Chapter I: HAVE been desirous, Mr. President, before the passage of this bill, (1)

not to make a speech, but to say a few words about it. I have come to the senate to-day unaffectedly indisposed, from a serious cold, and in no condition to address this body; but I regard this bill as so pregnant with injurious, and dangerous, and direful consequences, that I cannot reconcile it to a sense of duty to allow it finally to pass without one last, although unavailing effort against it. I am aware that the decree for its passage has gone forth; a decree of urgency, too; so urgent that a short postponement of the consideration of the measure, to admit of the filling of vacant seats in the senate by legislative bodies now in session――seats which have remained vacant, not by the fault of the people, but from the inability of those bodies to agree in the choice of senators――has been refused by the vote of the senate; refused, scornfully refused, although, whether the bill be transmitted two or three weeks sooner or later to the house of representatives, owing to its unorganized condition, and its known habits of business, will not expedite its passage a single hour! Refused by the concurrence of senators who, not representing on this subject the present sentiments and opinions of their respective states, seem unwilling to allow the arrival of those who would fully and fairly represent them!

It is remarkable, sir, that, judging from the vote on the engrossment of the bill for a third reading, it is to be hurried through the senate by less than a majority of the body. And if the two senators from Tennessee had clung to their seats with the same tenacity with which other senators adhere to theirs, who would have been instructed to vote against the bill, and are violating their instructions; and if the senate were full, the vacant seats being filled, as we have every reason to believe they will be filled; there would be a clear majority against the passage of the bill. Thus is this momentous measure, which both its friends and foes unite in thinking will exert a tremendous, if not revolutionary influence upon the business and concerns of the country――a measure which has so long and so greatly distracted and divided our councils, and against which the people have so often and so signally pronounced their judgment――to be forced through the senate of the United States.

Mr. President, it is no less the duty of the statesman than of the physician to ascertain the exact state of the body to which he is to minister before he ventures to prescribe any healing remedy. It is with no pleasure, but with profound regret, that I survey the present condition of our country. I have rarely, I think never, known a period of such universal and intense interest. The general government is in debt, and its existing revenue is inadequate to meet its ordinary expenditure. The states are in debt, some of them largely in debt, insomuch that they have been compelled to resort to the ruinous expedient of contracting new loans to meet the interest on prior loans; and the people are surrounded with difficulties, greatly embarrassed, and involved in debt. Whilst this is, unfortunately, the general state of the country, the means of extinguishing this vast mass of debt are in constant diminution. Property is falling in value; all the great staples of the country are declining in price, and destined, I fear, to further decline. The certain tendency of this very measure is to reduce prices. The banks are rapidly decreasing the amount of their circulation. About one half of them, extending from New Jersey to the extreme southwest, have suspended specie payments, presenting an image of a paralytic, one moiety of whose body is stricken with palsy. The banks are without a head; and instead of union, concert, and coöperation between them, we behold jealousy, distrust, and enmity. We have no currency whatever possessing uniform value throughout the whole country. That which we have, consisting almost entirely of the issues of banks, is in a state of the utmost disorder, insomuch that it varies, in comparison with the specie standard, from par to fifty per centum discount. Exchanges, too, are in the greatest possible confusion; not merely between distant parts of the union, but between cities and places in the same neighborhood; that between our great commercial marts of New York and Philadelphia, within five or six hours of each other, vacillating between seven and ten per centum. The products of our agricultural industry are unable to find their way to market from the want of means in the hands of traders to purchase them, or from the want of confidence in the stability of things; many of our manufactories stopped or stopping, especially in the important branch of woollens; and a vast accumulation of their fabrics on hand, owing to the destruction of confidence, and the wretched state of exchange between different sections of the union.

Such is the unexaggerated picture of our present condition; and amidst the dark and dense cloud that surrounds us, I perceive not one gleam of light. It gives me nothing but pain to sketch the picture. But duty and truth require that existing diseases should be fearlessly examined and probed to the bottom. We shall otherwise be utterly incapable of conceiving or applying appropriate remedies. If the present unhappy state of our country had been brought upon the people by their folly and extravagance, it ought to be borne with fortitude, and without complaint, and without reproach. But it is my deliberate judgment that it has not been; that the people are not to blame, and that the principal causes of existing embarrassments are not to be traced to them. Sir, it is not my purpose to waste the time or excite the feelings of members of the senate by dwelling long on what I suppose to be those causes. My object is a better, a higher, and I hope a more acceptable one――to consider the remedies proposed for the present exigency. Still, I should not fulfil my whole duty if I did not briefly say, that, in my conscience, I believe our pecuniary distresses have mainly sprung from the refusal to recharter the late bank of the United States; the removal of the public deposits from that institution; the multiplication of state banks in consequence, and the treasury stimulus given to them to extend their operations; the bungling manner in which the law depositing the surplus treasure with the states was executed; the treasury circular; and, although last, perhaps not least, the exercise of the power of the veto on the bill for distributing among the states the net proceeds of the sale of the public lands.

