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Jar. 10, 1837.)

Treasury Circular.

(SENATE.

pression in all the operations of business. It is a change / am asked, what is the end I propose, whether I am in to which society always adjusts itself slowly and pain favor of a specie circulation exclusively, and the total fully; and, under the most favorable circumstances, must suppression of bank paper, ! answer, No. Even if such be attended with distress-often with extensive ruin. an ovject were desirable, it is plainly impracticable. In Great caution, therefore, is necessary, lest it be unduly the present state of commercial progress and refinement precipitated in its progress, or harshly aggravated in its throughout the world, it would probably be impracticaeffects. We have, in the history of our own country, ble any where; but in this country, and under our sysat a period not too remote for the recollection of most of lem of government especially, it is obviously wholly unus, a memorable example of the distressing effects of a / attainable. Whether right or wrong, we find twentyrapid reduction of the circulating medium. It is striking- six independent State Legislatures possessed of the ly exhibited, in all its details, in the able report of Mr. power to create banking corporations. Whatever specuCrawford, then Secretary of the Treasury, on the cur. lative doubts may exist in the minds of some as to the rency, in 1820. It is there shown that the circulation of constitutional validity of this power, the States now the country, in the three years from 1816 to 1819, had actually possess and exercise it, as they have invariably been brought down from 110 millions in the former, to done from the foundation of the Government, and there 45 millions in the latter; miking the enormous reduction is not the slightest probability that they will ever be diof 65 millions within that short period! The scene of vested of it. In every sober and practical scheme of wide-spreadl ruin and distress which ensued is fresh in policy, we must proceed upon the assumption that this the memories of all who witnessed it. It inculcates, at independent Slate power will remain. Now, then, can least, the necessity of caution in the action of the Gov. die banking system be suppressed by this Government? ernment on this subject. It is our duty to withdraw Such a notion, if entertained any where, would indeed from the banking operations of the country that artificial be Utopian and visionary. stimulant which ihe Government itself has administered; My object, then, would be, not the destruction of the but that being done, a just policy, in general, requires banking system and the total suppression of bank paper, that the concerns of trade should be left to regulate but an efficient regulation of it, and its restriction to safe themselves by their own natural and remedial laws. and proper limits; not the exclusive iise of specie as a

Regarding, then, the Treasury circular as having circulating medium, but such a substantial enlargement mainly done its office, we are now called upon to estab- and general diffusion of it in actual circulation, as would lish some permanent and equal rule for the collection of make it the practical currency of common life, the uni. the public revenues. It is a duty which we cannot evade versal medium of ordinary transactions; in short, the if we would. In the joint power which the constitution money of the farmer, the mechanic, the laborer, and invests in Congress, to "lay and collect” taxes, our duty the tradesman; while the merchant should be left in the is read to us in terms too significant to be mistaken. it enjoyment of the facilities of a sound and restricted pais as much a part of the legislative authority to say in per currency for his larger operations. Such a reformwhat manner and by what rule the collection of the pub-ation in the currency as this would, in my opinion, be lic revenue shall be effected, as to say to what amount productive of the most beneficial results. It would give and from sources it shall be raised. Important as such a security to the industrious classes of society for the pro. regulation is at all times, it derives, at ihe present mo ducts of their labor, against the casualijes incident to the ment, a particular interest from its close connexion with

