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Treasury Circular.

[Dec. 19, 1836.

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the currency of the constitution. “Miserable foolery' The effect of the present movement, then, is to overas much behind paper money as a keel is behind a steam turn the plan of those who put down the Bank of the boat. But why lose time to prove their hatred of gold United States; and to substitute for the national gold curand their adoration of paper? They would be ashamed to rency, which they promised the country, the actual paper have it thought otherwise. They take care that nobody currencies of all the Slates and Territories of the Union. shall think otherwise by their ostentatious abuse, in sea This is the effect of the movement; and the question now sin and out of season, of the gold currency; and by their is, will the Senate put down gold-for gold can never ostentatious praise, without rhyme or reason, of paper live in such company-and adopt all these currencies? money? It is incontestable, then, that the imposition of Passing by the constitutional objection, as too obvious to the paper system upon the Federal Government is the need enforcement, and too often invoked without effect, second great object of this resolution; and that for the Mr. B. would endeavor to address himself practically to avowed reasons mentioned by General Hamilton in his the sense of the Senate, by showing them the mass of argument of 1790, in favor of substituting paper for gold | the evil which it was proposed to assume. Here it is, and silver.

said he, (holding up a copy of Bicknell's Counterfeit Mr. B. envied not the vocation of any men, or of any | Detector.) Here it is; a little volume of 32 pages, the party, who employed themselves in the habitual vitupe. first six containing twelve columns of the names of banks, ration of any part of the constitution of the country, and alphabetically arranged by States and Territories, (Mis. especially ibat part of it which was considered by ils souri and Arkansas the only names not in the list,) and framers as among the most important and valuable. Gold each column containing about eighty names. The reand silver is the currency of the constitution. Those who maining 26 pages are filled with the description of the attack that currency attack the constitution, and that in illegitimate progeny of these banks; that is to say, with a one of its most valuable parts, and the very part which frightful and sickening exhibition of forgeries. Here, most universally concerns the people. Every citizen is then, is near one thousand banks-probably upwards of concerned in the currency, and to attack that money a thousand by this time—whose promissory notes are to which the constitution guaranties, is to attack at once his be put on an equal footing with gold and silver at the rights and the sacred instrument by which he holds them. land offices, custom-houses, and post offices, of the Mr. B. had shown the origin of this war of paper against | United States; and which, being on an equal footing, will gold; he had shown it to lie at the origin of the great soon have the upper hand, and have all the custompolitical parties which, under whatsoever names, have houses, land offices, and post offices, to themselves; for existed for near fifty years in this country; and it was gold and silver will never go where they go, and will perfectly clear that, from the time of General Hamilton never abide where they sojourn. to the present day, a preference of paper to gold and We are called upon (said Mr. B.) to adopt this wildersilver has been the distinctive tenet of one party, and ness of banks as furnishers of currency to the Federal constitutes the essential and radical distinction between Government, to accept their paper promises to pay gold the two.

and silver, in lieu of gold and silver; and thus to make Mr. B. said it was incontestable that every nation must them the coiners, not of money, but of paper, for the have a national currency. It must have such a currency Federal Government, and to enable them to supersede not only in name but in fact; and nothing can answer for the constitutional coinage of the United States. He did a national currency but that which combines two proper. not enter into the question how far the States, each for ties: first, uniformity of value all over the country; itself, might authorize paper currency'; that is not the secondly, convenieni portability. Silver possesses one question now, but whether the Federal Government sball of these qualities, but it lacks the other; gold possesses adopt as its own all the paper currencies of all the States both, and the constitution of the United States guaran. and Territories? This is what we are called upon to do; ties its use. Gold is then the constitutional national cur. and by whom? Certainly there may be some very disinrency of the United States, and Mr. B. held all attempts terested and very patriotic men so calling; but, more certo substitute paper in its place to be unconstitutional and tainly, there are four deeply interested classes so calling, pernicious. Two national banks had been chartered to and visibly seen at the head of the movement. These furnish a national paper currency; they have both been classes were, 1. The speculators, who want bank loans put down, after twenty years' trial of each, by the power and bank facilities, to enable them to outbid the settlers, of the people. When the first was put down, a fatal and to monopolize the choicest lands. 2. The local error was committed by those who did it in not restoring banks, who want the national domain as a capital to bank gold; and that error was doubled by falling back upon

