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_ N, _,. ~ .v~,:r.~\x~n
.on .1 '-
.1&i~ "' " _,..
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-'-s-an-.~—-.-.1...-...-u ...,,_ — ----. ..-.-,...... ___‘ 7
; __. ..,
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promise a speedy ratification ; a result which
I cannot allow rnyselfto doubt. . ‘
Instructionsfhave been given to the Com-
missioner ofthe U States under our Conven-
tion with Texas, for the demarcation of the
line which separates us from that Republic.
The Commissioners of both governments
met in New "Orleans in‘ August last. The
joint commission was organized, and ad-
journed to convene at the same place on the
12th of October. It is presumed to be now
in the performance of its duties.
The new governmet of 'I‘exas has shown
its desire to c.ultivatc‘fricnd.l_y relations with
‘us, by a prompt rep:~.r.iiion for injurir-s coni-
plaine-.l of in the case of two vessels of the
United ‘Si.'lt€’S. 2 ‘ ‘
\Vith Central Amc“ica a convention has
been concliids-d‘fo'rthn renewal of its former
1,-e.,ty with the lriitc-(l States. This was
not ratified before the departure of our late
Charge d’A.ffair--s from that country, and
the copy of it brought by him was not receiv-
ed before the iidjilurnirn.-nt of the Senate a‘
the last session. in the mean while, the
period liinitedfor the exchange of rat§fi«.':i-
lions having ‘expired, l di,-emetl it expedient.
in consequr.-_ncc ofthe death ofthe Charge cl’
Affairse, to send a Special agent to C: ntr.-l
America. to close the affairs of our mission
‘ -there, and to arrange with the ,Gove‘rninei-2
an extension ofthe time for the exchange of
rati fications.‘
The commission ci‘cati;~tl by the. Stat-
‘wbich forinlcrly Ct)lIljlOSt‘.t_l the Republic of
Columbia, for adjusting the claims against
that Government, has, by a very unexpect.-d
construction of the treaty under which .
acts,;dec.i-Sled that no provision was made for
those claims of Cllizclls ofthe United State.-
which arose from captures by Coloinbian
privateers anl were atljudged against th-
'claimants in theju lici il ii-ibnnals. This de-
-cision will compel the.United States to ap-
ply to the several Goveriiineiits for-in-,-i-ly uni-
ted for redress. With all these-—New Circ-
. nade, Venezuela, and T'.lLlc'.'tClOl‘, :1 perfectly
good understanding exi.-ts. Curtrcaty with
‘_ Venezuela is faitlifully carried into execu-
tion, andtli t country, in the. enjoyment of
lmuqtlility, is gradually a’lv=.incing in pros-
rperity unlcr the guidance of its pl'csent dis-
Ttinguishetl President, General Paez. With
fEucador, a liberal coinmercial convention
‘has lately been concluded, which will be
‘-transmiited to the Senate at an early day.
\Vilh the great American Empire of B-a
zil ourrelations continue unchanged. as does
our frienlly intercourse with the other gov-
eannents of South A=nerica——-‘.lie Argetil.irii-.
Republic and the Republics of Urug‘uay,
Chili, Peru, aiid Bolivia. ‘The dissolution
' ofthe Peru Bolivian Confederation may oc-
casion some te.nporur_y inconveince to" our
.‘,citizen's in that quarter, but the obligations on
' the new Govt nrnents which have arisen otit
. of,_tbe Confederation to observe its treaty
stipulations, will no doubt be soon understood,
and it is presumed no indisposition will exist
tofulfill t'hose,wh'ch it contracted with the
Unitetl_StateS. -
The fiiia'n.:i-.il‘operations" of the Govern-
ment during the present year have, I am
happy to say, been very successful. Th:
-diffi;ult’cs unlsr which the Treasury De-
partrnent has l..bor:~;l from lti1o'.'.'it*i‘lefects in
the existing laws relative to the safejket-piiig
ofthe public mim.-ys :.tgg'rnvatt‘:d l;y.:the Sus.
pension ofsp.-cie p ivrncnts by severzil ofthe
banks holdini__,r public depist.-s, or indebted
to public. officers for notes received in pay-
ments ofpublic du--s, have been surmounted
_ to a very gratifiying extent
The la rge current expenditures have been
punctually met, and the faith ofthe Govern-
. merit in all its pecuniary concerns has bee
scrupulously ,lf).‘l.llll.i1ll'lt'(l. . ,
The nineteen millions of Treasury notes
authorized by the act of t'.'orig*l'ess of i837.
and the modifications thereof, with a view to
the indnl,_iz‘ence of inerc‘nants on their duty
bonds, 6:. of the deposits b inks in the payim--rift
ofpublic moneys held by them, have been
so punctually mieenied as to leave. less than
the original tun millions outstanding at any
one time, and the u hole. amount unredeemed
now falls short of three millions. Of these
the chief portion is not due till next year,
and the whole would have been already
extinguished could theTre:‘.sury have real-
ized the payments due to it from the banks.
