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SENATE.]

Treasury Circular.

lution in the currency; it induced the banks themselves to resume specie payments; it performed faithfully its whole office, and thus the matter ended. No human being then supposed that the resolution was intended to be absolutely imperative upon the Secretary; that it went to add the local paper of specie-paying banks to the legal currency.

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"At the time of the adoption of this resolution, debts accruing to the United States, whether on account of the sales of the public lands, or at the custom-house, or from other sources of revenue, were in fact received in some parts of the country, but evidently in disregard of the law, in the notes of the State banks, which did not redeem their paper by cash payments.' By this resolution it was obviously made the duty of the Treasury to correct that departure from law as soon as practicable; and it was, as is equally obvious, imperative on the Department, after the 20th February, 1817, to allow nothing to be received in payment of debts due to the United States but the legal money of the United States, Treas ury notes, notes of the Bank of the United States, or of those State banks the notes of which were payable and paid on demand in cash."

[DEC. 27, 1836.

If the resolution is imperative, if it be obligatory, then the Secretary had no discretion. He was bound to take the bills of all specie-paying banks, as well as the notes of the Bank of the United States, in payment for duties. But, according to my apprehension, the plain, sensible, common-sense meaning to be given to the resolution is, that the Secretary should, after its passage, adopt such means as he might deem necessary to have the revenue of the Government receivable in the legal currency--the currency then established by acts of Congress; and if, for matter of individual accommodation, it should be found necessary to relax at all, in such case the Secretary of the Treasury should no longer receive the paper of non-specie-paying banks; that he should, in no event, be justified in taking the bills of any bank which are not payable and paid on demand in the said legal currency of the United States. The resolution, in this respect, is merely advisory to the Secretary. It was intended to restrain him from collecting the revenue in the way and manner it had been collected for years before; and it was also clearly intended to give authority, to give countenance, to the Secretary of the Treasury, for a time, in relaxing the rule of law-in departing from the requisitions of exThis construction, given to the joint resolution of 1815,isting statutes so far as he might receive the paper of by its author himself, when its particular obligations, and the duties of our public officers under that resolution, were among the subjects then under consideration, appears to me to be correct. The resolution manifestly was intended to express the sense of Congress upon what had been the practice of the Treasury Department in reJation to the kind of money in which the debts of the Government had been collected; and, in terms most obvious, to restrain the Treasury Department from every such departure from the requirements of existing law, after the 20th of February, 1817. But the resolution makes no change in the law; it does not, in terms, nor by fair implication, establish the notes of all specie-paying banks as legal currency, and make them, as such, receivable for the customs and for the public lands.

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specie-paying banks for the public dues. But it cannot, it seems to me, be contended for a moment that here was an addition made to the legal currency of the coun-try; that, henceforward, the collectors and receivers would be bound to take in payment for customs and lands the bills of State banks paying specie when demanded.

The resolution was intended to operate for a time as a waiver on the part of the Government of its rights; but it could not be regarded as a positive, unqualified, and obligatory statutory provision. Such a law could never have been literally carried into effect. The receiver at New Orleans could not be presumed to know the true character of the bank paper of my own State; and yet he would be bound so to do, if the resolution was imperative and obligatory. That resolution was offered, as I have before stated, immediately after the act was passed establishing the United States Bank; and according to the construction now given to it, the exclusive privilege which had been given to that institution was taken away. The resolution, if it does not in terms re

Let us examine the whole resolution. It provides: "That the Secretary of the Treasury be, and he hereby is, required and directed to adopt such measures as he may deem necessary, to cause, as soon as may be, all duties, taxes, debts, or sums of money, accruing or be coming payable to the United States, to be collected and paid in the legal currency of the United States, or Treas-peal the fourteenth section of the bank charter, practi ury notes, or notes of the Bank of the United States, as by law provided and declared, or in notes of banks which are payable and paid on demand in the said legal cur rency of the United States; and that, from and after the twentieth day of February next, no such duties, taxes, debts, or sums of money, accruing or becoming payable to the United States, as aforesaid, ought to be collected or received otherwise than in the legal currency of the United States, or Treasury notes, or notes of the Bank of the United States, or in notes of banks which are payable and paid on demand in the said legal currency of the United States."

