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SENATE.]

Treasury Circular.

[Jan. 10, 1837.

Answer. A very large amount.

tion of small notes? In sovereigns? In gold or silver? Question. Can you give the committee any idea of Let us return to the examination of Mr. Lloyd: the amount?

Question. Before the abolition of the £l notes, were Answer. No, I cannot; but, so far as regards the those payments generally made in £l noles? issue of our own house, I should say that upon the aver Answer. Entirely. age we pay about 25,000 sovereigns a week.

Question. Was the amount then about the same? Question. Is that a fresh supply of sovereigns in each Answer. Quite as large." week, or do you obtain it from the circulation of the Previous to the suppression of the small notes, then, place?

the whole amount of payments now made in gold were Answer. We require a continual fresh supply, but made exclusively in £1 notes, and, but for that suppresnot to tbat extent. I think the fresh supply requisite sion, would still be made in £1 notes. While the £1 notes will average something less than 10,000 a week.

were in circulation, these payments could not be made Question. Before the abolition of the £1 notes, were in gold, because gold was not in circulation. Gold was, those payments generally made in £l notes?

doubtless, in the country, accumulated in the vaults of Answer. Entirely.

banks; but not being in circulation, there was no com- . Question. Was the amount then about the same? mon and accessible fund from wbich it could be readily Answer. Quite as large.

and conveniently obtained for the business of life. it Question. You say that about 25,000 a week is what never will be in circulation, until bank notes of the you are called upon altogether to pay, and that about smaller denominations have been first suppressed. It is 15,000 come back into your hands? What do you ap- in vain for the Government to allempt to bring it into prehend becomes of the remaining 10,000 sovereigns? circulation by demanding it in payment of the public

Answer. When the £l notes were in circulation, we dues. By doing so, the public debtor may be subjected could trace it pretty accurately, and I believe the course to hardship, the banks may be exposed to runs upon to be the same with the sovereigns; they are paid princi. them for specie, and the business of the community nay pally in wages. The work people lay them out in be crippled and deranged. But gold and silver will clothing and provisions, and those sovereigns pass to the never circulate wbile bank notes of the same denominaprovision dealers, and thence into the districts from which tion are permitted to occupy the channels of circulation. the provisions are supplied; the sovereigns then pass into “You may call spirits from the vasty deep, but will the hands of the country bankers in those districts, who ihey come?" either send !hem up to London or return them to Man. The requisition of specie in payments to the Governchester, as may be most convenient to them.

ment will not only not avail to bring gold and silver into Question. it does not follow, then, because you are circulation, but, if insisted on, while gold and silver yet obliged to have 10,000 sovereigns from the branch bank, form, comparatively, but a small part of the actual cur. (that is, branch of the Bank of England,) that the amount rency of the country, it will inevitably have the effect of of the circulation in Manchester is continually increasing diminishing their circulation. While bank paper forms at the rate of 10,000 a week?

the great mass of the currency of the country, if the Answer. No, I do not apprehend it is increasing at Government refuse to receive it in payment of the public all.”

dues, and demand specie exclusively, the necessary conNow, sir, let us see how these large payments in spe. sequence will be to enhance, to a greater or less extent, cie, in Manchester, are made. Mr. Lloyd says, ex the value of gold and silver in relation to paper. That pressly, that, of the 25,000 sovereigns a week paid out being the case, gold and silver will no longer circulate by bim, 15,000 of them are obtained from the circulation freely. Those who have specie will be unwilling to of the place, as, through that channel, they regularly part with it, except at a premium; and those who have come back into his hands; that he requires a fresh sup notes will be anxious io convert them into specie. ply of about 10,000 sovereigns a week from the bank; Hoarding of the precious metals will then commence, but these 10,000 sovereigns are also constantly relurning and but little of them be seen in circulation. No one, I to the bank from the circulation of the country. They presume, Mr. President, attaches much importance to are first paid by the work people to the provision deal. i ine collection of the public revenue in specie, as an ers; then by the provision dealers to the farmers, of ultimate object, if it can be made equally safe by other whom they procure their supplies; from the farmers