upon, and to give credit and circulation to their notes in local Stale paper, and adopting it for the currency of the all the new States. 3. Politicians out of power, who Federal Government. Profiting by that great error,

foresee, in the reception of this local paper, the ruin of those who put down the second national bank made it a the finances; and in that ruin foresee, also, the downfall part of their plan, and the part upon the success of of those now in power, and the elevation of themselves. which every thing was to depend, that gold, and not 4. The Bank of the l'nited States, which foresees like. local bank paper, should become the national currency wise, in the same ruin, its own resuscitation; and which, of the Union. This was the plan, and, in pursuance of pending that event, has gone into abeyance under a it, many steps bave been taken towards excluding local State charler, to be ready for the occasion. These were bank paper from the receipts and expenditures of the

the classes whose clamors against the Treasury order had Federal Government, and introducing gold in its place.

stunned the public ear; these were the classes who de The largest and most essential of these steps was the

nounced the President; these were the classes who de. Treasury order of July last; and now the present move.

mand the instant rescision of that order. As one of ment for the rescision of that order, and for the continu. those who had contributed to put down the Bank of the ation of local paper in the receipts, and consequently in United States, and who had promised a restoration of the expenditures, of the Federal Government, brings up the gold currency, Mr. B. must be permitted to make the question, whether gold or local paper is to be made head against this movement, which goes to re-establish the national currency? It brings up the question, for that bank, and to suppress that golden currency. wbat the Government receives as cash it must pay out as Having stated the number of the banks of the United cash; and what the Government !hus receives and pays States, he would say a word as to their reputed capitals out becomes the currency of the country also; for the

and circulation. Tbe chartered capital was computed at people, single-handed, cannot make head against the ac near one thousand millions of dollars; the paid-up capital tion of the Government.

Dec. 19, 1836.)

Treasury Circulur.


was stated at three hundred and twenty-five millions; the though at a loss to all holders who did not owe to the chartered right to issue paper money exceeded one Government the amount of what they held.

This was thousand millions; and the actual circulation was compu some security for the notes of the bank; but there was ted at one hundred and thirty millions. Now, all the another and a greater security, and this lay in the dispecie in the country is computed at seventy-five mil rect responsibility of the Government for the whole Jions, and all in the banks at forty.five millions; so that amount of the capital of the bank. The capital of that the reputed paid-up capital is four times greater than all bank consisted of successive loans to the Government, the specie in the country, and seven times greater than commencing in 1694 in a loan of £1,200,000 sterling, all the specie the banks possess. Mr. B. did not pretend and continued by additional loans, at different periods, that the banks should always have all their capital in until it amounts to £14,686,000, and bearing an interest their hands; but he did insist that it must be in the coun all the time at three per cent. per annum. This is now try, so that, when needed, it could be bad. The repu- the capital of the bank, and the debt of the Government ted paid-up capital is not in the country, by a difference to the bank, and the amount of the Government's direct of four to one; so that the fact stands revealed that a securityship for the liabilities of the institution. No such great proportion of these banks are banking on stock | Government security as this has existed, or can exist, in notes and on each other's notes; and the stockholders our country; and even with it the Bank of England has not being liable, the foundations of a great number of twice suspended specie payments, and once for twenty these banks must be unsolid and delusive; entirely un. years, besides inflicting the ordinary evils of banking safe for the community to rely upon; and that it would upon the Government and the country. be a cruel thing for the Federal Government, by in Proceeding to what are called the country banks in creasing their credit, to extend the sphere of their cir. England, Mr. B. showed that they were on a safer footculation, and to enlarge the vortex of their mischief when ing than the local banks of the United States. In the first the day comes to which all unsolid banks are daily liable. place, the partners and stockholders were each liable, in