I would ask, what obligation was imposed upon the Secretary of the Treasury by this joint resolution? Nothing more, and nothing less, than to forbear henceforward from receiving uncurrent State bank paper in payment of duties and of debts of every description, and to adopt such measures as he may deem necessary to cause all the public dues to be collected, as the law requires, viz: in the legal currency of the United States, in gold or silver, in Treasury notes, or in bills of the Bank of the United States. The acts of Congress had established each and all as legal currency, and given direction to public officers to receive them as such. This resolution established no new currency; it did not repeal nor add to any act of Congress which designated the kind of money receivable.

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cally renders that section to the bank itself unimportant, and imposed upon the bank new obligations under the charter extremely onerous, and of great hazard to the interests of that institution. This never was, it never could have been, intended. The law was not, in terms, changed by the resolution; and if the resolution, having the effect of law, is imperative and mandatory in this particular, then, most clearly, it follows that it must be general in its operations; it cannot be in force in Boston, and of no effect in Baltimore; and yet it has been admitted that the collector at New Orleans would not be bound to receive a bill of a specie-paying bank issued in New Hampshire. This admission, correct in point of fact, gives to this measure its true character. It clearly shows that the framer of this resolution himself did not regard it as an absolute provision of law, but rather as a matter of practice, which was to be confided to the sound discretion of the Secretary of the Treasury.

The Bank of the United States was to receive in deposite the money of the Government; and it was bound to transfer from place to place, without charge, the public funds; and yet, as I have before said, immediately after the passage of the joint resolution of 1816, the bank itself refused to receive on deposite the bills of specie-paying banks, and pass them to the general credit of the Government, and to transfer them, without charge, as a part and portion of the public funds. The Senator

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from Massachusetts, in his report in the case of Mr. Crawford, says:

"That institution [the United States Bank] is indeed bound to give necessary facilities for transferring the public funds from place to place; but this can only mean cash funds; and it is bound also to receive money in deposite for the United States; but it is not bound to receive in deposite, as cash, the bills of any banks whatever but its own, although they may come within the provisions of the resolution of 1816."

And thus the course of the bank was justified, and its proceeding never called forth any action of Congress expressive of its disapprobation. But how could such a course of proceeding be justified if the bills of State banks, paid in specie on demand, were by law added to the currency of the country? If the receivers were bound at all events to take the bills of specie-paying banks in payment for public lands and for customs, the United States Bank were also bound to receive them in deposite. They went to make up a part of the public funds of the Government; and yet receivers were justified in not taking the bills of specie-paying banks in payment for the public dues, and the bank was justified in refusing to receive them in deposite, and of transferring them, as a part of the funds of the Government, without charge. This is wholly irreconcileable with the idea, and with the fact, that such bills had been legalized, absolutely and unqualifiedly, as currency.

The resolution could not in any way affect the power of the President over the subject. He was bound to see the laws faithfully executed. The laws remained unaltered, the same after as before the resolution. The power and the duty of the President was the same after as before the resolution.

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State banks, even the bills of those State banks payable and paid on demand in specie. It results from this fact, that the Bank of the United States considered that the bills of local banks, be their character ever so good, were not money, were not legal currency, which they were bound to take in deposite; and hence this circular of Mr. Crawford became necessary.

In 1826 Mr. Rush extended this indulgence to certain enumerated State banks, not to all the specie-paying banks of the country, but to certain specified banks; but enjoined that, "as the receipt of any of the local or State bank notes may be discontinued at any time, without previous notice, it will be well for those who have payments to make to provide themselves with specie, or notes of the United States Bank or its branches, to guard against any change that may be found proper in regard to the notes of the local or State banks."

If that joint resolution of 1816 was imperative and obligatory, it is somewhat surprising that it should have received such a commentary from the head of the Treasury Department.