paper system. The laborer, in returning in the bosom the subject of the currency. It is in that connexion that of his family from his weekly toil, would no longer find all who have participated in this debate have discussed his slumbers broken by the apprehension that the hard the question before the Senate; and it is doubtless in earnings of the week, perhaps the accumulation of long that connexion that the public attention is turned with years of honest industry, might be dissipated in a mumst anxiety to our decision upon it. I feel, Mr. Presi. ment by the explosion of a bank, or the bursting of some dent, all the magnitude and all the difficulty of this paper bubble. It would give security, 10 a great exgreat question of the currency. There is none that tent, to the whole body of the community, against those rises higher in importance, or descends more deeply disastrous fluctuations in the value of property and coninto the interests of society. It "comes home to the tricts, which arise from the ebbs and Aows of an wirebusiness and the bosoms of men.” It affects alike the stricted paper currency. It would give security to the humblest laborer and the wealthiest capitalist; on it de banks themselves, by providing thein, in the daily interpend the security of property, the stability of contracts, nal circulation of the country, an abundant and accessia the comfort and support of families, and, i will add, in a ble lund fur recruiting their resources, whenever they great degree, the public morals; for nothing, in my should be exposed to an extraordinary pressure. opinion, is more calculated to unsellie the moral sense This, sir, is the happy state of things we miglit promand habits of a community than the dispositions and ise ourselves from replacing (as it is the aim of the pursuits fostered by the lottery of a fluctuating currency. proposition which I have had the honor to submit to do) In approaching such a subject, I feel all the diffidence all bank bills, under the denomination of twenty dollars, which a just sense or its difficulty and importance prop with a solid circulation of gold and silver. Is lliere any erly inspires. But, having submitted to the Senate a thing will, any thing visionary, any thing pernicious, in proposition which, if adopted, would, I fatter myself, such a system of currency as this li has the sanction, exert no small influence on this great interest; and as Mr. President, of the profoundest writers on questions the friends of the administration (myself among the of political economy, and has received the practical asnumber) have been accused of entertaining visionary, sent of the wisest nations. I ainwell aware that it would impracticable, and pernicious notions in regard to a re ill become me to present for the consideration of the form of the currency, I must beg the indulgence of the Senate any scheme which was not thus tested and ap. Senate while I state, with as much precision as I may, proved. Of all the writers who have treated and exam. the views of that reform which I entertain, and which ined questions of this character, none possess so higli an lave determined the shape of the proposition now under authority as the author of the “Wealth of Nations. It their consideration.

has been well and justly said ibat Adam Smith had done In discussing the question of a reform of the currency, for the science of political economy what Bacon and it is necessary to seule our ideas clearly as to two things: Newlon had done for physical science, and Sydney and first, the nalure and extent of the end to be aimed al; Locke for the science of government and the fundamelle secondly, the means by which it is to be attained. Nilial principles of civil anci political liberty. This work,

SENATE.)

Treasury Circular.

(Jan. 10, 1837.

appearing contemporaneously with the American Revo. urges the necessity of confining it to commercial accomlution, was deeply imbued with the free spirit and the modation in the larger transactions between dealer and large and vigorous thought which so remarkably distin-dealer. He is in favor of the suppression of all bank guished that great era. He came forth as the zealous notes under five pounds; whereby gold and silver will and powerful champion of free trade, the inflexible op. | fill the ordinary channels of circulation, and become, in ponent of monopoly and restriction, in all their multiplied fact, the cominon practical currency of the country. forms, the ardent advocate of every thing that is liberal, But this system does not rest on the authority of Adam generous, and popular, in the institutions of society and Smith alone. Not to mention the illustrious names or the intercourse of nations. No work has ever exercised the policy of other enlightened nations in support of it, so large an influence for good on the policy and destiny it has received the successive sanction of a long line of of nations; and none, I am sure, considering the stamp the ablest practical statesmen in England. It is a re. of liberty as well as wisdom impressed upon it, is bei markable fact

, that the great work of Adam Smith hav. ter entitled to the respect of an assembly of American ing appeared in 1776, the Parliament of Great Britain, legislators. Adam Smith, by a strange mistake, has been in the very next year, passed a law prohibiting all bank. held up, rather opprobriously, as the advocate of a pa ers from issuing notes under the denomination of five per system-as the founder, in fact, of the paper school! pounds. This continued to be the legislative policy of Sir, there can be no greater mistake than this. While that country till the memorable year of 1797, when, in he recognised the utility of a judicious system of bank. consequence of the exigencies and embarrassments of ing, in liberating and putting into productive employ that tremendous confict, growing out of the French ment capital which would otherwise remain dead and in revolution, which desolated and convulsed Europe for active, and the facilities it is calculated to afford to com. more than twenty years, the Bank of England, with the merce, he yet insists that the general circulation of the sanction of the Government, suspended specie paymenis; country should be gold and silver.

