In order, therefore, to discharge that excess, and retain, of the money reserved on the 1st of January, one million, which is the smallest sum deemed proper, under the acts of Congress, for the efficient operations of the mint, and at least three or four millions more to answer sudden and contingent calls, there will probably be a necessity to resort to the deposites now with the States, and to the instalments destined for them in October, or to some other resource, for a sum equal to $10,000,000. By a report of the Treasurer of the 30th ultimo, it appears that the balance in the Treasury, including what was in the custody of banks, the mint, and collecting officers, was then $14,596,311; that the amount of this subject to immediate draft was only $8,928,072; but the whole balance in the Treasury, including all which had been deposited with the States, and ordered to be, though only a small part of the amount is subject to immediate draft, was $41,532,381. Deduct all which has been, and was designed to be, deposited with the States, and there would be no balance left on hand subject to draft, though including every thing in the mint, and in the possession of receivers and collecttors, which is applicable to general purposes.

Hence it is probable that, besides the deficiency for the expenditures of the year, no sufficient means of any kind will exist on the first of October next, after defraying the intervening expenses, to complete the instalment of deposites then payable, unless a large part of the bonds for duties postponed to that day, and amounting to near $4,000,000, and the million and a half then due on the first bond from the United States Bank, shall be punctually paid, or, in the mean time, some provision on this subject made by Congress.

The money standing to the special credit of the Post Office Department and the Patent Office, as well as various trusts, is not included in the above exhibit, for reasons explained in the last annual report. Outstanding and unexpended appropriations at the end of the year will, in this view of our financial condition, be still left charged on the Treasury, amounting to about $16,000,000.

This does not differ much from their amount at the close of the last year. Whether the appropriations unexpended on the first of January, 1838, prove, therefore, to be one or two millions larger or smaller than is now anticipated, it must be manifest, from all the above data, that some new legislation is indispensable to complete satisfactorily the service of the year, and leave a suitable amount in the mint and the Treasury.

Indeed, before submitting the last annual report, the in dications of a decrease in the receipts, and of an approaching revulsion in our commercial prosperity, appeared so strong to the undersigned, that he felt compelled, with reluctance and regret, because differing so much from the views of many others, to estimate the accruing receipts for the year at only $24,000,000.

As the appropriations asked for were about $27,000,000, it was then suggested that the occurrence of a deficiency was probable. When those appropriations became in fact enlarged by Congress to more than $32,000,000, it rendered a deficiency inevitable, to the extent now anticipated, unless the receipts should happen greatly to exceed the estimates.

II. ON THE POSTPONEMENT OF THE PAYMENT OF BONDS FOR DUTIES.

The first suggestions which will be submitted concerning such special legislation as appears proper in consequence of the recent embarrassments of the country, relate to the postponement of the payment of bonds for duties.

might increase the security of the Government for eventual payment, but, in an emergency so great, and to many so unexpected, to furnish all the relief from sacrifices which could judiciously be extended under its limited powers, and in anticipation of what would probably be its straitened condition in a few months.

A postponement of the payment of the bonds falling due was, therefore, and in accordance with the views of the Executive, authorized for periods from thirty to ninety days, on interest and additional security, and in a manner more liberal than usual, by permitting it before as well as after suit, in all cases of embarrassment, great hardship, or insolvency.

The peculiar terms, and the reasons for such postponement, are more fully set forth in the documents annexed. [A. Letter from the Secretary of the Treasury to the collector of New York. B. Instructions of the Solicitor of the Treasury.]

When the difficulties in discharging bonds in a legal currency became increased by the suspension of specie payments in some of the principal cities, and the President decided to call a special session of Congress, the postponement was allowed to be extended till after the commencement of the session, in order that an opportunity might be afforded to obtain further relief by new legislation. Urgent requests were made for an indiscriminate delay of payment on all bonds to the 1st of January next, and for the receipt, in discharge of them, of notes issued by banks not paying specie. [See memorials from New York, Boston, and New Orleans, and copies of a reply to one of them, and letter to collector of New York, C, D, E, and F 1 and 2.]

