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SPEECH 
 
 i 
 
 OF 
 
 MR. RIVES, 
 
 VI R G I N I A, 
 
 IN OPPOSITION TO 
 
 THE SUB-TREASURY BILL, 
 
 AND IN SUPPORT OF 
 
 HIS SUBSTITUTE. 
 
 DELIVERED IN 
 
 THE SENATE OP T I1*H U . S. 
 FEBRUARY 6, 7, 1838. 
 
 PRINTED AT THE MADISONIAN OFFICE. 
 
 1838. 
 
SPEECH. 
 
 Mr. President. —It would have been very gratifying to me if I had found the 
 measure now under consideration such an one as I could conscientiously sup¬ 
 port. The question is one which every interest of the nation requires should be 
 settled—promptly,but wisely settled. It is time that the country were relieved 
 from those anxieties and apprehensions in regard to the future, which, added to 
 the embarrassments of the present, weigh like an incubus upon the national enter¬ 
 prise and palsy all its faculties. I should have been most happy, therefore, if I 
 could have seen in the measure recommended by the Committee of Finance, any 
 of those healing and salutary tendencies which the circumstances of the times 
 and the situation of the country so imperiously demand. I had hoped, indeed, at 
 one time, that such a measure would have been presented to us. The President, 
 in his message to Congress at the commencement of the present session, while 
 renewing the expression of his own opinions in favor of the financial project of 
 the late called session, very properly invited the consideration of Congress 
 to the manifestations of public sentiment which had, since then, taken place; and 
 recognizing “the national will as the supreme law of the Republic,” plainly inti¬ 
 mated that a measure which had proved unacceptable to the people ought not to 
 be aoain pressed on their adoption. I had hoped, that the Committee of Finance, 
 concurring in this republican sentiment of the Chief Magistrate, and in the pre¬ 
 sence of the manifestations which the recent elections in the North and the 
 South, the East and the West, had afforded of the national repugnance to the 
 measure of the late session, would, in the resources of their wisdom and 
 acknowledged abilities, have presented us some other, on which we might have 
 rallied with more harmonious opinions. I am sorry to say that, in the exami¬ 
 nation of the bill on your table, 1 have found nothing to justify or sustain this 
 hope. It is, in every essential respect, a reproduction of the condemned measure 
 of the late session, with some superadded features, which only seem to aggravate 
 its deformity and increase its dangers. It commits, as that did, the millions of 
 public treasure to the hazardous and demoralizing possession of executive agents 
 
 _it levies that treasure from the pockets of the people, after a short period, in 
 
 gold and silver only—it then disposes these collections in masses at a few im¬ 
 portant commercial points, to serve as a basis of operations, which must inevi¬ 
 tably terminate in a great Government Bank —and to take charge of and manage 
 this machinery, it institutes a new corps of executive officers, whose very name, 
 (Receivers-general,) calls up by an indissoluble association, the extravagance, 
 the peculation, the clumsy magnificence of that bloated and unwieldy system 
 of French finance, which is the acknowledged prototype of this new scheme. 
 
 I propose, Mr. President, in as brief and rapid a manner as possible, to pass 
 in review the principal points of this new financial project. Its fundamental and 
 vital principle is to collect the public revenue in gold and silver only, out of a 
 circulation consisting exclusively now, and mainly at all times, of bank paper 
 for the common uses of the people. Of this invidious discrimination between the 
 money of the government and the money of the people, and its anti-republican 
 and injurious tendencies, I had an opportunity of stating my views very fully du- 
 rino - the late session of Congress. It was the subject of very thorough discussion 
 
on both sides, at that time ; and for one I am perfectly content to abide the 
 verdict of public opinion on the arguments, on the one side and the other, then 
 presented, it was shown, in my judgment, most conclusively that the effect of 
 this principle would be permanently to create two currencies in the country—- 
 one and that the “ better ” one for the government, another and inferior one for 
 the people—that it would thus separate the interests of the governors from those 
 of the governed, destroying that bond of sympathy and common feeling between 
 them which is the best, if not the only, security for a sound administration of 
 public affairs—that it would indefinitely protract the present derangement of the 
 currency and deliver it over ffnally to a state of hopeUss and irremediable disor¬ 
 der—and that its operation upon the institutions of the Slates would be of the 
 most hostile and destructive character. I should not now recur to those topics, 
 having heretofore discussed them very fully, but that the Senator from New York, 
 (Mr. Wright,) has thought proper again to argue them, and I must say, with all 
 his ingenuity, has failed, in my estimation, to shake a single position maintained 
 by the opponents of his bill. It has been fashionable to denounce these objections 
 as mere ad captandum arguments ; but, sir, have they been answered ? Can they 
 be answered, otherwise than byreturning epithets for arguments ? 
 
 That the measure would establish a distinction, an odious distinction, be¬ 
 tween the currency of the government and the currency of the people, cannot 
 be denied, for such is the positive provision of the bill. It expressly requires that, 
 after a certain time, the government shall receive, in discharge of the public 
 dues, and pay to its officers and other creditors, nothing but gold and silver or its 
 own paper, while the common currency, in which the people transact their deal¬ 
 ings, would still remain bank paper. The fact, then, is undeniable. But it is 
 intimated there is nothing wrong in this ; and we, who oppose it are asked if 
 we would have the government in the present condition of things, for example, to 
 receive its revenue in the various spurious substitutes for money, which now form 
 so large a portion of the actual circulation of the country. The answer, sir, costs 
 me no embarrassment. I say, no; but this is precisely a case in which tlie-e#- 
 ception proxies the rule. The present is a temporary and accidental state of 
 things ; and the refusal of the government, under existing circumstances, to re¬ 
 ceive the degraded currency of the times in payment of the public revenue, so 
 far from being founded on any permanent distinction between the currency of 
 the government and the currency of the people, is intended to do away that dis¬ 
 tinction, and to provide a sound convertible currency for the common use of both 
 government and people—for the joint resolution of 1816 , which is still the law 
 of the land, expressly declares that when the banks shall resume specie pay¬ 
 ments and thus provide the people with a sound convertible currency, that cur¬ 
 rency shall be equally receivable by the government in discharge of its dues. 
 But the bill of the Honorable Senator contemplates no such thing. It rejects the 
 paper of the banks inexorably, under all circumstances whatever—even though 
 convertible instantly into specie. It will have, for the government, nothing but 
 gold and silver, or its own paper. It demands, with Shylock severity, its “ pound 
 of flesh,” and that, too, without the condition of humanity imposed on the Venitian 
 Jew “not to spill a drop of Christian blood” in the exaction. 
 
 The Honorable Senator from New York seems, however, to have persuaded 
 himself that the requisition of gold and silver in payment of the public dues, would 
 improve the general currency by bringing into circulation a larger portion of the 
 precious metals. But, sir, how can this be? It was shown, in the discussions 
 of the late session of Congress, that when there are two currencies in a country, 
 one answering all the purposes of the other, and a valuable purpose besides, that 
 which answers the additional purpose, would be at a premium, and being so, would 
 not enter into general circulation, but be bought and sold as an article of merchan¬ 
 dise. According to this law of currency, it would follow, under the operation of 
 
5 
 
 the proposed system, that gold and silver only, being applicable to revenue pay¬ 
 ments, they would, in general, command a premium, and would consequently be 
 withdrawn from general circulation. They would be sold by the broker to the 
 public debtor, who would pay them to the Government—by the Government, they 
 would be paid out to the public creditor, and the public creditor would go and sell 
 them again to the broker. This would be the narrow and charmed circle of 
 their movement. They could never enter into the general circulation, under such 
 circumstances ; nor, indeed, under any circumstances, (as has been amply shown 
 on another occasion,) without a previous suppression of the smaller denomina¬ 
 tions of bank notes, for which this bill contains no provision. 
 
 The Honorable Senator also argues, that this policy would tend to secure 
 soundness in the paper portion of the currency, by checking over-issues of the 
 banks. But, instead of contributing to the soundess of the paper currency, it 
 would necessarily increase its insecurity. The great source of insecurity in 
 the banking system at present, as is well known, is the danger of a suspension of 
 specie payments arising from a foreign drain of the precious metals. But this 
 measure would superadd to the foreign an internal drain of specie, to be locked 
 up in the vaults of the Government ; and, from the nature of things, this internal 
 and external drain would occur at the same moment, and exert together their 
 destructive influence upon the banks. It would be in years of heavy importations 
 that, the balance of trade turning against the country, the foreign drain would be 
 most sensibly felt, and it would be precisely, under such circumstances, that the 
 demand for specie to pay the duties, on these importations, being greatly aug¬ 
 mented, the internal drain w r ould operate also with most severity. How then can 
 the Honorable Senator imagine that the security of the paper currency, supplied 
 by the banks, is to be increased by exposing them to a double pressure, from 
 within and from without, at. so critical a moment. 
 
 In regard to the hostile operation of this measure on the State currencies, and 
 the credit, institutions of the states, the honorable Senator has taken up the sub¬ 
 ject in far too narrow a point of view. He spoke as if the whole matter of 
 complaint, in this respect, consisted in withholding the deposites of the public 
 money from the banks. But, sir, ihegist of the question does not lie here. This is 
 a matter in which the convenience and the safety of the government itself are con¬ 
 cerned far more than any interest of the Banks generally, or of the states by which 
 they are created. The real grievance is in the stern exclusion by law of the 
 sound convertible currencies of the states from all transactions of the Federal 
 Government, (transactions in which they have been heretofore invariably admitted, 
 from the origin of the government to the present day.) the official discredit and 
 protest , in advance, thus stamped upon those currencies by the unfriendly action 
 of this government., giving the signal for general distrust and want of confidence 
 in regard to them. Sir, it will be no difficult matter to show that, under the blight 
 of this legislative denunciation, and in the progressive working of the system now 
 proposed, the state currencies will be finally broken down, and a national govern¬ 
 ment paper currency, resting on the same principles as our old continental money, 
 be made to take their place. But the Senator from New York tells us that the 
 state currencies will enjoy as much favor under the new policy, as they did under 
 the regime of the U. S. Bank—that that institution very rarely received the notes 
 of the State Banks in collection of the public revenue, and when it did so, it 
 promptly returned them for conversion into specie. I certainly had not expected, 
 Mr. President, that the Bank of the United States would be held up, from that 
 quarter, as a model for imitation, in regard to its policy toward the state institu¬ 
 tions. But the Senator is mistaken in what he says of the course of that institu¬ 
 tion, and it will appear that even its policy was one of far more liberality toward 
 the state institutions than that which the honorable Senator himself now proposes. 
 It is officially stated in the triennial report of the President of that institution to 
 
6 
 
 the stockholders in Sept., 1831, that the Bank of the U. S. was in the practice of 
 “ receiving freely the notes of the State Banks, within convenient reach of the 
 Bank and its branches;” and this free reception of the notes of the State Banks 
 and periodical “ settlements of accounts ” with them, were the boasted means on 
 which that institution relied to regulate and preserve the soundness of the 
 general currency of the country. It is farther shown by the answer of thatofficer 
 to certain interrogatories propounded to him by the Committee on Finance, of this 
 body, in March, 1830, that though frequent “ settlemeiits of accounts” were made 
 by the Bank of the U. S. with the State Banks, they were “rarely forced to pay 
 specie” to any considerable amount for their notes, but payment was taken in their 
 bills of exchange, or balances permitted to lie over, ’till melted down in the ordi¬ 
 nary course of their business and mutual transactions. This statement is sus¬ 
 tained, through a series of years, by the annual returns of the Bank to Congress, 
 exhibiting generally large balances due to it from the State Banks. But, sir, even 
 though the course of the U. S. Bank had been as unfriendly toward the state insti¬ 
 tutions, as the gentleman from New York supposes, the law of the land , the legis¬ 
 lation of Congress, made no attack on them, as is now proposed. On the contrary, 
 their credit was cherished and sustained by the law ; for the joint resolution of 
 1816 expressly declared that their notes, when convertible on demand into spe¬ 
 cie, should be receivable, equally with specie, in payment of public dues. This 
 is the important consideration ; for in the law , in the policy and language of the 
 government , abides mainly that principle of confidence , on which all paper curren¬ 
 cy rests, and which is now proposed to be rudely withdrawn from the currencies 
 of the states, however unquestionable their soundness and value. 
 
 But, Mr. President, without, dwelling farther on these considerations, I beg 
 leave to ask gentlemen who are so zealously patronising the policy of this mea¬ 
 sure, if they can adduce to us, from ancient or modern times, from civilised or 
 even barbarous communities, a solitary example of a government demanding and 
 collecting its revenue in a currency different from the common, actual currency of 
 the country. If there be any such, it has escaped my researches. In countries 
 where the public revenue may have been, or may now be, collected in gold and 
 silver, it will be found that gold and silver constitute the common, actual currency 
 of the people. Even in England and France, where the circulation consists, in 
 so large a proportion of the precious metals, the revenue payments are, by no 
 means, confined to gold and silver; but bank notes are freely received in both, in 
 discharge of the government dues. It is, indeed, a fundamental maxim of taxation, 
 laid down by all writers on political economy,* and respected in the practice of 
 all governments, that the mode of payment of the public contributions ought to be 
 that most consistent with the convenience of the payers—the great body of the 
 community. Is it reserved for the government of the United States, in its theory 
 the most popular on earth, and claiming the merit of the closest sympathy with the 
 wants and interests of the people, to set the first example of a departure from this 
 just and benignant rule of policy ? and for what reason—for what purpose? I 
 think I have shown that none of the great interests of the country are to be pro¬ 
 moted by it. It may, it is true, be quite agreeable to the office-holders, and other 
 recipients of the bounty of the government, to obtain their emoluments in a“ bet¬ 
 ter” currency, than the common currency of the people ; but surely this will be 
 held no legitimate consideration for legislators and statesmen. What end, then, 
 is to be answered ? What object to be promoted by the introduction of this anoma¬ 
 ly 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. 
 