Mr. B. said that we had borrowed the paper system his person and property, for the whole amount of the from England, and from the Adam Smith school, whose debis of the institution; and this liability continued in the work on political economy had appeared about the close case of joint-stock partnerships until three years after a of the American Revolution, and created that passion for partner had ceased to belong to the institution, for every banking which has since prevailed in Great Britain and thing done while he was a member of it. In the next our America. He would show that the English repre- place, the English banks issue no note under £5, which sentatives of that school are now convinced of their er. is both a check upon their circulation, and a diminution ror, and are endeavoring to extricate the country from of the danger of losses to the community. In England, all banks of issue except that of the Bank of England, every note bore a Government stamp, and paid a tax, for the solvency of which the Government of Great Brit which was also some restraint on issues. The mode of ain stands security to the whole amount of it capital. I payment was another, as silver was only a tender to the Repeating that we had borrowed the paper system from amount of forty shillings; so that country bank notes Great Britain, Mr. B. had two remarks to make upon it: could only be paid in gold or bank of England notes, first, that banking with us was on a far more unsafe foot and these latter could only be paid in gold; so that, diing than in Great Britain; secondly, that the banks of is- rectly or indirectly, gold was the fund of redemption for sue were found to be too unsafe to be longer tolerated the whole English circulation, which was a far greater there. He proceeded to show the foundations on which check upon bank issues than silver. In the last place, he made these assertions, and afterwards to make a forgeries could be punished and restrained in England, practical application of his remarks to the question be. and can hardly be punished or restrained in the United fore the Senate.

States. The extent of our country, and the independ. First, that banking in the United States was on a more ence of the States and their judiciaries, interpose effectu. ansafe footing than in Great Britain. There was a fun- al barriers against the punishment of forgeries in one State damental difference, he said, between classes of banks.

upon the paper of other and distant Siates. These dif. In Great Britain there were two classes: one of discount, ferences, continued Mr. B., show that banking is on a deposite, and exchange; another of circulation. This less dangerous footing in Great Britain than in the Unilatter class was the only one existing in the United ted States; and, now, what is the result of experience States, and it was from it that all the public evils of there? It is fifty years since the Adam Smith school es, banking flowed. Here, then, was a radical difference tablished their perfect idea of a paper system, and between the systems of banking in the two countries; brought into general use those banks of issue on which the British system having the two species of banks, and they lavished all the holiday phrases still in vogue in the the American system having but one, and that the dan. United States: “Well regulated specie.paying banks gerous one. Confining his remarks, then, to the class

properly constructed specie.paying banks-duly restrictcommon to the two countries, (banks of issue,) he would ed specie-paying banks--safe and solid specie-paying show that this class is on a far more unsafe footing in the banks." it is fifty years since these phrases ruled the United States than in Great Britain. The Bank of Eng. legislation of Great Britain; and what is the lesson which land, he said, was backed by the Government of Great fifty years' experience has taught? Mr. B. would not Britain for its debts and capital. The notes of the insti answer this question from the writings of the anti-paper tution were a legal tender to the Government; and in a school, nor even from the bullion school of England; be Government whose annual taxes are two hundred and would answer it from the Adam Smith school itselffifty millions of dollars, the legal receivability of notes to from the writings of Mr. McCulloch, professor of politi. this amount is a fund for the redemption of more notes cal economy in the University of London, and the pres. than the Bank of England ever had in circulation. Her ent head of the Adam Smith school, whose work he has highest issue, during the suspension of specie payments recently edited, with a volume of notes, to show what and issue of one and I wo-pound notes, was twenty-nine has happened since the time of Dr. Smith, and what immillions and a balf pounds sterling, say $146,000,000. provements the paper system required in England. Mr. Her issues since the resumption of specie payments and B. read the title of one of his chapters, and some passuppression of one and two-pound notes, has, in a period sages from the chapter itself. This is the title or index of six years, anterior to 1832, ranged from 18,000,000 10 to the contents of the chapter: £23,000,000 slerling, being about 100,000,000 of dollars. “Quantity of Bank of England paper afloat at differ. The taxes to the Government, then, would absorb them, en! periods; effects produced on the country banks by


Treasury Circular.

(Dec. 19, 1836.


a contraction of the issues of the Bank of England; de. larger and more magnificent scale, and with more de. struction of country bank paper in 1814, 1815, 1816, structive consequences. Sauve qui peut! Save himself also in 1825 and 1826; measures proposed in 1826 for who can! was the universal cry. And the destruction improving the state of the currency; remarks on those of country paper was so sudden and excessive that in measures; proposals for taking security from country less than six weeks above 70 banking establishments banks; advantages that would result from carrying this were swept off.” proposal into effect; objections to it examined and an This (said Mr. B.) is Mr. McCulloch's account of the swered.”

