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but Pete January; and right ’
the strength '*• Fete and Piiilnu- ‘
quarreling. Well, nrter a *
xHOf, inme took him out and stripped him, *'
fi'nft. then they bbtckvd him as black as a '
njjrocr, ahil led him right np to the public *
sqtAt'c, and put him in a pen; it warm J
than lour feet high, and lie had to 1
sorter standing on his hands and
BRget; then they put big logs on the top of it. ' <
jjfrst morning he was sober, and every bo- :
gathered round the pen to see him, and ; ’
st like a varmint. Well, they j ‘
ut. After breakfast, Philan-]’
rry and myself started home, ''
’t gel far before wc cmre a- | 1
I had iny gmi, and tired nt ;
he w ent,'and Philander arter
bear plunged off a bluff, and i
use tu bis tail. 1 went to the
icy had jumped off a place tliF]
i wns 19 feet in pertikular. We
lost the bear, and went stFaight home. I I
did nbl feel very well when I got home, j
The old lady axed me what made me stay j
So'long; so I told her. Wei?, next day'll
stent over to Philander I’optlebi*TrVs. • lj
rode up to the house, and there 1 saw little
Jim Forllebcrry, and 1 axed him if lii- !
daddv was at borne, and he said be was.
So I lit off and went in, and found Philan
der and Mrs. Forllebcrry, and all the little
Fortleberrys. * How do yow do .** soys Mr.
Fonleberry. ‘Right well,’say* I; ‘how
do you do?’ savs I. ‘I am pretty well,’
says she, ‘except the runraty-aches.’ Well,
Philander pulled out a bottle of the ‘ over
joyful,' and we took a swig. Then Phi
lander commenced talking about Pete Ja
nuary. ‘ Hambnckle,’ says he, •J am go- I
••ing to be in the bowels of January before |
six months. And now, boys, there rs the J
word with the hair on’t.’
Here closed Homhnrkle’s testimony. !
He w is cross-examined, much to the amuse
ment of the crowd. After he had been or
•dcred to stand aside, he put out to a groce
ry ; in a few minutes I heard h-irn snorting.
Says he, • Boys, what do yon think of th it
d—d fool judge? Well, I can tell you
what sort of a fellow he is. I know’d w hen
he kept a little bit of a grocery, and wirnl
worth the powder that would kill him.’
Twenty-Fifth Congress.
EXTRA SESSION.
On the 4th inst. both Houses of Congress
assembled at the Capiti 1 in Washington, when
tha members wore caliod to order by Mr.
Franklin, the foruv.r Cleik of the House.
Thcro were present 224 numbers—lß being
absent.
On proceeding to ballot for Sp aker, Mr. J.
K. POLK, of Tenn., ( Adm nitration,) re
ceived on the first ballot 116 votes; John Bell
103; scattering, 4—wiien Mr. Polk was de
clared duly elected.
On the sth inst. the President, by his pri
rate Secretary, transmitted the following
MESSAGE :
Fcltow Cilizcitt of the Senate
and House of Re^resentatic?* —
Theactof the 23 lof June, 1836, reg
ulating the deposhes of the public money,
and directing the employment of State,
Dutrict, and Territorial banks for that
purpose, made it the duty of the Secretary
of the Treasury to discontinue the use of
such of them as should at any time refuse
to redeem their notes in specie, and to sub
stitute other banks, provided a sufficient
number could be obtained to receive the
public deposites upon the terms and condi
tions therein prescribed. The general and
almost simultaneous suspension of specie
payments by the banks in M iy last, render
ed the performance of this duty imperative,
io respect to those which h id been selected
underthe act ; and made it, at the same
" time, impracticable to employ the requi
site number of others, trpoff the prescribed
conditions. The specific regulations esta
blished by Congress for the deposite and
safe keeping of the public moneys, having
thus unexpectedly become inoperative, I
felt it to be my duty to afford you an eailv
opportunity for the exercise of your super?
visory powers over the subject
I was also led to apprehend that the sus
pension of specie payments increasing the
embarrassments before existing in the pecu
niary affiirs of the country, would so far
diminish the public revenue, that the ac
cruing receipts in the Treasury, would not,
with the reserved five millions, be sufficient
to defray the unavoidable expenses of the
Government, nntil the usual period for the
meeting of Congress ; whilst the authority
to call upon the States, for a portion of the
sums d -posited with them, was too restricted
to enable the Departm -nt to realize a suf
ficient amount from that ton •e. These
apprehensions have been justified by subse
quent results, which render it certain that
this deficiency will occur, if additional
mean* be not provided by Congress.
*Jhe difficulties experienced by the mer
cantile interest, in meeting their engage
ments, induced them to apply to me, previ
ously to the actual suspension of speck
payments, for indulgence upon their bond
far duties ; anl all the relief authorized by
law was promptly and cheerfully granted.
The dependence of the Treasury upon the
avails of these bonds, to enable it to make
the deposites with the States required by
I >w, lad me in the outset to limit this iiidul
gance to the first of September, but it ha
siucebean extended to the fir»t of October,
that the matter might be submitted to youi
further direction.
