The Madisonian. [volume], October 12, 1837, Image 2

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the whole commercial community. This idea
u very forcibly expressed by Mr. Calboun in
a speech delivered in 1816 in this House on
the bank charter, speaking of (be commercial
qualities of the then proposed Bank of tbe
United Stales, be says, " Thin bank is no
more than ? part of the commercial commu
nity in wbich it is established, and any em
barrassment of the bank mutt press, also, on
the whole commercial community, that com
munity would be the first to give way in such a
ease, and this would produce a run on the
bank, and compel the stoppage of pavment."
1 cannot imagine to myself a more decisive
step, in the pre*ont embarrassed condition of
the country and the banks, than the passage
of this bill, to force the banks to continue the
stoppage of payments, and finally to wind up
their business. If such would be the effect
what would be the consequences to the peo
ple. I let the President of the United Ntates,
when he was Governor of New York, an
swer. In his annual message to the Legisla
ture of New York, Mr. Van Huren speaking
upon the expediency of renewing the charters
oi many of the New York banks, which were
about to expire, portrayed the ruinous effects
which their discontinuance would produce
upon the State and llie people, expressed him
sell in these forcible and conclu>i> e terms:
'' But we cannot clo?e our eye* to the d.tficuliie* and
pecuniary enibarravamenU that muni rcault I'rout audde.-i
ly ?topping the oj*-ration* of ?u many and audi long e*
lablinhed institution*, Of the thirty millions t that arc
owing to them, I lie principal part in prohablv due from
merchant*, manufacturer*, and other largo dealer* in
their vicinity; hut they in turn hare their demand*
person* pursuing similar business in the rnunhy, and
those, again mutt look tu their cuttomri t, that fmhi acimg
alt classes of mxttly, in the Inihility tu contribute to
ward* a general settlement- The amount due fioin tlic
I'uiilt*. especially all thai portion whirliMMMU in bill*.
Fioui even this superficial view of the anbjrcl, it muat
bo evident to all refjectiig inindx, that the pecuniary
convulsion that mu*t remit from a coiii|>ul*ory clo>e of
these exto*ive concerns, would Ik: ueiih<.r *liout in
it* degree, nor transiknt m its JurUioti. You will. I
am couvinced, concur with me in the *entiment, that a
rf>*|ion?ibilily of ao si nous a character, and su fearful
ill it* po?*il>ie con?vi|iii'ncci>, aho-ilj not be incurred on
?light ground*, or fiom motive* of expediency in the
leant degree qucniiouablv."
Mr. Calhoun, in n speech in the Senate, in
1834, sp-aking upon the subject of the banks
and the effects of their sudden suppression,
thus expresses himself, " To suppress them
(the banks) at once would, if it were possi
ble, work a greater revolution, a greater change
in the relative condition of the various classes
of the community, than would the conquest
of the country by a savage enemy." This
sentiment is true, inevitably true, and by it I
propose to test the effects which the destruc
tion of the banks would at this time produce
upon the people. In 1834, tho people were
indebted to the banks $3*24,000,000 ; in 1837,
$591,000,000, if then the suppression of the
banks in 1834 would have produced such dis
tressing effects, what would it do now ?
Ruin the whole community. When the banks
are pressed, they press in turn the mercantile
community, and that presses the people who
are the" victims, for they have no debtors to
resort to, they must resort to their property.
Again. If the Government demands specie
in payment of the public revenue, the mer
chants must in turn demand spccic of their
debtors, the people, which, if they cannot
procure, will lead to the most destructive
sacrifices in tho sales of their property. No
creditor is bound to receive any thing but
specie, and this system will afford a pretext
for such a demand ; for the creditor may well
refuse to receive discredited, depreciated
bank paper, and therefore cause immense
sacrifices of property.
Mr. Chairman, the bank circulation is al
ready reduced from about 160 to 100 millions
dollars, as is also the active spccie circula
tion greatly reduced; the present circulation
is founded upon an adequate spccic basis, and
cannot, with due regard to the interest of the
people, be further reduced. This system will
render a further reduction inevitable, and pro
duce a corresponding inability on the part of
the people to pay debts, and a fearful depreci
ation in the value of property, anil in this
point of view will operate most injuriously
upon the debtor class of the community.
