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SEPTEMBER, 1837.]

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Is it not at that of the great body of the people, the ultimate taxpayers and supporters of the Government. Does any one suppose that the importing merchant, who has to give ten or twelve per cent. for the gold and silver, and seven or eight per cent. for the Treasury drafts, with which he pays his duties to the Government, does not add an equal amount, with the usual profit upon it, to the price of his goods? It is, then, the consumer at last, or, in other words, the great body of the people, who are subject to increased taxation for the benefit of the office-holder and the contractor.

legislator ought to be directed at the present moment-an early resumption of specie payments by the banks. But, looking at it in a broader and more general point of view, I ask, sir, upon what principle of republican government is it that the Government can be justified in drawing a line between itself and the people -in saying there shall be one currency for the Government and its officers, and another for the great body of the community-that the better currency shall be for the governors, and the baser currency for the governed? Such I have shown must be the effect of demanding the public dues in gold and silver exclusively, while the Sir, this is a state of things which I do not great mass of the circulation shall consist of wish to see perpetuated. It is contrary to the bank paper. Sir, I have always been taught genius and fundamental principles of our repubto believe-my honorable colleague and myself lican system. Of all schemes of policy I can learned it from the bill of rights of our own conceive, that which proposes a permanent disState as soon as we were capable of reading- tinction between the Government and the peothat a common interest between the governors ple in their pecuniary interests-one currency, and the governed is a fundamental principle of and that the better one, for the Government, free institutions, and that the best means of "re- and another, and inferior currency, for the peostraining the former from oppression is to make ple-such a system of discrimination is, to my them feel and participate in the burdens of the mind, of all others, the most injurious and relatter." Let the Government share the same volting in principle, the most heartless in charfate with the citizen, and you give it the strong-acter, and the most despotic in its tendencies. est of all motives to watch over the general interests. On the other hand, place it in a position different from that of the great body of the community, especially in so vital a matter as that of its revenue and pecuniary support, and you make it at once callous and indifferent to the sufferings of the people, and even give it an interest to perpetuate those sufferings. You destroy all sympathy on the part of the Government with the people, and you alienate the confidence and affections of the people from the Government.

What, sir, is at this moment the ungracious attitude in which the Government is placed towards the people? Its officers and contractors are paid in gold and silver, or in Treasury drafts made receivable in discharge of public dues, and therefore nearly equivalent to gold and silver, while the community at large are left to conduct their business as they may, in an irredeemable paper currency. Does not this operate as a virtual increase of the salaries of public officers, in the midst of general distress affecting all the rest of the community? The gold and silver which they receive is at a premium of ten or twelve per cent., and the Treasury drafts at seven or eight per cent., above the actual and common currency of the country. This premium is, I repeat, an addition of so much to the amount of their salaries; for, in a practical sense, there has as yet been no depreciation in the value of current bank notes. They pass for as much in the ordinary business of life-in the payment of debts, in the purchase of necessaries and conveniences, of whatever is worn, drank, or eaten-as they ever did. The premium, then, which the public officers and contractors obtain on their gold and silver, and Treasury drafts, is so much clear gain to them. And at whose expense is it acquired? VOL. XIII.-24

It is like quartering the Government, as a foreign enemy, on the heart of the country. You intrench it behind a frowning fortification, surround it with battlements, and lay the country, far and near, under contribution for the support of this garrison of office-holders. Desolation and oppression are without, while the tenants of the citadel are revelling in luxury and profusion within. I am not willing, for one, to see the Government of my country placed in this antisocial, if not belligerent, attitude towards the people. I am not willing that this favored land, to which the nations of the earth are looking for a successful example of the practical enjoyment of free institutions, should exhibit such a spectacle of inequality and oppression in the eyes of the world.

Much reliance, Mr. President, has been placed on the popular catch-word of divorcing the Government from all connection with banks. Nothing is more delusive and treacherous than catch-words. How often has the revered name of liberty been invoked, in every quarter of the globe, and every age of the world, to disguise and sanctify the most heartless despotism. Let us beware that, in attempting to divorce the Government from all connection with banks, we do not end with divorcing the Government from the people. As long as the people shall be satisfied in their transactions with each other, with a sound convertible paper medium, with a due proportion of the precious metals forming the basis of that medium, and mingled in the current of circulation, why should the Government reject altogether this currency of the people, in the operations of the public Treasury? If this currency be good enough for the masters, it ought to be so for the servants. If the Government sternly reject, for its uses, the general medium of exchange adopted by

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Kinds of Money for Revenue.

