The Madisonian. [volume], October 10, 1837, Image 2

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which hi s divided the mart eminent statesmen of the
day and has undergone the rigid kcruliny ot such
minds as Marshall and Suiry, and Win and Scr
gggQi Hiui Qiiuiy uilitmwbolittVdddornM il?' dchcb?
ihe bar, and the Sciwie of our cuuntiy, and whose
naiue> give lustre lo the age. My <>ec shill be to
present io ihe C^nut my owu reflections with & reter
eutv to-ueh derisiou>, lieaiie-, and s4atu.es a? the
Court may couvenieuily consult, should it be inclined
to pursue ihe investigation.
I shall pass by the diseuasiun of the rights which
disco.tfi_v or c >uquesi coulerred ujkju ihe uulijus ol
Europe over the aborigine* of this continent, barely
remarking thai ail the powers ol the British crown
over the savage tribss inhabiting thia country, passed,
by the revolution, 10 the United Suue> ol America,
and uot to the individual States. All sub^niteot
rights have b tn acquired by treaty stipulations or
coul'erred by the constitution upon Cougresa.
The consiitutioii of the United S.uies declares
that laws 111.do in pursuance of it, and treaties made
or to be made, are the supreme law of the laud, any
thing in any State cousiiiution or law to the contrary
uotwithstnnding.
The Indian tribes inhabiting this continent have
been alu y- recognized as indejiendeiit communi
ties, capable of making treaties and ot sustaining
the relations of pence ar.d war. " The United Slates,
says Chancellor Kent, '* have never dealt with these
people within our national limits as extinguished
sovereignty i. They have constantly treated with
them as independent nations governed by their own
usages, and possessing governments competent to
make uiid mnmtain treaties. They hove considered
tnem as public enemies in war, and allied friends in
peace. (Godell vs Jackson, 20 vol. Hep. 711) 1 he
Supremo C >urt of the Uni.ed Sates declared (?> Pe
ters' R ;*>rt, 551) that, "by the ninth article of the
treaty of Hopewell, a surrender of self-government
was never intended by the Cherokee.*,nd so to hold
would b' a perversion of the necessary meaniug ol
the Indians. In the same ca.se the l onrt used the
following language. " Is it credible that they should
have considered themselves as surrendering to ihe
United States the right to dictate their future ces
sions, and the tenns on which they should b? made,
or to eomtiel their submission to the violence of licen
tious and disorderly intruders 1"
All the treaties with the Cherokces from 1785 up
^o this time recognise them as a nation capable of
living under their own laws. The principal provi
sions in tiio.i? treaties have been thus summed up:
'? Perpsm il peace,.grant of land by the nation, ex
press dealgn aion of boundaries to give up offenders
taking reluge among thetn. Thnt retaliation shall
cease?!he exclusion of the whi'es from the lands
re:ain?d by the IndLni. Acknowledgement of the
pro;ec;ion of the Uni:cd States, and of no other
sovereign whatever. That Congress shall have the
vile und exclusive right of reg ilating trade with
them, and managing all their *fTairs, as that body
shall think proper (treaty of 1785.) A solemn gua
ranty to the Cherokces of all their lands not ceeded.
That it shall be against the law for white men to set
tle on such lands, and such intruders to be punished
as the Indians think proper." Judge Peck's opinion,
8 vol. Rep. " In the treaty of Hopewell the Clicro
kees arc treated as a nation, and throughout that in
strument their distinctive character as a separate po
litical community is kept up and clearly acknow
ledged. The treaty ol Holstein, in lffll, recog
nises them a* a nation, and guaranties the Cherokees
all their lands not thereby ceded. All subsequent
treaties recognise and acknowledge the operative
force o! these treaties." Judge Green's opinion, 8
vol. Rep. 3-M.
Is it necessary Cor language to be stronger??
Where can you 'tiud rights more clearly detined or
more solemnly guarantied I Lands are ceded,
bauudaries are expressly designated, a guaranty
lor those retained, ami assurance of protection from
the intrusions of the whites. Are then these treaties,
and have they the operative force of such an instru
ment as known lo the constitution I It has never
been doubled. They have been approved by the
President, ratified by the Senate, published to the
world as such, and recognised in the highest judicial
tribunals as the supreme law of the land.
Was the United States competent to enter into
stipulations of this kind, and is it able to perform
theml Or did this magnanimous Government de
signedly bind itself to terms which it could not en
force, with a handful of rude, unlettered savages,
while il compelled performance on their part, and
when they demanded a fulfilment of the conditions,
coldly to inform them we cannot comply, you must
rely upon the justice of the States, and the tender
mercies of the bordering white men
Was it ever contemplated by the Indians when
they received ihe solemn assurance of the United
States of protection from all intrusion of the whiles,
that they were to become subject lo a body ol laws
imposed on them by the States, the language of which
they did not even understand, and so entirely dis
similar to all their habits end customs I In the lan
guage of the Supreme Court of the United Slates "it
is incredible." It would be a perversion of language
to suppose so, and a fraud upon the Indians to give
it that operation. Or did this Government in the
formation of these treaties condescend to "palter in
a double sense to keep the word of promise to the
ear aiid break it to the hope V' 1 trust that such pu
nic faith will never stain our national character.