Questions were also expected to ari.e in
the recess, in respect to the October instal
ment of those d'-poaites, requiring the in
terposition of Congress.
A provision of another act, passed about
the same time, and intended to secure a
faithful compliance with the obligation of
the United States, to satisfy all dem uids
upon them in specie or its equivalent, pro
hibited the offer of any bank note, not con
vertible on the spot into gold or silver at
the will of the holder ;• and the ability of
the Government, with millions on deposite,
to meet its engagements in the manner thus
required by law, was rendered very doubt
ful hv the event to which I have referred.
Bsufible -that adequate provisions for
these unexpected exigencies could only be
made by Congress $ convinced that some
of them would be indispensably necessary
to the public rervice, before the regular
period of your meetings and desirous a'g
to enable you to exercise, at the earliest
moment, your full constitutional powers for
the relief of the country, I could not, with
propriety, avoid su>jesting you ;o the ji>-
cotiveiiiciive ol assembling al as t-ariy a
day as the state of the popular rcprcsciita
tion would permit. lam sure that I have
done but justice loyoirr feeling*, in believ
ing that this inconvenience will bo cheer
fully encountered, in the hope of rendering
your meeting conducive to the good of the
country.
During the earlier stages of the revulsion i
through which we have jusl passed, much <
acrimonious discussion arose, and great di- <
versily of opinion existed nttoiht rent can- t
ses. This was not surprising. The ope- ,
rations of ere lit are so diversified, and the I
influences which irfleet them so numerous, i
and often so subtle, llmi even impartial and 1 (
wcll-ififormed persons are seldom found to ;
agree in rrspret to them. To inherent dis- ' ,
ficulties'were also added other tendencies,;
which wcrt’"by no means favorable to- the I,
discovery of truth. It was hardly to be
expected, that those who disapproved tlx
policy of the Government in rid itidn to the ,
eurlehcy, would, in the excited state of
; üblic feeling produced by the occasion,
i fait to attribute to that policy any extensive
! embarrassment in the monetary affairs of the
country. The matter thus became con
! necied with rhe passions ami conflicts o
party ; opinions w-ere more or less affected
by political considerations; and differences
were prolonged which might otherwise have
been determined by an< appeal to facts, by
the exercise of reason, or by mu-tnal con
cession. It is, however, a cheering rell •<■
tion, that circumstances of this p'slurt»catr
not prevent a community so intelligent as
ours from ultimately arriving at correct
conclusions.- Encouraged by-the firm be
lief of this truth, I proceed to state my
j views, so far as may be necessary to a clear
i nnderstanding of the remedies I feci it my
d ity to propose, and of the reasons by
j whicli [ have been ltd to recommen I them.
The history oftrade in the. United States
for the last three or four,years, affords the
most convincing evidence that our present
condition ischi flyto be attributed to over
action in all the departments of business ;
an over-actrOn, deriving, perhaps, its first
impulses from antecedent causes, but stim
ulated to its destructive consequences by
excessive issues of bank paper, and by otli- 1
er facilities'for the acquisition and enlarge ]
■ m°nt of credit. At tire contmeneement of |
; the year 1834, the banking capital of the
United States, including that of rhe na
fonalbank then existing, amounted to about
two hundred millions of dollars ; the bank
notes tlterr in circulation to about ninety-five
milli on*; and the Inarrs and discotntts of
the banks to three him Ired and twenty-four
millions. Between tbit time and the first ]
I of J mttary, 1833, beitrg the I itest period
,; to which accurate accounts haie been re
| ceived, our banking capital was increased
. to more than two hundred and fifty-one
millions ; onr paper circulation to more
than one hundred and forty millions, and
the loans and discounts to more than four
liiwidrt-d and fifty-seven millions. To this ]
vast increase are to be added the many!
■ million* of credit, acquired by means of
l j';«reign loans, contracted by the States and]
g latP histitntions, and, above all, by the!
! lavish acrb‘‘ ,rn,K ' :n ' on<i ' Xtemled by foreign
dealers to our ’Thants.
The ctm eqnenc'f * redundancy
of credit, and of the «pti >* °f reckless spec
illation engendered by it, were a foreign j
debt contracted by our citizens, fs’im .ted ;
in March last at more th in thirty mii.. , <>' , Si
of dollars; the extension to traders in the
• interior of our country of credits for sup-'
plies, greatly beyond the wants of the peo-!
pie ; the investment of thirty-nine and a
half millions of dollars in unproductive'
public lands, in the years 1835 and 1936,
whilst in the preceding year the sales
amounted to only four and a half millions ;
the creation of debts, to an almost countless!
amount, for real estate in existing or anti-!
cipated cities and villages, equally unpro-1
ductive, and at prices now seen to have ■
been greatly disproportionate to their real J
: value, the expenditure of immense sums in j
improvenrents which, in many cases, have !
I been found to be ruinously improvident,
the diversion to other pursuits of much of
the labor that should have been applied to
i agriculture, thereby contributing to the!
