q..-
I PIresii1¢.m-
, " it/lie‘ séssian
' stricted to enable the Department
I C U I bf the Uziitedjstates to the
twozjqweg _qf‘,Co'1‘igress,,at, the commencement
Lof the? ?1‘?1‘*¢:""?i1iv’ifl’? 0°"-
..,.‘ *
..'r1.~~i ii
" :1‘
": gTESS§' -
Fellouiv Citiccnsitifi thii Senate , __ _
l.‘...\‘§?5- d _l-lnfilse-V0 Representatives: l ~ _
“" Til? act bf thefl23d of J uric, 13,-362 '9gl’1“tl"g
in,-.5 déposites or the public moneys and-directing
:~the' e‘mp]oy',nent, df- State, District,’ and Territo-
lrial bdnks‘ forlthatpurposei made‘ "3 ll}9 dl1t_Y'°f
the secretary of the '1‘reasury'to- discontinue
-the ? usecof:-suc;h of them as should at 3")’ llm‘-‘
heir notes in specie. Mid to
substitute other banks, PT°V1d‘?d.*? 3“.lfi°‘e“‘. ","—m:
Ti ' could be obtained to receive the public de
ebites upon the terms and conditions l.li€l'»lll,
general anda*.'*:°si:x:l.‘:.i.‘:;
ous suspension of specie paymui S Y ,, We
,in,May lagt,,1;eudei-ed the performaiic:-:_ oh .-ha},
duty-imreratire~m 2° l‘;‘l.°
“b‘eei’i' selected under the act 9 ll“ .mah _- ’u, ite-
' "mertime,-vimpracticable to employ 1-_ 4- Tell 5
‘Isiliimber of others UP0“ the Pl""5°"b°«d °‘”'d"
- ‘ 7 . - ,
tions The specified regulations established by
'Cori less for the ilepusitc and Safe ke.'9Pl"l-’ Ol
the gublic moneys. l13Vl"8 “"15 “"‘"’xp°°t"dly be"
. 6,',,l,l, inoperative I felt it to be my duty to afford
*9 ’ - ' 2 I o '
.you_an early opportunit for the pxertcisi. 0 3’ ur
supervisory p0WeTS 99'” the 5”’-lec '
' ‘I was 31.5,, ied to apprehend that the suspen-
fiion of specie payments, increasing the enibar-
rassmentsibefore existing in the pecufilftrg’ tflhf'
--s or in-would ‘l,£‘.‘l‘*f. its
public revenue, that the acctrlillng jesersed five
the Treasury, would not, witi tie _ I
millions, be sufficient to defray the uiiavoildablej
overnment until the usual pe-
G
fiiirderfdfsthiil tiliaeeting of Congress; whilst the
‘horny to call upon the States, for a DOFUOH
- tsource. These ap-
Sllgaclel1llé’£(;:!aI;£efIg)el:lnt§l,:.sLified by subsequent
liliersulfrsls which render it certain that this defi-
'ci‘ency’wiiloccur, ifyadditional means he notpro-
vided by Congress _
The dilficultics experienced
- - '. .7 " ii a
iltllllll’-£‘331le3S‘:"1li’lP[l-Iilete‘?Iiiiieviiofisly to the actual
suspension of specie payments, for liiqlulgcqicg
upon. their bonds for duties; and al tie re L
authorized by law was promptly cheerfully
’ 1-anted. The dependenceot the lreasury “P0”
me avans off these bonds, to eni_i.b_le it to make
-the deposites with the Stat'e_s r¢_?qU}1'0d by law’
led me in the outset to limit this indu_lgcnce to
;he first of September, but it has since been ex-
..
‘tended to the first of October, that the ‘matter
-mioht be submitted to your further direction.
' Questions were also expected to arise in the
recess in respect to the October iiistahnent of
“those depnsires, rcqgiring the interposition of
Coxgriiiidision of another act, passed about the
sameptime, and intended to secure a faitliful com-
pnance with the obligation of the Uiiitcd_Statcs,
to satisfy all demands upon them in specie or its
equivalent, prohibited the offer of any banknote,
- not convertible on the spot into goldor silver at
the will .of the holder; and the ability of the
Government, with millions on deposits, to meet
its engagements in the manner thus required by
jaw, was rendered very doubtful by the event to
which I have referred. _ _ . -
sensible: that adrquate provisions for these un-
expected exigiencies could only be made by Con-
fess; cnnviiiccd that some of them \‘V0l1ld.bi:
indispensnbly necessary to the public, service,
before fine regular period of your meeting; and
deS,,.(,,,s 3130 to enable you to exercise, at the
earliest monu-.nt,‘your full constitutional powers
for the relief of the country. I COUM }l0la_ Will!
propriety, avoid subjecting you to the inconven-
ience of assembling at as early at day as the
state of the popular representation would per-
mit. I am sure that I have done but justice to
your feelings, in lielioviiig that thisincoiivenieiice
will be cheerfully eiicountered,_iii the hope of
rendering your meeting conducive to the good
of the country. , , .