and, at the same time, resorted to an issue of one-pound As the general principles he has laid down on the sub. and two-pound notes. As soon, however, as the war jects of banking and currency continue still to be ap. was at an end, and the country was in a situation to adpealed to by the enlightened writers who have followed mit of the resumption of specie payments by the bank, bim, as affording the soundest exposition of those sub- the enlightened statesmen of England recurred to the jects, whatever modifications of subordinate points may prohibition of all notes under the denomination of five have been made by subsequent inquirers, I will give to pounds. This return to a sound policy, however, was the Senate, and principally in the words of Adam Smith not accomplished, nor has it been maintained, without himself, an outline of his system of currency. After encountering a strenuous and persevering opposition. speaking of the advantages to be expected from a ju. There is something so instructive in the history of this dicious and properly conducted system of banking, he reform of the currency in England, that it deserves to be says expressly that “the commerce and industry of a traced some what more in detail. In 1819, a law was country are not so secure when suspended, as it were, passed directing a complete resumption of specie pay. on the Dædalian wings of paper money, as when they ments by the bank in three years, to wit, in 1822; and travel about on the solid ground of gold and silver." He at the same time it was enacted that in two years after, says, therefore, it is the policy of wise Governments to wil, in 1824, all small notes under the denomination "to guard, not only against that 'excessive multiplication of five pounds should be prohibited. The first provisof paper money which ruins the very banks which issue ion was carried fully into effect at the designated period; it, but even against that multiplication of it which ena. but, such was the influence of the country bankers, and bles them to fill the greater part of the circulation of the other associated interests, that, before the appointed time country with it." He then proceeds to show that “the for the suppression of the small notes arrived, the latter circulation of every country may be considered as divi. provision was repealed, and the final suppression of the ded into two different branches: the circulation of the small notes was adjourned to 1833, the year of the ex. dealers with one another, and the circulation between piration of the charter of the Bank of England. But the dealers and consumers.” His next position is, " that the great commercial convulsion of 1825, which swept paper money may be so regulated as either to confine it. banks, merchants, farmers, every thing, before it, wiih self very much to the circulation between the different the destructive fury of a tornado, soon after occurred, dealers, or to extend itself likewise to a great part of that and forcibly admonished British statesmen of the necessibetween the dealers and congumers." The regulation ty of seeking a remedy-in part, at least in a more is effected by fixing the denomination of the notes per- solid constitution of their currency. Accordingly, in the mitted to be issued. “It were better," he adds, “That beginning of 1826, Lord Liverpool and Mr. Robinson, no bank notes were issued in any part of the kingdom the one the first Lord of the Treasury, the other the for a smaller sim than five pounds. Paper money would Chancellor of the Exchequer, introduced and carried a then confine itself to the circulation beiween the differ. bill providing for the prohibition, aster April, 1829, of ent dealers;" and where this is the case, he says, "there all small notes under the denomination of five pounds. is always plenty of gold and silver." “But where it This law was stoutly and zealously opposed at the time extends itself to a considerable part of the circulation of its enactment, and repeated attempts were subsequentbetween dealers and consumers, it banishes gold and ly made to procure its repeal, before the period fixed silver almost entirely from the country." The system for its operation. But these efforts were happily unavailof Adam Smith, then, resolves itself into this: that the ing; and the doctrine of Adam Smith, in regard to the circulation between dealer and dealer may be of paper, but prohibition of all notes under the denomination of five that the circulation between dealer and consumer should pounds, re-established in 1829, after experiencing the be of the precious metals; that this result ought to be bitter fruits of a temporary departure from it, may now secured by prohibiting the issue of bank notes for a less be considered as the final and settled policy of the British sum than five pounds, and that, if such a restriction be Government. It has received the sanction and support of adopted, there will always be plenty of gold and sil. her ables! statesmen--of Liverpool, of Peel, of Canning, ver" in circulation, performing all the offices of ex of Huskisson, of Brougham, of Wellington-all of whom, change in the "ordinary transactions” of society, while upon the fullest experience and consideration, have, from the use of paper would be confined to commercial ope.time to time, borne their testimony to the value and imrations of a larger scale. Instead of being the advocate, portance of this essential restriction upon a paper circufar less the founder, of an unrestricted paper system, he llation.

