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SENATE.]

Treasury Circular.

(Dec. 27, 1856.

lution in the currency; it induced the banks themselves If the resolution is imperative, if it be obligatory, then to resume specie payments; it performed faithfully its the Secretary had no discretion. He was bound to take whole office, and thus the matter ended. No human being the bills of all specie-paying banks, as well as the notes then supposed that the resolution was intended to be ab of the Bank of the United Stales, in payment for duties. solutely imperative upon the Secretary; that it went to But, according to my apprehension, ille plain, sensible, add the local paper of specie-paying banks to the legal common.sense meaning to be given to the resolucion is, currency.

that the Secretary should, after its passage, adopt such " At the time of the adoption of this resolution, debts means as he miglit deem necessary to have the revenue accruing to the United States, whether on account of of the Government receivable in the legal currency -- he the sales of the public lands, or at the custom-house, or currency then established by acts of Congress; and if, from other sources of revenue, were in fact received in for matter of individual accommodation, it should be some parts of the country, bui evidently in disregard of found necessary to relax at all, in sucii case the Secreta. the law, in the notes of the State banks, which did not ry of the Treasury should no longer receive the paper of redeem their paper .by cash payments. By this reso- non-specie-paying banks; ibat he should, in no event, be lution it was obviously made the duty of the Treasury :o justified in taking the bills of any bank which are not correct that departure from law as soon as practicable; payable and paid on demand in the said legal currency and it was, as is equally obvious, imperative on the Deo of the United States. The resolution, in this respect, is partment, after the 20th February, 1817, to allow noth- merely advisory to the Secretary. It was intended to re. ing to be received in payment of debts due to the United strain him from collecting the revenue in the way and man. States but the legal money of the United States, Treas. ner it had been collected for years before; and it was also ury notes, notes of the Bank of the United States, or of clearly intended to give authority, to give countenance, those State banks the notes of which were payable and to the Secretary of the Treasury, for a time, in relaxing paid on demand in casb."

die rule of law--in departing from the requisitions of exThis construction, given to the joint resolution of 1815, isting statutes so far as lie might receive the paper of by its author himself, when its particular obligations, and specie-paying banks for the public dues. But it cannot, the duties of our public officers under that resolution, it seems to me, be contended for a moment that here were among the subjects then under consideration, ap. was an addition made to the legal currency of the coun. pears to me to be correct. The resolution manifestly try; that, hencefurward, the collectors and receivers was intended to express the sense of Congress upon what would be bound to take in payment for customs and had been the practice of the Treasury Department in re. lands the bills of State banks paying specie when die Jation to the kind of money in which the debts of the manded. Government had been collected; and, in terms most ob. The resolution was intended to operate for a time as a vious, to restrain the Treasury Department from every waiver on the part of the Government of its rights; but such departure from the requirements of existing law, it could not be regarded as a positive, unqualified, and after the 2011 of February, 1817. But the resolution obligatory statutory provision. Such a law could never makes no change in the law; it does not, in terms, nor have been literally carried into effect. The receiver at by fair implication, establish the notes of all specie.pay. New Orleans could not be presumed to know the true ing banks as legal currency, and make them, as such, character of the bank paper of my own State; and yet receivable for the customs and for the public lands. he would be bound so to do, if the resolution was im.

Let us examine the whole resolution. It provides: perative and obligatory. That resolution was offered,

“That the Secretary of the Treasury be, and he here. as I have before stated, immediately after the act was by is, required and directed to adopt such measures as passed establishing the United States Bank; and accordbe may deem necessary, to cause, as soon as may be, alling to the construction now given to it, the exclusive duties, taxes, debts, or sums of money, accruing or be privilege which had been given to that institution was coming payable to the United States, to be collected and taken away. The resolution, if it does not in terms repaid in ihe legal currency of the United States, or Treas. peal the fourteenthi seciion of the bank charter, practi. ury notes, or notes of the Bank of the United States, 3s cally renders that section to the bank itsell unimportant, by law provided and declared, or in notes of banks wbich and imposed upon the bank new obl gations under the are payable and paid on demand in the said legal cute charter extremely onerous, and of great hazard to the inrency of the United States; and that, from and after the terests of shat institution. This nerer was, it never twentieth day of February next, no such duties, taxes, could have been, intended. The law was not, in terms, debis, or sums of money, accruing or becoming payable changed by the resolution; and if the resolution, having to the United States, as aforesail, ouglit to be collected the effect of law, is imperative and mandatory in this or received otherwise than in the legal currency of the particular, then, most clearly, it full ws that it must be United States, or Treasury notes, or notes of the Bank general in its operations; it cannot be in force in Bosof the United States, or in notes of banks which are pay. Ion, and of no effect in Baltimore; and yet it has been adable and paid on demand in the said legal currency of mitted that the collector at New Orleans would not be the United States."