During the earliest stages of the revulsion
througli which we have just passed, much _acri-
monidus discussion arose, and great diyorsity of
Opinion existed as to its real ‘causes. This was
not surprising. The operations of credit are
so diversified, and the influences which ulfcct
them so numerous, and often so subtle, that even
impartial and wcll-iiiforincd persons are seldom
found to agree in re.-spectto them. To inherent
difficulties were also added other tendencies,
which were by no means favorable to the disco-
very of truth. It was hardly to be expected,
that those who disapproved the policy of the
Government in relation to the currency, would,
in the excited state of public feeling produced
by the occasion, fail to attribute to that policy
any extensive eiiibarrasgmcnt in the monetary
affairs of the country. :1 he matter thus became
connected with the passions and conflicts of par-
ty; opinions were more or less affected by poli-
tical considerations ;.and difibrenccs were pro-
loncred which miglit otherwise have been (lt:l.Ci'-
minced by an appeal to facts, _by the_excrci.sc of
reason, or by imitual concession. It is, however,
a cheering reflsctioii, that circumstancesoftliis
nature cannot prevent a comni_ur_iity so intelli-
gent as ours from ultimately arriving at corrcct.
‘conclusions. Encouraged by l.h'.2.fil.'lIl belief of
this truth, I proceed to state my views, so ‘far as
may be necessary to a clear understanding or
the remediesfi 5291 ll 1")’ duty to P1'°P°S‘3s and
s by which I have been led to re-
,refuse.tQ.r€<.1?.¢m ‘
a
d
by the mercantile
gcineiits, induced
of. the reaso
mend them. ’ _
c0The history of trade in the United States for
the last three or four years, affords the most con-
vincing evidci-nce that our present .condition is
‘chiefly to be attributed to over action,in all the
of business; an over-action deriv-
' -departments _
ing perhaps, its first impulse from antecedent
causes, out stimulated to its destructive conse-
quences by excessive issues of bank paper, and
by other facilities for the acquisition and enlarge-
ment of credit. At the commencement of the
year 1834, the banking capital of the. United
States, including that of the national bank then
existing, amounted to about two hundred_mil-
lions of dollars; the bank notes then in circu-
}; tion to about ninety-five millions ; and
the loans and -discounts of the banks to three
hundred and twenty-four millions. Between
that time and the first of January, 1836, being
the latest period to which -accurate accounts
have been received, our banking capital was in-
creased foiriore than two hundred and fifty-one
minions; nu: paper circulation to more than one
hundred and forty millions, and the loans and dis-
counts to more than four hundred and fifty-seven
millions, To this vast increase are to be add-
ed the many ,millions of credit, acquired by
means of foreign loans, contracted by t ie States
and ‘state institutions, and, above all. by the la-
yjjhnjzaommodatioiin extended by foreign deal-
ers to our. merchants. , .
V The consequences of this redundancy of ore-
ait, and of the spirit of reckless speculition en-
ondered by it.’ were a foreign ‘debt contracted
fin our citizens, estimated in March last at_more
tli'an’thirty millions of dollarsi the 9Xt9“S_1°“_l3"
tfnders in theinteriolr of ‘ ‘our country of ‘credits
for‘auimliee- greatly be-Y°"‘l.tl1° "Yams 0‘. the
_o"ld_; the investment’ of thirty-nine an a half
niillionii of dollars. in unproductive public lands,
iirthe years 1835'and'18_36, whilst in the preced-
;’ ' year the sales amounted to only four and 9.
I1 Pmillious; the creation Ofldebtgito 8-_n fi_lm05t
‘countless amount, for real , estate in existing or
anticipated»
ducfive,‘ and at pricesnow seen to have been
' terprisc.
l in foreign countries; and all the means of ac-
’ lecting from individuals the revenue that has ac-
VOL.- XX.
greatly'disproporti0natc to their real value ; the
expenditure of immense sums in lm|')1’tiVemt=[]l.S
which, in many cases,.have been found to be ru-
inously improvident; the div:-rsion to other pur-
suits of much ofthe labor that should have been
zippli-ed to agriculiure, there-by tlolltrlblfillll-_Y 10
the I-'X_DCll(lli.l1l‘€‘. of large sums in thw importation
of grain from .Ell|'()j)t'—"ItlI expr-nditure wnicli,
amounting _in 1834 to about two hundred anii
fifty thousand dollars, was, in the first two (pir-
ters of the present year, increased to more than
two millions of dollars ; and,finally,wii.liout onu-
merating other injurious l'(3Sl]lIS,l.l](!l'l1[)l'l growth
among all classes, and especially in our gin-at
commcrcinltowns, of luxurious habits, founded
too often on merely fancied wea,lth,and detri-
mental alike to the industry, the resources and
the morals of our people.