■ i expenditure of large sums in the importa-
tion of grain from Europe—an expeudi
, turc which, amounting in 1834 to about
t two hundred' mid fifty thousand dollars,
! Was, in the first two quarters of the present
t year, increased to more than two millions of
dollars; and, finaflv, without enumerating
j other injurious results, the rapid growth
I ! among all classes, and especially in our great
• commercial towns, of luxurious habits,
• founded too often oh merely fancied wealth,
• and detrimental alike to the industrv, the
I resources, and the morals of our people.
1 It was so impossible that such a state of
■ things could long continu -, that the pros
pect of revulsion was pres-nt to the mind-
i of considerate men before it actually came.
• I None, however, had correctly anticipated
its severity. A concurrence ofcircumstan
, I ce* inadequate of themselves to prodtiee
’ such w'de spread and calamitous embar
. | rasstnents, tended so greatly tn
j them, that they cannot be overlooked irr
] considering their history. Among these
. may be mentioned, as most prominent, the
] great loss of capital sustained by our com
; inert ial emporium rntbe fire of December,
, . 1835—a loss, the effects of which were un
derrated at the time, because postponed for
a season by the great facilities of credit
then existing; the disturbing effects,in our
commercial cities, of the transfers of the
p iblic moneys required by the deposite law
of June, 1836 ; and the measures adopter!
by the foreign creditors of otir merchant*
to reduce their debts, and to withdraw from
the United States a large our
spec ie.
However unwilling any of our citizen
may heretofore have been to assign to these
causes the chief instrumentality in producing
the present state of tilings, the develope
uents subsequently made, and the actual
condition of other commercial countries,
must, as it seems to me, dispel all remain
ing doubts upon the subject. Il has since
appeared that evils, similar to those suffer
• d l»y ourselves, have been experienced in
Great Britain, on thecontini nt, and, indeed,
dirougiioiit the commercial world ; an l.
that, in other countries, as well a* in our
own, 'hey have been uniformly preceded
■y an undue enlargement of the bniinda
ies of trade, prompted, a* with us bv tin
recedented expansions of the sv t« in of
redit. A reference.to the amount ot ba k-
mg capital, and the issues of | aper < rerlii
put inMrculatiim in Great Brithin, by banks,
a ;d in other ways, daring the years 1834,
1835, nnd 1336. will show an augment a
lion of the paper currency there, as much
disproportioned to the red want* of trade
as in the United States. With this redun
dancy of the paper currency, there arose
in that country also a spirit ot adventurous
speculation, embracing the -whole range
of human enterprise. Aid was profusely
given to projected improvemen s ; large in
vestments were made in foreign stocks and
loans; credits for gdnds Were granted with
unbounded liberality to merchants in foreign
countries;, nnd nil'l he’ means of acquiring
nnd emphn ingx-redit- stere put in active-op
eration, and extended in their eflvets tt>eve
ry department of business, and to every .
quarter of the globe- The re-action was!
proportioned in its violence to the extraor-1
dinary character of the events which pre-!
ceded it. The commercial community of]
Great Britain were subjected to the greatest
difficulties, and their debtors in this conn
try were n<>l only suddenly deprived of ac
customed and expected credits, but called
upon for payments, which, in the actual;
posture of things here, could only be made ]
through a general pressure, and at the moil
ruinous sacrifices.
In view of these facts, it would seem inf
possible forsi’rtcere inquirers after truth to
resist the cbUvictior., that the causes of the
revulsion in both countries have been sub
stantially the same. Two nations, the most
commercial in the world, enjoying but re
cently the highest degree of apparent pros
perity, and maintaining with each ether the
closest relations, are suddenly, in a time of
profoundpefice, and without any great na
tional disaster, arrested in their career, and
plugged into a state of embarrassment and
distress. In both countries we have wit
tressed the same redundancy of paper mo
ney, nnd other facilities of credit ; the same
spirit of speculation ; the same partial suc
cesses ; the same difficulties and reverses,
and, at length, nearly’ the same overwhel
ming catastrophe.- The most material dif
ference between the results rn the twh>
countries has only been, that with us there
I hai also occurred an extensive derangc
[ ment in the fiscal affairs of the Federal and
' State Governments, occasioned by the
pension of specie payments by the banks.
The history of' these causes and effects,
in Great Britain and the United Slates, is
substantially the history of the revulsion in
all-other < ommercinl countries.
The prvSent'and visible effects of these
rircinnstani es on the operations of the Gov
ernment, and onthe industry of the people,
nnim 'out,the objects which call for your
immediate attention;
They are-r-to regulate by law the safe
keeping, transfi r, and disbursement, of the
public moneys to designate the funds to
be received and paid by the Government ';
to enable ‘lie-Treasury to meet prompily
i every demand upon it ; to prescribe the
] terms of indulgence, and the mode of set
. dement to he adopted, as well in collecting
! from individual* the revenue that has ac
| t rued, as in withdrawing it from former de
positories. and to devise and adopt such
] further measiin s, within the constitutional
competency of Congress, as will be be-t
calculated to rev ive the enterprise and to
promote the prosperity of the country.