bound to receive a bill of a specie-paying bank issued in I would ask, wiat obligation was imposed upon the New Hampshire. This admission, correct in point of Secretary of the Treasury by this joint resolution? Noin fact, gives to this measure its true character. It clear. ing more, and nothing less, ihan to forbear henceforward ly shows that the framer of this resolution bimself did from receiving uncurrent State bank paper in payment not regard it as an absolute provision of law, but rather of duties and of debts of every description, and to adopt j as a matter of practice, which was to be cor.fided to the euch measures as he may deem nccessary to cause all sound discretion of the Secretary of the Treasury. the public dues to be collccted, as the law requires, viz: The Bank of the United States was to receive in de. in the legal currency of the United States, in gold or posite the money of the Government; and it was bound silver, in Treasury notes, or in bills of the Bank of the to transfer from place to place, without charge, the United States. The acts of Congress had established public funds; and yet, as I have before said, immediately each end all as legal currency, and given direction 10 after the passage of the joint resolution of 1816, the public officers to receive them as such. This resolution bank itself refused to receive on deposite the bills of established no new currency; it did not repeal nor add specie-paying banks, and pass them to the general credit to any act of Congress which designated the kind of mo of the Government, and to transfer them, without charge, ney receivable.

as a part and portion of the public funds. The Senator

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Dec. 27, 1836.)

Treasury Circular.

(SENATE.

from Massachusetts, in his report in the case of Mr. Stale banks, even the bills of those State banks payable Crawford, says:

and paid on demand in specie. It results from this fact, " That institution (the United States Bank) is indeed that the Bank of the United States considered that the bound to give necessary facilities for transferring the bills of local banks, be their character ever so good, public funds from place to place; but this can only mean were not money, were not legal currency, which they cash funds; and it is bound also to receive money in de. were bound to take in deposite; and hence this circular posite for the United States; but it is not bound to of Mr. Crawford became necessary. receive in deposite, as cash, the bills of any banks In 1826 Mr. Rush extended this indulgence to certain whatever but its own, although they may come within enumerated State banks, not to all the specie-paying the provisions of the resolution of 1816."

banks of the country, but to certain specified banks; but And thus the course of the bank was justified, and its enjoined that, “as the receipt of any of the local or State proceeding never called forth any action of Congress bank notes may be discontinued at any time, without expressive of its disapprobation. But how could such a previous notice, it will be well for those who have paycourse of proceeding be justified if the bills of State ments to make to provide themselves with specie, or banks, paid in specie on demand, were by law added to notes of the United States Bank or its branches, to guard the currency of the country? If the receivers were against any change that may be found proper in regard bound at all events to take the bills of specie-paying to the notes of the local or State banks." banks in payment for public lands and for customs, the If that joint resolution of 1816 was imperative and ob. l'nited States Bank were also bound to receive them in ligatory, it is somewhat surprising that it should have re. deposite. They went to make up a part of the public ceived such a commentary from the head of the Treasury funds of the Government; and yet receivers were justi- Department. fied in not taking the bills of specie.paying banks in pay. Mr Taney, the late Secretary of the Treasury, issued ment for the public dues, and the bank was justified in a circular, dated March 26, 1834, in which he says: refusing to receive them in deposite, and of transferring "Reports occasionally reach Washington, unfavorable them, as a part of the funds of the Government, without to the credit of particular Slate banks. Many of these charge. This is wholly irreconcileable with the idea, rumors are, no doubt, without foundation; but it is the and with the fact, that such bills had been legalized, ab- duty of public officers to be continually watchful of the solutely and unqualifiedly, as currency.