In Worcester rs. the State of Georgia, 6 P eter's
Reports, 581, the Supreme Court of the United States
held that " the Cherokees are a distinct community,
occupying its own territory, with boundaries accu
rately described, in which the laws of North Caro
lina could have no force, and which the citizens of
North Carolina had no right to enter, but with the
assent of the Cherokees themselves." This perhaps
is the last case involving this question which has
been before the Supreme Court ol the United States,
?the only tribunal recognised in the Constitution
for the decision of such questions. The opinion
was pronounced by that pure hearted man and emi
nentjurist, Chief Justice Marshall, whose expositions
of the Constitution will be revered while that instru
ment itself endures. The time and the circum
stances give to this decision unusual solemnity and
importance. The Court will remember that the
Union was agitated from one extreme to the other
and threatened no less than an overthrow of the Con
stitution. At such a time how calm would ha ve been
the deliberations ol Marshall?how earnest his con
victions. - '
The Constitution of the Uniied States also pre
scribes that Congress shall have the power of regu
lating commerce with foreign nations, among the
several states, and with the Indian tribes.
It has been decided that personal intercourse was
commerce in the sense of the Constitution. The
laws of Ala. are therefore void, as being repugnant
to the provisions of the Act of Congress of March 30,
180J, commonly called the Intercourse Act. And it
would seem that the Congress of the U. States was of
the opinion that the Act of 1803 was still in force
as late as the year 1834, at which time an act was
passed re7ulating trade and intercourse with the
Indian tribes wesl of the Mississippi, and in which
the Aet of 180-2 was declared not repealed, as to
the tribes east. (See the Act of 1H34, Act of
1802.)
Upon what argument then rests the rights of the
States to extend their laws ov< r these people. We
are told that the Indian tribes are within Ihe
charteted limits of the Stales, and that the States
are sovereign ivithin those limits, and cannot be
rcstraine.l But are they not parties to the forma
tion of these treaties ) Where were the Senators of
these States at the time of their ratification 1 Does
their solemn protest stand upon Ihe records of the
Senate against this usurpation of the general Go
vernment 1 They were present and themselves
parties to the act.
Hut Ihe State of Alabama became a member of the
Union with this tribe of Indians then in her borders,
with most ol these treaties existing in full force,
pledging the protection of the United States, guaran
teeing to thein the undislutbed possession of their
country and the enjoyment of their u?;iges and cus
toms; prohibiting the intrusion of the whites upon
their soil, and laws enacted io carry out these pro
visions. and penalties prescribed for their infraction.
By accepting membership with these conditions be
fore her, she became a party to the acts, and cannot
disavow them.
Under the repeated nnd solemn guaranties of the
United Suites to the Cherokees. for the occupation of
their lands not ceded, would Ihe Government have
permitted the State of Alabama to have called upon
the military force of the State, and expelled these
people from her borders, by the use of the bayonet 1
The question need not be answered. It cannot be
doubted by any one familiar with the condition of
the country, that they citn be as effectually expelled,
though not quite so promptly, by means of legislation,
as by the point of the bayonet. They have not the
privilege of an oath before the judicial tribunals, no
voice in the legislative hall. Is it not equally a breach
of faith to permit that to be accomplished by indirect
means which would be prohibited il attempted di
rectly and forcibly.
The testimony on yoitr records, establishes the
fact, that if all controversies, of which they have
assumed cognisance, were submitted to the adjudi
cation of the civil tribunals of that country, it would
be impossible to execute the Cherokee treaty justly
and faithfully. There must be some other less in
terested power to interpose between them, and the
white people residing among thetn, who iiora their
superior cunning and knowledge ol the laws, tmd the
fact that the Lndian is not allowed hi.s oath. muM of
necessity be alwiyi *uccftj>ftl in defrauding *nd im
pressing (hern.
With these vi.^sof ray duty. Mr Pawident, with
my instructions Mure me, holding in my h-nd the
late Cherokee treaty, which solemnly guaranties to
the Cherokee* the possession of their property ?nd
the free u*e and occupation of the same until the
time fixed for their removal to the West. What
should huve b-en my course 1 If I had antid other
wise than I did, i should have considered myself r?
crcuut tu this sacred trust reposed in ine. An Indian
pi escnts himself before me, and in the language of
nature details his complaint. Fie says, I have been
dispossessed by the white man of the house which I
built and the fields which I have cultivated fur years,
iny property has b?en taken from me, and my
I family turned ou' to the shelter of the forest. Your
government is pledged to protect me, you have the
treaty before you, and you were sent to enforce it.
1 ask justice at your hand*. I say to him, go to the
civil trib.inals of the States, they will redrew
your wrongs. What would be his answer? wliat
would be your answer?or that of any other man in
the cominuuityl?It would be the voice of nature,
universal as the human family. He would say, you
insult me with such protection, it is a miserable
mockery. Is this your justice 1 This your faith so
often, so solemnly pledged to us. In the language
of scripture he uiit'ht exclaim, I have asked you for
bread, and you have given me a stone.
My crime has been, not in using the language here
supposed, but in listening to his complaints and re
dressing his wrongs. I have endeavored to do him
justice without enquiring into the particular provi
sion of this or that H ate law. I have not perplexed
myself with the sub'.le arguments of politicians
abmt tha indivisibility of'sovercignty, ot such like
cobwebs of the brain, but the path of justice b-ing
clear, 1 b'U obeyed the still small voice of con
science, which frequently, in the advance of reason
ing, overleaps those birriers wi:h which ?ub'ili;y
and ingenuity sometimes successfully oppose its pro
gress.