F<>r the deposite, transfer, and disburse
ment, of the revenue, National and State
banks have always, with temporary and
limiie'l exceptions, been heretofore employ
ed • but, ■?lthough advocates of each sys
tem are ?tid I” l,e bvund, it is apparent that
the events of b’? e ' ast ew tnonths have
greatly augmented desire, long
ing among the people of ti>? United States,
to separate the fiscal operations '*• -*be Go
vernment from those of individuals predr*
porations.
Again tn create a national bank, as a
! fiscal agent, would be to disr gard the pep-
I ular will, twice solemnly and unequivocal
lly expressed. On no question of domestic
] policy is there stranger evidence that the
; sentiments of a large m ijority are d.libe
rately fixed, and I cannot concur wit! those
who think they see, in recent events, a proof
that these sentiments arc, or a reason that
they should be changed.
Events, similar in their origin and char
acter, have heretofore frequently occurred,
without producing any such change; and
the lessons of experience must be forgotten,
if we suppose that the present overthrow of
credit would have been prevented by the
existence of a national bank. Proneness
to excessive issues has eVer hern the wire
of t-fre banking system;’ a vice as promi
nent in National as in State institutions.
This propensity is as s ibserv.ient to the ad
vancement of private interests in the one
as in the other ; and those who direct them
both, being principally guided by the same
views, and influenced by the same motives,
will be equally ready to sirmufare extrava
gance of enterprise by improvidence o'
credit. How strikingly is this conclusion
sustained by experience. The Bank of ihr
United States, with the vast powers con
ferred on it by Congress, did not or could
' itoi prevent former and similar embarrass
menls ; nor has the still greater strength it
has been said to possess, under its present
charter, enabled it, in the existing emergen
cy, to check other institutions, or even to
save itself. In Great Britain, where, it
Iras been seen, the same causes have been
attended with the same effects; a national
bank, possessing powers far greater than
are asked for by the warmest advocates of
such an institution here, has also proved un
able tn prevent an undue expansion ofcred
it, and the evils that flow from it. Nor can
I find any tenable ground for the re-esta
blishment of a national bank, in the de
rangement alleged nt present to exist in the
domestic exchanges of the country, or in
the facilities it may be capable of affording
'hem. Although advantages nf this sort
were anticipated when the first Bank of the
United States was created, they were re
garded as an incidental accommodation ;
not one which the Federal Government
was bound, or could be called upon, to fur
nish. This accommodation isnow, indeed,
dter the lapse of not many years, deman
ded from it as among its first duties ; and
in omission to aid and regulate commercial
’•xchange, is treated as a ground of loud
•nd serious complaint. Such results only
-erve to exemplify the constant desire, -
•ininng some of our citizens, to enlarge the '
powers of the Government, and extend its <
control to subjects with which it should not I
STANDARD OF UNT(Tn7
iuterierc. They can never justify the < tea- -
tion ol an instituti >n to promote such ob
jectsj Ou the contrary, they justly excite
among tin- community a more diligent in
quiry ir.ta'the charai’fer of those opera
lions ol trade, towards which it is desired
to extend such peculiar favors.
The various transactions which bear the
name of domestic exchanges, differ essen
tially in their nature, operation, and utility.
One class of them consists of bills of ex
change, drawn for the purpose of transfer
ring wttrab capitaFfrom one part of the
country to another, or to anticipate the pro
ceeds of property actually transmitted.
Bills of this description • are highly useful
in the ntovements of trade, and well deserve
all t!ie ; encotiragemi.mt which cairrightfulli
.be given to them. Another class is mad,
lup of bills of exchange, not drawn to
transfer actual capital, nor on the credit of
! property transmitted, but to create fictitious
i capital,, partaking at once of the yliaracter
of-notes discounted in bank, and of bank
notes iu ciicttlatmn, and swelling the mass
of paper credits to a vast extent rn the most
objectiontrble manner. These bills have
i formed, for the last few yearSj a large pro
portion of what are termed the domestic
| exchanges of the country, serving as the
| means of usurious profit, and constilinitig
the most unsafe and precarious paper m
circulation. This species of traffic, instead
of being upheld,MMiglit to be discountenan
ced by (he Government and the people.
In transferring its funds from place to
place, the Government is on the same foot
ing with the private citizen, and may resort
to the same legal means. It may do so
f through the medium of bills drawn by itself,
( or purchased from others ; and in these op
-1 eralions it may, in a manner ’ undoubtedly
constitutional and legitimate, facilitate and
■ assist exchanges of individuals founded on
■ ] real transactions of trade. The extent to
■ which this may be done, and the best means
of efi’ecting it, are entitled to the fullest
, consideration.- This has been bestowed by
■ the Secretary of the Treasury, and his
• views will be submitted to you in his report.