public interests, and it therefore is expected that you The resolution could not in any way affect the power

will be careful to receive the notes of no banks except of the President over the subject. He was bound to see such as are in good credit, and pay specie promptly fur the laws faithfully executed. The laws remained unal- their notes when presented; and you are to receive none tered, the same after as before the resolution. The except such as the bank in which you deposite will agree power and the duty of the President was the same after to pass to the credit of the United States as cash: and, in as before the resolution.

order to remove all possible grounds of controversy or The construction which I bave now given to the reso complaint, you will immediately, on the receipt of this Jution of 1816 has been given to it not only by public letter, obtain from the bank in which you deposite a list officers, but that construction has been sustained by of the State banks whose notes they will consent to reCongress, with reference to this subject, from that time ceive and pass to the credit of the United State as above to the present; and not until this period bas the correct. mentioned.” Repudiating the idea that receivers were ness of this construction, and of the corresponding prac. bound, at all events, to take the notes of all specie-paying tice of the Government, been questioned.

banks in payment; but the United States Bank formerly, In a report to the Senate, made by the present Sec and the deposite banks since, should have the selection retary of ihe Treasury at the last session of Congress, he " of those whose nutes should be received on account of remarked that, according to a construction adopted by the revenue." Mr. Hamilton, “the T'reasury, into which the money If this joint resolution was absolutely binding, it is difwas to be eventually paid, as the chief pecuniary agent ficult to account for the fact that it has never been obof the Government, could waive its right to specie, and served, but has been disregarded universal y, by the fiscould consent to receive the notes of State banks, wben cal agents of the Government, without calling forid any deemed by it in all respects equivalent to specie; and by action of Congress. If it was a right secured to speciethe joint resolution of Congress in 1816, which impliedlý paying banks, it is wonderful that not one of those nugave some sanction to this original practice, by probibit. merous institutions has ever presumed to lay its grieving the Treasury Department longer to receive the notes ances before Congress, that the agents of the Governof State banks not paying specie, and which it had in ment had refused to receive ils paper in payment of cus. the great emergencies of the war allowed to be taken toms or of lands, which they were bound to do under for public dues. The clause of the joint resolution of the joint resolution of 1816. 1816, not forbidding the receipt of notes of State banks I cannot, then, consider the order of the 11th July paying specie, has not been understood as amounting to last as illegal-as against the material binding provisions an express grant of power, making those State notes a of the resolution of the 30th April, 1816. I cannot retender for public dues; else the explicit favor granted to gard the issuing of that order as any assumption of powthe United States Bank notes alone would have been er on the part of the President. And, for aught I see, nugatory."

the order must stand, unless the President shall see fit Mr. Crawford, in 1817, after the establishment of the himself to withdraw it; or unless, Congress, by its own United States Bank, issued circulars probibiting United legislation, shall take away the foundation upon which States officers from receiving any bills which will not be that order rests--shall pass some law that shall render received by them and credited as cash. And why was the order itself inoperative. this? It will be recollecled that, by the 16th section of In reference to the policy and expediency of that the charter, the money of the United States was to be measure, I am free to admit that a great diversity of deposited in the bank and its branches. This charter opinion is entertained by different portions of the busihad been accepted, and ine corporation bad gone into ness community. The President says that he directed operation under it, and was bound to receive in deposite the issuing of the order with a view to the safety of the the money, the legal currency, of the country; but public funds, and to the interests of the people general. among its first acts, as I have before said, was an uncon iy. No man, unless familiarly acquainted with the state ditional refusal to receive on general deposite the bills of l and condition of the banks which had in de posite the

SENATE.]

Treasury Circular.

(Dec. 27, 1836.

public funds, the practices of those institutions with ref. should be reposed in the Treasury Department. The erence to the facilities furnished to the purchasers of the principle set forin in the amendment I approve; and that public domain, the amount of the actual sales of the is, to improve the currency by bringing into circulation public lands, and the means used in making these acquis more specie. But it would be altogether ineffectual, so sitions from time to time, could determine the policy, long as the States shall exercise the power of incorpo. expediency, or necessity, of such an order as that which rating local bank“, for Congress to attempi io prohibit the was issued on the 11th of July last.