three per cent. system earthquakes which have taken Mr. B. then read some passages from the chapter itself, place since the time of Adam Smith, maugre all his fine regretting the necessity which limited him to few and phrases about specie-paying banks, and bank notes brief extracts:

equivalent to gold, and convertible into gold at the will 1. Panic of 1793.-" The extended transactions of of the holder. Three times in twenty-five years has the the country required fresh facilities for carrying them whole blown up! to say nothing of the crisis of 1797, on; and, in consequence, a bank was erected in every and the numerous small panics and individual explosions market town, and in almost every village. To force which have filled up the intervals between the large their paper into circulation was the object of all. The

The result is a conviction that banks of issue catastrophe which followed was such as might have been must be suppressed, directly or indirectly, all over Erg. foreseen. The currency having become redundant, the land. The mode proposed, is to require security from exchanges took an unfavorable turn in the early part of them in addition to their individual liability, and that not 1792; and the Bank of England having been, in conse the personal security of men, but the real security of quence, obliged to narrow lier issues, a most violent re lands morigaged or Government stock pledged. Here vulsion took place in the end of that year and beginning is an extract from McCulloch on this point: of 1793. The failure of one or two great houses ex• " Whatever bank notes may be in law, they are praccited a panic, which proved fatal to myriads more. tically, and in fact, a legal tender. The great mass of When this revulsion began, there were, it is supposed, the people are totally without the power to refuse them. about 350 country banks in England and Wales; of the currency of many extensive districts consists almost which about 100 were compelled to stop payment, and entirely of country notes; and such small farmers, tradesupwards of 50 more were totally destroyed, producing men, or laborers, as should refuse to take them, would be by their fall an extent of misery and bankruptcy that obliged to migrate elsewhere. There cannot, therefore, had been, until then, unknown in England."

as it appears to me, be the shadow of a doubt that this is 2. Panic of 1813.-"Up to 1813 there were banks in a case in which Government is imperiously called upon to almost all parts of England, forcing their paper into cir- interfere. We have sustained incomparably more mis. culation at an enormous expense to themselves. The chief from the issue of spurious paper than from that of price of corn had risen to an extraordinary height in base coin; and in order to obviale such mischief in fu1813, and fell in the beginning of 1814. This fall pro- ture, and to give that security to the public which is so duced a want of confidence, and an alarm among the essential, we have, as was observed before, no alternacountry bankers and their customers; and such de- tive, but either to suppress country notes altogether, or struction of country paper took place as has not been to require security from the issuers.” * * * " In the paralleled, except only by the revulsion in 1825. By case of Bank of England notes, a guarantee is taken by 1816, no fewer than 240 country banks had stopped pay. the Government for the notes which the bank issues; ments, and 92 commissions of bankruptcy were issued and the whole capital of the bank musi be lost before by these establishments. The failures that then occur. the holders of the notes can be sufferers. Why is not red were the more distressing as they chiefly affected the same principle followed with respect to country the industrious and poorer classes, and frequently swal. banks? What objection can there be against requiring of lowed up, in an instant, the fruits of a long life of la. those who take upon themselves the office of furnishing borious exertion. Thousands upon thousands, who had the country with a circulating medium, to deposite with considered themselves affluent, found they were desti Government an adequate security for the performance tute of all real property, and sunk, as if by enchantment, of their engagements? In the use of money every one and without any fault of their own, into the abyss of is a trader; those whose habits and pursuits are little poverty. The universality of the wretchedness and mis- suited to explore the mechanism of trade, are obliged to ery had never been equalled, perhaps, except by the make use of money, and are no way qualified to ascerbreaking up of the Mississippi scheme in France." tain the solidity of the different banks wbose paper is in

