs correction. Far from I
ls< Iping probity and industry, th.; ruin to which j
it leads falls most severely on ihe great labor- j
it g classes, who are thrown suddenly out of I
employinvnt, and by the failure of magnificent I
• schemes uever intended to ctit ich them, are i
1 <!■ piived in a moment of their tidy resource.
, Abases of credit and excesses in speculation
i w ill happen in despite of the most salutary i
laws; no Government perhaps c.m altogether I
prevent them ; but surely every Government |
can refrain from contributing the stimulus that I
calls them into life. |
Since, therefore, experience has shown, that |
j to lend the public money to th.: local banks, is I
j hazardous to the operations of the Govern- I
| meat, at least of doubtful benefit to the institu- |
I tions themselves ; and productive <»f disastrous I
I derangement in the business and currency of I
! the country, is it the part of wisdom again to I
renew the connection?
It is true that such an agency is in many
respects convenient to the Treasury, but it is
not indispensable. A limitation of the expens
es of the Government to its actual wants, and 1
of the revenue to those expenses, with conven- j
ient means for its prompt application to the '
purnoses for which it was raised, are the ob
jects which we should seek to accomplish.—
The collection, safe-keeping, transfer and dis
bursement of the public money, cat), it is be
lieved, be well managed by officers ot the Go
vernment. Its collection, and, to a great ex
tent, its disbursement also, have indeed been
hitherto conducted solely by them; neither
National nor State Banks when employed, be
ing required to do more than keep it safely
. while in their custody, and transfer and pay it
I ut such portion at such times as the Treasury
. shall direct.
i Surely banks are not more able than the Go
i vernmeut to secure the money in their posses
sion against accident, violence, or fraud. The
: assertion that they are so, must assume that a
s vault in a bank is stronger than a vault in the
• Treasury p and Chat directors, cashiers, and
, clerks, not selected by the Government, nor
under its control, are more worthy of coufi-
• dence than officers selected from the people
; and responsible to the Government; officers
i bound by official oaths and bonds for a faithful
f performance of their duties, and constantly sub
. ject to the supervision of Congress.
r The difficulties of transfer, and the aid here-
> tofore rendered by banks, have been less than is
r usually supposed. The actual accounts show
> that by far the larger portion of payment is
, made within short or convenient distances from
; the places of collection ; and the whole cum
) bcr of warrants issued at the Treasury in the
> year 1834—a year, the results of which will, it
j is believed, afford a safe test for tho future —
; fell short of five thousand, or an average of less
f titan one daily for each State ; in the city of
- New York they' did not average more than two
. a day, and at the city of Washington only
four.
The difficulties heretofore existing arc more
ovot, daily lessened by an increase in the cheap
ness and facility as communication ; and it may
be asserted with confidence, that the necessary
transfers. as well as the safe-keeping and dis
bursements of the public moneys, ciin be with
' safetv and convenience accomplished through
the agency of Treasury officers. This opin
ion has been in some degree, confirmed by ac
tual experience since the discontinuance of the
banks as fiscal agents, in May kyst; a period,
which, from the embarrassments in commer
cial intercourse, presented obstacles as great
as any that may be hereafter apprehended.
