Newspaper Page Text
tLETotit From the secretary of the trea*
SURY, ON THE FINANCES.
[CONCLUDED.]
Vt. SETTLEMENT WITH THE FORMER DEPOSITS BASKS.
Anoihar subject that appears to require tho C&rJv ac
tion of Conjrc*.-*, i*, the further indulgence Which it may
be proper to ox ten-l to such of the (iinae: deposits banks
os are still indebted to the United States.
The fiats which are suppose^ ^ fig necessary to aid
Congress in forming' a correct decision on this subject will
be fully submitted. The •j, t >rils to which those banks were
expo led, had caused tr -fie d epartment much solicitude for
several months bof" jro the suspension of specie payments,
and led to soi»\j precautionary suggestions which it felt
bound to to them, so far as appeared consistent with
the usi'.il principles of ba iking in this country, and not
estimated, by creating sudden alarm, to hasten the catas
trophe that has since happened.
Besides tho general cautions w th respect to tho excess
es of bank issues, and the dangerous consequences likely
to ensue, which were d -ttiled in the lau annual Treasury
report, several instances occurred where the course ot trie
business of some of the d -positnries appearing from their
returns to be injudicious, special letters of advice were
doomed proper, and were written. A rigid system in re
quiring additio tal specie was also pursued in cases of un
usual deficiency- In regard to the effect of these steps
o.u the banks, it affords the undersigned pleasure to add,
that, fro n the co nplstt >n of their s -lection after the de
posits act p issed, to the last return* before their suspen-
(iiou, a great reducti ,n in the cirrulatio i, as well as dis
counts of maiy of them, had taken place, and in several
cases a much larger proportion ot specie wa> kept on hand.
Indeed, considering tho extraordinary amount ot public
money paid out by them between Inst November and May,
amounting to n ar twenty million* more than their re
ceipts during the s im^ period, it is a fact highly creditable
to their prudence and ability that the .pecie of ail was re
duced only from about fifteen to thirteen millions ; and
taeir circulation, instead of increasing, fell front near for
ty-one to thirty-seven millions.
As a whole, their specie, compared with their circula
tion, c intinued to be almost as large in May a# in Nov ru
ber, It avenged more than one to three, or much more
than has been cu3to:nary with tho banks in t .is country,
and was over double the relative quantity held by ail tot-
banka in. England at tho same period, and was m propor
tion one fourth larger than in the 13a..k of England
itself. Their immediate means, compared with their
immediate liabilities, were somewhat stronger in No
vember than in May, but were at both period*, near
ly 1 to 2), or greater than the usual ratio in He best times,
of most banks which have a large anioa .t of deposites in
possession.
la this condition of things, the suspension of specie pay-
■Ttients by the deposits banks was an event Bat generji.y
-anticipated.
The policy since pursued by most of thorn has bees fa
vorable to ait early discharge of their engagements to tfie
Treasury, and to a resuinptioi of specie payments. Ma
ny have gradually reduced their diseou its and circulation,
as well as paid over much of the public deposite*. 1 iris
Aliy 1,3 more fu.lv seen in the table annexed, bmeo the
1st of May, their disc mats, as a w hale, have been re luc
about $ 20,333,770. their circulation $ 4,991,791, and
Uneir public deposits* $ 1 >.607,316, while their specle ba-
diminished less than $ 1,003,030. Of the eighty-six banks
employed at the time of suspension, ten or eleven are
supposed to have paid over all the public money which
was then in their p issession, to the cred.t of tho Trea
surer. In the custody of more than half the others, an
aTnrraTat3 gf than 5703.003 remai..* unadjusted. Se
veral of the rent still possess large sums; but many oi them
drive continu. d promptly to furnish such payments, from
time t> tim-, fir meeting the public necessities, tuat, ac
cording to tho last weekly .statement, the whole baiai.ee
lo his credit remaining n.ipiid in all of tnem was only
$12,413 041.
Tbs course adopted in respect to the deposites of dis
bursing officers, af ter the suspension of ^peoie^payments,
and with a view- to safety, as well as to eucourngiMiie ear
ly resumption oi specie paymeuts, may be seen more-i"ul.y
in the document annexed.
It was considered proper to proceed, and attempt.to
.withdraw all tho public money from the discontinued agents
as fast as it was wanted for public purposes, and as new
-and suitable depositories could be procured to receive any
thing obtainable be.'ond such amount. But w.iile the for
mer agents appeared to be secure, and to be making pro
per efforts to meet such calls, it seome.i more conducive
to the eventual safety ot the money, a.id more co.si .tout
with true wisdom and the convenience of the fr a u,y,
to refrain from unnecessary pro sec u io.is and costs, tin
t' v > L . ar Jv session of Congress which had oeen caned, i.i
part, for the consider tion ot tiiis subject. On the con
trary, when any of the bank* persisted in neglecting to
pursue tho prudent course of curtailment, and in ma-iug
reasonable efforts to discharge the dr.tits on them in
an "acceptable manner, the department considered it a du
ty, however unpleasant, to deliver their agreements and
bonds to the Solicitor of the Treasury for suit. This has
already been done i.i nine cases; in some ns a matter
of precaution, to obtain additional security beyond wiiut
had boon given; an l i.i others, to ta e tue preliminary
steps for an action against the sureties as well as the
.principals.
Some of tho additional banks rendered necessary to car
ry into effect one of the provisions of tae late deposite act,
have, on this occasion proved tae least prompt and effi
cient in m-ieiing their obligations. But tiiougn the losses
of a few may be severe, and considerable do.ay -,n iy arise
da discharging their engagements: and thougu u has been
prop -r, and has evinced a commendable slate of moral (feel
ing in many of them, to strike at the root of the present
•excesses in paper, by curtailing large.y both their issu. s
and discounts, and thereby to mike serious sacrifices; yet
the co idition of them all appears to bo such us wid, with
the collateral security taken i.i most cases, render the Unit
ed States probably safe against any ultimate loss. C in
sidering th_* wide-spread pressure of the times, wnfeh bail
involved some of the banks, as well as their debtors, in
extraordinary embarr issmeat*. 'J, n i the pub.io money,
as a general rule, had prev;.,u s iy Ih_.hu caned from them
on.y in m iie?;ue ;.mis, as needed for expenditure aud
transfer, it was not to be expected that several oi them
wou'.d be abie to pay over at o ice, uid in specie, the whom
of the large a uou.it then in their possession.
More cap cially was tab not to be expecied, when, from
thi great accumulat o i of deposites, tne specie of nil ot
them at the time of suspension, as well as tor many months
bef ire, though larger than the proportion held by most oiuer
banks, did not equal, and comd not, without making a sud
den and great change in tue practice under our whole
banking system, equal om.--liaif.of their indebtedness to
tho Government alone. It is presumed that a considera
ble poition of the money since, as well as formerly, paid
by the banks on transfers and drafts, has not been .remand
ed nor paid in spec e.
But no persons have been required to accept any thing
else, nor, according to the views of tne undersigned, comd
they be without a violation of law uni sound po.icy.
Tho drafts of the Treasurer for debts, wuen drawn on
hanks, and not discharged o i presentment, h ive, under
Instructions from this department, been o.te.. ta.ieu up i.i
its bohalf by the collectors and receivers, in order as much
as possible, to relieve the public creditor from delay and
Joss. New drafts when the first ones were not paid in an
acceptable ma mer, have also, in some c ises, been g.vea
on other depositories, aud have helped to promote satis
factory adjustments.