What, Mr. President, is needed, at the present crisis, to restore the prosperity of the people? A sound local currency, mixed with a currency possessing uniform value throughout the whole country, a reëstablishment of regular exchanges between different parts of the union, and a revival of general confidence. The people want, in short, good government at Washington, the abandonment of rash and ruinous experiments, the practice here of economy, and the pursuit of the safe lights of experience. Give us these, and the growth of our population, the enterprise of our people, and the abundance, variety, and richness of the products of our soil, and of our industry, with the blessing of Providence, will carry us triumphantly through all our complicated embarrassments. Deny these, persevere in a mal-administration of government, and it is in vain that the bounties of heaven are profusely scattered around us.

There is one man, and I lament to say, from the current of events and the progress of executive and party power, but one man at present in the country, who can bring relief to it, and bind up the bleeding wounds of the people. He, of all men in the nation, ought to feel as a parent should feel, most sensibly, the distresses and sufferings of his family. But looking to his public course, and his official acts, I am constrained to say, that he surveys unconcerned the wide-spread ruin, and bankruptcy, and wretchedness before him, without emotion and without sympathy. Whilst all the elements of destruction are at work, and the storm is raging, the chief magistrate, standing in the midst of his unprotected fellow-citizens, on the distinguished position of honor and confidence to which their suffrages have devoted him, deliberately wraps around himself the folds of his India-rubber cloak, and lifting his umbrella over his head, tells them, drenched and shivering as they are under the beating rain and hail and snow falling upon them, that he means to take care of himself and the official corps, and that they are in the habit of expecting too much from government, and must look out for their own shelter, and security, and salvation!

And now allow me to examine, and carefully and candidly consider the remedy which this bill offers to a suffering people, for the unparalleled distresses under which they are writhing. I will first analyse and investigate it, as its friends and advocates represent it. What is it? What is this measure which has so long and so deeply agitated this country, under the various denominations of sub-treasury, independent treasury, and divorce of the state from banks? What is it? Let us define it truly and clearly. Its whole principle consists in an exaction from the people of specie, in the payment of all their dues to government, and disbursement of specie by the government in the payment of all salaries, and of all the creditors of the government. This is its simple and entire principle. Divest the bill under consideration of all its drapery and paraphernalia, this is its naked, unvarnished, and unexaggerated principle, according to its own friends. This exclusive use of specie, in all receipts and payments of the government, it is true, is not to be instantaneously enforced; but that is the direct and avowed aim and object of the measure, to be accomplished gradually, but in the short space of a little more than three years. The twenty-eight sections of the bill, with all its safes, and vaults, and bars, and bolts, and receivers-general, and examiners, have nothing _more nor less_ in view than the exaction of specie from the people, and the subsequent distribution of that specie among the officers of the government, and the creditors of the government. It does not touch, nor profess to touch, the actual currency of the country. It leaves the local banks where it found them, unreformed, uncontrolled, unchecked in all their operations. It is a narrow, selfish, heartless measure. It turns away from the people, and abandons them to their hard and inexorable fate; leaving them exposed to all the pernicious consequences of an unsound currency, utterly irregular and disordered exchanges, and the greatest derangement in all business. It is worse; it aggravates and perpetuates the very evils which the government will not redress: for, by going into the market and creating a new and additional demand for specie, it cripples and disables the state banks, and renders them incapable of furnishing that relief to the people which a parental government is bound to exert all its energies and powers to afford. The divorce of the state from banks, of which its friends boast, is not the only separation which it makes; it is a separation of the government from the constituency; a disunion of the interests of the servants of the people, from the interests of the people.

This bill, then, is wholly incommensurate with the evils under which the country is suffering. It leaves them not only altogether unprovided for, but aggravates them. It carries no word of cheering hope or encouragement to a depressed people. It leaves their languishing business in the same state of hopeless discouragement.

But its supporters argue that such a system of convertible paper as this country has so long had is radically wrong; that all our evils are to be traced to the banks; and that the sooner they are put down, and a currency exclusively metallic is established, the better. They further argue, that such a metallic currency will reduce inflated prices, lower the wages of labor, enable us to manufacture cheaper, and thereby admit our manufacturers to maintain a successful competition with foreigners. And all these results, at some future time or other, are to be brought about by the operation of this measure.

Mr. President, in my opinion, a currency purely metallic, is neither desirable, in the present state of the commercial world, nor, if it were, is it practicable, or possible to be attained in this country. And if it were possible, it could not be brought about without the most frightful and disastrous consequences, creating convulsion, if not revolution.

