OCR Interpretation

The Madisonian. (Washington City [i.e. Washington, D.C.]) 1837-1845, August 19, 1837, Image 2

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In circulation, there <m n# common and acc?uble tuna
from which U could bo re?lily .nd cooy.ni.nUy obUm
od for the busincs of Ufa. It n.ver will bo suppreaaed
It m in win for th. Got.rnm.nt U> atumpt lo bring it
into circulation by dwnaadmg it m p?ym.nt of lb. pub
lic dun By doing so, ihe public debtor m.v be sub
,?cted 10 hardship, th. bank. may b. exposed U> run.
udmi thorn for sp~i?, and th. bownoM of th. comrnu
niiy may bt crippled and denngtd Bat gold and w*
hrer will never eircuUu while bank notes of the ?*m*
denomination are permitted to occupy th. channe# of
circulation. "You may call spirit. from th. vaaty d..p,
but wilt they come V1
Tb. requiaition of apecie in poymonU to th. Gov.rn
ment will not only not .veil to bring gold and ailver into
ctrcuitUum, but if maieted on, while gold and silver yet
form, comparatively, but a email part of the actual cur
rency of the country, it will inevitably have the effect
of diminiahing their circulation. While bank paper
forma the great maae of the currency of the country, if
the Government wjfute to receive it in payment of pu
lie duee, and demand epecie exclusively, the neceaaary
consequence will be to enhance, to a greater or less ex
tent, the valu. of gold and ailver in relation to paper
That being the case, gold and ailver will no longer eir
culate freely. Those who have apccie will be unwilling
to part with it, except at a premium; and thus. who
have note, will be anxious to convert them into apccie.
Hoarding of the precioue metala will then commence,
and but little of them bo aeen in circulation No one,
I preeume, Mr. Preaident, attache* much importance to
the collection of the public revenue in apecie, aa an uUi
malt object, if it can be made equally .ale by other
mean*. It i. only a* an inatrument of purifying and
correcting the currency, that it deserve# the coneidcra
tion of a practical atatcaman. I he great object is not
to amu. apecie in the public treasury, or m the vault.
of banka, but to diffuac ita healthful currenu through
the buaineaa of aocioty, and to bring it into active cir
culation among the people. This can on y
by the previoua suppression of the sinsll notes , ai d
any attempt by the Government, before thai it iJu"e'^a.
collect ita revenuea in apecie, inatead of promoting and
extending th. circulation of gold and ailver, tenda direct
lv to narrow anil diminish their circulation.
The mdiacnininat. refuaal of bank paper in payment
of the public duea might, in the preaent condition of the
country, be attended with other serious hazard.. **
have heard a great deal recently, Mr. Preaident, of the
pecuniary panic and distress prevailing in England and
Ireland, and of extensive commercial embarrassments
felt there These embarraaamenta, (in Ireland, espe
cially,) aeem to have ariaen mainly from tin* very cir
cumstance of a refuaal to receive the paper of solvent
banka in collection of the public revenue. It appears
that aom. of the collector# of the cu.loma bad
nly refused the bill, of the Provincial Bank of Ireland.
Thereupon, ? run upon the bank immediately com
menced/ which, nevertheless, weathered the storm.
The panic spread in regard to other institutions, which,
though solvent, were compelled to ston pavment; and
a general acene of confuaion, alarm, and embarrassment
ensued. But I will give the details in an extract from
an English paper, which has been republished extensive
ly in all of our principal journala. Here it is :
" The pressure was yet severe, not only throughout
England, but in Ireland. In the latter country, there had
been a.pauic, attended by several severe disaster*. 1 Ins
panic was commenced by the collectors ol the customs at
Newry, and some other places, refusing the bills ol the
Provincial Bank of Ireland. A run upon the bunk was
the inevitable and immediate consequence. Iheeolvrncu
of the bank, however, hni never bern <puet toned, and *&* fi
nally attested by the re.ult. The panic spread in respect
to other institutions, and the Dublin Agricultural ?
^topped payment pn the 15th. Strong efforts were made
by its friend* to sustain it One gentleman Mr .re
aham, sent in 25,000/. The liabi ines of the bank are
stated at 240,000/; its assets at 6H0.000/.
"This bank was established in 1834, by 2,1 <0 p?rtniis.
It now has 5,000 paHners, and twenty ix brmichet scatter
ed all over the country, all of which itop of cvurte. But,
notwithetanding the eolvency of the institution, Us suspension
will operate fearful injury.
All this pecuniary suffering and distress, widely
ramified as it afterwards became, originated in the re
fusal by officers of the Government, to receive the
notes of a solvent bank in payment of the public reve
nue If, Mr. President, we shall, by a sweeping l??,
refuse to receive the paper of all banks, however sound,
in discharge of the public dues, will there not be danger
of similar consequences? Might it not o|>erate, to s
certain extent, ss a discredit of all bank pa|>er, exposing
the institutions which issue it to severe runs, and the
community at large to consequential pressure and em
barrassment 1 At all event.,-there would 1* heavy
demands upon the banks for the specie requisite in pay
menu to the Government, whi?h the limited metallic
circulation of the country would be wholly inadequate
to supply. Would it be just or wise in the Government,
in the present condition of the currency, with a Shylock
severity, to demand its pound of flesh ! NN ould not such
a course tend to produce, instead of averting, the catas
trophe which appears to lie dreaded by some'
I should be as little disused. Mr President, as any
member of this body, to hazard the safety of the public
revenue by any undue laxity in regard to its collection.
