anomaly in the history of legislation? Is it to carry out some theoretical dogma-some mere common place of party? Is it, in short, to satisfy the notions Couched and propagated under the well-sounding phrase constitutional currency. see how the proposed system would work. In vaults, safes, and all the usual appendages of a years of abundant importation, the circulation of banking establishment. The treasurer and secrethe seaports being insuflicient to furnish the requi-tary of the treasury are to preside, particularly, site sums of specie to pay the duties, large amounts over the central establishment here-the treasurer would be drawn from the south and west to meet of the mint and the branch mint over the estabI ask, then, what is meant by this phrase? Is it the demands of the custom house in the north and lishments in Philadelphia and New Orleans, and meant that no other currency is constitutional but east. The sections, thus stript of their specie, four receivers general, with their clerks and assisgold and silver? If so, deny the proposition. would be, all at once, subjected to the greatest of tants, over those at New York, Boston, Charleston, Bank notes, as currency, are as constitutional as gold all calamities in a pecuniary point of view-that and St. Louis. Thus you have the funds or capital and silver. The constitution, it is true, declares of a deficient circulation, suddenly contracted, not to operate on, placed in position at suitable points, that "no state shall make any thing but gold and in the ratio, merely, of the specie removed, but of and a complete organization of officers to manage silver coin a tender in payment of debts." This four or five times its amount; for to that extent and administer those funds. Nothing but the plaswas intended to establish an ultimate standard of would the banks be compelled to call in their cir- tic hand of the secretary of the treasury will be value for the adjustment of contracts, where the culation, in order to meet the drafts upon them for wanting to mould these materials into a bank, and parties chose to insist on the strictness of legal the precious metals. Under this desolating pro- to give motion and direction to the machine. How rights, but not to prevent the states from authorizing cess, the prices of property would be struck down, will it be done? The modus operandi will be perconvertible representatives of that value to be used the relation of debtor and creditor violently dis- fectly natural and simple. as currency, or a common medium of exchange and turbed, and every branch of industry paralysed The government funds, compared with the discirculation, in the ordinary business of life. On the and withered. On the other hand, when the land bursements to be made, will be in excess in some contrary, those representatives in the shape of bank sales became active, the current would be reversed, places, while they will be deficient in others. They notes, were known and used as currency, at the time large masses of specie would be drawn from the must then be transferred from one place of deposite of the adoption of the constitution, and nothing in north and the east to the south and the west, at. to another. This will hardly ever, it is to be prethat instrument prohibits them-the states have, tended with the same distressing effects on the sumed, be done by an actual transportation of speconstantly since, been in the habit of creating cor- trade and industry of the country, and only shifting cie. It will, doubtless, be generally effected by porations, authorized to issue and circulate them-the theatre of their disastrous operation. What the ordinary commercial means of drafts and bills the power, thus exercised by the states, has been could result from this perpetual dragging, to and of exchange. The bill most sedulously gives to invariably acquiesced in and recognised by the ge- fro, of the specie of the country, contrary to the the secretary of the treasury an unlimited discreneral government-and recently it has been deter-natural laws of trade, and in obedience only to tionary authority to make and order these transfers mined by the solemn and unanimous judgment of arbitrary governmental regulations, but incessant from one place of deposite to another, and from the highest judicial tribunal of the country, (in the throes and convulsions in the whole system of its one individual depository to another. At a place, case of Briscoe vs. the Commonwealth Bank of Ken- business and currency? therefore, where the government funds are in extucky,) that the states rightfully and constitution- It would be some compensation, in a national cess, and he wishes to transfer a portion of them to ally possess the power. I say it was unanimously point of view, if the specie, of which different some other place where they are deficient, be will so decided by the supreme court, because, although portions of the country would, in their turn, be naturally direct a draft, or bill of exchange on the a minority of the court were of opinion that, where stript, under the operation of this new system, latter place to be bought, paying for it out of the the state owned the entire stock of the bank, the ex- were restored to active and beneficial use in those specie accumulated in excess at the place of the crcise of the power would be an infringement of the sections to which it would be transferred. But negotiation. On the other, hand, when he wishes constitutional prohibition on the states to emit would this be the case? No, sir. The whole sur- to draw funds from a distant place, where they are bills of credit," yet all the judges concurred, that plus, beyond the current disbursement of the in excess, to a place where they are deficient, a bill the authority of the states was unquestionable where government, would rest in barren and unproduc- on the former place will be sold, and the money rethe stock of the banks was owned either by indivi-tive idleness, in the "vaults and iron safes" of ceived for it, added to the deficient funds at the duals entirely, or by them in common with the state your sub-treasuries. It would be an annihilation place of the negotiation. The officers of the gov as a partial stockholder. State bank notes, then, of so much of the national capital, susceptible of ernment, thus operating on the public funds under being issued in pursuance of an unquestionable con- multiplication, through conventional substitutes, to this system, would become habitual dealers in stitutional authority, are a constitutional currency, as four times its nominal amount, and capable of fruc- exchange-a regular and acknowledged branch well as gold and silver. It is true, a creditor can- tifying and sustaining the national industry to a of the business of banking. In the exercise of not be compelled to accept payment of his debt in corresponding extent. I must confess, Mr. Presi- these fanctions, the accommodation of indivibank notes, if he object to doing so; but this does dent, that this monopoly and hoarding of the pre-dials would come to be fully as much consulted as not affect their character as currency, as a common cious metals by the government, does seem to me the wants of the government. The receiver genmedium of exchange and circulation, or prevent a unworthy of the age in which we live. We may eral at St. Louis, for example, having an excess of payment in bank notes from being a final and com- find examples of it among the nations of antiquity. the public money's in his hands, and instructed to plete discharge of the debt, if accepted. But their circumstances were very different from transfer that excess to the sub-treasury at New But, perhaps, by this oft repeated phrase, it is ours. They were engaged in frequent wars, and York, would naturally do so by buying drafts of meant to be implied that there is some special they accumulated their treasure in advance, as a merchants or other individuals on the latter place. constitutional obligation on the government to de- provision for those national emergencies, always But in this application of the public money to the mand its dues in gold and silver. There is as little with them, more or less near at hand. It may also purchase of drafts, what an endless field would foundation, however, for this notion as for that deserve consideration whether the