[SEPTEMBER, 1837. the community, is it not thereby isolated from | ment. Let all notes under twenty dollars be the general wants and business of the country, gradually suppressed, and you will have an in relation to this great concern of the curren- abundance of gold and silver in common circucy? Do you not give it a separate, if not hos-lation, passing from hand to hand in the comtile, interest, and thus, in effect, produce a di- mon business of society. That will be a saluvorce between Government and people?-a tary and beneficent reform, enuring to the adresult, of all others, to be most deprecated in a vantage of the great body of the people as well republican system. as of the Government; and when it shall have been accomplished, when gold and silver shall thus have become the common currency of the country, you may, without hardship or injus tice, demand payment of the public dues in the precious metals. But this most desirable result -the general circulation of gold and silver in the common business of life-never can be effected (as I think I have fully shown on another occasion) without a previous suppression of bank notes of the lower denominations. In every scheme of reforming the currency, which looks to the benefit of the people as well as of the Government, this is the great point to be aimed at. It was the leading object of the measure I brought forward during the last session of Congress, and which then received the almost unanimous sanction of this House, and the assent of a large majority of the other, though, from causes to which I have already alluded, it failed to become a law. The same measure, in all its essential principles, I now again submit for the consideration of the Senate.

We have been told, Mr. President, of the embarrassments and inconveniences to which the Government is exposed, by receiving its revenues in any thing but gold and silver, in such an event as has now overtaken the country and involved it in general distress. For one, sir, I cannot respond to this appeal. I do not desire to see the Government placed in a position that would exempt it from embarrassment when the people are embarrassed. Would it give any satisfaction to a patriotic mind, in the present calamitous condition of the country, to see treasures of gold and silver pouring into the coffers of the Government, while the people are suffering all the evils of an irredeemable and depreciating paper currency? For myself, I am free to say, that neither as a citizen nor as a representative, having it in my power, if I would, to participate, in some degree, in these peculiar advantages of the Government, could such a state of things minister the slightest gratification to me. No, sir, my heart disowns the thought. So far from it, the contrast would be but a new feature added to the mortifying and distressed condition of the country, and casting reproach upon our institutions, which admitted such an unnatural and anti-republican inequality. If any thing could make your Government a callous and indifferent spectator of the sufferings of the people, refusing a helping hand to their relief, and "mocking when their fear cometh on," it would be to place it in a position like this. No, sir; whenever the people suffer embarrassment, embarrassment should be felt by the Government, that it may be stimulated, through experience of the common suffering, to do all it can to prevent or relieve that suffering. I am for hold-gold and silver tend "to widen the circulation ing the Government in all things to a common fate with the people, so that whatever touches the one shall be immediately felt by the other. Let the condition of the Government answer to the condition of the people, so that the conduct and policy of the one may, with equal fidelity, reflect the interests and sentiments of the other. This, sir, is the principle which has always guided my views in regard to the great question of the currency. No one desires a sound reform of the currency more than I do; but I wish to improve it for the benefit of the people as well as of the Government. I desire to see a large infusion of the precious metals into the general circulation and business of the country, and not a monopoly of them by the Government. This great object can be effected only by the suppression of bank notes of the lower denominations, and not by demanding gold and silver alone in payment of dues to the Govern

The President, sir, in his Message, tells us that the requisition of gold and silver in payment of the public dues would have "a direct tendency to produce a wide circulation of the precious metals, to increase the safety of bank paper, and to improve the general currency." │I desire to treat the opinions of the President with all possible respect a respect felt alike for the individual and the magistrate; but unless I have wholly misconceived the elementary principles which belong to this subject, as well as their obvious practical operation, it is impossible to sustain any one of these positions. How, sir, can the collection of the revenue in

of the precious metals?" It is a well-known and invariable law of currency, that bank notes and coins of the same denomination cannot circulate together. It is in vain, then, to attempt to widen the circulation of gold and silver by any other means than by the suppression of bank notes of the lower denominations. But, not now to dwell on this view of the subject, (which I have fully developed and enforced elsewhere,) I maintain that the collection of public revenue in gold and silver, while the common currency of the country consists of bank paper, instead of widening the circulation of those metals, would have the effect of taking them out of general circulation altogether. In the remarks I have already made, I think it has been satisfactorily shown that the necessary effect of this policy would be to cause gold and silver to bear a premium. Bearing a premium, they would not circulate as currency at all, but

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would be at once converted into an article of merchandise. The public debtor would buy them of the broker to pay his dues to the Government; and when paid out to the public creditor, he would go and sell them again to the broker. Instead of entering into circula-stitution of the currency as this accommodate all tion, all of them that were seen would be restricted to this narrow round of traffic, while the great mass of them would be withdrawn from public view as well as use.