It is only as an instrument of purifying and they pass into the bands of the country bankers, who correcting the currency that it deserves the consideraeither return them to the branch bank at Manchester, tion of a practical statesman. The great object is not or, what is the same thing in effect, send them up to the to amass specie in the public Treasury, or in the vaults of parent bank at London. Thus, the whole amount of banks, bui to diffuse its bealthful currents through the these specie payments is supplied by the actual circu- | business of society, and to bring it into active circulation lating medium of the country--a thing easy and conve. among the people. Th can only be effected by the nient enough, and perfectly natural, where the amount previous suppression of the small notes; and any attempt of gold and silver in daily and active circulation is by the Government, before that is done, to collect its 150,000,000 dollars. To make large payments in spe. revenues in specie, instead of promoting and extending cie, under such circumstances, is attended with no diffi- the circulation of gold and silver, tends directly to narculty, because specie is the common and habitual cur. row and diminish their circulation. rency of the country, The metallic circulation of The indiscriminale refusal of bank paper in payment England is a perpetual fountain, fed by the streams of the public dues might, in the present condition of the which flow from, and are constantly returning into, it country, be attended with other serious hazards. We But to make payments in specie to the Government have heard a great deal recently, Mr. President, of the alone, of thirty or twenty millions of dollars, or the half pecuniary panic and distress prevailing in England and or the fourth of those sums, in a country whose circula. Ireland, and of the extensive commercial embarrassments tion consists of $120,000,000 of paper, and of but felt there. These embarrassments (in Ireland, espe. $28,000,000 of gold and silver, is a far different opera- cially) seem to have arisen mainly from this very cirtion.

cumstance of a refusal to receive the paper of solvent Another most important lesson is to be derived from banks in collections of the public revenue. It appears the evidence of Mr. Lloyd. How were these payments that some of the collectors of the customs bad arbitrarily for wages made in Manchester previous to the prohibi- I refused the bills of the Provincial Bank of Ireland.

means.

JAN. 10, 1837.]

Treasury Circular.

(SENATE.

Thereupon, a run upon the bank immediately com tal principle in the fiscal code of Government; without menced, which, nevertheless, weathered the storin. The it, the practice of special deposites must be revived, panic spread in regard to other institutions, which, which formerly subjected the Government to heavy loss. though solvent, were compelled to stop payment; and a es, and is the origin of the unavailable funds still borne general scene of confusion, alarm, and embarrassment, on the books of the Treasury. But if the deposite ensued. But I will give the details in an extract from banks are to be absolutely responsible for the notes dean English paper, which has been republished exten posited with them as so much cash, they ought, certainly, sively in all our principal journals. Here it is:

to have a reasonable discretion as to the notes they shall “The pressure was yet severe, not only throughout receive on deposite. This is no new principle in the England, but in Ireland. In the latter country there practice of the Government; it has been a standing inhad been a panic, attended by several severe commer struction from the Treasury Department to the public cial disasters. This panic was commenced by the col receivers and collectors, for more than twenty years, to lectors of the customs at Newry, and some other places, receive no noles but such as the deposite banks would refusing the bills of the Provincial Bank of Ireland. credit to the United States as cashı. To satisfy, howev. run upon the bank was the inevitable and immediate er, as far as possible, the jealousy which has been exconsequence. The solvency of the bank, however, had pressed on this subject, and to guard against any arbinever been questioned, and was finally altested by the trury or wanton abuse of their discretion by the deposite result. The panic spre: in respect 10 other institutions, banks, I have, by a mo lification of my original resoluand the Dublin Agricultural Bank stopped payment on tion, placed them, in this regard, expressly under the the 15th. Strong efforts were made by its friends to supervision and control of the Secretary of the Treasury. sustain it. One genileman, Mr. Gresham, sent in While the proposition I have had the bonor to submit £25,000. The liabilities of the bank are stated at provides, as I believe, in the amplest manner, for the se. £240,000; its assets at £680,000.

curity of the public revenue, it pays a due regard to the “This bank was established in 1834, by 2,170 part. interests of the great body of the community. An in. ners. It now has 5,000 partners, and twenty-six Alexible exaction of gold and silver in payments to the branches scattered all over the country, all of which Government, in the present condition of the circulating stop, of course. But, notwithstanding the solvency of medium, it seemed to me, would involve a necessary and the institution, its suspension will operate fearful injury.” serious derangement to the whole business and com