Ifthose due from thpm during the next year
shall be punctully mails, and if Congress
shall’l:ee_p the appropriations within the es-
timates, there is every re: son to believe that
all the ouist:-mding Treasury notes can be re-
deemed, and the ordinary expenses defrayed,
_without imposing on the people any addi-
tional burden, cither of loans or increased
taxes. .
_ To avoid this, and to keep the cx;~.cmli-
tures within reasonable bounds is a duty,
second only in importance to the preservation
of our national character, and the protection
ofour citizens in their civil 5; political rights.
The creation, in time of peace, of a ilebt
likly to become pcrinarnent, is an evil for
which there is no equivalent The rapidity
with which many of the States are apparent-
ly approachingto this condition, adlll0l'llSllL'S
us of our own du is, in a manner too impress-
ive to be disregarded. One, not the least im-
portant, is to keep the Federal Government
always in a.con'li:.ion to discharge, with ease
and vigor, its highest functions, should their
exercise be required by any sudden conjunc-
turc of public aff.iirs—a condition to which
we are always exposed, and which may oc-
cur when it is least expected. To this 5-nil.
it is indispensable th .t its finances should be
untrammelled, and its resources. as far as
practicable, unencumbered. No circum-
stance could present greater obstacles to the
' accoaiplishment of these vitally important
objects, than the creation of an onr.-rons na-
tional debt. Our own experiance and also
that of other nttions, have demonstrated the
unavoidable and fearful rapidity with which
a public debt is increased, when the govern-
ment has once surrendered-itselfto ‘the ruin-
ous practice ofsupplying its supposed neces-
- sities by new loans. The-struggle. therefore
_ _¢ on our part, to be successful, must be made
at the thrisliold. To make our efforts ef-
fective, severe economy is necessary. This
is the surest provision for the national wel-
fire; and it is, at the same time. the. best pre-
servrgtive ofthe principles on which our in-
stitutions rest. Simplicity and -economy in
the. afliiirs ofS'tate.have—never;failcd -to enas.
ten and i.n‘i-igontte Republican principles,
,- ,... ., _, . —-v- .- -- .45
I‘ ‘ _._
wbi'e these have been as surely subverted-
by national" pt'odigal-ityfiiunder wliéitever‘spc-
cious pr-etexts it‘ may have been introduced
or fostered. ’ _
These considerations cannot be lost upon
a people who have never been inattentiv_e to
the effect of that policy upon the institutions
they have created, for themselves; but at the
present inonient their force is augmented by
the necessity which a decreasing rr.~venuc
must impose. The check lately given to
imporlations ofariicles subject to duties, the
-.lcr.=ingemr-ntsin the operations of internal
tl‘:lLlII.‘, and especially the redtiction gradually
taking place in our tariff of duties, all tend
mateiiially to lessen our receipts; indeed it is
probable. that the. dimir.-uticn rr-stilling from
the last cause alone, will not fall short of five
millions ofilollarsin tlieyear 1842, as the
final reduction of all duties to twentv per
cent. then takes efli.-ct. The. whole revenue
ilien accruing from the customs, and from
the sales ofjzublic lands, if not more, will
undoubtedly he wanted to defray the nccess. -
ry expenses of the Cioveinnicit under the
most prudent :i«litiiiiist1'zitio‘i'x_of its alfairs.—
These are circuinstances that impose the ne
ccssily of rigid economy, and require its
nrompt and constant exercise. \Vith the
Legislature rest the power and duty of so
adjusting the public expenditure as to pro-
mote this end. By the provisions ofthe Con-
stitution, it is only in consequence of appro-
priations made by law, that iiioaey can be
drawu fromtbe Treasury; no instance has
occured since the r-slablisliment of the. Go-
vernment in 'which the .Ex’ecutive, though a
componcntpa rt of the Legislative power.
has intt‘l'pOst-(I an objection to an appropria-
tion bill on the sole ground of its extrava-
rr.-uicc. I-lis duty in this respect has been
considered fulfilled by irqtiostiiig such appro-
priation only as the public service may be
reasonably expected to require. In the
pretont earnest direction ofthe public mind
tovvarrls this subject, both the Executive and
the Legislature have evidence of the strict
responsibility to which they will be held;
and while I am conscious of my own anx-
ious offorts to perform with fidelity this por-
tion of my public functions, it is a satisfaction
to me to be able to count on u cordial co-ope-
ation from you.
At theliine I entered upon my prcscntdn-
tics, our ordinary disburscnients—withou tin-
cluding those, on account of the public debt,
the. post ollice, and the trust funds in charge
ofthe government had been largely increas-
ed by appropriations for.tbe removal of the
Indians, for repelling Indian hostiities, and
for other less urgent expenses which grew
out ofan overflowing Treasury. . Indepen-
dent of the redemtion of the public debt and
trusts, the gross expenditures of seventeen
and eighteen millions in 1834 and 1835 had
by.these causes,-/swelled to '.\vcnt_y-nine mill-
ions in 1836, and the appropriations for
l83T. made.previonsl_v tothc fourth of March,
caused the expenditure to rise to the very
large amount of thirty-three millions. ‘V9
were enabled iluringthe year 1838, notw' li-
staudingthe continuance ofour Indian embar-
rassments, sou ewhat to reduce this amount;
and that for the present your 1839, will not
in all probability exceed twenty-six millions
or six millions less than it was last ycar.—
With a detcrminnation so far as depends on
me in vnntinuc this reduction, I have direct-
ed the estimates for 1840 to be subjected to
theiscverest scrutiny, and to be limited to the
absolute rcquircinents of the public service.