The proposition I have had the honor to submit, pro
vides studiously for the security of the revenue It not
only does not sllow the notes of any banks to be re
ceived, but such ss are promptly redeemed in specie?
auhicct, too. to important restrictions in regard to their
denominstions?but it expressly declare# that no notes
whatovcr ahall Iks received which the banks in wlncii
they are to be deposited shall not agree to pass at once
to the credit of the United Statca as cash. 'I his gua
ranty of the deposite banks converts the whole of the
public collections, virtually, into specie ; and when it is
recollected that the Secretary of the Treasury is undow
ered, whenever he thinks it necessary, to obtain from
them a special and supplemental security for the public
deposites, the solidity of the guaranty may be reposed
upon with confidence. *
It is objected to this provision, by some gentlemen,
that it puts it in the power of the deposite bunks to say
what notes shall, and what shall not, be received by the
Government in payment of rs revenues 'I lie absolute
responsibility of the deposite banks for the notes depo
sited with them on public" account is deemed a funda
mental principal in the fiscal code of the Government;
without it, the practice of ?pecial deputies must be re
vived, which formerly subjected the Government to
heavy losses, and is the origin of the unavailable funds,
still borne on the books of the Treasury. But if the
deposite banks are to be absolutely responsible for tho
notes deposited with them, as so much cash, they ought
certainly to have a reasonable discretion as to the notes
they shall receive on deposite. This is no new princi
ple in the practice of the Government; it has been a
standing instruction from the Treasury Department to
the public receivers and collectors, for more than twenty
vears, to receive no notes but such as the dejiosite batiks
'would credit to the United Slates as cash To satisfy,
however, as far as possible, the jealousy which has been
expressed on this subject, and to guard against any ar
bitrary or wanton abuse of their discretion by the depo
site banks, I have, by a modification of my original re
solution, placed them, in this regard, expressly under
the supervision and control of the Secretary ol tho i rea
While the proposition I have had the honor to submit
provides, as I believe, in the amplest manner, for the
security of the public revenue, it pays a due regard to
the interests of tho great body of the community. An
inflexible exaction of gold and silver in payments to the
Government, in the present condition of the circulating
medium, it seemed to me, would involve a necessary
and serious derangement U> the whole business and
commerce of the country These interests I believe to
be more or less common to all I am not one ol those
who ace a natural enmity and inherent incompatibility
between the interests of different classes of men ; I do
not belong to that school of philosophy which divides
society horizontally, the upper portion pressing upon the
lower with the weight of its incumbent mass, while the
latter is constantly striving to throw off the load by
violent and vindictive struggles, This is the helium
omnium in omnia which forms no part either of my phi
losophy or my feelings. No, sir; my theory assigns a
perpendiculsr stratification to society, placing all its
component parts, side hy Hide, on the same platform of
equality, with common rights, common interests, and
common duties, mutually giving and receiving support
by the juxtaposition In this aspect, the interests of the
merchant, the farmer, the mechanic, the laborer, are the
same; what proinotea the prosperity of one, redounds
to the advantage of each.
In regard to the effect upon the currency, the propo
rtion I have had the honor to submit, if adopted, would
sprove in eome degree instrumental, 1 trust, in promot
ing that great reform which has been so impressively
recommended by the patriotic Chief Magistrate of the
nation, and which, at the moment when ho is about to
cloae a long and glonous career of public service, in a
hallowed retirement, " by all a nation's wishes blest,"
may well form the object of his ardent vows for his
country. That reform aceks, by the substitution of cold
and silver in place of the lo*er denominations of bank
paper, to make the preciou. metals the familiar cur
rency of common life. But this object can be fully ac
complished only by the ultimate suppression of all notes
under twenty dollars ; five dollar notes ant. half eagles
will not circulate together ; the ten dollar note must be
put down, before the eagle can take its place.
I am aware, Mr. Preaident, that our position is not
exempt from difficulties and dangers But I see in them
nothing to create alarm, far less to excite despondency;
but^cvery thing to rouse the devotion and energy of ?h?