Mr Taney, the late Secretary of the Treasury, issued a circular, dated March 26, 1834, in which he says:

"Reports occasionally reach Washington, unfavorable to the credit of particular State banks. Many of these rumors are, no doubt, without foundation; but it is the duty of public officers to be continually watchful of the public interests, and it therefore is expected that you will be careful to receive the notes of no banks except such as are in good credit, and pay specie promptly for their notes when presented; and you are to receive none except such as the bank in which you deposite will agree to pass to the credit of the United States as cash: and, in order to remove all possible grounds of controversy or complaint, you will immediately, on the receipt of this letter, obtain from the bank in which you deposite a list of the State banks whose notes they will consent to receive and pass to the credit of the United State as above mentioned." Repudiating the idea that receivers were

The construction which I have now given to the resoJution of 1816 has been given to it not only by public officers, but that construction has been sustained by Congress, with reference to this subject, from that time to the present; and not until this period has the correctness of this construction, and of the corresponding prac-bound, at all events, to take the notes of all specie-paying tice of the Government, been questioned.

In a report to the Senate, made by the present Secretary of the Treasury at the last session of Congress, he remarked that, according to a construction adopted by Mr. Hamilton, "the Treasury, into which the money was to be eventually paid, as the chief pecuniary agent of the Government, could waive its right to specie, and could consent to receive the notes of State banks, when deemed by it in all respects equivalent to specie; and by the joint resolution of Congress in 1816, which impliedly gave some sanction to this original practice, by prohibit ing the Treasury Department longer to receive the notes of State banks not paying specie, and which it had in the great emergencies of the war allowed to be taken for public dues. The clause of the joint resolution of 1816, not forbidding the receipt of notes of State banks paying specie, has not been understood as amounting to an express grant of power, making those State notes a tender for public dues; else the explicit favor granted to the United States Bank notes alone would have been nugatory."

Mr. Crawford, in 1817, after the establishment of the United States Bank, issued circulars prohibiting United States officers from receiving any bills which will not be received by them and credited as cash. And why was this? It will be recollected that, by the 16th section of the charter, the money of the United States was to be deposited in the bank and its branches. This charter had been accepted, and the corporation had gone into operation under it, and was bound to receive in deposite the money, the legal currency, of the country; but among its first acts, as I have before said, was an unconditional refusal to receive on general deposite the bills of

banks in payment; but the United States Bank formerly, and the deposite banks since, should have the selection "of those whose notes should be received on account of the revenue."

If this joint resolution was absolutely binding, it is dif ficult to account for the fact that it has never been observed, but has been disregarded universal y, by the fiscal agents of the Government, without calling forth any action of Congress. If it was a right secured to speciepaying banks, it is wonderful that not one of those numerous institutions has ever presumed to lay its griev ances before Congress, that the agents of the Govern ment had refused to receive its paper in payment of customs or of lands, which they were bound to do under the joint resolution of 1816.

I cannot, then, consider the order of the 11th July last as illegal-as against the material binding provisions of the resolution of the 30th April, 1816. I cannot regard the issuing of that order as any assumption of power on the part of the President. And, for aught I see, the order must stand, unless the President shall see fit himself to withdraw it, or unless Congress, by its own legislation, shall take away the foundation upon which that order rests-shall pass some law that shall render the order itself inoperative.

In reference to the policy and expediency of that measure, I am free to admit that a great diversity of opinion is entertained by different portions of the business community. The President says that he directed the issuing of the order with a view to the safety of the public funds, and to the interests of the people generally. No man, unless familiarly acquainted with the state and condition of the banks which had in deposite the

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public funds, the practices of those institutions with reference to the facilities furnished to the purchasers of the public domain, the amount of the actual sales of the public lands, and the means used in making these acquisitions from time to time, could determine the policy, expediency, or necessity, of such an order as that which was issued on the 11th of July last.

The reasons which induced the President to direct the issuing of the specie circular, are given in the circular, and in the message, and in the report of the Secretary of the Treasury. It seems to me they were reasons in no way conflicting with the constitution or the law. Certainly some of the very reasons had been urged by gentlemen on the other side during the last session of Congress. To save the public domain from passing into the hands of speculators, to prevent an improper use of the public funds in deposite, to check the issues of overtrading banks, and to save the property of the nation, were among the reasons which induced the Executive to send forth the specie circular. And these very considerations were reiterated time and again on this floor in the course of the last session, in relation to the secu rity and s.fety of the money of the nation then deposited

in the State banks.