3. Panic of 1825.-"Nations are slow and reluctant circulation; accordingly, we find that men living on limit. learners; and it seems as if additional experience had ed incomes, women, laborers, and mechanics of all de. been necessary to convince the Parliament and people scriptions, are often severe sufferers by the failure of the of England that there was any thing defective in a sys-country banks, which have lately become frequent be. tem which had, in two previous instances, deluged ihe | yond example. Against this mischief the public should • country with bankruptcy; and which enables every in. be protected by requiring of every country bank (that dividual, however poor and unprincipled, who chooses is to say, exery bank except the Bank of England, for to open a money shop, to issue notes to serve as curren. which the Government is security to the whole amount of cy in the ordinary transactions of society! A rise of its capital) to deposite with Government, or with comprices and a rage for speculation took place in 1824–25. missioners appointed for that purpose, funded property, Many of the country bankers seemed to have no other or other Government security, in some proportion to the object than to get themselves indebted to the public; and amount of their issues. No establishment for the issue such was the vigor and success of their efforts to get of notes could then exist, unless it had been set on foot their paper into circulation, that the amount of it afloat by individuals possessed of adequate capital. And adven. in 1825 was estimated to be near fifty per cent. greater / turers, speculating on the funds of others, and sharpers, than the amount afloat in 1823. The consequence of anxious to get themselves indebted to the public, would this extravagant and imprincipled conduct is well known. find that banking was no longer a field on which they The currency became redundant, exchange began to de- could advantageously enter." cline, and a heavy drain for bullion compelled the Bank Mr. B. would economize time and words, and proof England to lessen her issues. This was the signal for ceed to the practical application of these extracts from the repetition of the tragedy of 1793, but on & much I the present head of the paper system school in England.

Dec. 19, 1836.]

Treasury Circular.


It is a surrender and proposed suppression of all banks 1. The destruction of the standard or measure of value. of issue except the Bank of England, for which the Paper money neither is, ever was, or ever can be, a British Government is the security and the responsible standard of value. Its quantity varies at the will of man, backer. This is what the original of our paper system, or rather at the will of each of the thousand Neptunes and a far safer system than ours, has come to in England! who preside over the ocean of paper; and not only at Given up and proscribed by the school that founded it, their will, but without their will, in the mere impruand that school more seriously engaged now in putting dence or folly of those who direct paper issues, and the down their system than they were fifty years ago in thousand causes which operate upon the expansion and founding it. And what is the state of things with us? contraction of banks. The standard, or measure of Not only an appalling extension of the paper system value, is at this moment materially altered in the United through the annual bank incorporations of nearly thirty States. This is seen in the increased price of every Legislatures, State and Territorial, but this attempt now article which depends for its price npon the domestic made in the Senate of the United States to compel the market; and it is proved by the stationary or reduced adoption of all the State and Territorial paper systems, price of every article which depended for its price on existing or to exis', by the Federal Government, and foreign markets. Cotton and tobacco were in this latter thus to make out of this multifarious mass a national pa- class, and had not risen, but rather fallen; all articles of per currency. This is the effect; and, without disturbing home use and consumption were in the former, and all the States in the use of this paper themselves, Mr. B. con had risen, some one half, some double. The precious fined himself to the question before the Senate, namely, metals, from their uniformity of production, difficulty of the adoption of the whole of it for the currency of the suddenly and violently changing the quantity and intrinsic Federal Government. To this he had insuperable and in-value all over the world, can alone make a standard or exorable objections, founded, first, upon the constitution measure of value. Our constitution has guarantied that of the United States, and, next, upon the unspeakable stanılard to us; and it is our sacred duty to preserve it. mischiefs of the scheme. On the constitutional point he Mr. B. finished his remarks on this point with a quotawould be brief, limiting himself to the words of the in-tion from Mr. McCulloch, preferring his authority to strument, and to Mr. Madison's commentary.

others, because he was of the paper system school, The constitution says: Congress shall have power though now limiting his system to the Bank of England

To coin money, regulate the value thereof, and of only: foreign coin, and fix the standard of weights and meas "No doubt has ever been insinuated with respect to Ures."

the expediency of the regulations by which all weights “ To provide for the punishment of counterfeiting the and measures of the same denomination are rendered securities and current coin of tbe United States." equal. But money is not a commodity merely; it is also

“ No State shall coin money; emit bills of credit; make the standard or measure, adopted by society, by which any thing but gold and silver coin a tender in payment of to estimate and compare the value of every thing debts."

else that is bought and sold; and if it be, as it most unMr. Madison, in No. 44 of !he Federalist, says: doubtedly is, the duty of Government to adopt every

