SEPTEMBER, 1837.] President's Proclamation. [SENATE. TWENTY-FIFTH CONGRESS.-FIRST SESSION. BEGUN AT THE CITY OF WASHINGTON, SEPTEMBER 4, 1837. PROCEEDINGS AT EXTRA SESSION. Executive Gobernment for the Thirteenth Presidential Term commencing 4th March, 1837, and ending 3d March, 1841. MARTIN VAN BUREN, of New York, President. RICHARD M. JOHNSON, of Kentucky, Vice President. Secretary of State. Secretary of the Navy. JOHN FORSYTH. [Appointed in the previous term.] MAHLON DICKERSON. [Appointed in the previous term. Postmaster General. [Appointed in the previous AMOS KENDALL. [Appointed in the previous term.] Secretary of the Treasury. LEVI WOODBURY. term.] Maine. John Ruggles, Ruel Williams. form an extraordinary occasion for convening them, I do, by these presents, appoint the first Monday of September next for their meeting at the city of Washington; hereby requiring the respective Senators and Representatives then and there to assemble in Congress, in order to receive such communications as may then be made to them, and to consult and North Carolina.-Bedford Brown, Robert Strange. Mississippi.-John Black, Robert J. Walker. Louisiana.-Alexander Mouton, Robert C. Nicholas. Tennessee.-Felix Grundy, Hugh L. White. Kentucky.-Henry Clay, John J. Crittenden. Arkansas.-William S. Fulton, Ambrose H. Sevier. Missouri.-Thomas H. Benton, Lewis F. Linn. Illinois.-John M. Robinson, Richard M. Young. Indiana.-Oliver H. Smith, John Tipton. Ohio.-William Allen, Thomas Morris. Michigan-Lucius Lyon, John Norvell. SENATE.] The President's Message. [SEPTEMBER, 1837. determine on such measures as in their wisdom may | Clerk, announcing to the Senate that a quorum be deemed meet for the welfare of the United States. of the House had assembled, had elected a In testimony whereof, I have caused the seal of Speaker, had concurred with the resolution of [L. S.] the United States to be hereunto affixed, and the Senate for appointing a committee to wait signed the same with my hand. on the President of the United States, and had Done at the city of Washington, the fifteenth appointed a committee on their part. day of May, in the year of our Lord one thousand eight hundred and thirty-seven, and of the independence of the United States, the sixty-first. By the President: M. VAN BUREN. Mr. KING, of Alabama, presented the credentials of Messrs. C. C. CLAY and ROBERT STRANGE, Senators as above, who took the usual oath. Mr. RIVES presented the credentials of Mr. ROANE, Senator as above, who was also qualified. On motion of Mr. KING, of Alabama, the Secretary of the Senate was instructed to inform the House of Representatives that a quorum of the Senate was now present, and ready to proceed to business. Mr. WRIGHT, from the joint committee appointed to inform the President of the United States that a quorum of the two Houses was assembled and ready to proceed to business, reported that the committee had performed the duty assigned them, and that the President had expressed to them his intention to communicate to the two Houses, in writing, this day at 12 o'clock. the President of the United States, by Mr. VAN A Message was accordingly received from BUREN, his private secretary, and was read by the Secretary, as follows: Fellow-citizens of the Senate and House of Representatives: The act of the 23d of June, 1836, regulating the deposits of the public money, and directing the employment of State, District, and Territorial banks for Treasury to discontinue the use of such of them as that purpose, made it the duty of the Secretary of the should at any time refuse to redeem their notes in specie, and to substitute other banks, provided a sufficient number could be obtained to receive the public deposits upon the terms and conditions therein prescribed. The general and almost simultaneous suspension of specie payments by the banks in May last, rendered the performance of his duty imperative, in respect to those which had been selected under the act; and made it, at the same time, impracticable to employ the requisite number of others, upon the prescribed conditions. The specific regulations estab of the public moneys having thus unexpectedly become inoperative, I felt it to be my duty to afford you an early opportunity for the exercise of your supervisory powers over the subject. Mr. WRIGHT moved that a committee be ap-lished by Congress for the deposit and safe-keeping pointed to join a similar committee from the House, in order to wait upon the President of the United States, and inform him that Congress was assembled and ready to receive such communication as he might have to make; and the motion was agreed to. I was also led to apprehend that the suspension of specie payments, increasing the embarrassments before existing in the pecuniary affairs of the country, would so far diminish the public revenue, that the accruing The CHAIR was, on motion of Mr. KING, of Alabama, authorized to appoint the said committee; and Mr. WRIGHT, and Mr. KING, of Ala-receipts into the Treasury would not, with the reserved bama, were appointed accordingly. On motion of Mr. LINN, the usual number of newspapers was ordered for the use of the Senators. The Senate then, on motion, proceeded to the election of the Sergeant-at-arms and Doorkeeper to the Senate; whereupon STEPHEN HAIGHT (the late doorkeeper) was unanimously elected, at the first balloting, Sergeant-at-arms to the Senate, in room of the late Sergeant, Mr. SHACKFORD, deceased; and at the third balloting, Mr. EDWARD WYER was elected (out of many candidates) Doorkeeper in room of Mr. HAIGHT. And then the Senate adjourned. TUESDAY, September 5. A message was received from the House of