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Answer. A very large amount.

Treasury Circular.

Question. Can you give the committee any idea of the amount?

Answer. No, I cannot; but, so far as regards the issue of our own house, I should say that upon the average we pay about 25,000 sovereigns a week.

Question. Is that a fresh supply of sovereigns in each week, or do you obtain it from the circulation of the place?

Answer. We require a continual fresh supply, but not to that extent. I think the fresh supply requisite will average something less than 10,000 a week. Question. Before the abolition of the £1 notes, were those payments generally made in £1 notes?

Answer. Entirely.

Question. Was the amount then about the same? Answer. Quite as large.

[JAN. 10, 1837.

tion of small notes? In sovereigns? In gold or silver?
Let us return to the examination of Mr. Lloyd:
"Question. Before the abolition of the £1 notes, were
those payments generally made in £1 notes?
Answer. Entirely.

Question. Was the amount then about the same?
Answer. Quite as large."

Previous to the suppression of the small notes, then, the whole amount of payments now made in gold were made exclusively in £1 notes, and, but for that suppres sion, would still be made in £1 notes. While the £1 notes were in circulation, these payments could not be made in gold, because gold was not in circulation. Gold was, doubtless, in the country, accumulated in the vaults of banks; but not being in circulation, there was no common and accessible fund from which it could be readily and conveniently obtained for the business of life. It never will be in circulation, until bank notes of the smaller denominations have been first suppressed. It is circulation by demanding it in payment of the public dues. By doing so, the public debtor may be subjected to hardship, the banks may be exposed to runs upon them for specie, and the business of the community may be crippled and deranged. But gold and silver will never circulate while bank notes of the same denomination are permitted to occupy the channels of circulation. "You may call spirits from the vasty deep, but will they come?"

Question. You say that about 25,000 a week is what you are called upon altogether to pay, and that about 15,000 come back into your hands? What do you ap-in vain for the Government to attempt to bring it into prehend becomes of the remaining 10,000 sovereigns?

Answer. When the £1 notes were in circulation, we could trace it pretty accurately, and I believe the course to be the same with the sovereigns; they are paid principally in wages. The work people lay them out in clothing and provisions, and those sovereigns pass to the provision dealers, and thence into the districts from which the provisions are supplied; the sovereigns then pass into the hands of the country bankers in those districts, who either send them up to London or return them to Manchester, as may be most convenient to them.

Question. It does not follow, then, because you are obliged to have 10,000 sovereigns from the branch bank, (that is, branch of the Bank of England,) that the amount of the circulation in Manchester is continually increasing at the rate of 10,000 a week?

Answer. No, I do not apprehend it is increasing at all."

Now, sir, let us see how these large payments in specie, in Manchester, are made. Mr. Lloyd says, expressly, that, of the 25,000 sovereigns a week paid out by him, 15,000 of them are obtained from the circulation of the place, as, through that channel, they regularly come back into his hands; that he requires a fresh supply of about 10,000 sovereigns a week from the bank; but these 10,000 sovereigns are also constantly returning to the bank from the circulation of the country. They are first paid by the work people to the provision dealers; then by the provision dealers to the farmers, of whom they procure their supplies; from the farmers they pass into the hands of the country bankers, who either return them to the branch bank at Manchester, or, what is the same thing in effect, send them up to the parent bank at London. Thus, the whole amount of these specie payments is supplied by the actual circulating medium of the country--a thing easy and convenient enough, and perfectly natural, where the amount of gold and silver in daily and active circulation is 150,000,000 dollars. To make large payments in specie, under such circumstances, is attended with no difficulty, because specie is the common and habitual currency of the country. The metallic circulation of England is a perpetual fountain, fed by the streams which flow from, and are constantly returning into, it. But to make payments in specie to the Government alone, of thirty or twenty millions of dollars, or the half or the fourth of those sums, in a country whose circulation consists of $120,000,000 of paper, and of but $28,000,000 of gold and silver, is a far different opera

tion.