It was so impossible that such a state of things
could long continue, that the prospect of revul-
sion was present to the minds of considerate
men before it actually came. None, however,
had correctly anticipated its severity. A con-
currence of circumstances inadequate of tlieiin-
selves to produce such wide spread and calamit-
ous einbarrassineiits, tended so greatly to aggra-
vate thcm, that they cannot be overlooked in
considering their liistory, Among these may be
mentioned, as most prominent, the great loss of
capital sustaincdjby our cominercial emporium
in the fire of December, 1835—a loss the effects
of which were underrated at the time, because
postponed for a season by the great facilities of
credit than existing; the disturbing effects, in
‘our commercial cities, of the transfer of the pub-
lic moneys required by the deposite law of June,
1836, and the measures adopted by the foreign
creditors of our merchants to reduce their debts,
and to withdraw from the United States a large
portion of our specie. ‘
However unwilling any pf our citizens may
heretofore have been to assign to these causes
the chief instrumentality in producing the pre-
sent state of things, the developments subse-
quently made, and the actual condition of other
commercial countries, must, as it seems to me,
dispel all remaining doubts upon the subject. It
has since appeared that evils, similar to those
suffered by ourselves have been experienced in
Great Britain, on the continent, and, indeed,
througliout the commercial world; and that in
other countries, as well as in our own,they have
been uniformly preceded by an undue enlarge-
ment of the boundaries of trade, prompted as
with us, by unprecedented expansions of the
systems of’ credit. '
A reference to the amount of banking capital,
and the issues of paper creditsput in circulation
in Great Britain, by Banks. and in other ways,
during the years 1834, 1835, and in 1836, will
show an augrneiiiatinn of the paper currency
tin.-re,as much disproportioned to the real wants
of trade as in the United States. With this re-
duiicaiicy of the paper currency, there arose in
that country also a. spirit of adventurous specu-
lation, cinbracing the whole range of human en-
Aid was profusely given to projected
iuiprov merits; large investments were made in
foreign stocks and loans; credits of goods were
granted with iinoounded lilierality to iuerclianis
quiring and employing credit were put in active
operation, and extcndcd in their effects to every
departinent of business, and to every quarter of
the globe. The reaction was proportioned in
its violence to the extraordinary cliaractcr ofthe
events which pri-ceded it. The commercial
community of Great Brifain was subjected to
the greatest difficulties, and their debtors in this
country were not only suddenly deprived of ac-
customed and expected credits, but called upon
f'or payments, which, in theactual posture of
things here, could only be made through a gene-
ral pressure, and at the most ruinous sacrifices.
In view of these facts, it would seem impossi-
ble for sincere inquirers after truth to resist the
conviction, that the causes of revulsionrin both
countries have been substantially the same.-
Two nations, the most commercial in the world,
enjoying but recently the highest degree of ap-
parent prosperity, and maintaining with each
other the closest relations, are suddenly, in a
time of profound peace, and without any great
national disaster, arrested in their career, and
plunged into a state of embarrassinent and dis-
tress. In both countries we have witnessed the
same redundancy of paper money, and other fa-
cilities of credit; the same spirit of speculation ;
the same partial successes; the same difficul-
ties and reverses; and, at length, nearly the same
overwhelming catastroplie. The most material
difference between the results in the two conn-
trivs has only been, that with us there has also
occurred an extensive derangement in the fiscal
affairs of the Federal and Sale Govérninents,
occasioned by the suspension of specie pay-
ments by the banks.
The history of these causes and efll.:ets,in
Great Britain ‘and the United Slates, is substan-
tially the history of the revulsion in all other
commercial countries.
The present and visible effects of these cir-
cumstances on the operations ofthe Govern-
ment, and on the industry of the people, point
out the objects which call for your immediate
attention.
They ai-e—to regulate by law the safe keep-
ing, transfer, and disbursement, .of the public
moneys ; to d. signate the funds to be received
and paid by the Government; to enable the.-.
Treasury to meet promptly every demand upon
it ;' to prescribe the terms of indulgence, and
mode of ~sctleinent to be adopted, as well in col-
crued, as in withdrawing it from former deposi-
tories, and to devise and adopt such further mea-
sures, within the constitutional -competency of
Congress, as will be best c'alcu|a't+.-d to revive the
enterprise and to promote the prosperity of the
country.
l For the deposile transfer, and disbursement. of
the revenue, Natioiial and Stale Banks have Ell-
ways. with temporary and limiied excepliiiiis.
been heretofore employed ; but aliliough advo-
cates of each sys_iem are still to be found. it is
apparent that the events 0! il)e'la5t few nionihs
have greatly augmenI_ed Ihc desire. long exi.-‘ling
arming the people of the Uiiiled Slates, to sepa-
raiethe fiscal operations of the Government from
ilio'seofindiviiluals or corporations. .
Again to create a nalional bank, as a fiscal,
agent, would be to disregard the popular will.
iwice solemnly and ,uneq“uivocal|_v expres:-'ed.,
On no question of domestic policy is there!
stranger evidence that the sentiments of a large l
cities and-'~villages, equally unpro-
majority are deliberately fixed ;.'and I‘ cannot
ill
“ noN"r GIYE.
f3()n(‘.l1l', with iliosc_who think they see. in receni
events, a proofihéit these scmiiiienis are, or a
reason that they should be, clmiiged.
Events, siiiiiliir iii ilioir origin and r-liarzicler.
liage lu=reiol'ore-frequeiiilyoccurred, wiihoni pijo- ~
!lui’5ll"l_!1 any such cliairae, and the lessons_i_)f
experience must be forgotten, ifwe suppose Ilia‘:
ihn pre;-‘en! overthrow ofcredit would have been
prevented by the existence of a naiioiial bank..
Prone-ness to cxcessixe issues has ever been the
vice ofthe banking system; a vice aspromineni
in National as in »Siai,e insiiiuiions.- This pro-
pcnsiiy is as subservient to llicadvanrteineiii of
UP run siiip.”