Since the discontinuance of most of he banks as de
positories, this d --p irtine..t has a.so tou.i.i itie use i.f dr f.s
made directly on receivers and colie. tors, veiy accepta
ble to the public creditors; and by the specie fortunately
then on hind, and siuee collected by the receivers, with a
part of what was before i.i the minr, and some occasion
ally supplied by a few of the banks and collectors, a large
amount of claims has been paid, ami the Treasury is
ready to pay others a* far as practicable, at points, and
in a manner convenient to mi .y. Bui till tne indebted
banks resume specie piyments, or increased collections
can bo ma le ia specie of what is due from t.iem a .d
from tho merchants, it must be obvious that tne department
hiwever anxious to pay ail the pub ic creditors and offi
cers i.i specie, when demanded, is unable to accomplish
so desirable an object.
This is one of the evils incident to the existing state of
the moneyed concerns of the country, and wliicn cannot
be remedied u dess C ingress furnish additional means,
until specie payments are generally resum d. So ne in
termediate losses, by a depreciation of hank notes, must,
therefore, fall o.i thus-*, whsth-T creditors or officer* of tne
Government, who consent to take t.iem ratner tuan sub
mit to delays in payment.
Hence it seems highly reasonable that the G ivernment
should hasten, as fast as possible, tne restoration of specie
payments, at least by its former fiscal agents who are still
ia its debt.
This v.-nuld put an eml to such losses. It also seems
proper that ttiass d -p isite hanks which nave not general
ly answered the dem l ids on them, but hive continu -d to
receive full interest o i the deposites tney b id loaned
out, shou.d be required to pay it on the s uns still re-
taine 1, and irnm the periuJs when they failed to fu.tii
their obligation* to the Treasury. It is m inif st tuat tue
members ot Congress, co ning from every section of tae
Country, would be the best judges of what further len.ty
or severity might properly be exercised towards t.iem;
gnd knowing more intimately the causes and consequences
of th,-' suspension of specie paymeuts by the banks in til. ir
respective 1 neighborhoods can decide with greater accura
cy whether a..' v indulgence couid hereafter he extend d to
them appropriate!' v * '"xcept ®-i the condition ot an early
resumptian of specie j*aymeats, and an allowance of inte
rest during any delay in their fiscal engagements.
With the moans of informativ’ ,u possessed by the under
signed, he doe4 not hesitate to ex,' ,r es* 11,1 opinion that it
should not be done without Ja eoropl*. Hnce **tth such con
ditions. As further evidence of the ije’ility cf ni ist of
them on this subject, it will be necessary ogty to ildvert
to the abstract of their lust returns, which has t>. *a previ
ously annexed.
¥rom the mode of doing business in the soutlnwratf hy
making much of their circulation not redeemable at home,
jk*Jt at distant points, and providing fir it tin-re by bills
ttf exchange, (*» many of which, during the past season,
bave failed to be paid,) the situation of several of the
banks there is least eligible, net only for an early resump
tion of specie payments, but fur a speedy and satisfactory
western and probably in the eastern UKd middle States,
if not elsewhere, tho ability to sustain such payment* ap
pears. by their returns, much greater than has been cos
tomary in this country. Their specie, compared with tbcti-
circulation, is as one to two, and on© to three; and .
immediate means, compared with their immediate liabili
ties, are over one to three. Hence it has been hoped that
the efforts which the banks were bound to make, would
lead in most places to the desirable events above mention
ed, without very long delay. The objection usually urg
ed against an early resumption, that ths unfavorable ba
lance of trade against this country woo Id, in that event,
cause some of the specie in the banks to be drawn out
and shipped, will, however true in point of fact, possess
much less force when it is con»iderod that the delay hi
therto has not prevented the export of specie. On the
contrary, considerable sums which were in ordinary cir
culation, have, since the suspension, been withdrawn, ami
a portion of them sent abroad, while their place is badly
supplied with depreciated paper. So happily adjusted,
however, are the laws of trade, even in tb*»:r influence on
the precious metals, that while 007 custom bouse books
show an export since the 1 uth of May last, chiefly to
England and France, of $ 3,703.320 of specie, they show,
daring the same tiny,* imports, ch iefly from other quarters,
of $3,140,020. Though the actual imports and export*
have both doubtless exceeded these amounts since that
period, and tile ratio of diff< retire has been somewhat
greater, yet the total drain has been much less than many
have imagined, and produced less effect on ibe general
ability »f the coUutlry and the banks to have specie payments
resumed and successfully sustained. Congress having
power to pas* a bankrupt law, it would be worthy of con
sideration, if the power be ever exercised, whether all banks,
and in any event, as recommended by Mr. Dallas and Mr.
Crawford, all employed by the Treasury, should not fee
subjected to its provisions, ai d, on any important and de
liberate failure in their pecuniary duties, be compelled at
once to close their concerns.
IS respect to the banks in the District of Colombia, as
well a* other* connected w ith the General'Government, it
s ems desirable that rbe measures adopted in relation to
them, by Congress, should have a strong tendency to en
courage the earliest resumption of specie payments which
is practicable and safe, T or this purpose, little doubt can
exist that while thoso measures will ho the most salutary
wilieh shall evince a due tibera ity and forbearance to the
extent really required by tho crisis, they sh«>od, beyond
that, he rigorous in exacting the adoption of such steps as
are sanctioned by the sound principles of currency and the
public Ta ta- They wi.l -then help, at an early d*y, to re
lieve the community, as well ns tbe Treasury, from a
.••o.id.tiou of t.ic circulating medium, which so far as it
cinsisis of bank paper irredeemable in s'pecie, is one of
.the worst scour res which can be inflicted on society. It
is no less hostile to the best maxims of political economy,
than usually subversive of every just sense of both moral
aud legal obligation. •
vn. os the Monet receivable for dues.
Tho kind of money or currency receivable for public
dues, is another embarrassment, concerning which legisla
tion has been deemed proper by ma .y. A change in the
existing practice has been requested by others, without le
gislation. But, 6i.ice the suspension of specie payments
by the banks, no change, which would sanction the receipt
of bank paper not redeemable in specie, has been thought
either prudent or permissible by this Department. Nor will
such an ene bo adopted without the express direction of
Co igress.
Believing that specie is the best standard, and the only,
one contemplated by the Constitution, for the public re
venue and expenditures, as well as for the value of contract*
and property, every departure fro.n it for those purposes is
deemed by tbe u .dersigned pernicious, if not unconstitu
tional. The question as to the expediency of using anv
o her in dium for a currency, is of a different character,
an 1 more complicated. But the ruinous consequences of
a resort to’ continental money, bills of credit, or any species
of paper not redeemable in specie, and which had been
developed in our own experience, as well as in the sound
est theories of political economy', were uiidoai.tedfy a prin
cipal cause for those rigid provisions in the Constitution'
connected with the currency. They restrict any State
from issuing mere “ bills of credit,’'from making any thing
a tend. r “ exc -|.t eo!d and silver,” or passing any law
‘•impairing the obligation of contracts,” as well as confine
11 Congress alone ttie powei “ to coin money” and “ regu
late the value thereof.” The exercise of this last Dower,
manifestly relating only to metallic money, appear-: to re
quire merely the coi mgeof a sufficient supply at the mint,
and in convenient d -nominations for all necessary purpos
es, and of such an intrinsic value, as, while preventing it
from being depreciated on the one hand, should, on the
other, not bo so underrated as to cause it to be too readi
ly exported, or melted down for use in manufactures.