practice which there be for undue favors to individuals, as well in which I have just exposed. The government is prevailed among them of hoarding the public trea-discriminating among those who might have drafts like every other creditor. It has the power, as ev-sure was not the cause, fully as much as the effect, to sell, as in adjusting the price and other terms of ery individual creditor has, (if it chooses wantonly of the frequency of their wars; for the relief to the purchase. So, likewise, if we suppose the reto exert it, and to recur to the rigor of strict right,) industry from unlocking those vast hoards in time ceiver general at New York, authorised to draw a to insist on the payment of its dues in gold and of war, may well be conceived to have rendered surplus of public moneys from St. Louis, he would silver; but, as an individual creditor also, it may the occurrence of war no unwelcome event to their do so by selling drafts on the receiver general at waive its strict right, the sternness of the summum crowded populations. If we descend to modern St. Louis; and in this operation of selling, there jus, (which, we are told, is most frequently summa times, we find no instance of this national hoard-would be precisely the same danger of abuse, and injuria,) and receive its dues in the same medium ing, but among rude and uncivilized communities of the influence of personal considerations, as I which individuals and the people, by common con- the barbary powers of the tartar tribes, for ex- have just shown to exist in that of buying exsent, use for the adjustment of their transactions. ample. The dey of Algiers is said to have been change. This it has done, from the adoption of the consti- the master of a large hoard of accumulated trea- It is also very easy to perceive that, under the tution to the present day, and never, heretofore, sure, when he was expelled from his dominions by forms of buying and selling bills of exchange by with any question of the constitutionality of the the French. So, also, was Mazeppa, the celebra- government officers, real loans to individuals may procedure. It not only has the constitutional pow-ted Cossack chieftain, the untutored ally of Charles be couched. If buy, for example, a bill of exer which every other creditor has, to waive the the XII. But surely, we are not going to the banks change which has sixty or ninety days to run, and strictness of its right, in this respect, but it is es- of the Dnieper, or the shores of Africa, for lessons pay for it in cash, as I suppose to be done in the pecially incumbent on it, as the common agent of in policy and legislation. We shall not thus, I case, put above, of a receiver general purchasing the people, guided by that fundamental and be- humbly trust, dishonor the spirit of the age, beliebills to transfer an excess of public moneys in his nignant maxim of taxation, to which I have alrea-the genius of our free institutions, and mar the hands, what is this in fact but a loan of money to dy adverted, to waive an extreme right, which, in destinies of our great and glorious country. be returned, at the end of sixty or ninety days, at its exercise, would so seriously affect the conveBut there are aspects of this measure even more some other place where the government wants it. nience of its constituents-the great body of the dangerous and alarming. In the remarks I had the It is, indeed, except as to place, the ordinary form people. honor to submit to the senate, at the late session, I of discounting mercantile paper. In like manner, We must not, then, be led away, under the do- said that this scheme had a squinting, "an awful the sale of a bill of exchange, to be paid for at a minion of well-sounding phrases, of plausible or squinting" towards a treasury bank. It now has future day, is a very convenient medium of a real pompous common places, to disregard the real in-that character boldly planted on its front. It is, to loan. The purchaser immediately sells the bill be terests of the country. As legislators and states all intents and purposes, a great government bank; has bought, realizes it in money, the use of which men, we must emancipate our minds from the de- and of this I persuade myself I shall be able to he enjoys for the stipulated period, and then returns lusive authority of mere dogmas, and look to the satisfy every gentleman who will do me the honor it with the rate of profit agreed upon in the nomiconsequences of our actions, the practical effects to accompany me in the analysis I propose to make nal purchase. The transaction is, to every practiof our measures. If we trace this requisition of of its composition. In the first place, the national cal intent, a loan; and professional gentlemen, specie for the public dues in its effects on the actual revenue, collected in gold and silver, is to be dispo- conversant with the devices practised to evade the business of society, we shall find that it is calcu-sed in masses at certain leading points, designated statutes against usury, will tell you that nothing is lated to convulse the whole monetary systein of by their importance in a commercial, financial, or more common than to make a real loan under this the country, and to keep it in a state of ceaseless political view. The bill directs that there shall very form of selling a bill of exchange. We see, and distressing commotion. Under the operation be a great central depot of it in the new treasury then, that the officers of the treasury, under the of the banking system as it exists in this country, building here-another depot in the mint of Phila- organization provided by this bill, would not only specie is to be regarded not so much a part of the delphia-a third at the branch mint at New Or- be engaged in buying and selling bills of exchange, currency, as the basis or source of a far larger por-leans, and four other similar depots of the national but they would have the power of discounting mertion. For every dollar of hard money that is taken treasure in gold and silver, at New York, Boston, cantile paper and making real loans. Thus the from the banks, four or five times its amount is Charleston, at St. Louis. Buildings are to be erect- bill creates, in effect, a bank of discount. withdrawn in another form from the actual circula-ed (where they do not already exist,) for the retion of the country. Bearing this in mind, let us ception and security of these funds, fitted up with It would, moreover, be a bank of deposite, for the 27th section of the bill expressly authorises in dividuals to deposite money in the “treasury, or at such other points as the treasurer may designate,' the receipts for which, it is declared, shall be current in the several land offices as cash. This, I am aware, is but a special and limited provision, confined at present to payments in advance for public lands. But the principle being once introduced, will, from time to time, be extended to other cases. I shall hereafter have occasion to show that president Jackson, when he suggested the idea of a government bank, of which this bill seems to be the developement, expressly recommended that it should be based upon individual, as well as public deposites. | import in the report of the secretary of the treasu- | be one. Gen. Jackson, with all his popularity and It is a remarkable circumstance, Mr. President, The secretary of the treasury, however, seems that the most ancient and celebrated banking insti to think there would be no bank in all this, because tutions of Europe have grown up from precisely there would be no incorporation. But incorpora- such beginnings as are contained in this bill. The The organization instituted by this bill would tion is not necessary to constitute a bank, which bank of Venice, for example, the oldest and most also be a bank of circulation, for the drafts, re- derives its character wholly from the nature of its celebrated bank in Europe, commenced as a fiscal ceipts, and other paper authorized to be issued by business and functions. The government bank of institution. The republic, pressed by its foreign the officers of the treasury, under the provisions of Russia is not incorporated. Neither is the gov-wars, was compelled to resort to a forced loan. In the bill, would form a part of the actual currency ernment bark of Austria. They are both