Another most important lesson is to be derived from the evidence of Mr. Lloyd. How were these payments for wages made in Manchester previous to the prohibi

The requisition of specie in payments to the Government will not only not avail to bring gold and silver into circulation, but, if insisted on, while gold and silver yet form, comparatively, but a small part of the actual currency of the country, it will inevitably have the effect of diminishing their circulation. While bank paper forms the great mass of the currency of the country, if the Government refuse to receive it in payment of the public dues, and demand specie exclusively, the necessary consequence will be to enhance, to a greater or less extent, the value of gold and silver in relation to paper. That being the case, gold and silver will no longer circulate freely. Those who have specie will be unwilling to part with it, except at a premium; and those who have notes will be anxious to convert them into specie. Hoarding of the precious metals will then commence, and but little of them be seen in circulation. No one, I presume, Mr. President, attaches much importance to the collection of the public revenue in specie, as an ultimate object, if it can be made equally safe by other means. It is only as an instrument of purifying and correcting the currency that it deserves the consideration of a practical statesman. The great object is not to amass specie in the public Treasury, or in the vaults of banks, but to diffuse its healthful currents through the business of society, and to bring it into active circulation among the people. This can only be effected by the previous suppression of the small notes; and any attempt by the Government, before that is done, to collect its revenues in specie, instead of promoting and extending the circulation of gold and silver, tends directly to narrow and diminish their circulation.

The indiscriminate refusal of bank paper in payment of the public dues might, in the present condition of the country, be attended with other serious hazards. We have heard a great deal recently, Mr. President, of the pecuniary panic and distress prevailing in England and Ireland, and of the extensive commercial embarrassments felt there. These embarrassments (in Ireland, especially) seem to have arisen mainly from this very circumstance of a refusal to receive the paper of solvent banks in collections of the public revenue. It appears that some of the collectors of the customs had arbitrarily refused the bills of the Provincial Bank of Ireland.

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Thereupon, a run upon the bank immediately commenced, which, nevertheless, weathered the storm. The panic spread in regard to other institutions, which, though solvent, were compelled to stop payment; and a general scene of confusion, alarm, and embarrassment, ensued. But I will give the details in an extract from an English paper, which has been republished extensively in all our principal journals. Here it is:

A

"The pressure was yet severe, not only throughout England, but in Ireland. In the latter country there had been a panic, attended by several severe commercial disasters. This panic was commenced by the collectors of the customs at Newry, and some other places, refusing the bills of the Provincial Bank of Ireland. run upon the bank was the inevitable and immediate consequence. The solvency of the bank, however, had never been questioned, and was finally attested by the result. The panic spread in respect to other institutions, and the Dublin Agricultural Bank stopped payment on the 15th. Strong efforts were made by its friends to sustain it. One gentleman, Mr. Gresham, sent in £25,000. The liabilities of the bank are stated at £240,000; its assets at £680,000.

"This bank was established in 1834, by 2,170 partners. It now has 5,000 partners, and twenty-six branches scattered all over the country, all of which stop, of course. But, notwithstanding the solvency of the institution, its suspension will operate fearful injury."

All this pecuniary suffering and distress, widely rami fied as it afterwards became, originated in the refusal, by officers of the Government, to receive the notes of a solvent bank in payment of the public revenue. If, Mr. President, we shall, by a sweeping law, refuse to receive the paper of all banks, however sound, in discharge of the public dues, will there not be danger of similar consequences? Might it not operate, to a certain extent, as a discredit of all bank paper, exposing the institutions which issue it to severe runs, and the community at large to consequential pressure and embarrassment? At all events, there would be heavy demands upon the banks for the specie requisite in payments to the Government, which the limited metallic circulation of the country would be wholly inadequate to supply. Would it be just or wise in the Government, in the present condition of the currency, with a Shylock severity, to demand its pound of flesh? Would not such a course tend to produce, instead of averting, the catastrophe which appears to be dreaded by some?

I should be as little disposed, Mr. President, as any member of this body, to hazard the safety of the public revenue by any undue laxity in regard to its collection. The proposition I have had the honor to submit provides studiously for the security of the revenue. It not only does not allow the notes of any banks to be received, but such as are promptly redeemed in specie-subject, too, to important restrictions in regard to their denomi nations-but it expressly declares that no notes whatever shall be received which the banks in which they are to be deposited shall not agree to pass at once to the credit of the United States as cash. This guarantee of the deposite banks converts the whole of the public collections virtually into specie; and when it is recollected that the Secretary of the Treasury is empowered, whenever be thinks it necessary, to obtain from them a special and supplementary security for the public deposites, the solidity of the guarantee may be reposed upon with confidence.