The whole amount necessary for public .payments has
boon much misapprehended. Without a surplus in the
Treasury, it would seldom exceed eight or ten inilliej,.*
d .liars, even if no evidences of delit, or any kir.i ))t mipcr
money, were receivable. Like a running •'', rt > an) . ,h e coin
whi-‘h fl >W3 in as constantly flows out , vithout m ,j ch accu _
mutation; one dollar helping t-, ^H-rtorm, in a single year,
the -service of payment p_ j re-payment numerous times,
l.-d -ed, the people - Jl (he whole United States do not, in a
sound state 0* ousiness and prices, need over one hundred
and te-t r.uiljons of an active circulating medium for all
tnoir currency. 1 his would be a larger proportion of cur
rency to 011 r present population than the average has been
from the adoption of the Constitution; and, if un exclu
sive metallic currency could be deemed desirnklo, would
require on y about thirty millions more than the spec.e
which is supposed now to exist in the country. But the
present quantity of specie being divided pretty equally be
tween the hanks and individuals, not half of it is in active
circulation; and. unless it becomes increased, and much
more equally diffused, some paper is, of course, necessary
to prevent a sudden revulsion in prices and values, and to
supply a suffic ent circulating medium for the legitimate
purot the States and the people. Some paper will,
probably, always be found convenient for commercial ope
ra-ions. It would, therefore, be invidious, if not unautho
rized, for the General Government to deprive the States
of any supposi d advantage in the use of it, so far and so
long as they may deem pr »per, or otherwise to interfere
with their course, in relation to it. except to enforce the
present constitutional prohibition against issui g any bit t
of credit, or making any thing a tender except gold and
xilver. Care, however, must be employed, incidentally,
to avert, as far as possible, any evil influences which migut
otherw i-e be exercised over our own fisral operations by
the different local policies pursued on a subject of so much
delicacy, hazard, and difficulty."
The power which Congress may possess to legislate,
with a view of furnishing a paper currency of any kind for
the ordinary uses of the community, or of regulating, in
anv way, domost e exchanges, is not entirely clear, nor well
defined. Whatever may be its just extent, it seems sel
dom, if ever necessary to be used, whi e the States retain
such a wide and undisputed authority over banking; und
w-’iile the local institutions, as well .vs private bankers,
h re no less than abroad, are generally so competent to ef
fect exchanges. Such a power is not expressly conferred
in the Constituti >n, nor doe- it seem to be implied, unless,
in the execution of some plain grants, it mav become pro
per to be exerted on any emergency, and without using
means other .rise forbidden, unwarrantable, or inexpedi
ent.
In regard to exchanges, it is believed that seldom, if
ever, h is any G ivernment,'however unlimiicd its authori
ty, considered it wi-e to prescribe special regulations for
effecting them. Su-h a Government might well feel em
powered “to regulate commerce with foreign nations,” or
between its own States, if it had any; but to regulate ex
changes between inlhi Inals, would, in most cases, be just
ly deemed arbitrary. U11 the contrary, the sound princi
ple* of trade seem to require as little interference as pos
sible with fixing tbe price of commodities, or the mode and
medium through which they shall be interchanged. Those
principle* wou.d only yield adequate protection or securi
ty, furnish facilities appropriate and authorized, and estab
lish a good standard of value. Indeed, the balances of in
debtedness between different sections of the country, if left
to work out their natural consequences on the rate of ex
changes, will usually, as they arc now doing, correct ex
cesses in business in unv quarter, and be self regulators, far
superior to any officious and minute legislation. The rate
merely for exchanges can seldom exceed the expense of
transporting specie bet ween uny two places; und, if sur
passing that, the excess must arise from what Government
h i* little power to cure—that is, from the difficulty in ob
taining money where indebted.;ess is greut, interest high,
and credit impaired.
In regard to the currency which is most suit&bie for pub
lic purposes, whatever may be the authority of the Getie-
rd Government to make or adopt a paper one. in full or in
part. it is dilfi -ul to perceive why, alter having established
specie us a standard, having forbidden any thing else to be
made a teoder, a id having succeeded in encouraging the
introduction of a supply of it into the country, very ample
for all fiscal purposes, it should expressly dispense with its
employment as the most usual medium lor thoso purposes.
The fundamental acts ol Congress as to the payment* for
d itics and lands have not made any exceptions in its use,
or provided any substitutes, except the “evidences of the
public debt.” Any exceptions allowed ought certainly ne
ver To p -rmit auy thing except specie, to be paid out as a
rightful tender by the United States; and tnis princip.e
ha» been a.ways strictly observed. But by constructions
adopted carlv in this department, and, subsequently, by the
charters to the two United States Banks, as well as by an
uppar nt sanction in the joint resolution of 1816, different
substitutes of note* issued by those and State bunk* have
at d iff rent times and under d.liferent modifications been
permitted to be received in payment. These, however,
have been allowed only when regarded as a clear equiva
lent to specie, by being readily convertible into it, and by
being recommended by some superior convenience or utili
ty, as well as by great security. A* specie likewise com
bines safety, uniformity, general use, sound theory, and-
almost universal experience in favor of its common employ,
ment, the framer* of the Constitution doubtless believed,
a*' ba* the uniform practice since, tliat all substitutes
uf paper, a* they have less intrinsic value, though they of
ten, by smaller weight or bulk, possess some qualities of
greater ei/nverdenca tor certain uses, should never be per
mitted to be forced on eithef the Government or the com
munity without their express consent, A< they depend
also on credit for thtir worth, it must be bad policy to
costntcnaitce them for either public or private usej where
a^iu*t;neas oT their debts, le dig Gevyrogpe&t, Bat in tbp their credit dee* nof rest eg undoubted security, or to en
courage such small denominations of them as would be em
ployed by those classes in society whose business is of a
kind which cannot be essentially promoted by tbe sohsti-
tute*; whose profit is little or nothing di rived from them;
and whose losses, where depreciations occur, cannot be
borne without distress.
Another general objection to every substitute not restiog
on an equal amount of specie in pledge to redeem it, which
was the original idea ot a Bauk of issue, is, that it tends
to dispense with the necessity of specie, in connection with
the currency, and thus, by converting more of it into an ar
ticle of trade, expel it from tbe country; while a circular
ting medium is introduced instead of it, which is usually
less safe, and often tempts to ruinous expansion* in issue*
a* well as business, so as to cause great fluctuation* in pri
ces, unsettle the value of property and contracts, and some
times strip from honest industry, in a moment, the bard
earnings of years.
Besides these, a special difficultv, in the use of *ny other
substitute for public purpose*, is tho procrastination, dis
appointment, and embarrassment w htch, in case of its de
preciation, are .sometimes occasioned l.y it to great nation
al measures, as well a* the discredit thus cast upon the wis
dom of the Government, for regulating its fiscal afiair* in
stich a manner as to be Unable to discharge punctually its
engagements, and for tbe exhibition of an example so
mischievous to both individual* and nations-. Another dif
tiCHlty in this country is the want of equal value, at differ
ent places, in any other, when compared wtfh the standard
of specie, and the virtual violation which its receipt for
duties may thns cause of the spirit of that part of the
Constitution requiring all import* to be “uniform.” Nor
can these two last difficulties bo always entirely overcome
by the n*e of such paper, or any other, thimsk redeemed
in specie, and on deroa -d, if it he taken at a distance from
the place -of its redemption! Bat. in the Admiatetration
of oUr fiscal concern#, it has always been very desirable to
avoid the want of uniformity, and the delay or expense,
and sometime* the loss, incident to the receipt for lands or
duties of such note* if redeemable at a distance, and,
which then Wotild sometime* occur before they could be
converted into specie, or such money as the public credit
or was bound or willing to accept. In order, therefore, to
prevent those injurious consequence*, one mode has been
to accept no Stute Bank notes whatever for public-doe*. W*
is now, and sometimes heretofore was, the practice "in res
pect to lands. Another ha* been, to permit none to be
taken except such as, under permission of the Treasury
Department-, the collecting officer* or the public deposito
ries were wiping at once to credit as specie.