consti- order to secure the payment of the interest on this and circulation of the country. That it is design-tuted of, and managed by, officers of the govern- loan, it set apart certain branches of the public ed, through the medium of this machinery, to is- ment, precisely as the machinery created by this revenue, and instituted a board of commissioners, sue permanently a government paper currency, bill is proposed to be managed and directed. So called the chamber of loans, who were charged under some form or other, is sufficiently evinced by in regard to the private and joint stock banks of with the collection and management of those the alternative clause of the bill relating to receipts England. They are not incorporated; but no bo- branches of the revenue, and the application of and payments by the government, which requires dy ever supposed them to be the less banks on that their proceeds to the punctual payment of the inthat all such receipts and payments, after a certain account. Some thirteen or fourteen years ago, the terest on the loan. In the transaction of the buperiod, shall be in gold and silver, "or in notes, celebrated Mr. Ricardo proposed the plan of "a siness confided to them, they had occasion some.. bills, or paper, issued under the authority of the national bank” in England, which, among other times, to buy and sell bills of exchange, as I have United States.' 29 The senator from South Carolina, things, was to have the exclusive privilege of issu- shown the officers of the Treasury, under the or(Mr. Calhoun,) the patron and champion of this ing the whole paper currency of the kingdom. It ganization of this bill, would do. Having frebill, and the author of the provision just referred to, was to be a government institution, consisting of quently surplus funds on hand, they began at length is known to advocate a paper currency of that des-five commissioners, residing in London, to be ap- to employ them more extensively in the operation cription, issued and resting exclusively on the cred-pointed by the crown and removable by parlia- of buying and selling exchange, and under this powit of the government. The secretary of the trea-inent, and to be assisted by agents and officers es- er, actually advanced money on mercantile paper, sury too, in his report on the finances, at the com-tablished in the leading country towns. The plan or in other words, became a bank of discount. The mencement of the present session, does not hesitate of this bill bears, in some respects, so close a re- credit and responsibility of the institution being to ask congress for the permanent grant of an au- semblance to that of Mr. Ricardo, that it is difficult established, the merchants of Venice began to thority to issue treasury notes, (at his discretion, to resist the impression that the one must have make use of it for the safe-keeping of their funds, within a certain limit,) according to the varying suggested the other. The organization proposed and so it became a bank of deposite also. Finally, wants of the treasury. But the design of supplying by Mr. Ricardo, consisted, like that of this bill, of a credit on the books of the institution for money a paper medium, for general circulation, through public officers, having certain duties and functions deposited, being equivalent to cash, payments in the fiscal action of the government, is more fully assigned to them, connected with the collection and the course of trade, came to be made by transfers developed in the report of that officer at the last management of the public revenue, as well as with of these credits from one to another, or by what session, and from that document, I beg leave to the issue of a paper currency. No act of incorpo- are now called checks, which performed the office, read to the senate a few significant extracts. ration was proposed or deemed necessary; but he and preceded the introduction of notes, and so the "Should congress," says the secretary, "deter did not, on that account, the less consider his chamber of loans became also a bank of circulation. mine that it is proper to furnish by its own author-scheme a "national bank," under which name it We see in this example, by what natural and easy ity, and for the purposes before mentioned, some was expressly presented to his countrymen. gradations the most celebrated banking institution paper medium of higher character, and other than But there is another authority on this head still in Europe, that which has been the model of all what now exists in private bills of exchange, or more in point. It remounts to the first suggestion the rest, grew out of the simple function of collecnotes of state banks, no doubt exists, that any bene. ever made in this country of a government or trea- ting and applying the public revenne, associating fits which may occasionally be derived from its sury bank. I allude, of course, to president Jack to itself a collateral and incidental action on the employment can be readily secured, without tread-son, who in his first annual message to congress, commerce and currency of the country, all of ing on the debateable ground of either the power (1829,) threw out the idea of a bank, founded on which functions, I have shown, are to be vested by or the policy of chartering a national bank. Certi- the credit and resources of the United States." the new financial scheme in the officers of the ficates, not on interest, but payable in specie to This suggestion became the subject of very able treasury department. bearer or order, as well as being receivable for all and elaborate examination by the committees on The same in every material respect, were the public dues, could be authorized to be given in finance, in this and the other house, by both of origin and progress of the bank of Genoa; which, payment to the public creditor, whenever preferred which, though consisting of warm friends of the next to that of Venice, was the oldest, and in its by him, and suflicient specie existed in the trea- president, the suggestion was repudiated and ex-day the most accredited banking institution in Ensury. This kind of paper would be very conve- ploded. The president, in his message at the com- rope. In England, too, the mint, at one time, in nient in form, and would differ little from the drafts mencement of the following session of congress, being made the depository of the funds of individnow in use on banks, except being drawn on a (December, 1830,) thought proper to recur to the uals, as the secretary of the treasury proposes that known specie fund, and expressing on its face not subject, and to define more precisely what he our mint and its branches should be, became vironly this, but its being receivable, in the first in- meant by a bank founded on "the credit and re-tually a bunk-"the great centre of money transstance, for all public dues. It would possess the sources of the United States." The scheme he actions and remittances for England and foreign highest credit attainable in society." "The com- then brought forward was identical, in every res- nations"-till Charles the ist, in 1640. impelled by mon drafts of this department, in the present con- pect, with that contained in the present bill; and his necessities, violated the private funds deposited venient form, possess one advantage, which could yet, with the soldierly frankness which characteris- there, and happily," as Burke says, put an end be imparted to the certificates. When used at ed him, he did not hesitate to call it by its proper to both its credit and use as a banking establishplaces against which the balance of trade exists, name-"a bank of the United States." Let us see ment. but drawn on places in whose favor it is, the for- what he said on that occasion. mer do now, and may hereafter, not only facilitate essentially the domestic exchanges, but at the same time, supersede numerous bank transfers, and the more expensive transportation of apecie itself." cntribute to the same desirable ends." "It must be obvions that the paper of any bank would be less safe and useful in being received for public dues, in proportion as it may want such solid securities and foundations as the certificates before described." midable an union of the moneyed and political power consummated in the hands of the government. Will he put so potent an engine, an instrument so efficacious of operating on the hopes and fears of men, of enlisting their interests, of controling their fortunes, into the hands of a department of the government, already armed with a patronage and power of fearful extent? The testimony of history then, as well as the "In the spirit of compromise and improvement nature of things, proves that the organization inwhich distinguishes our country and its institu- stituted by this bill, would work as a great gov tions, it becomes us to enquire whether it be not ernment bank-buying and selling exchange-under possible to secure the advantages afforded by the that form, at least, discounting mercantile paper.