 I ask, then, what is meant by this phrase ? Is it meant that no other currency 
 is constitutional but gold and silver ? If so, I deny the proposition. Bank notes, 
 
 ♦Smith’s Wealth of Nations—Book Y. chap. II. 
 
7 
 
 as currency, are as constitutional as gold and silver. The constitution, it is true, 
 declares that “ no state shall make any thing but gold and silver coin a tender in 
 paymeni of debts.” This was intended to establish an ultimate standard of value 
 for the adjustment of contracts, where the parties chose to insist on the strictness 
 of legal rights, but not to prevent the states from authorizing convertible represen¬ 
 tatives of. that value to be used as currency , or a common medium oj exchange and 
 circulation, in the ordinary business of life. On the contrary, those representa¬ 
 tives in the shape of bank notes, were known and used as currency , at the time of 
 the adoption of the constitution, and nothing in that instrument prohibits them— 
 the states have, constantly since, been in the habit of creating corporations, au¬ 
 thorized to issue and circulate them—the power, thus exercised by the states, has 
 been invariably acquiesced in and recognised by the General Government—and 
 recently it has been determined by the solemn and unanimous judgment of the 
 highest judicial tribunal of the country, (in the case of Briscoe vs. the Common¬ 
 wealth Bank of Kentucky,) that the states rightfully and constitutionally possess 
 the power. I say it was unanimously so decided by the Supreme Court, because, 
 although a minority of that court were of opinion that, where the state owned the 
 entire stock of the bank, the exercise of the power would be an infringement 
 of the constitutional prohibition on the states “to emit bills of credit,” yet all the 
 Judges concurred, that the authority of the states was unquestionable where the 
 stock of the banks was owned either by individuals entirely, or by them in com¬ 
 mon with the state as a partial stockholder. State Bank notes, then, being issued 
 in pursuance of an unquestionable constitutional authority, are a constitutional cur¬ 
 rency , as well as gold and silver. It is true, a creditor cannot be compelled to ac¬ 
 cept payment of his debt in bank notes, if he object to doing so ; but this does not 
 affect their character as currency , as a common medium of exchange and circulation, 
 or prevent a payment in bank notes from being a final and complete discharge of 
 the debt, if accepted. 
 
 But, perhaps, by this oft repeated phrase, it is meant to be implied that there is 
 some special constitutional obligation on the government to demand its dues in 
 gold and silver. There is as little foundation, however, for this notion as for that 
 which I have just exposed. The government is like every other creditor. It 
 has the power , as every individual creditor has, (if it chooses wantonly to exert 
 it, and to recur to the rigor of strict right,) to insist on the payment of its dues in 
 gold and silver; but, as an individual creditor also, it may waive its strict right, 
 the sternness oft he summum jus, (which, we are told, is most frequently summa 
 injuria,) and receive its dues in the same medium which individuals and the people, 
 by common consent, use for the adjustment of their transactions. This it has done, 
 from the adoption of the constitution to the present day, and never, heretofore, 
 with any question of the constitutionality of the procedure. It not only has the 
 constitutional power which every other creditor has, to waive the strictness of its 
 right, in this respect, but it is especially incumbent on it, as the common agent of 
 the people, guided by that fundamental and benignant maxim of taxation, to which I 
 have already adverted, to waive an extreme right, which, in its exercise, would 
 so seriously affect the convenience of its constituents—the great body of the people. 
 
 We must not, then, be led away, under the dominion of well-sounding phrases, 
 of plausible or pompous common places, to disregard the real interests of the 
 country. As legislators and statesmen, we must emancipate our minds from the 
 delusive authority of mere dogmas, and look to the consequences of our actions, 
 the practical effects of our measures. If we trace this requisition of specie for the 
 public dues in its effects on the actual business of society, we shall find that it is 
 calculated to convulse the whole monetary system of the country, and to keep 
 it in a state of ceaseless and distressing commotion. Under the operation of the 
 Banking system as it exists in this country, specie is to be regarded not so much 
 a part of the currency, as the basis or source of a far larger portion. For every 
 
8 
 
 dollar of hard money that is taken from the banks, four or five times its amount 
 is withdrawn in another form from the actual circulation of the country. Bear¬ 
 ing this in mind, let us see how the proposed system would work. In years of 
 abundant, importation, the circulation of the seaports being insufficient to furnish the 
 requisite sums of specie to pay the duties, largo amounts would be drawn from 
 the South and West to meet the demands of the custom house in the North 
 and the East. The sections, thus stript of their specie, would be, all at once, sub¬ 
 jected to the greatest of all calamities in a pecuniary point of view—that of a de¬ 
 ficient circulation, suddenly contracted, not in the ratio, merely, of the specie 
 removed, but of four or five times its amount; for to that extent would the banks be 
 compelled to call in their circulation, in order to meet the drafts upon them for the 
 precious metals. Under this desolating process, the prices of property would be 
 struck down, the relation of debtor and creditor violently disturbed, and every branch 
 of industry paralysed and withered. On the other hand, when the land sales be¬ 
 came active, the current would be reversed, large masses of specie would be 
 drawn from the North and the East to the South and the West, attended with 
 the same distressing effects on the trade and industry of the country, and only 
 shifting the theatre of their disastrous operation. What could result from this 
 perpetual dragging, to and fro, of the specie of the country, contrary to the natural 
 laws of trade, and in obedience ordy to arbitrary governmental regulations, but in¬ 
 cessant throes and convulsions in the whole system of its business and currency ? 
 
 It would be some compensation, in a national point of view, if the specie, of 
 which different portions of the country would, in their turn, be stript, under 
 the operation of this new system, were restored to active and beneficial use in 
 those sections to which it would be transferred. But would this be the case 1 
 No, sir. The whole surplus, beyond the current disbursement of the Govern¬ 
 ment, would rest in barren and unproductive idleness, in the “ vaults and iron 
 safes” of your Sub-treasuries. It would be an annihilation of so much of the 
 national capital, susceptible of multiplication, through conventional substitutes, 
 to four times its nominal amount, and capable of fructifying and sustaining the 
 national industry to a corresponding extent. I must confess, Mr. President, that 
 this monopoly and hoarding of the precious metals by the Government, does 
 seem to me unworthy of the age in which we live. We may find examples of 
 it among the nations of antiquity. But their circumstances were very different 
 from ours. They were engaged in frequent wars, and they accumulated their 
 treasure, in advance, as a provision for those national emergencies, always with 
 them, more or less near at hand. It may also deserve consideration whether the 
 practice which prevailed among them of hoarding the public treasure was not the 
 cause, fully as much as the effect, of the frequency of their wars ; for the relief 
 to industry from unlocking those vast hoards in time of war, may well be con¬ 
 ceived to have rendered the occurrence of war no unwelcome event to their 
 crowded populations. If we descend to modern times, we find no instance of 
 this national hoarding, but among rude and uncivilised communities—the Bar¬ 
 bary powers or the Tartar tribes, for example. The Dey of Algiers is said 
 to have been the master of a large hoard of accumulated treasure, when he was 
 expelled from his dominions by the French. So, also, was Mazeppa, the cele¬ 
 brated Cossack Chieftain, the untutored ally of Charles the NIL But surely, 
 we are not going to the banks of the Dnieper, or the shores of Africa, for les¬ 
 sons in policy and legislation. We shall not thus, I humbly trust, dishonor the 
 spirit of the age, belie the genius of our free institutions, and mar the destinies 
 of our great and glorious country. 
 
 But there are other aspects of this measure even more dangerous and alarming. 
 In the remarks I had the honor to submit to the Senate, at the late session, 
 I said that this scheme had a squinting, “ an awful squinting” towards a Trea¬ 
 sury Bank. It now has that character boldly planted on its front. It is, to all 
 
9 
 
 intents and purposes, a great Government Bank; and of this I persuade myself 
 I shall be able to satisfy every gentleman who will do me the honor to accompa¬ 
 ny me in the analysis I propose to make of its composition. In the first place, 
 the national revenue, collected in gold and silver, is to be disposed in masses 
 at certain leading points, designated by their importance in a commercial, finan¬ 
 cial, or political view. The bill directs that there shall be a great cental 
 depot of it in the new treasury building here—another depot in the mint at Phi¬ 
 ladelphia—a third in the branch mint at New Orleans, and four other similar 
 depots of the national treasure in gold and silver, at New York, Boston, Charles¬ 
 ton, and St. Louis. Buildings are to be erected (where they do not already exist,) 
 for the reception and security of these funds, fitted up with vaults, safes, and all 
 the usual appendages of a banking establishment. The Treasurer and the Secre¬ 
 tary ol the Treasury are to preside, particularly, over the central establishment 
 here—the Treasurer of the mint and the branch mint over the establishments in 
 Philadelphia and New Orleans, and four Receivers General, with their clerks and 
 assistants, over those at New York, Boston, Charleston, and St. Louis. Thus 
 you have the funds or capital to operate on, placed in position at suitable points, 
 and a complete organization of officers to manage and administer those funds. 
 Nothing but the plastic hand of the Secretary of the Treasury will be wanting to 
 mould these materials into a bank, and to give motion and direction to the ma¬ 
 chine. How will it be done ? The modus operandi will be perfectly natural 
 and simple. 
 
 The Government funds, compared with the disbursements to be made, will bo 
 in excess in some places, while they will be deficient in others. They must 
 then be transferred from one place of deposite to another. This will hardly 
 ever, it is to be presumed, be done by an actual transportation of specie. 
 It will, doubtless, be generally effected by the ordinary commercial means of drafts 
 and bills of exchange. The bill most sedulously gives to the Secretary of the 
 Treasury an unlimited discretionary authority to make and order these transfers 
 from one place of deposite to another, and from one individual depository to 
 another. At a place, therefore, where the government funds are in excess, and he ' 
 wishes to transfer a portion of them to some other place where they are defi¬ 
 cient, he will naturally direct a draft, or bill of exchange on the latter place to 
 be bought, paying for it out of the specie accumulated in excess at the place 
 of the negotiation. On the other hand, when he wishes to draw funds from a dis¬ 
 tant place, where they are in excess, to a place where they are deficient, a bill 
 on the former place will be sold, and the money received for it, added to the de¬ 
 ficient funds at the place of the negotiation. The officers of the Govern¬ 
 ment, thus operating on the public funds under this system, would become 
 habitual dealers in exchange—a regular and acknowledged branch of the business 
 of banking. In the exercise of these functions, the accommodation of indivi¬ 
 duals would come to be fully as much consulted as the wants of the Government. 
 The Receiver General at St. Louis, for example, having an excess of the public 
 moneys in his hands, and instructed to transfer that excess to the Sub-treasury 
 at New York, would naturally do so by buying drafts of merchants or other in¬ 
 dividuals on the latter place. But in this application of the public money to the 
 purchase of drafts, what an endless field would there be for undue favors to 
 individuals, as well in discriminating among those who might have drafts to sell, 
 as in adjusting the price and other terms of the purchase. So, likewise, if wo 
 suppose the Receiver General at New York authorized to draw a surplus of pub¬ 
 lic moneys from St. Louis, he would do so by selling drafts on the Receiver 
 General at St. Louis; and in this operation of selling, there would be precisely 
 the same danger of abuse, and of the influence of personal considerations, as I 
 have just shown to exist in that of buying exchange. 
 
 It is also very easy to perceive that, under the forms of buying and selling 
 
10 
 
 bills of exchange by Government officers, real loans to individuals may be 
 couched. If I buy, for example, a bill of exchange which has sixty or ninety 
 days to run, and pay for it in cash , as I suppose to be done in the case, put above, 
 of a Receiver General purchasing bills to transfer an excess of public mo¬ 
 neys in his hands, what is this in fact but a loan of money to be returned, at 
 the end of sixty or ninety days, at some other place where the Government 
 wants it. It is, indeed, except as to place , the ordinary form of discounting 
 mercantile paper. In like manner, the sale of a bill of exchange, to be paid for 
 at a future day, is a very convenient medium of a real loan. The purchaser 
 immediately sells the bill he has bought, realizes it in money, the use of 
 which he enjoys for the stipulated period, and then returns it with the rate of 
 profit agreed upon in the nominal purchase. The transaction is, to every 
 practical intent, a loan ; and professional gentlemen, conversant with the devices 
 practised to evade the statutes against usury, will tell you that nothing is more 
 common than to make a real loan under this very form of selling a bill of ex¬ 
 change. We see, then, that the officers of the Treasury, under the organization 
 provided by this bill, would not only be engaged in buying and selling bills of 
 exchange, but they would have the power of discounting mercantile paper and 
 making real loans. Thus the bill creates, in effect, a bank of discount. 
 