The eighth objection which I have to the
proposed system is, that it will greatly enlarge
tho Executive patronage, and fearfully in
crease its power. Upon this point, Mr. Chair
man, I am brought into direct collision with
the opinion of the President, who seems to bo
of the opinion that this measure will not only
not increase but actually dimmish Executive
patronage. I am not satisfied with the rea
soning of the message, and lind nothing in it
although ably urged to change tho opinion
which I took up, in 1831, as to the effect of
such a measure. The Secretary of the Trea
sury seems to think that by the appointment
of ten additional officers and an increased ex
penditure of about 00,000 dollars, will enable
that department to conduct this system with
success. In this opinion, Mr. Chairman, I
differ widely with the Secretary, although I
do not doubt his sincerity. All propositions
(<>r the creation of new systems arc accom
panied with the most rigid regard to economy,
bur after their organization their wants gradu
ally dovelope themselves, till finally, by legis
lation after legislation, the officers and tho
expenses are fearfully increased. All the
departments of the Government had small
and economical beginnings, yet in tho pro
gress of time the number of their officers and
the amount of their salaries, and other ex
penses, have greatly increased, such w ill be
the course of this system, this will be but the
gorin, and your ten additional officers and
$60,000 additional expense, will swell into
hundreds of officers, and hundreds of thou
sands of increased expenditure. To tell ine
that all the increase of clerks, house rent,
stationary, and other incidental expenses
which this system will require ran be met
with $60,000, is to tax my credulity with the
belief of ari utter impossibility. Sir, the Se
cretary of tho Treasury will find himself ut
terly mistaken is his estimate, if, by the pas
sage of this bill, he shall be authorized to put
this system into practice. In considering this
question it Should be borne in mind that our
country is rapidly increasing in population,
wealth, power, and commerce, and that ne
cessarily as these progress, increased duties
on tho part of the Government in all its dc
p irtrncnts will be unquestionable, and on no
department of the Government will these in
?reased duties devolve so materially as on tho
Treasury Department. Hence, sir, I look to
the adoption of this system as laying the foun
dation of an immense increase of the patron
age of the Executive in tho appointing and
disbursingpower. Mr. Chairman, tho patron
age of the Executive is tho most dangerous
of all its powers, and the most likely to end
in the overthrow of the liberties of the court- '
try r by the exercise of this power, the Ex- 1
oeutive ramifies in every section of this
widely extended empire, it's officers indebted j
lo the Executive for their appointment, and
holding litem at ita will* When we consider
their number, the influence which they exer
cise, and the positions which tlicy occupy,
we cannot but feel seusibly alive to (he mis
chiefs which they may produce. Their num
ber already exceeds one hundred thousaud,
and is constantly increasing?add to thia im
mense array of public officers ramified into
every section of the country, the amount of
money which is annually disbursed bv the
Executive, and we may form some idea of
the alresdy fearful power of the Executive
patronage. Hut, air, pass thia bill, and thin
power becomes ten fold stronger and more
dangerous. Now the Executive has not the
actual hut the lejjal custody only of the public
purse ; barriers hitherto safe have been inter
|>osed. This bill not only places the public
revenues in the legal but the actual custody
of tho Executive *, it removes all burner*, all
restrictions ; it places the custody of the pub
lic purse in the hands of those who will hold
their place at the will of the President, who
has the power to remove at pleasure. Sir,
will an American Congress place this fenrlul
power in the bands of the Executive? Will
they place in the hands of the President, al
ready having the power of tho " sword??the
power of the "purse" also? For this bill
completely invests him with the power of the
"purse." He will hold it in actual keeping.
Will they commit their liberties to the keep
ing of any man ? Will they trust such im
mense and such fearful means of mischief in
the hands of any Executive Magistrate?
Mr. Chairman, I shall make no professions
of unbounded confidence in any man. 1 will
not say that I have more, or that 1 have less
confidence in Mr. Van Huren than in other
men ; but, sir. this is a power which I would
not have committed to George Washington
himself, or any man that ever lived, or now
lives. Sir, I will not commit my liberty to
the keeping of any man. I fear all. If the peo
ple intend to preserve their liberties, they
should not commit them to the keeping of any
man ; but keep them under their own imme
diate carc and protection. A wise man s.iid,
"eternal watchfulness is the price which the
people pay for liberty." Sir, I warn them to
watch, and that incessantly ; if they do not,
fearful will be the consequences. Mr. Chair
man, the patronage of the Executive is al
ready sufficiently large for the safety of our
free institutions, and 1 am not willing to en
large it. While on this part of the subject,
1 cannot refrain from recurring to the fact,
that when General Jackson's protest to tho
resolution of tho Senate, charging him with
a violation of the constitution and the law, in
the removal of the public deposites from the
Hank of tho United States, was construed
into a claim for the Exccntivo of the actual
custody of the public money, he immedi
ately and indignantly repfllcd it in a short
explanatory message. This bill gives that
very custody which General Jackson indig
nantly repelled, as desired by him. Mr.
Chairman. I trust I shall he cxcuscd for recur
ring to my own State, for 1 assure the IIouso
1 do not mean it as in the slightest degree
invidious. Hut, sir, Virginia has always been
jealous of the exercise of the powers of this
Government, and of the increaso of Execu
tive power. From time to time, she has raised
her voice against it. Even while this consti
tution was under discussion in her convention,
many of her patriotic and distinguished sons
resisted its adoption from jealousy of the over
whelming power and influence which it would
imparl to this Government, and the Execu
tive branch of it. Henry, with the thunders
of his eloquence, denounced tho constitution
as tending lo absorb all power into this cen
tral Government. Pass this hill, and you
take the most important step towards the "ful
filment of hi* predictions. You at once, to
use his language, arm the Government with
the power of the " sword end the purse;"
which, I fear, will ultimately prove too strong
for the liberties of the people. What might
not an ambitious aspirant for .despotic, uncon
trolled, and unlimited power, not do with such
means in his hands? Sir, if he wants money,
he has only to demand it at the hands of its
keepers. If they refuse, he has nothing to
do but lo exercise his constitutional power
of removal, and then every obstacle is with
drawn. And what security have we, that, in
the course of time, some such man may not,
in the hour of popular infatuation and delu
sion, be elevated to the Executive chair ?
None sir, for history affords the important
lesson, tint every tyrant, who lias ever over
thrown the liberties of his country, has done
it under the hollow professions of the good of
the people, and have often made the people
the deluded victims of their own destruction.
It is enough for me to see that this bill places
in tho hands of the Executive, powers which
may be easily perverted to the most dange
rous purposes. To oppose it, although those
who propose and those who advocate it, may
not have,and I am sure entertain no such de
sign. Hut, sir, one of the panaceas held out
for the dangers which I h ive adverted to, is
the reduction of the expenditures of tho Go
vernment to its actual economical wants.
Sir, this measure has been often read to this
body ; yet, as often as it has been read, the
expenditures of the Government has as often
departed from the true principle of economy.
F rom some cause or other our expenditures
constantly increase. For these extravagancies
in expenditures, I do not hold the Executive
responsible. I hold Congress responsible.