All tbis pecuniary suffering and distress, widely rami. merce of the country. These interests I believe to be fied as it afterwards became, originated in the refusa), more or less common to all. I am not one of those who by officers of the Government, to receive the notes of a see a natural enmity and inherent incompatibility be. solvent bank in payment of the public revenue. If, Mr. tween the interests of different classes of men; I do not President, we shall, by a sweeping law, refuse to re. belong to that school of philosophy wbich divides so. ceive the paper of all banks, however sound, in discharge ciety horizontally, the upper portion pressing upon the of the public dues, will there not be danger of similar lower with the weight of its incumbent mass, while the consequences? Might it not operate, to a certain ex latter is constantly striving to throw off the load by vio. tent, as a discredit of all bank paper, exposing the insti- | lent and vindictive struggle. This is the bellum omnium tutions which issue it to severe runs, and the community in omnia which forms no part either of my philosophy or at large to consequential pressure and embarrassment? my feelings. No, sir, my theory assigns a perpendicu. At all events, there would be heavy demands upon the lar stratification to socieiy, placing all its component banks for the specie requisite in payments to the Gov. parts side by siile on the same platform of equality, with ernment, which the limited metallic circulation of the common rights, common interests, and common duties, country would be wholly inadequate to supply. Would mutually giving and receiving support by their juxtapoit be just or wise in the Government, in the present con sition. Jo this aspect, the intt rests of the merchani, dition of the currency, with a Shylock severity, to de the farmer, the mechanic, the laborer, are the same; mand its pound of Aesh? Would not such a course tend what promotes the prosperity of one, redounds to the to produce, instead of averting, the catastrophe which advantage of each. appears to be dreaded by some?

In regard to the effect upon the currency, the propoI should be as little disposed, Mr. President, as any

sition I have had the honor to submit, if adopted, would member of this body, to hazard the safety of the public prove in some degree instrumental, I trust, in promoting revenue by any undue laxity in regard to its collection. that great reform which has been so impressively recom"The proposition I have had the honor to submit provides mended by the patriotic Chief Magistrate of the ration, studiously for the security of the revenue. It not only and which, at the moment when he is about to close a does not allow the notes of any banks to be received, long and glorious career of public service, in a hallowed but such as are promptly redeemed in specie--subjeci, retirement, “by all a nation's wishes blest,” may well too, to important restrictions in regard to their denomi. form the object of his ardent vows for his country. nations—but it expressly declares that no notes whatev. That reform seeks, by the substitution of gold and sil. er shall be received which the banks in which they are ver, in place of the lower denominations of bank paper, to be deposited shall not agree to pass at once to the to make the precious metals the familiar currency of credit of the United States as cash. This guarantee of

common life. But this object can be fully arcomplished the deposite banks converts the whole of the public col. only by the ultimate suppression of all notes under twenJections virtually into specie; and when it is recollected ly dollars; five-dollar notes and half eagles will not cirthat the Secretary of the Treasury is empowered, when. culate together; the ten-dollar note must be put down, ever be thinks it necessary, to obtain from them-a spe. before the eagle can take its place. cial and supplementary security for the public deposites, I am aware, Mr. President, that our position is not exthe solidity of the guarantee may be reposed upon with empt from difficulties and dangers. But I see in them confidence.

nothing to creale alarm, far less to excite despondency; It is objected to this provision, by some gentlemen, but every thing to rouse the devotion and energy of the that it puts it in the power of the deposite banks to say patriot. With whatever embarrassments we may be what notes shall, and what shall noi, be received by the beset, there is a recli eming power in the virille and inGovernment in payment of its revenues. The absolute telligence of ihe American people, wilich will conduct responsibility of the deposite banks for the notes de pos. us in safety and triumph througii them all.

Sunne genited with them on public account is deemed a fundamen- 1 tlemen, i find, still fondly recur to their favorite pre

Senate.)

Texas- Treasury Circular.

(Jan. 11, 18:37.

scription of a national bank, as the panacea for all our ills. them. Let us grapple with the difficulties which may In my humble judgment, sir, the remedy is far worse oppose us, in a spirit of strenuous and determined patri. than the disease. The protection of a national bank otism, and we shall triumph over and subdue them. In would be “such protection as vultures give to lambs."' conclusion, let me say to the political friends with whom No, sir; let us rather invoke the protection of our grar. I have had the honor to act in trying times, that, after dian and victorious bird, the American eagle, the em. having successfully dissipated so many panics raised un. blem of our freedom and strength. An able and expe. der other auspices, we shall not, I trust, at last become rienced member of the House of Commons, speaking of

the victims of a panic of our own creation. the inherent tendencies of the banking system, said:

When Mr. Rives had taken his seat, " There is in it an inevitable tendency to over-issues of

Mr. CLAY rose and said that he desired to submit to paper, without a constant sentinel keeping watch upon the Senate a few considerations on the subject under it; and that sentinel [for them) was the metallic sove debate; but, as the hour was somewhat late, ihe Senate reign in constant circulation." The American metallic might prefer that he deferred what he bad to say till toeagle, in active circulation, will perform the same tute morrow, and proceed for the remainder of to.day to lary office for us; and, with such other provisions as the some other business; whereupon, practical and sagacious spirit of American legislation On motion of Mr. BROWN, the Senale adjourned. shall devise, will finally, I firmly believe, place our currency on a footing which, for convenience and security

WEDNESDAY, JANUARY 11. united, will rival any other under the sun. Let the Sale Legislalures proceed firmly and vigor.

Mr. KENT presented the credentials of Jour H. ously in the suppression of the small notes. I believe SpencE, elected by the Legislature of Maryland a Senator they will

. They have the highest motives which can ad. from that State, to fill the place vacated by the death of dress themselves to human action to accomplish this

Hon. R. H. GOLDSBOROUGH, till the 4th of March next. great reform. Let them subject all banks, both old and

TEXAS. new, to efficient regulation; let them regard with jeal. Mr. WALKER submitted the following resolution, ousy every proposition for an increase of banks, and

which lies on the table one day, for consideration: yield to none which is not founded on broad considera

Resolved, That the State of Texas having established tions of public utility; let them impose strict, practical and maintained an independent Government, capable of limitations, both upon their issues and their discounts; performing those duties, foreign and domestic, which let them provide for frequent periodical scrutinies into appertain to independent Governments, and it appearing their condition; and, above all, let ibem retain in their

that there is no longer any reasonable prospect of the own hands a constant power of correcting abuses, and of successful prosecution of the war by Mexico against said protecting, in every emergency, the interests of the State, it is expedient and proper, and in perfect concommunity. It is this principle of legislative regulation and control formity with the laws of nations, and the practice of this

Government in like cases, that the independent political over banking institutions which constitutes the distinct- existence of said State be acknowledged by the Governive feature of American policy. It is the result of the ment of the United States. practical character of the American mind; and I am Mr. WALKER said it was not bis intention to ask a happy to perceive that the people of older countries- departure from the rules of the Senate, in order to enter of England, especially—are turning to us for lessons and

upon the consideration of this resolution at this period. examples in this branch of the public economy. In that The resolution, (Mr. W. stated,) he would only say, et country, beyond the sixty-five miles from London, which

this period, was in exact concurrence with the views exdefine the limits of the Bank of England monopoly, nu. pressed by the President of the United States in his last me rous broods of joint stock companies and private message on this subject. In that message, the Presibankers have sprung up, without regulation by law, dent declared it as his opinion, that the independence of without limitation of number, without restriction as to Texas miglit be considered as suspended upon the issue their issues or discounts, aud without responsibility to of tbe ihreatened invasion by the army under the com the public authority. The consequence has been, that mand of General Bravo. Mr. W.said he had this morn. this branch of their system has run into wild disorder and ing received information direct from Vera Cruz, as late confusion. They now see that the privilege of issuing as the first of December last, that this invasion had promoney, of whatever kind, is an essential branch of the

ved entirely abortive; that the army of Bravo bad been re. public sovereignty, and, like every other delegated powoduced, by desertion a'd other causes, to a very small er of that sort, it must be subjected to regulation, to in-number; that this miserable remnant was unsupplied spection, to responsibility. This is a lesson they have with provisions; and that, in consequence of these events, learned from 1s; and it is gratifying to see that, on anoth. General Bravo had resigned the command of the army, er fundamental point, the most enlightened minds in and that the invasion, in all probability, would be abanthat country are coming to the same conclusion that we

doned. Mr. W. said he was satisfied that full reliance have attained. They begin to see that the monopoly of might be placed on the correctness of this information, the Bank of England, as that of the Bank of the United and that he was fully convinced that, with the knowledge States here, is a dangerous monopoly: that the dominion of these facis, the President would cheerfully unite with of such an institution over the circulation is a power Congress in recognising the independence of Texas, more of evil than good; and that it must be brought