Representatives, through Mr. FRANKLIN, their five millions, be sufficient to defray the unavoidable expenses of the Government, until the usual period for the meeting of Congress; whilst the authority to call upon the States for a portion of the sums deposited with them, was too restricted to enable the Department to realize a sufficient amount from that source. results, which render, it certain that this deficiency These apprehensions have been justified by subsequent will occur, if additional means be not provided by Congress. The difficulties experienced by the mercantile interest, in meeting their engagements, induced them to apply to me, previously to the actual suspension of specie payments, for indulgence upon their bonds for duties; and all the relief authorized by law was promptly and cheerfully granted. The dependence of the Treasury upon the avails of these bonds, to enable it to make the deposits with the States required by law, led me in the outset to limit this indulgence to the first of September, but it has since been extended to the first of October, that the matter might be submitted to your further direction. Questions were also expected to arise in the recess in respect to the October instalment of those deposits, requiring the interposition of Congress. A provision of another act, passed about the same time, and intended to secure a faithful compliance with the obligation of the United States to satisfy all demands upon them in specie or its equivalent, prohibited the offer of any bank note, not convertible on the spot into gold or silver at the will of the holder; and the ability of the Government, with millions on deposit, to meet its engagements in the manner thus required by law, was rendered very doubtful by the event to which I have referred. Sensible that adequate provisions for these unexpected exigencies could only be made by Congress; convinced that some of them would be indispensably necessary to the public service, before the regular period of your meeting; and desirous also to enable you to exercise, at the earliest moment, your full constitutional powers for the relief.of the country, I could not, with propriety, avoid subjecting you to the inconvenience of assembling at as early a day as the state of the popular representation would permit. I am sure that I have done but justice to your feelings, in believing that this inconvenience will be cheerfully encountered, in the hope of rendering your meeting conducive to the good of the country. [SENATE. the banks to three hundred and twenty-four millions. Between that time and the first of January, 1836, being the latest period to which accurate accounts have been received, our banking capital was increased to more than two hundred and fifty-one millions; our paper circulation to more than one hundred and forty millions; and the loans and discounts to more than four hundred and fifty-seven millions. To this vast increase are to be added the many millions of credit, acquired by means of foreign loans, contracted by the States and State institutions, and, above all, by the lavish accommodations extended by foreign dealers to our merchants. The consequences of this redundancy of credit, and of the spirit of reckless speculation engendered by it, were a foreign debt contracted by our citizens, estimated in March last at more than thirty millions of dollars; the extension to traders in the interior of our country of credits for supplies, greatly beyond the wants of the people; the investment of thirty-nine and a half millions of dollars in unproductive public lands, in the years 1835 and 1836, whilst in the preceding year the sales amounted to only four and a half millions; the creation of debts, to an almost countless amount, for real estate in existing or anticipated cities and villages, equally unproductive, and at prices now seen to have been greatly disproportionate to their During the earlier stages of the revulsion through real value; the expenditure of immense sums in imwhich we have just passed, much acrimonious discus-provements which, in many cases, have been found to sion arose, and great diversity of opinion existed as be ruinously improvident; the diversion to other to its real causes. This was not surprising. The pursuits of much of the labor that should have been operations of credit are so diversified, and the influ- applied to agriculture, thereby contributing to the ences which affect them so numerous, and often so expenditure of large sums in the importation of subtle, that even impartial and well-informed persons grain from Europe-an expenditure which, amountare seldom found to agree in respect to them. To ing in 1834 to about two hundred and fifty thousand inherent difficulties were also added other tendencies, dollars, was, in the first two quarters of the present which were by no means favorable to the discovery year, increased to more than two millions of dollars; of truth. It was hardly to be expected that those and, finally, without enumerating other injurious who disapproved the policy of the Government in re-results, the rapid growth among all classes, and espelation to the currency, would, in the excited state of public feeling produced by the occasion, fail to attribute to that policy any extensive embarrassment in the monetary affairs of the country. The matter thus became connected with the passions and conflicts of party; opinions were more or less affected by political considerations; and differences were prolonged which might otherwise have been determined by an appeal to facts, by the exercise of reason, or by mutual concession. It is, however, a cheering reflection that