It has almost uniformly appropriated largely
beyond the Executive recommendations. Up
on the subject of appropriations, a large num
ber of the friends of the late administration
voted for appropriations at war with its opin
ions ; but whether sanctioned by tho Execu
tive or not, thoso appropriations have been,
and will, I fear, continue to he made ; and the
expenditure, of course, placed in the hands
of the Executive, so that the effect is tho
same,-as far as the question of patronage is
concerned.
Mr. Chairman, T conclude this part of my
argument, by referring to the following extract
from Gen. Jackson's Message of Dccein'ier,
1831, in which he says,
" In tiir nBi"t,\nn\s which Congrens may pp k
KI atn-: HK<<PKCTIV<I tub CUSTODY OF Till'. I-C31.IC MONEY,
ir is ubsihabi.e that as i.itti.b DtacRcrioM as maybe
DBKMRl) CONSISTENT WITH Til Kill SIPK K I'.KPlNG, KHOLI.D
be given to Executive aok.nts. No one c:in bo mure
deeply impressed th in I am with the soundness of
the doctrine, whicli restrains and limits, by specific
provisions, JZ.crvtidiscretion, as far as it can hi
d ine consistently with the preservation of its consti
tutional character. /. t rtsprt in tk- control over ike.
fHhllc mnii.'!/, this dor trior if peculiarly npfdicabll."
(ien. Jackson's Message, De<\, 1K3'>.
In every word and every sentiment of which
I most heartily concur, and shall give earnest
of my concurrence by voting against this
scheme, which is directly at war with it.
Hnt, Mr. Chairman, in the Message of the
President, and the Report of the Secretary of
the Treasury, the dangerous political influence
which a connection between the Government
and the hanks may exert upon the integrity
and liberties of the country, la urged a? a
reaaon for discontinuing the connection which
has existed from the founda'ion of the Go
vernment to the present hour. Sir, 1 am not
only surprised at this reason, but llie source
train wliich it come* i for, sir, practice dis
proves the danger, and it is directly at war w it 11
the opinions of the late Administration, and
ihose previously expressed by these high pub
lic officers, 'l'his argument is directly at war
with the argument of Gen. Jackson's Mca
?9ge of December, 1834, upon this subject,
in which ho says,
" The attention of Congrciu iacarticatlv invited to the
regulation of I he de,K>ailea in llie Sla'e Hanka, by law.
VUhoiiL'h llie |wwer now rxrreiaed by the Lxecullte
druartmctil in liu* behalf, ia only aiich aa waa uniformly
exerted through every edminiatralioii from ihc origin of
the Govcmnienl op lo thu eaubliehmcnt of ihc preacnt
Honk, vet, it ia one which 'a euacepUble of irritation
bv lawj and, iheiefore. ought ?o to be regulated. The
mower of Congrr?? to direct in what place* the ireaaurer
shall keen the nonevs in the Ireaaurr. and lo wipoae re
al nctiotia upon the Eseeuline niilhorHv, in relation lo
their cualody and removal, ia lUillfuHcd. and ila iseiviao
mil rather lie courlrd lhaii diaoouraged by ihoae public
officera and agenta on whom re.ta the reaponaibilily for
their sifet* It ia d.airahle lhal na little power aa |xw
mlilc .hoiild be left lo thu J'rcaideiit or Secretary of the
'l'rcaaury over ihoao inaiitutiona?which, heitg thus
freed from rxeenhre influence, and without a. etimmon
in direct then oprralionn, would hare neither the
icutfitaliun uur the ability <?' interfere in the juditical
conflicts of the eouutry Sot denemp then tharleri
from the national uuifwritiei, thry would uerer h'ire
tlione inducement* to mcildir in penerul clciliuni. ichick
hate ltd Ihr. Bank of the United S'alrs to delate and
convulse the counti ij for upward* of tiro years. '
Also, his Message of December, 18.15, in
| which he says,
" Dy the use of the S:ate Itank.^, which <lo nut dc
j rive their charters from the general government, and
I arc n->t controlled by its authority, it is ascirt<uned
i tflU thf ttutu *ty.i of t/l? Vailed States en it be tollc-zUd
aiul disbursed without loss or iuconrcimnct, .mil that
all the want-, of tile community, in relation to ex
change and currency, are supplied as well as they
ever have b^i-il b -fore."?Message of Dec., 18^5
These sentiments were concurred in by the
late Secretaiy ol the Treasury, (Mr. I am y,)
by the committee of way3 and means of 1834,
in tbeir able reports ; and by the present Se
cretary of the Treasury. 1 would now inquire
what new developments have transpired, to
chan?o these decided and unequivocal opi
nions ? What political intrigue lias the banks
been engaged in ? what elections have tliey
interfered with7 what political influence have
they attempted to exercise? and when ? and
has it been since the last session of Congress?
1 know of none, and 1 have heard of none. II
the opinion is merely speculative, then expe
rience leads to nn opposite conclusion. Mr.
, Chairman, let us simply refer to facts, and
draw from them the most rational and direct
conclusions; and every man must be con
vinced lliat this reason is not sufficient to jus
tify a resort to the system now under consi
deration?the officers of the hanks hold their
place, at the hands of the directory ; the
dircctorv, of the stockholders, and the stock
holders at the hands of the State Govern
ments. The bank officers, directors, and
stockholders, none of them, bold their place
at the discretion of the fidrrol Executive. I he
only influence, then, which the Executive can
exercise over these institutions, will arise out
of the profit which may be durived from the
use of tho public money, which may, from
time to time, be deposited in their vaults:
this profit, with but one or two exceptions,
will not be sufficient to benefit the banks to
hazard the displeasure of the State Govern
ments?always overlooking their operations
?anil to draw them into any of the corrupt
purposes of this Government. Under the
system proposed, the tenure of all the officers
holding the public money, will be at the dis
cretion of tlie President, without any coun
teracting influence whatever. Let any man,
then, judge where there is most danger of
Executive influence, with the banks or the
executive officers. The response is not doubt
ful.
