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JAN. 10, 1837.]

Treasury Circular.

[SENATE.

pression in all the operations of business. It is a change am asked, what is the end I propose, whether I am in to which society always adjusts itself slowly and pain- favor of a specie circulation exclusively, and the total fully; and, under the most favorable circumstances, must suppression of bank paper, I answer, No. Even if such be attended with distress-often with extensive ruin. an object were desirable, it is plainly impracticable. In Great caution, therefore, is necessary, lest it be unduly the present state of commercial progress and refinement precipitated in its progress, or harshly aggravated in its throughout the world, it would probably be impracticaeffects. We have, in the history of our own country, ble any where; but in this country, and under our sysat a period not too remote for the recollection of most of tem of government especially, it is obviously wholly unus, a memorable example of the distressing effects of a attainable. Whether right or wrong, we find twentyrapid reduction of the circulating medium. It is striking-six independent State Legislatures possessed of the ly exhibited, in all its details, in the able report of Mr. power to create banking corporations. Whatever specuCrawford, then Secretary of the Treasury, on the cur- lative doubts may exist in the minds of some as to the rency, in 1820. It is there shown that the circulation of constitutional validity of this power, the States now the country, in the three years from 1816 to 1819, had actually possess and exercise it, as they have invariably been brought down from 110 millions in the former, to done from the foundation of the Government, and there 45 millions in the latter; making the enormous reduction is not the slightest probability that they will ever be diof 65 millions within that short period! The scene of vested of it. In every sober and practical scheme of wide-spread ruin and distress which ensued is fresh in policy, we must proceed upon the assumption that this the memories of all who witnessed it. It inculcates, at independent State power will remain. How, then, can leas', the necessity of caution in the action of the Gov- the banking system be suppressed by this Government? ernment on this subject. It is our duty to withdraw Such a notion, if entertained any where, would indeed from the banking operations of the country that artificial be Utopian and visionary. stimulant which the Government itself has administered; but that being done, a just policy, in general, requires that the concerns of trade should be left to regulate themselves by their own natural and remedial laws. Regarding, then, the Treasury circular as having mainly done its office, we are now called upon to establish some permanent and equal rule for the collection of the public revenues. It is a duty which we cannot evade if we would. In the joint power which the constitution invests in Congress, to "lay and collect" taxes, our duty is read to us in terms too significant to be mistaken. It is as much a part of the legislative authority to say in what manner and by what rule the collection of the public revenue shall be effected, as to say to what amount and from sources it shall be raised. Important as such a regulation is at all times, it derives, at the present moment, a particular interest from its close connexion with the subject of the currency. It is in that connexion that all who have participated in this debate have discussed the question before the Senate; and it is doubtless in that connexion that the public attention is turned with most anxiety to our decision upon it. I feel, Mr. President, all the magnitude and all the difficulty of this great question of the currency. There is none that rises higher in importance, or descends more deeply into the interests of society. It "comes home to the business and the bosoms of men." It affects alike the humblest laborer and the wealthiest capitalist; on it depend the security of property, the stability of contracts, the comfort and support of families, and, I will add, in a great degree, the public morals; for nothing, in my opinion, is more calculated to unsettle the moral sense and habits of a community than the dispositions and pursuits fostered by the lottery of a fluctuating currency. In approaching such a subject, I feel all the diffidence which a just sense of its difficulty and importance properly inspires. But, having submitted to the Senate a proposition which, if adopted, would, I flatter myself, exert no small influence on this great interest; and as the friends of the administration (myself among the number) have been accused of entertaining visionary, impracticable, and pernicious notions in regard to a reform of the currency, I must beg the indulgence of the Senate while I state, with as much precision as I may, the views of that reform which I entertain, and which have determined the shape of the proposition now under

their consideration.