Tlioy will be found less than the cxpcndi.
tures of 1839, by over five inillious_of dol
lars T
The prgcautionary measures which will
be i‘ccoininendc;l by the Secretary of the
Treasury, to protect faithfully the public
credit under the fluctuations and contingcn
vies to which our. receipts and expenditures
are exposed, and especially in a commercial
crisis like. the present, are commended to
your early attention. '
On :1 former ccca5_ii’)l‘I your attention was
invited to various considerations in support
of a pre-cmption law in behalf of the set-
tlers on the public lands; and also of a law
‘graduating the prices for such lands as had
long been in the market unsold, in conse-
quence oftlieir inferior quality. The exc-
cution of the. act which was passed on the
first subject has been attrntled with the hap-
piest consquences in quieting titles, and secu-
ring improvements to the industrious; and
exempt from the frauds which were practised
under previous pro-eruption laws. It has, at
the same time, as was anticipated,!contributt-d
liberally during the present your to the re-
ceirts ofthe Treasury.
The passage ofa graduation law, with the
guarcls before recoinmended, would also, I
am persuaded, add considerably to the reve-
nue for several years, and prove in other rc-
spects just and beneficial.
Your early consideration ofthe subject is,
therefore, once more iarnestly i'c-qiu-sled
_ 'l‘lw prcartll. condition of the defences of
our principal seaports and navy yards, as re-
presscnted by the accompanying report of
the Secretary of IV.'ir, calls for the early and
serious attention of Congress; and as con-
necting itself intimately with this subject, I
cannot rccominend too strongly to your con-
sideration the plan submitted by that officer
for the organization of the militia of the
United States.
In conformity with the expreessed wishes
of Congress, an attempt was made in the
spring to terminate the Florida war by nego-
tiation. It is to be regrctted that thrse. bu-
maue intentions should have been frustrated
and that the effort to bring these unhappy
difficulties to a satisfactory conclusion should
have failed. But, after euteringinto solemn
engagements with the Commanding Gene-
ral, the lndians, withcut any provocation, rc-
coinmenced their acts of treachery and mur-
der. The renewal of hostilities in that
Territory renders it necessary that I should
recommend to your favorable consideration
the plan which will be submitted to you
by the Secretary of VVar, in order to
enable that department to conduct them to a
successful issue. ‘ -
_ Having had an opportunity of personally
inspecting a portion ofthe troops during the
last summer, it gives me pleasure to bear
testimony to‘ the success ofthe efforts to -im-
prove their discipline, by keeping together
in as large bodies as the nature ofthe service:
will , permit. I recommend therefore, that‘
k ., .-Q-pow, --..-.----—~.. v----- A
__ ___.x __........._..._.--.r_.__. -....- ...__—-—---—- -'- --‘~---
it has also. to a very gratifying extent, bem,
commodious and permanent barracks be
constructed at the several ppsts designated
by the Secretary of War. 1\ot\\ithstanding
the high state of their discipline and excel-
lent. police, the‘ evils resulting to the service
from deficiency of company officers. WFTC
very apparent, and I recommend that the
staff ofiicc-rs be permanently separated from
the line. .
_ The navy has been usefully and honora-
bly ernployd in protecting the rights and
property of our citizens, ivhereverlhe coil-
dition of affairs seemed to require. its pres-
ence. -‘Vlill the exception of oncinstance,
where an outrage, accompanied by murder
was committed on a vessel of tl.e United
States while engaged in a lawful commerce,
nothing is known to have occured to impede
or molest the cntcrprizc of our citizens on
that cleinr-nt where it is so signally display-
ed. On learning this daring act of piracy,
Commodore Reed proceeded immediately to
the spot, and receiving no satisfaction, either
in the surrender ofthe murderers or the resto-
ration ofthe plundered property, inflicted se-
vere &. meritedchastisement on tl.c barbarians.
Itgwill be seen by the report ofthe Secre-
tary ofthe Navy respecting the disposition
of our ships of war, that it has been deemed
necessary to station a comyetent force on the
coast of Africa, to prevent a fraudulent use
of our flag by foreigners.