The manner of keeping tho public money
si ce that period, is fully stated in the report of
the Secretary of the Treasury. That officer
also suggests the propriety of assigning, by law,
certain additional duties to existing establish
ments and officers, which, with the modifica
tions and safeguards referred to by him, will,
he thinks enable the Department to continue to
perform this branch ofthe public service, with
out any material addition either to their num
ber or to the present expense. The extent of
the business to be transacted has already been
stated; and in respect to the amount of mo
ney with which the officers employed would
entrusted at any one time, it appears that, as
suming a balance of five millions to be at all
times kept in the Treasury, and the whole of it
left in the hands ofthe collectors and receivers,
the proportion of each would not exceed an
average of thirty thousand dollars ; but that,
deducting one million for the use of the mint,
a d assuming the remaining four millions to
be in the hands ofone-half of the present num
ber of officers—a supposition deemed more
likely io carrespond with the fact—the sum in
the hands of each would still bo less than the
amount of most of the bonds now taken from
the receivers of public money. Every appre
hension, however, on the subject, either in res
pect to the safety of the money, or the faithful
discharge of these fiscal transactions, may, it
appears to me, be effectually removed by ad
ding to the present means of the Treasury, the
establishment by law, at a few important points,
of offices tor the deposite and disbursement of
such portions ot the public revenue as cannot,
with obvious safety and convenience, be left in
tho possession of the collecting officers until
paid over by them to the public creditors. Nei
ther the amounts retained in their hands, nor
those deposited in the offices, would, in an or
dinary condition of the revenue, bo larger in
most cases than those often under the control
of disbursing officers of the Armv and Navy ;
and might be made entirely safe, by requiring
such securities, and exercising such control
ling supervision, ns Congress may by law pre
scribe. The principal officers whose appoint
ments w’ould become necessary under this plan,
taking the largest number suggested by the Se
cretary 7 ofthe Treasury, would not exceed ten ;
nor the additional expenses, at the same esti
mate, sixty thousand dollars a year,
There can be no doubt of the obligation of
those who are entrusted with the affiirs of Go
vernment, to conduct them with as little cost
to the nation as is consistent with the public
interest; and it is for Congress, and ultimate
ly for the people, to decide whether the bene
fits to be derived from keeping our fiscal con
cerns apart, and severing the connection which
has hitherto existed between the government
and banks, offer sufficient advantages to justify
the necessary expenses. If the object to be
accomplished is deemed important to the fu
ture welfare ofthe country, I cannot allow my
self to believe that the addition to the public
expenditure of comparatively so small an
amount us will be necessary to effect it, will
bo objected to by the people.
It will be seen by the report of the Postmas
ter General, herewith communicated, that the
fiscal affairs of that Department have been
successfully conducted since May last upon the
principle of dealing only in the legal ciirrency
of the United States, and that it needs no legis
lation to maintain its credit, and facilitate the
management of its concerns ; the existing laws
being, in the opinion of that officer, ample for
those objects.
Difficulties will doubtless be encountered for
a season, and increased service required from
tho public functionaries; such are usually in
cident to the commencement of every svstem,
but they will bo greatly 7 lessened in the pro
gress of its operations.
.The power and influence supposed to be con
nected with the custody and disbursement of
tho public money, are topics on which the pub
lic mind is naturally, and, with great propriety,
Mfa 4ss & W IWW la fW .
I peculiarly sensitive. Much has been said on
1 them in reference to the proposed separation oi I
I the Government from the banking institutions ;
j and surely no one can object to any appeals or :
| animadversions on the subject, which are con
j sistcyt w it.li facts, and evince a proper respect
! for the iutelliger.ee of the people. If a chief
i Magistrate may be allowed to speak for him
. self, on such a point. I can truly say, that to I
1 me nothing would be more acceptable, than j
the withdrawal from the Executive, to the j
I greatest practicable extent, of'all concern in
the custody and disbursement of the public re
venue ; not that I would shrink from any res-
I ponsibihty cast upon me by tho duties oi my
i office, but because it is my firm belief, that its I
i capacity for usefulness is in tic degree promo- j
! ted by the possession of any patronage not ac
tually necessary to the performance of those
1 duties. But. under our present form of Gov
! ernment. the intervention of Executive officers
; in (he custody and disbursement of the public
money seems to be unavoidable and before it
can be admitted that the influence and power
of the Executive would be increased dispens
ing with the agency of banks, the nature of
I that intervention in such rm agenev nniot be
j carefully regarded, and a comparis l .:! must be
j instituted between its extent in the two cases.
The revenue can only be collected by offi
cers appointed by the President, with the ad
vice and consent of the Senate. Tho public
moneys in the first instance, must, therefore, in
all cases, pass through hands selected by the
Executive. Other officers appointed in the
same way, or, as i:i -’-ome cases, by the Presi
dent alone, must also be entrusted with them
when drawn for the purpose of disbursement.
[ It is thus seen that, even when banks are, cm
, ployed, the public funds must twice pass thro’
I the hands of executive officers. Besides this,
j the head of the Treasury Department, who also
I holds his office at the pleasure of the President,
I and some other officers of the same department,
I must necessarily be invested with more or less
power in the selection, continuance, and su
pervision, of the bank that may be employed.