The President, then, was bound, if the reasons stated were founded in fact, to issue this order, which was to effect the very objects so much desired at the last session the safety the public funds, and the preservation of the public domain. The order could never have been issued from any political considerations--from any desire for individual popularity: every man must have known that its political effect would have been precisely that which has been produced. Higher con siderations than a thirst for personal popularity, or for political distinction, must have prompted the President to have issued this order. It was nothing less than a settled conviction that the public interest demanded the measure. He designed it as a mere temporary expe dien'; and it remains now for Congress to decide whether any thing, and, if any thing, what, shall be done in relation

to this matter.

I am not, Mr. President, however, so much in favor of an exclusive metallic currency, that I am prepared, at the present time, to agree to any proposition which shall in effect legislate bank paper out of circulation. I do not believe that it would be wise to establish an exclusive metallic currency as the settled, fixed, and de. termined policy of this Government. The country is not prepared for such a revolution in its circulating medium. The true interests of the community require that all such changes should be gradual and progressive. Any violent and extraordinary alteration in the currency of a country will invariably bring embarrassment, confusion, distress, and ruin. I am not, therefore, for any great alterations at the present time, although I am for adopting such an arrangement as will bring into circulation more specie, and put out of circulation all bank paper of a small denomination. I shall with great readiness, Mr. President, come in aid of any proposition which shall have for its object the introduction of more specie, and of less paper, among us. But, to my mind, the time has not arrived when the currency should be exclusively metallic. The whole amount of specie in our country is inadequate for the transaction of its necessary business. Even the three hundred millions of banking capital, in addition thereto, is regarded as insufficient.

The amendment proposed by the Senator of Virginia must produce some good effect; it will, in a measure, exclude from circulation bank paper of a less denomination than five dollars. As far as it goes, it has my approbation, and will receive my support, in case the mover will so modify his proposition as to prohibit the deposite banks from exercising a power over the currency, which

[DEC. 27, 1836.

The

should be reposed in the Treasury Department. principle set forth in the amendment I approve; and that is, to improve the currency by bringing into circulation more specie. But it would be altogether ineffectual, so long as the States shall exercise the power of incorporating local banks, for Congress to attempt to prohibit the issues of such banks. All that we can do we will do, and that is, to attempt to improve the character of such a paper currency, by refusing to receive in payment bills of a small denomination. But, Mr. President, if I have a correct understanding of the positions of the Senator from Ohio, upon the subject of banking operations in the West, there certainly was at least one good reason for the issue of the specie circular-to check the excessive issues of their local bank paper.

The Senator says "that the banks do not issue their notes upon the specie in their vaults. The notion is utterly fallacious; it is the staple produce of the country which those bank notes purchase; it is the pork and flour of the West, the cotton and sugar of the South, that is the true capital on which the banks make their issues." "The business of the country could not be transacted if the issues of bank paper were based on gold and silver alone."

I live in a wool-growing country; and that article, for some years past, has constituted one of the principal sources of business operations. It annually adds to the substance of our farmers, and it furnishes to the merchant the means of making his remittances; but I never supposed or believed that this staple of my country was the basis upon which our local banks make their issues. I live in the immediate vicinity of banks whose capital exceeds half a million of dollars, and I entertain no doubt that, in the places where those institutions are situated, there is annually disbursed more than one half of the capital of those banks in the purchase of wool; and the paper of those banks is issued within a period of 90 days, to purchase and to pay for this amount of that article; but no human being connected with the banks ever calculated on the value of the material itself for the redemption of their paper, or did the banks ever issue their paper upon such a capital. No, sir, their reliance was on the gold and silver in their vaults, on their specie funds; but more than all on the intrinsic value of the discounted paper; and whenever banks undertake to issue paper to pass current as money, equivalent to specie, based on no metallic capital, but upon the produce of the country-upon the pork and flour of the West-and to rely, for the redemption of their paper, upon the sales of such produce, sooner or later, by the fluctuations of trade, the sudden depressions of the staples of our country, such banks must experience severe losses, if not an entire prostration.