-leer:-nt experience has shown that the pro-
visions in our existing laws which relate to
the sale and transfer of American vessels
while abroad, are extremely dcfcctive.——
Advantage has been take of these defects to
give to vessels wholly belonging to foreign-
crs, and navigating the occult an apparent
American ownership. This cliaractcr has
been so well stimulated as to afford them
comparative security in prosecuting the
slave trade, a traffic which is c-mphatically
denounce in our statutes, regarded with ab-
horrence by our citizens, and of which
the off: ctual suppression is nowhere more
sincerely desired than in the United
Stuns. '1‘lici:s CifCtlm~‘..l{mCC$ P-.1-."!l€$ it
proper to recommend to your early _nt-
tcntion a careful revision of these laws, ‘so.
tlzat, without impeding the freedom and fa-
cilities ofour navigation, or impairing an im-
portant branch of our industry conuecctod
with it, the integrity and honor of our flag
may be carefully preserved. Information
derived from our Consul at I-Irlvana, show-
ing the necessity of this, was communicated
to a committee of the Senate near the close
ofthe lastsessiombuttoo late, as it appeared,
to be acted upon. It will be brought to your
notice by the proper department, with addi-
tional communications from other sources
The latest accounts from the Exploring
Expdition rcpresentit as prcc. eding success-
fully in its objects, and promising results no
less useful to trade and navigation than to
science.
The extent of post roads covered by mail
service on the first of July last, was about
133 999 miles, and the rate of annual trans-
portation upon them 3.4.r.496,878 miles.--
Tbe number ofpost offices on that ‘day was
twelve thousand seven hundred and eighty,
and on thethirtieth ultimo, l3,0:28. '
The revenue of the Post Office Depatmen:
for the year ending with the 30th of June last.
was {our millions fmir hnml.-ml n.-.rl_ oc1‘e.hy
six thousand six hundred and thirty-eight
dollars——exhibitng an increase over the
preccdingf year of two hundred and forty
one thousand five hundred and sixty dollars
The engagements and liabilities of the De-
partment for the same period are four mil-
lion six hundred and twenty-four thousand
one hundred and seventeen dollars.
The excess of liabilities over the revenue
for the last two years has been met out of the
surplus which had previously accumul-a'ed.
The cash on hand on the thirtieth ultimo,
was about $206,701.95, and the current in-
coin-_~. of the Department varies very little
from the rate of current expenditures. Most
of the service suspended last year has been
restored, and most ofthe new routes establish-
ed by the actof 7th July, 1838, have been
set in operation at an annual cost of 813 ,-
963. Notwithstanding the pecuniary difii-
culties of the country, the revenue ofthe De-
partment appears to be increasing; and un-
less it shall be seriously checked by the re-
cent suspension of payment by so many of
the banks, it will be able not only to main-
tain the prcsent mail service, but in a short
time to extend it. It is gratifying to witness
the prompitude and fidelity with which the
agents of this Department in general per-
form thcir public duties.
Some difficulties have arisen in relation to
contracts for the transportation ofthe mails by
railroad and steamboat companies. It ap-
pears that the maximum ofcompcnsation pro-
videcd by Congress for the transportation of
the mails upon railroads is not sufficient to
induce some of the companies to convey
them at such hours as are required for the
accommodation of the public. It is one ofthe
most important duties of the GeneralGovci n-
ment to provide and maintain for the use of
the people of the States the best practicable
mail establishment. To arrive at tbatend it
is indispensable that the Post Office. De-
partment shall be enabled to conrol the
hours at which the mails shall be carried
over .railroads, as it now does over all
other roads. Should'serious inconvenience
raise from the inadequacy of the com-
pensation now provided by law, or from un-
reasonable demands by any of the railroad
companies, the subject is of such general im-
portzince as to require the prompt attention of
Congress.
In It lation to stcatnboatlines, the most effi-
cient remedy is obvious, and has been sug-
gested bv the Postmaster General. The
“far -and Navy Departments already employ
steamboats in their service, and although it
is by no means desirable that_ the Govern-
ment should undertake tbe transportation of
passengers or freight as a buisness, there can
‘be no reasonable objection to running boats,
temporarily,whenever it may be necessary
to put down attempts at extortion, to be dis-
continued as soon as reasonable contracts can
be obtained. .
The suggestions of the Postmaster Gene-
ral relative to the inadequacy ofthe legal al-'
lowance to witnesses in cases of prosecutions
for mail-depredations, merit your serious con-
sideration. The safety ofthe mails requires
that such citizen whose time is required to be
gircn to the public, dca~.ands not only that
.__...._.-......_.._ .. __.___..p-._
his expenses shall be paid, but that he shall
receive a reasonable compensation.
The Reports from the VVar_,.- Navy and
Post Office Departments will accompany
this communication,'and one from the 'l‘reas-
ury Department will be’ presented to Con-
gress in a few days.
For various details in respect to the mat-
ters in charge of these departments, I would
refer youto those important documents, sat-
isfied that you will find in them many valua-
ble suggestions. which will be found well de-
serving,1:he attention ofthe Legislature. _
From a report made in December of last
year by the Secretary of State, to the Senate,
showing the trial docket of each ofthe Cir-
cuit Coarts, and the number of miles each
judge has to travel in the performance of
his duties, great inequality appears in the
amount of labor assigned to each judgc.—-
The number of terms to be bold in each of
the courts composing the ninth circuit, the
distances between the places at which they
sit, and from thence to the seat of Govern-
ment, are represented to be such as to ren-
der it impossible for the judge of that circuit
to perform, in a manner corresponding with
the public exigenecics, his term and circuit
duties. _A revision, therefore of the present
arrangement of the circuits seemed to be call-
ed for, and is recommended to your notice.