In discussing the question of a reform of the currency, it is necessary to settle our ideas clearly as to two things: first, the nature and extent of the end to be aimed at; secondly, the means by which it is to be attained. Ifi

My object, then, would be, not the destruction of the banking system and the total suppression of bank paper, but an efficient regulation of it, and its restriction to safe and proper limits; not the exclusive use of specie as a circulating medium, but such a substantial enlargement and general diffusion of it in actual circulation, as would make it the practical currency of common life, the uni versal medium of ordinary transactions; in short, the money of the farmer, the mechanic, the laborer, and the tradesman; while the merchant should be left in the enjoyment of the facilities of a sound and restricted paper currency for his larger operations. Such a reformation in the currency as this would, in my opinion, be productive of the most beneficial results. It wou'd give security to the industrious classes of society for the products of their labor, against the casualties incident to the paper system. The laborer, in returning to the bosom of his family from his weekly toil, would no longer find his slumbers broken by the apprehension that the hard earnings of the week, perhaps the accumulation of long years of honest industry, might be dissipated in a moment by the explosion of a bank, or the bursting of some paper bubble. It would give security, to a great extent, to the whole body of the community, against those disastrous fluctuations in the value of property and contracts, which arise from the ebbs and flows of an unrestricted paper currency. It would give security to the banks themselves, by providing them, in the daily internal circulation of the country, an abundant and accessible fund for recruiting their resources, whenever they should be exposed to an extraordinary pressure.

This, sir, is the happy state of things we might promise ourselves from replacing (as it is the aim of the proposition which I have had the honor to submit to do) all bank bills, under the denomination of twenty dollars, with a solid circulation of gold and silver. Is there any thing wild, any thing visionary, any thing pernicious, in such a system of currency as this? It has the sanction, Mr. President, of the profoundest writers on questions of political economy, and has received the practical assent of the wisest nations. I am well aware that it would ill become me to present for the consideration of the Senate any scheme which was not thus tested and approved. Of all the writers who have treated and examined questions of this character, none possess so high an authority as the author of the "Wealth of Nations." has been well and justly said that Adam Smith had done for the science of political economy what Bacon and Newton had done for physical science, and Sydney and Locke for the science of government and the fundamen tal principles of civil and political liberty. His work,

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Treasury Circular.

(JAN. 10, 1837.

urges the necessity of confining it to commercial accommodation in the larger transactions between dealer and dealer. He is in favor of the suppression of all bank notes under five pounds; whereby gold and silver will fill the ordinary channels of circulation, and become, in fact, the common practical currency of the country.

appearing contemporaneously with the American Revolution, was deeply imbued with the free spirit and the large and vigorous thought which so remarkably distinguished that great era. He came forth as the zealous and powerful champion of free trade, the inflexible op. ponent of monopoly and restriction, in all their multiplied forms, the ardent advocate of every thing that is liberal, But this system does not rest on the authority of Adam generous, and popular, in the institutions of society and Smith alone. Not to mention the illustrious names or the intercourse of nations. No work has ever exercised the policy of other enlightened nations in support of it, so large an influence for good on the policy and destiny it has received the successive sanction of a long line of of nations; and none, I am sure, considering the stamp the ablest practical statesmen in England. It is a reof liberty as well as wisdom impressed upon it, is bet-markable fact, that the great work of Adam Smith havter entitled to the respect of an assembly of American ing appeared in 1776, the Parliament of Great Britain, legislators. Adam Smith, by a strange mistake, has been in the very next year, passed a law prohibiting all bankheld up, rather opprobriously, as the advocate of a pa- ers from issuing notes under the denomination of five per system-as the founder, in fact, of the paper school! pounds. This continued to be the legislative policy of Sir, there can be no greater mistake than this. While that country till the memorable year of 1797, when, in he recognised the utility of a judicious system of bank- consequence of the exigencies and embarrassments of ing, in liberating and putting into productive employ that tremendous conflict, growing out of the French ment capital which would otherwise remain dead and in- revolution, which desolated and convulsed Europe for active, and the facilities it is calculated to afford to com- more than twenty years, the Bank of England, with the merce, he yet insists that the general circulation of the sanction of the Government, suspended specie payments; country should be gold and silver. and, at the same time, resorted to an issue of one-pound and two-pound notes. As soon, however, as the war was at an end, and the country was in a situation to admit of the resumption of specie payments by the bank, the enlightened statesmen of England recurred to the prohibition of all notes under the denomination of five pounds. This return to a sound policy, however, was not accomplished, nor has it been maintained, without encountering a strenuous and persevering opposition.