Jax. 10, 1837.)

Treasury Circular.

(SENATE.

And what has been the result in practice? Why, to swering equally well the purposes of domestic circulagive to the people of England virtually a metallic cur. tion, but one of them possessing only a local value, conrency; for gold and silver form there the daily habitual | fined to the country of its emission, while the other has medium of all ordinary transactions. A bank note, ex. a universal and equal value throughout the world, the cept on special occasions, is a sort of phenomenon. On latter will necessarily go abroad into the commerce of this point we have precise information. It appears, from the world, in quest of the riches and productions of forstatistical returns referred to by the Chancellor of the eign nations, leaving the former at home to perform an Exchequer in the House of Commons, a few years ago, office which it does equally as well, though it would be that the amount of gold then in circulation was twenty- wholly without use or value abroad. The total incomtwo millions of pounds sterling, and of silver eight mil. patibility, therefore, of a paper and metallic currency of lions of pounds sterling. I do not speak of gold and the same denominalions, has grown into an axiom. Ed. silver locked up in the vaults of banks; but of that which mund Burke, (whose sagacity in questions of this sort is passes daily from hand to hand, in the ordinary transac well known,) at the memorable period of the bill tions of business. Mr. Gallatin, in his instructive pamph. brought forward by Mr. Pitt for the suspension of spelet on the currency, published in 1830, states the metallic cie payments by the Bank of England, in 1797, in a lel. circulation of England at precisely the same amount. ter written during his last illness to Mr. Canning, which Allowing nothing for any augmentation since, the peo the latter gentleman brought most touchingly to the no. ple of England have, then, an actual circulating medi. tice of the House of Commons, in a debate of great interum of gold and silver to the amount of about one hun. est and instruction on this whole subject, at a much dred and fifty millions of dollars. The Secretary of the more recent period, (1826,) used these memorable Treasury, (who, doubtless, has access to the most authen. words: “ Tell Mr. Pitt tbat, if he consents to the issue tic sources of information on the subject,) in his annual of one.pound notes, he will never see a guinea again." report at the commencement of the session, states the The prophecy, sir, became history, No one saw a whole paper circulation of England, at this time, at one guinea in circulation in England while the balık continhundred and fifty-two millions of dollars. We may, ued the issue of one-pound notes. therefore, conclude that what Mr. Gallatin says, in the In 1828, when a great struggle again took place in the pamphlet thus referred to, is substantially correct--that, British Parliament, on the final consummation of the effort " by the suppression of all notes of a less denomination to restore a metallic currency, there was not a single than £5 sterling, the amount of the circulating metallic distinguished man who did not bear his testimony to currency in England has become equal to that of bank the truth of Mr. Burke's axiom. The Chancellor of notes of every description.” One half of the entire cir- the Exche quer said, on that occasion, " there was a natculation consists of gold and silver, constantly passing ural antipathy between the one-pound note and the sov. from hand to hand, and performing all the offices of es ereign. They would not exist together, for the note change in the ordinary business of life, and thus forming, soon drove the sovereign out of circulation.” The Duke in fact, the practical currency of the country. It is this of Wellington, who was eminently a practical man, and large infusion of the precious metals which has preserved spuke from the teachings of experience, said “the esthe currency of England, in the main, in a healthy perience of the last few years had proved the truth of condition, under a system of banking which her prime the theory, that one.pound notes and gold sovereigns minister himself, (Lord Liverpool,) in 1826, pronounced would not circulate at the same time. If you are to liave to be, in other respects, "the most insecure, the most gold in circulation, you cannot have one-pound notes." rotten, the very worst, which it is possible to conceive.” Mr. Huskisson, whose familiarily with questions of this