[think it proper to call your attention to the
power assumi.-d by Territorial Legislatures to an-
thorize the issue of bonds by corporate compa-
nies on the guarantee of the Territory Con-
gress p ssed a law in 1~l36,providin,qthat. no act
ofa Trirriiorial Legislature incorporating banks
should have the force of law until approved by
Congress, but acts of u. very exceptionable
character previously passed by the Legislatur-
of Florida, were suffered to remain in force, by
virtue of which bonds may be issued to a very
lzirgc amount by those institutions, upon the
faith of the territory. A resolution intending
to be ajoint one passed the Senate at the same
session, expressing the sense of Congress that
the laws in question ought not to be permitted
to remain in force unless amended in many ma-
terial respests, but it failed in the House of
Reprcscntal.ivC$ fur want of time, and the desir-
ed amcndm- nts have not been made. Tliointr--
restsinvolved are of great. importance, and the
subject deserves your early and careful atten-
tion.
The continued agitation of the question rela-
tive to the best mode of keeping and disbursing
the public money, still injuriously affects the
‘business ofthe country. The suspension of spe-
cie payments in 1837, rendered the use ofdepos-
itebanks, asprescribed -y the act of 1836. 11
source rather of embarrassment than aid, and of
ll(:C£'6Sil.y placed the custody of most ofthe pub-
lic money afterwards collected in charge of the
public officers. The new securities for its safety,
which this required, were a principal cause or
my convening an extra session of Congress; but
in consrquence of a disagreement between I.l'lt.
two Houses, neither then, nor at any subsrquent
period, has there been any legislation on the
subject. The effort made at the last session to
obtain the authority of Congress to punish the
use of public money for private purposes as a
crime, a measure attended under other Govern-
ments with signal udvant ge, was also unsuc-
cessful, from diversities of opinion in that body,
notwithstanding the anxiety doubtless felt by it
to afford every practicable security. The result
of this is still to leave the custody of the public
money without those safeguards which have been
for several years enrm stly t.lE'Si~(1f.'d by the Exec-
utive; and as the remedy is only to be found in
the a¢_:tion_of the L .£IlE-'lZLIllrP. ii. irnnneoc nn.Inn
the duty of again so mittmg to you the propriety
of passing a law for the safe keeping of the
pub‘ic moneys, and especially l.o ask that its use
for private purposes by any officers entrusted
with it, may be declared to be .1 felony, punish-
ble with penalties proportioned to the magnitude
"of the offence. ‘
These circumstances, added to the known
defects in the existing laws, and unusual de
rangement in the general operations of trade.
have,during the last three years, much increas-
ed the difficulties attendant on the collection,
keeping, disbursement ofthe revenue. and call-
ed forth correspondingexertions from those
having them in charge. Happily these have
been successful beyond expectation. Vast sums
have been collected and disbursed by the seve-
ral Departments with unexpccted clieapness and
ease; transfers have been readily made to ever_v
part of the Uniou,howevcr distant; and defol-
cations have been far less than might have been
anticipated, from the absence of adequate legal
restraints. Since the officers of the Treasury
and PostOflice Departments were charged with
the custody of most of the public moneys ‘re-
ceivetl by them, there have been collected sixty
six millions ofdollnrs, an-xcludingthe case of the
late collector at N. York, the aggregate amount
oflosses sustained in the co’lection cannot. it
is believed, exceed sixty Ihousand dollars. The
defalcation ofthe late collector of that ciiv, of
the extent and circumstances of which Congress
has been fully informed, ran through all the
modes of keeping the public money that have
been hitherto in use, and was dit-tinguished by
an aggravated disregard of duty, that broke
through the restraints ofevery sys'em, and can-
not, therefore. be usefufy referred to as a testof
the comparative safety of either. Additional
information will also be furnished by the report
ofthe Secreiarylof the Treasury, in reply to a
call made upon that officer by the House of
Representatives at the last session. requiring
detailed information on the subject of def.-iults
by public oflicers or agents under each adminis-
tration. from 1789 to 1837. This (it cument
will be submitted to you in a few days. 'l‘he
general results. (independent of the Post Ofiice.
which is kept separately, and will be stated by
itself.) so far as they bear upon this subject, are,
that the losses which have been. and are likely
to be sustained. by any class of agents, have
been-the greatest by banks, including, as requir-
ed in the resolution, their depreciated paper re-
ceived for public duos; that the next largest
have been by disbursing officers, and the least
by collectors and receivers. If the lossses on
duty bonds are included, they alone will be three-
fold those by both collectors and receivers. Our
whole experience, therefore, furnishes the strong-
est ovidencethat. the desired legislation of Con
grass is alone w.anting to insure in those opera-
tions the highest degree of security and facility.
Such also appears to have been the experience
of other nations. From the results ofthe inqui-
ries made by the Secretary of the Treasury in
regard to the practice among them, I am enabled
to state that in 22 out of 27 foreign Govern-
ments, from which undoubted information has
been obtained. the public moneys are kept in
charge of public officers. This concurrence of
opinion in favor of that system is perhaps as
great as exists on any question of internal ad-
ministration.