ivoravv ALK, com. vvi4inN«§-isuaiir, ’sEi-'r'i:i7:iini3rt
cer ain clziiigcrs of blending private interests with
the operations of. public business : and there
.is no reason ln,siipposc_ that a repetition ofthem
now would be more successful. ' -
it cannot be concealed that there exists, in
our conimiiniiy, opinions-and 'feel'm,«_vs on this
subject in direcl opposition to eaclrollier. A
large portion of them. c0i'nbining great intelli-
gence. activity. and lnflll(’l)C'e, are. no doubt sin-
cere in their beliefihai the operations of trade
ought to be assisted by such a connection; they
regard a national bank as necessary for this pur-
pose, and my are ilisiridliiioil to every measure
private iniercsis in the one as in the other ; niiilfi than does noi lend, sooner or laier; to the estab-
ihnse who direct llle'll both, being ;iriiic:i;i:i||y
£1lll(lG(l by the some views, and iiifluciiceil by
me same mniivcs, will be equally ready I0 sil-
mulale extravagance ofciilcrprise by improvi-i
ilence of (ffellll. How strikingly is this conclu-
1-‘inn sustain:-,(l by expeiieiice. The Bank of the
United States, with the vast power conferred on
it by Congress, did not or could not prevent for-
mer and similar embarrassmenls; nor has the
slill greater sircngili i‘. has been saidito possess,
under its present cliarler, enablediii. in the exist-
ing emergency, to check other iiisiiiuiioiis. or
even to save itself. In Great Britain, where, it
has been seen, the same causes have been_ai-
tenilcd with the same effects, a national bank,
possessing powers far greater than are aslied_,foi'
by the warmest advocates ofsuch an institution
here, has also pioved unable to prevent an ‘un-'
due expansion of credit, and the evils that flow
from ll. Norcan I find any tenable ground for
the reestablishinent of a national bank, in the de-
rangement alleged at present to exist in the do-
niesiic exchanges ofthe country, or in the facili-
ties it may be capable of affiirding them‘. Al~
though advantages of this sort were aniicipaled
when the first Bank of the United States was
created, they were regarded as an incidenlal ac-.
commodation ; not one which the Federal Go-
vernment was bound, or could becalled upon to.
furnish. This accomniodalion is now. indeed,
after a lapse of not many years, demanded from
it as among its first duties ; and an omission to
aid and regulate commercial exchange. is treated
as a ground ofloud and serious complaint. Such
results only serve to exemplify the constant de-
sire, among some of our citizens, to enlarge the
powers of ilie Government, and extend its con-
trol to siilijeci.s with which l['Sll0l)ltl not inter-
fere. They can neverjuslify the creation ofan
insiiluiion to prrimoie such rbjecis. On the con-
trary, ilieyjiislly excite among the ccviiiniiiiiiiy
a more ililigeiit inquiry into the Cll(;ll'HCl(:‘f of
those. operations of trade. towards which it is de-
sired io extendsnch peculiar favors. 3
The various transactions which bear the name
ofdninesiifcxclianges. differ essentially in their
naiiire, nperaiion, and uiiliiy‘. One Classul iii.-.ii¢
consists of billsof exchange, drawn for the pur-‘
pose oflransfcrring actual capital from‘one part
of the miinlry to another, or to anticipate Ilie
proceerls of properly aclllallyll'E]l'lSllillle(l. Bills
OfllIl.\‘(lf3>Cf'lpil(Jn are highly useful in iheiiiove-
meiiis ofirziile. and well deserve all the encour-
agenieiii which can rightfully be given to them.
Another class is made up of bills of cxcliange,
not drawn to transfer’ actual capital, nor on the
credii of properly transmitted, but I0 create ficti-
iioiisfcapiinl, partaking aijonce of the character
of notes discounted in Bank, and ofBank ‘notes
in circul_alion, and swelling the mass of paper
credits to a vast extent in the most objectionable
manner. These bills have formed, for the last
few years. a large proportion of what are termed
the domestic exchanges of the country, serving
as the means of usurious profit. and constituting
the most unsafe and precarious paper in circula-
tion. This speciesofirafific, instead of being up-
held. ought to be discounienanced by the ‘Go-.'
vernmcni. and the people. A T
Ii: transferring its funds from place to place,’
the Gover"nmeiit—is on the same footing with the
privale citizen, and may resort to the same legal
lisliniciii of SU('ll an iiisiilulion. On the ollier
hand. a niajoriiy ofthe people are believed to be
irrecoocilahly opposed in that measure; Ihey
consider such a coiiceiilraiion of power danger-
ous tolheir liberties; and many ofilicin regard ii
as a violation ofilie Consiiiiiiion. This collision
of opinion has, doubtless. caused much of the
embarrassmenl towhich the commercial Iransac-
-lions of the couiiiry have lately been exposed.
Banking has liecoiiic a puliiical topic of the
liigliesi interest, and trade has suffered in the
conflict of parties.‘ A speedy termination oflhis
Slate of things, however desirable, is scarcely to
be expected. VVe . have seen for nearly halfu
century, that those who advocate a national
bank, by whatever. motive they may be..influ—
enced, constitute a portion of our community too
numerous to allow us to hope for an early_aban-
doiimeniof their. favorite plan. On the other
band, they must iiicleed form an erroneous esti-
mate of the intelligence and temper offilie
American people, who suppose that they have
coiiiiiiued. on slight or insufficient ~giounds,
their perscvering opposition to such an insiiIii-
iion; or that they can be induced by pecuniary
pressure or by any other combination of circuin-
stances, to surrender principles they have so
long and so inflexibly iiiainlained.
My own views of the subject-are unchanged.