 It would, moreover, be a bank of deposite, for the 27th section of the bill ex¬ 
 pressly authorises individuals 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 7 that presi¬ 
 dent Jackson, when he suggested the idea of a Government Bank, of which 
 this bill seems to be the development, expressly recommended that it should be 
 based upon individual , as well as the public deposites. 
 
 The organization instituted bv this bill would also be a bank of circulation , 
 
 • for the drafts, receipts, and other paper authorized to be issued by the officers of 
 the treasury, under the provisions of the bill, would form a part of the actual 
 currency and circulation of the country. That it is designed, through the medium 
 of this machinery, to issue permanently a government paper currency, under 
 some form or other, is sufficiently evinced by the alternative clause of the bill 
 relating to receipts and payments by the government, wdiich requires that all 
 such receipts and payments, after a certain period, shall be in gold or silver, “ or 
 in notes, bills, or paper issued under the authority of the United States.” The 
 senator from South Carolina, (Mr. Calhoun,) the patron and champion of this 
 11, and the author of the provision just referred to, is known to advocate a pa¬ 
 ir currency of that description, issued and resting exclusively on the credit of 
 ie Government. The Secretary of the Treasury too, in his report on the 
 lances, at the commencement of the present Session, does not hesitate to ask 
 ongress for the permanent grant of an authority to issue Treasury Notes , (at 
 s discretion, within a certain limit,) according to the varying wants of the 
 reasury. But the design of supplying a paper medium, for general circulation, 
 irough the fiscal action of the Government, is more fully developed in the 
 •port of that officer at the last Session, and from that document, I beg leave 
 read to the Senate a few significant extracts. 
 
 “ Should Congress,” says the Secretary, “ determine that it is proper to furnish by its own 
 ithority, and for the purposes before mentioned, some paper medium of higher character , 
 d other than what now exists in private bills of exchange, or notes of State Banks , no doubt 
 ists, that any benefits which may occasionally be derived from its employment can be rea- 
 ty secured, without treading on the debateable ground of either the power or the policy of 
 artering a National Bank. Certificates, not on interest, but payable in specie to bearer or 
 
11 
 
 order, as well as being receivable for all public dues, could be authorized to be given in 
 payment to the public creditor, whenever preferred by him, and sufficient specie existed in 
 the Treasury. This kind of paper would be very convenient in form, and would differ 
 little from the drafts now in use on banks, except being drawn on a known specie fund, 
 and expressing on its face not only this, but its being receivable, in the first instance, for all 
 public dues. It would possess the highest credit attainable in society.” “ The common drafts 
 of this Department, in the present convenient form, possess one advantage, which could be 
 imparted to the certificates. When used at places against which the balance of trade exists, 
 but drawn on places in whose favor it is, the former 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 specie itself.” 
 
 The Mint certificates, heretofore given on the deposite of bullion and specie for coinage, 
 might be easily made running to bearer or order, and receivable for all public dues; and, in 
 that way, would contribute to the same desirable ends.” 
 
 “ It must be obvious that the paper of any bank would be less safe and useful in being 
 received for public dues, in proportion as if may want such solid securities and foundations 
 as the certificates before described.” 
 
 My purpose is not now to discuss the supposed advantages of this Government 
 paper currency, so much lauded by the Secretary. The great recommendation 
 of it, in his eyes, is that it would rest upon a specie basis co-extensive with the 
 issues. But as the certificates would be rarely returned for redemption, nothing 
 would be more likely to happen than what occurred in the case of the bank of 
 Amsterdam—that, in the mean time, large portions of the specie would be 
 withdrawn and diverted to other purposes. But my intention was simply to show 
 that an issue of a government paper currency, in some form or other, is one of 
 the main objects of this new financial scheme. In looking at the passages above 
 quoted, and others of similar import in the Report of the Secretary of the Trea¬ 
 sury, it is impossible to wink so hard as not to see that the design is to supply a 
 paper medium , through the fiscal operations of this government, which, it is 
 hoped, would ultimately supersede the state currencies; and the organization 
 proposed, in this bill, is the instrument by which that design is to be accom¬ 
 plished. That it would be a bank of circulation is unquestionable ; and I have 
 already shown that it would be a bank both of discount and deposite. 
 
 The Secretary of the Treasury, however, seems to think there would be no 
 Bank in all this, because there would be no incorporation. But incorporation is 
 not necessary to constitute a bank, which derives its character wholly from the 
 nature of its business and functions. The Government Bank of Russia is not 
 incorporated.—Neither is the Government Bank of Austria. They are both 
 constituted of, and managed by, officers of the Government, precisely as the 
 machinery created by this bill is proposed to be managed and directed. So 
 in regard to the private and joint stock banks of England. They are not in¬ 
 corporated ; but no body ever supposed them to be the less banks on that account. 
 Some thirteen or fourteen years ago, the celebrated Mr. Ricardo proposed the 
 plan of “ a National Bank ” in England, which, among other things, was to have 
 the exclusive privilege of issuing the whole paper currency of the kingdom. It 
 was to be a Government institution, consisting of five commissioners, residing in 
 London, to be appointed by the crown and removable by Parliament, and to 
 be assisted by agents and officers established in the leading country towns. The 
 plan of this bill bears, in some respects, so close a resemblance to that of Mr. 
 Ricardo, that it is difficult to resist the impression that the one must have sug¬ 
 gested the other. The organization proposed by Mr. Ricardo, consisted, like 
 that of this bill, of public officers, having certain duties and functions assigned to 
 them, connected with the collection and management of the public revenue, as 
 well as with the issue of a paper currency. No act of incorporation was pro¬ 
 posed or deemed necessary ; but he did not, on that account, the less consider his 
 scheme a “ National Bank,” under which name it was expressly presented to 
 his countrymen. 
 
 But there is another authority on this head still more in point. It remounts to 
 
12 
 
 the first suggestion ever made in this country of a Government or Treasury 
 Bank. I allude, of course, to President Jackson, who in his first annual mes¬ 
 sage to Congress, (1829,) threw out the idea of a bank, founded on the “credit 
 and resources of the United States.” This suggestion became the subject of 
 very able and elaborate examination by the Committees on Finance, in this 
 and the other House, by both of which, though consisting of warm friends of 
 the President, the suggestion was repudiated and exploded. The President, 
 in his message at the commencement of the following Session of Congress, 
 (December, 1830,) thought proper to recur to the subject, and to define more pre¬ 
 cisely what he meant by a bank founded on “ the credit and resources of the 
 United States.” The scheme he then brought forward was identical, in every 
 respect, with that contained in the present bill; and yet, with the soldierly frank¬ 
 ness which characterised him, he did not hesitate to call it by its proper 
 name—“ a. Bank of the United States.” Let us see what he said on that 
 occasion. 
 
 “ In the spirit of compromise and improvement which distinguishes our country and its 
 institutions, it becomes us to enquire whether it be not possible to secure the advantages 
 afforded by the present Bank, through the agency of a Bank of the United States, so modified 
 in its principles and structure, as to obviate constitutional and other objections. It is thought 
 practicable to organize such a Bank , 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 officers to sell bills of exchange to 
 private individuals, at a moderate premium, &c., &c., &c. In times of public emergency, 
 the capacities of such an institution might be enlarged by Legislative provisions” 
 
 The Bank which Gen. Jackson proposed, was to be organized, with the neces¬ 
 sary officers, as a branch of the Treasury Department, to be based on the public 
 and individual deposites, to remit the funds of the Government , and to deal in bills of 
 exchange. The organization, provided by the bill under consideration, is to pos¬ 
 sess every one of these attributes, and to perform other banking functions in ad¬ 
 dition, such as the issue of paper, which was not then contemplated. Yet, while 
 the former plan was boldly avowed to be a Bunk , this is denied to be one. Gen. 
 Jackson, with all his popularity and energy of purpose, was not able to commend 
 his plan to the favor of the country, and even his volonte defer, (iron will,) as it 
 was called by a foreign representative, on a memorable occasion, obeying the 
 great law of Republicanism, bent beneath the force of public opinion, and aban¬ 
 doned the scheme. Yet the same scheme is now reproduced, amid the confu¬ 
 sion of the times, in an aggravated form, but without the name. 
 
 It is a remarkable circumstance, Mr. President, that the most ancient and 
 celebrated Banking Institutions of Europe have grown up from precisely such 
 beginnings as are contained in this bill. The Bank of Venice, for example, the 
 oldest and most celebrated bank in Europe, commenced as a fiscal institution. 
 The Republic, pressed by its foreign wars, was compelled to resort to a forced 
 loan. In order to secure the payment of the interest on this loan, it set apart cer¬ 
 tain branches of the public revenue, and instituted a board of commissioners, call¬ 
 ed the Chamber of Loans, who were charged with the collection and manage¬ 
 ment of those branches of the revenue, and the application of their proceeds to 
 the punctual payment of the interest on the loan. In the transaction of the bu¬ 
 siness confided to them, they had occasion sometimes, to buy and sell Bills of 
 Exchange, as I have shown the officers of the Treasury, under the organization 
 of this bill, would do. Having frequently surplus funds on hand, they began at 
 length to employ them more extensively in the operation of buying and selling 
 exchange, and under this power, actually advanced money on mercantile paper, or 
 in other words, became a Bank of discount. The credit and responsibility of the 
 institution being established, the merchants of Venice began to make use of it 
 for the safe-keeping of their funds, and so it became a bank of deposite 
 
13 
 
 also. Finally, a credit on the books of the institution for money deposited, be g 
 equivalent to cash, payments in the course of trade, came to be made by transfers 
 of these credits from one to another, or by what are now called checks, which 
 performed the office, and preceded the introduction of notes , and so the chamber 
 of loans became also a bank of circulation. We see, in this example, by what 
 natural and easy gradations the most celebrated banking institution in Europe, 
 that which has been the model of all the rest, grew out of the simple function of 
 collecting and applying the public revenue, associating to itself a collateral and 
 incidental action on the commerce and currency of the country, all of which func¬ 
 tions, I have shown, are to be vested by the new financial scheme in the officers 
 of the Treasury Department. 
 
 The same in every material respect, were the origin and progress of the Bank 
 of Genoa; which, next to that of Venice, was the oldest, and in its dav, the most 
 accredited banking institution in Europe. In England, too, the mint, at one time 
 in being made the depository of the funds of individuals, as the Secretary of the 
 Treasury proposes that our mint and its branches should be, became virtually 
 a hank —“ the great centre of money transactions and remittances for England 
 and foreign nations”—till Charles the 1st, in 1640, impelled by his necessities, vio¬ 
 lated the private funds deposited there, and “ happily,” as Burke says, put an 
 end to both its credit and use as a banking establishment. 
 
 The testimony of history then, as weil as the nature of things, proves that 
 
 the organization instituted by this bill, would work as a great government bank_ 
 
 buying and selling exchange —under that form, at least, d iscountino- mercantile 
 paper,—receiving de.posi.tes, public and private,—and circulating a paper money 
 of its own. Now, L would appeal to every friend of the liberties of his country, 
 and ask him if he would willingly see so formidable an union of the moneyed 
 and political power consummated in the hands of the government. Will lie put 
 so potent an engine, an instrument so efficacious of operating on the hopes and 
 fears of men, of enlisting their interests, of controiing their fortunes, into the hands 
 of a Department of the government, already armed with a patronage and power 
 of fearful extent. ? 
 
 The honorable Senator from New York, (Mr. Wright) in a portion of hisre^ 
 marks 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 observa¬ 
 tions I have made on the practical operation of the Sub-treasury scheme are 
 founded in the grossest delusion, that scheme, instead of being antao-onistical 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 Exe¬ 
 cutive, controled and managed exclusively by Executive agents. If, then the ho¬ 
 norable Senator will insist upon making up an issue, to which the Miosf 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 ter¬ 
 ror of any alternative to drive them inlo 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 
 
14 
 
 ft 
 
 institutions, and to employ their agency, with such modifications and securities as 
 experience may have shown to be either necessary or desirable. 
 
 1 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, 1 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 strug¬ 
 gles 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 willing¬ 
 ness, and even zeal to reform , as the only effectual means ol 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, 1 proudly avow myself a conservative —a conservative of 
 Republican institutions, of Republican principles, of Republican practices, as il¬ 
 lustrated and interpreted by the great champions of the Republican faith. 
 