— "The nint certificates, heretofore given on the present bank, through the agency of a bank of the receiving deposites, public and private, and circudeposite of bullion and specie for coinage, might be United States, so modified in its principles and struc-lating a paper money of its own. Now, I would easily made running to bearer or order, and receiva-ture, as to obviate constitutional and other objec- appeal to every friend of the liberties of his counble for all public dues; and, in that way, would tions. It is thought practicable to organize such a try, and ask him if he would willingly see so forbank, with the necessary officers, as a branch of the treasury department, based on the public and individual deposites, (without power to make loans or purchase property,) which shall remit the funds of the government, and the expenses of which may be paid, if thought advisable, by allowing its offiMy purpose is not now to discuss the supposed cers to sell bills of exchange to private individuals, advantages of this government paper currency, so at a moderate premium, &c., &c., &c. In times of much lauded by the secretary. The great recom-public emergency, the capacities of such an institumendation of it, in his eyes, is that it would rest tion might be enlarged by legislative provisions.” upon a specie basis co-extensive with the issues. The bank which gen. Jackson proposed, was to But as the certificates would be rarely returned be organized, with the necessary officers, as 9 for redemption, nothing would be more likely to branch of the treasury department, to be based on happen than what occurred in the case of the bank the public and individual deposites, to remit the funds of Amsterdam-that, in the mean time, large por- of the government, and to deal in bills of exchange. tions of the specie would be withdrawn and divert- The organization, provided by the bill under coned to other purposes. But my intention was sim-sideration, is to possess every one of these attriply to show that an issue of a government paper butes, and to perform other banking functions in currency, in some form or other, is one of the main addition, such as the issue of paper, which was not objects of this new financial scheme. In looking then contemplated. Yet, while the former plan, at the passage above quoted, and others of similar was boldly avowed to be a bank, this is denied to The honorable senator from New York, (Mr. Wright) in a portion of his remarks which seemed to be intended specially for the benefit of those of us who are still for employing the state banks as depositories, and whom he described as a very small fraction, said that the real and only alternative before the country is the sub-treasury scheme or a national bank. Now, sir, unless the observations I have made on the practical operation of the subtreasury scheme are founded in the grossest delusion, that scheme, instead of being antagonistical to a national bank, is, in every respect, identical with it. It would be a national bank under the worst possible form. A national bank in the hands of the executive, controled and managed exclusively by executive agents. If, then, the honorable senator will insist upon making up an issue, to which the ghost of that thrice-slain monster, the Bank of the United States must be a party, he must amend his pleadings according to the real state of the case, and submit to the country this question-will you have a great government bank in the hands and under the control of executive officers, or will you have an incorporated national bank, designed to be a business concern and not a political engine? When this issue shall be presented, if indeed, it ever shall be, let me tell the honorable senator that there are those whose opposition to a national bank is as true as his or that of any other man, who would pause long, before they would permit the terror of any alternative to drive them into the support of a scheme, like that of the honorable senator, which they believe to be fraught with the most serious danger to the liberties, and certain destruction to the best interests of their country. I shall hereafter endeavor to show that the true and only means of averting either an incorporated national bank or a great government bank is to sustain the state institutions, and to employ their agency, with such modifications and securities as experience may have shown to be either necessary or desirable. I wish, however, for the present to pursue the remarks which the honorable senator, with "so much charity," to use his own expression, addressed to that small fraction of erring and obstinate brethren, Sometimes 'ycleped conservatives. The name, I believe, sir, has not been of their own choosing; but gentlemen who are well read in the history of parties will not fail to remember that the most odious and reproachful designations applied to them by their adversaries have become endeared by the persecutions of political intolerance, and those who at first felt injured and insulted by the application of a political nick-name, have at last proudly appropriated it, and come to glory in it as a memorial of their struggles and a symbol of their principles. Now, sir, I do not know that there is any thing in this name of conservative, as applied to American institutions, which an American patriot ought to wish to disown. It implies devotion to the existing institutions of his country-a desire to preserve and defend them-a willingness, and even zeal to reform, as the only effectual means of preserving-but an unconquerable resistance to schemes of wild innovation and destruction. If this is what is meant by a conservative, (and such is the true and proper import of the term,) then, sir, I proudly avow myself a conservative-a conservative of republican institutions, of republican principles, of republican practices, as illustrated and interpreted by the great champions of the republican faith. posed to confine our view here for second-hand | which bids defiance to calculation, But if their But, however, this may be, nothing can be more certain than that the expense of this system, when fully developed, must, from its complexity, and the number of officers it will call for, be very great. We have a standard to appeal to, on this question, which is worthy far more than any a priori reasonings. The system has been long established and fully tried in France, and we know its actual results there. On the other hand, in England the agency of banks has been extensively used in the collection and disbursement of the public revenue, instead of the individual agencies which are employed in France, and are contemplated by this bill. It will be a good test therefore, of this question, to look at the relative expenses of the revenue systems of France and England. I will read to the senate a comparative statement on the subject, which I have taken from the work of a highly respectable American traveller, vouched by original authorities, But, sir, to pursue the remarks of the honorable senator, addressed to this smal! faction of his political brethren. He tells them that their plan has very few supporters in either house of congress; that there are two great parties in congress, one for the sub-treasury scheme, and the other for a national bank, and he sees, therefore, no prospect of success for any middle ground. He then assumes that the state of public sentiment among the people corresponds to this division of opinion in congress. I must say, with all my respect for the gentleman's knowledge and skill in the statistics of party, that this assumption is not warranted under the circumstances of the case, nor does it seem