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public funds, the practices of those institutions with reference to the facilities furnished to the purchasers of the public domain, the amount of the actual sales of the public lands, and the means used in making these acquisitions from time to time, could determine the policy, expediency, or necessity, of such an order as that which was issued on the 11th of July last.

The reasons which induced the President to direct the issuing of the specie circular, are given in the circular, and in the message, and in the report of the Secretary of the Treasury. It seems to me they were reasons in no way conflicting with the constitution or the law. Certainly some of the very reasons had been urged by gentlemen on the other side during the last session of Congress. To save the public domain from passing into the hands of speculators, to prevent an improper use of the public funds in deposite, to check the issues of overtrading banks, and to save the property of the nation, were among the reasons which induced the Executive to send forth the specie circular. And these very considerations were reiterated time and again on this floor in the course of the last session, in relation to the secu rity and safety of the money of the nation then deposited in the State banks.

[DEC. 27, 1836.

should be reposed in the Treasury Department. The principle set forth in the amendment I approve; and that is, to improve the currency by bringing into circulation more specie. But it would be altogether ineffectual, so long as the States shall exercise the power of incorporating local banks, for Congress to attempt to prohibit the issues of such banks. All that we can do we will do, and that is, to attempt to improve the character of such a paper currency, by refusing to receive in payment bills of a small denomination. But, Mr. President, if I have a correct understanding of the positions of the Senator from Ohio, upon the subject of banking operations in the West, there certainly was at least one good reason for the issue of the specie circular-to check the excessive issues of their local bank paper.

The Senator says" that the banks do not issue their notes upon the specie in their vaults. The notion is utterly fallacious; it is the staple produce of the country which those bank notes purchase; it is the pork and flour of the West, the cotton and sugar of the South, that is the true capital on which the banks make their issues." "The business of the country could not be transacted if the issues of bank paper were based on gold and silver alone."

I live in a wool-growing country; and that article, for some years past, has constituted one of the principal sources of business operations. It annually adds to the

The President, then, was bound, if the reasons stated were founded in fact, to issue this order, which was to effect the very objects so much desired at the last session-the safety the public funds, and the preser-substance of our farmers, and it furnishes to the merchant vation of the public domain. The order could never have been issued from any political considerations--from any desire for individual popularity: every man must have known that its political effect would have been precisely that which has been produced. Higher con siderations than a thirst for personal popularity, or for political distinction, must have prompted the President to have issued this order. It was nothing less than a settled conviction that the public interest demanded the measure. He designed it as a mere temporary expedient; and it remains now for Congress to decide whether any thing, and, if any thing, what, shall be done in relation to this matter.

I am not, Mr. President, however, so much in favor of an exclusive metallic currency, that I am prepared, at the present time, to agree to any proposition which shall in effect legislate bank paper out of circulation. I do not believe that it would be wise to establish an exclusive metallic currency as the settled, fixed, and determined policy of this Government. The country is not prepared for such a revolution in its circulating medium. The true interests of the community require that all such changes should be gradual and progressive. Any violent and extraordinary alteration in the currency of a country will invariably bring embarrassment, confusion, distress, and ruin. I am not, therefore, for any great alterations at the present time, although I am for adopting such an arrangement as will bring into circulation more specie, and put out of circulation all bank paper of a small denomination. I shall with great readiness, Mr. President, come in aid of any proposition which shall have for its object the introduction of more specie, and of less paper, among us. But, to my mind, the time has not arrived when the currency should be exclusively metallic. The whole amount of specie in our country is inadequate for the transaction of its necessary business. Even the three hundred millions of banking capital, in addition thereto, is regarded as insufficient.

The amendment proposed by the Senator of Virginia must produce some good effect; it will, in a measure, exclude from circulation bank paper of a less denomination than five dollars. As far as it goes, it has my approbation, and will receive my support, in case the mover will so modify his proposition as to prohibit the deposite banks from exercising a power over the currency, which

the means of making his remittances; but I never supposed or believed that this staple of my country was the basis upon which our local banks make their issues. I live in the immediate vicinity of banks whose capital exceeds half a million of dollars, and I entertain no doubt that, in the places where those institutions are situated, there is annually disbursed more than one half of the capital of those banks in the purchase of wool; and the paper of those banks is issued within a period of 90 days, to purchase and to pay for this amount of that article; but no human being connected with the banks ever calculated on the value of the material itself for the redemption of their paper, or did the banks ever issue their paper upon such a capital. No, sir, their reliance was on the gold and silver in their vaults, on their specie funds; but more than all on the intrinsic value of the discounted paper; and whenever banks undertake to issue paper to pass current as money, equivalent to specie, based on no metallic capital, but upon the produce of the country— upon the pork and flour of the West-and to rely, for the redemption of their paper, upon the sales of such produce, sooner or later, by the fluctuations of trade, the sudden depressions of the staples of our country, such banks must experience severe losses, if not an entire prostration.