I n Our early operations, for pin poses of facilitating "re
mittances to the Treasury, quite as much as for accommo
dation. to others, collectors were instructed to receive cer
tain State bank notes, payable near the scat of Government,
and which were to bo credited as cash when forwarded by
mail, or otherwise to the Treasurer. The justification oi-
fered for this course may be seen in a report from this de
partment in April 1790. The situation of the country,
however, a* to ease in communication, facility in exchang
es, and tho nearer location of many points of collection
to those of expenditures, has since undergone such great
improvements, a* for a long time to have rendered the re
ceipt of notes to aid in public transfers seldom necessary,
and almost entirely disused. Another mode adopted by
Congress has been, to render tho receipts of the noteaof
Stale Banks, for any purpose less material, by .providing
those of a bank chartered by tbe General Government, and
making these last, by law, receivable for all public dues.
But-this mode lias ceased; and the legality as well as
sound policy of tbe practice to receive ' the notes of State
bunks for any .public dues, whether done With a ‘View to
fiscal or general convenience, and though under all the
strict limitations before mentioned, has been questioned by
some. Others have considered any limitation whatever,
by either the Executive or this department, os not justi
fiable since the joint resolution of 1816. It is, therefore,
respectfully suggested, that a strong propriety exists for
Congress to legislate more explicitly on the whole subject.
It may be proper and useful to add, that as most of the
duties on imposts have been discharged in checks on the
bank where the bonds were deposited for collection, or in
its own notes, and seldom in those of banks at any dis
tance, little embarrassment has-ever arisen concerning the
payments for duties in bank notes. But, in taking them
for la ds," the remote situation of the purchasers, the re
ceivers, and the banks, has generally been such that fre
quent difficulties and changes in practice have occurred du
ring the period while the United States Bank and its
branches, as well as the State banks, were employed as de
positories. In our mixed system of a currency, and one *0
long and so deeply -interwoven with the business of tbe
country, it was very inconvenient entirely to avoid, and at
the same time occasi>, ua [ly dangerous to permit, ta ingthe
bills oi any St ity. bank for lands; an i toe receipt of such
notes was obk^J ( U l K , either so restricted as to prove of lit
tie corivy 1 ( 0 |jj e community, or a risk was incurred oi
mure partial arrangements being made, and some ultimate
injuries sustained by the 1 reasury.
Under a i these circumstances, the course least liable to
strong objections appears to bo for Congress to prescribe
some specific regu.aiions on the whole subject.
This could be effected by direi ting what alone appears
safe, and wnati* understood to bo the practice in both En
gland and France. It is, that the bills of 110 1 cal banks be
taken, which shall not, from the near location of the bank,
'.e equivalent, to specie; be able to be converted into spicie
at very short periods by the receivers aud collectors, so as
to pay the public creditors legally, if demanding specie;
and be thus accounted for at pur, and without expense to
the Government. Another advantage from this course
would be its salutary eheck on over-issues by the neighbor
ing banks.
The occasional convenience of a sound paper currency
for various purposes, whether national or individual, such
as large payments, distant remittances, exchanges, or tra
velling, is highly valuid by some, and, where gold does
not circu.ate, is often very ronsideruble. But the difficul
ties in keeping it sound, the hazards und losses incident to
its use, and w hich have already been explained, are trou
blesome. Should Congress determine that it is proper to
furnish by its own authority, and for the purposes before
mentioned, some paper medium, of higher character and
other than what now exists, in private bills of exchange or
notes of Slate banks, uo doubt exists that any benefits w liich
may occasionally be derived from its employment can be
readily secured, without treading on the debateable ground
of either the power or the policy of chartering a national
bank.
Certificates, not on interest, but payable in *pecic to
bearer or order, as well as being receivable for uii public
dues, could be an horized to bo given in payment to tbe
public creditor, whenever preferred by him, aud sufficient
specie existed in tbe Treasury. This kind of paper wouid
lie very convenient in form, and would differ little from the
drafts now in use on Banks, except being drawn on a
known specie fund, and expressing on its face not only this,
but its being receivable in the first instance for all public
dues. It would possess the highest credit attainable in so
ciety.
As & ^practical illustration of their probable utility and
convenience, even the drafts, though exposed to several
disadvantages which would not exist with the certificates,
arc near the pur of specie, aud furnish such facilities for
large paymeuts and distant remittance* that the amount of
them, on both Banks and collecting officers, kept out uure-
turued, lias increased within a few mouths from the usual
aggregate of aLoul two millieus to nearly four and a half
million*.
II the de iiand for such paper increased, public and pri
vate convenience might be promoted, und au equal quantity
ot specie at the same time preserved in the country, by re
serving for this purpose, trom auy accumulation in the
1 reasury. a sufficient sunt, and by placing it at a few im
portant and convenient points, to render a greater number
of ccrtificati s redeemable there with the very coin,
whose representative" they are intended, aud honestly ought
to be.
All the advantages of these certificates could thus be fur
nished, by merely paying'them out to the public creditor,
when more desirable to him than specie. But no loans ot
them ap|>ear advisable, nor uny bank incorporation, bauk
officers, _ or bank machinery whatever, in connection with
the subject. They would combine the most important re
quisites appertaining to any paper currency—such as the
greatest security, an entire sj>ecie basis, and the unity of
all issues in one body ; while the control over these last,
which it is so very desirable to preserve independent, would
be placed and regulated by law, so us to prevent any in
terested or injurious excesses. 1 he whole risk would be
Ihe loss by casualty or unlaithfuluess of auy of tue specie
that was held to redeem tne paper, and which, as welt as
the expenses, would probably be in part remunerated by the
loss of certificates before tuey are returned. If the resi
due of the ex|ieuse should constitute any considerab.e ob
jection to the system, it couid bo fully obviuted by a mode
rate and fixed premium for ttie cenincates, either when is
sued or redeemed,.
Tne common drafts of this department, in their present
convenient tbrin, possesses another advantage, w hich wouid
sometimes be imparted to the certificates. When used at
places against which the balance of trade exists, but drawn
on pluces in whose favor it is, the former do uow, and may
hereafter, not only facilitate esssentiuiiy the domestic ex
changes, but, at the same time, supersede numerous bank
transfers, and the more expensive transportation of spe
cie itself.
The mint certificates, beretotore given on the deposite
of bullion and specie, for coinage might easily be made
running to bearer or order, aud receivable for all public
dues ; and, in that way, w-ouid contribute to the same desi
rable ends.
The present branches of the mint, if not numerous
enough, i.or situated at convenient places for tho receipt of
specie and bullion for this purpose might be aided by two or
three agencies, instead of more expensive new bra .ches, at
points favorable to the interests of tbe mint and of the com
munity.
It must be obvious that tbe paper of a °y Bank will be
less safe and useful in being received for public dues
in proportion as it may want such solid securities
und foundations as the certificates before described. But
it the notes of Stale bank* are made receivable for such
dues, under certain limitations like those which have been
explained, the other most desirable guaranties for their
safety, whether looking to any use of them by the General
Government, or to the durable interests of tbe States them
selves, seem to be for the latter, first, to impose on the ex
isting banks, so far as lawful, tbe checks mentioned in a
subsequent part of this communication, They could next
authorize very few banks hereafter, except those 0.f mens
discount and deposite | and where the power of tasking
■aner Issues te past e* money is added a power to sovere
ign in its character, and so indispensable to be vigilantly
guarded, could require a large proportion ol specie to the
circulation nnd deposites to fee kept on hand, and. fo ad
dition, have tliefeith and security of the state pledged to
indemnify the community, as, in the rase of tbe above nam
ed certificates, wonld be pledged those of the General Gov
ernment.