It is objected to this provision, by some gentlemen, that it puts it in the power of the deposite banks to say what notes shall, and what shall not, be received by the Government in payment of its revenues. The absolute responsibility of the deposite banks for the notes depos ited with them on public account is deemed a fundamen

[SENATE.

tal principle in the fiscal code of Government; without it, the practice of special deposites must be revived, which formerly subjected the Government to heavy losses, and is the origin of the unavailable funds still borne on the books of the Treasury. But if the deposite banks are to be absolutely responsible for the notes deposited with them as so much cash, they ought, certainly, to have a reasonable discretion as to the notes they shall receive on deposite. This is no new principle in the practice of the Government; it has been a standing instruction from the Treasury Department to the public receivers and collectors, for more than twenty years, to receive no notes but such as the deposite banks would credit to the United States as cash. To satisfy, however, as far as possible, the jealousy which has been expressed on this subject, and to guard against any arbitrary or wanton abuse of their discretion by the deposite banks, I have, by a mo lification of my original resolution, placed them, in this regard, expressly under the supervision and control of the Secretary of the Treasury.

While the proposition I have had the honor to submit provides, as I believe, in the amplest manner, for the security of the public revenue, it pays a due regard to the interests of the great body of the community. An inflexible exaction of gold and silver in payments to the Government, in the present condition of the circulating medium, it seemed to me, would involve a necessary and serious derangement to the whole business and commerce of the country. These interests I believe to be more or less common to all. I am not one of those who see a natural enmity and inherent incompatibility between the interests of different classes of men; I do not belong to that school of philosophy which divides society horizontally, the upper portion pressing upon the lower with the weight of its incumbent mass, while the latter is constantly striving to throw off the load by violent and vindictive struggle. This is the bellum omnium in omnia which forms no part either of my philosophy or my feelings. No, sir, my theory assigns a perpendicular stratification to society, placing all its component parts side by side on the same platform of equality, with common rights, common interests, and common duties, mutually giving and receiving support by their juxtaposition. In this aspect, the interests of the merchant, the farmer, the mechanic, the laborer, are the same; what promotes the prosperity of one, redounds to the advantage of each.

In regard to the effect upon the currency, the proposition I have had the honor to submit, if adopted, would prove in some degree instrumental, I trust, in promoting that great reform which has been so impressively recommended by the patriotic Chief Magistrate of the nation, and which, at the moment when he is about to close a long and glorious career of public service, in a hallowed retirement, by all a nation's wishes blest," may well form the object of his ardent vows for his country. That reform seeks, by the substitution of gold and silver, in place of the lower denominations of bank paper, to make the precious metals the familiar currency of common life. But this object can be fully accomplished only by the ultimate suppression of all notes under twenty dollars; five-dollar notes and half eagles will not circulate together; the ten-dollar note must be put down, before the eagle can take its place.

I am aware, Mr. President, that our position is not exempt from difficulties and dangers. But I see in them nothing to create alarm, far less to excite despondency; but every thing to rouse the devotion and energy of the patriot. With whatever embarrassments we may be beset, there is a redeeming power in the virtue and intelligence of the American people, which will conduct us in safety and triumph through them all. Some gentlemen, 1 find, still fondly recur to their favorite pre

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Texas-Treasury Circular.

scription of a nationa! bank, as the panacea for all our ills. In my humble judgment, sir, the remedy is far worse than the disease. The protection of a national bank would be such protection as vultures give to lambs." No, sir; let us rather invoke the protection of our guar dian and victorious bird, the American eagle, the em blem of our freedom and strength. An able and experienced member of the House of Commons, speaking of the inherent tendencies of the banking system, said: "There is in it an inevitable tendency to over-issues of paper, without a constant sentinel keeping watch upon it; and that sentinel [for them] was the metallic sovereign in constant circulation." The American metallic eagle, in active circulation, will perform the same tutelary office for us; and, with such other provisions as the practical and sagacious spirit of American legislation shall devise, will finally, I firmly believe, place our currency on a footing which, for convenience and security united, will rival any other under the sun.