As the general principles he has laid down on the subjects of banking and currency continue still to be ap. pealed to by the enlightened writers who have followed him, as affording the soundest exposition of those subjects, whatever modifications of subordinate points may have been made by subsequent inquirers, I will give to the Senate, and principally in the words of Adam Smith himself, an outline of his system of currency. After speaking of the advantages to be expected from a ju There is something so instructive in the history of this dicious and properly conducted system of banking, he reform of the currency in England, that it deserves to be says expressly that "the commerce and industry of a traced some what more in detail. In 1819, a law was country are not so secure when suspended, as it were, passed directing a complete resumption of specie payon the Dædalian wings of paper money, as when they ments by the bank in three years, to wit, in 1822; and travel about on the solid ground of gold and silver." He at the same time it was enacted that in two years after, says, therefore, it is the policy of wise Governments to wit, in 1824, all small notes under the denomination "to guard, not only against that excessive multiplication of five pounds should be prohibited. The first provisof paper money which ruins the very banks which issue ion was carried fully into effect at the designated period; it, but even against that multiplication of it which ena- but, such was the influence of the country bankers, and bles them to fill the greater part of the circulation of the other associated interests, that, before the appointed time country with it." He then proceeds to show that "the for the suppression of the small notes arrived, the latter circulation of every country may be considered as divi-provision was repealed, and the final suppression of the ded into two different branches: the circulation of the dealers with one another, and the circulation between the dealers and consumers." His next position is, "that paper money may be so regulated as either to confine it. self very much to the circulation between the different dealers, or to extend itself likewise to a great part of that between the dealers and consumers." The regulation is effected by fixing the denomination of the notes permitted to be issued. "It were better," he adds, "that no bank notes were issued in any part of the kingdom for a smaller sum than five pounds. Paper money would then confine itself to the circulation between the different dealers;" and where this is the case, he says, "there is always plenty of gold and silver." "But where it extends itself to a considerable part of the circulation between dealers and consumers, it banishes gold and silver almost entirely from the country." The system of Adam Smith, then, resolves itself into this: that the circulation between dealer and dealer may be of paper, but that the circulation between dealer and consumer should be of the precious metals; that this result ought to be secured by prohibiting the issue of bank notes for a less sum than five pounds, and that, if such a restriction be adopted, there will always be plenty of gold and silver" in circulation, performing all the offices of exchange in the "ordinary transactions" of society, while the use of paper would be confined to commercial operations of a larger scale. Instead of being the advocate, far less the founder, of an unrestricted paper system, he

small notes was adjourned to 1833, the year of the expiration of the charter of the Bank of England. But the great commercial convulsion of 1825, which swept banks, merchants, farmers, every thing, before it, with the destructive fury of a tornado, soon after occurred, and forcibly admonished British statesmen of the necessity of seeking a remedy-in part, at least-in a more solid constitution of their currency. Accordingly, in the beginning of 1826, Lord Liverpool and Mr. Robinson, the one the first Lord of the Treasury, the other the Chancellor of the Exchequer, introduced and carried a bill providing for the prohibition, after April, 1829, of all small notes under the denomination of five pounds. This law was stoutly and zealously opposed at the time of its enactment, and repeated attempts were subsequently made to procure its repeal, before the period fixed for its operation. But these efforts were happily unavailing; and the doctrine of Adam Smith, in regard to the prohibition of all notes under the denomination of five pounds, re-established in 1829, after experiencing the bitter fruits of a temporary departure from it, may now be considered as the final and settled policy of the British Government. It has received the sanction and support of her ablest statesmen--of Liverpool, of Peel, of Canning, of Huskisson, of Brougham, of Wellington-all of whom, upon the fullest experience and consideration, have, from time to time, borne their testimony to the value and importance of this essential restriction upon a paper circu❘lation.