The loss which America has sustained since the practicable means for rendering all foot.rules of the peace, from the pestilent effects of paper money on the same length, and all bushels of the same capacity, it necessary confidence between man and man; on the ne. must be still more incumbent upon it to omit nothing to cessary confidence in the public councils; on the indus render money, or the measure of value, a measure which try and morals of the people, and on the character of re. is, beyond all question, the most important of any used publican government, constitutes an enormous debt in society, uniform or steady in its value." against the States, chargeable with this unadvised meas. 2. Usury. This, he said, was a direct effect of paper ure, which must long remain unsatisfied; or, rather, an money. The more banks of issue, the higher the rale accumulation of guilt, which can be expiated no other of interest. Common bank interest in the United States wise than by a voluntary sacrifice on the altar of justice is seven per cent. or more, which is double the rate of of the power which has been the instrument of it. In interest in Holland, where there is no paper. But comaddition to these persuasive considerations, it may be ob. mon interest is nothing compared to the usury which enserved that the same reasons which show the necessiry sules great banking, and which becomes enormous when of denying to the States the power of regulating coin, banks, from necessity or mischief, stop discounts, and prove, with equal force, that they ought not to be at lib. throw borrowers upon money dealers. Three per cent. erty to substitute a paper medium in the place of coin. discount per month is then the order of things; and this *** The power to make any thing but gold and sil. may now be seen in Philadelphia, where the United ver a tender in payment of debts is withdrawn from the States Bank, with its thirty-five millions capital, on be. States, on the same principle with that of issuing a paper coming a State institution, was to fill the Slate with currency."

money, and reduce interest to five per cent. But that Resting the constitutional objection to this adoption of bank does lend to some borrowers at five per cent. or the State paper currencies for the currency of the Feder-less. The correspondence of the commissioners em. al Government where the constitution and Mr. Madison ployed in examining the state of the bank, preparatory had put it, and merely referring to the great revenue to the settlement of the value of the United States stock, acts of 1789 and 1800, for the correct exposition of the shows a mass of loans, to the amount of twenty-three constitution, in limiting the receipts for the cristoms and millions of dollars, on extended or indefinite time, and the lands to "gold and silver coin only,” and “ to specie at rates from 44, 5, 55, tu 6 per cent. per annum. No or evidences of the public debt,” Mr. B. would state the doubt many of the three per cent. per month borrowers beads, and the heads oniy, of the objections to the ex get their supplies from a part of these loans. pediency of the measure. Premising that what the 3. Panics, convulsions, and sloppages.--These said Government received, as cash, would have to be paid Mr. B.) are inherent in the paper system. They take out as cash, and that, if local paper was received at all, place in England in defiance of all power in the Governit would soon be received totally, and to the exclusion of ment and the banks themselves to keep thein down. specie, and that local paper would thus become the There, no panics are perpetrated to scourge the counactual currency of the Government and the country, try or to overset the Government, save and except the until relieved from it by a general explosion, Sr. B. two political ones lately seen--Mr. O'Connor's, and the went on to enumerate the practical evils of such an un one during the interregnum of Lord Grey's ada inistraconstitutional currency.


Treasury Circular.

[Dec. 19, 1836.

tion. But here, panics are the regular work of banks may succeed, but he (Mr. B.) would not despair. The and politicians, and are now looked for whenever an darkest hour of night is just before the break of day; important election is depending, or Congress is to be ex and, through the gloom ahead, he saw the bright vision cited.

of the constitutional currency erect, radiant, and victori. 4. The expense of the paper system.---This was proba. ous. Through regulation or explosion success must bly greater at present than the expenses of the Federal eventually come. if reform measures go on, gold and Government, and the whole a tax upon the productive silver will be gradually and temperately restored; if reclasses. The number of banks was about one thousand; form measures are stopped, then the paper system runs each bank bad its officers, and they their salaries; each riot, and explodes from its own expansion. Then the had its stockholders, and they their profits.

Then came Bank of the United States will exult in the catastrophe, Josses for broken banks, counterseits, and depreciated and claim its own re-establishment, as the only adequate paper, and changes in the value of property from ex regulator of the local banks. Then it will be said the pansions and contractions of the currency. These ex spicie experiment has failed! But no; the contrary will penses and losses were the price paid by the people for be known, that the specie experiment has not failed, but a paper currency, when they can get constitutional cur. it was put down by the voice and power of the interested rency from the mints, without paying salaries, furnishing classes, and must be put up again by the voice and pow. profits, or sustaining losses, if paper was checked and er of the disinterested communiiy. confined large notes.

5. Stock gambling, forgeries, banishment of all gold Appendix to Mr. Bentos's speech on the rescinding reso. and silver, were all great evils inherent in the paper

luíion, containing proofs of several things stated in the system, and too obvious to need, or even endure, com. speech. mentary. Mr. B., therefore, barely named them, and left every one's knowledge and memory to do the rest.