Of all conditions of society, that is most prosperous in which there is a gradual and regular increase of the circulating medium, and a gradual, but not too rapid increase in the value of property, and the price of commodities. In such a state of things, business of all kinds is active and animated, every department of it flourishes, and labor is liberally rewarded. No sacrifices are made of property, and debtors find, without difficulty, the means of discharging promptly their debts. Men hold on to what they have, without the apprehension of loss, and we behold no glutted markets. Of all conditions of society, that is most adverse in which there is a constant and rapid diminution of the amount of the circulating medium. Debtors become unable to pay their debts, property falls, the market is glutted, business declines, and labor is thrown out of employment. In such a state of things, the imagination goes ahead of the reality. Sellers become numerous, from the apprehension that their property, now falling, will fall still lower; and purchasers scarce, from an unwillingness to make investments with the hazard of almost certain loss.

Have gentlemen reflected upon the consequences of their system of depletion? I have already stated, that the country is borne down by a weight of debt. If the currency be greatly diminished, as beyond all example it has been, how is this debt to be extinguished? Property, the resource on which the debtor relied for his payment, will decline in value, and it may happen that a man, who honestly contracted debt, on the faith of property which had a value at the time fully adequate to warrant the debt, will find himself stripped of all his property, and his debt remain unextinguished. The gentleman from Pennsylvania, (Mr. Buchanan,) has put the case of two nations, in one of which the amount of its currency shall be double what it is in the other, and, as he contends, the prices of all property will be doubled in the former nation of what they are in the latter. If this be true of two nations, it must be equally true of one, whose circulating medium is at one period double what it is at another. Now, as the friends of the bill argue, we have been, and yet are in this inflated state; our currency has been double, or, in something like that proportion, of what was necessary, and we must come down to the lowest standard. Do they not perceive that inevitable ruin to thousands must be the necessary consequence? A man, for example, owning property to the value of five thousand dollars, contracts a debt for five thousand dollars. By the reduction of one half of the currency of the country, his property in effect becomes reduced to the value of two thousand five hundred dollars. But his debt undergoes no corresponding reduction. He gives up all his property, and remains still in debt two thousand five hundred dollars. Thus this measure will operate on the debtor class of the nation, always the weaker class, and that which, for that reason, most needs the protection of government.

But if the effect of this hard-money policy upon the debtor class be injurious, it is still more disastrous, if possible, on the laboring classes. Enterprise will be checked or stopped, employment will become difficult, and the poorer classes will be subject to the greatest privations and distresses. Heretofore it has been one of the pretensions and boasts of the dominant party, that they sought to elevate the poor by depriving the rich of undue advantages. Now their policy is, to reduce the wages of labor, and this is openly avowed; and it is argued by them, that it is necessary to reduce the wages of American labor to the low standard of European labor, in order to enable the American manufacturer to enter into a successful competition with the European manufacturer in the sale of their respective fabrics. Thus is this dominant party perpetually changing, one day cajoling the poor, and fulminating against the rich; and the next, cajoling the rich, and fulminating against the poor. It was but yesterday that we heard that all who were trading on borrowed capital, ought to break. It was but yesterday we heard denounced the long established policy of the country, by which, it was alleged, the poor were made poorer, and the rich were made richer.

Mr. President, of all the subjects of national policy, not one ought to be touched with so much delicacy as that of the wages, in other words, the bread, of the poor man. In dwelling, as I have often done, with inexpressible satisfaction upon the many advantages of our country, there is not one that has given me more delight than the high price of manual labor. There is not one which indicates more clearly the prosperity of the mass of the community. In all the features of human society, there are none, I think, which more decisively display the general welfare, than a _permanent_ high rate of wages, and a _permanent_ high rate of interest. Of course, I do not mean those excessive high rates, of temporary existence, which result from sudden and unexpected demands for labor or capital, and which may, and generally do, evince some unnatural and extraordinary state of things; but I mean a settled, steady, and durable high rate of wages of labor, and interest upon money. Such a state demonstrates activity and profits in all the departments of business. It proves that the employer can afford to give high wages to the laborer, in consequence of the profits of his business, and the borrower high interest to the lender, in consequence of the gain which he makes by the use of capital. On the contrary, in countries where business is dull and languishing, and all the walks of society are full, the small profits that are made will not justify high interest or high wages.

Wages of labor will be low where there is no business, and of course, but little or no demand for labor; or where, from a density of population, the competition for employment is great, and the demand for labor is not equal to the supply. Similar causes will tend to the reduction of the rate of interest. Our vast unpeopled regions in the west, protect us against the evils of a too crowded population. In our country, such is the variety of profitable business and pursuits, that there is scarcely any in which one can engage with diligence, integrity, and ordinary skill, in regular and ordinary times, that he is not sure of being amply rewarded. Surveying our happy condition in this respect, it was, during the last war, remarked by the present lord Jeffries, that America was the heaven of the poor man, and the hell of the rich. There was extravagance in the observation, mixed with some truth. It would have been more accurate to have said, that, with good government, it was an earthly heaven, both of the rich and poor.