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swering equally well the purposes of domestic circulation, but one of them possessing only a local value, confined to the country of its emission, while the other has a universal and equal value throughout the world, the latter will necessarily go abroad into the commerce of the world, in quest of the riches and productions of foreign nations, leaving the former at home to perform an office which it does equally as well, though it would be wholly without use or value abroad. The total incom

the same denominations, has grown into an axiom. Edmund Burke, (whose sagacity in questions of this sort is well known,) at the memorable period of the bill brought forward by Mr. Pitt for the suspension of specie payments by the Bank of England, in 1797, in a letter written during his last illness to Mr. Canning, which the latter gentleman brought most touchingly to the notice of the House of Commons, in a debate of great interest and instruction on this whole subject, at a much more recent period, (1826,) used these memorable words: "Tell Mr. Pitt that, if he consents to the issue of one-pound notes, he will never see a guinea again." The prophecy, sir, became history. No one saw a guinea in circulation in England while the bank continued the issue of one-pound notes.

And what has been the result in practice? Why, to give to the people of England virtually a metallic currency; for gold and silver form there the daily habitual medium of all ordinary transactions. A bank note, except on special occasions, is a sort of phenomenon. this point we have precise information. It appears, from statistical returns referred to by the Chancellor of the Exchequer in the House of Commons, a few years ago, that the amount of gold then in circulation was twentytwo millions of pounds sterling, and of silver eight mil-patibility, therefore, of a paper and metallic currency of lions of pounds sterling. I do not speak of gold and silver locked up in the vaults of banks; but of that which passes daily from hand to hand, in the ordinary transactions of business. Mr. Gallatin, in his instructive pamphlet on the currency, published in 1830, states the metallic circulation of England at precisely the same amount. Allowing nothing for any augmentation since, the people of England have, then, an actual circulating medium of gold and silver to the amount of about one hundred and fifty millions of dollars. The Secretary of the Treasury, (who, doubtless, has access to the most authentic sources of information on the subject,) in his annual report at the commencement of the session, states the whole paper circulation of England, at this time, at one hundred and fifty-two millions of dollars. We may, therefore, conclude that what Mr. Gallatin says, in the pamphlet thus referred to, is substantially correct--that, "by the suppression of all notes of a less denomination than £5 sterling, the amount of the circulating metallic currency in England has become equal to that of bank notes of every description." One half of the entire circulation consists of gold and silver, constantly passing from hand to hand, and performing all the offices of exchange in the ordinary business of life, and thus forming, in fact, the practical currency of the country. It is this large infusion of the precious metals which has preserved the currency of England, in the main, in a healthy condition, under a system of banking which her prime minister himself, (Lord Liverpool,) in 1826, pronounced to be, in other respects, "the most insecure, the most rotten, the very worst, which it is possible to conceive." Much has been said recently, I know, Mr. President, of great commercial embarrassments in England, which are attributed by many to a deranged state of her currency. These embarrassments, in my opinion, are viewed in much too serious a light; but if they were not, it must be borne in mind that all commercial countries, however solid the constitution of their currency, will occasionally be visited by revulsions in trade. If, too, they are to be considered as indicating a derangement in the currency of England, the source of that derangement is to be found in those defects of her system of banking which were referred to by Lord Liverpool as making it so insecure and precarious, and not, surely, in that salutary check, the prohibition of small notes. On the contrary, the abundance of gold and silver which that restriction secures in the common circulation of the country is the great preservative of the system, and the anchor which enables it to ride in safety amid fluctuations and tempests that might otherwise overwhelm or subvert it.

In 1828, when a great struggle again took place in the British Parliament, on the final consummation of the effort to restore a metallic currency, there was not a single distinguished man who did not bear his testimony to the truth of Mr. Burke's axiom. The Chancellor of the Exchequer said, on that occasion, "there was a natural antipathy between the one-pound note and the sov ereign. They would not exist together, for the note soon drove the sovereign out of circulation." The Duke of Wellington, who was eminently a practical man, and spoke from the teachings of experience, said "the experience of the last few years had proved the truth of the theory, that one-pound notes and gold sovereigns would not circulate at the same time. If you are to have gold in circulation, you cannot have one-pound notes." Mr. Huskisson, whose familiarity with questions of this sort was the result of profound studies, as well as matured experience, said, still more pointedly, "when the paper is let in, the gold will disappear. They might vote the money, they might coin it, but how could they retain it in the country?" This remark applies most forcibly to our present situation. We have voted the metallic money, we have coined it, but it will not circulate. Since we corrected, by law, the under-valuation of the gold coins, (but little more than two years ago,) the quantity of gold in the country, according to the late annual report of the Secretary of the Treasury, has increased fifteen millions. We have coined at our own mint, within that time, according to the same authority, ten millions of gold. But where is it? In the vaults of the banks, or hoarded by individuals! and we shall never see it in circulation until we have opened the way for it by a previous suppression of the small no es. If we mean to do any thing practical and effectual for introducing a more general circulation of specie, we must begin at the right end, by first putting down the small-note circulation.