" In the modes of business and official restraints
on disbursing officers, no egal change was pro-
duced by the suspension of specie payments.
The report. last. referred to will be found to con-
tain also much useful information in relation to
this subject. V ‘
I have heretofore assigned to Congress my
reasons for believing that the establishment of
an Independent National Treasury. as contem-
plated by the Conslilution, is necessary to the
sure action of’ the’ Federal Government. The
suspension of specie payments in 81837, by the
banks having the custody of the public money.
showed in so alarmiivgadegrec, our dependence
on those institutions for the performance ofou-
ties required by law, that I then recommended
the entire dissolution of that connection. This
recominendation has been subjrzctetl, as Idcsired
itshould be, to severe scrutiny and animated
discussion; &.IBll0W myselfiobelievetbat, not-
withstanding the natural diversities of opinion
which may be anticipated on all subjects involv-
ing such importantconsiderations.ithas securs Ll
in its favor as general a concurrence of public
sentiment as could be expected on one of such
magnitude.
Recent events have also continucdto develope
new objections to such a connection. Seldom
is any bank, under the existing system and prac
tlce. able to meet on demand, all its liabilities
for dopositcs and notes in circulation. It main-
tains specie payments, and transactsa profitable
bIt‘:iness,_ only by the coifislencc of the. publicin
its solvency; and whenever this is destroyed.
the demands ofits depositors and note-holders-
pressed more rzipidly than it can make collec-
tions from its debtors-—-force itto stop payment.
This loss of confidence with its consequences
occurred in 1837. and affordeillhe apology of the
banks for th- ir susponsioii. The public then
acquiesced in th validity of the excuse; and,
while the State Legislatures did not exact from
them their forfeited charters; Congress, in ac-
cordance with the recominc-ndation ofthe Exoc-
utive, a lowed them time to pay over the public
money they field, although compelled to issue
Treasury notes to supply the deficiency thus
created.
It now appears that there are other motives
than a want of public confidence under which
the bloke seek to justify themselves in a rcfu.-al
to meet_ their obligations. Scarcely were the
country mid Governmi-nt relieved in a degree,
from the difficultir-s occasioned by the general
suspension of 1837, when a partial one occur-
ring within thirty months of the former, pro-
duced new and serious embarrassments,tliough
it had no p llialion in such circumstances as
were alleged in justification of that which had
previously taken place. There was nothing in
t.he condition of the country to endangera well
Inanaged banlting institution: commerce was
deranged by no foreign war; every branch of
mztiiufzicturing industry wr-is crowned with rich
rewards; and the more than usual bundauce.
of our harvests, after Sllpplying our domestic
wants, had left our granaries and store-houses
filled with a surplcs for exportation. It is in
the midst of this, that an irredcemable and de-
precinled paper currency is entailed upon the
people by a large portion of the banks. They
are not driven to it by the ~ xhibition of 3. loss of
public confidence, or of a sudden pressure from
their depositors and note-holders. but they ex-
cuse themselves by alleging that the current of
business, and ex'chan‘ge'with foreign countries,
which draws the precious metals from their
vaults, would require, in order to meet it, a large
curt.-iilment of‘ their loans to a comparatively
small portion of the community, than it will be
convenient for "hem to bear. or perhaps safe for
the banks to exact. The pl- alias ceased to be
one ofiiecessiiy. Convenience and policy are
now deemed sufficient to warrant tlirsc institu-
tions in disregarding their solemn obligations.
Such conduct is not merely an injury to indi-
vidual creditors, but it is a wrong to the whole
community, from whose liberality they, hold
most valuable privilegcs—-wliose rights they vi-
olate, whose business they dcrangc, and the
value of whose property they made. .ti:»:';.;...
which tiieii-‘action is not only disconni ‘nil
knt ...I.-Ilr £._...I¢;‘-\an.L3“[_ 0|’, ihni. 0"‘ ,-.
gives it cliaracter to i.l1'l|' suspensions more a-
merit.
banking institutions are, it affords me unfeigned
pleasure to state, exempted from all blame on
account ofthis second delinquency. They have,
to their great credit. not only continued to meet
grounds of suspension now resorted to. ‘t :-
only by such a course that the confidence. * '
tutions themselves promoted.
New dangers to the banks are also daily dis
closed from the extension of that system of ex-
travagant credit of which they are the pillars.
Formerly our foreign commerce was principally
founded on an exchange of commodities, includ-
ing the precious metals. and leaving in its trans-
actions but little foreign debt. Such is not now
the cast: Aided by-ihcfatrililies afforded by
the banks. mere credit has become too common-
ly the basis oflrade. Many of the banks them-
selves, not content with largely stimulating this
system among others, have usurped the busi-
ness. wbile they impair the stability of the
mercantile community; they have become bog-
rowers instead of lenders; they establish their
agencies abroad; they deal largely in stocks
and merchandize; they encourage the issue of
State securities until the foreign market is glui-
ted with them; and unsatisfied with the legit-
imate use of their own capital and the exercise
of their lawful privileges, Iliéy raise by large
loans additional means for every variety of spec-
ulation. The disasters altendanlon lhiS(l8Vl3.l0D
from the forms’ course of business in this couri-
try. are now shared alike by banks and individ-
uals, to an extent of which there is perhaps no
previous example in the annals of our country.