It was not deemed proper to comply with these requests. But as long a delay as our fiscal situation justified, and every relief as to the currency which seemed legal, by the receipt of debenture certificates and Treasury drafts, for duties were permitted, in mitigation of the existing embarrassments.

Having, in this, done all that a sound and liberal exercise of the discretion of the Department appeared either to justify or require, no intention exists, nor would it be proper in the present state of the Treasury, to grant any indulgences beyond those already authorized, without the express direction of Congress.

Some further facts which may be useful to aid its members in coming to a correct conclusion on this subject, are, that the amount of bonds which have already been postponed to the 1st of October, is about $3,500,000, and by that date will, it is presumed, be increased to $4,000,000.

If Congress permit no longer postponement, the receipts for the year will probably be increased by the indulgences already granted, as they have been allowed, generally, on additional security, and always on interest.

But as suits and delays in collection will still occur, though to a less extent than in the first stages of the pressure, it is expected that not over two-thirds of the amount postponed before the close of this month can be collected during the current year.

The bonds already put in suit since the middle of May, amount to nearly $1,000,000. But if Congress extend the postponement till next January, as was originally requested by some of the parties, or for one year, as recently requested by the Chamber of Commerce of New York, (F 3,) the receipts for the present year will probably be thereby lessened from four to five millions.

Should Congress, however, adopt an intermediate course, as an act not of mere benevolence, but of additional relief, which appears reasonable, under the extraordinary mercantile distresses of the times, and more safe to the Government, in respect to eventual collections, it might sanction a delay not to exceed, altogether, six months beyond the

ury Department felt an anxiety not only to take steps which

computed that this would diminish the receipts, during the

present year, about two and a half millions of dollars; but, if granted on the usual terms, would increase the receipts, next year, in a greater proportion, by the interest accruing, as well as by the fuller collections which would probably be made in a greater number of cases.

The opinion of the Department on these various propositions is, that, considering merely our present financial necessities, no further postponement can be regarded as expedient, though in some other respects, as fully detailed in the recent letter from the Chamber of Commerce, (F 3,) the last delay mentioned might be found justifiable and more beneficial. But if a law be passed extending credit on the bonds, it is supposed that, in any correct view of the subject, its provisions need not be continued in force beyond the period when the worst effects of the pressure will be likely to have ceased, and when all imports could, by a further extension of the warehouse system, be advantageously made payable in cash, at the time the goods are wanted for immediate consumption.

The extension of that system is, therefore, respectfully recommended to the consideration of Congress, in connexion with the present subject, as it might introduce as great an improvement in the collection of imposts, as the substitution of cash for credit did in the collection of revenue from the sales of public lands. It would certainly increase the security, ease, and promptitude of the operation; would dispenge entirely with the trouble and risk in the payment of debentures; work favorably to the manufacturing interests; and, at the same time, facilitate our trade in foreign articles, as well as exonerate the merchant from many embarrassments in regard to sureties and guarantees.

III. OBSTACLES IN THE WAY OF TRANSFERRING THE LAST

INSTALMENT OF DEPOSITES TO THE STATES.

Early legislation has likewise become necessary, either to withhold or postpone, for a reasonable period, the fourth instalment of deposites with the States, or to furnish such aid as may be necessary to complete them in a satisfactory

manner.

By the general suspension of specie payments, and the consequent necessity, under the deposite act, to discontinue most of the public depositories, the transfers from the banks in the West and Southwest to the seaboard, which were necessary to place much of the money in a position to be conveniently lodged with the States in October, have, in several instances, been defeated. They had, as in case of the former instalments, been ordered seasonably, though, as a general rule, only where rendered proper, in consequence of a great accumulation of public funds in an unfavorable situation, on account of the course of trade and exchanges, to be paid directly to the respective States. But, in the troubled condition of the money market, they had not been injuriously hastened as to the time of payment, and, consequently, falling due in the course of the summer and early in autuinn, near two-thirds of the whole amount of these funds still on hand have been detained in the West and Southwest, where they had so unusually augmented from the large sales of public lands. Hence, if the last deposite with the States was, in this position of the money, to be attempted, the orders directing it must, in many cases, be made on places remote, and very inconvenient to some of the receiving States, on account of the unfavorable balance of trade, or the rates of exchange; and must be met, if at all, in a currency unacceptable and greatly depreciated. Transfers of portions of the July instalment could not, from the same cause, be effected in the precise mode intended, nor from the banks most desirable, though much of it had reached the appropriate points, to render the operation easy, before the suspension of specie payments. In all cases in which they were not offered to be paid in a currency satisfactory to the States, their agents were requested to return the orders of transfer till Congress could make

[25th CoNG. 1st SESS.

new and suitable provisions on the subject. [See form of letter and postscript to States, G.]