I. That the banks themselves, by contractions and Mr. B. approached the conclusion of his remarks on

expansions of the currency, lead to Auctuations which this great subject. It was, indeed, a great subject, in.

affect the prices of produce and properly, and beget volving that momentous question, the national currency.

panics. The Treasury order was a measure of regulation upon

1. Extract from the testimony of Joseph C. Dyer, the State banks, intended to save the finances and the

Esq., director of the Bank of Manchester, taken before currency, as well as the public lands. The bank of the

Lord Althorpe's committee: United States regulated the State banks by the simple panics.”_" The bank has been the cause of the panics.

The Bank of England, the cause of fluctuations and process of excluding their paper from the Federal re. ceipts and expenditures, and this was effected by the

Their manner of issuing and withdrawing the Bank of 241h and 25th articles of the by-laws of the corporation England paper produces those continued Auctuations, a'ready read. She excluded them to make room for her

at short periods, which affect the prices in the market, own notes; and this was the extent of her skill and of single week, vary three or four millions. The bank

and thereby affect trade. Those issues, sometimes in a her merit in all this boasted regulation of local currencies of which we hear so much. The Federal Govern

may be necessitated to do sr, but such a necessity is that ment has only to do the same, and the Stale bank issues

of inflicting a great evil on the country. The reiurns of are repelled upon their sources, and become compara: the 4th of February, 1826, prove witness's statement.

the weekly issues from the 28th of December, 1819, to tively harmless. It is receivability for federal dues; it is receivability at the land offices, custom-houses, and

“The reason why it is necessary to make an altera. post offices, which gives them wings to fly over the con

tion in the banking system of Lancashire, is that the tinent, and enables them to pass, without regard to the

circulation by the Bank of England subjects the trade credit or solvency of the bank from which they come.

to fluctuations, and exercises a pernicious influence over It is the Federal Government endorsement which does

the destinies of commerce. This expansion and con. the mischief; and this endorsement, for all the purposes inous extent. All the periods of panic may be attributed

traction of the circulation induce similar effects to a ruof false credit and want of responsibility, is given to the whole issue of every bank whose paper is made receiv.

to that power exercised in secret, and of which the pub. able for public dues. The experiment has been tried,

lic cun bave no knowledge, until it has accomplished its

results. It stimulates over-issues in the country, raises and local paper has failed as a national currency, and out of that failure arose the second United States Bank.

and lowers the value of money capriciously, and erects It will fail again, and again, and forever! There is no

its own security on the insecurity of country bankers. safely for the federal revenues but in the total exclusion

Such a company, possessing such influence su exercised, of local paper, and that from every branch of the reve

is a dangerous company; and plans can be devised to nue--customs, lands, and post office. There is no safe. procure a better circulation than the present, in which ty for the national finances but in the constitutional me.

There is neither stability nor steadiness.” dium of gold and silver. After forty years of wandering

2. Extract from the preface to the digest of evidence in the wilderness of paper money, we have approached | taken before Lord Althorpe's committee in 1832: the confines of the constitutional medium. Seventy-five " The records of past history have invariably desig. millions of specie in the country, with the prospect of nated a time of peace as one of prosperity and happi. annual increase of ten or twelve millions for the next

But, ever since the last war, the different great four years, three branch mints to commence next spring, interests of this country have been in a continued state and the complete restoration of the gold currency, ani. uf fluctuation between the extremes of prosperity and nounce the success of President Jackson's great meas. adversity; though the latter has unfortunately predomures for the reform of the currency, and vindicate the inated.

In the beginning of that constitution from the libel of having prescribed an im. year, (1825,) every class of the community was doing practicable currency. The success is complete; and well, if not in a stale of great prosperity. But a change ihere is no way to thwait it, but to put down the Treas. took place in the currency, by the Bauk of England ury order, and to reopen the public lands to the inunda contracting their issues. The general prosperity, withtion of paper money. Of this, it is not to be dissem out any other visible cause, immediately received a hled, there is great danger. Pour deeply interested chick; and as the bank continued to contract their classes are at work to do is speculators, local banks, issues, maiters became worse, until they ended in the United States Bank, and politicians out of power. They I panic. By this a lutal dirangement of the monetary


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