 But, sir, to pursue the remarks of the honorable Senator, addressed to this 
 small fraction 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 Con¬ 
 gress , 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 as¬ 
 sumes 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 gentle¬ 
 man’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 array of parties here is to give 
 law to public opinion, and that public opinion is not to shape and control the action 
 of parties here. Sir, I go for the voice of the people; and the people have 
 spoken for themselves. They have not left us to infer their sentiments from anv 
 accidental or temporary relation of parties here. They have pronounced judgment 
 on the gentleman’s scheme ; and 1 should like to know where the honorable gen¬ 
 tleman finds, in these expressions of public opinion, any evidence that there is 
 a great party in this country in favor of the Sub-treasury project. Never before 
 has any proposition been so signally rebuked and condemned by the voice of the 
 • people. I refer to these things, Mr. President, with no pleasure. I contributed 
 my best exertions to the election of the present Chief Magistrate, honestly an¬ 
 ticipating from his prudence, his abilities, and his patriotism, a wise and success¬ 
 ful administration of the public affairs. No one has felt a more sincere desire for 
 his success than I have done. The unfavorable manifestations of public senti¬ 
 ment, therefore, upon the first leading measure of his administration, (though I 
 foresaw and foretold them, from the first, moment that that measure was suggested,) 
 have been to me the source of any thing rather than pleasure. They have now, 
 however, become matters of public history; and as the Senator from New York 
 seems disposed to confine our view here for second-hand proofs of public opinion 
 on the merits of the different financial measures which have been proposed, I must 
 beg leave to invite his attention to those more majestic displays of public senti¬ 
 ment which have been presented on the great theatre of the nation. Let him 
 look at the elections which have taken place in the several States, since this 
 fatal measure was first broached in the official journal, and say how many of 
 them have eventuated in favor of the administration. With one or two excep- 
 
15 
 
 tions, they have all terminated against it; and mainly, there is reason to believe, 
 on account of this very measure. 
 
 Where, then, does the Honorable Senator find the evidence that there is any 
 great body of popular sentiment in this country in favor of his scheme ? The 
 evidence is all the other way, and of the most overwhelming force. So, as to the 
 other great alternative of which the Honorable Senator speaks, (a National Bank,) 
 a large majority of the people have repeatedly declared against it, and without im¬ 
 puting to them a degree of fickleness, of which 1, at least, do not suspect them, 
 they must still be opposed to it. What plan, then, will they rally to, as a safe and 
 practical substitute for the Sub-treasury on the one hand, or a National Bank on 
 the other ? It is the employment of the State Banks, institutions intimately 
 connected with their domestic interests, responsible to, and supervised by, their 
 domestic authorities, and exempt from all danger of political combination—the 
 employment of these institutions under regulations which shall, at the same 
 time, secure their efficiency and guard against abuse. Such, I am firmly per¬ 
 suaded, would be, at this moment, the unbiassed decision of a large majority of 
 the American people. And even if we appeal to the criterion set up by^the 
 honorable Senator from New York—the state of parties in Congress—I think we 
 may deduce from that, conclusions far more favorable to the State Bank depo- 
 site system than he has drawn. If there be but a small party in Congress, with 
 whom the State Bank deposite system is a first choice, he must admit that it is 
 the second choice of a large majority. The Sub-treasury party would, I pre¬ 
 sume, prefer it to a National Bank, and the National Bank party would prefer 
 it to the Sub-treasury. Now, sir, the honorable gentleman will permit me to 
 refresh his early reading, by reminding him of an incident related by Plutarch. 
 Afier the battle of Salamis, in which the power of the Persian monarch was 
 crushed by the combined Grecian fleet, the different commanders of the squadron 
 repaired to the altar of Neptune, and according to a custom of the country and the 
 times, each one put on a ticket the names of those who had rendered the most 
 important service in the action. Every officer put upon his ticket his own name 
 first, but all put the name of Themistocles next. This has been held, in all 
 future times, as conclusive proof of the superiority of Themistocles above all his 
 competitors; and the State Bank deposite system may adduce the same evidence 
 of its merit in being the second choice of both of the parties which respectively 
 advocate the Sub-treasury and a National Bank. The fraction, therefore, in 
 Congress, who still adhere to that system, however small they may appear in the 
 eyes of the honorable Senator, can see nothing in this state of things, which 
 calls upon either their patriotism or their prudence to abandon a policy which 
 they believe to be sanctioned by the sentiments, and demanded by the interests, 
 of the great body of the people. 
 
 But, sir., to return from this digression, let us see what additions are made to 
 the official as well as pecuniary patronage of the Executive, by the provisions of 
 this hill. When I had the honor of addressing the Senate at the last session, I 
 spoke of the bill then under consideration, as the “grain of mustard seed,” which 
 would grow up into a large tree and cover the land with its branches. But I was 
 told by the honorable Senator from New York and others, that the bill did, 
 not create a single new officer, and my friend from Connecticut, (Mr. Niles) 
 complimented me, as well as I remember, for my vivid imagination, to the account 
 of which alone he set down the apprehensions I had expressed. But what do 
 we now see? In three short months, the tree, which has already grown up from 
 this grain of mustard seed, has thrown out four large branches in the form of 
 Receivers General, each of which will have its dependent ramifications in the 
 form of cashiers, tellers, clerks, &c. The Treasurer also is to have his “assist¬ 
 ants ;” and an indefinite brood of clerks is provided for all the officers made depo¬ 
 sitaries of the public moneys under the bill, to assist in the discharge of the new 
 
16 
 
 duties devolved on them. Finally, a number of missionaries are to be appointed 
 from time to time, at the discretion of the Secretary of the Treasury, to visit and 
 inspect the various fiscal agencies created by the bill. Now, here is a cloud 
 of new executive officers, at once, which bids defiance to calculation. But if their 
 present number could be estimated, (as the Senator from New York has attempted 
 to do,) it would be altogether useless, for they must, from the nature of things, 
 be constantly and rapidly multiplying. Would the honorable Senator attempt to 
 measure the rising cloud, which threatens to overspread and blacken the whole 
 face of the heavens, by the speck, “ no bigger than a man’s hand,” which has 
 just appeared on the edge of the horizon ? This is but the beginning; and we 
 all know with what vigor and fruitfulness every thing grows on American soil. 
 Receivers General are allowed by the bill, at present, only to Massachusetts, 
 New York, South Carolina, and Missouri. But will not Maine, New Hamp¬ 
 shire, Connecticut, demand their Receivers General as well as Massachusetts,— 
 Virginia, North Carolina, and Georgia, as well as South Carolina,—Kentucky, 
 Ohio, and Tennessee, as well as Missouri ; and so in regard to all the other 
 States that are now pretermitted in the bill. If we have Receivers General, we 
 must finally have Payers General; for this is an integral part of the system in 
 France, from which we borrow the scheme proposed by the bill. In adopting a 
 system, it is fair to presume we mean to adopt its usual and ordinary concomitants. 
 Indeed, an honorable member of the other House, who is well skilled in questions 
 of finance, expressed the opinion to me, only the other day, that the functions of 
 paying and receiving ought to be separated, so as to form checks on each 
 other; and thus we shall have the French system, in both its branches, at once. 
 On the question of introducing a new system of policy, we ought never to forget 
 the old adage, which we derive from France also—c’est le premier pas r qui coute 
 —It is the first step which is decisive , and that taken, all the rest follow. 
 
 The Senator from New York (Mr. Wright) has likewise attempted an estimate 
 of the expense of this new system. But this, also, in my opinion, is a vain 
 thing. The first modest beginnings of a system furnish no standard by which 
 its ultimate expense can be measured. The Senator’s estimate makes the annual 
 expense, (exclusive of what may be called the outfit , in the cost of buildings, 
 &c.) somewhere about $20,000, (twenty thousand dollars.) But this is greatly 
 below the estimate of the Secretary ol the Treasury, in his report at the last 
 session; and in recommending a favorite scheme, the author of it is rarely 
 found to over-estimate its expense. That officer set down the annual expense 
 at $60,000 (sixty thousand dollars.) This, in my opinion, is very far below the 
 ultimate permanent expense. An able and experienced gentleman in my own 
 State, practically versed in these questions, and a zealous and decided advocate 
 withal of the new system, in setting forth its advantages, and defending it from the 
 objections which had been urged against it, met this very one of expense by 
 giving it as his opinion, formed upon deliberate and careful reflection, that the an¬ 
 nual expense would not exceed $600,000, (six hundred thousand dollars.) Now, 
 sir, when I arrived here, at the extra session of Congress, and read the estimate 
 of the Secretary of the Treasury, I could not but suppose, at first, that there 
 was an accidental mistake in his figures, by the omission of a cypher, and that 
 he intended to have put down the expense at $600,000, (at six hundred thou¬ 
 sand dollars,) instead of $60,000, (sixty thousand dollars.) 
 
 But, however, this may be, nothing can be more certain than that the expense 
 of this system, when fully developed, musl, 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 worth 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 indi- 
 
17 
 
 victual 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, to which 
 he refers. From this statement it appears that the cost of collecting the revenue in 
 England is, under the respective heads of taxation, as follows : Customs, 7 per 
 cent.—excise, 4 per cent—recording and stamps, 7 per cent.—Post Office 11 
 percent.—and direct taxes, 2 per cent.—averaging, upon the whole, 6 1-5 percent. 
 In France, under the same heads, the cost of collecting (he revenue is as fol¬ 
 lows : Customs, 33 per cent.—excise, 20 per cent.—recording and stamps, 9 
 percent.—Post-office, 45 per cent.—direct taxes, 15 per cent.—averaging, upon 
 the whole, 24 2-5 per cent! I am well aware that divers circumstances are to be 
 taken into consideration, in explaining this enormous difference of expense be¬ 
 tween the French and English fiscal systems ; but one of the principal causes of 
 that difference, (and it is so considered by the writer, to whom I have referred,) 
 will, at last., be found in the fact of the extensive use of hanking agency in the 
 collection of the revenue in England, and the exclusive employment of individual 
 agency, for that purpose, in France. 
 
 But it is not merely by the multiplication of officers and the increase of ex¬ 
 penditure, that the influence of the Executive branch of the Government is fear¬ 
 fully extended by this bill. That influence is greatly augmented by certain new 
 regulations it introduces in regard to the tenure of office—the compensation of 
 officers, and the forms and usages of fiscal administration. In the first place, 
 the Treasurer, the Receivers-General, and all the other officers, from the highest 
 to the lowest, employed in the fiscal service, may be required at any time, at the 
 discretion of the Secretary of the Treasury, to give new official bonds, in increas¬ 
 ed sums, to he fixed by the Secretary of the Treasury, “ any law in reference to 
 any of the official bonds of any of the said officers to the contrary notwithstand¬ 
 ing and in default of giving such new bond, the officer would, of course, be de¬ 
 prived of his office. Now, it is evident, that under such a power possessed by 
 the Secretary of the Treasury, all the officers connected with the operations of the 
 Treasury, would be converted into the trembling vassals of the Executive. A 
 direct removal from office is a measure of more than ordinary energy, and involves 
 responsibility. Cases might exist in which the Secretary of the Treasury would 
 be unwilling to take the responsibility of a direct removal from office, and yet 
 would accomplish the same object by a vexatious requisition of a new bond in 
 so large a sum, that the officer could not, or would not find sureties to the 
 increased amount. Who does not see that, under such a regulation, the officers 
 of the Treasury would lose all sense of independence ; and that those who 
 could consent to hold office on such terms, must be prepared to become the pas¬ 
 sive and unresisting tools of power. Heretofore it has been the wise policy of our 
 legislation to fix by law the sum in which official bonds are to be given, and to 
 leave nothing in that respect, or as little as possible, to Executive discretion. 
 Again, it will be seen from an examination of the bill, that the compensation of 
 several of the officers to be appointed under it, such as visiting agents, clerks, &c. 
 is to be fixed by the Secretary, at his discretion, and not by law. Here is another 
 source of servile dependence on the one hand, and of increased Executive in¬ 
 fluence on the other, which is not in harmony with the general spirit and maxims of 
 our legislation. 
 
 My attention has also been attracted by a provision of the bill which seems to 
 me to introduce a most dangerous innovation in the established forms and usages 
 
 o _ _ o 
 
 of the Treasury. It has heretofore been a fixed principle of fiscal responsibility, 
 that no money should be drawn from the Treasury, but upon a warrant of the 
 Secretary drawn on the Treasurer, countersigned by the Comptroller, and re- 
 
 o 
 
 tii 
 
 \ 
 
IB 
 
 corded by the Register, and upon that warrant, when it reaches the hands of the 
 Treasurer thus authenticated, the Treasurer draws his draft on the depository of 
 the public money for payment. These forms have always been held to be very 
 important checks, and indispensable preliminaries to any money being drawn out 
 of the Treasury, or in other words, paid by the depositary of the public mo¬ 
 neys. The Secretary draws his warrant upon the Treasurer, subject to the 
 checks before mentioned, and then the Treasurer draws upon the depositary who 
 is to make the payment. But, in no instance, does the Secretary draw directly 
 upon the depository, because that would be to lose the.security of the intermediate 
 checks of the Comptroller and the Register. By the 10th section of this bill, 
 however, in contravention of these established principles and checks, it is express¬ 
 ly 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 could 
 draw out all the money in the Treasury, or, which is ihe same thing, in the 
 hands of the depositaries, without, any check whatsoever. The effect of it, 
 whether so intended or not, is to place the whole public treasure at his unchecked 
 and absolute disposal. 
 