They have been repeatedly and iinreservedly
ElUn()uI)C(‘(l to my fellow citizens; who, with full
knowledge of them, rzonfcired upon me the two
highest offices nfihe Government. On the last
of these oi':¢:asims, I felt it due to ilie-people to
apprize lheiii distinctly. that, in the event of my
election, 1 would not be.able io..coopcraie in
ilie recslablislinienl of a national ;b_ank.- To
these seniiiiienls. l have now only,io add the
e:~:;iressioii‘ of an increased coiiviciion. that the
.reesiablishmeni of such a bank, in any form,
whilst it would not accomplish the beneficial
piii'pose promised by its advocaies, "would im-
pair the rightful supremacy ofthe popular will:
injure ilie cliaracler and iliminisli ihe influence
ofour poliiii-al system 1- and biiiig once l.'l()l'€'ll]l0
existence 2) rzonceniruied l1‘l()lJ€_)--gll power, hostile
.:n ilie spirit, and threatening ilie perm'aneney,
of our icpiililicaii insliliiiioiis.
Local banks have been employed for the de-
posits zinildisiribmionofllie revenue. at all times
pariinlly. and, on three different occasions, ex-'
cliisively ; first, anierior Io ilie establishment of
the first Bus k of the United States: secoiidly,
-in tho interval between llie |€l'l]llD§llll)l'l of that
insiiiuiion and the vlizirierof iis successor; and,
Iliirdly. during ihn liiiiiieclpcriod which has now
so ‘dl)l‘llpll_V closed._ Theconneciioiiihusrepeal-
silly attempted, proved unsatisfactory on each
successive occasion, notwithstanding Ihevarious
mczisurcs which were adopted to facilitate or iii-
snre its success. On the last occasion, in the
year l833,‘llie employment of the Slate banks
was guarded especially in every way which ex-
perience and caniion could suggest. Personal
security was required _for the safe keeping and
prompt payment of the moneys to be received,
and full returns of their condilionjwcrje, from
time to time. to be made by the deposilories. In
the first slages the measure was eminently suc-
cessfiil, noiwiihsianding the violent opposiiion
ofibe Bank ofihc Uniird States, and the uncens-
ing efforts made to overthrow ii. The selected
means. It may do so through the me'dium_ of
bills drawn by itself, or purchased from o1hcrs;:
and in these opei;ations it may, inja manner tin-
doubiedly constitutional and legitimate, facili-
tate and assist exchanges ofindividuals founded
on real iaiisaciions of trade. The extent to whirl;
this may be done, and lliebest means of effecting
it, are eniiiled to the fullest consideration. This
has been bestowed by the Secretary ofthe Treasi
banks performed with fidelity, and without any
embarrassuient to. themselves or to the coin-
munity, their engagements to the Government,
and the system ‘promised to be permanently
useful. But when it became necessary. under
the act of _J,une, 183 , to withdraw. from them
ihe [)l.'lJllC,lTlOl'l8\/S, for Ihc purpose of placing it
in aildiiional insiiiuiions. or oftransferring ii to
the Slates, they found ii, in many cases incon-
venient Io comply will’) the denia_i_ids of the
ury, and his views will be submitted to you in‘,
his report". ‘
But it was not designed by the Constitution
that the Government should assume ilie nianage—;
mom of domestic or foreign exchange. It is in-
deed authorized to regulate "by law the corn-
inerce bciween the States, and to provide a geri-
eral sianilaril of value, or medium ofexchange,
in gold and silver; but it is not ils.pr_ovince _to
aid iiiilivirliials in the transfer ‘of their fun'(ls,~“~
otherwise than through 'ilie,faciliiies :'ifl"o‘_r(led by
the Posi'Ol’fice Deparinientl ’A‘sjiisI‘ly might it
be called on-to provide, fontlic transportation of
their incrcliandize. Thes‘éai'e’operaiions ofirade.
They oiiglti to be conducted by tliosewho are
interested in them, in iliesariie ‘n'i_anner that the
iiici<lem'al difficulties of olher pursuits are en-
'counicred by oih7er,classes ofciiizens. Such aid
has not beeniileenied necessary inothcr coun-
tries. 'l"liioi»glioui Europe, the, domestic as well
as the foreign exchanges are carried on by pri-
vate houses,.ofien, if not girnerally, without ilie
assistance of Banks. Yet they extend ll1!‘0l1gl]-
out distinct sovereigniics, and far exceed in
amount the real exchanges ofthe United States.
There is no reasonwhy our own may not be con-
ducted in the same manner, with equal cheap-
ness and safely, z
Ceriaiiily Iliis might be accomplislied, if it
were favored by those most deeply inicrcstcd ;
and few can doubi that their own interest. 85
well as the general welfare of the couiiiry. would
be promoted by leaving such a subject in ilie
hands ufllmSell() whom it properly belongs. _A
sysiein founded on private interest. enierpri:-ze
aiiil cniiijwlilinn. Wilhuiil. the aid of legislative
granis or rcgulaiioiis by law, would rapidly pros-
per; it it cold be freefrom the influence ofpoliii-
cal agitation. and extend the same exempiinn
to trade itself; and it would put an end to those
complaints of neglect, pariialily, injus1ice,"and
oppression, which areihe unavoidable resnlisof
interference by the Government-, in the proper
concerns ofindividuals. A-llformer atzenipts on
Ihe part of ihe'Gdvernmenl to carry its legisla-
lion. in this respect, further than was ilesigneil
by the Constitution, -have in the end provcd.in-
\
Treasury. and numerous and pressing applica-
lions were made for indulgence or relief. As
the instalments under the deposits law became
payable. their own enibarrassnients._aml the ne-
cessiiy under which they lay of curtailing their
dis -ouiiis and calling in their debts. increased
the general distress, and coniribuled, with oiher
causes, to hasten the revulsion in which, at
length, they. in common with the other banks
were fatally involved.