But this request has not always been complied with. About $1,165,575 of that instalment has not yet been receipted for by the States to the Treasury, nor the orders returned. On the contrary, the United States Bank, chartered by the State of Pennsylvania, has lately become the purchaser of several of these orders, though not given by any debt, but merely directing a transfer from one public depository to another. This institution has demanded of the banks on which they are drawn that payment should be made to her in specie; and, on their failing to do so, has caused the orders to be protested. Under these circumstances, and, as the deposites with the States were to be made of what was in the Treasury, and consequently in the banks, on the 1st of January last, it is for Congress to decide whether payment shall be made of any of those orders in a mode and currency different from the rest of the third instalment of deposites with the States.

Another reason for withholding or postponing the October deposites, or for some legal provision to aid in completing them, is, that a sum equal to the revenue probably accruing, and a large portion of these deposites, had, before they were payable, been expressly appropriated by Congress to other objects. When looking to the rapid decrease in our receipts, to the expected deficiency in the course of the year, and the great amount of outstanding appropriations which, at the close of it, will be left unpaid, much of that whole instalment seems likely to be needed at an early day. By either of the first two measures, the money could, according to its original destination, be applied to the necessary wants of the General Government, as soon as it can be drawn from the banks in legal funds. In that way, 60 desirable an object would also be accomplished, without the expense and delay of the money being first paid over to the States, and then subjected to an early recall. On the other hand, several of the States might, in the present posture of their affairs, experience considerable inconvenience, either by not receiving it, or by soon refunding a large portion of its amount; and many of the banks which hold it might be able more satisfactorily to pay it to the States than to the Treasury. But, though the subject is one of much delicacy and difficulty, and peculiarly proper for the final action of Congress, it may be expected that this Department should express some opinion as to which course appears most eligible in the present condition of the finances. It is, therefore, with deference, suggested that, when regarding their condition and the importance of meeting with efficiency and good faith all the obligations of the Government to the public creditors, it would be most judicious to apply the whole instalment, as fast as it is wanted and can be collected, to the prompt discharge of these obligations; and that the last deposite with the States, not being a debt, but a mere temporary disposal of a surplus, should be postponed until Congress, in some different state of the finances, when such an available surplus may exist, shall see a manifest propriety and ability in completing the deposite, and shall give directions to that effect. Consequently no further steps will be taken as to the deposite of any part of that instalment till Congress has had an opportunity to act upon the subject in such manner as, in the present posture of affairs, its superior wisdom may consider preferable. IV. DIFFICULTY IN PAYING THE APPROPRIATIONS, AND

ON THE ISSUE OF TREASURY NOTES.

Some further obstacles exist in the way of discharging satisfactorily all the appropriations which have been made by Congress.

The effects which may be produced upon the accruing revenue, by granting or withholding further delays on bonds for duties, have already been explained.

In addition to these, there is a likelihood, in the present

pressure, that the payment of cash duties, to the extent of one million of dollars more than usual, will be unavoidably deferred to another year, as the importers, under the existing laws, are entitled to certain delays, by keeping in store the woollen goods which pay such duties.

This circumstance, in connexion with the difficulty of collecting the bonds, whether longer postponed or not, will sensibly increase the embarrassments which have been specially pointed out, and otherwise exist, in paying with promptitude and in a legal manner the large appropriations chargeable upon the residue of the current year.

Hence, after a considerable deficiency in the available means became highly probable, it was deemed expedient to adopt any judicious and lawful measure to remedy it, which was within the power of the Department. Accordingly, though large quantities of public lands were still in market unsold, and though the receipts from this source during the year would be higher than anticipated, in consequence, among other things, of a construction put upon the pre-emption laws, admitting a large class of settlers to entries, it was supposed that some further tracts, in places much desired by the new States, might prudently be offered. A few such have been advertised; but sufficient time, after due notice, has not yet elapsed to realize any thing from them.