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

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Treasury Circulur.

gentleman, then, may be satisfied, by showing him what has been the policy of the present administration; and that cannot be better stated than in the words of our venerable and patriotic Chief Magistrate himself. I beg the indulgence of the Senate while I read a very unequivocal and explicit passage on this subject in the President's message of the last year. In that document he says:

"It has been seen that, without the agency of a great moneyed monopoly, the revenue can be collected, and conveniently and safely applied to all the purposes of the public expenditure. It is also ascertained that, instead of being necessarily made to promote the evils of an unchecked paper system, the management of the revenue can be made auxiliary to the reform which the Legislatures of several of the States have already commenced in regard to the suppression of small bills, and which has only to be fostered by proper regulations on the part of Congress to secure a practical return, to the extent required for the security of the currency, to the constitutional medium. Severed from the Government as political engines, and not susceptible of dangerous extension and combination, the State banks will not be tempted, nor will they have the power which we have seen exerc'sed, to divert the public funds from the legitimate purposes of the Government. The collection and custody of the revenue being, on the contrary, a source of credit to them, will increase the security which the States provide for a faithful execution of their trusts, by multiplying the scrutinies to which their operations and accounts will be subjected. Thus disposed, as well from interest as the obligations of their charters, it cannot be doubted that such conditions as Congress may see fit to adopt respecting the deposites in these institutions, with a view to the gradual disuse of the small bills, will be cheerfully complied with; and that we shall soon gain, in place of the Bank of the United States, a practical reform in the whole paper system of the country. If, by this policy, we can ultimately witness the suppression of all bank bills below twenty dollars, it is apparent that gold and silver will take their place, and become the principal circulating medium in the common business of the farmers and mechanics of the country. The attainment of such a result will form an era in the history of our country, which will be dwelt upon with delight by every true friend of its liberty and independence. It will lighten the great tax which our paper system has so long collected from the earnings of labor, and do more to revive and perpetuate those habits of economy and simplicity which are so congenial to the character of repub. licans, than all the legislation which has yet been attempted."

Here we have a complete delineation of the policy of the administration on this great question of the currency. Neither the President, nor the body of his friends, have proposed a total suppression of bank paper, or an exclusive metallic currency; but, to use his own words, they have desired to see "a practical reform in the banking system, by the ultimate suppression of all bank bills below twenty dollars, so that gold and silver might take their place, and become the principal circulating medium in the common business of the farmers and mechanics of the country." This, he expressly declares, would be "a practical return, to the extent required for the security of the currency, to the constitutional medium;" and the attainment of which, he adds, “will form an era in the history of our country, which will be dwelt upon with delight by every true friend of its liberty and independ ence." There is nothing in the Treasury circular inconsistent with this interpretation of the policy of the administration. That measure, as I have already said, was an occasional and temporary ac1, resorted to under a peculiar emergency, till the power of Congress could be interposed to apply a more systematic remedy, and

[JAN. 10, 1837.

cannot be considered as a departure from a settled and general line of policy. On the contrary, the President, in his message at the commencement of the present session, expressly recurs to the suppression of the lower denominations of bank notes, by the concurrent legislation of the General and State Governments, as forming "the true policy of the country," by which only "a larger portion of the precious metals can be infused into our circulating medium." No other plan can be effectual for the accomplishment of such a result; and, until it shall be adopted, all that may be said, however glowing and fascinating, of the advantages of a metallic circulation, will prove but barren theory, and delusive and unprofitable generality. You may bring gold and silver into the country, and pile them mountains high in your banks; but, without the suppression of the small notes, they will never circulate in the business of society, and will always be exposed to be drawn off by the absorbing currents of foreign trade. The object of a rational policy | is, to bring them into daily and active use, invigorating and sustaining the pursuits of industry, and not to have them, like the ancient household relics described by the poet, " wisely kept for show."