■ The question is then narrowed to the single
point, whether, in the intermediate stage be-
■ tween the collection and disbursement of the
‘ public money, ths agency of banks is necessary
! to avoid a dangerous extension of the patron.
I age and influence of the Executive? But is it
clear that the connection of the Executive with
powerful moneyed institutions, capable ofmin-
■ | isteringto the interests of men in points where
! i they are most accessable to corruption, is less
liable to abuse than his constitutional agency
’ in the appointment and control of the few pub
-1 he officers required by the proposed plan ?
■ Will the public jioney, when in their hands,
' he necessarily exposed to any improper inter-
L ference on the part of the Executive? May it
• not be hoped that a prudent fear of [ublic jea- j
’ lousy and disapprobation, in a matter so pecu- ,
f liarlv exposed to them, will deter him from any J
’ such" interference, even if higher motives be I
found inoperaive ? May not Congress so re
gulate, by lav, the duty of those officers, and :
• subject it to such supervision and publicity, as j
■ to prevent tic possibility of any serious abuse i
' on the part of the Executive ? and is there i
' equal room for such supervision and publicity
- in a connection with banks, acting under the |
• shield of corporate immunities, and conducted j
1 bv persons irresponsible to the government and ,
• the people? It is believed that a considerate :
■ and candid investigation of these questions will ;
! result in the conviction, that the proposed-plan ]
• is far less liable to objection, on the score of j
■ Executive patronage and control, than any j
E bank agency that has been, or can be, devised.
With these views, I leave to Congress the
' measures necessary to regulate, in the present
f emergency, the safe-keeping and transfer of
f the public moneys. In the performance of con
. stitutional duty, I have stated to them, without
■ reserve, the result of my own reflections. The
■ subject is of great importance ; and one on
: which we can scarcely expect to be united in j
> sentiment as wc arc in interest. It deserves a |
• full and free discussion, and cannot fail to be j
• benefited by a dispassionate comparison of;
f opinions. Well aware myself of the duty of I
i reciprocal concession among the co-ordinate
■ branches of the Government, I can promise
I reasonable spirit of co-operation, so far as it
• can be indulged in without the surrender of
1 constitutional objections, which I believe to be
t well founded. Any system that may be adopt
, ed should be subjected to the fullest legal pro-
i vision, so as to leave nothing to the Executive .
, but what is necessary to the discharge of the [
, duties imposed an him : and whatever plan j
' may be ultimately estabished, my own part shall ’
■ be so discharged as to give to it a fair trial, and
) the best prospect of success.
i The character of (he funds to bo received and
) disbursed in the transactions of the Govern-
> ment,likewise demands your most careful con- |
sideration. '
There can be no doubt that those who framed
i and adopted the Constitution, having in imme
: diate view'the depreciated paper of the Con- '
• federacy—of which five hundred dollars in pa
: per were, at times, only’equal to one dollar in
, co i n —intended to prevent the recurrence of
similar evils, so far at least as related to ihe
> transactions of the iie.v Government. They;
i gave to Congress express powers to coin mo-
I ney, and to regulate the value thereof, and of
• foreign coin ; they refused to give it power to
• establish corporations—the agents, then as now
• chiefly employed to create a paper currency •
i j they prohibited the Spates from making any
thing but gold and silver a legal tender in pay
; ment of debts; mid the first Congress directed,
; by positive law, that tho revenue should be re-
■ ceived in nothing but gold and silver.
Public exigency at the outset of the Govern-
■ inert, without direct legislative authority, led
, to the use of hanks as fiscal aids to tho Treas-
• ury. An admitted deviation from the law, at I
:; the same period, and under the same exigency,
the Secretary of the Treasury received their
notes in payment of duties. The sole ground
F on which the practice, thus commenced, was
• then, or has since, been justified, is the certain,
t immediate, and convenient exchange of such
; notes for specie. The Government did mdied
• receive the incontrovertible notes of State banks
■ during the difficulties of war ; "and the commu
nity submitted without a murmur to the uue-
i qual taxation and multiplied evils of which
I. such a course was productive. M ith the war,
■ this indulgence ceased, and the banks were
> obliged again to redeem their notes in gold and
■ silver. The Treasury, in accordance with
. previous practice, continued to dispense v ith
: the currency required by the act ot 1789, and
i took the notes of banks in full confidence of
I their being paid in specie on demand ; and
Congress to guard against the slightest viola- '
. tion of this principle, have declared, by law,
; that if notes are paid in the transactions of the
i Government, it must be under such circum
: stances as to enable the holder to convert them
' into specie without depreciation or delay.