If the fourth instalment of the deposites with the States be deferred, and the difficulty in seasonably transferring it be thus removed, yet, being chiefly in the custody of banks not paying specie, it is manifest that it cannot be immediately realized in funds suitable to meet existing appropriations. If it be not deferred, some further provision will be still more indispensable to enable the Treasury not only to place it with the States, but to pay all the public creditors and officers in a satisfactory manner, until the duties now due from the merchants, and the funds now in the discontinued deposite banks, can be collected. It is true, that a resort to the States for refunding portions of the large sums already deposited with them would also remain by law; but under the limitations of the act of June, 1836, it would be very slow in its operation, and, if complied with, would prove entirely insufficient to answer such an urgent occasion as the present. During the ensuing quarter, the whole amount that could be legally recalled would not exceed six hundred and fifty thousand dollars. Hence it seems expedient, either in aid or exclusion of a requisition on the States, (as may be deemed most suitable by Congress,) to provide some temporary resource until enough of the fourth instalment, or other means in the Treasury, can be rendered available to discharge all the public engagements. It need not be a loan, or an increase of taxes of any kind, as the General Government, in respect to its finances, (whatever temporary embarrassment the recent convulsions in commerce and banking may have created,) is far from having any just cause for despondency. It is neither overwhelmed with a national debt, nor destitute of large pecuniary resources on hand; but, entirely free from the former, it is so amply supplied with the latter as to have in the Treasury over forty millions of dollars, and eight or ten millions more in bonds, which will soon become payable. But a large portion being in deposite with the States, and the residue chiefly in banks and in the hands of merchants, under the difficulties before named, in procuring promptly, and in a legal currency, the amounts of money which are needed, some collateral aid, for a short period, till a sufficiency can be collected, appears to be judicious, if not indispensable.

It is fortunate that the energies of the country generally are not paralyzed, nor its prospects clonded by any great physical calamities; and hence its immediate wants can, without doubt, be provided for in various ways.

One mode would be to authorize the issue of Treasury notes, receivable for all public dues, but without interest.

These would differ from the drafts or checks now in use only as the latter are given for immediate payment, and drawn on persons and banks having public money sufficient to meet them; and, consequently, the holders must be exposed to the trouble and expense of presenting them at the places where payable. Still they are nearly on a par with specie. In the present deranged state of bank paper and exchange, and in the favorable condition of the General Government, by its ample resources and exemption from pecuniary liabilities, to impart the greatest confidence in respect to the redemption of such notes, it is probable that they would readily be taken at par by most of the public creditors. Especially would this be likely to happen, provided they were issued in denominations as low as twenty, fifty, and one hundred dollars; and not in too large quantities, but used only in anticipation of the accruing revenue on occasional emergencies, and to a limited amount.

Contrary to expectation, should the Department, during the present delinquency of many of the public debtors, be exposed to such very large calls, and collect so little revenue, as not to be able, by both the above notes and drafts, to meet all its engagements in a satisfactory manner, it would be desirable that the President should possess a contingent authority to cause Treasury notes to be issued, bearing an interest not to exceed six per cent.

Specie could always be raised on these for the public creditor, when he preferred it. But as notes bearing inuch interest would soon cease to be used in circulation, (and if they should not, would, as a currency, be troublesome in the computation of interest, and too strongly tend to exclude specie from the country,) it might be advisable not to make them receivable, at first, for any public dues, but only to resort to that measure afterwards, when it should be found convenient for redeeming them.

In connexion with the issue of any Treasury notes, it is believed to be wise to make ample provision for their early and final redemption. This could be accomplished by enacting, that when the money on hand in the Treasury and the mint, available for public purposes, may exceed a given amount of four or five millions, it shall be the duty of the Secretary of the Treasury to cause these notes (securing priority to any on interest) to be redeemed to such an extent as the surplus may exceed that sum, and what will probably be needed to defray current expenses. It being believed that a reduction of the tariff, and suitable regulations concerning the sales of public land, ought at a proper time to be put in force, so as to prevent any large and regular accumulation in the Treasury, the Department would respectfully propose that, in case of any unexpected excess beyond the sums above specified, it should merely be invested, in a temporary manner, in safe State stocks, at their market rate, subject to be sold again whenever the procceds shall be wanted to discharge existing appropriations.