I repeat it, sir, and I appeal to every man conversant with banking for the correctness of my position, that the solvency and security of banks must depend essentially upon the intrinsic value of its discounted paper, in connexion with its specie funds, which ordinarily amount to one third of its whole circulation. Some bank, peculiarly circumstanced, and possessing great facilities and extraordinary privileges, may have within its control specie equal to its whole circulation, but not equal to its whole liabilities. The banks of New England, on an average, do not possess a specie capital within their control, or specie funds, exceeding one third of the whole amount of their paper circulation and actual liabilities; but they rely for their solvency on the worth of the debts due to them, on the intrinsic value of their discounted paper; and every man conversant with banking must know that it is a safe reliance, and that a bank doing business upon the principles I have stated can never be so embarrassed as to put in jeopardy its own bank notes. The Secretary of the Treasury has, as usual, received

his full share of abuse for his supposed connexion with, and participation in, the order of the 11th of July. It remains yet to be ascertained whether the act shall receive the approbation or disapprobation of the American people. I leave the matter with them: the issue is made up-the reasons for and against the measure have been set forth-let judgment be rendered. In the decision of that tribunal to which the Executive has so successfully and so triumphantly appealed on former occasions, he will most cheerfully acquiesce.

But the attacks which have been made upon the Sec. retary of the Treasury, pending this debate, have not been confined to the specie circular. His want of judgment, of financial skill, of tact, and of talent, have been made most clearly to appear (as has been said) in his es timate of the receipts and expenditures for the year 1836, as presented in his official report at the commence. ment of the last session of Congress. This charge has become somewhat stale, worn out by its long-continued use. These reiterated attacks upon that officer establish one fact beyond all possibility of doubt--that the gentlemen who make these charges consider that they are contending with no ordinary enemy, but with an enemy talented, powerful, and, if not invulnerable, certainly not easily vanquished.

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speculation began to break forth. It will be found that there was no very unusual increase until August of that year. The Secretary is now obliged to make up his estimate a month sooner than was formerly practised, and at a time when he could not have received the whole returns of October; and although he does estimate the proceeds at a half of a million more than usual, yet I am free to admit that the estimate falls far short of the reality; but, in making this admission, I cannot see that thereby any fault, any want of discernment, any want of foresight, of calculation, or of judgment, is chargeable upon the Secretary of the Treasury. It will appear that the ac tual receipts of the fourth quarter, ending with December, in 1834, from lands and customs, were but five and one third millions; while those for the last quarter of 1835 were about eleven and one third millions; and not so much land was advertised within the last as within the first period. The sales of lands in that quarter ran up to five and a half millions-a sum exceeding the whole sales of any one year since 1820. In December alone the sales amounted to two and one third millions, when usually not over half a million sold in that month. And, in relation to the receipts from customs, I might add, that the destruction by fire, in New York, of some seventeen millions of merchandise, rendered fresh importations necessary, which greatly increased the receipts from that source of revenue, and which could not have been considered by the Secretary. I cannot believe that in November, 1835, with all the lights then cast upon this subject, that the gentleman from South Carona himself could or would have anticipated such an extraordinary amount of revenue. But it is enough for me to say, that the Secretary of the Treasury, in making his estimates of receipts for the year 1836, was govern ed, in a measure, by the actual receipts of former years from the same sources. But whoever calculates the receipts of any subsequent year by the actual receipts of the year 1836, will find that he has committed a greater and a more hazardous error than has been committed by the present Secretary,

At the last session I attempted to show how these extraordinary receipts had found their way into the Treasury. I then stated, and I now believe, that the fact it self of there being a most extraordinary amount received during the current year, is no evidence of want of sagacity or judgment in making and presenting the estimates as they were made a d presented in 1835. If the Secretary had then presumed to have estimated twentyfour millions as the probable amount which would be rereived in the course of the coming year from the sales of the public lands--if he had estimated that twenty millions would be received from customs, and Congress, relying on that estimate, had proceeded to make appropriations accordingly, and it had turned out that no greater sum than usual had been received from the sales of lands, or from the duties on imports, what would the gentlemen then have said? They would have denounced him indeed as a visionary statesman, and in whom no confidence should be reposed. Such estimates, found-in our commercial cities (and I am most willing to agree ed on no facts, but the result of mere conjecture, would have justly exposed him to the charge of rashness and of folly.