It is contended, however, that the reduction of wages would be only nominal; that an exclusive specie currency being established, the prices of all commodities would fall; and that the laborer would be able to command as many of the necessaries of life with his low wages, as he can at present.

The great error of senators on the other side is, that they do not sufficiently regard the existing structure of society, the habits and usages which prevail; in short, the actual state of things. All wise legislation should be founded upon the condition of society as it is, and even where reform is necessary, it should be introduced slowly, cautiously, and with a careful and vigilant attention to all consequences. But gentlemen seem disposed to consider themselves at liberty to legislate for a new people, just sprung into existence, and commencing its career――one for which they may, without reference to what they see all around them, speculate and theorize at pleasure. Now if we were such a people, and were deliberating on the question of what was the best medium of circulation to represent the property, and transact the business of the country, it is far from being certain that it would be deemed wisest to adopt an exclusive specie standard. But when we glance at society as it actually exists, with all its relations and ramifications, its engagements, debts, wants, habits, customs, nothing can be more unwise, it seems to me, than to attempt so radical a change as that which is contemplated.

I cannot admit that the laborer, with his low wages, would be in as eligible a situation as he now is; the argument excludes all consideration of his condition, during the transition from the paper, to the specie medium. In the descending process, from an abundant to a scarce circulation, there would be nothing before him but distress and wretchedness; and he would be in the greatest danger of starvation, before the El Dorado of gentlemen was reached. The adjustment of prices to the state of the currency, is not so sudden a work as is imagined. Long after the specie standard should be established, the old prices of many articles would remain; and all foreign productions, which enter into the consumption of the poor man, would continue unaffected by our domestic currency, if it be true, that there would be no alteration in the condition of the laborer, if he would really get as much, in _value_, in the new state of things as in the old, how is that of the capitalist, engaged in manufactures, to be improved? Would not his situation also remain unaltered? The assumption, that an exclusive hard money circulation is best for the laborer, best for the manufacturer, best for the country, is against all the experience of the world. Beyond all doubt, England is the most prosperous of all the nations of the old world, and England is the greatest paper money country that exists. Her manufactures find a market in every portion of the globe; her operatives and laborers are paid better, and fed better, than any in Europe. Have the manufactures of the hard money countries of the continent, prevailed over those of England, and driven them out of the markets, in fair competition? Far from it. Their policy is to exclude, by prohibitions and heavy duties, the entry of British goods into their ports. England has sought to make treaties with them all, and especially with France, upon the basis of free trade, and France has replied, that her manufactures are too much behind those of England to admit of their being placed upon a footing of equality. Paper money, inflated England, manufactures about two thirds of all the cotton exported from the United States; and her cotton manufacture alone, is probably greater than that of all the rest of Europe.

But, Mr. President, if the banishment from circulation of all bank paper, and the exclusive use of specie in this country were desirable, is it practicable, can it be possibly brought about? I have said that the legislator is bound to have due regard to the wants, wishes, necessities, and condition of the country for which he acts. But a practical American statesman has a further duty to perform; that of attentively considering the distribution of the power of government in this confederacy. Here we have local governments for the respective states, and general government for the whole. The general government has but few, limited, and well defined powers, the states severally possessing all power not denied to them, or delegated by the federal constitution. Whatever difference of opinion might exist, if it were a new question, it cannot now be controverted, that each of the twenty-six state governments has the power to bring into existence as many banks as it pleases. Banks have accordingly been created, and will continue, and must exist, in spite of the general government. The paper of banks will, therefore, remain, as it has been, a part of the general circulation, in defiance of any policy which this government may proclaim. And if one or more of the states were to adopt the hard money policy, there would be others which would find, in the very forbearance of certain members of the confederacy to establish or continue banks, a fresh motive to create and sustain them; for the issues of their banks would run into the states which had them not, and they would thus appropriate to themselves, at the expense of others, all the benefits of banking. I recollect well how banks were originally first introduced into many of the southern and western states. They found themselves exposed to all the inconveniences, without enjoying the benefits, of the banking system; and they were reduced to the necessity of establishing banks, to share the advantages, as well as the disadvantages, of the system.