iss:les of such banks. All that we can do we will do, The reasons which induced the President to direct the and that is, to attempt to improve the character of such issuing of the specie circular, are given in the circular, a paper currency, by refusing to receive in payment bills and in the message, and in the report of the Secretary of a small denomination. But, Mr. President, if I have of the Treasury, It seems to me they were reasons in a correct understanding of the positions of the Senator no way conflicting with the constitution or the law. from Ohio, upon the subject of banking operations in the Certainly some of the very reasons biad been urged by West, there certainly was at least one good reason for gentlemen on the other side during the last session of the issue of the specie circular-lo check the excessive Congress. To save the public domain from passing into issues of their local baik paper. the hands of speculators, to prevent an improper use of The Senator says that the banks do not issue their the public funds in deposite, to check the issues of over. noles upon the specie in their vaults. The notion is ut. trading banks, and 10 save the property of the nation, terly fallacious; it is the staple produce of the country were among the reasons which induced the Executive which those bank notes purchase; it is the pork and flour to send forth the specie circular. And these very con. of the West, the cotton and sugir of the South, that is siderations were reiterated time and again on this Avor the true capital on which the banks make their issues." in the course of the last session, in relation to the secu. "'The business of the country could not be transacted rily and s.fety of the money of the nation then deposited if the issues of bank paper were based on gold and silver in the Sta!e banke.

alone." The President, then, was bound, if the reasons stated I live in a wool-growing country, and that article, for were founded in fact, io issue this order, which was lo some years past, has constituted one of the principal effect the very objecis so much desired at the last sources of business operations. It annually adds to the session--tlie safety the public funds, and the preser substance of our farmers, and it furnislies to the merchant vation of the public domain. The order could never the means of making liis remittances; but I never supposed have been issued from any political considerations--from or believed that this staple of my country was the basis any desire for individual popularity: every man must upon which our local banks make their issues. I live in have known that its political effect would have been pre. the immediate vicinity of banks whose capital exceeds cisely that which has been produced. Higher “on half a million of dollars, and I entertain no doubt that, in siderations than a thirst for personal popularity, or the places where those institutions are situated, there is for polilical distinction, must have prompted the Presi. annually disbursed more than one half of the capital of dent to have issued this order. It was nothing less than those banks in the purchase of wool; and the paper of a settled conviction that the public interest demanded those banks is issued within a period of 90 days, !o pure the measure. He designed it as a mere temporary espe. | chase and to pay for this amount of that article; but no dieni; and it remains now for Congress lod cide whether human being connected with the banks ever calculaied any thing, and, if anything, what, shall be done in relation on the value of the material itself for the redemption of to this matter.

their paper, or did the banks ever issue their paper upI am not, Mr. President, however, so much in favor on such a capital. No, sir, their reliance was on the of an exclusive metallic currency, that I am prepared, gold and silver in their vaults, on their specie funds; but at the present tinie, 10 agree to any proposition which more than all on the intrinsic value of the discounted shall in effect legislate bank paper out of circulation. I paper; and whenever banks undertake to issue paper lo do not believe that it would be wise to establish an ex. pass current as money, equivalent to specie, based on no clusive metallic currency as the settled, fixed, and de. imetallic capital, but upon the produce of the countrytermined policy of this Government. The country is upon the pork and flour of the West- and to rely, for not prepared for such a revolution in its circulating the redemption of their paper, upon the sales of such medium. The true interests of the community require produce, sooner or later, by the fluctuations of trade, the that all such changes should be gradual and progressive. sudden depressions of the staples of our country, such Any violent and extraordinary alteration in the currency banks must experience severe losses, if not an entire of a country will invariably bring embarrassment, con prostration. fusion, distress, and ruin. I am not, therefore, for any I repeat it, sir, and I appeal to every man conversant great alterations at the present time, although I am for with banking for the correctness of my position, that the adopting such an arrangement as will bring into circu. solvency and security of banks must depend essentially lation more specie, and put out of circulation all bank upon the intrinsic value of its discounted paper, in con. paper of a small denomination. I shall with great readi- nexion with its specie funds, which ordinarily amount ness, Mr. President, come in aid of any proposition to one third of its whole circulation. Some bank, pecu. which shall bave fur ils object the introduction of more liarly circumstances, and possessing great facilities and specie, and of less paper, among us. But, to my inind, ) extraordinary privilegis, may have within its control the time has pot arrived when the currency should be specie equal to its whole circulation, but not equal to its exclusively metallic. The whole amount of specie in whole liabilities. The banks of New England, on an our country is inadequate for the transaction of iis neces. average, do not possess a specie capital within tbeir con. sary business. Even ihe three hundred millions of bank- trol, or specie funds, exceeding one third of the whole ing capital, in addition thereto, is regarded as insufficient. amount of their paper circulation and actual liabilities;