Os my own duties under the existing laws,
: when the banks suspended specie payments, 1
s could not doubt. Directions were immediate-
• ly given to prevent the reception into the Trea
sury of any thing but gold and silver or its
■ equivalent; and every practicable arrange
i meat was made to preserve the public faith, by
. similar or equivalent payments to the pub'ic
, cteditors. The revenue from lands had been
. for some time substantially so collected, under
the order issued by the directions ot my pre
. decessor. The effect's of that order mid been
I’ so salutary, and its forecast in regard to the in
creasing insecurity of Bank paper had become
, so apparent, that, even before the catastrophe,
I had resolved not to interfere wilh i ■ opera- ' 1
tion. Congress is now to decide whether the : :
revenue shall cut/iitiue to be so collected or j i
no*. ■ | i
'l'be receipts into the Treasury, of bard? notes, j
not redeemed ii: specie on demand, will not, I j i
presume, be sanctioned. It would destroy, with, j
out tiie excuse of war or public distress, that |;
equality of imports, and identity of commercial ! |
regulation, which lie nt the foundation of our
Confederacy, and would offer to each State a 1
direct temptation to increase its foreign trade, :
by depreciating the currency received lor du- :
tii'S in its porte. Such a proceeding would 1
also, in a great degree, frustra'e the policy, so I
highly' cherished, of infusing into our circula- '
iion a larger pioportion of the precious me
tnls ; a policy, th.: wisdom of which none can
doubt, though there may be different opinions
as to the extent to which it. should be carried.
Its results have been already too auspicious,
audits success is too closely iuteiwoven with
the future prosperity of the country, to permit
us for a momotit to contemplate its abandon
ment. We have seen, under its influence.our j
specie augmented beyond eighty millions; our]
coinage increased so as to make that of gold j
amount, between August, 1834, and Decern- I
her, 1836, to ten millions of dollars ; exceeding
the whole coinage at the mint during the thirty
one previous years. The prospect of further
improvement continued without abatement until
the moment of the &us; ension of specie pay
ments. This policy has now indeed been sud
denly checked, but is still far from being over
thrown. Amidst all conflicting theories, one
position is undeniable; the precious metals
will invariably disappear when there ceases to
boa necessity for their use, ns a circulating
medium. It was in s'rict accordance with
this truth, that whilst, in the month of May
last, they were every where seen, and were
cm rent for all ordinary purposes, they disap
peared from circulation the moment the pay
ment of specie was refused by the banks, and
the community tacitly agreed to dispense with
its employment. Their place was supplied by
a currency exclusively of paper, an-1 in many
cases, of the worst description. Already are
the bank notes now in circulation greatly de
preciated, and they fluctuate in value between
one place and another; thus diminishing and
making uncertain the worth of property and
the price of labor, and failing to subserve, ex
cept at a heavy loss, the purposes of business.
With each succeeding day the metalic curren
cy decreases ; by some it is hoarded in the na
tural fear, that once parted with, it cannot be
replaced; while by others it is diverted from
its more legitimate uses, for the sake of gain.
Should Congress sanction this condition of
things, by making irredeemable paper money
' receivable in payment of public dues, a tempo
| rary check to a wise and salutary policy will,
I in all probability, be converted hits its abso-
J lute destruction.
I It is true that bank notes actually convertible
into specie maybe received in payment of the
revenue, without being liable to all these objec-
■ tions, and that such a course may. to some ex
tent, promote individual convenience; an ob
ject always to be considered where it duos not
[ conflict with the principles of our Government
lor the general welfare of the country. If such
I notes only were received, and always under
< circumstances allowing their early presenta-
I tion for payment ; and if, at short and fixed
I periods, they were converted into specie, to be
kept by the officers of the Treasury, some of
j the most serious obstacles to their reception
j would perhaps be removed. To retain the
i notes in the Treasury would be to renew, un
der another form, the loans of the public H,otiey
to the banks and the evils consequent thereon.