Banks, bank notes, a convertible paper money, are, therefore, inevitable. There is no escape from them. You may deliver as many homilies as you please, send forth from this capitol as many essays and disquisitions as you think proper, circulate president’s messages denouncing them as widely as you choose, and thunder forth from a party press, as loud and as long as you can, against banks, and they will continue to exist in spite of you. What, then, is it the duty of a wise, practical, federal statesman to do? Since he finds a state of things which is unalterable, to which he must submit, however convinced he may be of the utility of a change, his duty is to _accommodate_ his measures to this immutable state of public affairs. And, if he cannot trust the eight or nine hundred local banks which are dispersed through the country, create a federal bank, amenable to the general government, subject to its inspection and authority, and capable of supplying a general currency worthy of its confidence; make, in short, the government of the whole partake of the genius, and conform to the fixed character, of the party.

Mr. President, I never have believed that the local banks were competent to supply such a general currency, of uniform value, as this people wants, or to perform those financial offices which are necessary to a successful administration of this government. I pronounced them incompetent, at the period of the removal of the deposits; and we foretold the unfortunate state of things that now exist. But the party in power, which now denounce them, proclaimed their entire ability, not only to supply as good, but a better currency, than that which was furnished by the bank of the United States, and to perform all the financial duties which that institution fulfilled. After that party had succeeded in putting down the bank of the United States, and got their system of state banks into full operation, it continued, year after year, to announce to the public that all its expectations had been fully realized.

A bank of the United States established by this government would not only furnish it a currency in which it might safely confide, in all receipts and payments, and execute every financial office, but it would serve as a sentinel; a cement, and a regulator to the state banks. The senator from Pennsylvania has urged that the present bank of the United States of Pennsylvania, has a charter more extensive than that of the late bank of the United States; that it is, in fact, the old bank with a new charter; and that, with all its vast resources and means, it has been not only unable to act as a regulator of the local banks, but was recently the first to set the pernicious example of a suspension of specie payments.

Mr. President, can the distinguished senator be serious in his description of these attributes of the Pennsylvania bank? Surely he must have intended that part of his speech for some other theatre. In the first place, Pennsylvania, besides sundry other onerous conditions of loans and subscriptions to objects of internal improvements, levied upon the present bank, in the form of bonus, some four or five millions of dollars. Then the general government has withdrawn from it the seven millions of stock which it held in the old bank――a circumstance which I have no doubt has tended to cripple its operations. And it is wholly without the deposits of the government, which the former bank possessed. Instead of being an ally, the general government has been in the relation of an enemy to it. And it has had to encounter all the enmity of a powerful party, within the bosom of the commonwealth. So far from assuming the office of a regulator of the local banks, its late distinguished president, upon whose authority the senator relies for proof of the extent and liberality of its new charter, expressly declared that it had ceased to be a general agent, and had retired within the circle of its state duties. So far from having derived any strength from its connection with the late bank of the United States, there cannot be a doubt that that connection rendered it far less efficient than it would have been, if it had gone into operation with an unencumbered capital, freshly subscribed, of thirty-five millions of dollars.

To guard against all misconception or misrepresentation, I repeat, what I said on a former occasion, that, although I am convinced, thoroughly convinced, that this country cannot get along well without a bank of the United States, I have no thought of proposing such a bank, and have no wish to see it proposed by any other, until it is demanded by a clear and undisputed majority of the people of the United States.

Seeing that a bank of the United States could not be established, two years ago, I expressed my willingness to make an experiment with the state banks, rather than resort to this perilous measure. And now, such are my deep convictions of the fatal tendency of this project of a sub-treasury, that I would greatly prefer the employment of the agency of state banks. But whilst I should entertain hopes of their success, I confess that I should not be without strong apprehensions of their failure. My belief is, that the state banks would be constantly exposed to disorder and derangement, without the coöperation of a bank of the United States; and that our banking system will only be safe and complete, when we shall have both a bank of the United States, and state banks.

We are told by the president of the United States, in his message at the opening of the session, that a great moneyed power exists in London, that exerts a powerful influence on this country that it is the result of the credit system; and that every bank established in a remote village in this country, becomes bound to that power by a cord, which it touches at its pleasure.

There is, sir, some truth in this representation, and every genuine American must feel it with shame and regret. It is a melancholy fact, that the arrival of steam vessels in the port of New York, from England, is looked for with more curiosity and interest, on account of the financial intelligence which they bear from London and the bank of England, than the arrival of the mail from congress. Our people have been taught, by sad experience, to expect nothing good from the councils of their own country, and turn their attention towards the operations in a foreign country. Was this eager inquiry into the transactions of the bank of England made during the existence of the bank of the United States? No sir, no sir. You denounced this bank as a monster, destroyed it; and you have thrown us into the jaws of a foreign-monster, which we can neither cage nor control. You tore from us our best shield against the bank of England, and now profess to be surprised at the influence which it exercises upon our interests! We do not find that the continental nations of Europe, that have national banks, complain of the influence of the bank of England upon them. On the contrary, the bank of England has recently been compelled to apply to the bank of France for a large sum of specie to sustain its credit and character.