Much bas been said recently, I know, Mr. President, sort was the result of profound studies, as well as maof great commercial embarrassments in England, which lured experience, said, still more pointedly, “when the are attributed by many to a deranged stale of her cur. paper is let in, the gold will disappear. They might rency. These embarrassments, in my opinion, are viewed vote the money, they might coin it, but how could they in much too serious a light; but if they were not, it must retain it in the counlry?” This remark applies most be borne in mind that all commercial countries, however forcibly to our present situation. We bave yoted the solid the constitution of their currency, will occasionally metallic money, we have coined it, but it will not circu. be visited by revulsions in trade. I, too, they are to be Jale. Since we corrected, by law, the under-valuation considered as indicating a derangement in the currency of the gold coins, (but little more than two years ago, ) of England, the source of that derangement is to be the quantity of gold in the country, according to the late found in those defects of her system of banking which annual report of the Secretary of the Treasury, bas in. were referred to by Lord Liverpool as making it so increased fifteen millions. We have coined at our own secure and precarious, and not, surely, in that salutary mint, within that time, according to the same authority, check, the prohibition of small notes. On the contrary, ten millions of gold. But where is it? In the vaults of the abundance of gold and silver which that restriction the banks, or hoarded by individuals! and we shall never secures in the common circulation of the country is the see it in circulation until we have opened the way for great preservative of the system, and the anchor which it by a previous suppression of the small no es. enables it to ride in safety amid fluctuations and tempests mean to do any thing practical and effectual for introduthat might otherwise overwhelm or subvert it.

cing a more general circulation of specie, we must begin It is this abundant supply of the precious metals, fill. at the right end, by first pulling down the small-note ciring and saturating the ordinary channels of circulation, culation. which I desire to see brought about in our own country. This is the true policy of the Government, and is that That is the end to be aimed at. What are the means by practical reform of the currency wbich has been steadily which it is to be accomplished? We have seen that in held in view by the present administration and its friends. England it has been accomplished by the prohibition of The honorable Senator from Massachusetts (Mr. WEBall bank notes of a less denomination than £5. Similar STER) discovered great solicitude to know what is to be means will, doubtless, accomplish the same end here; the system of policy of the new administration upon this and, I must add, nothing else will. It is in vain to expect subject. I have no means of knowing, Mr. President, to bring gold and silver coins into circulation, without a which that gentleman does not equally possess. It is previous suppression of all notes of corresponding de generally supposed, bowever, that the coming adminisnominations. The reason is obvious. If there exist in iration will, in the main, conform its policy to the ex. any country two distinct currencies, both of them an- 1 emplar of the present. The inquiry of the honorable

if we

SENATE.)

T'reasury Circulur.

(Jan. 10, 1837.

gentleman, then, may be satisfied, by showing him what cannot be considered as a departure from a settled and has been the policy of the present administration; and general line of policy. On the contrary, the President, in that cannot be better stated than in the words of our ven his message at the commencement of ihe present session, erable and patriotic Chief Magistrate himself. I beg the expressly recurs to the suppression of the lower denom. indulgence of the Senate while I read a very unequivo- | inations of bank notes, by the concurrent legislation of cal and explicit passage on this subject in the President's the General and State Governments, as forming "the message of the last year. In that document he says: true policy of the country,” by which only “a larger