I patriot With whatever ewbamuamenta w? my be
beset, l be re ia ? redeeming power in the virtue end in
telligence of the American people, which will conduct
ua in safety and triumph through them *11. Some gen
tlemen, I find, ?till fondly recur to their favorite preacriu
Don of a national hank a* the panacea for all our ilia In
my humble judgment, air, the remedy ia far worae than
the diaeaae. The protection of a national bank would
be " auch protection aa vulturea give to lamba " No,
air; let ua rather luvoke the protection of our guardian
and victorioua bird, the American eagle, the emblem of
our freedom and atrength. An able and ei|?erienced
member of the Houae ef Common*, speaking of the
inherent tendenciea of the banking ayatem, said, " there
ia in it an inevitable tendency to over laauea of paper,
without a constant sentinel keeping watch U|ton it, and
that sentinel" (for them) " waa the metallic sotereign
in constant circulation." The American metallic eagle,
in active circulation, will |>erform the aame tutelary
office for ua; and with auch other provision* aa the
practical and aagacioua apirit of American legislation
shall deviae, will finally, I firmly believe, place our cur
rency on a footing which, for convenience and aecurity
united, will rival any other under the sun.
I^et the Stale Legislature* proceed firmly and vigor
nualy in the au|tpression of the small notes. I believe
they will. They have the highest motives which can
address themselves to human action to accomplish this
great reform. Let thein subject all banks, both old and
new, to efficient regulation ; let tlieia regard with
jealousy every proposition for an increase of banks, and
yield to none which is not founded on broad considera
tions of public utility ; let them impose strict, practical
limitations both upon their issuea and their diacounts ;
let them provide for frequent periodical scrutinies into
their condition ; and, above all, let them retain in their
own hands a constant power of correcting abuses, and
of protecting, in every emergency, the interests of the
It is this principle of legislative regulation and con
trol over banking institutions, which constitutes the dis
tinctive feature of American policy. It is the reault of
the practical character of the American nund ; and I
ain happy to perceive that the people of older coun
tnea?of England especially?are turning to us for les
sons and examples in this branch of the public econo
my. In that country, l>?yond the 65 miles from Lon
don, which define the limits of the Bank of England
monopoly, numerous broods of joint stock companies
and private hankers have sprung up, without regulation
by law, without limitation of number, without restric
tion as to their issue*or discounts, and without respon
sibility to the public authority. The conseijuunce has
been, that this branch of tln-ir system has run into wild
disorder and confusion. They now see that the privi
lege of issuing money, of whatever kind, is an essen
tial branch of the public sovereignty, and, like every
other delegated power of that sort, it must he subji-cfod
to regulation, to inspection, to responsibility. This is a
lesson tliev have learned from us; and it is gratifying to
see that, on another fundamental point, the most en
lightened minds in that country are coming to the same
conclusion that we have attained. They begin to see
that the monopoly of the Uank, of England, as that ofi
the Hank of the tJmted States here, is a dangerous mo
nopoly ; that the dominion of such an institution over
the circulation is a power more of evil than good ; and
that it must be brought down to the level of competi
tion with other solid institutions. The opinions of the
two countries, on this great concern of the currency,
are mutually approximating, and settling down upon a
common system. They are learning from us the neces
sary checks and controls of a paper currency ; we from
thein, I trust, the value and iui|>ortancc of an enlarged
metallic circulation. I rejieat, then, there is nothing in
our present situation to excite alarm or despondency,
whatever occasion there may be for vigilance and cau
tion. Lei us look our dangers steadily in the face, but
let us not he dismayed by thein Let us grapple with
the difficulties which may oppose us, 111 a spirit of stren
uous and determined patriotism, and we shall triumph
over and subdue thein. In conclusion, let me sav to
the political friends, with whom I have had the honor to
act in trying times, that, after having successfully dissi
pated so many panics raised under other auspices, we
shall not. I trust, at last become the victims of a panic
of our own creation.
" In fht regulation! which Congress may prescribe,
respecting the custody of I he PU1ILIC MONEY, it is
deemed consistent lnth their safe keeping, should kk
givrn to Exkci'tivk Aoknts."?General Jackson's
Message, Dec. 1835.
" Who U-ill probably he found lrss tesrONsmi.C,
sake, conveniknt, anh bconomioal" [th,m banks ]?
Mr. Woodbury's Report, Dec , 1831
"Hanks cannot he dispensed with,
Against the proposition to " dioOrce the General Go
vernment from all Hanking Institutions, and substi
tute Sub-Treasuries,
1. It will be trying an unnecessary expe
2. It gives one currency to the. Govern
ment, and another to the people, and reflects
discredit on tlie latter.
3. It levies a tax of ten to twenty per cent,
upon the public debtors, and therefore the
consumers, who are the I'eoplw.
4. It yields up the proposed reform of the
Hanking System, which was the favorite
policy of the whole of Gen. Jackson's ad
ministration, and one of the leading principles
involved in Mr. Van Buren's election.
' 5. It is hostile to the State Institutions.
G. Those Institutions are so thoroughly
incorporated with every interest in the coun
try, that it would be difficult to get rid of
them for many years.
7. The public, money will be unsafe.
8. It virtually surrenders the "purse" to
the Executive.
9. It will enlarge the patronage of the
Federal Government.
10. It will increase tin; dillicultv, charge
and expense of transporting the public funds.
11. It'will subject the public debtors to
great inconvenience.
12. It opens temptation to peculation and
embezzlement, and is therefore of a demoral
izing tendency.
13. It will put off indefinitely, and perhaps
render impossible the resumption of specie
payment by the State ?Institutions.