But, sir, we must look to higher and much more potent causes than the operations of any bank, foreign or domestic, for the lively interest which is felt in this country, in the monetary transactions of England. In England, the credit system, as it is called, exists in a much more extensive degree than in this country; and, if it were true of the nature of that system, as is alleged, to render one country dependent upon another, why should not England be more dependent upon us, than we upon England? The real cause of our dependence arises out of the unfavorable balance of our foreign trade. We import too much, and export too little. We buy too much abroad, make too little at home. If we would shake off this degrading foreign dependence, we must produce more, or buy less. Increase our productions, in all the variety of forms in which our industry can be employed; augment the products of our soil, extend our manufactures, give new stimulus to our tonnage and fishing interests, sell more than we buy, get out of debt and keep out of debt to the foreigner, and he will no longer exert an influence upon our destiny.

And this unfavorable balance of our foreign trade is wholly independent of, and unconnected with, the nature of the character of the currency of the country, whether it be exclusively metallic, or mixed with paper and the precious metals. England, in a great measure, by means of that credit or paper system, now so much denounced, has become the centre of the commerce, the exchanges, and the moneyed operations of the world. By the extent, variety, and perfection of her manufactures, she lays most nations that admit them freely, under contribution to her. And if we had no currency but specie, we should be just as much exposed to the moneyed power of London, or, which is the true state of the case, to the effects of an unfavorable balance of trade, as we now are. We should probably be more so; because a large portion of the specie of the country being in the vaults of a few depositaries, it would be easier then to obtain it for exportation, in the operations of commerce, than now, when it is dispersed among nine hundred or a thousand banks. What was our condition during the colonial state, when, with the exception of small amounts of government paper money, we had no currency but specie, and no banks? Were we not constantly and largely in debt to England? Was not our specie perpetually drained to obtain supplies of British goods? Do you not recollect that the subject of the British debts formed one of those matters which were embraced in the negotiations and treaty of peace, which terminated the revolutionary war? And that it was a topic of angry and protracted discussion long after, until it was finally arranged by Mr. Jay’s treaty of 1794?

Look into the works of Doctor Franklin, in which there is more practical good sense to be found, than is to be met with in the same compass any where. He was the agent of Pennsylvania, from about the middle of the last century until the breaking out of the revolutionary war, and a part of the time the agent, also, of the colonies of Georgia, and Massachusetts. His correspondence shows, that the specie of the colonies was constantly flowing from them for the purchase of British goods, insomuch that the colonies were left absolutely destitute of a local currency; and one of the main objects of his agency was to obtain the sanction of the parent country to those issues of paper money, which the necessities of Pennsylvania compelled her to make. The issue was strenuously opposed by the merchants engaged in the American trade, on account of the difficulty which it created in making collections and remittances home. So great was that drain of specie, that we know that Virginia and other colonies were constrained to adopt tobacco as a substitute for money.

The principal cause, therefore, of the influence of the moneyed power of London over this country, is to be found in the vast extent of our dealings with her. The true remedy is, to increase our manufactures and purchase less of hers, and to augment our exports by all the means in our power, and to diminish our imports as much as possible. We must increase our productions, or economise much more than we have done. New Jersey, before the revolution, being much pressed for one hundred thousand pounds sterling, Doctor Franklin proposed a plan, by which she could in one year make up that sum. The plan was this; she was in the habit of importing annually from England merchandise to the amount of two hundred thousand pounds. He recommended that the ladies should buy only half the amount of silks, calicoes, teas, and so forth, during the year, which they had been in the habit of consuming; and in this way by saving, the colony would make the required sum of one hundred thousand pounds. If we would, for a few years, import only half the amount from England that we have been in the habit of doing, we should no longer feel the influence of the London money power.

Mr. President, gentlemen, in my humble opinion, utterly deceive themselves, in supposing that this measure is demanded by a majority of the people of the United States, and in alleging that this is proved by the result of elections of the past year. That there were a vast majority of them opposed to it was demonstrated incontestably by previous elections. The elections of last year did not in many, perhaps most instances, turn at all upon the merits of this measure. In several states the people were deceived by assurances that the sub-treasury was at an end, and would be no longer agitated. In others, the people had reason to be dissatisfied with the conduct of their banks; and they were artfully led to believe this bill would supply a corrective of the errors of the banking system. And where they have apparently yielded their assent to the bill, it has been that sort of assent which the patient yields, whose constitution has been exhausted and destroyed by the experiments of empiricism, and who finally consents to take the last quack medicine offered to him in the hope of saving his life. I know the people of the United States well. They are ever ready cheerfully to submit to any burden demanded by the interest, the honor, or the glory of their country. But what people ever consented to increase their own burdens unnecessarily? The effect of this measure is, by exacting specie exclusively from the people, and paying it out to the official corps and the public creditor, to augment the burdens of the people, and to swell the emoluments of office. It is an insult to the understanding and judgment of the enlightened people of the United States, to assert that they can approve such a measure.