This would greatly increase the caution and watchful
ness of all concerned, and could be done by special laws
lor that purpose, or by allowing no new banks hereafter,
except State Banks so organized, or by requiring Stocks
to be owned by all tbe banks, and lodged in trust to the
extent necessary, with the specie on hand, to secure the im
mediate redemption of all the bills issued, and all the de-
posites payable on demand. Anotln-r kind of security be
yond what now generally exist, would be, never to permit
ileposites to be received, payable on demand in specie, (a
practice so very daneerons to the bill holders,) except in
the case of special deposites kept for a moderate compen
sation. The only other description of security which is
likely to prove in any degree efficient, seem* to be of a pe
nt 1 character, either by extending the provisions of a bank
rupt law to all banks, as before su^gesti d in respect to
such as may be fiscal agents, or by allowing all dep-vsitors,
public or private, and all bill holders, not only a large in
terest, but severe prosecutions against tbe directors alter
any deliberate omission by banks to discharge their duties
in the manner provided in their charters and contracts.—
The paramount object in a 1 such- provisions should, ol
course, be to gnaid against abuses, and reform existing
evils, though, in some instances, the case may have become
sti desperate as to require even amj u ation to save life.——
Every thing else concerning bank paper is supposed to be
long to the wisdom and sound discretion of tbe #evera
States as they may prefer from time to time, to create ai d .
■employ it. Within tbe co.istitrttional limitations, and as ;
soon as deemed expedient by any oi them, specie alone,
or paper, or a mixed medium of both, as considered pre
ferable by each for its own purposes, can he, it it be not
now established. At the same lime it is hoped and believ
ed that no wish exists in any quarter to prevent, but rather
a deep and general anxiety, like that, evinced by Congress
"the Executive, and this department, for some years past, to
■encourage the same sound currency, for the uses of the
people and the states, a# -for the fiscal Operations of the
General Government.
Vlll. SOME GENERAL CAUSES AND REMEDIES -OF THE PRES
ENT EMBARRASSMENTS.
In conclusion, it is ih- intention of the undersigned not
to advert to the chief cause* rif the recent calamities except
so far as they are connected with our financial condition
and as appears necessary to iudicatc, briefly, a ‘few reme
dies by means of general legislat ion.
Without doubt one of tliose causes was the over-produc
tion "of cotton, coupled with the large and sudden depreci
ation in its price.
The whole product, though before-so great, had, within
three years, been increased probably more than one hun
dred millions of pounds, so as to exceed in a single year
the enormou* "quautitv of live hundred and forty millions
of pounds. The fall of price was such, as on that quantity
would make a difference in its value of nenr forty million*
of dollar*. The occurrence of this fall, however, was nt
such a period of the "year a* not much to effect over half
trie last, crop; but the violence of the shock, though thus
lessened,"Stilloccasioned a loss to an appalling amount.—
The fall was chiefly consequent upon the over production
and the abrupt withdrawal of foreign credit, combined u ith
some other "circumstances which need not now be particu
larized. The over production originated partly, like most
other excesses here, from an extraordinary extension of
credits and of bank issues, and partly from keeping open
the sales of public lauds to ail persons and nt the former
low prices, after other articles, including cotton and lands
had suddenly risen much in their nominal value. Under
this templing state of things, those sales wereexorbitantlv
enlarged, till they amounted to over twenty millions of
acres in a year, when not more than three or lour millions
were probably necessary; and not so much hail before been
requisite annnally, to meet the natiintl demand for new
public lands for raising cotton, and for all other kinds of
agricultural employment. But this excess in sales, so un
expected and ruinous, can. it is believed, be averted here
after, whenever they are likeiy to go beyond a desirable
amount, by passing laws which shall confine them to actu-
ul settlers, or increase the price to others. Tbe same mea
sure, with other remedies hereafter suggested for some
other existing evils, will help t» correct future excesses in
the production ol the great d mestic staple of the
Union.
Another of the causes of the present emlmrassments
was the unprecedented quantity of foreign goods imported.
By stimulants to overtrading, such as very extended and
often renewed credits abroad, ns well as nt home, so treach
erous in appearances of prosperity those importations were
dangerously swollen" to" the amount of'almost two hundred
millions of dollars a year, and thus constituted un excess
over our exports of about sixty millions, ai.d involved
the country in a foreign debt, merely commercial, whose
balance against us, after nil proper deductions lor freights
profits, and similar considerations, probably exccedtd the
aggregate of $30 000,000.
That excess, so little anticipated and so indiscreet, the
system of credit formerly in use, nnd better regulated
would have seasonably prevented, by requiring an early
adjustment of balances, and, (bus turning the foreign 1.1-
changes against us, would have stopped many exitava-
gances both in trade und bunk issues.
But stimulated aud unrestrained, as before described, it
increased tbe duties some millions beyond vthat a prudent
though prosperous state of trade was likely to produce,
and cambini d with some other causes, has ovei whelmed,
the mercantile interest with many of those disasters und* r
which it has suffered so severely the past season. From
many of these, no just legislation ran now aflord much re
lief. Nor could any legislation heretofore have prevented
severe revulsions from this source, except by imposing
checks on inordinate credit and banking, ns well as on sud
den nnd large expansions and contractions in l-auk issues,
and by that further reduction of the tariff, which bus been
so strenuously urged for two years past to be adopted,
whenever our fiscal condition evinced that the whole of the
accruing duties were not needed for public purposes. Be
cause tlie great surplus, forced inlo the Treasury by the ex
cesses in the sales of land, and in duties on imports, not be
ing seasonably withdrawn, either by equivalent appropria
tions, or further reductions in the current receipts through
new laws or by investments, ha* undoubtedly contributed,
through the loan of ir "while in deposite, to sustain in some
degree, if not produce, the spirit of overtrading. That
surplus was often depreciated ; and the only sound preven
tives still appear to this department to be. the measure* be
fore enumerated for preventing its accumulation. And after
it had uiidesignodly happened, the widest disposal of it was
supposed to l>e, to expend it, as fast as useful, on proper
objects of a public character; and, in the mean time, not to
leave it in the deposite banks but to invest it in state slocks
as a provident fund, to ri main both safely and profital.ly
till wanted to aid in meeting current expenditures or extra
ordinary contingencies.
The undersigned regrets that he was not so fortunate
in sustaining his opinions concerning the transient and
fluctuating character of the excesses in our revenue, as to
have received, the concurrence of Congress in relation to
those cautionary provisions formerly recommended by him
for meeting the revulsions, and contingencies, which he
supposed incident to them, as well as to our financial sys
tem generally. He is, at the same time, aw-are that the
deposite act, so far as it placed a part of the public money
with the states for safe-keeping, and the Treasury circular
issued by the direction of the Executive as to the kind of
money receivable for public lauds, were intended, among
other things, to obviate a portion ot tbe evils connected
with those excesses. Nor does he entertain any doubt
that they both contributed ut first toawaken caution amoug
the more considerate, and to excite strong suspicions, ii
not convictions, in prudent minds, us to the great extrava
gances of credit into which the community had rashly
plunged. But after those measures had accomplished
these and similar benefits with a portion of the communi
ty though others still felt justified in anticipating a continu
ance of surpluses and distributions, the subsequent influence
of either the act or the circular, in checking tne threatened j
mischiefs, is believed, in most cases, to have been overrat
ed.