So long as a willingness of the foreign lender.
and a sullicicnt export of our productions to
meet any necessary partial payments, leave the
flow of credit undisturbed, all appears to be
prosperous; but as soon as it is checked by any
hesitation abroad, or by an inability to make
payment there in our productions, the evils ofthe
system are disclosed. The paper currency
wliicli mightserve for domestic purposes, is use-
less to pay the debt due Europe. Gold an
silver are therefore drawn. in exchange for their
notes, from the banks. To keep up their sup-
ply of coin. these institutions are obliged to call
upon their own debtors, who pay them princi-
pally in their own notes, which are as unavail-
able to them as they arc to the merchanlsto
meet the foreign demand. The calls of the
banks, ilierefon , in such emergencies, of neces-
siiy. exceed that demarid,anil produce a corres-
ponding curtail of their accommodations and of
the currency, at the very moment when the
state of trade renders it most inconvenient to be
borne. The intensity «if, this pressure on the
community is in proportion to the previous lib-
erality of credit and consequent expansion of
the currency; forced sales of property are made
at the time when the means" of piirchasing are
most reduced, and the worst calamities l0.iutli-
viduals are only at last arrested, by an open
violation of their obligations by the banks. a
refusal to pay specie for their notes, and an im-
posiiion upon the community of a fluctuating
and depreciated currency.
Theseconsequencea are inherent in the pres-
ent system. They are not influenced by the
banks being large or small. created by National
or State Governments. They are the results of
led lhe certain effects of these laws, we liavl,-‘~
seen the bank of the largest capital in the Union.
established under the National charter, an=.'
lately slrengllied. as we were aizllioratniivelg
informed, by exclianging that for a State cbartei.
with new and unusual privileges--in a condition
ion. as it was said, of entire soundness and grs;-2-1
prosperily—not merely unable to resist thc:~:~.
effects, but the first to yield to them
Nor is it to be overlooked that there IXISI‘
chain of necessary dependence among the ID
luliolls which obliges lhem,'lo a great extent .4
follow the course of others, notwithstanding .-.
injustice to their own immediate credliors
injury to the particular ccmmnnily in w’ ':.:-'-
they are placed. This dependence. of a b .:;-3..
which isin proportion to the extent ofllie dtl: Fa
circulation and deposils is not merely on o ‘ml’:-
in its own vicinity, but on all those which ~' on-
neci il with the centre of trade. Distant b.i;-;‘i.~-.
may fail. without seriouslv affecting those in,
our principal commercial cities; but the failure.’
of the latter is felt at the extremities of the‘
Union. The suspension at New York, in 1837,,
was every where, with very few exceptions,
followr-c'.. as soon as it was known; that recently
at Philailelpliia immediately affected the bankd
of the South and \Vesl in a similar manner.--l
The depentleiice of our whole banking sysre‘
on the institutions in a few large cities, is not;
found in the laws of their orgaiiization, but it!"
those of trade and exchange. The banks at lhai ,
centre to which currency flows, and u here'il is '
required in payments for mercbandize, hold the
power of comroling those in regions whence it
comes. while the latter possess no means of-
reslraiiiiiig them; so that the value of individu-
al properiy, and the prosperity oftrado,tlirougli
ilie whole interior of the country, are made to
depend on the gmd or bad management of the \'
banking insiiutions in the great seats of trade
on the st about".
But Ilie chain of dependence does not stop
here. It does not terminate at Pliilatlelphia or’
N. York. It reaches acrossihe ocean.aml ends
in L ~n(lon. the centre ofthe credit system. 'l‘lie{'
same laws of trade, which give in the banks in
our principal cities power over the whole bank-A
ing system ofthe United States. subject the for-
mer. in their turn. to the money power in Great
Britain. It is not denied that the suspension of
the N. Y. banks in 1337, which was followed
in quick succession throu,<_rlionl i re Union, was
produced by_ari application of that power; and I
it is now alleged, in exlenuation of the present
condition of so large a joition of our banks, that
their enibaira-ssincms have arisen from the-
same caiise -
From this influence they cannot now entirely
escape. for it has its origin in the credit curren-
cies of the countries; it is strengthened by the
current of trade and ex(‘ll:v)rT‘g’(;.. \;fil.l("l) centres
in London. and is rendered almost irresistible
by the large debts contracted there by our iner-
elianis, our banks and our States. It isllms
that an introduction of a new bank into the most
distant of our villages. places the business of
that village within the influence of the money
power of England. It is thus that every new
debt which \\ e contract in that country. serious- ‘
ly affects our own currency, and extends over
the pursuits ofour citizaensiis powerful influence. '
We cannot escape from this by making new
banks, great or small, slate or national. The
same chains which bind Ihose now existing in
the centre of this system of paper credits, most
especially fetter every similar institution we
create. It is only by the extent to wluch this
system has been pushed of late, that we have
and insecure. It must be evident that llli -. It-T-1 , -.