 Now, sir, is not the effect of these various provisions, and of the whole scope 
 and tenor of this bill, to concentrate, at last, the entire control of the public 
 moneys, in the hands of the President ; for the Secretary of the Treasury, and all 
 the other fiscal officers are but his agents, appointed by him, and removable at 
 his pleasure ? But the Senator from New York, (Mr. Wright,) contends that the 
 President would have no more control over the public moneys under the pro¬ 
 posed system, than if they were deposited in banks—that the same legal formali¬ 
 ties must be gone through to touch the public moneys, in the one case, as in the 
 other. It may be true, that the President has no more legal control over the pub¬ 
 lic money in the one case than in the other ; but has he not a greater practical 
 control. In the one case, the depositaries of the public money would, be his 
 agents, subject to his authority, the creatures of his will, dependent upon bis plea¬ 
 sure for their continuance in ^flice, and made by the peculiar provisions of this 
 bill, as I have already shown, especially and habitually sensible of that depen¬ 
 dence. In possessing so complete a control over the keepers of the public mo¬ 
 ney, he would possess virtually a control over the public money itself. But, in the 
 case of the employment of banks, the depositories of the public money are in¬ 
 stitutions not created by the President—not dependent on him for their contin¬ 
 ued existence :—on the contrary, they hold their charters, and the advantages 
 they confer, from a distinct authority, to which they are at all times responsible 
 and are thus guarded against any undue influences from other quarters, which 
 might warp them from their integrity and their duties. 
 
 In making these remarks, Sir, I speak in no spirit of captious jealousy, as to 
 the highest Executive trust of the Government, or of its actual incumbent: but 
 I speak in the spirit of the constitution, which anticipates the danger, and sup¬ 
 poses the possibility of the abuse of power, and inculcates the necessity of guard¬ 
 ing against it. The system organized by this bill is one of the most thorough 
 centralization. It rides over the institutions of the States, prostrates their credit 
 and usefulness, brings patronage and power to the General Government, concen¬ 
 trates them in the hands of the Executive, to whom it gives an unlimited con¬ 
 trol over the public moneys, and through the banking operations to be founded 
 on them, an extensive and paramount influence upon the moneyed concerns of the 
 whole country. It is fitting that such a system should be borrowed from France, 
 the country whose institutions exhibit the most unqualified example extant of 
 centralization —under which the capital has swallowed up the provinces, and Pa¬ 
 ris has become synonimous with France. Bwt it is equally fitting that such a 
 
19 
 
 system should be resisted, to the last extremity, in this land of Republican free¬ 
 dom, by all who are attached to the rights of the States—by all who are opposed 
 to the enlargement of Federal and Executive power—and, by all who watch with 
 jealousy, and view with alarm, every tendency to consolidation. 
 
 I will now, Mr. President, follow the Senator from New York, (Mr. Wright,) in 
 the remarks he made on the comparative safety of the two systems proposed, 
 for keeping and disbursing the public moneys. Although experience, the only 
 safe arbiter, has long since settled this question, the honorable Senator argued 
 it as if it were still open to doubt, and made, I am free to admit, an exceedingly 
 ingenious and plausible argument. He instituted a parallel between the two 
 systems, in regard to the great leading points on which their safety is supposed to 
 depend, and in each instance brought out a substantial equality. First, as to offi¬ 
 cers, he said it would be fair to presume that the officers of the government and the 
 officers of the Banks would be equally trust-worthy—Then, as to sureties , he 
 said both the banks and the government officers are equally required to give sureties, 
 if deemed necessary. So, likewise, as to vaults, the government officers, he said, 
 are to be provided with vaults, as well as the banks. The only particular, then, 
 in which the banks, as he alledged, could be supposed to present a better guaran¬ 
 tee for the safety of the public funds, is that their capital stock is pledged for the 
 reimbursement of the public moneys committed to them ; but this advantage in 
 favor of the banks, he very adroitly balanced by what he represented to be the 
 risk of mingling the Government funds with those of trading corporations. Now- 
 all this is very fair and plausible on the surface. But what is the fact—- -what 
 is the testimony of experience ? 
 
 While the honorable gentleman was running this parallel in theory between the 
 two systems, there was a document lying on the table of the other House, 
 which had run the same parallel on the surer foundations of practice. I allude 
 to a recent report of the Secretary of the Treasury, in answer to a call of that 
 House, at the Extra Session, made on the motion of an honorable friend of mine, 
 (Mr. Garland, of Virginia,) containing a list of all “the receivers, collectors, or 
 depositories of the public money, who are in default to the Government, with the 
 amount of their respective defaults, &c.” What, Sir, does this document, which 
 I now have before me, show ? 'That the whole amount of balances due from 
 banks, which are deemed unavailable, is a little more than one million of dollars, 
 (1,046,649); and these balances go back to a period long past, when the ex¬ 
 traordinary embarrassments consequent on the war involved banks and indi¬ 
 viduals in difficulties, beyond any former or subsequent example. In relation 
 to the banks, which have been recently employed as depositories, it appears 
 that they have either paid up all they owed the Government, or are in the course 
 of paying it up as called for by the wants of the public service, without any 
 apprehension of default on their part, or availing themselves of the indulgence 
 of the act passed at the late Session of Congress, have either secured, or are 
 expected to secure, satisfactorily, the payment of the whole balances due from 
 them, according to the terms of that act. Only eleven of them, it appears, 
 out of near ninety employed as depositories, have even asked indulgence, under 
 the act here referred to, and but a single one of them has been ordered to be 
 sued. Now, Sir, when we look to the list of individual collectors and receivers— 
 what do we see ? An aggregate default of about three millions ! and though some 
 of the more recent balances appearing on that list, may be reduced by future 
 collections, yet from the long standing of most of them, there is no reason to 
 believe that the aggregate amount of the entire list will be affected, in any sensible 
 degree, by these partial recoveries. It is to be remarked too, that this list does 
 not, include disbursing officers , “ whose indebtedness” is stated by the Secretary 
 “to be very great,” and the actual losses by whom, I showed, during the late Ses¬ 
 sion of Congress, from a report of Mr. Crawford, to have “ greatly exceeded” a 
 
20 
 
 million and a half of dollars, from 1789 to 1819, and by this time, have grown 
 up, in all probability, to another aggregate sum of three millions! Neither 
 does this list include officers of the Post Office department, among whom it 
 was shown by official documents, at the last annual Session of Congress that 
 there were as many as eighteen hundred and thirty-two defaulters ! It is to be 
 observed also, that this list is confined to public agents, “ who were out of office on 
 the 12th day of October, 1837.” 
 
 Now, sir, if the Honorable Senator from New York had taken the trouble to 
 look at this document, before he made his speech, he might have saved himself 
 the labor of a great deal of superfluous ingenuity. In contrasting the ingenuity of 
 his argument with the blunt contradiction of facts which this document presents, 
 1 was strongly reminded of an anecdote I have often heard of the late venera¬ 
 ble Bishop Madison, of Virginia. That excellent prelate was also a profound 
 philosopher, and much addicted to philosophizing. On one occasion, he under¬ 
 took to explain why the shade of a lamp, almost in contact with the flame of the 
 candle beneath, w as not, in any degree, heated by it. This he did by a learned 
 dissertation on the laws of caloric, and all the other scientific data which could 
 be brought to bear on the subject. Having completely satisfied himself, and the 
 admiring audience which surrounded him, of the truth of his theory, he conld not 
 avoid, in the consciousness of his triumph, putting his hand on the lamp shade, 
 which had been the subject of his disquisition, when an exclamation of acute 
 pain disclosed the fact that his hand had been severely burnt in the application. 
 Nature, thus, contradicted the philosopher, and so, stubborn facts w ill sometimes 
 confute the most astute logician. 1 cannot but think that if the Honorable Senator 
 from New York at the close of his very ingenious argument, had laid his hand 
 upon this document, he must have felt his lingers, at least, a little scorched. 
 
 Has the Honorable Senator forgotten the emphatic testimony, deduced from 
 a careful collation of facts, borne by the present Secretary of the Treasury, only 
 three years ago, to ihe superior safety of banks as depositories of the public 
 money? Let me then, refresh his recollection by reading to him and the 
 Senate, an extract from the able report of that officer, made to Congress, in De¬ 
 cember 1834,on the system of keeping and disbursing the public money. “ It 
 is a singular fact,” says the Secretary, “ in praise of this description of public 
 debtors, the .selected banks , that there is not now due on deposites, from the whole 
 of them which have now stopped payment, from the establishment of the Con¬ 
 stitution t.o the present moment, a sum much beyond what is now due to the 
 United States from one mercantile firm that stopped payment in 1825 or 1826, and 
 of whom ample security wms required and supposed to be taken under the re¬ 
 sponsibility of an oath. If we include the whole present dues to the govern¬ 
 ment from discredited banks, at all times and of all kinds, whether as depositories 
 or not and embrace even counterfeit bills and every other species of unavailable 
 funds in the Treasury, they will not exceed what is due from two such firms” 
 He then continues, “ If our former small losses by them, (the banks,) in keeping 
 and paying over the public revenue, under circumstances so very adverse , are com¬ 
 pared with our large losses either in collecting or disbursing that revenue , their 
 present safety seems to be as great as is consistent with the usual operations 
 of the paper system, or with the credit which must always be entrusted by 
 government, in some w T ay or other, to agents, of some kind in keeping the 
 public money. In considering their safety, it should be constantly recollected 
 that the ow ners and managers of banks, when properly regulated by legislative 
 provisions in their charters, are, like other individuals, interested to transact 
 business securely ; are desirous of making and not losing money ; and that 
 these circumstances, with the preference, in case of failure, belonging to depo¬ 
 sitors and holders of their bills over the stockholders, united with the security, 
 if not priority, given to the government, render them, in point of safety, generally, 
 much superior to individual agents of the United States.” 
 
21 
 
 If there be any fact , inconlestibly established in our history, and by the exp 
 rience of all other governments, it is the superior safety of banks as depositors 
 over any individual custody. The reason of it is obvious. The more cbmplc 
 organization of banks, the number of their officers acting as mutual checks < 
 each other, the daily supervision to which they are subjected, their forms of doii 
 business, all, furnish securities, which can never be had in case of the isolate 
 possession of money by an individual, whatever responsibilities he may be boun< 
 by. And if a loss of the moneys committed to them should occur either by ac¬ 
 cident, fraud, or violence, the capital of the bank stands pledged for the security 
 of the depositor. This is, after all, the only kind of security that can be relied on 
 with confidence. If any gentleman will take the trouble to read the notes 
 and remarks annexed to the various cases of default, presented in the document 
 from the House of Representatives to which I have referred, he will see how 
 utterly worthless and illusory is the personal security on which we have hereto¬ 
 fore relied. The instances in which any thing has been obtained from sureties, to 
 make good the default of their principal, are like angel’s visits—“ few and far 
 between.” The general return is, “ the securities insolvent,” “ conveyed away 
 their property,” “ not found,” “ residences not known,” or some other equally 
 unavailable return. 
 
 In England and France, as well as here, this species of security has been 
 found either nominal or mischievous ; and in France it has for many years, been 
 wholly given up. The only kind of security, that is recognized there, is like that 
 which the banks give in the responsibility of their stock. Every person who 
 receives an appointment, connected with the collection or disbursement of the 
 revenue, is required, before he enters on the duties of his office, to deposite with 
 the government, as security, an amount of money, proportioned to the probable 
 amount of the public treasure that will pass through his hands. This money is 
 held by the government as a guarantee for the faithful administration of the trust 
 conferred, and forms, at the same time, a part of its financial resources on which 
 it pays an interest of 4 per cent, till restored to the officer on his satisfactorily 
 acquitting himself of his responsibilities, or till it be otherwise forfeited by his 
 default. The moneys thus deposited with the government, by public officers, 
 as guaranties for the faithful performance of their duties, are denominated Cau « 
 tionnemens , and amount to a very large sum. I happen to have in my posses¬ 
 sion, the report made by the French Minister of Finance, Count Chabrol, to th( 
 king in March 1830, from which it appears that the Caulionnemehs on the 1st dai 
 of January of that year amounted to the enormous sum of frs. 226,483,973 
 (two hundred and twenty-six millions, four hundred and eighty-three thousand, 
 nine hundred and seventy-three francs,) at a time when the whole revenue of 
 the kingdom did not exceed frs.900, 000,000, (nine hundred millions of francs.) 
 Now, sir, if gentlemen mean to introduce here the system of individual depo¬ 
 sitaries ot the public moneys, let them be warned by the experience of the coun¬ 
 try from which they borrow that system that it can be made safe only by the pre¬ 
 cautionary device of Cautionnemens, the effect of which would be to give to the 
 millionaires of our cities the monopoly of all fiscal employments. 
 
 But, sir, great as is the danger of heavy pecuniary losses to the government 
 under this system, I regard even that as a trifle compared with the extensive demo¬ 
 ralization it would produce in the country—by the temptation held out to pecula¬ 
 tion, to private cupidity, to political corruption, in the large sums of public money 
 lying idle in the hands of the public officers. 
 