14. It will result in the issuing of paper
money by the Government, and render it to
all intents and purposes, a Brink.
15. It will derange exchanges, confuse
business, and causc a universal blight and
16. It will contravene the approved doc
trine of Gen. Jackson : "that in the regula
tions which Confess may prescribe, respect
ing the custody of the public money, it is
desirablcjhat as little discretion, as may be
deemed consistent with their safe; keeping,
?hould be given to Executive Agents."
17. The amount of specie, equal to the
public revenue, will be almost wholly lost to
the uses anil profits of the country.
18. It will result i? an increased demand
fur a National Bank, and secure its establish
" We do but tell you, what you all do know."
This country has progressed for hnlf a
century, under a system as favorable to its
prosperity, as any perhaps that can be devised.
It has been borne triumphantly through two
wars, involving an expenditure of nearly two
hundred millions of dollars?it has establish
ed its system of government, embracing in
its policy, internal and external, an area and
extent surpassing any nation on the globe;
sustained an honorable pepce, and preserved
its faith and credit; improved itself within,
and fortified itself without; delivered itself
from the bondage of all debt, and distributed
largo surplus revenue among the states;
developed the resources and exhibited the pro
mise of a great, free, and glorious nation.
For these things, we, who enjoy them, are
indebted to the virtues of our fathers, the wis
dom of the founders of our institutions, and
our own conservative conduct, industry, and
Twentyssix separate and independent states
have been formed, many of them differing in
pursuits and geographical features. Appa
rently insurmountable obstacles have been
overcome, and the howling wilderness has
been transformed, as if by magic, into popu
lous and cultivated communities. Rivers and
lakes, hitherto accustomed only to the wild
water-fowl, or the Indian bark, have become
suddenly alive with commercial vessels and
the machinery of steamboats. McAdamized
higwaya, rail-roads and canals, have pervaded
the country in every direction, giving free
circulation to the products of mechanical skill,
of art, and of labor, and animating the whole,
immense, diversified country, with every sort
of active business and intelligent enterprise.
The abundant means of wealth every
where presented, and within the reach of all,
attracted crowds of emigrants from less fa
! vored foreign countries, who have swarmed
in our Atlantic cities, and lined the great high
ways leading to the rich valleys of the grow
ing west. Many of our own citizens -had al
ready found their way there, and the rapid
settlement of that country was no longer a
matter of doubt. The policy of the Govern
ment had rendered the terms of purchase
easy and convenient, and the ownership of
western lands, and the occupancy of valuable
sites and eligible localities for cities and towns,
hccainc matters of strife. So long as people
confined themselves to their actual means, or
were sustained by the business and resources
of the country around them, those^iperations
were for the most part, safeTh^althy, and prac
ticable. But the rapid increase of population,
and the demands of a rapidly expanding bu
siness and trade, could not fail to be observed
by people shrewdly alive to their own inte
rests. Their cupidity became excited, and
an inordinate desire for wealth was generated.
The rage for speculation ensued. It seized
nil classes, and became an universal mania.
The old beaten track of plodding for our gains,
was forsaken and contemned by the restless
anxiety for change, and all seemed to engage
in the alluring game of running hazards.. It
involved .the wool-grower, manufacturer, and
merchant of the north, the cotton grower and <
merchant of the south, the tobacco planters of
the middle states, and tli'e traders and adven
turers of the west.
A long period of peace and unexampled
prosperity, had fortified every interest with
universal confidence. The long and profound
peace of Europe, had accumulated surplus
capital which sought investment here. The
charter of the Hank of the United States ex
pired. The enlargement of the specie circu
lation from twenty-eight millions, to about
seventy millions, had furnished a basis for an
increase of banking corporations, and a con
sequent extension of bank facilities. Nothing
but some great public calamity could have
stopped the course of events. The career
was hastened by the most incorrigible and uni
versal passions of human nature, The mcr-1
j chants of the south made enormous advances
! to the cotton planters in anticipation of their
| crops." The capitalists Of all the large towns
engaged all their surplus funds in speculation,
i or in loans for the purpose. Lands and pro
| dure rapidly advanced, and every thing com?
! mauded unusually high prices. All were sti
mulated by the opportunities which these ris
ing values presented of making money.?
People of small means, and people of no
means, were alike infected, and to make tip
' lor the "deficiencies of their own resources,
the banks were called .upon for more and ex
! tended accommodations. The operations of
j trade and commerce, became also every where
. inllatcd. The merchants of the west, invest
ing the proceeds of their sales more profitably
| in lands and other speculations, would piy up
| at the usual periods but a small proportion of
; their old accounts, and run in for new hills tip
j on extended credits. Their creditors at the
| east, complaining at first, soon found them
| selves following their example, and engaged
! in the same process of withdrawing capital
i Iroin their ordinary business, and investing it
! in the speculations which were going off with
so much eclat at home, and they not only, also,
bought their goods on extended credits in
Europe, but went in for tintisually large sup
plies. The consequence was that the iinjiort
ations of 183G, exceeded the exportation s of
the same year about sixty millions, and by
about the same amount did they exceed the
importations of any previous year. Nor was
the spirit confined to this country. Many of
| the largest houses in Loudon had engaged in
j unwieldy speculators in cotton and tobacco, j
, and vast amounts of foreign capital was ein- !
