ments. A wholesome credit is therefore crimes? Is it not because the inducepersonal, and should be left free from ments to these crimes spring from the legal restraint, nor should it be stimula- banking system? But, Mr. Chairman, ted by legal combinations. But the I wish to take another view of the evils credit of banks is false. They issue of this system: the pernicious effect it what purports to be money, but is not money. They call a thing valuable which is wholly valueless. They issue pretty pictures on silk paper promising to pay money which it is notorious they cannot pay, as is evident from their conduct the last half year; and for these false promises fools pay them interest, which interest is extracted from the labor of an unsuspecting community. These reservoirs of credit are often pernicious to young men, to the thoughtless, the inexperienced, and the sanguine. A facility of obtaining loans, leads to improvident extravagance and want of prudence, and causes men to despise the slow accumulations of honest labor. It induces them to anticipate the earnings of the future, and leads to excess which often ends in ruin. But the greatest objection I have to these reservoirs of credit, arises from their tendency to expansions and contractions. They expand the currency at times until the necessaries of life rise beyond the reach of the poor; and when they contract, the poor are thrown out of employment. The laborer, Mr. Chairman, is the last to receive benefit from a rise of prices, but the first to suffer the evils of a diminished currency. The expansions of bank credit lead to gambling speculation. The managers of banks have only to make money scarce and purchase property when prices are low, and, again, to expand and make money plenty, and then sell at the advanced prices; and in this way our banded brotherhood of bankers may in time monopolize not only the property, but the profitable business of the country. Here let me call your attention to one other evil of the paper system. I mean the facility with which it is counterfeited. Why, sir, are counterfeiting and forgery such common

has on agriculture, manufacturing and mining. However the farmer may be flattered for a time with the name of high prices for his produce, it is demonstrable that the fictitious price created by a redundant currency, is injurious to the country, and must ultimately react upon that most useful class of our citizens. It will probably be admitted by all that we should not only raise all our bread stuffs in this country, but, also, produce a surplus for exportation. Why, then, have we been for the last two years importing provisions from Europe? Is it not because the nominal wages of labor was so high, owing to the quantity of paper money afloat that too large a proportion of society has been withdrawn from agriculture? The farmer found himself unable to hire la. bor at a price that would enable him to compete with foreign grain in our own markets, much less to send our grain to foreign markets: because instead of our own productions going abroad to bring money home, our money must be sent abroad to purchase provisions. The paper system is equally injurious to the manufacturing and mining interests, by putting a fictitious price on those articles which sustain miners and manufacturers. To illustrate, I will suppose that under a particular state of things American Iron can be manufactured for $100 per ton, and that foreign Iron of as good quality may be delivered for $80 per ton. If Congress impose a duty of 25 per cent on foreign iron it will be evident that the importer cannot afford to under-sell our manufacturer; but if, at the same time, the banks increase their issues 25 or 50 per cent, it will increase the price of labor, of provisions, and all other expences of the iron master in nearly the same proportion. Hence, under this state of things Ameri

can iron cannot be manufactured under $125 or $130 per ton, thus giving the foreigner an advantage in our market, even after paying the duties imposed for protecting American labor. It is, therefore, obvious that the increase of the paper currency counteracts the ef fect of the tariff for benefitting our own manufacturés. The same reasonings apply to mining. Why is coal brought from Halifax and Liverpool when the mountains of Pennsylvania contain enough to supply the world? A sound currency, free trade, and moderate protection are all we require to cause our mining, manufacturing and agricultural interests to flourish despite of foreign competition.

fectual by many, is a limitation of the dividends or profits in banking. If the bankers are not allowed to divide more per cent. on their capital, than honest men are permitted to lend their money for; say six per cent per annum, (or say 7 per cent. to cover contingencies) then inducements to over issues would be taken away; for they would not be likely to extend their business beyond the dividend allowed by law. But, in my apprehension, the most effectual cure for the evils of which we complain, would be the amendment now before you, prohibiting all banks from issuing notes under $10 immediately, and under $20 after the year 1842. The amounts proposed are those which have been geneOne of the most obvious evils, Mr: rally proposed through the democratic Chairman, of this pernicious banking press of the State, and they have my system, is the constant tendency to cre- hearty approbation so far as they go to ate a redundant currency, and thus to remedy the evil; but I must acknowllead men from sober habits of industry edge that my individual opinions are into wild schemes of speculation, landing yet more radical on this subject. I them, after a career of extravagance, in would be willing to prohibit the circulainsolvency. That the present banking sys- tion after a few years, of all bank bills tem is productive of a long train of evils, under $50 or $100. My reason, sir, is, is undeniable;-evils, in my opinion out- that as you forbid the circulation of weighing all the advantages claimed for small bills, you increase that of specie it by its friends. It becomes a serious in the same ratio. I have an ardent deenquiry, whether they are evils that ad- sire to saturate the country with specie, mit of cure, and if so what remedy is that the farmer, the mechanic, the laborlikely to be effectual? Many restric- er and the small dealer may transact all tions have been proposed, deemed more business in a solid currency, having the or less efficacious; but the most effec- faith of the whole world for its support. tual would be a liability of the stockhold- If we must and will have paper, I wish ers for the debts of the concern, a limi- to see such a basis for it, as will pretation of the issues, and a limitation of vent fluctuation. But. it will not do to the dividends. I am sorry that the first keep that basis in the banks, for expe proposition of the gentleman from Sus rience has shown that the more specie quehanna, (Mr. Read) to make stockhol- they have in their vaults, the more they ders of banks liable for the debts, was inundate the country with paper. I, voted down, by a majority of this com- therefore, wish to see specie not in the mittee. Had that proposition prevailed, vaults of the banks but in the hands of it would have secured the caution and the productive classes of the community. prudence of individual responsibility It is needless to add that specie and necessary for the economical prosecution bank paper of the same denomination, of every business in life. The best will not circulate together. This is guarantee for prudence is a liability to shown by the "shin plasters" driving the penalty of loss following misman- the specie change from circulation. agement. Another remedy thought ef- Why is it that gold has not circulated?