 [ have now, Mr. President, gone through my objections to this Bill on account 
 of what it contains. I object to it also, and not less earnestly, on account of what 
 it does not contain. It contains no provision for the relief of the country. It 
 “ takes no thought” for the public. It looks only to the ease and comfort of the 
 government. The most urgent want of the country, the highest interest of all, 
 
22 
 
 is a speedy restoration of specie payments by the banks. Now, too, is the critical 
 and decisive moment. The banks have been, hitherto, diligently and steadily 
 curtailing their discounts and circulation, with a view to that resumption, ’till they 
 have brought their business within such safe limits, that they might now easily 
 resume with a little encouragement. But if they are once again let loose from 
 these salutary bounds,—if, despairing of a general resumption, and yielding to 
 the strong temptations of irredeemable issues, they should again expand, all hope 
 will be lost of recalling them to a specie standard, and the disastrous reign of an 
 inconvertible paper currency will be indelinitely prolonged. Now, then, is the mo¬ 
 ment to join in this great work of effecting a restoration of specie payments. 
 But does this Bill do anything toward its accomplishment? On the contrary, 
 it does every thing it can to retard and obstruct it. In the run it would create 
 on the banks for specie, both by the demand it makes of it for the uses of the 
 government, and by the general discredit which the high example of the govern¬ 
 ment would stamp on bank paper, it throws new and insurmountable obstacles in 
 the way of resumption. ’ 
 
 But. the Honorable Senator from New York says that the resumption of specie 
 payments by the banks is no concern of this government—that it is exclusively 
 an affair of the states and of the banks themselves—and we, who urge the neces¬ 
 sity of promoting by every proper and practicable means, the accomplishment of 
 this great object, are reproached with using an argument, which, he tells us, be¬ 
 longs to the friends of a National Bank. Now, sir, I beg leave to say to the 
 honorable Senator that both reason and experience prove that the only effectual 
 means of preventing a National Bank is to bring about a resumption of specie 
 payments by the State Banks, and that nothing is more directly calculated to lead 
 to the re-establishment of a Bank of the U. S., than the course of those who would 
 do nothing toward effecting that resumption. Let the honorable Senator look 
 back to that most instructive period, rich in lessons for the present times—the 
 former suspension of specie payments by the banks from 1814 to 1817—and he 
 will see that it was the unwillingness or the inability of the State Banks then to 
 resume specie payments, which alone led to the establishment of a National Bank. 
 Let him read the official correspondence of Mr. Dallas—the numerous reports 
 and communications of that able and patriotic man, worthy of him and of the 
 country—and he will find through out, an explicit recognition of, and unvarying 
 testimony to this great truth—that if the State Banks could have been induced 
 more promptly to resume specie payments at that time, there wmuld have been 
 no occasion for a National Bank, and that that institution would not have ex¬ 
 isted. The true means of preventing its re-establishment now is by the instru¬ 
 mentality of the State Banks, under the lead and encouragement of the govern¬ 
 ment, to restore to the country a sound, convertible currency. 
 
 This government can and ought to aid in this great work. Its vast revenue 
 power, and its pervading action, Coextensive with the whole Union, give it 
 means and influences which the states do not possess. It holds, indeed, through 
 that power, a lever of the greatest efficacy, for controling the entire currency of 
 the country. Through its collections and disbursements, it can hold out induce¬ 
 ments of the most influential character to sway the course of the banks. In the 
 mode of conducting its receipts and payments, it has it in its power to set an exam¬ 
 ple of the most persuasive influence toward the restoration of general confidence .— 
 In a disturbed state of the currency like the present, these are powers to be exer¬ 
 cised in a spirit of liberality and benignity—not of menace, denunciation or 
 vengeance. The occasion demands the language of encouragement and support— 
 not of severity and sternness. Look at the communications of Mr. Dallas and 
 Mr. Crawford with the banks during the former suspension of specie payments, 
 and it will be seen in what spirit the influence of the government was then ex¬ 
 erted, and effectually exerted, in the end, to accomplish a return to specie pay- 
 
23 
 
 ments. The banks were not then outlawed by the official press—they were not 
 then put under the ban of the government—they were not then pursued as con¬ 
 spirators , but were treated as institutions having themselves a stake in the com¬ 
 mon weal, and with which the common interests of the whole country were iden¬ 
 tified. It will be edifying, for a moment, to look back to the manner in which 
 the government then conducted its relations with the banks ; and I must say that 
 if the exertions of the banks, generally, since the recent suspension of specie 
 payments, to prepare themselves for a resumption bv a steady and persevering 
 curtailment of their business and profits, be compared with the course of the banks, 
 on the former occasion, in taking advantage of the suspension to enlarge their 
 issues to a most extravagant extent, and in obstinately refusing to apply the 
 valuable public stocks held by them to acquiring the ability to resume, the 
 banks now are entitled, at least, to as much liberality and favor as were shown 
 to them then. 
 
 By the joint resolution of April, 1816, which has been so often referred to, it was 
 made the duty of the Secretary of the Treasury to take such measures as he should 
 deem necessary to effect a collection of the revenue in gold and silver, Treasury 
 notes or the notes of specie paying banks. In the discharge of this duty, Mr. 
 Dallas very soon opened a correspondence with the State Banks to induce them 
 to return to specie payments. In a circular which he addressed to them on the 
 22d of July 1816, he used this language : 
 
 “From the State Banks, a sincere and effectual exertion, in the common cause of restoring the 
 legal currency, is certainly expected and required ; hut 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 success¬ 
 ful operations of the Bank of the U. States, to be intimately connected with the credit and pros¬ 
 perity of the State Banks." 
 
 Here, we see the language of the government toward the banks was that of 
 encouragement and confidence. They were assured, in advance, of the friend¬ 
 ship, and even of the support of the government, if they would faithfully co-operate 
 in the common cause of restoring the legal currency. 
 
 The communications of Mr. Crawford, the able and distinguished successor of 
 Mr. Dallas, were in the same spirit. You, Mr. President, and those who acted 
 with you in those difficult times, will recollect that, although the joint resolution of 
 April, 1816, indicated the 20th of Feb. following, as the day for a general resump¬ 
 tion of specie payments, the banks determined, in a convention held by them for 
 the purpose of deliberating on the subject, not to resume till the 1st of July, 1817. 
 In order to induce them to change that determination, Mr. Crawford made a 
 formal proposition to them that if they would resume on the 20th of February, the 
 public money then in their vaults should not be transferred, at all, to the Bank 
 of the United States, (constituted by its charter the general depository of the na¬ 
 tional funds) and that between that day and the 1st of July, no portion of the pub¬ 
 lic money should be drawn from them for any purpose whatever, unless the neces¬ 
 sities of the public service imperiously required it. I beg leave to read to the 
 Senate the following extracts from his circular to the banks of 20th Dec. 1816, 
 submitting that proposition: 
 
 “ 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 am¬ 
 ple, and the strongest disposition exists to apply them , so as to produce the most beneficial re¬ 
 sults.” 
 

 24 
 
 “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 confi¬ 
 dently believed that the interests of the banks and of the community are not in opposition to 
 each other, and that any sacrifice, which the effort may cost them, will be compensated by the 
 advantages and facilities which it is in the power of the Treasury to afford them." 
 
 “ The deep interest which the Treasury has in the support of bank credit , and the connection 
 it has with the Bank of the United States, would, independent of the known disposition of 
 that institution to conciliate the State Banks, be sufficient to protect them against an illiberal 
 policy on its part.” 
 
 In this communication, it will be perceived, that Mr. Crawford felt and avowed 
 that the means of the Treasury, to aid in the restoration of specie payments were 
 ample. He freely proffered that aid to the State Banks—he not only made them 
 the most liberal propositions for their own advantage, but he gave them a specific 
 pledge of protection and support against any illiberal policy on the part of the Bank 
 of the United States. An appeal thus urged to both the interests and patriotism 
 of the State Banks, could not fail to be effectual. It accomplished its object. 
 The banks changed their original determination, and did resume specie payments 
 on the 20th of Feb., 1S17. 
 
 Now, Sir, can any one doubt that if the same spirit had actuated the Treasury 
 Department in its relations with the banks recently: if, especially, when a majo¬ 
 rity of the banks, represented in the Bank Convention, assembled in New York, 
 in November last, manifested a strong desire to fix an early day for the resump¬ 
 tion of specie payments, and were prevented from doing so only by the influence 
 of a powerful and overshadowing institution—if, I say, Sir, the Treasury Depart¬ 
 ment had shown, on that occasion, the same dispositions which animated Mr. 
 Crawford in 1816, and had come forward and given assurances of support to 
 that portion of the banks, who were anxious to return to specie payments, 
 against the “illiberal policy” of the Bank of the United States, can there be 
 a doubt that at this moment, we should be in sight ot a fixed period for the ter¬ 
 mination of the present calamitous and disordered state of the currency. But, 
 unfortunately, the policy has been to stand entirely aloof from the banks, after 
 having contributed, it is admitted on all hands, by the measures of the Govern¬ 
 ment, in some one or other of its branches, to the embarrassments by which they 
 were overthrown. No aid, no encouragement has been given—not even a voice 
 of cheering has been uttered amid the general distress. On the contrary, odi¬ 
 um and prejudice have been extensively invoked through the press, at least, to 
 render more complete that want of confidence, which is the sole obstacle to the 
 re-establishment of both the credit and ability of the banks. And now, in the 
 sequel, comes this fatal Sub-Treasury bill to deal them the last blow in their 
 prostrate condition. The great interests of the country, connected with the resto¬ 
 ration of the credit of the banks, and of the currency which they supply, have been 
 overlooked or unappreciated; and the whole object seems to have been to de¬ 
 vise some plan by which the Government could, in future, get along in the 
 smoothest way—by which it could be relieved from those responsibilities, and pro¬ 
 tected from that “ shower of imputations” in the discharge of its duties which, 
 the honorable Senator from New York, (Mr. Wright,) so pathetically deprecates. 
 
 What, then, I would ask, are governments instituted for, if it is not to meet 
 difficulties, in the public cause—to meet and overcome them—to encounter re¬ 
 sponsibilities—to endure a shower of imputations, yea “ the pelting of the pitiless 
 storm”, if duty to the country demand. And an able man and a patriot need not 
 repine at these trials of his virtue and talents. The ultimate gratitude of his 
 country will ever be in proportion to the temporary injustice he may sustain by 
 the bitterness of enemies or the persecutions of faction. How enviable, at this 
 moment, the fame of Mr. Crawford, than whom no man, in his day, encountered 
 more responsibilities by the bold and fearless manner in which he met the duties 
 
25 
 
 of his station, or sustained more unfounded imputations. But truth has triumphed 
 over prejudice and error, and he now lives and will forever live in the grateful me¬ 
 mory of his country. This desire to avoid difficulties and their attendant responsi¬ 
 bilities, founded, as I think I have shown it to be, in mistake as to the true inter¬ 
 ests of public men, is the source of still greater calamities to the country. It 
 is the natural parent, strange as it may seem at first sight, of all schemes of 
 strong government ; and is not unsuitably avowed by the honorable Senator from 
 New York, as a consideration in favor of a measure, the effect of which, in my 
 humble judgment, would be to render this Republican government of ours one of 
 the strongest on the face of the earth. On this subject, sir, I beg leave to read 
 to the Senate the remarks of the profoundest observer, perhaps, of human affairs 
 that ever lived. They are full of instruction, and cannot be too well weighed by 
 public men. In speaking of the National Assembly of France, Burke makes 
 use of these words : 
 
 “ Their purpose every where seems to have been to evade and slip aside from difficulty. 
 This it has been the glory of the great masters, in all the arts, to confront and overcome; 
 and when they had overcome the first difficulty, to turn it into an instrument for new con¬ 
 quests over new difficulties.” “ This amicable conflict with difficulty obliges us to an 
 intimate acquaintance with our object, and compels us to consider it in all its relations. It 
 will not suffer us to be superficial. It is the want of nerves for such a task ; it is the fondness 
 for short cuts and falacious facilities, that has, in so many parts of the world, created govern¬ 
 ments with arbitrary powers .” “It is this unwillingness to wrestle with difficulty which 
 has obliged the National Assembly of France to commence their schemes of reform with 
 abolition and total destruction .” 
 
 The disposition to evade difficulty , the policy of short cuts , we are told by this 
 great master of political wisdom, has in every part of the world, “ created govern¬ 
 ments with arbitrary powers and was what in France led the National Assem¬ 
 bly “ to commence their schemes of reform with abolition and, total destruction .” 
 Now, sir, if this had been specially written for our warning, and with express 
 reference to the question before us, it could not have been more apposite or 
 more instructive. Every summary invention, in a free country, suggested by the 
 ease of government , however intended, will be found, at last, to carry with it the 
 deepest dangers to the liberties and happiness of the people. The honorable 
 Senator from New York, too, should remember that it was to him who should 
 untie, and not to him who should cut the Gordian knot, that the ancient oracle 
 promised the glories of empire. The first is the achievment of skill and industry, 
 and its fruits are peace, liberty and happiness. The second is the achievment of 
 power, and its result is the establishment of power. Let the honorable Senator 
 from New York untie the knot, by leading the banks to a resumption of specie 
 payments, (as, I am sure, by proper means, he could easily do,) and not cut it 
 by the Sub-treasury scheme, and I will be among the first to award him the civic 
 wreath. With Mr. Jefferson, in his memorable letter to Mr. Madison, while 
 the Federal Constitution was under consideration, I say, “ I am no friend to strong 
 government. It is always oppressive. It puts the Governors at their ease , but at 
 the expense of the people .” Here lies the fatal objection to the Sub-treasury 
 scheme. It puts the “Governors at their ease,’’but is dangerous and “oppres¬ 
 sive,” to the people. 
 