TREASURY CIRCULAR. down to the level of competition with other solid institu. tions. The opinions of the two countries, on this great The Senate having again proceeded to the order of concern of the currency, are mutually approximating, the day, which was the consideration of the resolution and setting down upon a common system. They are

heretofore moved by Mr. Ewing, of Ohio, concerning learning from us the necessary checks and controls of a the Treasury circular, with the substitute therefor propaper currency; we from them, I trust, the value and posed by Mr. Rives importance of an enlarged metallic circulation. I re Mr. CLAY said that he took great pleasure in tenderpeat, then, there is nothing in our present situation to ing to the Senate his respectful thanks for the indulgence excire alarm or despondency, whatever occasion there which had yesterday been accorded him, at the instance may be for vigilance and caution. Let us look our dan. of the Senator from North Carolina. And he should es. gers stea:lily in the face, but let us not be dismayed by Iteem himself most happy if on the present occasion be

Jax. 11, 1837.)

Treasury Circular.

(SENATE.

should be so successful as to say what should occasion no President Jackson commenced his administration by recregret to any for having conferred npon him that indul- ommending a mixed currency, yet that he gradually de. gence.

parted more and more from that ground, until, in the In the State (said Mr. C.) of which I am a citizen, I message of 1835, referred to by the Senator from Vire had lately occasion to express my opinion in regard to ginia, he speaks of getting back to the “constitutional that Treasury order which it is proposed in the resolution medium,” evidently alluding to an exclusive specie ciroffered by my friend from Onio (Mr. Ewino) to rescind. culation. You will therefore agree that the uncertainty What I said on that occasion appeared in the prints of of which I have spoken is not feigned, but real; and I enthe day; and a degree of unexpected notoriety has since treat the two divisions of the friends of the administrabeen given to it during the present session. What I ut. tion speedily to sellle between themselves the contro. tered i sincerely believed. I believed it then, I believe verted question, what the policy to be pursued actually it now; and I reaffirm it with all sincerity here in my is, and forthwith to state it io the country, so that all our place, as my settled opinion. Before, however, I pro business men may have an eye to it, and regulate them. ceed to state the grounds on which it rests, I shall take selves accordingly, in their moneyed transactions. some notice of the able speech wiib which we were yes The Senator froin Virginia tells us that he is in favor terday favored by the honorable Senator from Virginia, of an enlargement of the metallic foundation of the cur. (Mr. Rives.] Though that speech was any thing but a rency. And who is not? Is the idea a new one with justification of the legality of ihe Treasury order, it was the Senator from Virginia? Did it not originate, or wag ingenious, plausible, often eloquent. The speech it not at least first pressed by my friends who were en throughout its whole tenor was indeed directly adverse de voring to guard the currency of the country from the to the order, The Treasury order proceeds on the dangers which beset it? Was not the principle of ren principle of requiring specie only in payment for one of stricting issues of bank notes below prescribed denomithe most important branches of the public revenue; bilt nations first introduced by the Senator from Massachu. the Senator from Virginia is in favor of receiving in pay. seits who sits near me, (Mr. WEBSTER,) as one provision ment a mixed currency. The order proceeds on the in the renewed charter of the Bank of the United States principle of exbibiting partiality toward certain particu-in 1832? And while I am very sure that the Senator from lar classes, in their payment of the public dues; the Sen- Virginia did not take from the speech of my friend on ator from Virginia is for a rule which shall operate alike that occasion the anecdote which he introduced into his and equally on all, and shall extend to every branch of own of the message sent by Mr. Burke to Mr. Pilt, the public revenue. In a great deal, indeel, in most of warning him that if he permitted the issue of one-pound what was so well said by that Senator, I entirely concur. notes he would never again see a guinea in England, yet There are, however, some points of difference, which I it does so happen that that very anecdote was related shall presently notice. I regret, that while the country by the Senator from Massachusetts in his speech before generally, while the Senator himself, and while we all

, the Senate in 1832, and was used by him expressly in are so deeply interested in knowing what is to be the support of the idea of increasing and strengthening the real policy of the administration on the question of the metallic basis of our paper currency. currency, we are left as much in the dark as ever.