ployed in various projects in the United States, j
| The speculations were governed by no set- I
tied and certain laws of trade. Tliev count
" 0
ed the value of their purchases, not upon their
intrinsic worth, but upon the probable price
which they might accidentally obtain in an
excited market. When speculation was at
its highest tide, the Treasury Order of the
11th July, 1836 was issued, requiring specie
in payment for public lands. This measure
was intended to check speculation, to secure
the government against losses from deprecia
ted paper, and infuse so far as that amount of
revenue would go a larger portion of metallic
currency into circulation. According to the
estimate of the Secretary of the Treasury, the
whole amount of specie in circulation did not
exceed twenty-eight millions of dollars. It
is obvious therefore, that if the Goverment re
ceived from the land sales the amount esti
mated the last year, twenty-four tnilhons out of
tuvnty-eight in circulation, would have pass
ed through the Land offices.
The cotum crop of the south failed, and
the returns of the husbandmen of the north
were small, both iu consequence of neglect
and bad season. The term of mercantile
credit had run out?no seasonable returns
were had from their enormous investments.
A heavy foreign debt had accumulated, and
become due. The only alternative seemed
to be a run upon the banks for specie or an ex
tension of credit, until other reTnittances could
be made. The merchants, commencing with
those houses which had mude advances to
the cotton growers, failed, and the banks, com
mencing also in the south-west, suspended
specie payments. It was not the mercantile
interest alone, that was involved in specula
tion, itnd likely to suffer the consequences of
a revulsion. Embarrassments of the coin
i.icrcial interests, will always affect every
other interest, because every other interest Is
more or less connected with them. Dis
tress ensued, in sonic of our large cities, which
has been unparalleled in the commercial history
of this country. Business, in most places,
languished, all enterprise was paralyzed, con
fidence destroyed, and credit gone. Such a
state of things, however, could not long con
tinue among a people of such elasticity and*
sagacity as those of the United States. With
the blessings of Providence, and the exertions
of productive industry, a short time to settle
balances, and the country would again resume
its healthy and prosperous condition.
Hutou the one hand, the efforts of a tireless
opposition, determined to embarrass and, pros
trate the General Government, have highly ex
aggerated the pictures of the times,alarmed and
excited the imaginations of superficial minds,
and doubtless aggravated the disorders we
have cursorily attempted to depict; careful
ly concealing their own agency in the matter,
and the true causes of the prevalent embar
rassments, they have endeavored to fasten the
whole mischief upon the Government, and
turn it to political account. Taking advan
tage of public distress and individual suffering,
they have endeavored to weaken the confi
dence of the friends of the administration; and
trying to sow division in their ranks, have
presumed to calculate upon the complete over
throw of the republican party. Afterpretend
ing to abandon the ground, we now find them
unmasking their designs, and loudly clamoring
for the resuscitation of an Institution,with pow
ers co extensive, if not greater than those of
the government itself, which the people had
dis tinctly and repeatedly voted down.
On- the other hand, a party, little satisfied
with any thing as it exists, living in a world
of impracticable theory and abstraction, have
agitated doctrines, which not only tend to in
crease the difficulties under which the coun
try labors, but threaten the most excellent in
stitutions with subversion, and even the social
compact with disorganization. The burden
of their clamor is, the destruction of the credit
I system?a system, truly called, " the distin
! guishing feature between despotism and lib
I erty"?the lever of Archimedes, which has de
veloped our resources, increased our wealth,
established our power?a system with which
we commenced our career as a nation, with
which we have prospered, upon which we
| repose, and to which we owe all we are, and
| all we can hope to be.
Party spirit, thus kept excited, may continue
the disorders of the times, and defer the resto
ration of confidcnce. "But it w ill not long be
| thus. The abundant harvests of the season,
will soon begin to aid in stimulating business ;
and the lessons of prudence and economy, that
people have been practising, will soon enable
the foreign debt to be paid off", and the coun
try will resume its usual course, chastened
somewhat bv its adversities. In the mean
time, all should exert themselves iu propagat
ing sound principles, in maintaining good faith,
honor and credit, and in promoting harmony
and union.
Crusaders against the Banking System of
! the States, would be wise in providing them
j selves w ith text books, furnished by combin
ing tin- opinions of the great leaders of the
Republican party. They will then wander
forth in their Quixotic career with a better
understanding of the position ot". their ene
mies, and forewarned of those Inns, where,
like poor Sancho, they may gfct tossed in a
If they flatter themselves that the seeking
of new and untried paths, the adoption of
new creeds, or the eutire relinquishment of
the old ones, will be countenanced by those
to whom they would fain look for direction,
they must have a singular confidence in that
jeytel of virtues, CoNstSTE.vcv. For our part,
v.e will not have the uncharitable ness to be
lieve, that these gentlemen whose opinions
we quote, and relv upon with confidence as
the true doctrine, will "turn their bucks upon
th'Mxelres," and repudiate the principles upon
which they have always professed to act.