I repeat it, sir, and I appeal to every man conversant with banking for the correctness of my position, that the solvency and security of banks must depend essentially upon the intrinsic value of its discounted paper, in connexion with its specie funds, which ordinarily amount to one third of its whole circulation. Some bank, peculiarly circumstanced, and possessing great facilities and extraordinary privileges, may have within its control specie equal to its whole circulation, but not equal to its whole liabilities. The banks of New England, on an average, do not possess a specie capital within their control, or specie funds, exceeding one third of the whole amount of their paper circulation and actual liabilities; but they rely for their solvency on the worth of the debts due to them, on the intrinsic value of their discounted paper; and every man conversant with banking must know that it is a safe reliance, and that a bank doing business upon the principles I have stated can never be so embarrassed as to put in jeopardy its own bank notes.

The Secretary of the Treasury has, as usual, received

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his full share of abuse for his supposed connexion with, and participation in, the order of the 11th of July. It remains yet to be ascertained whether the act shall receive the approbation or disapprobation of the American people. I leave the matter with them: the issue is made up-the reasons for and against the measure have been set forth-let judgment be rendered. In the decision of that tribunal to which the Executive has so successfully and so triumphantly appealed on former occasions, he will most cheerfully acquiesce.

But the attacks which have been made upon the Sec. retary of the Treasury, pending this debate, have not been confined to the specie circular. His want of judgment, of financial skill, of tact, and of talent, have been made most clearly to appear (as has been said) in his estimate of the receipts and expenditures for the year 1836, as presented in his official report at the commencement of the last session of Congress. This charge has become somewhat stale, worn out by its long-continued use. These reiterated attacks upon that officer estabJish one fact beyond all possibility of doubt--that the gentlemen who make these charges consider that they are contending with no ordinary enemy, but with an enemy talented, powerful, and, if not invulnerable, certainly not easily vanquished.

At the last session I attempted to show how these extraordinary receipts had found their way into the Treasury. I then stated, and I now believe, that the fact it self of there being a most extraordinary amount receiv ed during the current year, is no evidence of want of sagacity or judgment in making and presenting the esti mates as they were made and presented in 1835. If the Secretary had then presumed to have estimated twentyfour millions as the probable amount which would be received in the course of the coming year from the sales of the public lands--if he had estimated that twenty millions would be received from customs, and Congress, relying on that estimate, had proceeded to make appropri ations accordingly, and it had turned out that no greater sum than usual had been received from the sales of lands, or from the duties on imports, what would the gentlemen then have said? They would have denounced him indeed as a visionary statesman, and in whom no confidence should be reposed. Such estimates, found ed on no facts, but the result of mere conjecture, would have justly exposed him to the charge of rashness and of fully.

What is the course to be pursued by a prudent, calculating, sensible, and discreet officer, at the head of the Treasury Department, in presenting his estimates of receipts and expenditures?

He is to ascertain what had been the actual receipts in former years; whether they had increased beyond the natural increase which would result from an increase of the population of the country; and if so, to study the causes of such an increase, and to make up his estimates of receipts with reference to the population and condition of the country. It is, after all, but an estimate; it cannot be regarded as fact; it is in a measure conjectural, and the Secretary is greatly abused for guessing so badly. But the honorable Senator from South Carolina, in his report upon executive patronage, fell into the same error. He under-estimated the receipts from the sales of the public lands as well as from customs. If I am not mistaken, it will be found that the extraordinary amount received from the sales of the public lands was received from mere private entries, and were not the proceeds of the public sales. How was it possible for the Secretary to know, or even to conjecture, who would purchase, and what amount would be purchased, of the public land at private sale, within a given period? Things, I believe, had gone on in the usual mode up to July or August, 1835; and then