Then, sir, as to the tendency of this policy to "increase the safety of bank paper "-would you increase the safety of bank paper by abstracting the fund for its redemption? Yet such would be the plain operation of this policy. The Secretary of the Treasury has referred to the condition of the Treasury in 1834, as affording a general average to illustrate the operation of the new financial system he proposes. In looking at the Treasury statements for that year, I find that the average amount of public moneys on deposit in the city of New York, during that year, was about five millions, while the whole amount of specie in the banks of the city was about two millions. Taking this as a fair average for that city, what would be the influence of this new policy of collecting the public dues in gold and silver, on the safety of bank paper there? Where would you get the five millions of specie to meet this demand for the public revenue? It is evident the banks would be drained by it of their stock of the precious metals, and the community would thus be deprived of the security on which they relied for the soundness of the bank paper held by them. The "improvement of the general currency," then, which the President anticipates as the result of the policy he proposes, would, unless the principles heretofore received as incontestable truths on the subject of the currency be utter fallacies, amount to this, that the precious metals would no longer form a part of the general circulation; that they would cease to be currency, and become mere articles of merchandise, to be obtained only at a premium, and that the specie basis, on which the soundness and safety of bank paper so mainly depend, would henceforward, to a great extent, be withdrawn and monopolized by the Govern

ment.

The measure which I now offer to the consideration of the Senate, and which received the almost unanimous sanction of both Houses of Congress at the last session, is the result of these views. Permit me, for a few moments, to inquire what would be its practical effects on the general condition of the currency, if the policy it holds out should be carried into full effect by the co-operation of the States and the General Government, as I think it would be if sustained here. It contemplates the gradual suppression, after given periods, of all bank notes under ten and twenty dollars respectively. Supposing this last limit attained, how would the currency of the country then stand under its operation? According to a calculation I

submitted last winter, founded on authentic data, it would in that case be constituted nearly as the currency of England is, that is, nearly one-half of the precious metals, and the residue of convertible paper. Would not such a conthe wants of the community? What are the real wants of the country in regard to currency? To have a sound, staple, and convenient medium of circulation, for ordinary and local purposes; and for occasional and more extended use, a medium which, in addition to these fundamental properties, shall be substantially of uniform value throughout the whole country. Now, for the first description of uses there could be no better currency than the policy of this bill would give us. There would be an abundance of gold and silver in circulation for the great mass of ordinary and daily transactions, while, for large payments and remittances, we should enjoy the conveniences of a sound, convertible paper medium. In regard to those distant uses which call for a medium of general and uniform credit, the occasions of them are either travelling or remittances. But for travelling, there could be no medium of more uniform and general credit than the gold coins, which, in the case supposed, could always be had without difficulty, while they would at the same time be perfectly portable and convenient. As to distant remittances, they are hardly ever made in money of any sort, but are effected through drafts and bills of exchange; and when the local currencies within their respective spheres shall be raised to par with specie, the rates of exchange, with the advantages of so portable a currency as gold to adjust balances between the States, would be next to nothing-certainly as cheap as it has ever been under the regime of a national bank.

Among the most important advantages of such a constitution of the currrency as is contemplated by this bill, are the substantial securities it would afford against the peculiar dangers and evils of the banking system. Those evils are, a tendency to over-issues of paper, fluctuations in the quantity of currency and in the value of property as effected by them, and the liability to a suspension of specie payments. The suppression of the small notes would operate, in two ways, to check over-issues. In bringing a larger quantity of gold and silver into circulation, it would, of course, diminish in the same proportion the issues of paper to form a part of the circulation. The number of issuers, too, would be diminished; for, the small rote circulation being a considerable source of profit, its suppression would take away one efficient motive to the multiplication of banks. Then as to fluctuations in the amount of the currency, and the often ruinous fluctuations that ensue in the value of property, this evil is greatly increased by the fact that, in the existing state of the currency in this country, whenever an unfavorable balance of trade creates a drain on the banks for specie, having no means