It is, however, a mistaken impression, that
any large amount of specie is required for pub.
lie payments. Os the seventy or eighty mil
lions now estimated to be in the country, ten
j millions would be abundantly sufficient for that
| purpose, provided an accumulation of a large
I amount of revenue, beyond the necessary wants
lof the Government, be hereafter prevented. If
I to these considerations be added the facilities ,
| which will arise from enabling the Treasury
I to satisfy the public creditors, by its drafts or
' notes received in payment of the public dues,
it may be safely assumed that no motive of con
venience to the citizens requires the reception
ofbank paper.
To say that the refusal of paper money by the !
Government, introduces an unjust discrimina- |
tion between the currency received by it, and ]
j that used by individuals in their ordinary as-i
] fairs, is, in my judgement, to view it in a very ,
■ erroneeus light. The Constitution prohibits j
the States from making any thing but gold and i
silver a tender in the payment of debts, and thus ;
secures to every citizen a right to demand pay
ment in the legal currency. To provide by ]
| law that the Government will only receive its '
dues in gold and silver, is not to confer on it ]
any peculiar privilege ; but merely to place it
on'an equality with the citizen, by reserving to j
it a right secured to him by the Constitution.
It is doubtless for this reason that the princi
ple has been sanctioned by successive laws,
from the time of the first Congress under tiie
Constitution down to ihe last. Such prece
.l dents, never objected to and proceeding from
such sources, afford a decisive answer to the
imputation of inequality or injustice.
But, in fact, the measure is one of restric
tion, not of favor. To forbid the public agent
to receive in payment any other than a certain
kind of money, is to refuse him a discretion
possessed bv every citizen. It may be left to
those who have the management of their own
transactions, to make their own terms ; but no
such discretion should be given to him who acts
merely as an agent of the people, who is to
collect what the law requires and to pay the <
appropriationsit makes. Av hen banks notes i
are redeemed on demand, there is then no dis
crimination in reality, for the individual who
receives them may, at his option, substitute the
specie for them ; he takes them from conveni
ence or choice. When they arc not so re- I
deemed, it will scarcely be contended that ,
receipt and payment, by a public officer, diould ;
be permitted, though none deny that right to ]
an individual ; if it were, the effect would be !
most injurious to the public, since their officer ;
could make none of those arrangements to I <
meet or guard against the depreciation, wnich [ i
an individual is at liberty to do. Ner can in
convenience to the community be alleged as an
objection to such a regulation. Its object and
motive are their convenience and wellarc.
If, ata moment of simulatneous and unex- ;
pected suspension by the banks, it acids some
thing to the many embarrassments of that pro- ,
ceeding, yet these are far overbalanced by its :
I direct tendency to produce a wider circulation ;
of gold and silver, to increase the safety of
bank paper, to improve the general currency <
and thus to prevent altogethersuch occurrences <
and the other and far greater evils that attend
them.
It may, indeed, be questioned, whether it is
not for the interest of the banks themselves
that the Government should not receive their
paper. They would be conducted v. ith more
caution, and on sounder principles. By using
specie only in its transactions, the Govern-i
ment would create a demand for it, which j
would, tc a great extent, prevent its exporta
tion, & by keeping it in circulation, maintain a ‘
broader and safer basis for the paper currency, j
That the banks would thus be rendered more
sound, and the community more sate, cannot]
admit, of a doubt.
The foregoing views, it seems to me, do but :
fairly curry out the provisions of (hekJ’cderal
Constitution in relation to the currency, as far
as relates to the public revenue- At the time
that instrument was framed, there were but
three or four banks in the United States; and
had ihe extension ofthe bulking system, aid
the evils growing out of it. been foreseen, they
would probably have been specially guarded
against. The same policy which led to the
prohibitian of bills of credit by the States,
would, doubtless, in that event, have also inter
dicted their issue as a currency in any other
form. The constitution, however, contains no j
such prohibition ; and, since the Slates have
exercised, Ihr nearly half a century the power
to regulate the bus.ness of banking, it is not!
to be expected tbet it w ill lx: abandoned. The !
whole matter is now under discussion before
the proper tribunal—the people of the States. I
Never !>< lore has the public mind been so tho- |
roughly awakened to a proper sense of its i:n- j
portance; never has the subject, in all its bear. |
ings, been submitted tc so searching an inquiry.