Let the State Legislatures proceed firmly and vigorously in the suppression of the small notes. I believe they will. They have the highest motives which can ad. dress themselves to human action to accomplish this great reform. Let them subject all banks, both old and new, to efficient regulation; let them regard with jea)ousy every proposition for an increase of banks, and yield to none which is not founded on broad considerations of public utility; let them impose strict, practical limitations, both upon their issues and their discounts; let them provide for frequent periodical scrutinies into their condition; and, above all, let them retain in their own hands a constant power of correcting abuses, and of protecting, in every emergency, the interests of the community.

[JAN. 11, 1837.

them. Let us grapple with the difficulties which may
oppose us, in a spirit of strenuous and determined patri-
otism, and we shall triumph over and subdue them. In
conclusion, let me say to the political friends with whom
I have had the honor to act in trying times, that, after
having successfully dissipated so many panics raised un-
der other auspices, we shall not, I trust, at last become
the victims of a panic of our own creation.
When Mr. RIVES had taken his seat,

Mr. CLAY rose and said that he desired to submit to the Senate a few considerations on the subject under debate; but, as the hour was somewhat late, the Senate might prefer that he deferred what he had to say till tomorrow, and proceed for the remainder of to-day to some other business; whereupon,

On motion of Mr. BROWN, the Senate adjourned.

WEDNESDAY, JANUARY 11.

Mr. KENT presented the credentials of JOHN H. SPENCE, elected by the Legislature of Maryland a Senator from that State, to fill the place vacated by the death of Hon. R. H. GOLDSBOROUGH, till the 4th of March next.

TEXAS.

Mr. WALKER submitted the following resolution, which lies on the table one day, for consideration:

Resolved, That the State of Texas having established and maintained an independent Government, capable of performing those duties, foreign and domestic, which appertain to independent Governments, and it appearing that there is no longer any reasonable prospect of the successful prosecution of the war by Mexico against said State, it is expedient and proper, and in perfect conformity with the laws of nations, and the practice of this Government in like cases, that the independent political

ment of the United States.

Mr. WALKER said it was not his intention to ask a departure from the rules of the Senate, in order to enter upon the consideration of this resolution at this period. The resolution, (Mr. W. stated,) he would only say, st this period, was in exact concurrence with the views expressed by the President of the United States in his last message on this subject. In that message, the President declared it as his opinion, that the independence of Texas might be considered as suspended upon the issue of the threatened invasion by the army under the com mand of General Bravo. Mr. W.said he had this morn

It is this principle of legislative regulation and control 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 practical character of the American mind; and I am happy to perceive that the people of older countries of England, especially-are turning to us for lessons and examples in this branch of the public economy. In that country, beyond the sixty-five miles from London, which define the limits of the Bank of England monopoly, numerous broods of joint stock companies and private bankers have sprung up, without regulation by law, without limitation of number, without restriction as to their issues or discounts, aud without responsibility to the public authority. The consequence has been, that this branch of their system has run into wild disorder and confusion. They now see that the privilege of issuing money, of whatever kind, is an essential branch of the public sovereignty, and, like every other delegated pow-duced, by desertion and other causes, to a very small er of that sort, it must be subjected to regulation, to inspection, to responsibility. This is a lesson they have learned from us; and it is gratifying to see that, on another fundamental point, the most enlightened minds in that country are coming to the same conclusion that we have attained. They begin to see that the monopoly of the Bank of England, as that of the Bank of the United States here, is a dangerous monopoly; that the dominion of such an institution over the circulation is a power more of evil than good; and that it must be brought down to the level of competition with other solid institu tions. The opinions of the two countries, on this great concern of the currency, are mutually approximating, and settling down upon a common system. They are learning from us the necessary checks and controls of a paper currency; we from them, I trust, the value and importance of an enlarged metallic circulation. I repeat, then, there is nothing in our present situation to excite alarm or despondency, whatever occasion there may be for vigilance and caution. Let us look our dangers steadily in the face, but let us not be dismayed by

ing received information direct from Vera Cruz, as late as the first of December last, that this invasion had proved entirely abortive; that the army of Bravo had been renumber; that this miserable remnant was unsupplied with provisions; and that, in consequence of these events, General Bravo had resigned the command of the army, and that the invasion, in all probability, would be abandoned. Mr. W. said he was satisfied that full reliance might be placed on the correctness of this information, and that he was fully convinced that, with the knowledge of these facts, the President would cheerfully unite with Congress in recognising the independence of Texas.