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of recruiting their supply but from abroad, for | them back to specie payments on the day fixed every dollar of specie that is drawn from them, by that resolution. The same means, too, were they are forced to draw in their own circula- employed with success by the Secretary of the tion to three or four times the amount. But Treasury, in 1815, to induce the banks to rewhen the domestic channels are filled with gold ceive Treasury notes (which had sustained a and silver, as they would be if the small notes considerable depreciation) at par, though they were suppressed, the banks, being always able had before refused to receive them either in to replace whatever specie is drawn from them, payment or on deposit. by a foreign drain, with an equal quantity obtained in the country, their circulation remains comparatively steady. The same circumstance, enabling the banks to meet any sudden run upon them by a prompt reinforcement of their resources, obviates the danger of a suspension of specie payments, and renders such a contingency next to impossible. If all bank notes under twenty dollars had been suppressed, who, for example, could suppose that, filled as the channels of circulation would in that case have been with gold and silver, and the quantity of bank paper comparatively small, the banks of this country would, in the late pressure, have been compelled to suspend specie payinents?

One of the most alarming and portentous aspects of this sub-Treasury scheme still remains to be considered. To my view it has a squinting, an "awful squinting," towards a Treas ury bank-a bank under the sovereign and exclusive control of Executive agents. It appears from the report of the Secretary of the Treasury that the contemplated fiscal agencies are to furnish "a paper medium" for the community, by "issuing certificates and drafts payable in specie to bearer or order, and made receivable for all public dues." After descanting on the advantages of "this kind of paper," he says: "If the demand for such paper increased, public and private convenience might be promoted, The system of policy, then, proposed by this and an equal quantity of specie, at the same bill, if carried into full execution, would secure to time, preserved in the country, by reserving the country a sound, stable, convenient, and sub- for this purpose, from any accumulation in the stantially uniform currency-consisting nearly Treasury, a sufficient sum, and placing it at a one-half of coin for the daily and ordinary transac- few important and convenient points, to render tions of life, and the residue of sound convertible a greater number of certificates redeemable paper, for large operations and commercial pur- there with the very coin whose representative poses. Without depriving the community of they are intended and honestly ought to be." any of the advantages of the banking system, it These views of the Secretary are referred to, would obviate the danger and cure the evils and impliedly sanctioned, by the President in incident to that system. But the Senator from his Message. Now, sir, is not this apparatus, South Carolina, (Mr. CALHOUN,) while acknowl- to all intents and purposes, a Government bank? edging the high importance of the reform con- The fundamental idea of a bank is an institutemplated by the bill, objects that the means tion which "issues and circulates a paper credproposed for its accomplishment are inefficient. it, founded on a deposit of coin or other propIf that gentleman be right in supposing that erty, which paper credit is to answer the purthe credit of bank paper is owing to its receiv-poses of money!" This project fulfils every ability in payment of the public dues, which, he says, operates as a general endorsation of it by the Government, then surely the means proposed by the bill are not inefficient. What more powerful inducements could be addressed to the banks to conform their issues to the provisions of the bill, than the annunciation that, if they did not do so, the Government would withhold from them that which, according to the opinion of the Senator from South Carolina, alone gives credit to their paper? But, without agreeing with the Senator from South Carolina in the extent to which he carries his views of the credit of bank paper being solely I ask gentlemen, then, if they are willing to derived from its receivability by the Govern- organize a great moneyed machine like this, ment, I still believe that the sanctions of this and put it, for all future time, in the hands of the bill, though I have never supposed them suffi- Executive; if they are willing, in the form of cient of themselves to fully accomplish the ob- a fiscal agency, to create a Treasury bank, with ject, would exert a very considerable influence its ramifications penetrating every part of the on the conduct of the banks. It must not be Union, to be managed, directed, and controlled forgotten that the means proposed by this bill exclusively by Executive agents? To my mind are the very means employed by the joint res- it presents a fearful conjunction-realizing that olution of 1816, to bring the banks back to spe- union between the moneyed and political powcie payments on that occasion, and which, not- er of the country, which reflecting men have withstanding the previously declared determi- hitherto considered the most fatal of all devices nation of the banks to the contrary, did bring|to the liberties of the people. I have revolved

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feature of the definition. The officers of the Government are to issue a paper credit in the form of certificates and drafts founded on a deposit of specie in the Treasury and sub-Treasuries, which paper credit is to answer the purposes of money, or a general "circulating me dium." It is a remarkable coincidence that this scheme is the precise embodying of the outline given by General Hamilton in 1791, of what he describes and avows to be a bank-a Government bank. Such, I believe, is the tendency and virtual operation of the sub-Treasury scheme.