What is the course to be pursued by a prudent, calculating, sensible, and discreet officer, at the head of the Treasury Department, in presenting his estimates of receipts and expenditures?

The manner of executing the deposite bill of the last session is also made a matter of grave charge against the Secretary; and the pecuniary distress which now exists

that is is most severe) has been here and elsewhere charged upon the Secretary, as the unavoidable effect of the manner of his executing that bill. Now, Mr. President, I think I shall find little difficulty in showing that the Secretary could not have done less, without a violation of the law, and without wholly disregarding the state of public opinion, and the just expectations of the community. It was the forbearance of the Secretary which has saved, if not the banks themselves, certainly the commercial and mercantile community, from severer trials, embarrassments, and sacrifices. The Secretary could not have done less; he might have done more; and the few failures which have occurred in our commercial cit

bill, are evidence of the bigh character, resources, and responsibilities, of our mercantile community.

He is to ascertain what had been the actual receipts in former years; whether they had increased beyond the natural increase which would result from an increase of the population of the country; and if so, to study the causes of such an increase, and to make up his estimates of receipts with reference to the population and condition of the country. It is, after all, but an esti-ies, in carrying into effect the provisions of the deposite mate; it cannot be regarded as fact; it is in a measure conjectural, and the Secretary is greatly abused for guessing so badly. But the honorable Senator from South Carolina, in his report upon executive patronage, fell into the same error. He under-estimated the receipts from the sales of the public lands as well as from customs. If I am not mistaken, it will be found that the extraordinary amount received from the sales of the public lands was received from mere private entries, and were not the proceeds of the public sales. How was it possible for the Secretary to know, or even to conjecture, who would purchase, and what amount would be purchased, of the public land at private sale, within a given period? Things, I believe, had gone on in the usual mode up to July or August, 1835; and then

It was early alleged that the Treasury Department would not execute the deposite bill; that, under some pretence or other, the Secretary would delay carrying into effect its provisions, and thereby frustrate the just expectations of the people. These allegations were made and reiterated after the adjournment of Congress, because the money was not immediately removed from those places where too much had accumulated, to points where there was little or none of the public funds.

The act to regulate the deposites of the public money was approved on the 23d of June last, and it is a fact well known, that on the following day the Secretary of the Treasury commenced a correspondence, having for

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its object the selection of additional banks for the depos ite and keeping of the public money. It was manifestly the duty of the Secretary of the Treasury "to select, as soon as may be practicable, and employ as the depositories of the money of the United States," such new banks as may be located at adjacent or convenient to the points or places at which the revenues may be collected or disbursed, requiring him, at all events, to select at least one bank in each State and Territory, if one can be found willing to be employed as a depository of the public money; and the act requires that the Secretary of the Treas ury shall not suffer to remain in any deposite bank an amount of the public moneys more than three fourths of the amount of its capital stock actually paid, for a longer time than may be necessary to make the transfers, for purposes of equalisation; and in the event of too great an accumulation of deposites in any bank, such transfers shall be made to the nearest deposite banks which are considered safe and secure."

Such were some of the provisions of the bill regulating merely the deposites of the public money in the deposite banks.

The Secretary was then obliged, as soon as practicable, to select in the different States the additional deposite banks made necessary. lle was not at liberty to postpone or to delay this service. The act was imperative; for the great and leading argument urged in favor of this bill was, that such an accumulation of the public money at particular points, and in particular banks, was exposing to hazard the public funds; and he was, therefore, in the most explicit manner, required "not to suffer a greater amount of the public money than a sum equal to three fourths of the capital of any deposite bank to remain in such deposite bank, but at once to remove such excess to other places of deposite, for the purpose of qualisation."

The duty enjoined upon the Secretary, under these provisions of the deposite bill, was clear and explicit, and that duty was promptly met and faithfully perform. ed. The banks were selected with as little delay as possible; and the document now on the table will show how early these transfers were made for the purpose of equalisation, and to prevent any bank retaining in deposite, of the public money, an amount beyond three fourths of its capital, "for any longer time than was necessary." So much for the charge made against the Secretary at the time for neglecting to execute the deposite bill.