It would be distrusting the intelligence and
virtue of the people to doubt the speedy and
efficient adoption of such measures of reform
as the public good demands. All that can.
rightfully be done by the Federal Government,
to promote the accomplishment of that impor
tant object, w ill, without doubt, be performed.
In the mean lime, it is our duty to provide
all the remedies against a depreciated paper
currency which the Constitution enables us to
afford, 'i'lie Treasury department, on several
former occasions, has suggested the propriety
and impoitance ofa uniform law concerning
the bankruptcies of e«-rjwrtrtit>ns, and other
bankers. Through the instrumentality of such
a law, a salutary check may doubtless be im
posed on the issues of paper money', and an ef
fectual remedy given to the citizen in a way' at
once equal in al! parts of the Union, and fully
authorized by the Constitution.
The indulgence granted by Executive au
thority in the payment of bonds for duties, has
been already mentioned. Seeing that the im
mediate enforcement of these obligations
would subject a large and highly respectable
portion of our citizens to great sacrifices, and
believing that a temporary postponement could
be made without detriment to other interests,
and with increased certainty of ultimate pay
ment, I did not hesitate to comply with the re
quest that was made of me. The terms al
lowed are, to the full extent, as liberal as any
that are to be found in the practice of the Ex
ecutive Department. It remains for Congress
to decide whether a further postponement may
not with propriety be allowed, and, if so, their
legislation upon the subject is respectfully in
vited.
The report of the Secretary of tha Treasury
will exhibit the condition of these debts ; the
extent and effect of the present indulgence ;
the probable result ot its further extension on
the state of the Treasury, and every other fact
necessary to a full consideration of the subject.
Similar information is communicated in regard
to such depositories of public moneys as are
indebted to tha Government, in order that Con
gress may also adopt the proper measures in
regard to them.
The receipts and expenditures for the first
half of ttie year, and an estimate ot those for
the residue, will be laid before you by the
Secretary of the Treasury. In his report of
December last, it was estimated that the cur
rent receipts would fall short of the expendi
tures by about three millions of dollars. It
will be seen that the difference will be much
greater. This is to be attiibuted not only to
the occurrence of greater pecuniary ernbar
rasments in the business ot the country than
ttIOSC Whi Hint? thm yi'tydiwod, miJ| uuiipe
quently, a greater diminution in the revinue,
but also to the fact that the appropriotions ex
ceeded, by nearly six millions, the amount
which was asked for in the estimates then
submitted. The sum necessary for the ser
vice of the year beyond the probabla receipts,
and the amount which it was intended should
be reserved in the Treasury at the commence
ment of the year, will be about six millions.
If the whole of the reserved balance be not at
once applied to ths current expenditures, but
four millions be still kept in the Treasury, as
seems most expedient, for the uses of the mint,
and to meet contingencies, the sum needed
will be ten millions.
In making tins estimate, the receipts are
calculated on the supposition of some further
extension of the indulgence granted in the pay
ment of bonds or duties, which will affect the
amount of the revenue for the present year to
the extent of two and a half millions.
It is not proposed to procure the required
amount by loans or increased taxation. There
are now in the Treasury nine millions three
hundred and sixty-seven thousand two hun
dred and fourteen dollars; directed by the act
of tho 23d of June, 1836, to be deposited with
the Stat ’s in October next. This sum, it so
deposited, will be subject, under the law, to be
recalled, if needed, to defray existing appro
priations; and as it is now evident that the
whole, or t'xe principal part of it, will be wan
ted for that purpose, it. appears most proper
that the deposite be withheld. Until the a
mount can be colleeted from the banks, Treas
ury notes may be temporarily issued to be
gradually' redeemed as it is received.
lam aware that this course may be produc
tive of inconvenience to many of the States.