> But it was not designed by the Constitti
! tion that the Government should assume the
• management of domestic or foreign ex-
I change. It is indeed authorized to regtr-
■ Hate by law the commerce between the
. - States, and to provide a general standard
, of value; or medium <-f exchange, in gold
t and silver; hut it is not its province to aid
i individuals in the trai sfer of their funds,
otherwise than thro'iirli the facilities afl’ord-
> ed by the Post Office Department. As
- justly might it be called on to provide for
, | the transportation of their merchandise,
r These are operations of trade. They
[ ought to be conducted by those who are
- ; interested in them, in the same manner that
»! the inc idental difficulties of other pursuits
i are encountered by other classes of citi
; tens. Shich aid bar not been deemed ne
’ cessary in other ccnintries. Throughout
? Europe, tne domestic as well as the foreign
- exchanges are carried on by private hour
; es, often, if not generally, without the as-
■ instance of bank*. Yet they extend through-
- out distinct sovereignties, and fir exceed in
y amount the real exchanges- of the United
I ! States. T. here is no nerison- why onr own
t ] may not be conducted in the same manner,
j with equal cirenpness and safi'ty. Certain
ly this might be accomplished,.if it were
- favored by those most deeply interested;
■ and few can dimbt that their own interest,
I ns-well as the general wc-Ifire of the coun-
- try, would be promoted by leaving such a
- subject in the hands of those to whom it
t properly belongs. A system founded on
r private interest, enterprise, and competi-
- tion, without the aid of legislative grants
, or regulations by. law, would rapidly pros-
- per; it would be free from the influence of
- political agitation, and extend-the some ex-
to trade itself; and if would pm an
i end i' l those complaints of neglect, partinl-
■ ity, injustg’e, and oppression, which are the
■ unavoidable re?’ l '** of interference by the
Government, in the p.-oper concerns of in-
• dividuals. All former attempts on the part
of the Government to carry its ic-gislation,
■ in this respect, further than was designed
f by the Constitution, have in the end proved
t injurious, and have st rved only to convince
the great body of the people, more and
- more, of the certain dangers of blenoif! 0 ’
, private interests with the operations of pub
I lie business; anil there is no reason to sup
, pose that a repetition of them now would
f he more successful.
It cannot be concealed that there exists,
in onr community, opinions and feelings on
this subject in direct opposition to each oth
er. A large portion of them, combining
great intelligence, activity, and influence,
are no doubt sincere in their belief that the
operations of trade ought to be assisted by
such a connection; they regard a national
bankas necessary for this purpose, nnd they
are disinclined to every measure that doe -
not tend, sooner or later, to the establish
ment of such an institrition. On the other
hand, a majority of the people are believed
to be irreconcilably opposed to that meas
ure: they consider such a concentration of
power dangerous to their liberties; and ma
ny of them regard it as a violation of the
Constitution. This collision of opinion
lias, doubtless, caused much of the embar
rassment to which the commercial transac
tions of the country have lately been ex
posed. Banking has become a political
topic ot the highest interest, and trade has
suffered in the conflict of parties. A spee
dy termination of this state of things, how
ever desirable, is scarcely to be expected.
We have seen for nearly half a century,
that those who advocate a national bank,
by whatever motive they n ay be influenced,
constitute a portion of our community too
numerous to allow u* to lu pe for an early
abandonment of their faiorite plan. On
the other hand, they must indeed form an
erroneous estimate of the intelligence and
temper of the American people, who sup
pose that they have continued, on slight or
insufficient grounds, their pi rsevering oppo
sition to such an institution; or that they
can be induced bv pecuniary pressure, or
by any other coinbinati >n of circumstances,
to surrender principles they have so long
and so inflexibly maintained
My own views of the subject are un
changed. They have been repeatedly and
unreservedly announced to my fellow-citi
zens, who, with full knowledge of them,
conferred upon me the two highest offices of
the Government. On the last of these oc
i nsions, I felt it due to the people to appr ze
them distinctly, that, i j the .event of my
••lection, 1 would not be able to co < perate
in the nt of a national bank.
To these st uliments, 1 base now.only to
add the expression of an increased Couvic
tion, that the re-establishmeiit of smh a
batik, in any form, whilst it would not ac
complish the beneficial purpose premised
by its advocates, would impair the rightfid
supremacy of the popular will; injure the
character and diminish the influence of our
political system; and bring once more into
existence a concentrated moneyed po.ver,
hoslile to the spirit, and threatening the
permanency, of our republican iiistitiitions.
•Local banks have been employed for the
deposite and disti>il'-utioi» of the revenue, al
all times partially, and, on three different |
occasions exclusively; first, anterior to the I
establishment of the first Bank ol the Uni
ted States; -secomiiy, in the interval be
tween the termination ol- that institution
and the charter of ill successor; and,’third
ly, during the limited period which has now
so abruptly closed. The connection thus
repeatedly attempted, proved unsatisfactory
on each successive occasion, notwithstand
ing the various measures Av bicli-were ad
opted to facilitate or insure its success. On
the last occasion, in the yerri - 1533, the
employment of' the State banks was guar
ded especially hi every way which experi
ence and caution could suggest. Person
al security was required for the safe-keeping
and prompt payment of-the moneys to be
received, and full returns of their condition
were, from time-to time, to be made by the
depositories. In the first stages the meas
ure was eminently’ successful, notwithstand
ing the violent opposition of the Bank of
the United States, and the unceasing efforts
made to overthrow it. The selected banks
performed with fidelity, and without any
embarrassment to themselves or to the com
munity, their engagements to the Govern
ment, and the system- promised to be per
manently useful. But when it became ne
cessary, underthe act of June, 1836, to
withdraw from them the public money, for
the purpose of placing it in additional in
stitutions, or of transferring it to the States,
they found it, in many cases, inconvenient
to comply with the demands of the Treas
ury, and numerous and pressing applications
were made for indulgence or relief. As the
instalments under the deposite law became
payable, their own embarrassments, and the
necessity und< r which they lay of curtailing
.their discounts and calling kr their debts,
increased the general distress, and contribu
ted, with other causes, to hasten the revul
! sion in which, at length, they, in common
with the other banks, were fatally invoh ed.