TREASURY CIRCULAR.

The Senate having again proceeded to the order of the day, which was the consideration of the resolution heretofore moved by Mr. EwING, of Ohio, concerning the Treasury circular, with the substitute therefor proposed by Mr. RIVES

Mr. CLAY said that he took great pleasure in tendering to the Senate his respectful thanks for the indulgence which had yesterday been accorded him, at the instance of the Senator from North Carolina. And he should esteem himself most happy if on the present occasion he

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should be so successful as to say what should occasion no regret to any for having conferred upon him that indulgence.

[SENATE.

President Jackson commenced his administration by recommending a mixed currency, yet that he gradually departed more and more from that ground, until, in the message of 1835, referred to by the Senator from Virginia, he speaks of getting back to the "constitutional medium," evidently alluding to an exclusive specie circulation. You will therefore agree that the uncertainty of which I have spoken is not feigned, but real; and I entreat the two divisions of the friends of the administration speedily to settle between themselves the controverted question, what the policy to be pursued actually is, and forthwith to state it to the country, so that all our business men may have an eye to it, and regulate them. selves accordingly, in their moneyed transactions.

In the State (said Mr. C.) of which I am a citizen, 1 had lately occasion to express my opinion in regard to that Treasury order which it is proposed in the resolution offered by my friend from Onio [Mr. EwING] to rescind. What I said on that occasion appeared in the prints of the day; and a degree of unexpected notoriety has since been given to it during the present session. What I uttered I sincerely believed. I believed it then, I believe it now; and I reaffirm it with all sincerity here in my place, as my settled opinion. Before, however, I proceed to state the grounds on which it rests, I shall take some notice of the able speech with which we were yes- The Senator from 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 the Treasury order, it was the Senator from Virginia? Did it not originate, or was ingenious, plausible, often eloquent. The speech it not at least first pressed by my friends who were enthroughout its whole tenor was indeed directly adverse deavoring 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 reprinciple of requiring specie only in payment for one of stricting issues of bank notes below prescribed denomithe most important branches of the public revenue; but nations first introduced by the Senator from Massachu the Senator from Virginia is in favor of receiving in pay-setts who sits near me, [Mr. WEBSTER,] as one provision ment a mixed currency. The order proceeds on the principle of exhibiting partiality toward certain particular classes, in their payment of the public dues; the Senator from Virginia is for a rule which shall operate alike and equally on all, and shall extend to every branch of the public revenue. In a great deal, indeed, in most of what was so well said by that Senator, I entirely concur. There are, however, some points of difference, which I shall presently notice. I regret, that while the country generally, while the Senator himself, and while we all, are so deeply interested in knowing what is to be the real policy of the administration on the question of the currency, we are left as much in the dark as ever. On one side of the Senate, by one friend of the administration, it is said that the precious metals alone are to form the currency, and that all paper is to be driven out of use; gradually, indeed, but surely. The Senator from Virginia, on this side, says that the policy about to prevail seeks to establish a mixed currency, consisting in part of specie, and in part of the notes of specie-paying banks. Which of these friends of the administration are we to credit? I must confess, that so far as past experience is to be looked to on such a subject, it seems to favor a metallic system more than a mixed currency.