But when the money began to be moved, after the additional deposite banks had been selected, and after due notice had been given to those banks which then held in deposite, of the public money, an amount beyond three fourths of their capital, that they must prepare to make the requisite transfers, then, forsooth, a universal hue and cry was raised against the Secretary, for making any removal of any portion of the public money, until the 1st day of January; alleging that it was arbitrary and oppressive on the part of the Secretary, not required by the letter or by the spirit of the act; and that such an unreasonable proceeding would produce unnecessary distress among the banks, and the unavoidable ruin of thousands of our mercantile community. Thus blowing both hot and cold: blaming the Secretary for his pretended acts of omission, and for his real acts of commission. Under the provisions of the act to which I have referred, the Secretary doubted whether he should have the power, before the 1st day of January, 1837, to remove from particular points in any one State where there should be accumulated a great excess of the public money to any place beyond the limits of such State; and so settled was the public mind as to the course to be pursued in such a case, and so decided was the public sentiment, that no sooner were those doubts known to exist, than Congress passed the act "supplementary to

[DEC. 27, 1836.

the act to regulate the deposites of the public money," which provides "that nothing in the act to which this is a supplement shall be so construed as to prevent the Secretary of the Treasury from making transfers from banks in one State or Territory, to banks in another State or Territory, whenever such transfers may be required, in order to prevent large and inconvenient accumulations in particular places, or in order to produce a due equality and just proportion, according to the provisions of said act."

The Secretary was bound, then, according to the plain English of these two acts, without delay, to set himself about removing from one set of banks, which then held of the public money an amount beyond three fourths of their capital, about eighteen and one third millions of dollars, and to deposite this in various other banks in the different States; and to this may be added twenty-two millions, collected since the passage of the bill. All this was to be done independent of those provisions of the act which_required that the surplus in the Treasury on the 1st of January, above five millions, should be deposited with the several States. The mo ney, on the passage of the deposite bill, which was on deposite in banks in the city of New York, could not be left in that city, because the money then there, and what was there collecting monthly from imports, would make an aggregate exceeding three fourths of their whole banking capital. There was in deposite in that city, on the 23d of June last, about thirteen millions; there is collected ordinarily from customs, about one and a quarter million each month. Their whole banking capital does not, it is believed, exceed eighteen millions. The Secretary, then, could not, without a direct violation of his duty, have suffered this amount of money there to remain, even if every banking company in that city had been willing to have been employed as a depository. I have stated that the Secretary found it necessary, in the discharge of his duty, to remove about eighteen and one third millions of dollars. This very operation is cause enough for the pressure which exists in our great commercial cities. No one at all acquainted with business, but must admit that every dollar of this money had been loaned by one set of banks to their customers; and the process of transferring made it necessary to collect from those customers, for those banks, in order that it might be removed to another set of banks. This was a real and important money transaction. It was not an affair which could have ordinarily been done without an actual col lection of the money from the debtors of the deposite banks. By the deposite bill itself, the banks which held the public money were required to pay interest on all over one fourth of the money in deposite; and it must, then, have been fairly presumed that the money of the Government which had been placed in the deposite banks was out on loan. The fact was so; and, as I have before said, the very process of collecting from one set of customers at one set of banks, and paying over to an other, furnishes cause enough for the prevailing pres

sure.

Who does not recollect the complaint made by the Bank of the United States in 1833, for the removal of the deposites from that institution, less by one half in amount than changed places under the late act of Congress? Who does not recollect the pretended distress and ruin which was alleged to be the consequence of that act of removal, when even the actual amount then taken from the Bank of the United States was not removed at once, but only as needed to pay warrants? Where there were great excesses of the public money in any State, as in New York, Louisiana, and Mississippi, it was expected that the Secretary would at once remove such excesses to other States having little or none of the public money. While those States had millions upon

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of the public money, as well as New York, Louisiana, Massachusetts, and Mississippi?

It was far better for the merchants themselves to part with the money by degrees, to commence before Janua ry. It has been said (with a view of showing that an unnecessary pressure has arisen from the manner of executing the deposite bill) that the United States Bank paid the national debt without any distress. That is by no means a parallel case: but even that was not done without some time and indulgence being extended to that institution. That debt was paid as it was due, in the great citics, and not in the interior. But portions of it have been just as well paid by the deposite banks since 1833, as by the Bank of the United States prior to 1833. But the two cases are unlike. Deposites with the States are not to be paid to creditors in our great cities, but to States at a distance, and in the interior; and hence the cause of the existing pressure and derangement. But the main, the moving, the original cause of all the pecuniary distress which has occurred, may be traced to the excessive surplus in the Treasury. It was the fact that our Government had thirty or forty millions of dollars unemployed in the deposite banks, not requi ed to meet the necessary wants of the Government; it was this great accumulation of money, this enormous amount of unappropriated funds, that induced speculation and over-trading. The national debt had been fully discharged. The compromise act led to the belief that the tariff would remain undisturbed; that of course the receipts from customs and from lands would greatly exceed the public expenditures. This state of unexampled and unprecedented national prosperity, these extraordinary resources of the country, have produced one of the most extraordinary revolutions in the business of the country which has taken place since the close of the Revolution.