An additional consideration in favor of those measures is, that since the payment of the public debt, which absorbed any occasional surplus of receipts, it is impossible, according to the views expressed in some previous reports from the undersigned, that, with sources of revenue so fluctuating as ours, and so dependent on commercial prosperity, any fiscal operations should be long continued with ease, vigor, and uniformity, without some such regulator as a power to issue and redeem Treasury notes, or to invest and sell the investment of surpluses. By any other course we should constantly be exposed to great deficiencies, or excesses, with all their attendant embarrassments. If depositing the excesses with the States, subject to be recalled to supply deficiencies, the pecuniary profit to the whole Union will be no greater, while such a course may involve us in a series of vexatious demands on them, accompanied by various dangers, both to them and the Gen

eral Government; and, in the mean time, it is feared will, in many instances, tend to excite excesses and evils similar to some of those under which the country is now suffering. V. ON THE SAFE-KEEPING OF THE PUBLIC MONEY

HEREAFTER.

The arrangements for keeping the public money which had been in successful operation for a few years previous to the passage of the deposite act of 1836, became partially embarrassed by carrying into effect some of its provisions. But the enforcement of them all, where not entirely perfected, was in seasonable progress in May last, when the Department was compelled by the act to give notice to such of the selected banks as had suspended specie payments that they could no longer be considered as general depositories of the public money. [See circular I.] A list is annexed of all before employed in that capacity, which have been discontinued. [K.]

After due inquiries to procure other depositories, in conformity to the act, the Department has completed the appointment of only one. This, and four more that have not suspended, with one that has resumed specie payments, (making six in all,) constitute the present bank depositories for general purposes. A schedule of them is added. [L.] During the inability to obtain specie-paying banks at other points, the Treasurer, being required by the closing part of the eighth section of the act, to keep and disburse the public money according to the laws before in force, has done it in conformity to the very wide discretion which existed when no rules were in force, that had been prescribed by Congress, except to "keep" and "disburse the same" under the general superintendence of the Secretary of the Treasury. A part of it has, therefore, been kept in special deposite in this city, a portion of it in the mint, and the residue with the officers collecting it, until it was wanted for public purposes, or until it accumulated in such sums at any point as not to be, probably, wanted there for such use. [See two circulars, M and N.] In the first case it has, from time to time, been applied to the payment of creditors, by drafts on the receivers or collectors; and in the last, the excess has been directed to be temporarily placed with banks not remotely situated, and in special de posite for safety, until wanted for expenditure elsewhere, or until some new legislation shall take place in relation to it. Under these circumstances, the Department would respectfully suggest some provisions which may be more specific, and may be required for the safe-keeping and disbursing of the public money.

In the present condition of the Government and the country, two systems are proposed, either of which, it is believed, may be practicable and adequate to the exigencies of the crisis. One is, an enlargement and adaptation of the system partially employed since the suspension of specie payments, so as to make it answer all necessary purposes. This could be effected merely by assigning to our existing officers and establishments some additional duties.

The Treasurer, at the seat of Government; the mint, with its branch at New Orleans, and another which has been contemplated, and is much needed, at New York, for other purposes; collectors of the customs, and receivers of money for the sales of land, as well as postmasters, might all be directed to keep in safety, not only the public money collected by them, but all actually placed in their possession, by transfer or otherwise. As fiscal agents, they might also be required to pay over and transfer it for such public purposes as may be authorized by Congress, and under such regulations as the Treasury Department from time to time may prescribe. Indeed, the third section of the post office law of 1825, with the bond taken under it as to the agency of the postmasters, is, perhaps, already sufficiently broad for that class of officers. At points like New York, and a few others, where a likelihood existed

[25th CoNG. 1st SESS.

that the sums would permanently be large, but which, under a reduced revenue and expenditure, would seldom occur, authority might be given to appoint the clerks now acting as cashiers or tellers under the collectors and receiv ers, or other more suitable persons, to act as keepers and paymasters of the public money. But they should be made independent of the collectors and receivers, and placed under the like tenure of office, and under suitable bonds. tional means of safety, and such additional but limited compensation to any of the above officers, might be provided, as the increased risk and labor might render just; but in only a few cases would these last be much augmented at any place.