The next objection which occurs, to my
mind, is, that the system proposed will exert
a hostile influence upon State institutions, and
he subversive of State righ's. Mr. Chairman,
no member has intimated the idea, that for a
long period of time of war, tho .country can
divest itself of a paper circulation, if the
soundness of the circulation is preserved,
there must be some harmony of action. The
natural war which paper wages against specie,
and specie against paper, must be avoided.
This bill, which stril.es at the credit of the
banks, by excluding their notes from payment
of public dues, and thereby necessarily nar
rows the boundary of their circulation and
lessens their profits will necessarily produce
a counteracting policy on the part of the
banks; that policy will be. the resort to small
note issue.-', for in this way alone can they
drive specie out of circulation to enlarge their
own, and thus add to the embarrassment of
the country. Hut, Mr. Chairman, this is not
the most serious objection to this bill: it will
engender jealousy and hostility on the part of
vilie States towards the federal Government;
a stale of things greatly to be deprecated, and
pregnant with great, evils to our institutions.
Mr. Chairman, do you think that the States
will, be passive tinder the operation of a sys
tem which is so blighting to institutions
created, nourished, and matured by th?m ; and
to which they are so much indebted for their
present flourishing condition, and their rapid
march in science, wealth, internal improve
ments and general prosperity. Will they see
these means of their future prosperity sapped
and destroyed. I iliink not. I'ass this hill,
and then arm this Government with the
power of a bankrupt law, in relation to iliese
banks, by which a bo ard of commissioners,
appointed by federal authority, may discon
tinue any of these institutions, and you at once
place t!ie:n at the mercy of this Government.
This, sir, I cannot consent to do.
Mr. Chairman, every State of the Union,
I do not doubt, has some interest in the
preservation of the credit of its banks.?
The state of Virginia has invested in stock,
in her various banks, three million seven
hundred and seven!i/-ei<^ht thousand dollars.
They arc the depositories of her internal im
provement fund, and her fund for the educa
tion of the poor. Think you, Mr. Chairman,
she will stand quietly by and sec these banks
discredited and impaired to the hazard of these
immense funds and their successful employ
ment, and surrender her systems of improve
ment and education. I think not. How gen
tlemen have arrived at the conclusion that the
people generally are opposed to the banking
institutions of the country, I ain at a loss lo
discern. These institutions were all charter
ed by tho representatives of iho people in
their respective state legislatures?represen
tatives who are annually elected, an 1 whose
conduct is stri' tly scrutinized. How many
have been repudiated by tho people for incor
j porating hanks ? 1'ew, very low. How many
I would obtain re-election after voting for their
destruction ? Not one, I dare believe. Thie
fact alone, sir, Conclusively prove*, that the
people sustain these institution*, however
much they inay bo disposed to cvrrect, and
no doubt will correct, abuses. Mr. Chairman,
there is another a-poct in which I view this
subject as highly imjiortaiit, and which I am
bound to consider. Sir, none of its can so
fur look into the lista of time as to see what
even to-morrow may bring forlh, although
every feeling of our hearts may linger around
this Union with the deepest filial regard and
solicitude, yet on the tide of time, and amidst
lh? storm of events it may be shivered into
atoms. It is prudent at all times to be pro
pared for events which wc most ardently de
precate, but which may by |H>ssii>ility occur.
To meet any contingency, then, which coming
events may produce, should not the states
strengthen their internal resources, improve
their strength, and cherish tho*c institutions
which might in coming events be indispensa
ble to their safety ? The states entertaining
these views, will not be disposed to submit to
any system which may impair their strength
and dry up their resources. Mr. Chairman,
when in the progress of our history 1 saw
this Government claiming tho constitutional
power to charter a National Dank, to con
struct a system of internal improvements
within the jurisdiction of the states, and the
power of taxing the couutry liur the protection
of domestic manufactures, my fears that all
the powers of government would be concen
trated into this great central power, were great
ly aroused, lint, Mr. Chairman, when tho
< Government not only seeks to disconnect it
sell from these banks, and then in the form of
a bankrupt law hold over them a power which
in its exerc ise may destroy every one of them,
my jealousy is increased. Now. Mr. Chair
man, I deny to this Government tho power in
this way to interfere with institutions charter
ed by the states, having the clear and decided
constitutional authority to do so. Sir, can it
be that this Government is invested wiih pow
er to impair or in any way embarrass the
operations of the clear constitutional powers
reserved to the states ? If it has, where is
the limitation T What institution may it not
reach ? what power may not bo impaired ?
I hese views, 'Mr. Chairman, have brought
inv mind to the conclusion, which many of
t he distinguished fiiends of the administration
formerly entertained, th.it this war upon the
State Hanks is a war upon Slate rights. I
speak of it as tho tendency, not as the design
of this proposition.
Mr. Chairman, the Committee of Ways
and Means have referred us to the examples
of France and England as worthy of imita
tion in the receipts, safe-keeping, and dis
bursements of their revenues, and to enlighten
us upon this subject, have hud a view of their
systems printed and laid upon our desks. Sir,
their systems are essentially ours, for in their
whole fiscal operations the banks are the prin
cipal agents. Hut, sir, I shall not look to the
monarchies and despotisms of Europe for ex
amples in so regulating the fiscal agency of
this Government as to secure the liberties of
the people and our free institutions. Sir, the
actual custody of the public money in Eu
rope by the governments, is accompanied with
the employment of immense standing ar
mies, who suppress and keep down liberal
sentiments, and keep unbroken the fetters
w ith which the oppressed people are bound
down. Sir, it was left for republican America,
for a free people, to devise a plan by which
ihe public purse can be so kept as to be ac
cessablo u> the Executive for nil legal dis
bursements, and yet so withheld from ?ts actu
al custody as to place it beyond the power of
abuse. Such has been tho effect of the sys
tem heretofore?such, I fear, will not be the
effect of the proposed system if adopted.