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speculation began to break forth. It will be found that there was no very unusual increase until August of that year. The Secretary is now obliged to make up his estimate a month sooner than was formerly practised, and at a time when he could not have received the whole returns of October; and although he does estimate the proceeds at a half of a million more than usual, yet I am free to admit that the estimate falls far short of the reality; but, in making this admission, I cannot see that thereby any fault, any want of discernment, any want of foresight, of Calculation, or of judgment, is chargeable upon the Secretary of the Treasury. It will appear that the ac tual receipts of the fourth quarter, ending with Decem. ber, in 1834, from lands and customs, were but five and one third millions; while those for the last quarter of 1835 were about eleven an 1 one third millions; and not so much land was advertised within the last as within the first period. The sales of lands in that quarter ran up to five and a half millions-a sum exceeding the whole sales of any one year since 1820. In December alone the sales amounted to two and one third millions, when usually not over half a million sold in that month. And, in relation to the receipts from customs, I might add, that the destruction by fire, in New York, of some seventeen millions of merchandise, rendered fresh importations necessary, which greatly increased the receipts from that source of revenue, and which could not have been considered by the Secretary. I cannot believe that in November, 1835, with all the lights then cast upon this subject, that the gentleman from South Caro ina himself could or would have anticipated such an extraordinary amount of revenue. But it is enough for me to say, that the Secretary of the Treasury, in making his estimates of receipts for the year 1836, was govern ed, in a measure, by the actual receipts of former years from the same sources. But whoever calculates the receipts of any subsequent year by the actual receipts of the year 1836, will find that he has committed a greater and a more hazardous error than has been committed by the present Secretary."

The manner of executing the deposite bill of the last session is also made a matter of grave charge against the Secretary; and the pecuniary distress which now exists in our commercial cities (and I am most willing to agree that is is most severe) has been here and elsewhere charged upon the Secretary, as the unavoidable effect of the manner of his executing that bill. Now, Mr. Pres ident, I think I shall find little difficulty in showing that the Secretary could not have done less, without a violation of the law, and without wholly disregarding the state of public opinion, and the just expectations of the community. It was the forbearance of the Secretary which has saved, if not the banks themselves, certainly the commercial and mercantile community, from severer trials, embarrassments, and sacrifices. The Secretary could not have done less; he might have done more; and the few failures which have occurred in our commercial cities, in carrying into effect the provisions of the deposite bill, are evidence of the high character, resources, and responsibilities, of our mercantile community.

It was early alleged that the Treasury Department would not execute the deposite bill; that, under some pretence or other, the Secretary would delay carrying into effect its provisions, and thereby frustrate the just expectations of the people. These allegations were made and reiterated after the adjournment of Congress, because the money was not inmediately removed from those places where too much had accumulated, to points where there was little or none of the public funds.

The act to regulate the deposites of the public money was approved on the 23d of June last, and it is a fact well known, that on the following day the Secretary of the Treasury commenced a correspondence, having for

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its object the selection of additional banks for the deposite and keeping of the public money. It was manifestly the duty of the Secretary of the Treasury "to select, as soon as may be practicable, and employ as the depositories of the money of the United States," such new banks as may be located at adjacent or convenient to the points or places at which the revenues may be collected or disbursed, requiring him, at all events, to select at least one bank in each State and Territory, if one can be found willing to be employed as a depository of the public money; and the act requires that the Secretary of the Treas ury shall not suffer to remain in any deposite bank an amount of the public moneys more than three fourths of the amount of its capital stock actually paid, for a longer time than may be necessary to make the transfers, for purposes of equalisation; and in the event of too great an accumulation of deposites in any bank, such transfers shall be made to the nearest deposite banks which are considered safe and secure."

Such were some of the provisions of the bill regulating merely the deposites of the public money in the deposite banks.

The Secretary was then obliged, as soon as practicable, to select in the different States the additional deposite banks made necessary. He was not at liberty to postpone or to delay this service. The act was imperative; for the great and leading argument urged in favor of this bill was, that such an accumulation of the public money at particular points, and in particular banks, was exposing to hazard the public funds; and he was, therefore, in the most explicit manner, required "not to suffer a greater amount of the public money than a sum equal to three fourths of the capital of any deposite bank to remain in such deposite bank, but at once to remove such excess to other places of deposite, for the purpose of qualisation."