“ It has been seen that, without the agency of a great portion of the precious metals can be infused into our moneyed monopoly, the revenue can be collected, and circulating medium.” No other plan can be effectual conveniently and safely applied to all the purposes of the for the accomplishment of such a result; and, until it public expenditure. It is also ascertained that, instead shall be adopted, all that may be said, however glowing of being necessarily made to promote the evils of an un. and fascinating, of the advantages of a metallic circulachecked paper system, the management of the revenue tion, will prove but barren theory, and delusive and can be made auxiliary to the reform which the Legisla- unprofitable generalily. You may bring gold and silver tures of several of the States have already commenced in into the country, and pile them mountains high in your regard to the suppression of small bills, and which has banks; but, without the suppression of the small notes, only to be fustered by proper regulations on the part of they will never circulate in the business of society, and Congress to secure a pracrical return, to the extent re will always be exposed to be drawn off by the absorbing quired for the security of the currency, to the constitue currents of foreign trade. The object of a rational policy tional medium. Severed from the Government as politi- is, to bring them into daily and active use, invigorating cal engines, and not susceptible of dangerous extension and sustaining the pursuits of industry, and not to have and combination, the State banks will not be tempted, them, like the ancient household relics described by the nor will they have the power which we have seen exer. poet, wisely kept for show.” c'sed, to divert the public funds from the legitimate pur The question, then, is, by what means in our power poses of the Government. The collection and custody this great object of the suppression of the small notes of the revenue being, on the contrary, a source of credit may be promoted or accomplished. It is through the to them, will increase the security which the Stales pro. collection and management of the public revenue only vide for a faithful execution of their trusts, by multiply. that the agency of this Government can, at present, be ing the scrutinies to which their operations and accounts usefully interposed. By refusing to receive in payment will be subjected. Thus disposed, as well from interest of the public dues the notes of all banks which shall is. as the obligations of their charters, it cannot be doubled sile bills of the lower denominations, as is proposed by that such conditions as Congress may see fit to adopt re. the resolution I have had the honor to submit, a strong specting the deposites in these institutions, with a view inducement of interest will be held out to the leading to the gradual disuse of the small bills, will be cheerful. State banks to discontinue their smaller issues. The ly complied with; and that we shall soon gain, in place consideration of the credit and more general currency of the Bank of the United States, a practical re given to their paper, by a receivability in payment of form in the whole paper system of the counlry. If, the revenue, would doubtless induce more or less of by this policy, we can ultimately witness the suppression them to conform to the standard which shall be estab. of all bank bills below twenty dollars, it is apparent that lis'ied in this respect by the legislation of Congress. gold and silver will take their place, and become the But my reliance is not so much upon the operation of principal circulating medium in the common business of this measure per se, as upon the moral influence it is the farmers and mechanics of the country. The attain. calculated to exert upon the policy of the States. They ment of such a result will form an era in the history of have the complete power to prohibit, by law, the emisour couniry, which will be dwelt upon with delighi by sion and circulation of the smaller notes; and I cannot every true friend of ils liberty and independence. it doubt, if this Government shall hold up to them a standwill lighten the great tax which our piper sistem bias so ard deemed indispensable to the purification and reform long collec'cd from the earnings of labor, and do more to of the currency, ihat that power will, in process of time, revive and perpeluate those labits of economy and sim. be exerted so as to second and render effec'ual the poli. plicity which are so congenial to the character of repub.cy of our legislation here. Have we not every en. licans, than all the legislation which has yet been at couragement, in what has already taken place, to bope templed.”