I have thus, Mr. Speaker, presented my
objections openly and fearless, and upon my
responsibility to my constituents. 1 may be
inisiakcn, and time may expose the error;
yet, sir, until the fallacy of these objections
are made manifest, I must respectfully to nil
with whom I dill'er, but firmly and decidedly
oppose the plan recommended by the Execu
tive.
(To be continued.)
bemarki of pih. leuarr,
On the Dill to authorize the issuing of Treasury Soles.
If ihc House will indulge roe, sir, at this late hour
I will make a few remarks upon the subject before it!
I candidly confess I have been all along favorr.ble
to the Issuing of these (Treasury) notes, without in
terest, or bearing a very small interest?two or three
per cent, at the outside?because I thought they
would answer, nnd answer very effectually the
double purpose of relieving the pro'vernment, r.n'd re
lieving, in almost an equal degree, the great body
of the people. I have no dread at all of such an is
sue leading to a system of paper monev, ns has b?en
s^id here and elsewhere. For one I go for no such
si/sl-m. I do not claim for the government the right
the constitution, of furnishing a circulating
medium, as such, to the community. But there is no
such power involved in the amendment on your ta
ble, or in that modification of it to which I have just
alluded, and which I greatly prefer. It is one of the
simplest anil roost usual forms of borrowing monev
v i hin the very letter of the constiiution. That pow
er is vested in Congress without any qualification or
reserve whatever as to Ihe manner in which it shall
b; exercised. By what authority?with what color
of plausibility, can gentlemen pretend to say to us
von may b irrow thus, b it not thus?this form of loan
is lrgal. Mat an nnhrard of and flagrant usurpation 1
Can h b< pretended that the founders of this "overn
ment, loorfin? forward to the infinitely diversified
exigencies of a society intended to be perpetual
spreading over a country vast, almost b -vond dis-'
enption, In extent, exposed to all the vicissitudes of
peace and war, of prosperity and distress, delibe
rately deprived it of a means of raising money to
which it has already been forced, en a memorable
occasion, to resort, .-nd which is perfectly famflinr
in the practice of every government in ihe civilized
world; nnd that too, when the power is convrvcd.fn
terms as large and comprehensive a; languagecan b-^ 7
I say, sir, tint this convenient form of loan, which
consists chiefly in r.ntleipating to meet casual cxi
?rencies, the current revenues of a country, i.s to
b ? met wiih every where in Europe. Every body
has h?ard of the distinction between floating anil
funded drb'. In Engl nnd there is always a lai"c
amount of Exchequer Bills in the market. The se
curities ol the Bank of England consist, almost ex
clusively of them, as combining srfjty and convc
vienco in the highest possible degree. In the conti
nental states Treasury lions are just as common.
In short, it we were not the only people upon earth
so happy as to know, only bv hearsay of the expe
dients to which, in the conduct of difficult affairs
states rue every where compelled to revert, gentlcl
men world scarcely express such naire astonish
ment an I alarm at one of the most usual of them.
But I repeat it, sir. I am not toutwitting myself to
the doo'rir.e that this government has, under the
constitution, an unlimited control over our enrrtnni
enher in this or in any other form. You know, Mr!
Speaker, what my opinions arc upon that subieet
from those generally cn'crtained in the part oft he
c mntrv which I have the honor to represent. I
have done too much in my humble way to fortify
and to ditiuse those opinions; I know too well their
importance, in a government constituted as this is, to
the weaker part of the confederacy, and especially
ni'ir that that weaker part seems threatened with se
rious aggression, to ab indon them, nay, nor to bite one
jot of their rigor and sternn">.*, for the sake of a
mere momentary relief and convenience. I admit
that when thfs House is called upon bv the Execu
tive to I ;>uc Treasury notes, as in every other ease
i>l loan, it ought to see that th" government really
wants money, and wants it too for bnnn fide f-rt'ml
(not nnimiuil, as they are called, or notional) pur
pose* That is the restriction, sir. That is the
sound practical rule from which I will never consent
to depart; and if 1 did not thick that U applied to our
actual situation, I should oppose not only the bill on
(fee table, but every other bill for raising aappUcs at
the pro-eat moment. Hut the cose presented, and,
so far as I have b-en able to coasuler the matter
made i>Ht by the Executive, is that vithuu press
ing with a most *igid and prcbably ruinous seve
rity upon its debtors, ihe DepuMle Banks and
the merchants jwithout uggravaling, beyond ex
profeiuo, the calamitous condition of the times, it
must resort tovou for temporary aid?for authority
to anticipate ine fmits of our r'eiurnirx pnw-perily,
without formally laying the foundation ol a tew na
tional dt bi, and lo erente a species of l<wiw, which
w ill not only furnish y.itt witn the means you want,
but, incidentally, relieve the embarrassments of the
community, and especially, in the great r.nd impor
tant interest of our domestic exchanges.
But, says the gentleman from Virginia before me,
(Mr. Wise) you are turning the government into a
Hank?you are creating a great political corporation
to trade in money, at tlie very moment that you de
cide it to bo inexpedient lo charter a commercial
corporation for the same purpose. Why, sir, re
cording to this ver" r.ivel definition,every dcLtnr isa
b inker?-it i* the borrower, not the lender, that be
longs to that privileged class. (A laugh.) lOhisis
true, we are a nation of b inkers. ["Soyouare,' from
Mr. Wi*eJ?"over-brnked" to use the common
phrase, will a vengeance. But on what posvble
ground can such a proportion b_* advanced ! 1 he
st.ites, it is said, are Unbidden lo issue billt of credit.