The amendment proposed by the Senator of Virginia but they rely for their solvency on the worth of the debts must produce some good effect; it will, in a measure, due to them, on the intrinsic value of their discounted exclude from circulation bank paper of a less denomina paper; and every man conversant with banking must tion than five dollars. As far as it goes, it has my appro. know that it is a safe reliance, and that a bank doing bation, and will receive my support, in case the muver business upon the principles I have stated can never be will so modify his proposition as io prohibit the deposite so embarrassed as to put in jeopardy its own bank notes. banks from exercising a power over the currency, which The Secrelary of the Treasury has, as usual, received

Dec. 27, 1836. ]

Treasury Circular.

(SENATE.

his full share of abuse for his supposed connexion with, speculation began to break forth. It will be found that and participation in, the order of the 11th of July. It there was no very unusual increase until August of that remains yet to be ascertained whether the act shall re year. The Secretary is now obliged to make up his ceive the approbation or disapprobation of the American estimate a month sooner than was formerly practised, and people. I leave the matter with them: the issue is made at a time when he could not have received the whole reup-the reasons for and against the measure have been turns of October; and although he does estimate the proset forth-let judgment be rendered. 1:1 the decision of ceeds at a half of a million more than usual, yet I am free that tribunal to which the Executive has so successfully to admit that the estimate falls far short of the reality; but, and so triumphantly appealed on former occasions, he in making this admission, I cannot see that thereby any will most cheerfully acquiesce.

fault, any want of discernment, any want of foresight, of But the attacks which have been made upon the Sec. calculation, or of judgment, is chargeable upon the retary of the Treasury, pending this debaie, have not Secretary of the Treasury. It will appear that the xc. been confined to the specie circular. His want of judg- tual receipts of the fourth quarter, ending with Decemment, of financial skill, of tact, and of talent, have been ber, in 1834, from lands and customs, were but five and made most clearly to appear (as has been said) in his es. one third millions; while those for the last quarter of timate of the receipts and expenditures for the year 1835 were about eleven an ! one third millions; and not 1836, as presented in his official report at the commence so much land was advertised within the last as within ment of ihe last session of Congress. This charge has the first period. The sales of lands in that quarter ran become somewhat stale, worn out by its long.continued up to five and a half millions--a sum exceeding the whole use. These reiterated attacks upon that officer eslab. sales of any one year since 1820. in December alone lish one fact beyond all possibility of doubt--that the the sales amounted to two and one third millions, when gentlemen who make these charges consider that they usually not over half a million sold in that month. And, are contending with no ordinary enemy, but with an en in relation to the receipis from customs, I might add, emy talented, powerful, and, if not invulnerable, certain. that the destruction by fire, in New York, of some sevenly not easily vanquishied.

teen millions of merchandise, rendered fresli importaAt the last session I attempted to show how these ex. tions necessary, which greatly increased the receipts traordinary receipts had found their way into the Treas. from that source of revenue, and which could not have ury. I then slated, and I now believe, that the fact it. been considered by the Secretary. I cannot believe self of there being a most exciaordinary amount receiv. that in November, 1835, with all the lights then cast ed during the current year, is no evidence of want of sa upon this subjeci, that the gentleman from South Carogacity or judgment in making and presenting the estio Ina himself could or would have anticipated such an ex. mates as they were made and presenied in 1835. If the Traordinary amount of revenue. But it is enough for Secretary had then presumed to have estimated twenty me to say, that the Secretary of the Treasury, in making four millions as the probable amount which would be re his estimates of receipts for ihe year 18,36, was governceived in the course of the coming year from the sales of ed, in a measure, by the actual receipts of former years the public lands--if lie had estimated that lwenty mil from the same sources. But whoever calculates the relions would be received from customs, and Congress, receipts of any subsequent year by the actual receipts of lying on that estimate, bad proceeded to make appropri. the year 1836, will find that he has committed a greater ations accordingly, and it had turned out that no greater and a more hazardous error than bas been committed cum than usual bad been received from the sales of by the present Secretary. lands, or from the duties on imports, what would the The manner of executing the deposite bill of the last gentlemen then have said? They would have denounce session is also made a matter of grave charge against the ed him indeed as a visionary statesman, and in whom no Secretary; and the pecuniary distress which now exists confidence should be reposed. Such estimates, found. in our commercial cities (and I am most willing to agiee ed on no facts, but the result of mere conjeciure, would that is is most severe) lias been here and elsewhere hare justly exposed bim to the charge of rashness and charged upon the Secretary, as the unavoidable effect of folly.