Addi.

Taking the year 1834 as furnishing a specimen sufficiently large of the probable business in future connected with the general operations of the Treasury Department, but, of course, not including the separate establishment of the post office, the whole number of warrants issued in that year was a little under five thousand, and, though differing much in actual amount, averaging about $5,000 each. This would be less than twenty warrants a day, and hence would require less than one per day to be paid in each of the twenty-six States. They differed, in fact, from four per day in this District, and two per day in New York, which were the highest numbers, to only one per week in several of the States. [See table P.] The business at each office daily, or even weekly, in making payments of the drafts, would therefore, be very little. If more than one draft issued on a warrant, the business would be increased in that proportion, unless the whole payments were reduced, as is probable, hereafter to sixteen or seventeen millions yearly.

In regard to the risk, five millions in the Treasury at any one time, if all placed in the hands of collectors and receivers, would not, on an average, exceed $30,000 with each of the present number.

But if the amount, besides one million in the mint, was chiefly in the hands of half the present number, which would approach nearer to the probable result, the sum with each would still be less than most of the existing bonds of receivers; and when exceeding theirs, or those of the principal collectors, the excess, in most cases, could be readily prevented or reduced, by being drawn out to pay creditors, or be conveniently transferred to the Treasurer of the United States, at the seat of Government, or to the mint and its branches. Until one of the latter is authorized at New York, the substitute before mentioned, of one of the present officers in the customs there as an independent keeper and paymaster of the public money could be adopted, and, if deemed prudent, be extended to any other similar place.

In this mode, the present number of officers connected with the collection and disbursement of the revenue throughout the United States need not be at all increased. Nor will it become necessary, except in a few cases, to augment their compensation. Twenty or thirty thousand dollars a year would probably cover the whole additional expense of every kind.

The other system to which the attention and consideration of Congress are respectfully invited, is a new organization, by means of commissioners or receivers general, to gather the collections to more central points, and keep and disburse there a large portion of the public money, or such as could not be kept safely and expended conveniently in the bands of the collecting officers. Such an organization might be at only three or four of the most important points; or it might be made more extensive, and the number enlarged to eight or ten. This could be arranged, in all important particulars, substantially in the manner which is now in very successful practice in some of the most enlightened and opulent Governments of Europe, and as was urgently recommended by this Department as early as

1790. [See extract O.] The only material difference need be, to pay out more of the money near the places where it is collected, rather than first to transmit most of it to the seat of Government. This organization of fiscal agents would be advantageous as a separate establishment for this business alone, and as an independent check on most of those collecting the revenue. But it would require some addition to the present number of officers, and in the first instance would more increase the public expenses.

But the whole addition of principal officers need not exceed ten. Nor would the increased annual expense to the Government probably amount to over fifty or sixty thousand dollars, as the system would enable both the War and Navy Departments to dispense with several of their agents for making local disbursements. The danger of any losses will be nearly the same under both plans. It is impossible to conduct the affairs of Government, or the ordinary transactions of society, without trust and risk of some kind. But one great object, wherever pecuniary confidence is reposed, should always be to require the best safeguards which appear reasonable; and in either of these systems, as hereafter explained, the amount trusted can be more easily kept from becoming excessive, and the hazard of losses, affecting the deposite agent by his lending or trading, be fully obviated, by the strict prohibition of both the latter under severe penalties.

Our direct losses from either collecting or deposite agents have always been comparatively small. Those by the former, it is believed, have not equalled those by the latter, though the latter, being banks, have usually in the end paid most of their deposites. The losses by the former are also supposed not to have exceeded one-fifth of those on the bonds of merchants for duties, and probably not oneeighth of those from the purchasers of public lands, under the credit system.

Occasional and strict examinations of the money on hand, where large in amount, would furnish a strong safe guard beyond the character of the officer, and the property of himself and sureties, and which it might be provided should be made by a committee of Congress, or in any other mode deemed most eligible to constitute an effectual check.