The course of justice and humanity are but the
dictates of an enlarged and liberal policy. By such
a course the Indians were taught that some remains
of justice, some touches of feeling, yet existed in the
bjs.mis of white tuen, for their uuforlunate and pe
culiar situations. 1 trust that it softened in some
degree, the asperity of their feelings, and caused
them to look with some confidence to the future.?
Suppose a ditl'erent course had been pursued, and
every species of oppression ond cruelly prac
tised towards them, and they could find no teilress.
Might they not justly say, we can but die? let us first
b; revenged! Do we seek in vain in the pages of
history for such resolutions prompted bv despair!
But, Mr. President, I ain happy thai no charges
which should dishonor me as a man, or disgrace me
as an o:Rcer, have appeared against me. That I
mav have committed errors of judgment, I cannot
doubt, but the case before (he court 1 cannot think
is one. And although the consequences of this
case were tragical indeed,surely I am not responsi
ble for the violence of human passions which caused
such a result. No one can regret it more than I do.
Mr. President, I return the court my thanks for
their courtesy and unwearied attention during the
investigation.
JOHN E. WOOL,
Brig. Qeiural,\U. S. Army.
OEJIERAL ORDBK8, MO. A3.
HEAD QUARTERS OF THE AR\1Y,?
Adjutant Genkbal's Orricc, V
Washington, Oct. 2, 1837. )
I ...The Court of Enquiry, instituted by direction of
the President of the United States, whereof Brevet Ma
jor General W infield Scott is President, and which
convened on the 4th September, 1837, at Knoxville,
Tenn., pursuant to " General Order No. 49," to exa
mine into the transactions of Brevet Brigadier General
Wool, and others under his command, in reference to
his and their conduct in the Cherokee country, so called,
as set forth in a letter from his Excellency the Governor
of Alabama, dated July 3, 1837, addressed to the Se
cretary of War, and in the joint resolutions of the Se
nate and House of Representatives of that State, has
reported the following
" OPINION."
" The Court, after fully weighing and considering
tho whole of the testimony submitted in the case, are
of opinion, that not one of the imputations on the con
duct of General Wool, contained in the preamble to
the joint resolutions of the Legislature of Alutimnu, or
t.'ie letter of his Excellcncy, Governor Clay, to the War
Department, which enclosed the said resolutions, is
founded in justice or in fact. It wtlf be seen that on
the application of the Judge Advocate to the Executive
of Alabama, for document* and the names of witnesses
to support the accusation a gamut General Wool, tho
late Governor (the Honorable C. C. Clay) replies:
' The only official information I ever received in refer
ence to the conduct of General Wool, will be found in
the Executive Archives. I am not informed of the
names of the witnesses to prove the chsrges egainst
General Wool ; but presume the officers who served
under him, in that part of tho Cherekee Nation lying in
Alabama, would be competent to prove tho orders,
which were the subject of complaint.' And the scting
Governor (his Exccllency, H. McVsy,) says : ? Having
caused an examination to be made, nothing can be found
on file iri tins Department which will enable me to fur
nish the information desired, nor sm I able to comply
with your' request from other sources.' Pursuing,
however, the suggestions of the Honorable Mr. Clsy,
that ' the officers who served under biin (General Wool)
in that part of the Cherokee Natiou lying in Alabama,
would bo competent to prove the order* which were
the subject of complaint,' the Judge Advocate, princi
pally at the instance of General Wool, summoned many
witnesses, and the latter has also freely submitted to the
Court every paper in his power which, as it would seem,
belongs to the matter under investigation.
" I" roin this mass of evidence, parole and documen
tary. it appears that, in his conduct towards Alabama,
so far from ' disturbing tho poace of the community,'
and 'trampling on the rights' of the jvoplr, Get .era 1
Wool's acts were so strikingly marked by caution, tem
per, and mildness, as to receive the almost universal
approbation of the very jieoplc whom he is charged with
having outraged.
"Another, and the principal accusation eont#hied in
the letter of Governor Clay to the War Department,
(evidently founded on the preamble of the said joint re
solution,) is, that General Wool had usurped the powert
of Ihe civil tribunal* of Alabama: and the said pream
ble sets forth that ' a company of volunteers in the ser
vice of the United States, under the command of (Bri
gadier) General Wool, have been stationed in the coun
try lately owned by the Cherokee tribe of Indiana in
tliis State, for the pretended purpose of keeping |>eace
between the said tribe of Indiana and tlie citizens of
the State, and have taken upon themselves the autho
rity to adjudicate upon the claims of our cilizeni to
their right to the fiossession of improvements; and in
the enforcements of these adjudications have brought
about a most ruinous and fatal conflict between our
most worthy citizens, the consequences of which hsve
already resulted in the taking ot each other's lives." The
case here referred to has been most fully developed in
the evidence, from which it appears, that the Indian I
children of one John Gunter. deceased, through the she
rifT(Kiddle) of Jackson county, administrator ex officio,
under the orphan s court, claimed the possession of cer
tain improvement!, of which Nathaniel Steel, a white
man, was in the actual oecuj?anev : .that on the applica
tion to that effect to General Wool, by the sheriff ad
ministrator, General Wool decided the case, with the
previous approbation of the said Steel, giving the right
k of |K>sscssion to a certain part of the improvements to
the Administrator, with which decision Stool expressed
himself to be satisfied: that captain Morrow, who com
manded a volunteer company three or four miles off,
received instructions from General Wool to put tho
administrator in possession of thst part of the improve
ments adjudged to him : that Steel quietly, ami without
the application of military force, consented to give up
?the possession, and began accordingly to evacuate the
premises ; u(>on which Captain Morrow, and the small
detachment that was with hun, withdrew to his camp,
distant as aforesaid and that the conflict which after
wards occurred, was neither in the presence, nor at the
moment, within the knowledge of any officer or soldier
in the service of the United States.