circumstances of this nature cannot prevent a community so intelligent as ours from ultimately arriving at correct conclusions. Encouraged by the firm belief of this truth, I proceed to state my views, so far as may be necessary to a clear understanding of the remedies I feel it my duty to propose, and of the reasons by which I have been led to recommend them. The history of trade in the United States for the last three or four years affords the most convincing evidence that our present condition is chiefly to be attributed to over-action in all the departments of business; an over-action deriving, perhaps, its first impulses from antecedent causes, but stimulated to its destructive consequences by excessive issues of bank paper and by other facilities, for the acquisition and enlargement of credit. At the commencement of the year 1834, the banking capital of the United States, including that of the national bank then existing, amounted to about two hundred millions of dollars; the bank notes then in circulation to about ninety-five millions; and the loans and discounts of cially in our great commercial towns, of luxurious habits, founded too often on merely fancied wealth, and detrimental alike to the industry, the resources, and the morals of our people. It was so impossible that such a state of things could long continue, that the prospect of revulsion was present to the minds of considerate men before it actually came. None, however, had correctly anticipated its severity. A concurrence of circumstances, inadequate of themselves to produce such widespread and calamitous embarrassments, tended so greatly to aggravate them, that they cannot be overlooked in considering their history. Among these may be mentioned, as most prominent, the great loss of capital sustained by our commercial emporium in the fire of December, 1835-a loss the effects of which were underrated at the time, because postponed for a season by the great facilities of credit then existing; the disturbing effects, in our commercial cities, of the transfers of the public moneys required by the deposit law of June, 1836; and the measures adopted by the foreign creditors of our merchants to reduce their debts, and to withdraw from the United States a large portion of our specie. However unwilling any of our citizens may heretofore have been to assign to these causes the chief instrumentality in producing the present state of things, the developments subsequently made, and the actual condition of other commercial countries, must, as it seems to me, dispel all remaining doubts upon the subject. It has since appeared that evils, similar to those suffered by ourselves, have been ex SENATE.] The President's Message. perienced in Great Britain, on the continent, and, indeed, throughout the commercial world; and that in other countries, as well as in our own, they have been uniformly preceded by an undue enlargement of the boundaries of trade, prompted, as with us, by unprecedented expansions of the systems of credit. A reference to the amount of banking capital, and the issues of paper credit put in circulation in Great Britain, by banks, and in other ways, during the years 1834, 1835, and 1836, will show an augmentation of the paper currency there, as much disproportioned to the real wants of trade as in the United States. With this redundancy of the paper currency, there arose in that country also a spirit of adventurous speculation, embracing the whole range of human enterprise. Aid was profusely given to projected improvements; large investments were made in foreign stocks and loans; credits for goods were granted with unbounded liberality to merchants in foreign countries; and all the means of acquiring and employing credit were put in active operation, and extended in their effects to every department of business, and to every quarter of the globe. The reaction was proportioned in its violence to the extraordinary character of the events which preceded it. The commercial community of Great Britain were subjected to the greatest difficulties, and their debtors in this country were not only suddenly deprived of accustomed and expected credits, but called upon for payments, which, in the actual posture of things here, could only be made through a general pressure, and at the most ruinous sacrifices. In view of these facts, it would seem impossible for sincere inquirers after truth to resist the conviction that the causes of the revulsion in both countries have been substantially the same. Two nations, the most commercial in the world, enjoying but recently the highest degree of apparent prosperity, and maintaining with each other the closest relations, are suddenly, in a time of profound peace, and without any great national disaster, arrested in their career, and plunged into a state of embarrassment and distress. In both countries, we have witnessed the same redundancy of paper money, and other facilities of credit; the same spirit of speculation; the same partial successes; the same difficulties and reverses; and, at length, nearly the same overwhelming catastrophe. The most material difference between the results in the two countries has only been, that with us there has also occurred an extensive derangement in the fiscal affairs of the Federal and State Governments, occasioned by the suspension of specie payments by the banks. The history of these causes and effects in Great Britain and the United States, is substantially the history of the revulsion in all other commercial countries. The present and visible effects of these circumstances on the operations of the Government, and on the industry of the people, point