Reiving upon the acts of Congress which held
out to them the strong probability, if not the
certainty, of receiving this instalment, they
haie in some instances adopted measures with
which its retention may seriously interfere.—
That such a condition of things should have
occurred is much to be regretted. It is not
the least among the unfortunate results of the
disasters of the times; and it is for Congress
to devise* a fit remedy, if there l e one. I'he
money being indispensable to the wants of the
Treasury it is difficult to conceive upon what
principle of justice or expediency its applica
tion to that object can bo avoided. To recai
any portion of the sums a'ready deposited with
the States, would be more inconvenient and
less efficient. To burden the country with
increased taxation, when there is in fact a
large surplus revenue, would be unjust and un
wise; to raise moneys by loans under such cir
cumstances, and thus to commence a new na
tional debt, would scarcely be sanctioned by
American People.
The plan promised will be adequate to all
fiscal operations, during the remainder of the
year. Should it be adopted, the Treasury,
aided by the ample resources of the country,
will be able to discharge punctually, every pe
cuniary obligation. For the future, all that is
needed will be that caution and forbearance in
appropriations which the dimmint’/ion of the i
revenue requires, and which the complete ac- |
qomplishmetit of great forwardness of many
expensive national undertakings renders equal
ly consistent with prudence and patriotic lib
erality.
The preceding suggestions and recommen
dations are submitted, in the -belief that their
adoption by Congress will enable the Execu
tive Department to conduct fiscal concerns
wilh success, so far as their management has
been committed to it. Whilst the objects and
the means proposed to attain them are within
its constitutional powers and appropriote duties,
they’ will nt the same time, it is hoped, by their
necessary operation, afford essential aid in the
transaction ot individual concerns, and thus
yield relief to the people at large in a form a
! dapted to the nature of< ur Government. Those
who look to the action of this Government
fur specific aid to tli ? citizen to relieve cm-
’ 1 barrassments arising from losses by revulsions
in commerce and credit, lose sight ofthe ends
for wheih it was created, and the powers
with which it is clothed. It was established
to give security to us all, in our lawful and
honorable pursuits, under the lasting safeguard
of republican institutions; It was not intend
ed to confer special favours on individuals, or
lon any’ classes of them :to create systems of
agriculture, manufactures or trade; or toen
i gage in them, either separately or in connection
I with individual citizens or mganized associa
tions. If its operations were to be directed
for the benefit of any one class, equivalent fa
vors must, in justice, be extended to the rest,
and the attempt to bestow such favors with an
equal hand, or even to select those who should
mosidcserv e them, would never be successful.
i All communities are apt to look to Government
■ for to 8" much. Even in our own country,
i where its powers and duties are so strictly limi
ted, wc are prone to do so, especially at periods
]of sudden embarrassment snd distress. But
. this ought not to be. The framers of our ex
! cellent Constitution, and the people who ap
j proved it with calm and sagacious deliberation,
; acted at the time on a sounder principle-
They wisely judged that the less Government
interferes with private pursuits, the better for
the General prosperity. It is not its legit'mate
object to make them rich, or to repair, by' direct
grants of money or legislation in favor of par
ticular pursuits losses not incurred in the pub
lic service. This would be substantially to
use the property of some.for uic . be.ri£fitx>l Oliv
ers. But its real duty—that duty, the perfor
mance of which makes a good Government
the most precious of human blessings-is to
enact and enforce a system of general laws
commensurate with, but not exceeding, the ob
jects of its establishment, and to leave every
citizen and every 7 interest to reap, under its
benign protection, the rewards of virtue, indus
try and prudence.
I cannot doubt that on this, as on all similar
occasions, the Federal Government will find
its agency most conducive to the security and
happiness ofthe people, when limited to the
exercise of its conceeded power. In never
assuming, even for a well meant object, such
powers as were not designed to be conferred
upon it, we shall in reality do most for the
, general welfare. To avoid every unnecessary
interference with the pursuits of the citizen,
will result in more benefit than to adopt meas
ures which could only assist limited interest,
and are eager'y, but perhaps naturally, sought
for under the pressure of temporary circum
stances. If, therefore, I refrain from sugges
ting to Congress any 7 specific plan for regula
ting the exchanges of the country: relieving
mercantile embar r assmcnt : or, interfering
with the ordinary operations of foreign or do
mestic commerce; it is from a conviction
that such measures are not within the consti
tutional province ofthe General Government,
and that their adoption would not promote the
real and permament welfare of those they
might be designed to aid.