! Under these circt instances, it becomes
| our solemn duty to inquire whether there
are not, in any connection between the
Government and banks of issue, evils of
great magnitude, inherent in its very na
ture, and ati-ainst which no precautionscan
effectually guard,-
Utiforseen in the organization of the
Government, and forced on ihe Treasury
:by early necessities, the practice of em
| ploying banks, was, in truth, from the be
! ginning, more a measure of emergency than
]of sound policy. When we started into
existence as a nation, in additiont<vthe bur
! dens of the new Government, we assumed
I all the lame hut honorable load of debt
which was the price of our lib'rty; hut we
| hesitate I to weigh down tht infant i'ndus
! try of the country by resorting to nde-
Iqu ite taxation for the necessary revenue.
! 'File facilities of banks, ie. return for the
I privileges they acquired, were promptly of
j sered, and perhaps too readily received, by
{an embarrassed Treasury. During the
long continuance of a national debt, and
the intervening difficulties of a foreign war,
the connection was continued from motives
of convenienceybut these causes-have long
since pissed a«ay. We have no emer
gencies that make banks necessary to aid
the wants of the Treasury; we have no
load of national debt to proviife for, and
we Have on actual deposite a large surplus.-
No public interest, therefore, now requires
the renewal of a connection that circum
stances have dissolved. The complete or
ganization of our Government, the abun
dance of our resources, the general harmo
ny which prevails between the different
States, and with foreign Powers, all ena
ble us now to select the system most con
sis-’ent with the Constitution, and most con
ducive to the piib’tc welfare. Should we,
then, connect the Treasury s’r a loiir'h
time with the local hanks, it can only be
nnd Ta conviction that past failures have
arisen from accidental, not inherent, de
fects.
A danger, difficult, if not impossible, to
be avoided in such an arrangement, is made
strikingly evident in the very event by
which it has now been defeated. A sudden
act of the banks intrusted with the funds of
'•e people, deprives the Treasury, without
| ,dt or agency of the Government, of the
I ability to pay its creditors in the current’.,
hey have by law a right to demand. This
circumstance no fluctuation of commerce
could have produced, if the public revenue
had been collected in the legal currency,
Hid kept in that form by the officers of the
Treasury. The citizen whose money was
in bank receives it back, since the suspen
sion, at a sacrifice in its amount; whilst he
who kept it in the legal currency of the
country, and in his own possession, pur
sues, without loss, (he current of his busi
ness. The Government, placed in the sit
uation of the former, is involved iu embar
rassments it could not have suffered had it
pursued the course of the latter. These
embarrassments are, moreover, augmented
bv those salutary and just laws which for
bid it to use a depreciated currency, and,
by so doing, take from the Government the
ability which individuals have of accom
modating their transactions to such a ca
tastrophe.
A system which can, in a time of pro
found peace, when there is a large revenue
laid by, thus suddenly prevent the applica
tion and the use of the money of the peo
ple, in the manner and for the objects they
have directed,cannot be wisejbut who can
think, without painful reflection, that, un
der it, the same unforeseen events might
have befallen us in the midst of a war, and
taken frorn us, at the moment when most
wanted, the use of those very means.which
were treasured up to promote the national
welfare and guard our national rights? To
such embarrassments and to such danger
will this Government he always exposed,
whilst it takes the moneys raised for, and
accessary to, the public service, out cf the
hands of its own ofliier.-, and converts
them into a mere right of action against i
corporations entrusted with the possession
ol dietni Nor can such results be effectu
ally guarded agpinst in such a system, with
out investing the Executive with a control
over the banks themselves, whether State
or National, that might with reason be ob
jected to. Ours is, probably, the only Go
vernment in the world that is liable, in the
management of its fiscal concerns, to oc
currences like these. But this imminent
risk is not the only danger attendant on the
surrender of the public money to the custo
dy and control of local corporations.
Though the object is aid to the Treasury,
| its iff'ct miybe to introduce into the ope
! rations of the Government influences the
most subtle, founded on interests the most
Sflfisll.
The use by the banks for their own ben
efit, of the money deposited with them, has
received the sanction of the Government
from the commencement of this connexion.
The money received from the people, in
stead of being kept till it is needed for their
use, is, in consequence of this authority, a
fund, on which discounts are made for the
profit of those who happen to be owners of
stock in the banks selected as depositories.