out the objects which call for your immediate attention. They are to regulate by law the safe-keeping, transfer, and disbursement of the public moneys; to designate the funds to be received and paid by the Government; to enable the Treasury to meet promptly every demand upon it; to prescribe the terms of indulgence, and the mode of settlement to be adopted, as well in collecting from individuals the revenue that has accrued, as in withdrawing it from former depositories; and to devise and adopt such further measures, within the constitutional competency of Congress, as will be best calculated to revive the [SEPTEMBER, 1837. enterprise, and to promote the prosperity of the country. For the deposit, transfer, and disbursement of the revenue, National and State banks have always, with temporary and limited exceptions, been heretofore employed; but, although advocates of each system are still to be found, it is apparent that the events of the last few months have greatly augmented the desire, long existing among the people of the United States, to separate the fiscal operations of the Government from those of individuals or corporations. Again to create a national bank, as a fiscal agent, would be to disregard the popular will, twice solemnly and unequivocally expressed. On no question of domestic policy is there stronger evidence that the sentiments of a large majority are deliberately fixed; and I cannot concur with those who think they see, in recent events, a proof that these sentiments are, or a reason that they should be, changed. In Events, similar in their origin and character, have heretofore frequently occurred, without producing any such change; and the lessons of experience must be forgotten, if we suppose that the present overthrow of credit would have been prevented by the existence of a national bank. Proneness to excessive issues has ever been the vice of the banking system; a vice as prominent in national as in State institutions. This propensity is as subservient to the advancement of private interests in the one as in the other; and those who direct them both, being principally guided by the same views, and influenced by the same motives, will be equally ready to stimulate to extravagance of enterprise by improvidence of credit. How strikingly is this conclusion sustained by experience! The Bank of the United States, with the vast powers conferred on it by Congress, did not, or could not, prevent former and similar embarrassments; nor has the still greater strength it has been said to possess under its present charter, enabled it, in the existing emergency, to check other institutions, or even to save itself. Great Britain, where, it has been seen, the same causes have been attended with the same effects, a national bank, possessing powers far greater than are asked for by the warmest advocates of such an institution here, has also proved unable to prevent an undue expansion of credit, and the evils that flow from it. Nor can I find any tenable ground for the re-establishment of a national bank, in the derangement alleged at present to exist in the domestic exchanges of the country, or in the facilities it may be capable of affording them. Although advantages of this sort were anticipated when the first bank of the United States was created, they were regarded as an incidental accommodation; not one which the Federal Government was bound, or could be called upon, to furnish. This accommodation is now, indeed, after the lapse of not many years, demanded from it as among its first duties, and an omission to aid and regulate commercial exchange is treated as a ground of loud and serious complaint. Such results only serve to exemplify the constant desire, among some of our citizens, to enlarge the powers of the Government, and extend its control to subjects with which it should not interfere. They can never justify the creation of an institution to promote such objects. On the contrary, they justly excite among the community a more diligent inquiry into the character of those operations of trade, towards which it is desired to extend such peculiar favors. The various transactions which bear the name of domestic exchanges, differ essentially in their nature, operation, and utility. One class of them consists of bills of exchange, drawn for the purpose of transferring actual capital from one part of the country to another, or to anticipate the proceeds of property actually transmitted. Bills of this description are highly useful in the movements of trade, and well deserve all the encouragement which can rightfully be given to them. Another class is made up of bills of exchange, not drawn to transfer actual capital, nor on the credit of property transmitted, but to create fictitious capital, partaking at once of the character of notes discounted in bank, and of bank notes in circulation, and swelling the mass of paper credits to a vast extent, in the most objectionable manner. These bills have formed, for the last few years, a large proportion of what are termed the domestic exchanges of the country, serving as the means of usurious profit, and constituting the most unsafe and precarious paper in circulation. This species of traffic, instead of being upheld, ought to be discountenanced by the Government and the people. In transferring its funds from place to place, the Government is on the same footing with the private citizen, and may resort to the same legal means. It may do so through the medium of bills drawn by itself, or purchased from others; and in these operations it may, in a manner undoubtedly constitutional and legitimate, facilitate and assist exchanges of