for such a result? It is only a few years ago that but Here we have a complete delineation of the policy of three of the States, according to Mr. Gallatin, (Pennsylthe administration on this great griestion of the curren vania, Maryland, and Virginia,) had prohibited the iscy. Neither the President, nor the hody of his friends, sue of notes under five dollars. But, since that time, it have proposed a total suppression of bank paper, or an has been the policy of the General Government, in the exclusive metallic currency; bul, to use his own words, collection and management of the public revenues, to they have desired to see "a practical reform in the bank- discountenance bank notes under that denomination. ing system, by the ultimate suppression of all bank bills And what has been the result? We have seen the Stales, below twenty dollars, so that gold and silver might take one by one, successively conforming to the example, Their place, and become the principal circulating medium till now a majority of ihem have prohibited all bank in the common business of the farmers and mechanics of notes under the denomination of five dollars. The con. the country." This, he expressly declares, would be "a fidence I feel in the enlightened patriotism of the Stale practical return, to the extent required for the security Governments, and in the popular intelligence and virtue of the currency, to the constitutional medium;" and the which control them, gives me every assurance that an altainment of which, he adıls, “ will form an era in the appeal to their co-operation in so great and noble a history of our country, which will be dwelt upon with work will not be in vain, especially when they shall delight by every true friend of its liberty and independ. have before them a sober and practical exliibition of

There is nothing in the Treasury circular in the probable results of the policy in which their concur. consistent with this interpretation of the policy of the rence is invited. administration. That measure, as I have already said, Let us, then, inquire what is likely to be the extent was an occasional and teinporary aci, resorted to under of the effect which will be produced on the currency by a peculiar emergency, till the power of Congress coul! the successive prolibition of all notes under five, ten, be interposed to apply a more systematic remedy, and and lwenty dollars, respectively. Mr. Gallatin, whose

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Jax. 10, 1837.)

Treasury Circular.

(SENATE.

skill in questions of this sort is universally admitted, in The Legislature of my own State is now engaged in re his able pamphlet on the currency written in 1830, es. vising her banking system, and I console myself in the timated the reduction in the amount of the paper circu. belief that she will be among the foremost io vindicate lation which would arise, at that time, from the suppres. the wisdom and patriotism of the State councils froin sion of all notes under five dollars, at six millions; and distrust, by heartily seconding, in her legislation on the that likely to be produced by a suppression of the notes subject, our efforts bere to establish a sound currency under ten dollars, at about seven millions; making an for the country. aggregate of thirteen millions of dollars, and equal to But, sir, lill by the suppression of the small notes the one fifth of the whole paper circulation of the country. | circulation of the country has become better filled with Another highly respectable authority on American bank the precious metals, I do not think it would consist with ing (Gouge) estimates, in 1831, the amount of notes un a just, wise, and paternal policy on the part of the Gov. der five dollars then in circulation at seven millions; and ernment to exact payment of its dues in specie exclusive. of notes under ten dollars at ten millions; making an ly. It could not be done without great hardship to the aggregate of seventeen millions. But let us take Mr. public deblor, and extensive distress and embarrassment Gallatin's estimate, and suppose that the suppression of to the whole community. To demonstrate this, nothing the notes under five and ten dollars would, together, more is necessary than to compare the amount of specie operate a reduction of one fifth in the whole amount of in circulation with the amount of the revenue; for it is conbank paper in circulation. Let us iben suppose (wbich, ceded now, that if payment of one branch of the reveI presume, would not be extravagant) that the suppres. nue be required by any permanent regulation to be made sion of all notes under twenty dollars, and above ten, in specie, all ought to be paid in specie. According to would produce, in amount, a diminution of one fifth the estimate of the Secretary of the Treasury, (which more of the paper circulation. By the ultimate sup. | appears to me a very liberal one,) the wbole amount of pression of all notes under twenty Jollars, we should specie in circulation does not exceed twenty-eight milthen gain an aggregale reduction of two fifths in the lions of dollars. The revenue during the last year whole paper circulation of the country. According to amounted to forty-seven millions; and perhaps, with all the recent report of the Secretary of the Treasury, the our efforts to reduce it, it may still not fall short of thirty whole paper circu'ation of the coupiry amounts at this millions. There would, then, be thirty millions of dollars time to 120 millions, two fifths of which would be 48 tu be paid to the Government, out of a circulation of millions of dollars. But, in order to be within sure i wenty-eight millions! To confront the two sums is to limits, we will suppose that the amount of bank paper show the temerity, if not the impossibility, of the atwhich would be withdrawn from circulation by the tempt. If the public debtors should be thrown upon suppression of all notes under twenty dollars would be the banks for large amounts of specie, not to be had from only 40 millions. That, of course, would be replaced the circulation of the country, no one can be at a loss to by an equal amount of gold and silver. How, then, perceive to what a disastrous extent the business relations would stand the account in the final result? Porty mil. and pecuniary concerns of the whole community would lions, laken from the 120 millions of paper circulation, be embarrassed and deranged. And how much of would leave 80 millions of paper; and, added to the 28 specie, permit me to ask, would remain for that immillions of gold and silver already in circulation, accord. mense mass of payments in private transactions, whichi, ing to the estimate of the Secretary of the Treasury, according to a practical estimate made by Mr. Gallatin, would give us 68 millions; or (for the sake of round in reference to the revenue collected, and the businumbers, and to compensate liberal deductions made ness done, in the city of New York, exceeds more above) 70 millions of gold and silver in active circula than fifty times the payments to the Government? tion-not dammed up and stagnating in the coffers of Nothing, therefore, can be clearer than that an attempt, the banks, but spread over the land, irrigating, refresh with our present limited metallic circulation, to collect ing, and fertilizing the whole country.