The duty enjoined upon the Secretary, under these provisions of the deposite bill, was clear and explicit, and that duty was promptly met and faithfully perform ed. The banks were selected with as little delay as possible; and the document now on the table will show how early these transfers were made for the purpose of equalisation, and to prevent any bank retaining in deposite, of the public money, an amount beyond three fourths of its capital, "for any longer time than was necessary." So much for the charge made against the Secretary at the time for neglecting to execute the deposite bill.

But when the money began to be moved, after the additional deposite banks had been selected, and after due notice had been given to those banks which then held in deposite, of the public money, an amount beyond three fourths of their capital, that they must prepare to make the requisite transfers, then, forsooth, a universal hue and cry was raised against the Secretary, for making any removal of any portion of the public money, until the 1st day of January; alleging that it was arbitrary and oppressive on the part of the Secretary, not required by the letter or by the spirit of the act; and that such an unreasonable proceeding would produce unnecessary distress among the banks, and the unavoidable ruin of thousands of our mercantile community. Thus blowing both hot and cold: blaming the Secretary for his pretended acts of omission, and for his real acts of commission. Under the provisions of the act to which I have referred, the Secretary doubted whether he should have the power, before the 1st day of January, 1837, to remove from particular points in any one State where there should be accumulated a great excess of the pub lic money to any place beyond the limits of such State; and so settled was the public mind as to the course to be pursued in such a case, and so decided was the public sentiment, that no sooner were those doubts known to exist, than Congress passed the act "supplementary to

[DEC. 27, 1836.

the act to regulate the deposites of the public money," which provides "that nothing in the act to which this is a supplement shall be so construed as to prevent the Secretary of the Treasury from making transfers from banks in one State or Territory, to banks in another State or Territory, whenever such transfers may be required, in order to prevent large and inconvenient accu. mulations in particular places, or in order to produce a due equality and just proportion, according to the provisions of said act."

The Secretary was bound, then, according to the plain English of these two acts, without delay, to set himself about removing from one set of banks, which then held of the public money an amount beyond three fourths of their capital, about eighteen and one third millions of dollars, and to deposite this in various other banks in the different States; and to this may be added twenty-two millions, collected since the passage of the bill. All this was to be done independent of those provisions of the act which required that the surplus in the Treasury on the 1st of January, above five millions, should be deposited with the several States. The mo ney, on the passage of the deposite bill, which was on deposite in banks in the city of New York, could not be left in that city, because the money then there, and what was there collecting monthly from imports, would make an aggregate exceeding three fourths of their whole banking capital. There was in deposit e in that city, on the 23d of June last, about thirteen millions; there is collected ordinarily from customs, about one and a quarter million each month. Their whole banking capital does not, it is believed, exceed eighteen millions. The Secretary, then, could not, without a direct violation of his duty, have suffered this amount of money there to remain, even if every banking company in that_city had been willing to have been employed as a depository. I have stated that the Secretary found it necessary, in the discharge of his duty, to remove about eighteen and one third millions of dollars. This very operation is cause enough for the pressure which exists in our great com. mercial cities. No one at all acquainted with business, but must admit that every dollar of this money had been loaned by one set of banks to their customers; and the process of transferring made it necessary to collect from those customers, for those banks, in order that it might be removed to another set of banks. This was a real and important money transaction. It was not an affair which could have ordinarily been done without an actual collection of the money from the debtors of the deposite banks. By the deposite bill itself, the banks which held the public money were required to pay interest on all over one fourth of the money in deposite; and it must, then, have been fairly presumed that the money of the Government which had been placed in the deposite banks was out on loan. The fact was so; and, as I have before said, the very process of collecting from one set of customers at one set of banks, and paying over to another, furnishes cause enough for the prevailing pres

sure.

Who does not recollect the complaint made by the Bank of the United States in 1833, for the removal of the deposites from that institution, less by one half in amount than changed places under the late act of Congress? Who does not recollect the pretended distress and ruin which was alleged to be the consequence of that act of removal, when even the actual amount then taken from the Bank of the United States was not re moved at once, but only as needed to pay warrants? Where there were great excesses of the public money in any State, as in New York, Louisiana, and Mississippi, it was expected that the Secretary would at once remove such excesses to other States having little or none of the public money. While those States had millions upon

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