The question, then, is, by what means in our power this great object of the suppression of the small notes may be promoted or accomplished. It is through the collection and management of the public revenue only that the agency of this Government can, at present, be usefully interposed. By refusing to receive in payment of the public dues the notes of all banks which shall issue bills of the lower denominations, as is proposed by the resolution I have had the honor to submit, a strong inducement of interest will be held out to the leading State banks to discontinue their smaller issues. The consideration of the credit and more general currency given to their paper, by a receivability in payment of the revenue, would doubtless induce more or less of them to conform to the standard which shall be established in this respect by the legislation of Congress. But my reliance is not so much upon the operation of this measure per se, as upon the moral influence it is calculated to exert upon the policy of the States. They have the complete power to prohibit, by law, the emission and circulation of the smaller notes; and I cannot doubt, if this Government shall hold up to them a standard deemed indispensable to the purification and reform of the currency, that that power will, in process of time, be exerted so as to second and render effectual the poli cy of our legislation here. Have we not every encouragement, in what has already taken place, to hope for such a result? It is only a few years ago that but three of the States, according to Mr. Gallatin, (Pennsylvania, Maryland, and Virginia,) had prohibited the issue of notes under five dollars. But, since that time, it has been the policy of the General Government, in the collection and management of the public revenues, to discountenance bank notes under that denomination. And what has been the result? We have seen the States, one by one, successively conforming to the example, till now a majority of them have prohibited all bank notes under the denomination of five dollars. The confidence I feel in the enlightened patriotism of the State Governments, and in the popular intelligence and virtue which control them, gives me every assurance that an appeal to their co-operation in so great and noble a work will not be in vain, especially when they shall have before them a sober and practical exhibition of the probable results of the policy in which their concur rence is invited.

Let us, then, inquire what is likely to be the extent of the effect which will be produced on the currency by the successive prohibition of all notes under five, ten, and twenty dollars, respectively. Mr. Gallatin, whose

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skill in questions of this sort is universally admitted, in his able pamphlet on the currency written in 1830, estimated the reduction in the amount of the paper circulation which would arise, at that time, from the suppres sion of all notes under five dollars, at six millions; and that likely to be produced by a suppression of the notes under ten dollars, at about seven millions; making an aggregate of thirteen millions of dollars, and equal to one fifth of the whole paper circulation of the country. Another highly respectable authority on American banking (Gouge) estimates, in 1831, the amount of notes under five dollars then in circulation at seven millions; and of notes under ten dollars at ten millions; making an aggregate of seventeen millions. But let us take Mr. Gallatin's estimate, and suppose that the suppression of the notes under five and ten dollars would, together, operate a reduction of one fifth in the whole amount of bank paper in circulation. Let us then suppose (which, I presume, would not be extravagant) that the suppression of all notes under twenty dollars, and above ten, would produce, in amount, a diminution of one fifth more of the paper circulation. By the ultimate suppression of all notes under twenty dollars, we should then gain an aggregate reduction of two fifths in the whole paper circulation of the country. According to the recent report of the Secretary of the Treasury, the whole paper circu'ation of the country amounts at this time to 120 millions, two fifths of which would be 48 millions of dollars. But, in order to be within sure limits, we will suppose that the amount of bank paper which would be withdrawn from circulation by the suppression of all notes under twenty dollars would be only 40 millions. That, of course, would be replaced by an equal amount of gold and silver. How, then, would stand the account in the final result? Forty millions, taken from the 120 millions of paper circulation, would leave 80 millions of paper; and, added to the 28 millions of gold and silver already in circulation, according to the estimate of the Secretary of the Treasury, would give us 68 millions; or (for the sake of round numbers, and to compensate liberal deductions made above) 70 millions of gold and silver in active circulation-not dammed up and stagnating in the coffers of the banks, but spread over the land, irrigating, refreshing, and fertilizing the whole country.