Yet on

At the last session of Congress, a proposition was introduced into the Senate, requiring the payment of specie in all cases by the purchasers of our public lands. That proposition was, however, put down by an almost unanimous vote. For, although no call was made for the yeas and nays, I think I am fully authorized in saying that, had such a call been made, there would not have been more than one or two votes in favor of the measure. the 11th of July, almost immediately on the rising of Congress, we find this very proposition imbodied in a Treasury order, which requires the payment of specie in regard to our most important branch of the public revenue. This fact would seem to indicate that the policy of a mixed currency, for which the Senator from Virginia has contended, was not then the policy of the adminis. tration, and that not his but another's influence was predominant in the cabinet. In the preamble to this order, in which the reasons for it are set forth, we find not only that specie is required from all purchasers of the public land, but that that other element of the currency which the Senator would retain is denounced as "paper money." ." And even in regard to the messages of the President himself, did time permit, and were it necessary to do so, it would be easy to show from all of them, so far as they relate to this subject of currency, that although

in the renewed charter of the Bank of the United States in 1832? And while I am very sure that the Senator from Virginia did not take from the speech of my friend on that occasion the anecdote which he introduced into his own of the message sent by Mr. Burke to Mr. Pitt, warning him that if he permitted the issue of one-pound notes he would never again see a guinea in England, yet it does so happen that that very anecdote was related by the Senator from Massachusetts in his speech before the Senate in 1832, and was used by him expressly in support of the idea of increasing and strengthening the metallic basis of our paper currency.

But whilst both gentlemen concur in the propriety of imposing some limitation on our paper circulation, yet there is a wide difference between them as to the mode in which that desirable object is to be effected. The Senator from Virginia would rely on the voluntary action of a thousand banks, and of twenty six State sovereignties operating on those banks. We of the opposition, on the contrary, thought it wisest to rely on a remedy within our own power, to trust to our own laws, and to look to that which we could effect by our own energies and the exertion of our own constitutional authority. We considered this a practical and efficacious means. The Senator from Virginia relies on what I consider wholly inefficient. His reliance, it seems, is on the enlightened patriotism of the States and of the banks; the enlightened patriotism of nine hundred or a thousand banks, created for the sole purpose of making money! But, sir, have we no lessons from experience in our own past history, as to the degree of reliance which may safely be placed on the mere voluntary action of any community, however enlightened and patriotic it may be? What was the state of things during our own Revolution, when we were contending in the most glorious cause that ever animated the hearts or nerved the arms of men? The reliance was then on the voluntary payment of the quotas, not of twenty-six, but of thirteen States, indispensable to the success of that cause and to our soldiers, who, unfed and unclad, were enduring every suffering to which humanity can be possibly exposed. Let me ask the honorable Senator, in view of what then took place, whether reliance on the patriotism even of enlightened States, much less that of banking corporations, is safe and secure.

It is now four or five years since the policy was first announced on our side, and was afterwards taken up by a portion of the friends of the administration, to widen the metallic foundation of the currency by a prohibition of

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small bank notes; and what has been the result? How many States has enlightened patriotism induced to adopt the policy? The Senator from Virginia mentioned Virginia, Pennsylvania, and Maryland, to which he might have added Kentucky, and possibly one or two others, as having imposed the desired restriction; but they did it either prior to, or without any sort of reference to the annunciation of the policy from Washington. Of all the twenty-six States, he believed New York and Maine only had conformed their legislation to the recommendation sent forth from this city. And it is remarkable, with respect to Maine, as he had understood, that, after the restriction was imposed, a supply of the prohibited notes below five dollars was sent for to Massachusetts, for small change in the transaction of business.

No, sir; no man has a higher opinion of the patriotism of the country than I have. There is no one who entertains a higher opinion of the patriotism of the States, or is more disposed to place a due and proper degree of reliance upon it; but I consider it sound policy not ex clusively to depend upon it, but to add to that security the salutary vigor of the law. Hence we supposed that it had been demonstrated by all experience in this country that a national bank, created by, and under the proper control of, this Government, was a fit and necessary instrument to guard the paper system of the country against its tendency to run into excessive issues, and ultimately into utter disorder; that such a bank would at least retard that deplorable state of things; and that, if it could not finally prevent it, when the notes of the local banks had lost all confidence, and ceased to be a secure circulation, the notes of the national bank would remain a safe medium, in which the revenue of the country could be collected and disbursed.

From the moment that the Bank of the United States ceased to exist, you gave up the rudder of the national currency, and I greatly fear that it will get into such a state of confusion that we shall see it go on, from worse to worse, until all shall unite in totally withdrawing from it the public confidence.