» Under those circumstances, it becomes our
zS(A':€llll] duly to inquire whether there are not, in
any conncciioii between the Government and
b -iiks of issue, evils of great magniiiide, inhe-
rdit in its very nature, and against which no
p ccauiioiis can effectually guard. ‘
lUiiforeseen in ilie nrganiz-nfiiin oftlie,Govern-
n"'cni, and forced on the Treasury by early ne-
ccisilics, the practice of employing banks. was
iiiirulh. from the beginning, more aineasure of
eiiergriicy ihan of sound policy. When we
si-' ted into existence as a llall0n.;llCl_.ad(llllO(l to
ilii burdens ofthe new Government, we assumed
al the large but‘ honorable load of debt which
w” ilie price of our liberty ; but we hesitated
to pveigh down the infant industry of the
comiry by resorting to adequate taxation for the
DH ssary revenue. The facilities of, banks, in
rgi rn for ,lli€ privileges they acquired, were
pri iipilyolfered. and perhaps loo readily receiv-
ed. by an eiiibarrassed Treasury. ‘During the
loo coniinuaiice of a national debt and the in-
Ier‘ niiig difficulties ofa foreign war, the con-
net: on was continued from motives of conven-
iem-. but‘ ihesc causes have long since passed
aw: . We have !l()C'il8l‘g6LlL‘l8S[l_lal make.bai_iks
nee sary to aid the wants ofthe Treasury; we
havl, on load of national debt to provide for, and
we ave noaciual deposile a large siirplus. No,
pub c interest. therefore, now requires there-
ne 1 of.,a connection that circumstances have
disslved. The coniplele organization of our
Gov rniiiem.j..i_lie. abunilziiice of our’resour'c‘es,
t.ic_ enernl harrnony which prevails between
enal e us now to select the system most consis-
jurious. and have servedfonly’ to convince, the
great body of the people, mom and more, of tho’
the qiiisreiit slates. and with foreign Powers, all
itli theConsiitu_iion,.and most conducive '
teat _
then, connect
to lhé public welfare. Should we,
l
. l
l
0'.
SRITIO. 27.
:1s37.
L
ilie Treasury for a fourth time with the local
lianks,_it can only be under a conviction that past
failures have arisen from accidental, not inhe-
rent, defects. L '
A danger difiicult, if not impossible to be
avoided_in such an arrangement, is made strik-
ingly evident in the very event bywhich it has
now’ been defeated. A sudden act of the banks
intrusted with the funds of the people, deprives
the Treasury,.-witlioiit fault -or agency of the
Government, of theability to pay its creditors
in the currency they have by law a right to de-
mand. This circumstance no fluctuation of com-
merce could-have produced, if the public reve-
nue had been collected in the legal currency,
and keptin that form by the officers of the Trea-
sury. The citizen whose money was in bank
receives it back, sincethc suspension, at it sac-
rificc in its amount; whilst he who kept it in the
legal curreiicy of the country, and in his own
possession. pursues, without loss, the current of
his business. The Governmct, placed in the
situation ofthe former,is involved in embarrass-
_ll’l(‘lllS it would not have suffi.-rod had it pursued
the course of the latter. These embarrassmciits
are, moreover, augmented by those salutary and
just laws which forbid it to use a depreciated
currency, and, by so doing, take from the Go-
vernment thc ability which individuals have of
accommodating their transactions to such a ca-
tasirophe.
A_‘ system which can, in atime of profound
peace, when there is a. large revenue laid by,
thus suddenly prevent the application and the
use of the money of the people, in the manner
and for the objects they have directed, cannot
be" wise; buI;__..who can think without painful re-
flection, thatunder it, the same unforeseen events
might have befallen us in the midst of a war,
and taken from 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 embarrass-
ments and .to.such dangcrs willthis Govern-
ment be always exposed, whilst it takestho mo-'
nies raiscd for, and necessary to the punlic ser-
vice, out of the hands of its own otiicers, and
converts them into a mere right of action against
corporations entrusted with the possession of
them. Nor can such results be effectually guard-
ed against in such a system, without investing
the Executive with a control over the banks,
themselves, whether State or National, that
might with reason he objected to. Ours is, pro-
bably, the only govcrnmcnt in the world that is
liable, in the managerneiit of its fiscal concerns,’
to occurrences like these. But this imminent
risk is not the only danger attendant on the sur-
render of the public money to the custody and
control of local corporations. Though the ob-
ject is to aid the Treasury, its effect may be to
introduce into the 'o'pei'-«_tio‘ns ofthe Government,
influences the most subtle, founded on interests
the most selfish.
The use by Ihe banks, fortlieir own benefit, of
the money deposited with them, has received the
sanction ofilie Governmcni from the commence-
meni ofiliis connection. The money received
from the people, instead of being kept till it is
needed foriheir use, is, in conseqneiice of this
authority, a fund, on which discounis are made
for the profit of those who happen to be
owners of the stock in the banks selecled as de-
posiiories. The supposed and ofien exaggerated
advantages of such a boon will always cause it
to be sought for with avidity. 1 will not stop to
consider on whom the patronage incident to it is
to be conferred; Whether the selection and con-
trol be irusiedio Congress or to the Executive,
either will be subjected to appeals madein every
form which the sngaciiy of interest can suggest.