" It is further in proof, and indeed fully admitted by
General V\ ool, that lie decided many other claims, pre
ferred by Indians, to improvements wrongfully possess
ed by citizens of the States ; and it would appear that
in all these case* his decisions were acquiesced in, not
only without conflict, but without, complaint. The
question now occurs : By what authority did General
Wool take upon himself to give decisions on the clasa
of cases just recited, and in doing so, did ho, us is so
lemnly charged from a h'gh quarter, usurp the powers
of the civil tribunals of Alabama \ The I Oth article of
the treaty - between the United States and the Chero
kecs, ratified May 23. 1836, allows those Il.dians to re
main in the country therein ceded to the United States
up to May 2.1, 1838, and the United States stipulate
to protect and defend thcin (the said Indians) in their
possessions ami property, and the free use and occupa
tion of the same.' This treaty is repeatedly referred to
in the instructions from time to time addressed to Gene
r*l Wool, by the War Department, and once emphati
cally by President Jackson himself, in a letter to the
same commanding officer, and m each case, as a rule
of conduct for the latter. In this letter from the then
President, and slao 18 that (a?m lb* War Office. Octo
ber IU-1086, Gent >si Wo^i ia directed to consult I he
Alb ari^e of (lie wid UiJijv which tonfeia even abigh
er power on ihe romnianaing otticor than the 16th, aa
applicable lo the Cherokee* whilst vet residing within
the geo^rsptucsl limita of North Carolina, Georgia, Ten*
ueaMM) and Alaliania, and conatx|ueiilly llial lie. Gen.
Wool, w?* by the Iflth Article, fully invested with the
luferior power of rtjxtsscssing an Indian claimant of im
provements wronjtfijllv withheld by a white intruder not
recognized by the Cherokee* a* one of their people.
A tram, the inatruiii. nl agreed ii|?on by the Umiod Sutra
and tlie Cherokee Nation, and ratified by the Stnkle of
the United Slate*. May 23, 1836, bring called, upon it*
face, a Irmly. and repeatedly referred to aa auch l>y the
I'reaidrnt and Secretary of War, General Wool naturally
considered it aa auch an instrument aa m spoken of iu ihe
2d clauae, article 6th, of ihe Constuuiion of the United
States : that la, aa the supreme law of the laud ; and
consequently believed himself, under it and his uistruc
lioua, to poaaesa the right, aa well aa the power, to do
juaticr, in the Cherokee country, to Indian complainant*
without uaurping the power of ibe civil tribunals of Ala
bama, or that of the tribunals of the other particular
States mentioned. Wnliout, however, imeotiig tlua
view of the subject any farther, which might l.t? impro
per in a military tribunal, thia court ia of opinion that
General Wool, in the acta recited and complained of,
cannot be juailv charged with having usurped powera
belonging to the courla of Alabama.
"In the letter of hia Excellency Governor Clay, to
the Secretary of War, dated July 3, 1837, before the
Court, there is an incidental mention of another letter
from the sinne to the same, complaining of other acta of
General Wool, perhaps of the same, or a similar charac
ter to those already noticed: but this letter not having
been submitted to this court by the proper authority,
and its contents unknown, except by conjecture, no tea
tunonv haabeen taken, and no opinion ia here given on
Ha aob|ecl.
"The attention of the Court, in its order of appoint
ment, has also been directed to ' other* under lus (Ge
| neral Wool's) command in reference to' the inaticra
I complained of; but the name of no other officer ia given
| in that order, or mentioned by the I*gialature or Execu
tive of Alabama, in the paper*, from them, submitted
to (he court. It has, however, been incidentally dia
clossd by the evidence, that Captain Morrow, command
ing a company of Tennessee Voluiilreta, i" the tetnpo
rary service of the United Slates, was the individual
charged with lite execution of General Wool * decision
relative to the improvements of John Guuter, .deceased,
which were in tho possesion of Nathaniel Steel. Iu re
ference to thia excellent officer, (Captain Morrow) it i*
sufficient to say that he acted in strict conformity with
the orders of his superior, and in auch manner a* lo de
mand and receive the emphatic approbation of all the
parties claiming those improvement*?aa may be seen
in their resjtective letters to him, annexed to the pro
ceedings of this Court."
II. The Psksioknt or thk United State* ap
prove* the proceeding* hi the foregoing case.
^ III. Tho Court of Enquiry of which Brevet Major
General Scott is President, is hereby dissolved.
By order of Ai.kxasuek Macomb,
Major General Comma wit n#-in- Chief.
11. JONES.
Adget. General.
SPEECH OF MR. GARLAND,
or Virginia,
In the House of Representatives of the U. S.
Sept. 25, 1837?in opposition to the foil
reported by the Committee of Ways ami
Means, entitled, " A bill imposing additional
duties as depositories in certuin cases on
public officers, and for other purposes :
(Continued.)