No true patriot can contemplate the course of the party in power without the most painful and mortified feelings. They began some years ago their war on the bank of the United States. It was dangerous to liberty; it had failed to fulfil the purposes of its institution; it did not furnish a sound currency, although the sun, in all its course, never shone upon a better. In short, it was a monster, which was condemned to death, and it was executed accordingly. During the progress of that war, the state banks were the constant theme of praise, in speech and song, of the dominant party. They were the best institutions in the world, free from all danger to public liberty, capable of carrying on the exchanges of the country, and of performing the financial duties to government, and of supplying a far better currency for the people than the bank of the United States. We told you that the state banks would not do, without the coöperation of a bank of the United States. We told you that you would find them a weak league; a mere fleet of open boats tied together by a hickory withe, and which the first storm would disperse and upset. But you scorned all our warnings, and continued, year after year, to puff and praise the operations of these banks. You had the boldness, in the face of this abused nation, to aver that the country had been supplied by them with a better currency, and better exchanges, than it had been by the bank of the United States. Well, by your own measures, by your treasury circular, distribution of the surplus, and so forth, you accelerated the catastrophe of the suspension of the banks. You began with promises to the people of a better currency, better times, more security to civil liberty; and you end with no currency at all, the worst possible times, an increase of executive power, and a consequent increase of danger to civil liberty. You began with promises to fill the pockets of the people, and you end by emptying theirs and filling your own.

I now proceed, sir, to the object which constituted the main purpose of my rising at this time. I have hitherto considered the bill, as its friends in the senate represent it, as a measure simply for exacting specie, keeping it in the custody of officers of the government, and disbursing it in a course of administration. I mean now to show that, whatever its friends here may profess or believe, the bill lays the foundations, deep and broad, of a government bank――a treasury bank, under the sole management of the president. Let us first define a bank. It may have three faculties, separately, or combined; the faculty of issues, entering into and forming a part of the circulating medium of the country; that of receiving deposits, and that of making discounts. Any one of these three faculties makes it a bank; and by far the most important of the three, is that of the power of issues. That this bill creates a bank of issues, I most sincerely believe, and shall now attempt to prove; and the proof will be first extraneous, and secondly intrinsic.

As to the extraneous proof, I rely upon the repeated declarations of the late president of the United States, in his annual messages. On more than one occasion, he stated the practicability of establishing a bank on the revenue of the government, and to be under the superintendence of the secretary of the treasury. And when he vetoed the charter of the late bank of the United States, he expressly declared, that, if congress had applied to him, he could have furnished the scheme of a bank, free from all constitutional objections; doubtless meaning a treasury bank. The present chief magistrate and the present secretary of the treasury have also, repeatedly, in language, in their messages and reports, characteristically ambiguous, it is true, but sufficiently intelligible, intimated the facilities which the commerce and business of the country would derive from the drafts issued by the treasury in virtue of this bill. The party, its press, and its leaders, have constantly put this sub-treasury scheme in competition with a bank of the United States, and contended that the issue was sub-treasury or bank of the United States. But how can they be compared, or come in competition with each other, if the most important function of a bank of the United States――that of supplying a medium of general circulation and uniform value――is not to be performed under this bill?

I pass to the more important, and, I think, conclusive proof, supplied by the provisions themselves of the bill. After providing that all money paid to government for duties, public lands, and other dues, shall be deposited with the treasurer of the United States, the receivers-general; and the mints, the tenth section enacts:

‘That it shall be lawful for the secretary of the treasury
to transfer the moneys in the hands of any depositary hereby
constituted, to the treasury of the United States; to the mint
at Philadelphia; to the branch mint at New Orleans; or to the
offices of either of the receivers-general of public moneys,
by this act directed to be appointed; to be there safely kept,
according to the provisions of this act; and also to transfer
moneys in the hands of any one depositary constituted by
this act, to any other depositary constituted by the same,
at his discretion, and as the safety of the public moneys,
and the convenience of the public service, shall seem to him
to require; which authority to transfer the moneys belonging
to the post-office department is also hereby conferred upon
the postmaster-general, so far as its exercise by him may be
consistent with the provisions of existing laws; and every
depositary constituted by this act, shall keep his account
of the moneys paid to or deposited with him, belonging to the
post-office department, separate and distinct from the account
kept by him of other public moneys so paid or deposited. And for
the purpose of payments on the public account, it shall be lawful
for the treasurer of the United States to draw upon any of the
said depositaries, as he may think most conducive to the public
interests, or to the convenience of the public creditors, or
both.’