of the manner of his executing that bill. Now, Mr. Pres. What is the course to be pursued by a prudent, cal ident, I think I shall find little difficulty in showing that culating, sensible, and discreet officer, at the head of the The Secretary could not have done less, without a viola. Treasury Departineni, in presenting his esu maies of re tion of ihe law, and without wholly disregarding the slate ceipts and expenditures?

of public opinio:1, and the just expectations of the comHe is to ascertain what had been the actual receipts munity. li was the forbearance of the Secretary which in former years; whether they had increased beyond ite has saved, if not the banks themselves, certainly the connatural increase which would result from an increase mercial and mercantile community, from severer trials, of the population of the country; and if so, to study the embarrassments, and sacrifices. The Secretary could causes of such an increase, and to make up bis esti not have done less; be miglu have done more; and the males of receipts with reference to the population and few failures which have occurred in our commercial cito condition of the country. It is, after all, but an esti ies, in carrying into effect the provisions of the deposite male; it cannot be regarded as faci; it is in a measure bill, are evidence of the bighi characier, resources, and conjectural, and the Secretary is greatly abused for responsibilities, of our mercantile community. guessing so badly. But the honorable Senator from li was early alleged that the Treasury Department South Carolina, in his report upon executive patronage, would not execute the deposite bill; that, under some fell into the same error. He under-estimated the re pretence or other, the Secretary would delay carrying ceipts from the sales of the public lands as well as from into effect its provisions, and thereby frustrate the just customs. If I am not niistaken, it will be found that expectations of the people. Trese allegations were the extraordinary amount received from the sales of the made and reiterated alter the adjournment of Congress, public lands was received from mere private entries, because the money was not inmediately removed from and were not the proceeds of the public salts. How those places where too much had accumulated, to points was it possible for the Secretary to know, or even to where there was little or none of the public funris. conjecture, who would purchase, and what amount The act to regulate the deposites of the public money would be purchased, of the public land at privale sale, was approved on the 230 of June last, and it is a fact within a given period? Things, I believe, bad gone on well known, that on the following day the Secretary of in the usual mode up to July or August, 1835; and then the Treasury commenced a correspondence, having for

SENATE.]

Teasury Circular.

(Dec. 27, 1836.

its object the selection of additional banks for the depos. the act to regulate the deposites of the public money," ite and keeping of the public money. It was manifestly which provides that nothing in the act to which this is the duty of the Secretary of the Treasury “lo select, as a supplement shall be so construed as to prevent the soon as may be practicable, and employ as the deposi- Secretary of the Treasury from making transfers from tories of the money of the United States," such new banks in one State or Territory, to banks in another banks as may be located at adjacent or convenient to the Slate or Territory, whenever such transfers may be repoints or places at which the revenues may be collected quired, in order to prevent large and inconvenient accu. or disbursed, requiring him, at all events, to select at least mulations in particular places, or in order to produce a one bank in each State and Territory, if one can be found due equality and just proportion, according to the pro. willing to be employed as a depository of the public mo visions of said act." ney; and the act requires that the Secretary of ihe Treas. The Secretary was bound, then, according to the ury shall not suffer to remain in any deposite bank an plain English of these two acts, without delay, to set amount of the public moneys more than three fourths of himself about removing from one set of banks, which the amount of its capital stock actually paid, for a lun. then held of the public money an amount beyond three ger time than may be necessary to make the transfers, fourths of their capital, about eighteen and one third milo for purposes of equalisation; and in the event of too lions of dollars, and to deposite this in various other great an accumulation of deposites in any bank, such banks in the different States; and to this may be added iransfers shall be made to the nearest deposite banks twenty-two millions, collected since the passage of the which are considered safe and secure."