 What system of policy, then, it will be asked, would I pursue ? The same great 
 authority, whose words I have already quoted, says, “ a good patriot and a true 
 politician will always consider how to make the most of the existing materials of 
 his country.” This is the foundation principle on which I would build. Expe¬ 
 rience has shown, in the language used by the present Secretary of the Treasury 
 in 1834 , that banks are the most “ responsible, safe, convenient and economi¬ 
 cal” fiscal agents for the government. The State Banks are institutions now 
 existing. I would “ make the most ” of them for the public service. There is no 
 national banking institution in existence ; and the condition of the country, already 
 
26 
 
 surcharged with banks, the state of public opinion, the known sentiments and 
 pledges of those charged with the public administration, all conspire to render it 
 very unlikely that there will be any such institution at least for years to come. 1 
 say farther—in my humble opinion, there ought to be no such institution ; first, 
 because there is no constitutional authority to create it, and secondly, because its 
 political dangers, in any form in which it has heretofore existed, have been found 
 to more than counterbalance its supposed advantages, in other respects. Then, 
 as to the Sub-treasury scheme, it is a novelty utterly unknown to our laws and 
 usages, which could not be brought into existence without violating all the ha¬ 
 bitudes of our people, deranging the operations of business, and hazarding the 
 most cherished principles of our political institutions. What, then, ought to be 
 done ? Recur to the “ existing materials of the country,” the State Banks,— 
 “ make the most” of them for the convenience of the government, as well as for 
 the general good—reform their abuses, correct their defects and adopt every pre¬ 
 caution which may be necessary to ensure their fidelity and efficiency. 
 
 These institutions, it is true, have recently, in common with every other interest 
 in the country and with the whole commercial world, been subjected to serious 
 embarrassments. All agree, however, though differing as to the particular causes 
 which produced them, that those embarrassments have been the result of very 
 peculiar and extraordinary circumstances. The banks, too, which were employed 
 as the depositories and fiscal agents of the government, have, for the most part, 
 amid circumstances of the greatest difficulty, actually discharged all their engage¬ 
 ments to the government, enormously heavy, as they were, in consequence of the 
 large surplus revenue ; or the few who have not yet done so, have satisfactorily 
 secured the comparatively small balances due from them, to be paid at short pe¬ 
 riods, according to an indulgence voluntarily granted to them by Congress. The 
 past, therefore, candidly considered, furnishes no ground against the renewed 
 employment of the State Banks as fiscal agents of the government. Expe¬ 
 rience may have, and doubtless, has, disclosed defects and errors in the particular 
 plan upon which they have been heretofore employed. Correct, then, those errors— 
 supply those defects—but do not reject their employment altogether. This, sir, 
 is the general principle on which I have bottomed the proposition I have submitted 
 as a substitute for the bill reported by the honorable Senator from ]New York ; 
 and I will now proceed to explain, in detail, those provisions of the substitute 
 which distinguish it from the state bank deposite system as heretofore organized. 
 
 It is now generally acknowledged that one of the principal circumstances which 
 contributed to embarrass the operations of the late Deposite system, was the large 
 number’of banks employed as depositories,—amounting, in the end, I believe, to 
 near ninety. This increase of number, in part, was rendered necessary by that 
 provision in the act of June, 1836, which required that, where the amount of 
 public deposites in any bank exceeds threefourths of its capital actually paid in, 
 the surplus should be transferred to some other bank. In the execution of the act, 
 however, (from considerations which I am not able to explain) there was a still far¬ 
 ther increase in the number of depositories, not called for by the requirements of 
 this provision. It is obvious how the whole play of the machinery must have 
 been weakened and obstructed by this needless complexity of its parts. I am 
 satisfied that twenty banks, judiciously selected and properly located, would be 
 competent to do the whole business of the Treasury Department, with much 
 less danger of embarrassment to the Banks, and a far more easy and effectual 
 supervision on the part of the Secretary. The substitute, therefore, provides that 
 the number of Banks to be employed as public depositories shall, in no case, ex¬ 
 ceed twenty-jive, to be chosen from among the most solid and respectable banks 
 in the respective States, and their location, as well as number, to be determined 
 solely with reference to the wants and convenience of the Treasury in conducting 
 its fiscal operations. 
 
27 
 
 The substitute also proposes an important change in the mode of selecting 
 the deposite banks. Heretofore thev were chosen by the Secretary of the Trea¬ 
 sury, at his will and pleasure alone. This sole agency of the Executive will, in 
 designating the depositories of the public money, exposed the late system to a sus¬ 
 picion of favoritism and a want of confidence in general, which greatly impaired 
 its moral force, and admitted a possibility of abuses, which, it is certainly pro¬ 
 per, should be guarded against. It was this which caused it to be characterised as 
 th c pel-bank system. I propose to divest it of this character by subjecting the se¬ 
 lection of the Secretary of the Treasury, in every case, to the supervision and 
 control of Congress. If the selection be made during the session of Congress, it 
 is to be immediately submitted for the approval of the two Houses—if, during the 
 recess, it is to be laid before them at the commencement of the next session, to 
 be in like manner confirmed or annulled by them. The effect of this provision 
 will be to bring every tiling’, relating to the public moneys, under the direct and 
 efficient control of the representatives of the people and the States, and in so 
 delicate and important a matter, to leave as little as possible to Executive dis¬ 
 cretion. 
 
 Another leading provision in the substitute is one which requires the deposite 
 banks to have weekly settlements with the banks, in their vicinity, with which 
 they have business transactions, and to call for balances in specie, whenever and 
 to whatever extent it may be necessary to check over-issues and to preserve the 
 soundness of the currency. In the adoption of this practice by the late Bank of 
 the United States, consisted its boasted power and influence as a regulator of the 
 currency. There is no reason why the same salutary control should not be 
 exercised by the deposite banks, and with even greater effect, inasmuch as their 
 aggregate capital and presumed amount of transactions with other banks, would, 
 no doubt, exceed those of the late National Bank. It will be perceived from the 
 terms of this provision in the substitute, that it is not contemplated to enjoin on the 
 deposite banks a fixed and inexorable requisition of balances from the other banks 
 in specie, under all circumstances whatever; for considering the large balances 
 that would be habitually accumulated by them against the other banks in the pro¬ 
 cess of collecting the public revenue, such a requisition would be destructive in 
 many cases, to institutions of unquestionable soundness. It is contemplated, 
 therefore, that this power should be exercised under proper safe-guards, and only 
 to the extent that, may be necessary to restrain imprudences or excesses, endan¬ 
 gering the general currency. It was to this extent only, as I have shown in a 
 previous part of these remarks, that the power was exercised by the late Bank 
 of the United States. 
 
 The substitute likewise makes it the duty of the Secretary of the Treasury to 
 use his influence to bring about, an arrangement, (as no doubt is entertained he 
 could do,) among the several deposite banks to receive and credit as cash the 
 notes of each other in payment of the public revenue, wherever so tendered. The 
 effect of this arrangement would be to put the notes of the deposite banks prac¬ 
 tically on the same footing as the branch notes of the late Bank of the United 
 States—every where receivable in payment of public dues, and enjoying, conse¬ 
 quently, a general credit and circulation throughont the Union. It would give 
 to the country, to a great extent, the advantages of an uniform paper currency, 
 as the preceding provision would secure to it a sound one ; and the two together, 
 in supplying, practically , the benefits promised by a National Bank, would super¬ 
 sede the strongest arguments now urged in favor of such an institution. 
 
 In regard to the kinds of money, in which the public revenue is to be collected, 
 the substitute adopts, with slight modifications, the provision of the currency bill 
 of the last session of Congress. It declares that the public dues, of every descrip¬ 
 tion, for lands as well as customs, shall be received in gold and silver, or Trea¬ 
 sury notes, or such notes of specie-paying banks, (under certain restrictions 
 intended to promote the suppression of small notes,) as the deposite banks, sub- 
 
28 
 
 ject to the supervision and control of the Secretary of the Treasury, shall agree to 
 credit to the United States as cash. It will be perceived that in the proposition 
 now submitted, ! have postponed for one year the exclusion of the notes of banks 
 which issue bills or notes under five dollars. It is known that many of the States 
 authorize notes under that denomination ; and some, who have heretofore prohi¬ 
 bited them, will, it is supposed, authorize the issuing of them under existing cir¬ 
 cumstances, and for a limited period. It is evident that the use of this descrip¬ 
 tion of notes, in supplying the place of, and consequently diminishing the demand 
 for specie in small dealings, would tend materially to facilitate the resumption of 
 specie payments by the banks. This consideration has induced me, under the 
 peculiar circumstances of the times, to adjourn for one year the period for exclud¬ 
 ing the notes of banks issing bills or notes under five dollars ; and the same con¬ 
 sideration has prevailed with me, for the present, to limit the farther exclusion of 
 bank notes to the issues of such banks as shall, after the expiration of two years, 
 continue to issue bills or notes under ten dollars. In doing this, under the exi¬ 
 gencies of the times, I wish to be understood as not abandoning my original opin¬ 
 ions, (which remain unchanged,) in favor of extending the prohibition of small 
 notes ultimately to all under the denomination of twenty dollars. 
 
 Finally, the substitute, in furtherance of the great policy of fixing a period to the 
 present disastrous reign of irredeemable paper, provides that after the 1st day of 
 July next, the notes of no bank which shall not then have bona fide resumed 
 specie payments, shall, at any time thereafter, be received in payment of the public 
 dues. This, in connection with the liberal provisions made by the Substitute, in 
 other respects, for re-establishing the credit of convertible bank paper, will, I am 
 persuaded, bring about a general resumption of specie payments at the time desig¬ 
 nated. The mere fixation of a day by Congress will exercise a powerful moral 
 influence ; and not the less so, as the day fixed corresponds with that indicated by 
 a majority of the banks in the Bank Convention held in New York in November 
 last. 
 
 These, Mr. President, are the leading provisions of the measure I have submit¬ 
 ted, which distinguish it from the system heretofore adopted for the employment of 
 State Banks as depositories of the public money. In many respects, they make 
 of it a new system, obviating some of the strongest objections which have been 
 hitherto urged against it, providing new guards against abuses and containing new 
 provisions forextending its usefulness and efficiency. Under an able and not un¬ 
 friendly direction, I feel every confidence that it would meet both the wants of the 
 government and the wishes of the country. 
 
 I shall, doubtless, be asked what arrangement I propose in regard to the 
 banks discounting on the public deposites- There is no absolute interdiction of 
 their doing so, in the measure I propose, (for to this, I think, I shall be able to 
 show there are insuperable obstacles,) but it carefully withdraws the stimulus to 
 the use of that power which has heretofore been applied, and it moreover furnishes 
 a. positive security , of an important character, against the excessive use of it. It 
 will be recollected by the Senate that the law of June, 1836, which organized the 
 late deposite system, (besides requiring of the banks very important and onerous 
 services,) required them to pay an interest of two per cent, on all the public de¬ 
 posites in their possession exceeding one-fourth of their capital actually paid in.— 
 Now, this not merely authorized, but compelled the banks to discount on the 
 public moneys, whether they willed it or not, in order to enable them to pay the 
 interest charged. It was a stimidus administered by the government to the use of 
 the power. This stimulus, this compulsion rather, I propose to withdraw by re¬ 
 pealing that clause of the law of 1836 which charged the banks interest on the 
 public moneys ; for the important services to be rendered by them as fiscal agents 
 of the government, are the fair and proper equivalent of any legitimate advantage 
 to be incidentally derived by them from the custody of the public moneys. 
 
 In the limitation of the number of deposite banks to twenty-five, as proposed by 
 
 / 
 
29 
 
 the measure I have had the honor to submit, there is an important security against 
 the public deposites being made the basis of bank discounts, to any great extent. 
 It must not be forgotten that the charters of all the State Banks fix a general 
 limit beyond which they are not permitted to extend their discounts. That limit 
 is, I believe, ordinarily twice, or twice and a half, the amount of theip capitals 
 paid in. As the public deposites, under the measure I propose, would be confined 
 to twenty-five banks, it is evident that they could not be used, to any great 
 extent, (relatively to their amount,)by those banks to enlarge their discounts, be¬ 
 fore they would encounter an impassable barrier in the limit of their charters, 'i his, 
 it is well known, occurred in several cases, (particularly in New York,) under 
 the operation of the late system, notwithstanding the greater number of 
 banks then employed as depositories; and in those cases, authority was 
 given to the banks which had thus exhausted their chartered power of 
 discounting on the public deposites, to turn over the surplus, on which they 
 could no longer discount under the limitations of their charters, to other banks, 
 that they might discount upon them. To any arrangement of this sort tor multiply¬ 
 ing bank discounts on the public deposites, the measure I have submitted would 
 oppose an insuperable obstacle, as it inflexibly fixes, under all circumstances 
 whatever, the number of banks to be employed as depositories of the public mo¬ 
 neys ; and in filing that number at twenty-five, the salutary charter limitation 
 upon the power of discounting, would, as I have just shown, soon be brought 
 into action to prevent excess by them. 
 