individuals founded on real transactions of trade. The extent to which this may be done, and the best means of affecting it, are entitled to the fullest consideration. This has been bestowed by the Secretary of the Treasury, and his views will be submitted to you in his report. But it was not designed by the constitution that the Government should assume the management of domestic or foreign exchange. It is, indeed, authorized to regulate by law the commerce between the States, and to provide a general standard of value, or medium of exchange, in gold and silver; but it is not its province to aid individuals in the transfer of their funds, otherwise than through the facilities afforded by the Post Office Department. As justly might it be called on to provide for the transportation of their merchandise. These are operations of trade. They ought to be conducted by those who are interested in them, in the same manner that the incidental difficulties of other pursuits are encountered by other classes of citizens. Such aid has not been deemed necessary in other countries. Throughout Europe, the domestic as well as the foreign exchanges are carried on by private houses, often, if not generally, without the assistance of banks. Yet they extend throughout distinct sovereignties, and far exceed in amount the real exchanges of the United States. There is no reason why our own may not be conducted in the same manner, with equal cheapness and safety. Certainly this might be accomplished, if it were favored by those most deeply interested; and few can doubt that their own interest, as well as the general welfare of the country, would be promoted by leaving such a subject in the hands of those to whom it properly belongs. A system founded on private interest, enterprise, and competition, without the aid of legislative grants or regulations by law, would rapidly prosper; it would be free from the influence of political agitation, and extend the same exemption to trade itself; and it would put an end to those complaints of neglect, partiality, injustice, and oppression, [SENATE, which are the unavoidable results of interference by the Government in the proper concerns of individuals. All former attempts on the part of the Government to carry its legislation, in this respect, further than was designed by the constitution, have in the end proved injurious, and have served only to convince the great body of the people, more and more, of the certain dangers of blending private interests with the operations of public business; and there is no reason to suppose that a repetition of them now would be more successful. It cannot be concealed that there exists, in our community, opinions and feelings on this subject in direct opposition to each other. A large portion of them, combining great intelligence, activity, and influence, are no doubt sincere in their belief that the operations of trade ought to be assisted by such a connection; they regard a national bank as necessary for this purpose, and they are disinclined to every measure that does not tend, sooner or later, to the establishment of such an institution. On the other hand, a majority of the people are believed to be irreconcilably opposed to that measure: they consider such a concentration of power dangerous to their liberties; and many of them regard it as a violation of the constitution. This collision of opinion has, doubtless, caused much of the embarrassment to which the commercial transactions of the country have lately been exposed. Banking has become a political topic of the highest interest, and trade has suffered in the conflict of parties. A speedy termination of this state of things, however desirable, is scarcely to be expected. We have seen for nearly half a century that those who advocate a national bank, by whatever motive they may be influenced, constitute a portion of our community too numerous to allow us to hope for an early abandonment of their favorite plan. On the other hand, they must indeed form an erroneous estimate of the intelligence and temper of the American people, who suppose that they have continued, on slight or insufficient grounds, their persevering opposition to such an institution; or that they can be induced by pecuniary pressure, or by any other combination of circumstances, to surrender principles they have so long and so inflexibly maintained. My own views of the subject are unchanged. They have been repeatedly and unreservedly announced to my fellow-citizens; who, with full knowledge of them, conferred upon me the two highest offices of the Government. On the last of these occasions, I felt it due to the people to apprise them, distinctly, that in the event of my election, I would not be able to co-operate in the re-establishment of a national bank. To these sentiments, I have now only to add the expression of an increased conviction, that the re-establishment of such a bank, in any form, whilst it would not accomplish the beneficial purpose promised by its advocates, would impair the rightful supremacy of the popular will; injure the character and diminish the influence of our political system; and bring once more into existence a concentrated moneyed power, hostile to the spirit, and threatening the permanency, of our republican institutions. Local banks have been employed for the deposit and distribution of the revenue, at all times partially, and, on three different occasions, exclusively: first, anterior to the establishment of the first Bank of the United States; secondly, in the interval between the termination of that institution and the charter of its successor; and, thirdly, during the limited |