I‘he banks, llIl(lel' such a syslern, are stimulated
to make the most ofiheirfortunaie acquisition;
the deposiies are treated as an increase ofcapi-
ial ;’ loans and circulation are rashly augmented,
and when the public exigencies require a return,
it is attended with einliarrassmenls not provided
for, nor foreseen. Thus banks that thought
themselves most foriiinale when the public funds
were received, find themselves most embarrass-
ed, when ihe season (if payment suddenly ar-
rives. ‘ .
Unfortunately, too, the evils of the system
are not limiiedio the banks. It stimulates a
general rasliness of -enterprise, and ‘aggravates
the fluctuations of commerce and the currency.
This result was strikingly exhibited during the
operations of- the late deposiie system, and es-
pecially in the purchases of public lands. The
order which ultimately directed the payment of
gold and silverin such purchases, greatly check-
ed, bui could not altogether prevent, the evil.-
Specie was indeed more difficult to be procured
than the’ notes wbich'lhe banks could them-
selves creaie at pleasure; but still, being ob-
tained from them as a loan, and returned asa
deposile, which they were again at liberty to
use, it only passed round the circle with dimin-
ished speed. Thisoperation could not have been
-performed, had the funds ofthe Government
gone into the Treasury, to be regularly disburs-
ed. and not into banks, to be loaned out for their
own profit, while they were pefmiiied to substi-
tute for it a credit in. account.
In expressingtbcse sentiments, I desire not to
undervalueihe benefits ofa salutary credit to any
branch of enterprise. The credit bestowed on
probily and industry is the just reward of
merit and an honorabloincenlive to further acqui-
sition. Noneoppose it who love their country.
andundersiand its welfare. But when it is un-
duly encouraged—-"when it is made to inflame
-the public mind with the temptations ofsudden
and unsubstaniial wealih—when ii turnsindustry
inlo paths that lead sooner or later to “disapoini-
men! and distress-—it beeomes liable to censure,
and needs~corre'ci'ion. Far from helping probi-
iy and industry, the ruin to which it leads falls
most severe!-v on ihe great laboring classes, who
-are wrown suddenlvout ofemployment, and by
-the failure ofmagnificent‘-schemes never intend-
'ed to enrich them, are deprived in a moment of
their only resource. ' Abuses ofcredit and ex-,
cesses in specu‘lation_will‘ happen in despite of
the most salutary laws; no Government perhaps
can altogether prevent them-; but surely-every
Government can refrain-fro'in contributing the
stimulus that calls them into life. - - '
Since, therefore, exjperi_en'ce has shown, that
zolend the public money to the" local banks, is
hazardous to the operations" of the Government.
at least of (l0llb‘llU_l benefit to the institutions
themselves, and prod uctive ofdisasfrons ileifaiigc-
meat in the business 'a‘ndjc,urrency of ihocouuiry.
, is it the part of wisdom again .10 renew the;
V should seek to accoinplisli.
con-
neéiion? » . _;_» _, ,.i 5.?
It is true that such anagrncy is in many re-
indispensable. A limitation of- the expenses ‘of
the Government to its actual wants, and.of-the
revenue to those expenses, with convenieulvmeans
for its prompt application to the purposes-for
which it was raised, are the objectslxvliioh we
The collection, safe-
keeping, transfer and disbursementofthe-public
money, can, it is believed,’ be well managed-_b,y
officers of the Government. ‘Its collection,: and,
ion great exteni, its disbursement a,lso',-'—b,a_ve_-in-
deed been hiiherto conducted solely by them,;
neither National. nor Slate banksflwlien .emplo_y--
ed, being required to do more than keep it safely
such portions and at such times as the Treasur-y
shalldirect. ‘ ~ w . j
Sur_ely banks are not more able tha,Il;slili1.e.__Go-
vernmeni to secure the money in their possession
against accident, violence, or fraud. ‘The amet-
iion that they are so, must assume that a vault
in a bank is stronger than a vault in the Treasu-
ry; and ‘that directors, 'cashieis,.and clei*k_s, not
selected by the Government, nor under its co_n_-
irol,;are more W0l‘|ll_\,l, of confidence than officers
selected from the people and responsible lo the
government ; officers bound by official oaths and
bonds for a faithful performance ;ofilieir duties’
and Cpflslantly subject to the supcrvis_ioI_1 of’Con-
gress. ‘
The difficulties oftransfer, ar.:l the aid here-
tofore rendered by banks, have been less ilian usu-
ally supposeil. The actual accounts show that
by far the larger portion of paymeiits is made
wiiliin short or convenient disiances. from the
warranls issued at the Treasury in the year 183-1-
——a year, the results of which will ii is believed
affiird a safe test for the fuiure-—fell short of five
thousand, or an average oflessthau onedaily for
each State; in the city of New York they .cl"ii,l
not average more than iwoa day,vand at the city
of \Vashinglon only four. I .