But whilst both gentlemen concur in the propriety of one side of the Senate, by one friend of the administra- imposing some limitation on our paper circulation, yet tion, it is said that the precious metals alone are to form there is a wide difference between them as to the mode the currency, and that all paper is to be driven out of in which that desirable object is 10 be effected. The use; gradually, indeed, but surely. The Senator from Senator from Virginia would rely on the voluntary action Virginia, on this side, says that the policy about to prevail of a thousand banks, and of twenty-six State sovereignseeks to establish a mixed currency, consisting in part ties operating on those banks. We of the opposition, of specie, and in part of the notes of specie.paying banks. on the contrary, thought it wisest to rely on a remedy Which of these friends of the administration are we to within our own power, to trust to our own laws, and to credit? I must confess, that so far as past experience is look to that which we could effect by our own energies to be looked to on such a subject, it seems to favor a and the exertion of our own constitutional authority. metallic system more than a mixed currency.

We considered this a practical and efficacious means. At the last session of Congress, a proposition was in. / The Senator from Virginia relies on what I consider troduced into the Senate, requiring the payment of spe. wholly inefficient. His reliance, it seems, is on the encie in all cases by the purchasers of our public lands. lightened patriotism of the States and of the banks; the That proposition was, however, put down by an almost enlightened patriotism of nine hundred or a thousand unanimous vote. For, although no call was made for the banks, created for the sole purpose of making mưiney! yeas and nays, I think I am fully authorized in saying that, But, sir, have we no lessons from experience in our own had such a call been made, there would not have been more past history, as to the degree of reliance which may safethan one or two yotes in favor of the measure.

ly be placed on the mere voluntary action of any conthe 11th of July, almost immediately on the rising of Con-munity, however enlightened and patriotic it may be? gress, we find ibis very proposition imbodied in a Treas. What was the state of ihings during our own Revolution, ury order, which requires ihe payment of specie in re when we were contending in the most glorious cause gard to our most important branch of the public revenue. that ever animated the hearts or nerved the arms of meu? This fact would seem to indicate tbal ine policy of a The reliance was then on the voluntary payment of the mixed currency, for which the Senator from Virginia quotas, not of twenty-six, but of thirteen States, indishas contended, was not then the policy of the adminis. pensable to the success of that cause and to our sol. tration, and that not his but another's influence was pre-Viers, who, unfed and unclad, were enduring every sufdominant in the cabinet. In the preamble to this order, fering to which humanity can be possibly exposed. Let in which the reasons for it are set forth, we find not only me ask the honorable Senator, in view of what then took that specie is required from all purchasers of the public place, whethier reliance on the patriotism even of enland, but that that other element of the currency which lightened States, much less that of banking corporations, the Senator would retain is denounced as “paper mo is safe and secure. ney.” And even in regard to the messages of the Pres. Ti is now four or five years since the policy was first an. ident himself, did time permit, and were it necessary to nounced on our side, and was afterwards taken up by a do so, it would be easy to show from all of them, so far portion of the friends of the administration, to widen the as they relate to this subject of currency, that although metallic four dation of the currency by a probibition of

On

Yet on

SENATE.)

Treasury Circular.

[Jan. 11, 1837.

small bank notes; and what has been the result? How thority? He told us that the money transactions in one many States has enlightened patriotism induced to adopt single city, the city of New York, were estimated several the policy? The Senator from Virginia mentioned Vir- years ago, and that by a man than whom none is better ginia, Pennsylvania, and Maryland, to which he might acquainted with all such matters, at 1,500 millions annuhave added Kentucky, and possibly one or two others, wally; and at this day the amount is probably double that. as having imposed the desired restriction; but they did Now, if, in one single city, the course of business requires it either prior to, or without any sort of reference to the the employment of 1,500 millions of dollars annually, annunciation of the policy from Washington. Of all the what must be the ap gregate amount of the transactions twenty-six States, he believed New York and Maine only in all the other cities and parts of the Union? The had conformed their legislation to the recommendation amount baffles all human calculation; and do you sup. sent forth from this city. And it is remarkable, with re pose that, by wielding a revenue of only thirty millions, spect to Maine, as he had understood, that, after the re

you can overawe, coerce, and control banks whose bustriction was imposed, a supply of the prohibited notes siness amounts, perhaps, to a thousand times as much? below five dollars was sent for to Massachusetts, for What proportion does the number of your deposite small change in the transaction of business.