The operations of tbe deposite act, in supplying deficien
cies of revenue, by a recall "from the States, however well
intended, will probably prove very deficient. In some
other respects they have, by first requiring to be speedily
collected and subdivided among more numerous l amts from
ten to fifteen millions of dollars, and then compelling,
within the short period of nine mo.-itna from the first ot
January last, another collection and transfer of nt atuy flir
ty millions more, and much ot it trom the merchunts. and
to places not situated in the usual channels of trade or of
large fiscal operations, unquestionably aggravated many of
the distresses which had their principal origin in othei
causes. Those operations necessarily aided topioduce the
derangement that occurred in the domestic exchanges, and
imposed a task on the banks, unprecedented lor its amount
and difficulty. By converting suddenly into demands for
specie very large sums, most of which were before mere
credits, they also hastened, if not increased, the loss of
confidence in banks that has since *0 widely impaired their
character and usefulness.
Another, and the last general cause ef the present em-
barussmenU which will be noticed, as having much connec
tion with our financial affairs, has been an unnecessary aud
injudicious increase of hank capital, discounts, aud i-sues.
A similar increase, however this may have been influenc
ed by the lar ,e temporary deposites of public money made
with banks and States, and by the causes before alluded to
has happened in some foreign countries, as well as here,
during the same period, from other great commercial and
momentary impulses, that are permanently connected with
all papfer systems not founded entirely upou specie. These
impulses have operated in some measure independently 'pf
several transient and local causes, whose effects bare, by
many been much exaggerated, it is probable that they
never can be properly controlled under such a system of
expansive credit, while the individual directors of much
oi that credit have so little separate legislative restraint
placed over their conduct, and have private interest at
stake, which, in the pursuit of immediate and large profits
must usually possess a strength so superior to that of
any sense of general duty to consult tbe public security.
The amount of circulation, which existed in the early
part of the last year, had increased thirty or forty millions
of dollars in only 3 yearq. It continued to expand for some
month* afterwards, and h> die last annual report was
considered likely to prove ruinous to steady price* ; to
surround with danger every species of simi.d trfide : aud
not to be susceptible of that reduction to proper dimension*
which was necessary and soon iw vitab e wit hoot probably
producing some of the wide spread sufferings which bav»
since happened. The constitutional power of the General
Government, to check such evils, except, a* I eforc indicated
and except incidentally, through tlie kind of money it can
and should permit to be employed in If* revenues and ex
penditures, is apprehended to be limited. Thu ugh the
latter, it may be useful to discourage, as of late y* ars, has
been attempted by Congress as well as the Executive, fb»
dangerous issues of small bills, and, ii.deed paper emis
sions of any kind, which are not “ paid on demand in gold
or silver coin at the place where issued, und shall not be
equivalent to S|iecie at the place when- offered, and ronver-
table into gold or silv- r upon tbe spot, at tbe will of tlie
holder, and wit! out delay or loss to him.” For tbe like
purpose, ir may likewise continue inflexibly to countenance
for smaller payment*, and in tbe business of society not
particularly commercial, a metallic currency, which is n<»t
liable like bank paper to sudden fluctuations aud great loss
es. A further wise step would doubtless be, to refrain to
make by its own acts, any addition to tbe amount ot bank
cnpitul already too gr at; and to rely on bank puper as
little as practicable, when uKthoriz d in the improvident
manner which lias often prevailed, und exhibit d so much
feebleness and insecurity, as well as produce so many incon
veniences a d losses.
It a >p -ars tothe undersigned that, all beyond this, which
can be beneficially accomplished, in connection with the
last clause of the present e.-nharass uents. vnl without an
alteration in tue Co istituiion code ring on the General
G ivernment direct nurnority ov -r every kind of banking,
.mist be effected through the state Legislatures, and the
commercial liai its of the community. Much improve
ment can, dnubt.es*, be introduced, if t.-e Legislatures will
impose tiiese aJdit.onal regu-atiuns, restraints, ui.d secu
rities, which have been before enumerated. Much mon-
will also follow, a id substantial relief be afforded to the
people at large, if, in addition to the other measures rec *m-
meuded, individuals will exercise the wisdom t«» piaie
a greater reliance on real ca:-itai. act ve industry,
frugality, and we.l grounded credit, than on that infla
ted system -which of late ha* cotem|Hiraucously prevailed
to such a ruinous extent, both in this and some other c«.un
fries—a system which has been encouraged by some per
sons, under the delusive idea that there was no overtrad
ing of any kind, till a revulsion lias occurred almost with
out a parallel, and has given to commerce and credit a
blow, whose destructive effects it may require years fully
to repair.
All which.i* respectfully submitted.
LEVI WOODBURY,
Secretary of the Treasury.
CONGRESSIONAL.
ISSUE OF TREASURY NOTES.
The bill to authorize the Secretary of the Treasury to
issue Treasury notes being taken up lor a third reading—
Mr. Calhoun rose anil addressed the Senate at consider
able length. He commenced by observing that the ques
tion which they had to decide was what relation the Gov
ernment and the banks shall bear to e.ich other hereafter 1
Shall the Government again use the banks as fiscul agents?
Shall they make them the depositories of the public funds?
ai.d above all, shall they receive their notes as specie, a.:d
treat them as such in their disbursements ? Tiiis was the
great, the leading question one of the first magnitude—one
full of consequences. He had given it his most d -liberate
and anxious investigation. He had come to this coo elu
sion—that the interests both of the bank* and tiie govern
ment, forbid a reunion. He would now offer his views in
support of the measure. He wou.d present them in that
manner which became the occasion—who li became that
country, and which was due to himself. All that he asked
was, tliat credit for sincerity- might be give.i Him for the
opinio..* he would give, and that he tn ght be judged with
tuat candor whicH he wou.d give otoers credit for
Those who were in favor of a reu-iioii would find a pre-
limi inry difficulty. The hanks and the Government w> re
already separated by the operation of laws; and so lo. g us
those laws remained in force they comd not be reunited.—
There were none in this body in favor of their union ; none
who would be willing to use the banks as fiscal agents ot
the Government, as long as the present stute of things re
main which had produced the separation; uone wou.d bc
wihing to make them the depositories of the public funds
none would be willing to receive their note*. ‘I hisdifficui
ty must he overcome. He did not believe that either the
friends of the administration, or those of-the opposition
parly would be forn.d the advocates of a reunion. He
thought that reason and experience were most derided
ly in favor of disconnecting the banks from tin-government.
If the Government was to be connected with the banking
system, a United States Bank was indispensable. He
would go further, and say that if we had a rig t to re
ceive haul: notes its cash iu lucreccipts a III t expenditure*
of the Government, we not only had a right lo create a
national bank but were bound to create one. Whatever
the Government treated as money, they had a right to re
ceive as money; and under the provision of tlie constitu
tion, which requires ail taxes lo be uniform throughout the
United States we were bound to make the money as uni
form as possible These were no rerci t opinions i f his,
for i.e bud so expressed bin-sell" on tbe d* posite question
in 1334. He then said ; “Gei.t.emcn you have not gone
far enough. If you intend to war against ti e Bank, you
m:-st go a step further—you must separate in toto from tdl
banks, or have a Bank of the United States. However,
not having separated from the Banks, we uow felt our
selves involved in the present distress. Now the aiterna
tive had arisen between disconnection with tl.e Banks,
or a Bank of the .United States. !1 his was ttie issue. One
of two courses must be pursued 'iueu, again, llie ques
tion recurred: ht»\v were we to gel a Bunk? for we had
reason to believe tb.-t the public voice was opposed to
such au institution, at > *1 one great, o:d, cousisient, uni
form party, so numerous and so respectable that their
opinion on this question out fit to.be respecte d until there
should be an amendment 01 tbe Coustitutiou. Again:
one branch of the Government s*tood opemy pledged be
fore the world, up in constitution..!! grounds not to give
it* sanction to the re-estalnishmci.t ■'<£ .ft bank. He con
tended that there must be a political revolution first, aiut
we should buve to wait fouryeais before ibe struggle look
place. And wliat, be wou.d ask, was to be *fie condition
of the Treasury in the mean time? Were we to remain
disconnected, or are we to uuite ourselves with ihe State
banks ?