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the subject deeply and anxiously, and I can see but two possible issues to the scheme proposed. It will either terminate in a great Treasury bank, such as I have described, affording a fatal accommodation to the moneyed concerns of the country at the expense of its liberties, or otherwise failing in any degree to relieve the actual derangement of the currency-on the contrary, abandoning that currency to wild disorder and confusion; the people, finding the inconveniences of such a state of things no longer tolerable, will, with a voice extorted by their sufferings, call for a national regulator in the shape of an incorporated national bank! Either alternative is, to my mind, fearful and alarming; but, believing one or the other to be the destined result of the scheme proposed, I entreat gentlemen to pause and consider well the consequences of their decision.

I recur now, Mr. President, to the question more particularly involved in the bill I ask leave to introduce. I think I have shown, sir, that the exaction of the public dues in gold and silver, while the great mass of the circulation shall consist of bank paper, would be oppressive in practice; that it is anti-republican in principle, as drawing an invidious line of demarcation between the Governinent and people; and, especially, that, in the present circumstances of the country, it would indefinitely retard, if not render impossible, that resumption of specie payments by the banks which is the great and urgent object of the public solicitude. In considering the propositions which the occasion has brought forth, I have been strongly reminded of the words of a great man-of one born to serve and instruct mankind. Speaking of the province and duties of a practical statesman, that great oracle of political wisdom says: "A statesman differs from a professor in a university. The latter has only the general view of society; the former (the statesman) has a number of circumstances to combine with those general ideas, and to take into consideration. Circumstances are infinite, and infinitely combined, variable, and transient; and he who dares not take them into consideration is not erroneous, but mad, metaphysically mad. A statesman, never losing sight of principles, is to be guided by circumstances; and, judging contrary to the exigencies of the moment, may ruin his country forever." I ask, sir, is this the moment, when the country is weak and suffering, to subject it to the action of so violent a remedy (if remedy it can be called) as that involved in the proposition to collect the revenues in gold and silver? Does it show a wise regard to circumstances, at such a moment, when that credit system, under which the country has grown up to power and greatness, and with which, for the present, at least, its most vital interests are identified-at a moment when that credit system, thus incorporated with the country, has already sustained one of the severest shocks to which it has ever been exposed-is it wise and prudent, I say, to

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introduce an innovation in the fiscal policy of the Government, which aims a fatal blow at that systein, and all the wide-spread and diversified interests connected with it? The effect of this innovation, at the present moment, must be, as I have already shown, to fix upon the country, for an indefinite period of time, the curse of an irredeemable and depreciating paper currency, or otherwise to force, violently and prematurely, an exclusive metallic circulation, by compelling the banks at once to wind up their concerns. But what would be the consequence of thus compelling the banks precipitately to wind up their affairs? They have vastly more debts due to them than they owe. Compel them, then, to wind up, and you turn them loose, or rather drive them, in necessary self-defence, upon the community. According to the most recent and authentic statements upon the subject, the aggregate amount of debts due to the banks is between four and five hundred millions of dollars. Force them by your policy to collect this vast sum from the community, and what a wide-spread scene of desolation, embracing every class of the community, must ensue! The banks will press upon the importing merchant, the importing merchant upon the retail trader, and the latter upon his customers

the laborer, the mechanic, and the farmer. If the result of this desolating process should not be, in the language of Burke, "the ruin of the country forever," it would be, at least, to inflict upon it, causelessly and heedlessly, a blow, from which recovery could be effected only through long years of suffering and distress.

I stand here, Mr. President, as no advocate of the banking system. I have been the constant enemy of its abuses, the correction of which, by salutary and progressive reforms, I have steadily pursued, without aiming, however, at the destruction of the system itself, which the country has chosen to adopt, and under which it has hitherto attained a prosperity unparalleled in any age or quarter of the world. The measure I now offer to the consideration of the Senate is, in my humble judgment, one of the most effective reform. I have no interest whatever in banks. I do not own, never have owned, and never expect to own a single share of stock in any bank, nor do I owe a debt, even of the smallest amount, to a bank. I mention these things, not because I could suppose that other gentlemen, who might happen to be differently situated, could, in the slightest degree, be influenced by considerations of this sort. I deem too highly of the patriotism of my fellow-citizens not to believe them above all personal considerations, as I am sure all with whom I have the honor to be associated on this floor are, in pronouncing on great public questions, involving the interests of the country. I know, however, that there are ungenerous minds, which impute other principles of action to public men; and, following the example of the Senator from South

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