banks bear to that of the whole of the banks of the UnNo, sir; no man has a higher opinion of the patriotism ion? Before the passage of the deposite act they of the country than I have. There is no one who enter amounted, if I remember, to less than forty; they are tains a higher opinion of the patriotism of the States, or now, perhaps, eighty; and we are told by a secret auis more disposed to place a due and proper degree of thority, which seems to be high and controlling, that reliance upon it; but I consider it sound policy not ex their number, when the deposite act is executed, is clusively to depend upon it, but to add to that security again to be reduced down to forty; but say it is eighty, the salutary vigor of the law. Hence we supposed that and then by your operation on these eighty banks you it had been demonstrated by all experience in this coun. are to bring about an effect so important as to deprive try that a national bank, created by, and under the prop- the remaining nine hundred and twenty banks of that er control of, this Government, was a fit and necessary, which, in many instances, constitutes the most important instrument to guard the paper system of the country part of their circulation. Can we not see that the thing against its tendency to run into excessive issues, and ulti. is perfecily chimerical? mately into utter disorder; that such a bank would at Suppose you prevail with one bank to give up the is. least retard that deplorable state of things; and that, if it sue of its small notes. What is the immediate effect? could not finally prevent it, when the notes of the local | The vacuum produced by the withdrawal of the small banks had lost all confidence, and ceased to be a secure notes of that bank is instantly filled by the small notes of circulation, the notes of the national bank would remain other banks; and even if you could go a step further, a safe medium, in which the revenue of the country could | and prohibit your deposite banks from receiving in debe collected and disbursed.

posite the notes of any bank which issues bills below five From the moment that the Bank of the United States dollars, what would be the further effect? There would ceased lo exist, you gave up the rudder of the national be an instant collision between the deposite banks and currency, and I greatly fear that it will get into such a the other banks of the country; and, as the other banks state of consusion that we shall see it go on, from worse are so much more numerous, the necessary result would to worse, until all shall unite in totally withdrawing from be, the utter destruction of the deposite banks themit the public confidence.

selves. We have already seen some of the effects reBut if it were even possible that you could succeed, by sulting from these requirements. We passed an act at appeals to the States and to the banks, in bringing about the last session prohibiting the use of notes below $10 in the restoration of a sound currency, how long would it the disbursements of the United States. Well, sir, we last? Supposing a general pressure to be produced by have a disbursing bank in this city; and how was the the withdrawal of specie fiom the country, would not rule observed? All the Senators who hear me are per. the banks instantly be prompted by the States themselves sonal witnesses to its violation in payment to themselves to supply the wants of the community by furnishing the of their daily allowance. I do not mention this to comdesired 'medium? Trace back your own history; look plain of it. It is possible, if you had ordered the officers to that period which preceded the Revolution, when the of the Senate to receive either specie or notes over $10, colonies were compelled to resort to bills of credit, and it would have been complied with. But the bank still even to tobacco, as a circulating medium. I believe that goes on, and it would still continue its course, notwithin Virginia, the law to that effect remains still on the standing any voluntary restriction which your wisdom may statute book, and that fee bills of some public officers suggest. is it not too much to expect that, when you, are yet made out at the rale of so many pounds of to to whom the task belongs, have abandoned the care of bacco for each item. If altered, the law has not been the currency of the country, the States or the banks very long changed. The necessity of a circulating me shall take upon themselves the duty of remedying the dium of some kind is indispensable. Society cannot ex defecis or the neglect of your legislation? The parties ist without it. It cannot revert to the primitive state of will take care of themselves, and will look no further. barter. The representative of property must be had, They will leave to the whole to provide for the interests even if it be in the form of peliries, tobacco, uncoined of the whole. What interest have the banks in Maine, bars, paper money, or small bank notes. And this great for example, so to shape their course as to suit the social want is paramount to all law.

exigencies of the community in Louisiana? We, on the But the plan of the honorable Senator, to effect a re contrary, contended for one currency, which should be s!riction on bank issues, does not consist exclusively in a general throughout the Union, consisting of the notes of reliance on the patriotism of the banks or the Siates. the bank of the General Government, and for a local curlle would appeal to the interest of the banks, and would rency, consisting of the bills of local institutions; so that hold over them the threat that, unless they cease the is. there might be a general currency, to be employed in pur. sue of small notes, the public deposites shall be with poses of a general nature, while the local currency would drawn from their custody; in other words, it is by employ- subserve all local purposes. Our wish was to have the ing the revenue of the United States that he would ef. general currency every where receivable in payment of fect the restriction he seeks. Now, sir, what is the the public dues, while we relied on the local banks for amount of this revenue? Twenty-five or thirty millions the medium of local circulation. But you have given up per annum. And what did he tell us from very high au a bank whose credit was coextensive with the commer

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