Ho would say that if the disconnection remained so
long, the fate of a Bank of the United States would
sealed forever. He would te.l gentlemen on the other side,
that if they succeeded in re-uniting the Government with
the Stale Banks, there wouid not be a chance of getting a
Bank of the United States on God's eartli until anotner
catastrophe like the present shi:u:<l have again occurred
He knew little uf tiie human heart w-ho believed there
was any chance of getting n Bank while eight hundred
banks were in successful Ojieratinn, tor they would never
permit the introduction of a great and overshadowing
institution, which would have the eflect uf destroyin,
them. Yes, they would have :o wait uutil anotner catas
trophe comes.
He ciitertaiiM d the opinion, that if a Bank of the Uni
ted States should be estaolished, tbe pressure which wou.d
follow that event, would be even greater ilian tiie present.
A bauk competent to its purposes, calculated to meet the
great increase in the trade and commerce of the country,
should buve a capital of one liundn d millions, with a spe
cie basis of fifteen or twenty niillious. Lut where, lie ask
ed, was it to come from ? 'The consequence of tfie crea
tion of a new bunk, and the accompanying resumption ot
specie paymeuts, would be destructive lo tlie State banks.
But where was the money to be hud l (ruin abroad—;rom
England ! We hud heavy debts to pay that country, and
if we attempted in the midst of the present state of tilings
to draw back the specie, tbe revnlsiou wouid be at least
equal to the one we have just witnessed. Gentlemen were
inclined to think that tiie present crisis is like that of 1316.
Now he was certain that mere was no analogy betweeu tue
two cases. On 1 he contrary, it was direct.y opposite. The
crisis of 1816 was a small afluir compared witu this. Mr.
C. exolained the difference between tho circuit.siunces of
that day and those of the present. Among t..e measures
proposed then, as now, was a bankrupt law. lie was op
posed to a bankrupt law, because Uo considered it too
harsh a measure. Bt sides, ii was ulteriy uiicui.slitutional.
He maintained that snou.d we iry a ba>.k of tne United
State*, uuder the existing circumstances, t.-e recoi. would
be overwhelming. He, for one, w. uni u»l be wiiii..g to
make tfie attempt. He knew it wounl compel specie pay-
ntenrs, not as h reformer, but us a destroyer. Tne greater
portion of the State bum s woidd be swept from tfie hoard.
And, even if there w ticc no other objections to the measure,
thi* was a sufficient on*.' for him»eli.
Mr. C. weut into a brie/ history of farts connected with
the passage of the bill of ,'316, rechartcnng the Bank
of tbe United. States, and the part wuicii be took ou that
occasion.
There was but one mode in which w* 1 ® Government cou d
re-unite itself with the flunk, uiluout p.roducing distress;
hut that mode was inhnitely objectionable *he South.—
He meant, by the Goverumaut adopting tlie b uited Slates
Bank of Pennsylvania as a fiscal agent. The -au opU";*n ol
that course would compel a resumption of specie pay .Heuts,
with much less force than a new bank of tue United States
wouid. But he never couid bring hi- mind to give such a
preference to one State over another. No. couid'he cou-
sent to make an institution the fiscal agent of tue Govern
ment which owes its existence to a ia\v 01 a State, in the
attack made upon tbe bank by the late President of the
United Suites, over which Mr. Biddie presided, fie (Mr.
G.) had sustained it as far as he could u|niu constitutional
and legal grounds. Trie bank, however, owing to tne great
talents of Mr. Biddle, survived the shuck. To adopt tuat
hank, under all the circumstances of tne case, w oind be u
triumph to it over the country. It wou.d go far to make
the bank the Government itseif. He repeated that he ne
ver could give his consent to make that bunk tue fiscal
agent of tlie Government. He could not agree to a re
union of the bauk with the Government, hr cause he re
garded a union as the great cause wuich incapacitates bank
notes from performing the office of a sound currency, it
was one of tbe greatest causes of co.itraction aud expau-
siou by tbe bank, aud which could produce such a catastro
phe as now bad happened. Ban* notes, uuder the best
circumstances, were ill suited! to perform the functions of a
currency for the country. Centractkrr* and expansions of
the enrrancy, a* had keen evidenced, could be monsd „
and the practice of which rooti-rted the whole coantrv : ’ •
to gambler* and speculators. The grant source of 1fou
expansions resulted from a union between the bank* and
the Government. One great and powerful reason which
contributed to the circulation of n hank note was thatk
not only represented the credit of the bank, bat the m Ife
of ttie Government itself. **■
The consequence iff n connection between the Govern,
ment and the bank was, that just as the feral action of tha
Government increased from time to time, tbe le-vw trass.
actions must also increase, m- contract in the - rn|
tion. Tbe great and leading cause of the present om^
throw of the banka was the connection between them and
the Government.
Mr. C. next adverted to the passage of the different fa
rin' acts from the year 1824, ar.d proceeded to state tkat
tbe consequence of tbe last act that was passed was to turn
the Exchanges of the United States in fevorof Eidnd,
and that the 1-ank bad, just prior to General Jackson’s at
tack on it, expanded iu issues in a remarkable degree
which was made, in his (Mr. C‘s) opinion, the pretext for
a war against that institution. In hi* estimation. General-
Jackson did wrong in pursuing that course. The charter
was about to expire, and an admirable opportunity woukji
hive offered for renewing the charter for a limited
ti-nc, su as to outlive the charter of the Bank of Eo.
g.aud.
VV iih regard to the removal of the deposites, he bed, at
the period of that event, but one opinion, and that was that"
the ca astrophe which had occurred would come; and it
had come at last. The tariff acts of 1824 and ’28, com-
■MJJ -d with the measures adopted in the British Parliament
after that period, had produced a change in respect to the
currency of tbe country. The two acts in question, parti-
<■ularly, gave a westward course to the metallic currency,
and w hi-h was increased by the movements of the Geix>
rat Government. It was a remarkable fact, that tbe three
great susjiensions which had taken place in England and!
the United States, the present one, one in 1813, and the
one iu Great Britain in 1797, (be believed) all resulted
from the connection of the banks with tbe Government;
au-i, to this cause, in his opinion, the fluctuating of th*
bank currency was attributable.
He went on to argue that the granting of a charter fi*
a national bank in Pennsylvania, or to any other State
would have tbe efii-ct of concentrating the commerce anff
business of tiie country there, to the prejudice of other
pulions of the Union. He, in fact, regarded the giving
of a chart* r as making a preference in favor of one Stats
over another, which was contrary to the spirit and genius
of our Government. He maintained that, prior to 1834.
there was little or no connection between the Government
aud the bank. It stood upon a solid basis, and there «u
littie or no accommodation ou either side. The blow a-
gainst the hank had commingled the Government and the
bank, and that blow would remain until tbe Government
became the bank, or the hank the Government. There
was, then, no othei alternative, in his opinion, but a sepa
ration. He proceedtd to observe that be entertained no
hostility whatever tothe bank, and be bad dear friends who
wouid be affected by the decision of the presentqaestion.
He blamed not the bank, nor the stockholders and direc
tors, for tiie many evils which had arisen. They had grows
up wiihout any man seeing the cause. Nothing but lima
aud experience could develope it.