To romodv the n^use^ of the Hanking Svs
teiu by destroying ail the Banks, would be
very much like hanging a sinner for the pur
pose of reforming him. We trust the people
will be guilty of no such folly. We trust they
will be on their guard, and not permit the pre
vailing disorders to blind their eyes to the
true policy, nor allow themselves to be led
astray by the sinister devices of demagogues,
or the extravagancies of fanatics.
We readily admit that our Banking System
' in defective, and we shall cordially co-operate
in any proper measures for a practicable and
wholesome reform. But let us avoid rashness
and violence. The embarrassments of the
country would be wofully involved and in
creased, by punishing the State Institutions
with destruction, because, involved in the
vortex of a widespread commercial and finan
cial calamity, they were forced to suspend
specie payments. Moderation and lorbear
ance will best subserve the purposes of re
form, and turn away-the evils, with ? hich the
community would be overwhelmed by any
other course. Let us remember the great
principles for whic h we have been long con
tending. Let us remember that Congress, in
relation to the currency, has only power, by
the letter of the Constitution, to " coin money
and regulate the value thereof, and of foreign
coin." 'l'he question of a National Bank,
therefore, should be considered settled. Let
uh rely upon the already declared policy of the
Government, lor the best and safest measures
to promote the "general welfare." And let
us remember, in the language of President
Jackson, that, "instead of being necessarily
made to promote the evils of an unchecked
paper system, the management of the revenue
can be made auxiliary to the. reform which the
Legislatures of several of the States have al
ready 'commenced." In this respect let us
see how far we may rely upon the declared
opinions of Republican leaders.
In his message in December, 1835, Presi
dent Jackson says:
" It hit* been seen that, without the agency of a great
moneyed monopoly, the revenue can Ins collected, and
Conveniently and safely applied to ail the purpose* of
the public expenditure. It is alao ascertained that, in
stead of being necessarily made to promote the evils of
an unchecked paper system, the management of ihe-r?
venue can be made auxiliary to the reform winch the
Legislatures of several of the States have already com
menced in regard to the suppression of small bills, and
trhich has only to be fostered by proper regulations on
the part of Congresn to secure a practical return, to the
extent required fur the security of the currency, to the
constitutional medium. Severed from the Government
as political engines, and not susceptible of dangerous
extension and combination, the State lhniks will not be
tempted, nor will they have the power which we have
seen exercised, to divert the public funds from the le
; gitimate purposes of the Government. The collection
and custody of the revenue being, on the contrary, a
? source of credit to them, will increase the security
: which the States provide for a faithful execution of
| their trusts, bv multiplying the scrutinies to which their
; operations and accounts will be subjected. Thus dis
| pused, as well from interest as the obligations of their
| charters, it cannot be doubted that such conditions as
I Congress may see tit to adopt respecting the depositee
! in these institutions, with a view to the gradual disuse
| of the small bills, will be cheerfully complied with ; and
that we shall soon gain, in place of the Bank of the U.
i States, a practical reform in the w>holc.paper sy?tem of
the country. "If, by this policy, we can ultimately wit
| ncss the suppression of all bank bills below twenty dol
lars, it is apparent that gold and silver will take their
place, and become the principal circulating medium in
the common business of the farmers and mechanics of
the country. Tlie attainment of such a result will form
an era in the history of our country, which will be dwelt
upon with delight by every true frrend of its liberty and
independence. It will lighten the great tax which our '
, itaper system has so long collected troin the earnings of
labor, and do more to revive and perpetuate those habits
' of economy and simplicity which are so congenial to
the character of Republicans, tluu all the legislation
1 which has yet been attempted."
; Mr. Van Buren expressed himself thus, in
relation to this subjcct, in his letter to Mr.
1 Williams:
| " The constitution gave to Congress express power
to coin money and regulate the value thereof, and of
foreign coin, and it expressly prohibits the exercise of a
i similar power by the States. ? ? ? ? Whether
! they also designed to divest the states of their antece
dent right to iucor|*irate banks, it would now be more
curious than useful to enqunc. That matter, so far as
; it relates to the mere question of po*er, must be re
garded as settled in favor of the continued authority of
thie stoics. Assuming that this was contemplated by
the trainers of the federal constitution, it is then most
: evident that their liojies of a sound currency must have
been based upon the expectation that the resjiective go
' vernmcnls would faithfully discharge their peculiar du
ties, and as-faithfully contiue themselves to their re
spective spheres; that the federal government would
exert all its constitutional powers, not only by creating
and diffusing a metallic currency, but by protecting it
against a paper circulation of the same nominal value,
I whilst the states supplied such emissions oj payee "s
might be actually demanded by the necessities uf Com
merce, and not at variance cither ill denomination or
amount with the existence of an adequate specie cui
rency. I lad such a policy been pursued, there is the
I lest reason for believing that a just proportion between
paper and spccie might have been preset ped, and a
sound curiciuy uniformly maintained "
Again :
"Although I have always been opposed to the in
crease of banks, I would nevertheless pursue towards
the existing institutions a just and liberal course?pro
tecting them in the rightful enjoyment of the principles
which have been grunted to them, and extending to
them the good will of the community, so long as they
discharge with tidelity the delicate and important public
trusts with which they have been invested."