the public revenue in specie alone would be distressing Such, Mr. President, would be the solid and practical to the last degree, and could not abide the test of that result of the ultimate suppression of all bank bills under public judgment without whose approbation no syslem of the denomination of twenty dollars. It would give to policy can or ought to stand. the country nearly one balf of its whole circulation in The honorable Senator from Missouri, (Mr. Bestox,] the precious metals, forming a solid and unfailing fund in the able speech made by him in the opening of this for the payment of labor, for the buying and selling of discussion-á speech which does him great credit, not the necessaries of life, for the great mass of daily trans. only for the extent and variety of the research displayed by actions, including the wants and interests of the farmer, bim, but for the force and ability with which he illustrathe mechanic, and the tradesman; while the other half led his own views, (in some of which it is my misfortune would consist of an improved paper currency for the to differ from him, )-brought to the notice of the Sen. use and accommodation of the merchant, and for the ate, from the evidence taken before the Committee larger operations of trade and business. I would ask of Secrecy of the House of Commons on the Bank of gentlemen is such a result is not " a consummation de. England charter, in 1832, the case of a banker at Man. voutly to be wished}" Would it not, in the glowing chester, who paid out, in the course of a year, about and patriotic language of the President, form “an era six millions of dollars in specie to ibe operatives of that in the history of the country which would be dwelt upon place. But this was done in a country which, as I bave with delight by every true friend of its liberty and inde. already shown, possesses an actual circulating metallic pendence?” And can we suppose that the enlightened currency of one hundred and fifty millions of dollars, Legislatures of the States, in the view of such a result, whereas our metallic circulation is but twenty-eight mil. pregnant with consequences so important to the safety, lions! The examination of Mr. Samuel Jones Lloyd, ine prosperity, and the morals, of the whole community, the banker referred to,) on this point, is so instructive and especially to the interests of those numerous and in- in itself, and so strikingly illustrative of the arguments I dustrious classes which form the basis and support of have advanced, that I beg leave to read the whole of that our republican system, could be so deaf to the united portion of it to the Senate, in the form of question and call of patriotism and wisdom, as not to lend their co-op. answer in which it is reported: eration in so great and salutary a reform? For myself, " Question. You are aware that a great amount of Mr. President, I feel a cheering confidence that they specie is required every week for the payment of wages will give a helping and efficient hand to this great work. at Manchester?

VuL. XIII.--23

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