to me sound in principle. It implies that the organization and ar- But, sir, to return from this digression, let us see ray of parties here is to give law to public opinion, what additions are made to the official as well as and that public opinion is not to shape and control pecuniary patronage of the executive, by the provithe action of parties here. Sir, I go for the voice sions of this bill. When I had the honor of adof the people; and the people have spoken for dressing the senate at the last session, I spoke of themselves. They have not left us to infer their the bill then under consideration, as the " grain of sentiments from any accidental or temporary rela- mustard seed," which would grow up into a large tion of parties here. They have pronounced judg- tree and cover the land with its branches. But I ment on the gentleman's scheme; and I should like was told by the honorable senator from New York to know where the honorable gentleman finds, in and others, that the bill did not create a single new these expressions of public opinion, any evidence officer, and my friend from Connecticut, (Mr. Niles) that there is a great party in this country in favor of complimented me, as well as I remember, for my the sub-treasury project. Never before has any vivid imagination, to the account of which alone he proposition been so signally rebuked and condemn set down the apprehensions I had expressed. But ed by the voice of the people. I refer to these what do we now see? In three short months, the things, Mr. President, with no pleasure. I contri- tree, which has already grown up from this grain buted my best exertions to the election of the pre- of mustard seed, has thrown out four large branches sent chief magistrate, honestly anticipating from in the form of receivers general, each of which will to which he refers. From this statement it appears his prudence, his abilities, and his patriotism, a wise have its dependent ramifications in the form of that the cost of collecting the revenue in England and successful administration of the public affairs. cashiers, tellers, clerks, &c. The treasurer also is is, under the respective heads of taxation, as folNo one has felt a more sincere desire for his suc- to have his "assistants;" and an indefinite brood lows: customs, 7 per cent.-excise, 4 per cent.-re. cess than I have done. The unfavorable manifes of clerks is provided for all the officers made depo-cording and stamps, 7 per cent.—post office 11 per tations of public sentiment, therefore, upon the first sitaries of the public moneys under the bill, to as- cent. and direct taxes, 2 per cent.-averaging, upleading measure of his administration, (though I sist in the discharge of the new duties devolved on on the whole, 6 1-5 per cent. In France, under the foresaw and foretold them, from the first moment them. Finally, a number of missionaries are to be same beads, the costs of collecting the revenue is as that that measure was suggested,) have been to me appointed from time to time, at the discretion of the follows: customs, 33 per cent.-excise, 20 per cent. the source of any thing rather than pleasure. They secretary of the treasury, to visit and inspect the recording and stamps, 9 per cent.-post-office, 45 have now, however, become matters of public his- various fiscal agencies created by the bill. Now, per cent.-direct taxes, 15 per cent.-averaging, tory; and as the senator from New York seems dis- here is a cloud of new executive officers, at once, upon the whole, 24 2-5 per cent! I am well aware that divers circumstances are to be taken into con- movable at his pleasure? But the senator from me, show? That the whole amount of balances due sideration, in explaining this enormous difference of New York, (Mr. Wright,) contends that the pre-from banks, which are deemed unavailable, is a litexpense between the French and English fiscal sys-sident would have no more control over the public tle more than one million of dollars, (1,047,649); teins; but one of the principal causes of that differ- moneys under the proposed system, than if they and these balances go back to a period long past, ence, (and it is so considered by the writer, to were deposited in banks-that the same legal for- when the extraordinary embarrassments, consequent whom I have referred,) will, at last, be found in malities must be gone through to touch the public on the war, involved banks and individuals in diffithe fact of the extensive use of banking agency in moneys, in the one case, as in the other. It may culties, beyond any former or subsequent example. the collection of the revenue in England, and the be true, that the president has no more legal con- In relation to the banks, which have been recently exclusive employment of individual agency, for that trol over the public money in the one case than in employed as depositories, it appears that they have purpose, in France. the other; but has he not a greater practical con- either paid up all they owed the government, or are But it is not merely by the multiplication of offi- trol. In the one case, the depositaries of the pub- in the course of paying it up as called for by the cers and the increase of expenditure, that the in- lic money would be his agents, subject to his au- wants of the public service, without any apprehenfluence of the executive branch of the government thority, the creatures of his will, dependent upon sion of default on their part, or availing themselves is fearfully extended by this bill. That influence is his pleasure for their continuance in office, and of the indulgence of the act passed at the late sesgreatly augmented by certain new regulations it in- made by the peculiar provisions of this bill, as 1sion of congress, have either secured, or are expecttroduces in regard to the tenure of office-the com- have already shown, especially and habitually sen-ed to secure satisfactorily, the payment of the whole pensation of officers, and the forms and usages of sible of that dependence. In possessing so com- balances due from them, according to the terms of fiscal administration. In the first place, the trea- plete a control over the keepers of the public mo- that act. Only eleven of them, it appears, out of surer, the receivers-general, and all the other offi- ney, he would possess virtually a control over the near ninety employed as depositories, have even cers, from the highest to the lowest, employed in puclic money itself. But, in the case of the em- asked indulgence, under the act here referred to, the fiscal service, may be required at any time, at ployment of banks, the depositories of the public and but a single one of them has been ordered to be the discretion of the secretary of the treasury, to money are institutions not created by the president sued. Now, sir, when we look to the list of indigive new official bonds, in increased sums, to be fix--not dependent on him for their continued exist-vidual collectors and receivers-what do we see? ed by the secretary of the treasury, “any law in ence:-on the contrary, they hold their charters, An aggregate default of about three millions! and reference to any of the official bonds of any of the and the advantages they conter, from a distinct au- though some of the more recent balances appearing said officers to the contrary notwithstanding ;" and thority, to which they are at all times responsible on that list, may be reduced by future collections, in default of giving such new bond, the officer and are thus guarded against any undue influences yet from the long standing of most of them, there is would, of course, be deprived of his office. Now, from other quarters, which might warp them from no reason to believe that the aggregate amount of it is evident, that under such a power possessed their integrity and their duties. the entire list will be affected, in any sensible deby the secretary of the treasury, all the officers con- In making these remarks, sir, I speak in no spi- gree, by these partial recoveries. It is to be renected with the operations of the treasury, would rit of captious jealousy, as to the highest executive marked too, that this list does not include disbursbe converted into the trembling vassals of the exe- trust of the government, or of its actual incumbent: ing officers," whose indebtedness" is stated by the cutive. A