bill. Allihis was to be done independent of those proSuch were some of the provisions of the bill regula- visions of the act which required that the surplus in the ting merely the deposites of the public money in the de. Treasury on the 1st of January, above five millions, posite banks.

should be deposited with the several States. The mo. The Secretary was then obliged, as soon as practicable, ney, on the passage of the deposite bill, which was on to select in the different states the additional deposite deposite in banks in the city of New York, could not be banks made necessary. He was not at liberty to post left in that city, because the money then there, and pone or to delay this service. The act was imperative; what was there collecting monthly from imports, would for the great and leading argument urged in favor of this make an aggregate exceeding three fourihs of their bill was, that such an accumulation of the public money whole banking capital. There was in deposite in that at particular points, and in particular banks, was expo city, on the 230 of June last, about thirteen millions; sing to hazard the public funds; and he was, therefore, there is collected ordinarily from customs, about one and in the most explicit manner, required “not to suffer a a quarter million each month. Their whole banking greater amount of the public money than a sum equal to capital does not, it is believed, exceed eighteen millions. three fourths of the capital of any deposite bank to re The Secretary, then, could not, without a direct violation main in such deposite bank, but at once to remove such of his duty, have suffered this amount of money there to excess to other places of deposite, for the purpose of remain, even if every banking company in that city had qualisation.”

been willing to have been employed as a depository. I The duty enjoined upon the Secretary, under these have stated that the Secretary found it necessary, in the provisions of the deposite bill, was clear and <splicit, discharge of his duty, to remove about eighteen and one and that duty was promptly met and faithfully perform third millions of dollars. This very operation is cause ed. The banks were selected with as lille delay as pos. enough for the pressure which exists in our great com. , sible; and the document now on the table will show how mercial cities. No one at all acquainted with business, early these transfers were made for the purpose of equal. but must admit that every dollar of this money bad been isa'ion, and to prevent any bank retaining in deposite, of loaned by one set of banks to their customers; and the the public money, an amount beyond three fourihs of process of transferring made it necessary to collect from iis capital, “ for any longer time than was necessary.” those customers, for those banks, in order that it might So much for the charge made against the Secretary at be removed to another set of banks. This was a real and the time for neglecting to execute the deposite bill. important money transaction. It was not an affair which

But when the money began to be moved, alter the ad-could have ordinarily been done without an actual colo ditional deposite banks had been selected, and after due lection of the money from the debtors of the deposite notice had been given to those banks which then held in banks. By the deposite bill itself, the banks which held deposite, of the public money, an amount beyond three the public money were required to pay interest on all fourths of their capital, that they must prepare to make over one fourth of the money in deposite; and it mus, the requisite transfers, then, forsooth, a universal hue then, have been fairly presumed that the money of the and cry was raised against the Secretary, for making any Government which had been placed in the deposite removal of any portion of the public monei, until the banks was out on loan. The fact was so; and, as I have 1st day of January; alleging that it was arbitrary and op before said, the very process of collecting from one set pressive on the part of the Secretary, not required by of customers at one set of banks, and paying over to an. the letter or by the spirit of the act; and that such an other, furnishes cause enough for the prevailing pres. unreasonable proceeding would produce unnecessary distress among the banks, and the unavoidable ruin of Who does not recollect the complaint made by the thousands of our mercantile community. Thus blowing Bank of the United States in 1833, for the removal of both hot and cold: blaming the Secretary for his pre- the deposites from that institution, less by one half in tended acts of omission, and for his real acts of commis. amount than changed places under the late act of Consion. Under the provisions of the act to which I have gress? Who does not recollect the pretended distress referred, the Secretary doubted whether he should have and ruin which was alleged to be the consequence of the power, before the 1st day of January, 1837, to re that act of removal, when even the actual amount then move from particular points in any one State where taken from the Bank of the United States was not re. there should be accumulated a great excess of the pub moved at once, but only as needed to pay warrants! lic money to any place beyond the limits of such State; Where there were great excesses of the public money and so settled was the public mind as to the course to be in any State, as in New York, Louisiana, and Mississippi, pursued in such a case, and so decided was the public it was expected that the Secretary would at once remove sentiment, that no sooner were those doubis known to such excesses to other States having little or none of the exist, than Congress passed the act "supplementary to public money. While those States bad millioos upon

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