Such, Mr. President, would be the solid and practical result of the ultimate suppression of all bank bills under the denomination of twenty dollars. It would give to the country nearly one half of its whole circulation in the precious metals, forming a solid and unfailing fund for the payment of labor, for the buying and selling of the necessaries of life, for the great mass of daily transactions, including the wants and interests of the farmer, the mechanic, and the tradesman; while the other half would consist of an improved paper currency for the use and accommodation of the merchant, and for the larger operations of trade and business. I would ask gentlemen if such a result is not "a consummation devoutly to be wished?" Would it not, in the glowing and patriotic language of the President, form "an era in the history of the country which would be dwelt upon with delight by every true friend of its liberty and independence?" And can we suppose that the enlightened Legislatures of the States, in the view of such a result, pregnant with consequences so important to the safety, the prosperity, and the morals, of the whole community, and especially to the interests of those numerous and industrious classes which form the basis and support of our republican system, could be so deaf to the united call of patriotism and wisdom, as not to lend their co-operation in so great and salutary a reform? For myself, Mr. President, I feel a cheering confidence that they will give a helping and efficient hand to this great work. VOL. XIII.-23

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The Legislature of my own State is now engaged in re vising her banking system, and I console myself in the belief that she will be among the foremost to vindicate the wisdom and patriotism of the State councils from distrust, by heartily seconding, in her legislation on the subject, our efforts here to establish a sound currency for the country.

But, sir, till by the suppression of the small notes the circulation of the country has become better filled with the precious metals, I do not think it would consist with a just, wise, and paternal policy on the part of the Government to exact payment of its dues in specie exclusively. It could not be done without great hardship to the public debtor, and extensive distress and embarrassment to the whole community. To demonstrate this, nothing more is necessary than to compare the amount of specie in circulation with the amount of the revenue; for it is conceded now, that if payment of one branch of the reve nue be required by any permanent regulation to be made in specie, all ought to be paid in specie. According to the estimate of the Secretary of the Treasury, (which appears to me a very liberal one,) the whole amount of specie in circulation does not exceed twenty-eight millions of dollars. The revenue during the last year amounted to forty-seven millions; and perhaps, with all our efforts to reduce it, it may still not fall short of thirty millions. There would, then, be thirty millions of dollars to be paid to the Government, out of a circulation of twenty-eight millions! To confront the two sums is to show the temerity, if not the impossibility, of the attempt. If the public debtors should be thrown upon the banks for large amounts of specie, not to be had from the circulation of the country, no one can be at a loss to perceive to what a disastrous extent the business relations and pecuniary concerns of the whole community would be embarrassed and deranged. And how much of specie, permit me to ask, would remain for that immense mass of payments in private transactions, which, according to a practical estimate made by Mr. Gallatin, in reference to the revenue collected, and the business done, in the city of New York, exceeds more than fifty times the payments to the Government? Nothing, therefore, can be clearer than that an attempt, with our present limited metallic circulation, to collect the public revenue in specie alone would be distressing to the last degree, and could not abide the test of that public judgment without whose approbation no system of policy can or ought to stand.

The honorable Senator from Missouri, [Mr. BENTON,] in the able speech made by him in the opening of this discussion-a speech which does him great credit, not only for the extent and variety of the research displayed by him, but for the force and ability with which he illustrated his own views, (in some of which it is my misfortune to differ from him,)-brought to the notice of the Senate, from the evidence taken before the Committee of Secrecy of the House of Commons on the Bank of England charter, in 1832, the case of a banker at Manchester, who paid out, in the course of a year, about six millions of dollars in specie to the operatives of that place. But this was done in a country which, as I have already shown, possesses an actual circulating metallic currency of one hundred and fifty millions of dollars, whereas our metallic circulation is but twenty-eight millions! The examination of Mr. Samuel Jones Lloyd, (the banker referred to,) on this point, is so instructive in itself, and so strikingly illustrative of the arguments I have advanced, that I beg leave to read the whole of that portion of it to the Senate, in the form of question and answer in which it is reported:

"Question. You are aware that a great amount of specie is required every week for the payment of wages at Manchester?

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