direct removal from office is a measure but I speak in the spirit of the constitution, which secretary" to be very great," and the actual losses of more than ordinary energy, and involves respon- anticipates the danger, and supposes the possibility by whom I showed, during the late session of consibility. Cases might exist in which the secretary of the abuse of power, and inculcates the necessity gress, from a report of Mr. Crawford, to have of the treasury would be unwilling to take the re- of guarding against it. The system organized by greatly exceeded" a million and a half of dollars, sponsibility of a direct removal from office, and yet this bill is one of the most thorough centralization. from 1789 to 1819, and by this time, have grown would accomplish the same object by a vexatious It rides over the institutions of the states, prostrates up, in all probability, to another aggregate sum of requisition of a new bond in so large a sum, that the their credit and usefulness, brings patronage and three millions! Neither does this list include offiofficer could not, or would not find sureties to the power to the general government, concentrates them cers of the post office department, among whom it increased amount. Who does not see that, under in the hands of the executive, to whom it gives an was shown by official documents, at the last annusuch a regulation, the officers of the treasury would unlimited control over the public moneys, and al session of congress that there were as many as lose all sense of independence; and that those who through the banking operations to be founded on eighteen hundred and thirty-two defaulters! It is could consent to hold office on such terms, must be them, an extensive and paramount influence upon to be observed also, that this list is confined to pubprepared to become the passive and unresisting the moneyed concerns of the whole country. It is lic agents, "who were out of office on the 12th day tools of power. Heretofore it has been the wise fitting that such a system should be borrowed from of October, 1837." policy of our legislation to fix by law the sum in France, the country whose institutions exhibit the Now, sir, if the honorable senator from New which official boads are to be given, and to leave most unqualified example extant of centralization-York had taken the trouble to look at this docunothing in that respect, or as little as possible, to under which the capital has swallowed up the pro-ment, before he made his speech, he might have executive discretion. Again, it will be seen from vinces, and Paris has become synonimous with saved himself the labor of a great deal of superfluan examination of the bill, that the compensation of France. But it is equally fitting that such a sysseveral of the officers to be appointed under it, such tem should be resisted, to the last extremity, in this as visiting agents, clerks, &c. is to be fixed by the land of republican freedom, by all who are attached secretary, at his discretion, and not by law. Here to the rights of the states-by all who are opposed is another source of servile dependence on the one to the enlargement of federal and executive power hand, and of increased executive influence on the and, by all who watch with jealousy, and view other, which is not in harmony with the general with aların, every tendency to consolidation. spirit and maxims of our legislation. 66 ous ingenuity. In contrasting the ingenuity of his argument with the blunt contradiction of facts which this document presents, I was strongly reminded of an anecdote I have often heard of the late venerable bishop Madison, of Virginia. That excellent prelate was also a profound philosopher, and much addicted to philosophizing. On one occasion, I will now, Mr. President, follow the senator he undertook to explain why the shade of a lamp, My attention has also been attracted by a provi- from New York, (Mr. Wright,) in the remarks almost in contact with the flame of the candle besion of the bill which seems to me to introduce a which he made on the comparative safety of the two neath, was not, in any degree, heated by it. This inost dangerous innovation in the establithed forms systems proposed, for keeping and disbursing the he did by a learned dissertation on the laws of caland usages of the treasury. It has heretofore been public moneys. Although experience, the only oric, and all the other scientific data which could be a fixed principle of fiscal responsibility, that no money safe arbiter, has long since settled this question, the brought to bear on the subject. Having completeshould be drawn from the treasury, but upon a war- honorable senator argued it as if it were still openly satisfied himself and the admiring audience which rant of the secretary drawn on the treasurer, coun- to doubt, and made, I am free to admit, an exceed surrounded him, of the truth of his theory, he could tersigned by the comptroller, and recorded by the ingly ingenious and plausible argument. He insti- not avoid, in the consciousness of his triumph, putregister, and upon that warrant, when it reaches the tuted a parallel between the two systems, in regard ting his hand on the lamp shade, which had been hands of the treasurer thus authenticated, the trea- to the great leading points on which their safety is the subject of his disquision, when an exclamation surer draws his draft on the depository of the pub- supposed to depend, and in each instance brought of acute plain disclosed the fact that his hand had lic money for payment. These forms have always out a substantial equality. First, as to officers, he been severely burnt in the application. Nature, been held to be very important checks, and indis- said it would be fair to presume that the officers of thus, contradicted the philosopher, and, so, stubpensable preliminaries to any money being drawn the government and the officers of the barks would born facts will sometimes confute the most astute out of the treasury, or in other words, paid by the be equally trust-worthy. Then, as to sureties, he logician. I cannot but think that if the honorable depositary of the public moneys. The secretary said both the banks and the government officers are senator from New York at the close of his very indraws his warrant upon the treasurer, subject to the equally required to give sureties, if deemed neces- genious argument, had laid his hand upon this docchecks before mentioned, and then the treasurer sary. So, likewise, as to vaults, the government offi- ument, he must have felt his fingers, at least, a little draws upon the depositary who is to make the pay-cers, he said, are to be provided with vaults, as well scorched. ment. But, in no instance, does the secretary draw as the banks. The only particular, then, in which directly upon the depository, because that would be the banks, as he alleged,could be supposed to present to lose the security of the intermediate checks of a better guarantee for the safety of the public funds, the comptroller and the register. By the 10th section of this bill, however, in contravention of these established principles and checks, it is expressly provided, that " for the purpose of payments on the public account, it shall be lawful for the said secretary to draw upon any of the said depositaries, as he may think most conducive to the public interest, or to the convenience of the public creditors or both." Under this provision the secretary of the treasury While the honorable gentleman was running this selected bunks, that there is not now due on depocould draw out all the money in the treasury, or, parallel in theory between the two systems, there sites, from the whole of them which have now stopwhich is the same thing, in the hands of the depo. was a document lying on the table of the other ped payment, from the establishment of the constisitaries, without any check whatsoever. The ef- house, which had run the same parallel on the surer tution to the present moment, a sum much beyond fect of it, whether so intended or not, is to place the foundations of practice. I allude to a recent re-what is now due to the United States from one merwhole public treasure at his unchecked and abso-port of the secretary of the treasury, in answer to a cantile firm that stopped payment in 1825 or 1826, lute disposal. call of that