From the connection which existed between
the Government and the State Hanks, growing
out of their adoption as fiscal agents, and the
general impression which it produced, that
tho Government was disposed to cherish and
sustain them, the slightest manifestation of
the want of confidence on the part of the Go
vernmcnt, was calculated to produce the most
disastrous effects upon ihcir credit, and crip
ple their operations. It was calculated to im
pair general confidence, and produce a rush
for specie, so sudden and violent, that but few
banking institutions could be prepared to with
stand it. This want of confidence was clearly
manifested in the Treasury Circular of July,
1836, lit which danger was distinctly announced
to the country. 1 his measure of itself, how
ever, could not have exerted any very delete
rious influence, upon the credit of the bunks ;
but, operating in conjunction with other causes,
was calculated seriously to impair public
confidence, and to produce serious embarrass
ments in the monetary system of the country.
I he 1 reasury circular, which required spe
cie for the payment of the public lands, pro
duced an uuusual and unnecessary drain of
specie from tho Atlantic to the Western tanks,
and of course, it was incumbent on the
Eastern banks, to use the usual precaution of
contraction to meet the demand, whatever it
might be. Independent of this direct opera
tion, emigrants, who were numerous from the
Eastern to tho Western States, sought that
kind of currency which was receivable at the
Land Offices. Hence, specio being only re
ceivable there, they demanded specie for their
notes, which being principally Eastern, the
Eastern banks were bound to pay. These
<1 rafts for specie were calculated to produce a
corresponding curtailment Of the circulation
and loans ol the banks, which were among
the professed objects of the order. The gold
and silver thus drawn from the Eastern, was
deposited in tho Western banks, and there
kept entirely unemployed, to the great detri
ment of trade, awaiting the, drafts of the Go
vernment. In addition to the operation of the
specie circular, and about the time of its ut
most severity, the pressure of a heavy foreign
debt created an additional heavy demand for
specie, which was principally to be drawn
from the vaults of the banks. The effect of
this demand for specie to pay the foreign
debt, necessarily produced a contraction of
loans and circulation, corresponding with the
extent of the demand. We all remember the
gloomy period of 1819, when distress and
ruin pervaded the whole community, ami filled
it with dismay, and as it is fair to judge of the
present by the past, I have selected the four
j ears preceding 1819, and the present pre
ceding four years, with a view to contrast the
state of trade then, with its present state; in
order, in part, to account for the present re
vulsion and derangement of commerce, and
the effects now, as then, produced. In the
years 1815, 1816, 1817 and 1818, the state of
foreign trade was as follows :
exports.
IS 15 $52,567,753
181(5 81,020,452
1817 88,671 ,!W?
1818 93,981,133
$310,430,907 $481,14-1,271
310,430,907
Exccss of importations over exports 8170,713,305.
V\ Itich, after proper allowance for tonnage
and other expenses, left a heavy balnnce.
The effect was, that n bank circulation in 1816
of $110,000,000, was reduced in 1819, to
$45,000,000; wc all recollect duriug this
year, the immense deduction which property,
prodtico and labor underwent. The foreign
trade for 1833, 1834, 1835 and 1830, is as
follows :
EXPORT*.
1833 $90,1I0.43H
1834 KM.336,973 ,
1835 118,955,239
KW 128,(503,040
$442,005,090
IMPORTS.
$113,011,274
,117,103.000
9!),250,000
121,750,000
IMPORTS.
$108,1IH,3I1
196,521,332
151,030,368
189,980,035
$575,000,0445
142,095,601)
The cxcess of importation*,
$133,551,350
NLeaVtft a larf? foreign^^B *fd *hh?u?h
the Wance a?w is t37.?00#00 less than in I
1Hl0.y?tit wUBcieu% lllf" ,w reili"e"r *
heavy reduction in bank loan? and circulation,
necessary to meet it?because exchanges, be
in" matenaHy reduced, it cwtld b* ???< ?? *<>?
thing hut specie. The heavy importation* of
specie from England, ih/ouKh the luatrumen
talily of acci5|>ianceii ol American dralls,
alarmed the Hunk of England for its own safe
tv ; and to counteract thia drain, it refused
to discount fur any merchant who accepted
American bills, thus making it necessary to
demand more specie for the payment ol the
foreign debt, than would otherwise have been
required. This policy was more rigidly pur
sued than perhaps it otherwise would have
been, had it not been supposed (rom the de
clarations of a great portion of the American
press, that it was a part of the policy of our
Government to prevent the exjiortatiou of spe
cie entirely, and coniinue, as far as possible,
the drain from Europe. Combined with these
causes, was ihe execution of the Deposito
Act of June, 1836.
It having been ascertained from the rapid |
increase of the revenue from the sales of the
public lands, and the duties on foreign impor
tations, that there would be a large surplus in
the Treasury on the 1st of January, 1837, it
was determined to withdraw it from tbe con
trol of the Federal Government, (to which its
possession offered so many strong and dange
rous temptation*,) and Iroin the custody of
the deposite banks, to prevent its b.ing made
the foundation of dangerous and excessive ,
issues of bank paper ; and to place it in the j
custody of the State Governments, thus to re- |
main to be employed for the local benefit of |
the people, (from where it had been unconsti
tutionally and improperly drawn.) until needed
for the legitimate purposes of the Govern
ment, a disposition, in my humble opinion,
both wise and salutary, both as regards the
j currency and the purity of the Government.