Thus is the secretary invested with unlimited authority to transfer the public money from one depositary to another, and to concentrate it all, if he pleases, at a single point. But, without this provision, the city of New York necessarily must be the place at which the largest portion of the public money will be constantly in deposit. It collects alone about two thirds of the duties on imports, and is becoming, if it be not already, the money centre of the United States. It is not indispensable, to create a bank of issues, that the place of issue and the place of payment should be identical. The issue of the paper may be at one city, and the place of payment may be a different and even distant city. Nor is the form of the paper material, so as to carry it into the general circulation of the money of the country. Whether it be in the shape of bank notes, bank checks, post-notes, or treasury drafts, is of no consequence. If there be confidence in it, and the paper be of convenient amount, passes by delivery, and entitles the holder to demand the specie upon its face, at his pleasure, it will enter into the general circulation; and the extent of its circulation will be governed by the amount issued, and the confidence which it enjoys.

I presume that no one will contest these principles. Let us apply them to the provisions of this bill. The last clause of the tenth section, already cited, declares:

‘And for the purpose of payments on the public account, it shall
be lawful for the treasurer of the United States to draw upon
any of the said depositaries _as he_ may think most _conducive_
to the public interests, or to the _convenience_ of the public
creditors, or both.’

Here is no restriction whatever as to the amount or form of the draft. There is nothing to prevent his making it for one hundred dollars, or fifty dollars, or ten dollars. There is nothing to prevent the use of bank paper; and the draft will have the number of signatures usual to bank paper. It will or may be signed by the treasurer, register, and comptroller.

Now, sir, let me suppose that a citizen has a demand upon the government for five thousand dollars, and applies to the treasurer for payment. On what receiver-general will you, he will be asked, have the amount? On the receiver-general at New York? In what sum? One half of the sum in drafts of one hundred dollars, and the other in drafts of fifty dollars. The treasurer cannot lawfully decline furnishing the required drafts. He is bound by law to consult the _convenience_ of the public creditor. The drafts are given to him. What will he do with them? There is not a spot in the whole circumference of the United States, in which these drafts will not command a premium, or be at par. Every where to the south and west of New York they will command a premium of from one fourth to two and a half per centum. Every where east and north, they will be at par. What, I again ask, will the holder do with them? Will he commit the indiscretion or folly of cashing these drafts, and expose himself to the hazard and inconvenience of losing or carrying the specie about him? No such thing. Being every where better than or equal to specie, he will retain the drafts, and carry them with him to his home, and use them in his business. What I have supposed likely to be done by one, will be done by every creditor of the government. These drafts, to a considerable extent, will remain out, enter the general circulation, and compose a part of the common currency of the country, commanding, at particular places, as notes of the bank of the United States have done, and now do, a premium, but any where being certainly good for the amount on their face. All this is perfectly plain and inevitable; and the amount of this element of government drafts, in the general currency of the country, will be somewhat governed by the amount of the annual disbursements of the government. In the early administration of this treasury bank, its paper will command general and implicit confidence. It will be as much better than the paper of the bank of the United States or the bank of England, as the resources of the United States are superior to those of any mere private corporation. Sub-treasurers and receivers-general may fly with the public money committed to their charge; may peculate or speculate as they please, and, unlike the condition of banks, whose fraudulent officers squander the means of those institutions, the nation remains bound for the redemption of all paper issued under its authority. But the paper of the late bank of the United States acquired a confidence every where, more or less, in and out of the United States. It was received in Canada, in Europe, and at Canton. The government drafts upon receivers-general will have a much more sure and extensive circulation. Who will doubt their payment? Who will question the honor and good faith of the United States in their redemption? The bankers of Europe, the Rothschilds and the Barings, will receive them without hesitation, and prefer them to the specie they represent, whenever the rate of exchange is not decidedly against this country, because they can be more safely and conveniently kept than specie itself. And with respect to our state banks, the treasury drafts will form the basis of their operations. They will be preferred to specie, because they will be more convenient, and free from the hazards incident to the possession of specie. The banks will require no more specie than the wants of the community for change make necessary.

Thus, sir, will these government drafts, or bank notes, as they may be called, remain out in circulation. The issues of the first year, under appropriations of the public revenue, will be followed by the issues of succeeding years. More and more will it be perceived to be needless and indiscreet to cash them; and more and more will the specie of the country accumulate in the custody of the receivers-general, until, after a few years, the greater part of the specie of the country will be found in the vaults of the depositaries, represented by an equal amount of government paper in circulation. I can conceive of no case or motive, but one, for withdrawing the specie from the vaults of the depositaries, and that is, when, from an unfavorable state of our foreign trade, the course of foreign exchange is much against us; and then this system will furnish great facilities to the export of the precious metals.