The lion. William C. Hives, in his excel
lent speech upon the subject of the currency,
delivered in the Senate List winter, held the
following doctrine, which seems to have been
heartily responded to throughout the country,
and by many, considered " the most reason
able sentiments upon this subjec^Tcver put
forth." Mr. Rives says : <
" My object then would be, not the destruction of
the banking system and the total suppression of bank
paper, but mi etlicierfl regulation of it, and its restriction
to sate and proper limits , not the exclusive use of spe
cie as a circulating medium, but such a substantial en
largement and general diffusion of It, III actual circula
tion, as would make it the practical currency of com
mon .life, the universal medium of ordinary transactions
?m shoii, the money el the farmer, the mechanic, the
laborer, and the tradesman : while the merchant should
be left in the enjoyment of a sound and restricted paper
currency for his larger operations Such a reformation
in the currency as this, would in my opinion be produc
tive of the most bcneticial results It would give se
curity to the industrious classes of society for the pro
ducts of their labor.' against the casualties incident to
the paper system. It would give security to a great ex
tent to the whole body of the community, against those
disastrous tiuctuatious m the value of property and
contracts, which arise from the ebbs and flows of all
unrestricted paper currency. It would give security to
the (tanks themselves, by providing them m the dally in
ternal circulation of the country, an abundant and' ac
cesaibic fund for recruiting their resources, whenever
they should be ex|>os?d to an extraordinary pressure."
Again, in the language of prediction, now
proved history, he says:
'?The requisition of specie in payments to the Govern
ment will not only not avail to bring gold and silver into
??cnh'tw, ''?!*, if in?it>Usl mi, whrle fhl arnl stiver vrt
term, comparatively, but ? small pan of u? actual cui
wncy of th? country, it will inevitably have the effect ?f
diminishing their circulation. While bank paper form.
U? great mm of the currency of the country, if the
Government refuae lo receive it in payment of the
P bbc duea, and demand apecie excluaively, tlie rteces
eary conaequence will be to enhance, to ? greater or
^ ?1*M in relation to
P?per I hat being the c>w, gold and ailver will no
Ionge exrcidais freely. Tho~ who have apecie will be
unwilling to part with It, except at a premiu.i7.nd thoM
W*"/Wl" *7 ^n,10U? 10 convert th*"? into
?pecie. Hoarding of the precious metal, will then
commence, and but little of tU, be aeen emulation.
No one, I preaume Mr Pre.,dent, attache, much im
portance to the collection of the public revenue in
2T * T U""HaU ?^eCtl '' ? ?? be made equally
f ?lhe.r n,e,nr ? ? on'r ?? ?n m.trumeot of
purifying and correcting the currency, tint It dcaervea
the consideration of a practical .tateaman. The great
object 1a not to amaaa at?ec,e in the public treaaury, or
in the vault, of bank., but to diffuae lU healihfulcur
rency through the buainea. of -aowetrrand to brina it
into active circulation among the people Thie can or.lv
be effected by the previoua auppres.ton of the .mall
note. ; and any attempt by the Government, before that
is done, to collect ita revenuea in .pecie, m.tead of pro
moting and extending the circulation of gold and ailver
tend, dircctly to narrow and diminiah their circulation.''
The Hon. Nathaniel P. Tallmadge, in hi*
speech in the United States Senate, upon the
Deposits Act, which has been extensively
quoted and commended, expressed the follow
ing views. It is proper, also, to remark, that
these opinions have recently received the
" entire approbation" of about " seven hun
dred members of the democratic republican
party, in the city of New York," whose con
nexion with the commercial interests, and
knowledge of commercial wants, should en
title their views to great weight on subjects of
this character. He says :
" W hat, then, do Wiey expect and desire * I answer
no more, nor no leaa, than every real friend to Ins coun
try 1. willing to adopt, namely, a preservation, and at
the same time, a regulation of the credit system. In
all such measures of reform I will go aa far a. he who
goes farthest. Preserve and regulate, bur not deatroy,
la mv motto Enlarge your .pecie basis ; introduce, aa
far as practicable, a gold currency, by the prohibition of
?mall note. ; provide mean, for coining at the mint;
take all proper mea.ures to prevent exceasive issues of
bank paper, and the unnecessary increase of bank mcor
|>orations; repeal your restraining laws, so as to permit
the free employment and investment of foreign capital.
W hatover danger there may be. is to be found in the
abuse of the system, and not in Us existence Guard
against these abuses, and correct them when discovered.
An entire abandonment of the credit system, and a
return to a We and exclusive metallic currency, if it
were practicable, would produce desolation and de
struction from one extreme to the Union to the other.