The supposed and often exaggerated advan
tages of such a boon will always-cause it to i
be sought for with avidity. Twill n-ot stop
to consider on whom the patronage incident
to it is to -be conferred ; whether the selec
tion and control be trusted to Congress or
to the Executive, either will be subjected to
appeals made in every form which the sa
gacity-of interest can-suggest." The banks,
under such a system, are’ stimulated to
make’tbe most of their fortunate acquisition;
the deposites are treated as an increase of
capital ; loans and circulation are rashly
augmented ; and when the public exigen
cies require a return, it is attended with
embarrassments- not provided for,.nor fore
seen. Thus banks that thought themselves
most fortunate when the public foods were
received, find themselves most embarrassed
when the season of payment suddenly ar
rives.
Unfortunately, tpo, the evils of tlie sys
tem are not limited to the banks. It stim
ulates a general rashness of enterprise, and
aggravates the fluctuations of commerce
and the currency. This result was stri
kingly exhibited during tire operations of
the late deposits system and especially in
ptircha es of public lands. The order
which ultimately directed' the payment of
gold and silver in such purchases- greatly
cherk'-d, 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 from them as a
loan, and returned as a deposite, which they
were again at liberty to use, it only passed
round the circle with diminished speed.-
This operation could not have been per
i formed, ha<) the funds ot the Government
gone into the Treasury, to be regularly
disbursed, and not into banks, to be loaned
otil-for tlimrown profit,while they were per
mitted to substitute for it a credit in ac
count.
In expressing these sentiments, I desire
not to undervalue the benefits of a salutary
credit to any branch of enterprise. The
creilit bestowed on probity and industry is
the just reward of merit, and an honorable
incentive to further acquisition. None op
pose it who love their country and under
stand its welfare. But wlien it is ttndtdj'
encouraged—-when it is made to inflame the
public mind with the temptations ofsudden
and unsubstantialwealth-—when it turns in
dustry, into paths that lead sooner or later
to disapporntfnent and.distress—it becomes
liable to censure, and needs correction.
Far from helping probity and industry, the
ruin to which it leads falls most severely on
the great laboring classes, who are throw n
suddenly out of employment, and; by the
failure of magnificent schemes never inten
ded to enrich them, are deprived in a mo
ment of their only resource. Abuses of
credit and excesses in speculation will hap
pen in despite of the most salutary laws; no
Govcfnmt nt perhaps can altogether prevent
them ;,but surely every Goverenrent can re
frain from contributing, the stimulus that
calls them into life..
Since, therefore experience has shown,
that to lend the public money to. the focal
banks is hazardous to the operations of the
Government, at least of doubtful benefit to
tiiC in«'ittilions themselves and productive
of disasterotts derangement in the business
and currency of the country, is it the part
of wisdom again to renew the connextion ?
It is true that such an agency is in many
respects convenient to the Treasury, but
it is not indispensible. A limitation of the
expenses of she Government to its actual
wants, and of the revenue to those expenses,
with convenient means for its promt appli
cation to purposes for which it was raised,
are the objects which we should seek to ac
complish. The collection, safe-keeping,
transfer, and disbursement of the public
money can, it is believed, be well managed
by officers of the Government. Its collec
tion, and, to a great extent, i's disbursement
also, have indeed been hitherto conducted
solely by them ; neither National nor State
banks when employed, being required to do
more than keep it safely while in their cus
tody, and transfer and pay it in such por
tions and at such times as the Treasury shall
direct.
Surely banks are not more able than the
Government to secure the money in their
possession against accident, violence, or
fraud. The assertion that they are so, must
asstun that a vault in a bank is stronger
than a vault in the Treasury ; and that di
rectors, cashiers, and clerks, not selected
by the go vernment,nor under its control,are
more w’orth.y es cqtifidence than officers se
lected from the people and responsible to the
government; officers bound by official oaths
and bonds for a faithful performance of their
duties, nnd constantly suljeet to the super
vision ofC'Higress.
The difficulties of transfer, and the aid
heretofore rendered by banks, have been
less than is usually supposed. The actual
accounts show that by far the larger por
'ion of payments is made within sh< rt or
convenient distances from the places of
-ollection ; and .he « hole number of war
ants issued at the Treasury in the year
1934—a year, the results ol which will it i
mlieved tifford a safe tesj for the futiin
II short of five thousand, or up average ol
less than one daily for each State ; in the
city of New York they nut average
more than to a day, and at the city of
Washington only four.
The difficulties heretofore existing are,
moreover, daily lessened by an increase in
the cheapness and facility of communica
tion ; and it may be asserted with confidence,
that the necesssary transfers, as well as the
safe-keeping and disbursements of the pub
lic moneys, can be with safety and conve
nience accomplished through the agencies
of Treasury officers. This opinion lias
been, in some degree, confirmed by actual
experience since the discontinuance of the
banks as fiscal agents, in May last; a peri
od which, from the embarrassments in com
mercial intercourse, presented obstacles as
great as any that may be hereafter appre
hended.