The plans which have been explained as to fiscal agents, re suggested for consideration, under a belief that either is appropriate in the present posture of affairs; that they require but slight changes in our existing laws or usages; and, whatever objections can be adduced against them, will, at the same time, be found to possess many signal advantages.

They will not, so much as some other modes of keeping the public money, expose the Treasury to disappointments and delays, through a dangerous partnership of ininterest, or the use of that money for private or corporate purposes. As the vicissitudes of trade or speculation affect the persons who borrow from the public banking depositories, the evil consequences must sometimes inevitably reach and embarrass the Treasury itself. Nor, on the other hand, will these modes, like our former one, cause frequent injury to those who, trading on the revenue of the Government, are subject to be most pressed to refund it when least able. It is believed, likewise, that the funds of the Treasury can be always more readily commanded in a legal currency, and the hopes of its creditors not defeated, nor its faith violated so often, if the money is not loaned out, either in full or in part, but, as in other countries, is retained in specie or its equivalent, and in the actual custody of officers exclusively fiscal. In other countries, the public money is believed to be seldom, if ever, chargeable to the Treasurer, till it is either paid over on some draft, so that he can get credit for the payment, (and which mode is practised somewhat in England, as well as here, and extensively in France,) or lodged, not in deposite in any

bank, but in his own possession at the seat of Government. In the former mode, the systems now proposed, and especially the first one, would operate so as to disburse at each point most of the public money collected near, and would thus enable the Treasury to command its resources with less delay; the money not being previously paid over at some distance, and to a separate set of agents, as has usually been the practice here in the use of banks; nor much of it transported inconveniently to the capital, as has usually been the practice elsewhere. This mode would thus possess one of the greatest excellencies in any fiscal system: which is, to pay over quickest to the public creditor, and with the least official complexity, whatever is collected from the public debtor.

Besides these advantages, others would be, that the money in the Treasury, under both of the plans submitted, can always be more easily kept down to moderate dimensions, by reductions in the revenue, and by temporary investments of an occasional surplus, as there will be no antagonist interest connected with it, wishing for loans and the use of surpluses, and thus co-operating to prevent a reduction.

The existing establishments and officers, whenever convenient, would be employed without a double machinery, or the organization of a new system of agents. Executive control would be diminished rather than increased by them, because any additional officers will be selected, not by the President alone, nor the Treasury Department, as the banks now are, but virtually be designated by Congress, and the principal incumbents appointed by the consent of the Senate. They would also remove all ground for the objection sometimes urged against the former system, that the Executive alone exercises an extensive patronage and great moneyed influence through a host of bank presidents, directors, and stockholders, scattered through every section of the country, and selected without the assent or check of either House of Congress in any particular case, and making loans of the public money from considerations merely political or official. A very wide discretion will be thus restricted, and a prolific source of suspicion and imputation of favoritism and partiality be entirely stopped.

The officers, under the plans proposed, will likewise be amenable exclusively to the General Government, and not be embarrassed, like the officers of the banks, by conflicting duties and interests in respect to the States; nor involved in those collisions, jealousies, and recriminations, often attendant on that position.

The independent and harmonious action of each Government in its appropriate sphere will thus be more fully secured. The local institutions, as a general principle, will be left to the care and uses of the several States which es tablished them, without interference on the part of the General Government, and to be regulated or discontinued, as deemed most useful, under their own State policies, and most conducive to the original purposes of their creation. Nor would any general moneyed corporation, aside from the grave doubts which exist as to both its constitutionality and general expediency, have been likely in such a crisis as that of the war of 1812, or perhaps that of the last spring, to have proved a much safer public depository than those local institutions. Though more convenient in form for fiscal purposes than they, and free from some objections as to want of symmetry and accountability which obtain against them, yet, if chartered on usual principles, and judging from experience here as well as abroad, it must have failed, in a trial like those, to have sustained either our pecuniary operations, or its own, in strict good faith and in due vigor.

Without entering into details to illustrate this position, it is necessary to notice only the single circumstance, that the Bank of England, during a severe war, suspended specie payments near a quarter of a century, and that