What are bill* of credit f Mr. Madison, as appears
from one of the documents hid upon our tables, in a
leUer to a gentleman of some distinction in Penn
sylvania, affirms, without hesitation, and as a thing
quite settled, that it is of the very essence of Mica
paper?its distinctive characteristic, iutpecifc differ
cue , so to sjieak?that it b* made a legal lender.
[Mr. Robertson of Virginia. It has b;en decid
ed otherwise.]
M. Lroahic. Where, \ih n, by whom 1
Mr. RonKfiTEON?by Judge Story, (cries of' Go on,
go on.") Mr. Legare continuing: Sir, 1 will exa
mine the correctness of that opinion pie<cntly. In
the mean time, I b 'g leave to state lotne Iloiise that
Mr. Madison only repeated inilieletteralludedto, the
opinions which lie had previously cither expressly or
impliedly advanced, not easu illy,loosely or inconsi
derately, bit in the most delib erate manner end on
the most momentous occasions. In his first mes
sage to Congress iu the session of '15?' 1*? he goes
even further than in that letter?further, as I have
said, thriii as at present cdvised, 1 am quite willing
to follow him. He dis'.inc ly pe-en's in that slate
paper, the alternative of a National Bmk, or a Go
vernment currency. Now, sir, I feel that I owe it
to the House and to truth, 1 owe it to my own sta
tion here and the candor which I ever feel myself
obliged to practise in debate,to state that Gen. Hamil
ton, in his celebrated itypori upon the Bank in '1)1, docs
seem to treat such Government issues as the very
description of Bills of credit, so notorious under
the old order of things, and therefore interdicted for
ever to the legislation of the States. He admits in
deed, that the interdict does not apply to us, directly,
but he very reasonably thinks that it at least hints
a rule for llie conduct of this Government, which it
ought not, lightly, to neglect. To take up the mat
ter on principle it might well b ? asked, what harm
is done by the issue of paper which no b:>dy is
obliged to receive, and every bxlv may profitably
me, in payment of public dues'! But even if you
allow, as I will not undertake to deny, that a mere
issue of currencv, as tuck, comes within the prohibi
tion?what do you meau by currency ? Is it pre
tended, for example, that the States, with their vast
residuum of political power and public duty,can not
b?rrow money, and give to their creditors the evi
dence of debt assignable or unassignable I And if
these evidences or acknowledgments of deb' pess?as
pass in these times of active commerce they inevitably
will?from hand to hand, do they become violations
of the Constitution for that 1 Sir, it is a false, wild,
chimerical conccipt that such a notion ever entered
into the heads of tlie majority of the Convention in
'88, or that kindred idea, so often uttered of late, that
all b inking corporations in the different states, mere
private partnerships chartered by the legislatures,
fall virtually within the prohibitory clause. It
seems to me no'hing short ol monstrous to imagine,
that the States, charged as they are with all the high
obligations of civil society?of defence and protec
tion, of police, of education, of justice?With almost
every thing th.it relates to the order and well-being
of a community, could have thought, for a moment,
of depriving themselves ofa resource without which,
in modern times, no free commonwealth can possi
bly manage its affairs without often falling into the
most perplexing and even perilous embarrassments.
And what is the argument bv which it is attempted
to lay them under such a disability 1 Why, lhat
Congress, having the power to coin money and re
gulate the value thereof?was intended to have a
complete control over the currency! Now what is
enrrcncy, or rather, what, in these times, is not ??
Where will yon-draw any practical line bitwen one
acknowledgment of debt, one bill of credit, if you
please, and another, when in all their effects, commer
cial end political they are evidently the same ! Sjr,
having bestowed much thought and research upon
this most difficult and important of all the subjects
that now challenge the attention of a public man,
with opportunities perhaps more favorable to the
discovery of truth, and to the forming of correct con
clusions for the conduct of affairs, than it has fallen
to the lot of most persons to enjoy, and finding, after
so many nights end days of patient inquiry, the diffi
culties which surround this rubjecl rfiuost as many
and (to me) as formidable as ever, I have been fill
ed with wonder since I cainc here at the confident
and dogmatical tone of many persons (on nil sides)
whose conclusions have cost them far less pains ami
b^en adopted without any such loss of time.?
Among other things coolly taken for granted is the
meaning of this word "currency." Now, sir, if
gentlemen will be at the trouble of looking into the
Minutes of Evidence taken before the Committee
of the House of Commons charged with the ques
tion of the renewal of the Bank charter in '3*2, they
will find that with Ihe exception of small sums paid
away in wages, the whole circulating medium of
Lancashire, Warwickshire, the West Hiding of
Yorkshire and other, if not all the great manufac
turing districts of England consisted at no remote
jieriod exclusively of bills of exchange.* The
whole circulation, I say, iu which the immense bu
siness of the most flourishing manufacturing and
commercial empire in the world is transacted?and
especially that part of its trade which has done so
much to enrich d >th this country and England?isal
most entirely composed of common mercantile pa
per, with which Government, according to the opi
nions of our people and the genius of our institutions,
has, by the confession of all men, no'hing whatever
to do. Sir, I shall have, I trust, some future and
b.Mter opportunity of going more at large into that
subject which has, fwr some time past, so deeply en
gaged, mid I am sorrv to have to add, agitated the
minds of men in all parts of the'United States?I
mean the credit system, under which this nation has
I grown up to he what it is. But I could not but take
I this occasion to remark how very loosely, with what a
I dangerous latitude both of phrase and opinion, we arc in
| the habit of treating these matters, and involving as they
! do all the fundamental interests of society, and of ex
j employing the remark in the use of one of the most fa
| miliar terms thai occur in our debute* and our dcclam.v
| tions. We talk of bank paper as if all the harm done
j bv expansions of currency were owing to it alone.?