The manner of keeping the public money
since that period, is fully stated in the report of
the Secretary of the Treasury. That officer
also suggests the propriety of assigning, bylaw,
certain additiontil duties to existing establish
ments and officers, which, with the modifica
tions and safe-guards referred to by him, will,
he thinks, enable the Department to continue
to perform this branch of the public service,
without any material addition either to their
number or to the present expense. The extent
of the business to be transacted has already
I. been stated; and in respect to the amount of
j money with which the officers employed would
be entrusted at any one time, it appears that,
assuming a balance of five millions to be at all
times kept in the Treasury, and the whole of it
left’in the hands of the collectorsand 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,
and assuming the remaining four millions to be
in .the hands of one-balf of the present num
ber of. officers—a supposition deemed more
I likely to correspond with the fact—the sum in
the IfandiJ of each would still be Jess 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 re-,
sped to the safety of the money, or the faithful,
discharge of these fiscal > transactions, may, it
appears to me, bo effectually removed by ai
ding to the present means, of the Treasury thp
establishment by law, at a few important points,
of offices for the deposite and dfcbuinenient of
such portions of tht* ptiblrc revenue as
with obvious safety and-convcnierlce, bp left in
the possession of the collecting officers- until
paid over b’ them to the public creditors. Nsi
ther-thc amounts retained in their hands, nor
those deposited in the offices, would, in an ordik
nary condition of the revenue, be larger ihf;
most cases than those often undiVr tiler control of'
disbursing officers of the Army and Na.vy, and.,
might be made entirely safe, by requiring such,
securities, and exercising suclr controlling ' su
pervision, as Congress may by., law- prescribe.
The principal officers whose appointments would
become necessary under this plan, taking th<».
largest number suggested by the Secretary of
the Treasury, would not exceed tent nor thp
additional expenses, at the same estimate, sixty
thousand dollars a year;
There can be no doubt of the obligation of
those who are entrusted with the affairs of Gov—,
ernment, to conduct them with as little cost to
the nation as is consistent with the public inters
est; and it is for Congress, and idtunatcly sot;.
the people, to decide whether the benefits to be,
' derived from keeping our fiscal concerns apart,
! and severing the connection which has li’rther
to existed between the Govt rnment and banks,
! offer sufficient advantages to justify the neces-.
sary expenses. Ifthe object to be accomplish-,
ed is deemed important to the future welfare
the country, I cannot allow myself to believe,
that the addition to the public expendi.ure, of
comparatively so small an amount as will be nen.
cessarv to effect it, wirt be objected to bv the.
people.
It will be seen by the report of the Pnstmas.-.
ter General, herewith communicated, that tltp
fiscal affairs of that Department have been sue-.,
i cessfully conducted since May last upon the
{ principle of dealing only in the legal currency
!of the United States, and that it needs no le
i gislation to maintain its credit, and facilitate the
i management of its concerns; the existing laws;,
being, in the opinion of that officer, ample for
i those objects. ' «
! Difficulties will doubtless be encountered" sot;
! a season, and increased services required froiq
the public functionaries; such are usually inci
dent to the commencement of every system,
but they will be greatly lessened in the pro
gress-of its operations.
■ The power and influence supposed to be
{ connected with the custody and disbursement
| of the public money, are topics on which the
public mii»<r is naturally, and, with great pro
priety, peculiarly sensitive. Much has been
said on them, in reference to the proposed sep
aration of the Government from the banking
institutions; and surely no one can object to any
appeals or animadversions on the subject,
which arc consistcrrt with facts, and evince a
proper respec’ for the intelligence of the peo
ple. If a Chief Magistrate may be allowed to
speak for himself, on such a point, I can truly
say, that to me nothing would be more accept
able, tlia then withdrawal from the Executive,
to the greatest practicable extent, of all con
cern in the custody and disbursement of the
public revenue; not that I would shrink from
any responsibility ca?t upon me by the duties’of
my office, but because it is my firm belief, that
its capacity for usefulness is in no degree pro
moted by the possession of any patronage not
actually necessary to the performance of those
duties. But under our present form of Gov
ermnment, the intervention of the Executive
officers in the 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 by
dispensing with the agency of banks, the na
ture of that intervention in such an agency-must
be carefully regarded, and a comparison must
be instituted between itsextent in the two cases.
The revenue can only be collected by officers
appointed by the President, with the advice
and consent of the Senate. The public mo
neys, in the first instance, must, therefore, in all
i cases, pass through hands selected by the Ex-
I ecutivc. Other officers appointed in the same
way, or, as in some cases, by the President
alone, must also be entrusted with them when
drawn for the purpose of disbursement- It is
thus seen that, even when banks are employed,
the public funds must twice pass through the
hands of Executive officers. Besides this, the
head of the Treasury Department, who also
holds his office at the pleasure of the President,
and some other officers of the same depart
ment, must necessarily be invested with more
or less power in the selection, continuance, and
supervision, of the banks 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, the agency of banks is necessa
ry to avoid a dangerous extension of the pat
ronage and influence of the Executive? But
is it clear that the connection of the Executive
with powerful moneyed institutions, capable of
ministering to the interests of men in points ‘
where tbriy are most accessible to corruption,
is less liable Io abuse, than bis constitutional
agency in the appointment and control of the
'ew public officers required by the proposed
■flan? Will the public money, when in their
iands,be necessarily exposed to any improper
interference on the part of the Executive? May