The difficulties liereiofore existing are, moie-
over, daily lessened by an increasein the cheap,-
ness and’ facility of coniriiunicaiion: and iinniay
be asserted with confidence. that the necessary
transfers, as well as the safe-keeping and dis-
bursements ofthe public moneys. can be wiili
safety and convenience accomplished through
the agencies of Treasury ofl_iccrs.. Th}; opinion
has been. in some dcgree, coiifi,rmed by actual
experience since ilie ill.-:coniinu1.ini.te ofthe banks
as fiscal zigeiil.-. in‘ May last; ajiciiiitl ,\'l'lllCll.-
from the eiribarrnssmcnis lll_C0nlTl1€',l'(‘liil inter-
course, presented olislacles as great a,s'_'ziny that
may be hereafier apprehciirlcd. , Vj’ _' _
The manner ofki-eping ilie pu blic linonjcy since
iliai period, isfully _slale(l,l_l] i'lie‘re-"port of the
Secretary of ilie Treasury. Tliat, of_li_ce_r also
suggests ilie proprieiy'ofa-isigiiiiig. by faw, cer-
iain adiliiional (l_Ull€S to cxistiiig eslablislirnents
and ofiic rs. which, wiih ilie moilificaiions and
safeguartls re-fcrrcdlo by him. will, he. i_hink_s,
enable ilie Department _l.o coniiiiiie to ‘perform
this branch ofthe public service, without’ any
niaierial addiiion either in their number or to the
present expense. The extent ofthe business‘ to
be transacted has already been slated ;' and in
respccl to the amount ofinoney wiili wliicli the
officers employed would be entrusted at any one
time, it appears that, assuming abiilance offive
millions to be at all times kept'in' ilic Treasiiry,
and the whole nfii left in the hands of ilie col-~
lectors and receivers, the portion of each would
not exceed an average ofiliiriy iliousano dollars;
but that, deducting one million for the use’of_ihc
mint, and assuming the remaining four inillinos
to be in the hands of one-half of the present
number ofofiicers——a supposition-deemed more
lik(3Jv lo corrispond with the fact-—ihe su_m in the
hands ofeach would still be less ihan‘ll'ie amount:
of most of the bonds now taken from the receiveiii
of public money. . V
Every apprehension, however, on the subject,
eiiherin respect to the safety ofllie money, or
the faithful discharge ofthese fiscal transactions,
may, it appears to me, be cflieciuzilly removed,
by adding to the present means of the ’l‘rcnsu'ry
the establishment by law, at a few important
points, of offices forlhe deposiie and disbursement
of such portions ofthe public revenueia"s cannot,
with obvious safely and onnvenience, ’l)C' left in
the possession of the ciilleciiiigofiiccrs until paid
over by them to the public creditors. Neither
the amnuiils retained in their hands, nor iliosc
deposited in the ofiices, would in an ‘ordinary
condition ofthe revenue. be larger in most CZlS(‘S
than those often under the control of (lisbursiirg
officers of the arinv and navy, and might bu
made entirely sufe,by requiring such se'(:iiriiies,
and exercising such controlling supervision, :3:-;
Congress may by law prescribe. The principal.
ofiiccrs whose appoinlmeiiis would beconie
necessary under this plan taking Ilie largest
iiiimbersuggesied by the Secretary ofthe Ti'easi'i-
ry. would not exceed ten. nor the additional ex-
penses, at the same estimate, sixiy1liousanddol-
lars a year.
' There can be no doubt of the obligation" of
those who are eriiriisted with Ihe affairs of Gov-
_vernmeni, to condor.-i ilic-in with as little cost to,
the nation as is consistent with the public inter-
est; and ii is for Congress, and ultimately for
the people, to decide wlicllierlhe benefits to be
and severing the connection which has hiilicrlo
existed beiweenilie governineni and banks, offer
suflicient advantages tojustify the necessary ex-
penses. lfihe objectio be accomplished is deem-
ed important :0 the future welfare ofthe country,
Icannot allow myself to believe that the addi-
iion lo ihe public expenditure of comparatively
so small an amount as will be necessary; to effect
it, will be objected to by the people. ,
It will be seen byifie report ofthe Postmaster
General. herewith communicated, that the fis-
cal affairsoftliat"Department have been success-
fully coiiducied since May last upon the princi-
ple of dealing‘ only in the legal currency ofthe
United States, and that it needs no legislation to
maintain its credit, and facilitate the‘ manage
meni ofils concerns; the existing laws being, ll;
the opinion of that officer, ample for those ob-
'ects. ’ -
Difficulties will "doubtless be encountered for
a season, and increased services required from
the public functionaries; such are usually inci-
dent to the commencement of every system, but
they will be greatly lessened in the progress of
its operations. ' ‘ , T , '
The power and infliience supposed to be con-
nected with the custody, and disbursement of the
public money, are topics on which t_he_..p,nlilic
mind is naturally, and, with great.propri,ety, pe-
culiarly sensiti_ve.' _Much has been said on tlieni,
in reference to the proposed separation of -the
Government from the banking‘_institu,t,ions ; and
surely no one can object, to any jappealsor an-
imadversions on the subject, fwhicli are COIiE_l_Sl'.e!ll2
with facts; and evince it proper‘ respect for‘t_hc
intelligence of the people. -If‘ a Chief Magis-
trate may be allowed to speak for himself," ‘on
such a point,_I can truly say, tliat_to_‘me nothing
would be more acceptable, tlian the withdrawal
from the Executive, to the greatest practicable
extent, of all concern in the custody and dis-
bursement of the public revenue ; not ‘flint E
' would shrink from‘ any rcspoiisiliility cast upon
meby the duties ofmy. office, but because it is
my firm‘ belief, that its capacity for-usefunt-s‘s"is
in no degree promoted by the possession of any
patronage not actually necessary to the pe'rforiii-
ance of those duties. But under’ our present
forni of Governinent, the intervention of tlic }:lX.-»
spects convenient to the Treasury. bl“ ills-B0‘ ,
while in their custody,»and_ transfer and paylii.-in ,
place of'colleciion: and the whole iiiiiiiber_of '
derived from keeping our fiscal concerns apart, ~
1
\
Norwalk Chronicler