Why, sir, bank notes, even iu the times of the most ex
travagant issues, nre but a part, and even a very small
j>art of the circulation'act in motion by the operation of
the credit system, at a period of great excitement, iu
communities advunced in civilization, and having all
the facilities of an extended commcrcc. Tliey are the
efflorcscencc?so to express it?the (lo ver, the blossofn
of ihe currency of such a country, essential, I admit, to
its perfection and frnitfulness, but no more the whole
bod/ and frame of lhat nighty tree, than that cistern
portico is to this capilol. But it is not mv purpose to go,
at this time, into the consideration of this subject in all
its bearings and extent, and I liavo said already enough
to awaken the House to ihe danger of those loose and
sweeping generalities in which it is liecomc so much
the habit, in this country, to deal, even in the most nn
portant practical concerns.
A* to the constitutional power of Congress, then, to
issues these note under existing circumstances, I enter
tain no doubt at all. at least with reference to the ob
jections mainly relied on in this discussion, and especially
by the gentlemen over the way, (Messrs. Fletcher, Phil-,
lips, and Cusliing of Mass ) Bat to the issuing them
? No. 4'IOfi, Mr. Dvcr, " By circulation I mean not mere
ly local notes, hut bilhnf txchtlHgr,"
No -I'271?The same?"To deny tho Lancashire
l.ullks to bo hunks of issue'because they issue only jm?(.
j notis to make a distinction withnt a difference !"
I It is stated i'i No. 1.161 that the Imnks of Lnncadiire, at
that time, did not issue notes, properly so called, but
dra ft*, at different dates up to Ihrrt months, upon their
a cents in London. In 1825 and othertim^s of excitement
they were circulated to an immense amount and did as
much mischief by an enlarged currency of paper as was
done in other pirts of Knxlxnd !<y
So Xo. 5330, IM.?" Hiils of exchange format p~'sent
I (It!.;) t!ie pre.it currency of Lancashire ani they fnrncd
i almost the exclusive currency with the exception of small
| notes paid for wages, till within th"*c lust seven years?
[192-5 to 1*32. ]
Tiien follows lh" statement that nine tenths of all the
buMiiest of the counties mentioned tlioeo aw represent
ed f.jr small bills.
I without interest or with ? very (mall interest for which
j I repeat my deeded prefrrehee, another difficulty has
1 lieen presented by iny friend from Virginia near me (Mr.
Hubert ton.) He maintained that a? the Constitution
foibtda any thing but ({old and siUel lobe made a legal
tender by the Slates, it implicitly requires that we atiould
pay live debts of this Government only in speciu or in
what is equivalent to it. Ami yet, in almoat the same
breath, the gentlemen proceeded to denounce the I's
rcutive for not being saltafied with the bank notes of the
States which be maintained are really not all depreciat
ed. Sir. on thia last head ! agree with him entirely, at
leaat to far as regards the state of our paper currency
j in the southern Statea. I maintained when I firat came
here what haa bceu aince demonstrated iu a masterly ar
gument in another part of thia building ? and la strik
ingly corroborated by the recent fall in exchanges, that
the price of bullion had been raised bv an extraordinary
fori ign demand, and was no proof whatever of the re
dundancy of the circulation, which haa been very much
reduccd within the last ten nionlha, and ia probably
even inadequate to the necea?ary exchanges of the coun
try, iu the uaual course of buaiuess. But if this is true,
as I have no doubt it is, then the right of a creditor un
der the Constitution to demand specie for hia debt, be
comes that MuiHiHum jw which all the world over, ia
iummu Injuria. And if thia is the case us between in
dividuals, why should a rule so very different be applied
to the transactions of Government I Nay, the news
brought us from New York thia morning la that while
gold** only at 5 per cent. premium, treasury drafts are
at 4 : for you must remark, sir, that the letter of Prime,
| Ward & Co , received just now, ia dsted at least a
i fortnight ago, and since that time a most decided
1 change lias taken place in the specie market a? well as
in foreign bills. 1 think then 1 am perfectly safe in af
firming that there is no danger whatever of the contem
plated treasury notes falling below what, by the confes
sion of live geulluuiau himself, ought to satisfy any man
not bent upon enforcing a contract according u> the ut
most rigor of the law, in a manner inconsistent with
equity and good conscience. We shall pay our cre
ditors in what is 4 j>er cent, above those bank notes
which arc there acknowledged to lie at their full value
in reference to all other oominodiuea but gold and sil
ver. ,
[Here Mr Robertson said nothing was at par, which
was not equivalent to gold and silver, or something to
that effect ]
Mr. Legare. Then why find so much fault with the
Government for demanding gold and silver of its debt
ors'! The gentleman is plainly in a dilemma, from .
which it is not easy for him to extricate himself,
[Mr. JU>Bfc?T80M said, with the permission of the
gentleman from South Carolina, he would make a brief
explanation. He had not at all discussed the question
of depreciation. He could not admit, however, that
l>aper money.was not depreciated. On the contrary,
he insisted iliat it must always be regarded in a legal
Minse, as depreciated when below the leal standard?
gold and silver, without regard to the causes, whether it
be a foreign demand or any other, which may have occa
sioned the difference. Still he denied the policv or jus
tice of exacting gold and silver at this time in payment
of the public dues; when it could not be procured but
at a high premium, and when indeed there was scarcely
any other currency st the command of the people than
depreciated paper. He thought it was oppressive in
this Government to exact this sacrifice?to reject that
which the State Governments were content to receive ,
and what in the ordinary transactions betweeu man and
man, it would be deemed immoral and dishonorable to
refuse ]
Sir, I am charmed to hear the gentleman say so.