For the' purposes of giving the banks timely
1 notice, and to enable them to rueet the de
i mauds of this law without detriment to them
selves or the public, the operation of the act
was not to commence until the 1st day ol
January after its passage, a period of six
months, and then to be met in four equal quar
terly instalments. This was ample time to
prevent any serious derangement of the af
fairs of the banks, or the commerce of the
country. In a short time after the passage
of this act,'and long before it was ascertained
what would be the amount to be distributed,
and of course the first instalment, the Se- |
cretary of the Treasury issued his orders to
the deposite banks, directing them, by a fixed
period, to transfer to specified points, about
$13,000,000, (as well as I recollect,) instead
of giving drafts to the Stairs for their several
quotas on the most convenient banks, to pay the
amount on the day il was due; which might
have been met, according to the usual mode
of commercial exchange, between creditor ami
debtor banks, and merchants ; and by which
they would have been performing but the usual
commercial functions; whereas, by the opera'
tton of the orders oj the Treasury Department,
the amount to be transferred, was abstracted
from commercial employment, from the time of
the transfer till the payment; and created a
demand, in some instances, for specie, which
might have been avoided. Thus was inflict
ed upon commerce an injury from the injudi
cious execution of the law, which is dexter
iously ascribed to tho provisions of the law it
self! This operation was particularly severe
upon the New York Banks, which held in the
neighborhood of $20,000,000 of the public
deposites. The deposite act in itsell did not
necessarily decrease, or tend to decrease, the
active capital of the country ; it was taken
from banks to be again put into banks. While
it reduced the active means of some, it in
creased that of others. In many instances
the credit was only passed from the Federal
to the State Governments. There was no
thing in it to embarrass the trade and commerce
of the country. Tho effect was produced by
its unwise execution, coming in aid of other
causes of an embarrassing character. In this
opinion I am sustained by the most able and
skilful financiers ol the country.
At about the time of the suspension of spe
cie payments, there were in the banks, (ii nw
estimate be correct,) about J155,000,000 of
private deposites. These private deposites
were generally made in bank notes ; yet the
depositors had the right to demand specie for
them. When the operation of these causes
were perceived, and the diminution of confi
dence on tho part of the Government mani
fest, the private depositors, in place of their
deposited notes, began to demand specie.
Brokers als>? began to demand specie for all
the notes which they held, or could purchase,
and this was no small amount.
The banks in tho city of New York, where
the storm first began to rage and to produce
most serious effects, although-ultimately res
ponsible for all their obligations, could not
meet this sudden rush upon their vaults with
out ruin to themselves and the people; they
therefore suspended specie payments. This
suspension, the causes of which were not
| understood by the country, produced alarm
throughout the whole community; and a gene
ral suspension of specie payments was the re
sult. By this suspension I do not doubt that
the banks have not only saved themselves but
the country from utter ruin and destruction.
I confidently believe that the withdrawal of
the confidence of the Government, so strength
ened the operation of all the causes to which
1 have adverted, that it compelled the hanks
to a course, which with the fostering care and
continued confidence of the Government,
could and would have been avoided : for the
banks have no interest, whatever, to embar
rass their own operations by an act so destruc
tive of that credit which is so necessary to the
successful extension of their business?for
sound unsuspected credit is - the Very soul of
their operation*, and the foundation of their
profits.
The truth of this argument is fully sustain
ed by recurrence to the history of the Bank
of England, as well as our own banking insti
tutions. On many occasions the Bank of
England has been sorely pressed, yet it
retained the confidence, ami was aided by
the (rowrnmrnt, and was enabled thereby
to Burmount its embarrassment, and reco
ver from its difficulties. In 1793 particu
larly, its operations were so embarrassed,
and the rush (or specio so great, that it
was compelled to suspend specie payments ;
and continued the suspension, without in
termission, from that time till 1829, many
of the causes which produced the suspen
sion, continuing to exist during the whole
time. In this state of embarrassment, its
course was justified by the British (lovern
tnent, whose confidence, and that of the mer
cantile community continued, and its suspen
sion was legalized, until finally, by a pru
dtntiai course of mefwuqp, adopted to its true
Cffuditunfc it triumphed ffer all difficulties ;
md, in 1829, returned specie payment*,
which it still continues. The confidence of
the Government and merchants enabled the bank
thus to sustain itself; to maintain its solvency
and its credit; and to per lor in, with succchm,
iia commercial uui fiscal duties.
In 1815, the Slate Bank*, from the opera*
lion of muny cause*, suspended specie pay
ments, yet the confidence of the Government
was not withdrawn. Mr. Dallas and Mr.
Crawford, both able and patriotic men, an
Secretaries of the Treasury, having sustained
their credit hy all the means in their |>ower.
Mr. Crawford, particularly, made large depo
siies of public money in many of them ; und
thereby enabled them to indulge the people,
maintain their own credit, redeem their debt
to the public, und finally, in 1817, to resume
specie payment 1 believe if the same benevo
lent and patriotic policy had been pursued to
wards the State Hunks, at the present period,
the: existing suspension would not have continu
ed to this time, if it hud taken place at all.
Mr. Dallas nor Mr. Crawford, however, iiad
not contrived the iilea of a total separation
beticecn the Government and the bariki/ig in
stitutions of the country as fiscal ogents; und,
therefore, felt some inducement to sustain and
preserve them; but a different feeling seems
lo prevail with the present Secretary of the
I reasury, who can only expect to succeed in
his views by the embarrassments and difficul
ties of the banks. \V hile 1 do not ascribe to
liiin any design to produce the embarrassment
which has overtaken the banks, and, with
them the commerce of the country, yet I am
well satisfied, that he hat* withheld from them
that confidence, which might justly have been
extended; and which would, before this, have
redeemed them from their embarrassing diffi
culties, and have afforded salutary relief to
the people, and the commerce of the country.