But if it were even possible that you could succeed, by appeals to the States and to the banks, in bringing about the restoration of a sound currency, how long would it last? Supposing a general pressure to be produced by the withdrawal of specie from the country, would not the banks instantly be prompted by the States themselves to supply the wants of the community by furnishing the desired medium? Trace back your own history; look to that period which preceded the Revolution, when the colonies were compelled to resort to bills of credit, and even to tobacco, as a circulating medium. I believe that in Virginia, the law to that effect remains still on the statute book, and that fee bills of some public officers are yet made out at the rate of so many pounds of tobacco for each item. If altered, the law has not been very long changed. The necessity of a circulating medium of some kind is indispensable. Society cannot exist without it. It cannot revert to the primitive state of barter. The representative of property must be had, even if it be in the form of peliries, tobacco, uncoined bars, paper money, or small bank notes. And this great social want is paramount to all law.

But the plan of the honorable Senator, to effect a restriction on bank issues, does not consist exclusively in a reliance on the patriotism of the banks or the States. He would appeal to the interest of the banks, and would hold over them the threat that, unless they cease the issue of small notes, the public deposites shall be withdrawn from their custody; in other words, it is by employing the revenue of the United States that he would effect the restriction be seeks. Now, sir, what is the amount of this revenue? Twenty-five or thirty millions per annum. And what did he tell us from very high au

[JAN. 11, 1837.

thority? He told us that the money transactions in one single city, the city of New York, were estimated several years ago, and that by a man than whom none is better acquainted with all such matters, at 1,500 millions annuually; and at this day the amount is probably double that. Now, if, in one single city, the course of business requires the employment of 1,500 millions of dollars annually, what must be the aggregate amount of the transactions in all the other cities and parts of the Union? The amount baffles all human calculation; and do you suppose that, by wielding a revenue of only thirty millions, you can overawe, coerce, and control banks whose business amounts, perhaps, to a thousand times as much? What proportion does the number of your deposite banks bear to that of the whole of the banks of the Union? Before the passage of the deposite act they amounted, if I remember, to less than forty; they are now, perhaps, eighty; and we are told by a secret authority, which seems to be high and controlling, that their number, when the deposite act is executed, is again to be reduced down to forty; but say it is eighty, and then by your operation on these eighty banks you are to bring about an effect so important as to deprive the remaining nine hundred and twenty banks of that which, in many instances, constitutes the most important part of their circulation. Can we not see that the thing is perfectly chimerical?

Suppose you prevail with one bank to give up the issue of its small notes. What is the immediate effect? The vacuum produced by the withdrawal of the small notes of that bank is instantly filled by the small notes of other banks; and even if you could go a step further, and prohibit your deposite banks from receiving in deposite the notes of any bank which issues bills below five dollars, what would be the further effect? There would be an instant collision between the deposite banks and the other banks of the country; and, as the other banks are so much more numerous, the necessary result would be, the utter destruction of the deposite banks themselves. We have already seen some of the effects resulting from these requirements. We passed an act at the last session prohibiting the use of notes below $10 in the disbursements of the United States. Well, sir, we have a disbursing bank in this city; and how was the rule observed? All the Senators who hear me are personal witnesses to its violation in payment to themselves of their daily allowance. I do not mention this to complain of it. It is possible, if you had ordered the officers of the Senate to receive either specie or notes over $10, it would have been complied with. But the bank still goes on, and it would still continue its course, notwithstanding any voluntary restriction which your wisdom may suggest. Is it not too much to expect that, when you, to whom the task belongs, have abandoned the care of the currency of the country, the States or the banks shall take upon themselves the duty of remedying the defects or the neglect of your legislation? The parties will take care of themselves, and will look no further. They will leave to the whole to provide for the interests of the whole. What interest have the banks in Maine, for example, so to shape their course as to suit the exigencies of the community in Louisiana? We, on the contrary, contended for one currency, which should be general throughout the Union, consisting of the notes of the bank of the General Government, and for a local currency, consisting of the bills of local institutions; so that there might be a general currency, to be employed in purposes of a general nature, while the local currency would subserve all local purposes. Our wish was to have the general currency every where receivable in payment of the public dues, while we relied on the local banks for the medium of local circulation. But you have given up a bank whose credit was coextensive with the commer

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