Then whv should the public creditor call Upon the Go
vernment to do, for his benefit, an immoral and dishon
orable thing ; and why should he think himself wronged
if we offer him what ia st this moment four jwr cent bet
ter than the paper which, according to the gentleman's
own showing,ought to satisfy every equitable and consci
entious man 1 But the truth is, I apprehend no difli
cultv at all from those to whom we shall have payments
to make, and through whose hands these notes w ill
almost, without exception, make their way into circula
tion. They will receive them cheerfully, and without
hesitation ; and although I perfectly appreciate the de
licate and honorable scruplcs which some gentlemen
seem to feel about offeting in satisfaction of the public
dues, a paper ever so little inferior to the only legal ti n
der recognised in the constitution, yet I cannot, my
self, in a matter left, after all, entirely to the free w ill of
the party, cannot consent to sacrifice substantial justico
and the public good,to what I must consider as a super
stitious sdherence to the mere letter of the law. Nobody
at all versed in these subjects, now regards the precious
metals as any thing but an approximation, and often a very
imperfect approximation to a correct measure of vain \
They have been adopted from the necessity of the
thing, as the two great " commodities of commerce"
furnishing a ready medium of exchange for all oilier',
and, on the wiiolc, the best practical means of compar
ing them ; but they arc still, like the rest, mere commo
dities, subject to a very great fluctuation in value, ac
cording to the common principles which govern prices
The present state of things furnishes, in my opinion,
a sinking example of this important truth; and now,
I ask, whether any really just man ought to complain
of us, if we offer biin these notes, with the most perfect
liberty to refuse them at his own discretion, anu treat
us asalehtors on his unsettled account; if in making
that offer, we hold to him ihe frank, manly, and reasona
ble language dictated to us by the tfuth of llie case, and
the actual si'uation of the country?if we say to him
" gold and silver, which is in strict law, though not
in good conscience, your due, wc have none, liy an un
foreseen and terrible revulsion, by contingencies beyond
any human control, our debtors have been, Biid are still
unably to meet their engagements with us in the usual
way. The country is in deep embarrassment and dis
tress, and we cannot, even were we disponed to do so,
press them to a literal compliance with their contracts,
without involving our whole people, more or less, in the
fearful consequences of the bankruptcy that would.pro
bably ensue. We give you, however, an acknowledge
ment of your claims against us, which will be every
where nearly as good, in some parts of ihe country,
probably better than the precious metals?which, at all
events, is at a premium, in reference to what yon would
not hesitate to receive from a private debtor ; and we
put it to your patriotism and your sense of justice, to
dccide whether we have not, to all substantial purposes,
complied w ith our engagements." Sir, depend upon it,
such an appeal to the good sense and the generosity of
our fellow citizens, will not be made in vain.
The right of the Government, therefore, in every
? sped ol' the case, being, as I conceive, fully esta
blished, the only remaining question is, in what form
will these notes be most beneficial to the public ?
Whc:her it is better to issue them bearingan interest
of not more than <> per cent., or bearing either no in
terest at all, or a very stpall one, to be ascertained by
the House. And this brings me to the difference be
tween me and the Chairman of the Committee ol
Ways and Means, or to express it more accurately,
perhaps, between the Senate and the Committee ol
this House. Sir, I admit that these notes nt a high
er rate of interest than! approve, would serve fin ex
cellent purpose as remittances to Europe?but ex
changes, as we have seen, are ready fallen nearly
50 per cent, within a very few days, ami there is
every reason to believe that as soon as the coming
crop shall be brought to market, they will be down
ol par. But the prospect of an improvement in our
j domestic exchanges is unfortunately not so good. Ail
immense debt is due from the West and the Sotith
I west to the great commercial capitals on the Allan
' tie, to the payment of which, notes bearing a high
I rale of interest will contribute no aid whatever?
| They will, you may rely upon it, sir, be Instantlv
j b night up by capitalists for investment. They will
disappear entirely, as gold and silver have-disappenr
ed. In consequence of the shock given to all credit
by the late revulsion, there are immense depositee in
oil your banks waiting for some safe opportunity to
lay them out on any reasonable terms. The answers
made to the Circular of the Secretary of the Trea
i surv, have no weight at all with me, not onlv because,
! as I said just now, a very material change has occur
j red in the price of bullion since that date, but for se
J vera! other reasons which need not be dw elt upon
I here. These notes arc not intended to go into the
| market at all. My idea of the proper use to be made
of thctn is that they shall be passed away, as I have
i said, to the functionaries and creditorsof the Govern
j meat. I repeat, that I have no doubt that they will
j be readily accepted by them, and that the extravagant
rate? of exchange between the different parts ol the
country, will keep them tin at a considerable premi
um in respect of the best bank paper, and nearly, it
not quite, at a par with gold and silver.
1 ??
?Dy Mr Kin?, of Georgia.
| " The proposition of Mr. Lfioii 1 to ilis
snlce all eonnrrtion between the Treasury anil
Bunk*.'' is disorganising, revvlutionary, suhver?
sive of the fundamental principles of our go
vernment and its entire practice, from 1 ><H
i down to this day ; it ts as palpable as the sun
that the effect of the scheme would be to bring
the public treasure much nearer the actual cus
tody and control of the President than it ts
now, and e.rpote it to be plundered by a
tired hands, where one cannot now reach it.
Washington Globe of November 20, 1834.