The charge made by the President, and
those who now favor a total separation be
tween the fiscal operations of the Govern
ment and the banks, " that they have been
guilty of an exres?ive issue and circulation of
their paper," is true?lamentably true. Yet
1 ennnot perceive in all the facts and circum
stances, connected with the charge, that
they have been actuated by any improper or
impure motives. These institutions are con
ducted by men who are liable to be misled by
the same impulses which betray the most
prudent and the most cautious of mankind
into occasional error. A spirit of speculation
had extensively spr?ed itself throughout the
country; acted and re-acted from the people
to the banks, and from the banks to the peo
ple, until all, absorbed by brilliant prospects
of immeasurable wealth, were led beyond the
bounds of prudence and discretion ; and ruin,
to many, has been the penalty. These im
pulses have occasionally produced like effects
through all periods, and resulted in like ca
tastrophes, whether their currency was exclu
sively metallic or not.
All these evils carry with them, however,
sure antidotes. The current of money always
has its level; and whenever it exceeds that
level, the redundancy runs off and leaves the
curreut at its proper level. In its reduction,
serious and distressing injury is often inflict
ed ; yet the return is gradual and sure. Hut
a question arises, whether the banks are
entirely in fault in this matter? Is not the
Government itself much in fault ? And shall
the banks be compelled to take the whole
responsibility for an error in which the Go
vernment has largely participated ? At the
time the public deposites were removed from
the Bank of the United States, the then Se
cretary of the Treasury, acting under the
impression, that the charter of the Bank of
the United States was not to be renewed, and
that its extensive circulation and discounts
were to be called in, in order that no shock lo
the business of the country might be sustain
ed, urged upon the State Banks, in the fol
lowing note, the duty which would devolve
upon them lo supply the vacuum which would
be created by this withdrawal, growing out of
their fiscal connection with the Government.
I his the banks attempted to do, and gradually
increased their accommodations and enlarged
their circulation. He says,
Treasury Department,
September 2fi, 1833.
Sir : The Girard Bank has been selected by this
Department as ihe depository of the public money
collected in Philadelphia arid its vicinity, and the
collector at Philadelphia, will hand to you the form
of a contract proposed to be executed, with a copy of
his Instructions from this Department.
In selecting your institution as one of the fiscal
agents ol the Government, I not only rely on its
solidity and established character, as affording a
sufficient guarantee for the safety of the public
money intrusted to its keeping, but I confide, also
in its disposition to adopt the most liberal course
which circumstances will admit towards our money
ed institutions generally, and particularly to those in
the city of Philadelphia.
The deposites of the public money will enable you
to afford increased facilities to commerce, and to
extend your accommodation to individuals. And
asthe duties which arc payable to the Government
arises from the business and enterprise of the mer
chants engaged in foreign trade, it is but reasonable
that they should be preferred, in the additional
accommodation which the public deposites will
enable your institution to give, whenever it can be
done without injustice to the claims ol oiher classes
of the community.
I am, very respectfully, your obedient servant
R. B. TANKY,
_ . Secretary of the 'rVeasun/.
To the Prmidsnt of the Girard Bank. Phil*
ae.Lpkia.
This recommendation was repeated by the
late President in his succeeding annual Mes
sage. By the deposite act of June, 1836,
for proportions of the public monev bevond
a specific amount, the Deposite Hanks were
required lo pay interest, which made it a prin
ciple of self-defence, that they should extend
their loans ami increase their"circulation ; be
cause it was not to be expected that they
would lock up. nnd keep uncmploi/ed, the public
money, on which they were bound to pay in
terest1 'I hesc two causes combined, certainly
produced an excess in the bank discounts and
circulation of tho country. This excess has
been increased by another cause, which Mr.
Taney nor Congress did not, or could not,
have anticipated. The vacuum which was
anticipated by the refusal to renew the charter
of the Bank of the United States, was never
produced; for, contrary to all expectation,
the capital and stockholders of that bank were
subsequently incorporated by the State of
Pennsylvania, which continued in circulation
its notes, and prevented any material diminu
tion in its discounts.
1 appeal, then, to the good sense of this
House to say, whether the excessive issues
complained of, have not been produced by
causes, calculated in their very nature lo mis
lead, and produce the excess complained of,
without the slightest imputation of fraud or
corruption against the banks ?
Mr. (. hairmnn, the connection which now
exists between tho finances of the Govern
ment and the Deposite Banks, was produced
by the solicitations of the Government itseir
I he Government f..und itself en?a?ed in
j 8' v<;r? *'?d dubious coofiict with the Bank ,a
meilT " had de,*?nine<]
merthrow. To do this, it was necessary ho
InH h 1 ll" ?lK'r:,,,OI",? lh,lt ?be commerce
tenaUv"'?h*\ .'he tWUHlry "ol b,! ma
terially shocked, and the sensibilities of the
| people excited. To effect this, u sought .?