ground for bank suspensions, in rcii.-z'~.';ri. ii. _ -.
larming than any which they exhibited before,
and greatly increases the impropriety of relying
on the banks in the transactions of the Govern-
A large and highly regpectable portion of our
their engagements, but have even repudiat-. -.li.-'.-.~ _ . -.
good will of the community can be pl'8S8?'.'UU. 1.
and, in the sequel, the bestintercsts of the in-.=i}- '
been made fully aware ofifs irresistible tenden-
-' ' ‘ i . "_'§,'j!;g gggwrl _r~nrrPn(!V In a
’ J .1,‘ ~' .t_ .-i
~ - | -~ ‘-9
-._-i -.:.-Iitr».-.,- .x '- -- 4l\
-’i -1 u -. -y. -
“,5, ..A .. -‘. .- .-
lilr'l' pr v: -'l."lI his 2.. _..
-iv: ,. i.-H‘ i: .
‘again by the cmitiucl ul ti-'c.';,' ;:.-'.:..:i' it
connects them with the centre of trade in our
own country, they are yet subjected. beyond all
this. to the effect of whatever measures policy,
necessity, or Caprice. may induce those who
control the credits of England to resort to. I
mean not to comment upon these measures pres-
eril or past, and much less to discourage the
prosecution of fair commercial dealing between
the two countries, based on reciprocal belnefils;
' ' ' ' , ' _ ...,,_,,., ,r.'§';.-: '.;~-, :.';_.-=
..i 2-,, ;i..
‘r "‘3':1'=im, limsx‘ :lr~"
'.~.:;fA':1\"- :‘i it ‘A ' ‘-- = ‘-4 x
i3-.-, z--j,i=:il_\~' c.'tp:-eliic-.-.“ 41* ' :l:-'~;-
,.-=2 lll‘i-?i}_1i\ :.'.l ?'i-' :.£:i‘
our bankiiigsyslem, and by that meansindirectly '
obtaining, particularly when our banks are used
as dcposiiories of the public moneys. a danger-
ous political iufluencein the U. S. lhave deem-
edit my duty to brin,r_vthesubje_ct lnyournoticc, .
and ask for it your serious consideration.
is an argument required beyond the exposi-
lion of these facts, to show Ilie impropriety of
using our banking institutions as deposilories of
the public money? Can we venture not only to
encounter the risk ofilicir individual and mutu-
al mlsnianagerrienl. but, at the same time, to
place our foreign and domestic policy entirely ‘
under the control ofa foreign moneyed interest}
To do so is to impair the independence of our
government, as the present credit system has
already impaired the independence of our
banks. It is to submit all '35 important opera-
tions. whether of peace or war, to be controlled
or thwarted at first by ourowr; banks. and then
by a power abroad greater than lliemselves._, I,
cannot bring myselflo depict the huuiiliationloj‘
wliicb this Government and people might be‘. '9
sooner or later reduced, if the means for do-‘i
fending their rights are to be made dependent‘ -
upon those who may have the most powerful of
motives to impair them. J‘ *
Nor is it only in reference to the effect oflhis
slaleofthings on the independence ofourgnvernr
meat or or our banks. that the subject presents
itself for consideration ; it is to be viewed also,
in its relations to the general trade of our coun-
try. Tbe_time is not long past when a deficien-
cy of foreign crops was thought to aflbrd a pro- ._
fitable market for the surplus of our industry;
but now we await with feverish" anxiety the
news of the English harvest, not so much from
motives of commendable sympathy. but fearful
lest its anticipated failnrs should narrowibe
field of credit there. Does not this speak \'ol- -
nines to the patriot '1 Can a system be‘ benefi-
cent, wise, or just. which creates greater anxie-
ty for interests dependent on foreigncrediuthan
for the general prosperity of our own country.
and the profitable exportation of the surplus
produce of ourlabor?
The circumstances to which I have thus ail-
vcrlad appear to me to afford weighty reasons. '
developed by late events. to be added to those
which I have on former occasions offered, when
submitting to your better knowledge and discern-
ment the propriety of separating the custody of
public money from banking institutions. Nor
has an thing occurred to lessen. in my opinion ,- I
ilie force of what has been heretofore urged.
The only ground on which that cuslodycau b
desired by the banks. is the profitable use whic
they may make of the money. Such use
would be regarded in individuals as a breach of
trust, or a crime of great magnitude, and yet it
may be reasonably doubted whether, first and
last. it is not attended with more uiischievou
consequences, when permitted to the formc
than to the latter. The practice of -periniuin
the public money to be used by its keepers a .
-:.‘.v‘~i: =;-xi:-' '1!» “ '.
the irzesislable laws ofiradc and credit. In the
recent events which have so strikingly illnstra--I
heretofore, is believed to be peculiar to this:
Culmlfyi and to exist scarcely any where else.
Norwalk Chronicler