Whut remained to be done was to re-organize the Trea
sury—to reform the agents of the Government. Nothing
but their adoption of this course would suit the new con
dition of tilings. How that was to be brought about be
could not at present say. It must not be a Treasury bank.
No biii should have his vote which was in any way con
nected with the patronage of the Government. He de
clared that he entertained the most implicable and deadly
hatred to any extension of government patronage.
(Here Mr. C. stated tiie objects of the amendment he-
intended to offer, which will be found below. J
Ho remarked that he desired the aid of tbe supporters
of tue administration to carry his measure, for witnoutit,
nothing could be carried. If he couid see his wav as clear
as tfie light ol" Heaven, he wou.d not trust th« execution of
a measure to unwilling hands.
W itfa respect 10 relief for the country : VVe owed monev,
a .d it must be paid, and relict only would come in time,
and by frugality and industry. He regarded the growi-jg
crops ol cotton in Alabama, Louisiana and Mississippi,
and the rice and tobacco crops, os principally calculated tv
bring about relief to tue country.
After a tew other remarks, Mr. C. offered the following
prapisitiou:
&KC. And be it further enacted. That from and after
the first day ot January,eighteen hundred and thirty-eight,
Uiree-fourtiis of the amount due to the Government for
d nth's, taxes, sales of public lands, or other debts, may be
paid iu tfie notes of specie-paying banks ; and that trim*
and after the first day of January, eighteen hundred amii
thirty-nine, one half may be so paid; and from and alter
the hrst day of January, eighteen hundred aud forty, one-
fourtu; aud firutn and after tlie first day of January, eigk-
u »n lumdred and torty-onc, all sums due, for duties, sale*
of puuiic land*, or other debts to the Government; shall
be paid only 111 the legal currency of the United States, or
iu such notes, bills, or paper issued under the authority of
the same, as may be directed to he received by law.
Mr- Benton said he fuliy concurred in the object of tbe
amendment. He then offered the following amendment,
and moved-that it be printed, together with the proposition
offered by Mr. Calhoun, and laid oa the table; which was
agreed to.
Sec. And be it further enac ed, That the collection
and disbursement ut the revenues shall continue to be made
in the kinds of money directed by existing laws, until the
day ol —— next; from aud after wnich time all the
revenues of th - United States, and of the General Post
Office, and all payments to them, shall be received iu gold
and stiver coin only, except in cases in which Treasury
notes, or land scrip, may be receivable by law; and ou all
payments so made in gold coin, a discount of one percent
shall be allowed 111 favor of the payer. And, from and al
ter tfie same day, every officer or agent ungaged in making
disbursements ou account of the United Slates, or ot the
General Post Office, shall make all payments in gold and
sliver coiu only, or in treasury notes when authorized by
law; aud any receiving or disbursing officer, or agent, who-
shad negieci, evade, or vio.ate, the provisions of this sec
tion, sliail be dismissed the service, and shall forfeit ail
compensation winch may then lie due him.
S*ec. And be it further enacted, That it shall be tbe
duty of the Secretary of the Treasury to prescribe regula
tions to enforce th.- speedy presentation ot all Govern.1 eat
drafts for pay ment at the place where payable; and, ia
case ot unreasonable delay iu such presentation, payment
oi tiie draft so delayed may be made at any other place
within tae limits of the United States.
Mr. Benton also ottered the following bill, which was
la d ou the taule, aud ordered to be priuled:
A tii-L-L to re-esiabiish the currency of the Constitotisn fer
the Federal Government.
Be it eiu ' c,f d by the Senate and House of Rcprcwcnt*-
tiers of ike I’nLed States of America in Congress as-
srmoled, I hat bank notes und paper currency of evcij
description snail c*. nse to be received, or offered in pay
ment, o 1 account of life United States, or of the Post Of*
hce. or in fees iu the courts of the United States, as-fol
lows: ol Jess denomination chan twenty dollars, none after
tfie luird day of March, eighteen hundred and thirty-seveeS
of less denomination thou fifty doi.'ars, none alter the think
day of March, eighteen hundred and thirty-eight; of Jed
neiiomtiiutiou than oue hundred dollars, none after the
Uiird day day of March, eiefatten hundred C'd thirty-nine;
of less (ie>.oniinatiou than five hundred dollar!?, none after
the third day of March, eighteen hundred and forty; of
less denomination than one thousand dollars, none after
the third day of March, eighteen hundred and forty-one;
and uoue of any denomination from and after the third of
March, eighteen hundred and forty-two.
Sec. 2. And be it further enacted, That any person
holding an uppoiutment under the laws of the United
States, and a.,y bauk employed to keep public money*,
winch person or bank shad neglect, evade, violate, contra
vene, or in auy way elude, tbe provisions of this act, *b*U
be guilty of au otteuce against the laws: and the person so
offending shall be liable to be dismissed from the service,
and the bank so offending shall, on satisfactory information,
be discontinued as a dejmsitory of public moneys.
Alter some furttier proceedings, the question was tskra
on 1 fie eugi ossuieut ot tlie bill by yeas and nays, and de
cided as lolfows:
V EAs—Messrs. Allen, Bayard, Benton, Black, Brown,
Buctiaudii, Culkuun. day of Alabama, Clayton, 1 uitor,
Grundy, Hu board, Kent. King ot Alabama, King of Geor
gia, Kuigtit, Lyon, McKean, Morris, Nicholas, Niles, Not"
veil, Bierce, Rivers, Roane, Robbins, Robinson, Rugglrt,
Sevier, smith of Connecticut, Simith of Indiana, Strange,
swift,Tadmadge, Tipton, Walker, Wall, Webster, White,
William*. W rigid, aud Young—43.
NAY S—Messrs. Clay of Kentucky, Crittenden, Pro* MB »
Southard^aud Spence—5.
Uu motion of Mr. W right, the Senate adjourned.
(communicated 1
A meeting of the Students of Midway Seminary f0
called on the 22d inst. for the purpose of paying a tribal*
of rvspest to the memory of their lamented fellow-stud*’®*,
Thomas J> Gordon. Mr. J. L. King was called w«*
Chair, and C. A. Stillman appointed Secretary. ,
Tba object ot the meeting being stated, it was moved** 1
M 'eoaded that acumm.ttee ut tire be appointed to draft *
pret.yible and resolution* : the motion being carried, u*
eiiair r, l '°c««fed to nominate tbe following commh***
Messrs! W. . Vort » s - D*y, R- w - Jemisoo, C. S.
and VV. Gilbert, wbo » mr a short absence, returned wa»
he following, w ** unanimously adopted:
Iu tbe dispensation ^ » wi f. Prondence, we have bt»
called 10 mount the loO® ^ * friend ® ft®
Yes, Gordon, the compO*»“» °f our pw
and our amusements, ha* suddenly been called tram
his final resting place. In vaiT* leok for him *uud thf
scenes in which he was wont to laingfe with us. Tkj Vp.
cant s**at—the unused book* ‘the deserted room,.all speak,
lo ut in solemn accent*, and tell us that he ilgPofi. Wj*
we deplore our loss we would not fosgel-tbet be who W.
done itdoeth all thiugs well. We would listen to a*
voice which speaks to us in this salemn dispensation, ***
bow reverently to its dictate*. To us this voice is the
impressive,inasmuch as Gordon ia tbe first who hash***
cut down in tbe midst of ns. We hear in it the ******
admonition, “ be ye also ready; your life ia but a rap®"*
which flits across the plain, and is gone forevrr.
We therefore, /he Students ef Midway Sesliaartr** •