house, at the extra session, made on the and of whom ample security was required and supNow, sir, is not the effect of these various provi- motion of an honorable friend of mine, (Mr. Gar-posed to be taken under the responsibility of an sions, and of the whole scope and tenor of this bill, land, of Virginia,) containing a list of all "the re- oath. If we include the whole present dues to the to concentrate, at last, the entire control of the pub-ceivers, collectors, or depositories of the public mo- government from discredited banks, at all times and lic moneys, in the hands of the president; for the ney, who are in default to the government, with the of all kinds, whether as depositories or not and emsecretary of the treasury, and all the other fiscal of amount of their respective defaults, &c." What, brace even counterfeit bills and every other species ficers are but his agents, appointed by him, and re-sir, does this document, which I now have before of unavailable funds in the treasury, they will not Has the honorable senator forgotten the emphatic testimony, deduced from a careful collation of facts, borne by the present secretary of the treasury, only is that their capital stock is pledged for the reim- three years ago, to the superior safety of banks as bursement of the public moneys committed to them; depositories of the public money? Let me then, but this advantage in favor of the banks, he very refresh his recollection by reading to him and the adroitly balanced by what he represented to be the senate, an extract from the able report of that offirisk of mingling the government funds with those of cer, made to congress, in December 1834, on the trading corporations. Now all this is very fair and system of keeping und disbursing the public moplausible on the surface. But what is the fact-ney. "It is a singular fact," says the secretary, what is the testimony of experience? in praise of this description of public debtors, the States." as much In a circular "From the state banks, a sincere and effectual exertion, in the common cause of restoring the legal currency, is certainly expected and required; but in return they will merit and receive the confidence of the treasury and of the national bank; the transfer of the public funds from the state banks to the national bank and its branches, will be gradual, and the notes of the state banks will be freely circulated by the treasury and the national bank." In a preceding part of the same letter, he says"The present opportunity is embraced to repeat the assurances which have been uniformly given and maintained, that this department feels the fiscal interests of the government, and the successful operations of the Bank of the United States, to be intimately connected with the credit and prosperity of the state banks." exceed what is due from two such firms.” He then sums of public money lying idle in the hands of having themselves a stake in the common weal, continues, "if our former small losses by them, (the the public officers. and with which the common interests of the whole banks,) in keeping and paying over the public re- I have now, Mr. President, gone through my ob- country were identified. It will be edifying, for a venue, under circumstances so very adverse, are com-jections to this bill on account of what it contains. moment, to look back to the manner in which the pared with our large losses either in collecting or dis-1 object to it also, and not less earnestly, on ac- government then conducted its relations with the bursing that revenue, their present safety seems to count of what it does not contain. It contains no banks; and I must say that, if the exertions of the be as great as is consistent with the usual opera- provision for the relief of the country. It "takes banks, generally, since the recent suspension of tions of the paper system, or with the credit which no thought" for the public. It looks only to the specie payments, to prepare themselves for a remust always be entrusted by government, in some ease and comfort of the government. The most sumption by a steady and persevering curtailment way or other, to agents, of some kind in keeping urgent want of the country, the highest interest of of their business and profits, be compared with the the public money. In considering their safety, it all, is a speedy restoration of specie payments by course of the banks on the former occasion, in should be constantly recollected that the owners the banks. Now, too, is the critical and decisive taking advantage of the suspension to enlarge their and managers of banks, when properly regulated by moment. The banks have been, hitherto, diligently issues to a most extravagant extent, and in obstilegislative provisions in their charters, are, like and steadily curtailing their discounts and circula- nately refusing to apply the valuable public stocks other individuals, interested to transact business se- tion, with a view to that resumption, till they have held by them to acquiring the ability to resume, curely; are desirous of making and not losing mo- brought their business within such safe limits, that the banks now are entitled, at least, to ney; and that these circumstances, with the pre- they might now easily resume with a little encou-liberality and favor as were shown to them then. ference, in case of failure, belonging to depositors ragement. But if they are once again let loose By the joint resolution of April, 1816, which and holders of their bills over the stockholders, uni- from these salutary bounds,-if, despairing of a has been so often referred to, it was made the duty ted with the security, if not priority, given to the general resumption, and yielding to the strong of the secretary of the treasury to take such meagovernment, render them, in point of safely, gener- temptations of iredeemable issues, they should sures as he should deem necessary to effect a colally, much superior to individual agents of the United again expand, all hope will be lost of recalling them lection of the revenue in gold and silver, treasury to a specie standard, and the disastrous reign of an notes, or the notes of specie paying banks. In the If there be any fact, incontestibly established in inconvertible paper currency will be indefinitely discharge of this duty, Mr. Dallas very soon opened our history, and by the experience of all other gov-prolonged. Now, then, is the moment to join a correspondence with the state banks, to induce ernments, it is the superior safety of banks as de- in this great work of effecting a restoration of specie them to return to specie payments. positories over any individual custody. The rea- payments. But does this bill do any thing towards which he addressed to them on the 22d of July, son of it is obvious. The more complex organiza- its accomplishment? On the contrary, it does every 1816, he used this language: tion of banks, the number of their officers acting as thing it can to retard and obstruct it. In the run mutual checks on each other, the daily supervision it would create on the banks for specie, both by the to which they are subjected, their forms of doing demand it makes of it for the uses of the govern business, all, furnish securities, which can never ment, and by the general discredit which the high be had in case of the isolated possession of money example of the government would stamp on bank by an individual, whatever responsibilities he may paper, it throws new and insurmountable obstacles be bound by. And if a loss of the moneys com- in the way of resumption. mitted to them should occur either by accident, But the honorable senator from New York says fraud, or violence, the capital of the bank stands that, the resumption of specie payments by the pledged for the security of the depositor. This is, banks is no concern of this government-that it is after all, the only kind of security that can be relied exclusively an affair of the states and of the banks on with confidence. If any gentleman will take themselves and we, who urge the necessity of the trouble to read the notes and remarks annexed promoting by every proper and practicable means, to the various cases of default, presented in the doc- the accomplishment of this great object, are reument from the house of representatives to which proached with using an argument, which, he