The difficulties and distresses of the times 1
though unquestionably great, are limited in s
| their extent, and cannot be regarded as affect
ing the permament prosperity of the nationJM
Arising, in a great degree, from the transactions
of foreign and domestic commerce, it is
them that they have chiefly fallen. The
agricultural interest ha ,in many parts of -the j
country, suffered comparatively little ; and, as x
if Providence intended to display the muniffi- ,
cenco of its goodness at the moment of our
greatest need, and in direct contrast to the evils
occasioned bv the waywardness of man, we
i have been "Bfosvcff throughout cur extended
i territory with a season of general health and
uncommon fruitfulness. Tho proceeds of our
■ greart staples v, ill soon furnish the meat s of
liquidating debts at home and abroad, and con
tribute equally to the revival of commercial
' credit, —The banks, established avowedly for
its support, deriving their profits from it, and
resting under obligations to it, which connolbc
overlooked, will feel at once the necessity and
justice of uniting their energies with those of
■ the mercantile interest. The suspension of
' specie payments, at such a time and under such
circumstances as we have lately’ witnessed,
could not be other than a temporary measure;
; and wc can scarcely err in believing that the
I period must soon arrive when all that are sol
vent will redeem their issues in gold or silver.
i Dealings abroad naturally depend on resources JI
and prosperity at home. If the debt of
merchants has accumulated, or their
impaired, these are fluctuations always
dent to extensive or extravagant
trail.-*,ictioi’.. But the ultimate security of
! obligations docs not admit of question.
1 are guarantied by the resources of a country,
/ the fruits of whoso industry afford abundant
means of ample liquidation, and by the evident
interest of ov'-ry merchant to sustain a credit,
! hitherto high, by promptly applying these
> means for its preservation.
I deeply regret that events have occurred
{ which require mo to ask your consideration of
I such serious topics. I could have wished
i that in making my first communication to the
I assembled representatives of tnv country, I Lad
I nothing to dwell upon but the history of her
I unalloyed prosperity. Since it is otherw ise
' we can only feel more deeply the responsibility
I of the respective trusts that have been confided
I to us, and under the pressure of difficulties. .
unite in invoking the guidance and aid of the
! Supremo Ruler of nations, and in laboring
i with zealous resolution to overcome the diffi
] culties by which we are environed.
I It is under such circumstances, a high grat
ification to know, by long experience, that we
can act for a people to whom the truth, how.
ever unpromising, can always be spoken with
safetv ; for the /rial of whose patriotism no
emergency is too severe, mid who are suie ne
ver to desert a public functionary honestly la
i boring for the public good. It seems just that
they should receive, without delay, any aid in
: their embarrassments which your deliberations
j can afford. Coming directly from the midst
i of them, and knowing the course of events in
> every section of our country, from you may'
best be learned as well the extent and nature
i of these < tubarrnssments, as the most desirables
measures of tolief.
I am aware, however, that it is not proper
to detain you, at present, longer thin may bo
demanded by the special objects for which you
are convened. To them, therefore, I have con*
fined my communication : and, believing it
will not be your own wish to extend your de
liberations beyond them. I reserve till the usual
period ofyour annual met ting that general in,
formation on the state of the Union which the
! Constitution requires me to give.
M. VAN BUREN.
i Washington. 4th September, 1837.
rrcsideiit's Message and Central Bank.—■
I f the I’rosident’s recommendation to withhold
. tho last payment to the States of the Surplus
Revenue, is adopted by Congress, as we have
i no doubt it will be understood that it will cut
' ’ short the distributions now going on at tho
JI Central Bank. As the Governor was opposed
■ to the distribution of the Surplus to the States,
■ I bv Congress, we suppose he and his advocates
' I will congratulate themselves that it is suddenly
5 stopt. WiH the people of the co.inties who
have not received their quotas from the Cen4?
I tral Bank, congratulate themselves likewise, on
■ ! this auspiciou< event 1 Perhaps not.