 I think, therefore, Mr. President, that under the provisions of the Substitute I 
 have proposed for the consideration of the Senate, there would be no danger 
 of any unreasonable extension of discounts on the publ-ic deposites. I know, how¬ 
 ever, there are gentlemen of great intelligence and patriotism, who are for an abso¬ 
 lute prohibition of the banks discounting, to any extent, however moderate, on the 
 public deposites, and who favor, as the means of carrying out that prohibition, a 
 system of special deposites. The high respect I entertain for the opinions of 
 those gentlemen has induced me to consider their suggestion, with more than 
 ordinary anxiety to come to the same conclusions ; but after thorough examin¬ 
 ation and reflection, according to the best lights of my understanding, 1 am satis¬ 
 fied that no system of special deposites, however specious in theory, could be 
 worked out in practice, without involving consequences which they themselves, 
 (or at least, a large majority of them,) would promptly repudiate. In the first 
 place, it is demonstrable, I humbly conceive, that any system of special depo¬ 
 sites, to be practical and efficient, must lead to a collection of the revenue, 
 directly or indirectly , in specie ; and this they oppose as earnestly as I do. The 
 Government must always hold itself ready to pay its creditors in the lawful curren¬ 
 cy of the country, if demanded . This the banks are bound to do, on behalf of 
 the Government, under the general deposite system. But if you adopt the special 
 deposite system and collect the revenue, at the same time, in bank notes, the 
 banks would be bound to pay out to the public creditor only the identical notes 
 deposited with them ; for this is the fundamental and immutable idea of a special 
 deposite. How, then, would such a system work ? The public creditor would 
 present his warrant to a deposite bank—the bank would offer him, in payment, 
 first this note and then that, which had been specialty deposited with it: but none 
 of these notes suiting the convenience of the creditor, and the bank being bound 
 to pay no other, the public claimant would go unpaid, and the engagements of 
 the Government be dishonored. To avoid the danger of such a result, the Go¬ 
 vernment, if it adopted a system of special deposites, would be driven, of neces- 
 ’ sity, to a collection of the revenue in gold and silver ; or, otherwise receiving the 
 notes of specie-paying banks pro forma, collect the specie for them from the 
 banks by which they were issued, and place that specie on special deposite. But 
 where would be the difference, in the practical effects on the banks and the business 
 and interests of the community connected with them, between collecting the reve¬ 
 nue, in the first instance, in gold and silver, and collecting it in the notes of specie- 
 
30 
 
 paying banks, to be converted into goid and silver by demand upon the banks'? 
 The honorable Senator from ew York (Mr. Wright) expressed the opinion, that 
 the latter mode of operation would be the harshest; and when it is considered that 
 this periodical conversion of bank notes would be in large masses , and attended, 
 consequently, with periodical and distressing contractions of the currency , I cannot 
 but agree with him. At all events, there are but these two modes of working 
 out a special deposite system in practice, and neither the one nor the other, it. seems 
 to me, can be made acceptable to those who oppose the Sub-treasury scheme, 
 on account of its tendency to create two currencies in the country—gold and 
 silver for the Government—paper for the people. 
 
 There are subsidiary objections to this special deposite system, which, al¬ 
 though not of so much weight as that which I have just stated, cannot be over¬ 
 looked in a just and comprehensive estimate of it. If you adopt it, you re¬ 
 nounce, at once, all means of engaging the interests and enlisting the co-operation 
 of the banks to carry out any of those reforms in the paper currency, which have 
 heretofore been so favorite an object of the policy of the country. You must also 
 pay them, and pay them, too, no inconsiderable sum for their services to tho 
 Government, and thus abandon one of the strong grounds (that of economy,} on 
 which bank agency has heretofore been preferred to individual agency, in con¬ 
 ducting the ope rations of the Treasury. 
 
 But, to take up the subject in a more enlarged view, is there any valid rea¬ 
 son why banks should not be permitted to discount, to a moderate extent, on ave¬ 
 rage balances of public money in their possession, as well as on individual depo¬ 
 sites? Wherever banks exist, to receive deposites, public or private, is a regular 
 branch of their business ; and to discount upon the average balances oj those dc- 
 posites, which experience shows are not likely to be drawn out by the depositors, 
 is as legitimate and acknowledged an operation of banking as to discount upon their 
 capitals. Is it not for the interest of all that this should be done—that no portion 
 of the national capital should be annihilated by being locked up from use, but 
 that the whole should be made tributary, in some way or other, to the invigo- 
 ration and support of the national industry? No just distinction can be shown, 
 in this respect, between public and private deposites. Accordingly, in all coun¬ 
 tries where banks exist, and where the public moneys are deposited in those in¬ 
 stitutions, deposites of that kind have been invariably recognised, within proper 
 limits, as a perfectly legitimate source of discounts and accommodation to the com¬ 
 munity. It is admitted that it has been uniformly the case in this country, in re¬ 
 gard to the public funds both of the general government and of the States, from 
 the adoption of the Constitution down to the present day. What new light, then, 
 has broken in upon us, that we are, all at once, grown so much wiser than our 
 fathers ? In England, the practice is, and has been invariably the same ; and here 
 I take upon me to confront a statement which I have repeatedly seen made 
 to the contrary—to wit, that the balances of the public moneys in the hands of the 
 Bank of England were not discounted upon, but were regularlv and habitually ap¬ 
 plied to the purchase of Exchequer Bills, on behalf of the government. The fact 
 is otherwise—the Bank of England has the use of these balances, for banking 
 purposes ; and this use of them is so well understood and avowed that in some in¬ 
 stances, where the balances have risen to a very great amount, (as, for a series of 
 years after 1S06, they did to between £11,000,000 and £12,000,000, equal to 
 near. $60,000,000 of our money,) the bank has been required to pay a special com¬ 
 pensation to the government for that use. But the ordinary balances of public mo¬ 
 ney in the Bank of England range from £4,000,000 to £5,000,000 pounds ster¬ 
 ling—about twenty millions of dollars of our money—the use of which is permit¬ 
 ted to the bank without any compensation. In like manner, the balances of pub¬ 
 lic money in France, which are occasionally transferred to the Bank of France, 
 are permitted to be used as a source of extended discounts, and I am informed by 
 
31 
 
 an enlightened correspondent in that country, were actually so used to the great 
 relief of industry and trade, during the late commercial crisis. 
 
 Shall a less beneficent use be made of the public moneys, not called for by the 
 necessities of the Government, in this Republic of ours, than in the monarchies of 
 Europe? Shall we alone, of all the great family of modern civilized communi¬ 
 ties, revert to the barbarous practice of hoarding (and that, too, in specie,) the oc¬ 
 casional surpluses, which, from the nature of our revenue system, can neither 
 be foreseen nor guarded against ? A most able and eloquent friend in the other 
 House, (Mr. Legare) has justly characterised the process of taxation as a species 
 of confiscation. It is so, sir. Is it not incumbent upon us, then, when by so 
 harsh a process, we have undesignedly levied upon the people more than is ne¬ 
 cessary for the wants of the Government, to mitigate the exaction as much as 
 possible by restoring the overplus to their use through the channels of business 
 and commerce. Why should the Government play the dog in the manger , neither 
 using its idle hoards itself, nor permitting any body else to use them. Efforts 
 have been made to render the practice of discounting upon the publicdeposit.es 
 odious, by representing it as a thing for the benefit of the banks alone. But 
 is it so ? Does not every class of the community experience the benefit, and none 
 more so than the great agricultural class, the price of whose products depends 
 mainly on the facilities of sound credit, and the abundance of active capital dif¬ 
 fused among the merchants—the more immediate customers of the banks ? 
 
 It has been sometimes said, also, that the practice of discounting on the public 
 deposites adds to the fluctuations of the currency. But the reverse is demonstra¬ 
 bly true. When a large amount of revenue is collected by the Government, 
 and is neither disbursed in the public service, nor returned to the community 
 through the medium of discounts, a sudden and distressing contraction of the cm- 
 rency necessarily ensues. If, however, that portion of the public money, not re¬ 
 quired for the public service, is permitted to be used in the way of discounts for 
 short periods, by the banks, the circulation, through the double process of Go¬ 
 vernment disbursements and bank issues, is maintained at an uniform level, with¬ 
 out sensible contraction or expansion. The banks being enabled to foresee at 
 what periods the funds issued by them will be required for occasions of public 
 expenditure, call them in as they are wanted for disbursement—what is draw n in 
 by the hand of the banks, is immediately let out by the hand of the Government— 
 and thus the current of circulation is kept steady and full. 
 
 These truths have, until lately, been universally felt and acknowledged ; and 
 by none more emphatically, or with greater weight of authority than the distin¬ 
 guished individual “in whose footsteps” the present administration was expected 
 to tread. It is, doubtless, recollected by the Senate, that, on the occasion of the 
 removal of the deposites from the Bank of the United Slates, President Jackson, 
 in the able and memorable paper which he presented to his cabinet, stated that 
 the funds thus removed were not to be “ annihilated ”—that they “ would be 
 again issued for the benefit of trade ” by the institutions to which they were trans¬ 
 ferred. This was, then, considered a trait of liberal, beneficent, and states¬ 
 manlike policy, on w'hich the Chief Magistrate and his act were triumphantly sus¬ 
 tained and vindicated by his friends before the people. The same distinguished in¬ 
 dividual, in his very last message to Congress, declared “ it was contrary to the 
 genius of our free institutions to lock up iu vaults the treasure of the nation.” 
 Now the highest ambition of statesmanship seems to be to contrive these self¬ 
 same “ vaults ,” in which the funds of the nation are to be sent to their “ long re¬ 
 pose,” as “ dead men’s bones;” for once there, all that remain, beyond the 
 wants of the Government, are to be buried, annihilated, destroyed, to every 
 purpose of useful existence. What has produced these sudden and singular re¬ 
 volutions of policy and doctrine ? Is it because an extraordinary and accidental 
 state of things, the result of peculiar and anomalous causes, has involved the 
 banks, individuals, and the Government, in temporary embarrassment ? Then 
 
32 
 
 I say nothing is more unsafe than for statesmen to found general and permanent 
 rules of policy on isolated and exceptional cases. We must look to the habitual 
 and ordinary course of human affairs, collect from them the average results of 
 experience and observation, and guide our action by those results. Because the 
 Commonwealth’s Bank of Massachusetts has failed, because it suits the purpose 
 even of grave Senators to use it daily as a stalking-horse on this floor, are we to 
 be “frighted from our propriety,” and, therefore, distrust and denounce the whole 
 banking system of the country ? Are we to take advantage of temporary and 
 factitious excitements, to get up and foster a popular prejudice against banks as 
 a fund for political speculation, at the expense of all the sober realities of life” 
 and the practical, pervading, home-bred, interests of the country. 
 
 As I said, on a former occasion, Mr. President, I stand here as no advocate of 
 the banks. I have not the slightest interest in, nor conection with, them, direct or 
 indirect, present or prospective. I am as sensible as any man of the dangers and 
 abuses to which they are liable, and I will go, hand in hand, with any man in 
 devising securities against the one, and applying correctives to the other. But as 
 a practical legislator and a patriot, 1 am bound to look to the actual interests of so¬ 
 ciety ; and in that view, I cannot fail to see that any violent shock given to 
 the established system of business and credit in the country must produce a wide¬ 
 spread scene of confusion and distress, involving, in its destructive visitation, 
 every class of the community. 
 
 In offering the measure I have submitted to the Senate, I have discharged what 
 I consider to be my duty to the country. That country is now in a state of suffer¬ 
 ing and distress, aggravated by deep anxieties and apprehensions in regard to the 
 future. The measure 1 propose would, I firmly believe, give relief for the present 
 and hope for the future. It could not fail to restore confidence, and in doing that, 
 to revive the languishing energies of trade, to quicken the labors and the hopes 
 of the husbandman, the manufacturer and the mechanic, to raise enterprise again 
 upon its feet, and above all, to put an end to that unnatural and suicidal war, 
 which, for the last eighteen months, has grown up between the government 
 of the country, and its business and industry. In presenting such a measure, 
 
 I cannot but regret that I shall be deprived of the support of many members of 
 this body with whom 1 have lately stood, side by side, in upholding and defending 
 the principles on which it rests My consolation, however, is that I stand now 
 where I stood then. On the other hand, the measure they bring forward and 
 patronise is one which, three years ago, we all united in opposing, and which was 
 then denounced, in the name of the administration and its friends, as a “ dangerous 
 enlargement of Executive power, and putting into its hands the means of corrup¬ 
 tion.” This measure cannot have changed its character by mere efflux of time; 
 and thinking of it now as I thought of it then, I still oppose it. 
 
 In taking this course, I know full well, Mr. President, I am to incur the 
 anathemas of party. But I can never forget that I have a country to serve, as 
 well as a party to obey. “ ’Tis Rome demands our help ;” and for one she shall 
 have mine, according to the humble measure of my abilities and the best lights of 
 my understanding. The zealots of both parties may denounce and condemn 
 as they have heretofore denounced and condemned me; but sustained by thdg 
 consciousness of upright intentions and a faithful devotion to the interests of mV 
 country, I shall hold my course unfaltering ; and even with the terror before niy 
 eyes of sinking into that small minority of which the honorable Senator from New 
 York, (Mr. Wright,) so charitably warned us, I shall yet, animated by a sense of 
 duty, find in my soul one drop of patience.” 
 

 
 
 
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