tells I have referred, he will see how utterly worthless us, belongs to the friends of a national bank. Now, and illusory is the personal security on which we sir, I beg leave to say to the honorable senator that have heretofore relied. The instances in which both reason and experience prove, that the only any thing has been obtained from sureties, to make effectual means of preventing a national bank is to Here we see the language of the government togood the default of their principal, are like angel's bring about a resumption of specie payments by ward the banks was that of encouragement and visits-few and far between." The general re- the state banks, and that nothing is more directly confidence. They were assured, in advance, of the turn is, "the securities insolvent," "conveyed calculated to lead to the re-establishment of a bank friendship, and even of the support, of the governaway their property," "not found," "residence not of the United States, than the course of those who ment, if they would faithfully co-operate in the known," or some other equally unavailable return. would do nothing towards effecting that resump-common cause of restoring the legal currency. tion. Let the honorable senator look back to that The communications of Mr. Crawford, the able In England and France, as well as here, this spe- inost instructive period, rich in lessons for the pre- and distinguished successor of Mr. Dallas, were in cies of security has been found either nominal or sent times-the former suspension of specie pay- the same spirit. You, Mr. President, and those mischievous; and in France it has for many years ments by the banks from 1814 to 1817--and he will who acted with you in those difficult times, will been wholly given up. The only kind of security see that it was the unwillingness or the inability of recollect that, although the joint resolution of that is recognized there, is like that which the the state banks then to resume specie payments, April, 1816, indicated the 20th of February followbanks give in the responsibility of their stock. which alone led to the establishment of a national ing, as the day for general resumption of specie Every person who receives an appointment, con- bank. Let him read the official correspondence of payments, the banks determined, in a convention nected with the collection or disbursement of the Mr. Dallas-the numerous reports and communica- held by them for the purpose of deliberating on the revenue, is required, before he enters on the duties tions of that able and patriotic man, worthy of him subject, not to resume till the 1st of July, 1817.-of his office, to deposite with the government, as and of the country-and he will find throughout, In order to induce them to change that determi security, an amount of money, proportioned to the an explicit recognition of, and unvarying testimony nation, Mr. Crawford made a formal proposition to probable amount of the public treasure that will to, this great truth-that if the state banks conld them that if they would resume on the 20th of Febpass through his hands. This money is held by have been induced more promptly to resume specie ruary, the public money then in their vaults should the government as a guarantee for the faithful ad payments at that time, there would have been no not be transferred, at all, to the Bank of the United ministration of the trust conferred, and forms, at occasion for a national bank, and that that institu- States, (constituted by its charter the general dethe same time, a part of its financial resources on tion would not have existed. The true means of pository of the national funds) and that between which it pays an interest of 4 per cent. till re- preventing its re-establishment now, is by the in- that day and the 1st of July, no portion of the stored to the officer on his satisfactorily acquitting strumentality of the state banks, under the lead and public money should be drawn from them for ary himself of his responsibilities, or till it be other- encouragement of the government, to restore to purpose whatever, unless the necessities of the wise forfeited by his default. The moneys thus the country a sound, convertible currency. public service imperiously required it. I beg leave deposited with the government, by public officers, This government can and ought to aid in this to read to the Senate the following extracts from as guaranties for the faithful performance of their great work. Its vast revenue power, and its per- his circular to the banks of 20th December, 1816, duties, are denominated cautionnemens, and amount vading action, co-extensive with the whole union, submitting that proposition: to a very large sum. I happen to have in my pos- give it means and influences which the states do session, the report made by the French minister not possess. It holds, indeed, through that power, of finance, count Chabrol, to the king, in March, a lever of the greatest efficacy, for controlling the 1830, from which it appears that the cautionnemens entire currency of the country. Through its colon the first day of January of that year, amounted lections and disbursements, it can hold out induceto the enormous sum of frs. 226,433,973 (two hun- ments of the most influential character to sway the dred and twenty-six millions, four hundred and course of the banks. In the mode of conducting eighty-three thousand, nine hundred and seventy-its receipts and payments, it has in its power to set three francs,) at a time when the whole revenue an example of the most persuasive influence towards of the kingdom did not exceed frs. 900,000,000 the restoration of general confidence. In a dis(nine hundred millions of francs.) Now, sir, if turbed state of the currency like the present, these gentlemen mean to introduce here the system of are powers to be exercised in a spirit of liberality individual depositaries of the public moneys, let and benignity-not of menace, denunciation or them be warned by the experience of the country vengeance. The occasion demands the language in opposition to each other, and that any sacrifice, from which they borrow that system that it can be of encouragement and support-not of severity which the effort may cost them, will be compensated made safe only by the precautionary device of and sternness. Look at the communications of Mr. by the advantages and facilities which it is in the cautionnemens, the effect of which would be to give Dallas and Mr. Crawford with the banks during power of the treasury to afford them." to the millionaires of our cities the monopoly of all the former suspension of specie payments, and it "The deep interest which the treasury has in the fiscal employments. will be seen in what spirit the influence of the gov- support of bank credit, and the connection it has But, sir, great as is the danger of heavy pecuniary ernment was then exerted, and effectually exerted, with the Bank of the United States, would, indelosses to the government under this system, I re- in the end, to accomplish a return to specie pay-pendent of the known disposition of that institugard even that as a trifle compared with the exten- ments. The banks were not then outlawed by the tion to conciliate the state banks, be sufficient to sive demoralization it would produce in the country official press-they were not then put under the protect them against an illiberal policy on its part." -by the temptation held out to peculation, to pri- ban of the government-they were not then pur- In this communication, it will be perceived, that vate cupidity, to political corruption, in the large sued as conspirators, but were treated as institutions Mr. Crawford felt and avowed that the means of "The means of the treasury to aid the operations of the banks in effecting a revolution in the state of the currency, so imperiously necessary to the public interest, are considered ample, and the strongest disposition exists to apply them, so as to produce the most beneficial results." "In making the above proposition to the state banks, the strongest reliance is placed in their disposition to join in the effort necessary to relieve the community from the evils to which it has been subjected, by the disordered state of the circulating medium. It is confidently believed that the interests of the banks and of the community are not |