Such notions ought not, cannot, must not prevail."
Hon. Silas Wright, Jr. in his speech in the
United States Senate, in January, 1834, re
marked : .
"The Senator /rom Massachusetts has asked?If
you will not recharter the bank, or establish a new bank
what will you do ! He (Mr. Wright) would answer as
an individual, expressing his own sentiments, that he
would support the Executive Department of the Go
vernment, by all the lawful means in his power, in the
attempt now making to substitute the Stale Banks for
the United States. He believed them perfectly and
completeli/ competent to the object, and he was wholly
unmoved by the alarms that had been sounded as to
their insecurity and the dangers that 'were to be appre
hended from the change.. He held that the steps al
ready taken to effect the object in view were all war.
ranted by the Constitution and laws cf the land. It was
his firm opinion that the steps which had been taken
would redound to the honor and l>est interest of the
country, and ought to be sustained by the People and
their Representatives." *
In conclusion, Mr. Wright observed :
" He would merely pronounce his opinion that the
country would sustain the Executive arm of the Go
vernment in the Experiment now making to substitute
the State Institutions for the Bank of the United States
He had the most entire confidence in the full and com
plete success of the. Experiment."
Mr. Woodbury, in his Report to Congress,
in December, 1834, says:
" It is the part of sound philosophy and true political
wisdom to improve to the utmost, consistency with con
stitutional difficulties, our present mixed currency
? hen it is remembered that, after long experience,
almost every nation of Europe, and especially the most
enlightened and commercial ones, have, though possess
in# full power to abolish wholly the paper svstem, deein
ed it good economy and a great convenience to retain it
to a certain extent, for the larger and more distant ope
rat ions in. commerce and finance; when it is considered
that the (Kiper system is generally supposed to increaso
the activity of the surplus moneyed capital of a country,
by collecting it into banks, and' distributing it speedily,
as needed, and to make a less quantity of circulating
medium, employed in this way, answer' the same pur
poses of society with a larger quantity otherwise em
ployed ; and when u is computed by msnv, whether
justly and wisely, need not here bo discussed, that,
through the issues of paper over the amount of specie
id the vaults of hanks, the public is enable to obtain a
temporary use of so muck more money, as if to that
extent, and for that purpose, it were a real addition to
the specie capital, and at the same tune to realize a sav
ing in the wear and loss of the specie in the vaults,
which it would otherwise sustain in actual use, the ques
tion becomes very doubtful whether, in this commerc.sl
and widely extended country, the anticipation can bo
justified, that the States or the people will soon, if ever,
consent to the disuse of banks of paper issues. But it
is more probable, that the discussion and increased in
terest attending this subject will terminate here, as in
hugland, not in abolishing all country or local banks,
though Parliament, like the States, possess undisputed
power to do it; but, for the present at least, is only
exercising greater care in the regulation of these bank.
the States, and in creating, by both Stale and United
Mates legislation, a broader basis of specie in circula
tion. for the increased security as well of the banks as of
the community, and for the great and desirable improve
ment of the currency of the country."
C>ov. Campbell, in his sound and sensible
Message, recently delivered to the Legisla
ture of Virginia, furnishes us the following
excellent creed. He says :
1 he time is unpropitious, if it were otherwise desira
ble, to aitempt any radical changes in the policy of the
commonwealth. I he system of banking has been long
since introduced, and we find it fixed upon us The
commonwealth is largely interested in the .tocks of our
?anking institutions, through the fund for internal im
provement and the literary fund ; and the stock which
is thus held, is a part of the sccuriiy which has been
pledged to the holders of the public debt. Ba'nk paper
has long performed all the purges of currency, and by
the holders of it, the poor and the rich, is counted as
money The merchants and traders of our towns ha?e
been accustomed to look to the banks for facilittes and
aid ; and through their instrumentality it waa, thly havi
been enabled to make their purchase, of the planter ai.J
tanner ft would surely be unwise in a period of diffi
culty, and when private credit is in need of unusual fa
cilities, to put down institutions which arc so incorpora
ted with every public and individual interest, and from
which it would result as an immediate conseqence, and
the difficulties ol paying would be augmented, whilst
the debt to be paid would be increased There are those
who would have no banks, either state or federal, and are
for enforcing an exclusive metallic circulation. The pro
ject, in the actual condition W the country, I believe to
be wholly impracticable and the agitation of it at this
period, could have no other effect than still further to
derange the business and oppress everv interest in the
community. And I consider it of the highest importance
to maintain the credit of the state banks, as forming un
der proper regulations and reforms, the only practical
substitute for a United States Bank?and their preserva
tion affords the only defence againat the dangerous
scheme of a powerful and overwhelming national msti
Ajfain, in a recent tOast he gives us :
" Hard money for our common transactions Bank
notes, equivalent to specie, for Ihe commerce of ti?e
country." .
In the Address of the Albany Cieneral
Republican Committee we find the following
saving doctrine :
" We sre not advocates for unlimited and eitrava
gsrt* credit's : anJ ??? 'mwt that all r!a?M? t:t 'he ?

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