[DEC. 27, 1836.

ordinary, this violent pecuniary pressure in our cities. It has been said that the pressure is not as great as is represented. I know it to be most severe. When the best notes in our cities are sold at a discount, and sold so as to yield an interest of two, three, and even four per cent. per month; let no one say that the pressure is mere pretence. It is an awful and cruel reality. It is but the effect of our own policy. If we had left in the pockets of the people the money not wanted for the ordinary uses of the Government, if we had prevented the accumulation of such an enormous surplus, if we had been compelled annually to contract loans to meet current expenditures, business would not have been diverted from its accustomed channels, wild speculation would not have stalked through our land, and the present pressure and distress would not have been felt. We should, Mr. President, now unite in preventing the repetition of the evil, by removing its cause. The surplus found in your Treasury was the original cause of the present pressure. It was our acts of the last session which were auxiliary in bringing about the present state of things. I know that it is very convenient to make the organs of Congress (while faithfully, but fo.bearingly, executing the laws) scapegoats, not only for the effects of those laws, but for all the improvidence, rashness, over-trading, and speculation, of Europe as well as of America. I have nothing further to add, in answer to the charge made against the Secretary, for the course pursued by him in the execution of the deposite bill. I should not have troubled the Senate with any remarks, had I not wished to avail maself of this opportunity to speak of that measure. I gave my vote in favor of that bill, and I have reason to believe that that vote has received the decided sanction of the yeomanry of New Hampshire. The bill passed both Houses of Congress by unexampled majorities, and yet the minority in the Senate, as well as in the House of Representatives, comprise some of our most distinguished statesmen and purest patriots. The bill, as it passed, was most emphatically and most truly nothing more nor less than a bill for the regulation, deposite, and safe keeping of the common treasure of the whole country. There is no room for doubt, with rcspect to the character of that measure. The thirteenth section of that bill, among other things, provides that the States receiving their proportion of the surplus shall pledge their faith to pay the said moneys, and every part thereof, from time to time, whenever the same shall be required by the Secretary of the Treasury, for the purpose of defraying any wants of the public Treasury." Whatever may be the practical operation of this measure, it was regarded at the time in no other light than a bill to regulate the local banks, having the public money in deposite, and to transfer from those banks portions of the common fund to places of greater security, the respective treasuries of the several States. I cannot be In addition to this, the course pursued by some of the lieve that among those then belonging to the Senate, banks themselves has contributed to bring about the pres- who gave to this bill their support, there was a single inent state of things. The means of those institutions have dividual of the number, who would for a moment counbeen employed, not as usual, in the transaction of the tenance the idea of taxing, directly or indirectly, the peoregular business of our mercantile community, but in ple for the purpose of distributing money to the people. the shaving of notes, exchanges, and stocks. The seven I never could have yielded my assent to any such prinor eight millions of the money of the Government now ciple; and, in voting for the deposite bill, no Senatur in the Bank of the United States, it may be presumed, could believe that he was thereby yielding his assent to has been in active use in that way. To these may be any such doctrine. I hold it to be subversive of the very added the great pressure now existing in the money foundation upon which rests our representative Govern market of England, which has produced its effects here. ment. Such a principle is opposed to the best and puIn my judgment, these have been among the causes rest feelings of patriotism; to the letter, the spirit, the which have aided in producing the present state of things. genius, of our free institutions. I never could have given It is to be hoped that it will only be temporary; it is to my vote for this bill as a distribution bill. This characbe hoped that the crisis has already passed; that the good ter has been most unjustly given to this measure here sense, the high intelligence, the pure patriotism of our and elsewhere. The Senator from Mississippi is mistacommercial and mercantile community, will be able to ken if he supposes that it is so understood by the great bring to a speedy end this unexampled, this most extra-body of the people of the States. The legislative act of

Within the last eighteen months the capital of the country has, to a certain extent, taken a new direction. It has changed hands; it is no longer under the control of our commercial and mercantile community, a community which is now more severely and intensely suffer. ing from the pressure than any other class. say that it was the surplus in the Treasury, it was the amount of unemployed public money, which has brought this evil upon us; which has induced every species of speculation; which has quickened the zeal, animated the spirit, and put in requisition all the active energies of the adventurer. The history of the times shows that there have been most unprecedented speculations and over-trading. Speculations not in the public lands only, but in stocks, in banks, in railroads, in canals, in lots, in every thing that the wit of man could devise. This mania for speculation has pervaded our whole country; it has reached the villages of New England; and but few individuals have entirely escaped from its influence.