, aid, and procured the operation, of the late
j Deposite Banks, without whose aid and co
!h rrni0,L' T 1? he*iUllon >>> believing.
tl /'i v ^ ^T' S,al^ would have
triumphed. Yen, Sir, 1 believe that a would
have successfully resisted even Andrew Jack
son, with all his popularity, his acknowledged
firmness and courage. The Stat, Banks came
to the uidif the Government, and the Guvrrn
nwnt triumphed. For this they incurred the
undying hostility of il,? Bunk of the United
States, which still pursues thein. Thev in
curred the denunciations and prophecies of
evils of the Opposition, who opened upon
them all their batteries. This they with
stood ; hut in the hour of victory, which thev
so signally contributed to achieve, in the very
first hour of their difficulties and peril*, the
very J'rtutds whom they rescued from del. at,
have taken possession of the batteries of t|?!
enemy, and now pour thick vo/hes upon their
devoted heads! Is this generous' ls u
magnanimous ? Is it liberal T 1 leave you,
sir, to give the answer. 1 leave you to deter
mine whether, for cause* which makes the
act not only excusable, but justifiable. These
j institutions are to be utterly annihilated for
their late suspension of specie payments,
I when they have, upon trying occasions, al'
forded seasonable relief to the country, and
are entirely solvent.
That the State Banks are susceptible of
such regulations as will secure to the country
a sound currency, I do not doubt; for this is
clearly proved by experience; and that the
revenue of this Government may be so em
ployed as to be a most potent engine in the
accomplishment of such a desirable object,
by the force with which either their hopes or
their fears may be addressed, cannot be re;t
sonably doubted. In 1816, when specie pay
ments were suspended, and the evils of a
redundant and deranged currency afflicted ihe
country much more severely than now, Mr.
Webster, in a speech delivered in this House
on 30th April, 1816. expressed himself thus:
" That if these banks, (meaning the State
Banks,) what engine, he asked, was Congress
to use for remedying the existing evil ? Their
only ligitimate power, he said, was to inter
dict the paper of such banks as do not pay
specie from being received at the custoiii
house. With a receipt of forty millions a year,
he said, if the Government were faithful to
itself and the interests of the people, they
could control the evil, and it was their duty to
make the effort. They should have made u
long ago, and they ought now to make it; the
evil grows worse by indulgence. If Congress
did not now make a stand, and stop the cur
rent whilst they might, would they when the
current grew stronger and stronger, hereafter
do it? if this Congress should adjourn with
out attempting a remedy, he said, it would
desert its duty."
If then, how much more potently could
Congress now operate with the enlarged re
venues of the Government ? Yet Mr. Webster
did not hold over ihe heads of the bjinks the
terrors of a final and eternal separation. Mr.
Biddle, the President of the Bank of the
United States, in his triennial report to the
stockholders, in 183J, says: " And they (the
Bank of the United States and branches,)
received freely the notes of solvent Slate
Banks, with whom periodical and convenient,
but certain, settlements of accounts were
made."
" By receiving freely the notes of the State
Banks, within convenient reach of the bank
and its branches, and by frequent sctth ?nun Is
with them, these institutions are kept in the
habitual presence of an accountability, which
naturally induces them so to apportion their
issues u> their means as to secure the sound
ness of the currency."
I do not doubt the soundness of an opinion,
so thoroughly demonstrated by the practice
which fell under the observation of him who
expressed it ; and I do not doubt that the Go
vernment in the employment of its revenues,
and the observance of the same rules, may,
through the instrumentality of the state insti
tutions, preserve a sound currency, with much
more success than the United States Bank
did. . Frequent periodical, and certain settle
ments are the efficient instruments by which
excessive issues may.be avoided, and sound
currency preserved.
Mr. Chairman, if existing laws, which pro
hibit the continuance of any deposite bank as
a fiscal agent of the Government, and the re
fusal of their notes in payment of the public
revenue, had not sufficient terror to prevent
the suspension of specie payment, how nun h
more efficacious do you suppose the adoption
of this measure as the permanent law of the
land, will be in rosteruag specie payments?
so much to be desired, and so necessary to
lb? prosperity and tranquility of the country ?
Sir, it will not only not hasten, but greatly
prolong that important event. During the
suspension of 1816, Mr. Dallas, then Secre
tary of the Treasury, in his annual report to
Congress of the 3d of December, 1816, ex
pressing his opinion upon this identical sub
ject, and the propriety of exercising the pow
er of such restriction, said : " The successive
attempts made by this department to relieve
the administration of the finances from its
embarrassments, have been ineffectual. There
was no magic in a mere Treasury instruction
to the collectors of the revenue, which could
by its virtue, charm gold and silver into cir
culation. Tiie people, individually, did
NOT POSSESS A METALLIC MEDIUM, and Could
not be expected to procure it throughout the
country, as well as in cities, by any exertion
I unaided by the banks. And the banks too
i timid or too interested, declined every over
ture to a co-operation for reinstating tho law
j ful currency. In this state of thingn, the
! Treasury, nay the Legislature, remained pass
ive. The power of coercing the banks was
limited to the rejection of their notes in the
payments of dues and taxes, and to the exclu
sion of their agency in the custody ami dis
tribution of the revenue; hut the exercise of
i that power could not generate a coin ct r
j Ruscv, although it would certainly act op
pressively upon the people, and put at ha
zard every sum of money which was due to
the Government. Until, therefore, a substi
i tute was proposed for the paper of the Bank,
it would have been a measure of impolitic
and useless severity towards the cominuni
i ty to insist, that all contributions to the ex
penses of the Government, should bo paid in
! a medium which, it i9 repeated, the commu
nity did not possess and could not pro
I CURE."