Is it not because no man will pay $5 or ets of other states was forbidden under $10 in gold, as long as he has a $5 or a severe penalties, and we have the satis$10 note to give? But gentlemen say it faction to know that no lottery office is is the business of the Legislature & not of kept openly in the Commonwealth. Just the Convention, to make these restric- so will it be with the bank notes of the tions. The gentleman from the city on forbidden denominations. They can by my right, (Mr. Biddle) is against any re- legislative enactments be entirely exstrictions on the Legislature, & the gentle- cluded from circulation. We had simiman from Franklin, (Mr. Chambers) is lar predictions, sir, when the law was also disposed to leave the subject to the under discussion in 1828 for prohibiting discretion of the Legislature; and our the circulation of the one, two and three worthy President (Mr. Sergeant) de dollar bank notes; but that bill became precates mistrusting the representatives a law, the prohibited notes went out of of the people. Now, sir, I beg leave to circulation and Pennsylvania abounded differ from these gentlemen. I disavow with silver change, while the neighborall unnecessary reflection on our law ing states of Ohio, New York, New Jermakers, but duty compels me to state sey and Delaware, were overrun with that our Legislature, if not the most cor- paper trash. I apprehend no difficulty rupt, are at least the most accessible to from the insertion of the prohibition into importunity of any of the branches of the Constitution. If the former act filour government. It is well known, sir, led the state with silver change, the prothat crowds of interested applicants at posed prohibition would also fill it with tend at Harrisburg every winter, and a gold currency. Here let me notice that those applicants contrive to procure one or two objections. It is objected by the passage of laws for selfish and sinis- the friends of the present banking syster purposes. They are familiarly called tem, that there is not specie enough in "middle-house-men," "lobby-members," the country. To this I reply that coin

or “borers." It is to guard our Legislature from the importunities of such men that I wish to see wholesome restrictions on banking in our Constitution. The gentleman from Franklin has also objected that if our own banks are prohibited from issuing notes under $20 we will be exposed to notes of other states, and inundated with other bank páper, over which we have no control. This sir, was the argument used against repealing the lottery act granted to the Union Canal Company, that for a long time disgraced the statute book of Pennsylvania, and demoralized her citizens. It was then urged that if we had no lottery of our own, that lottery tickets from other states would be sold as readily as ever, and thus carry out of the state, the money that ought to be retained in it. But the moral sense of the community triumphed. The Union Canal Lottery was repealed. The sale of lottery tick- be represented by a dollar, by 75 cents,

is but a measure of value. A dollar is our unit for measuring value, as a pound is for measuring weight, a gallon for capacity, or a yard for length. With this difference alone; the measures of length, weight and capacity are kept stationary by the dealer, while in the case of the measure of value, the measure itself is handed over as an equivalent. But, sir, the bankers have invented a false and fraudulent measure, as false, as false balances which are severely denounced in Holy Writ. Your paper system may be compared to a yard stick composed of gum elastic, which can be expanded or contracted at pleasure. A dealer, sir, with such a measure must be very deficient in tact or shrewdness if he can not keep himself safe, let who will suffer. But, sir, a word or two concerning the scarcity of specie. It is of little consequence whether a day's wages of labor

dency of banks to interfere with the politics of the country. This is a deplorable evil. It has within a few years produced a state of political feeling and animosity between the parties, and among neighbors, such as has not been witnessed since the black cockade times of high toned Federalism in '98, excepting the blue light toryism of the last war. The gentleman from the city (Mr. Biddle) has spoken of the warfare of the government against the institutions of the country. The warfare of the govern→

or by 50 cents, provided all other things which the laborer may wish to procure be in the same proportion; hence the specie now in the United States will serve as well for measuring value as if it were double or treble the amount; but if it is in less proportion than in the rest of the world, specie will flow to us from other countries, for money like water will find its level. Again, sir, gold and silver are produced just as you produce salt or iron. Increase the demand and you increase the production. When iron falls in price, our furnaces go out ment against the institutions, indeed! of blast. When iron rises, more iron- What institutions? The United States works are put into operation. When the Bank; a creature of its own creating. price of salt is low, those wells on the Sir, the gentleman is in error in calling Kiskisminitas which yield from nine to it a war of the govrnment. It was, sir, fourteen barrels of salt in twenty-four a desperate and reckless war of that hours, can alone be worked, but when overgrown corrupt institution for a prosalt rises, four or five barrel wells are longation of its existence and exclusive brought into requisition. Just so will privileges. Instead of quietly submitting it be with the gold mines in the South to the laws of the country and suffering ern States. If you increase the demand the charter to expire according to the for gold, mines of less value will be wish of the majority, the managers of worked, while those mines that now that bank convulsed the country from yield a profitable return for the labor the centre to the circumference, by a required, will be worked much more extensively. I think, sir, that a former Secretary of the Treasury, stated in one of his annual reports to Congress, that it would require about $11 for each person in the U. States to give a suitable amount of currency. We number at this time perhaps, about 16,000,000. We ought, therefore, now to have about $176,000,000. I believe it will be conceded that there is now, or at least was 400,000,000 capital and 800,000,000 last May, when the banks stopped payment about $80,000,000, in gold and silver, in the country: We have therefore but to double this sum to have nearly the amount required. This can be done, if necessary, in eight or ten years, without embarrasment.

system of expansions and contractions, panics and pressures, and poisoning public opinion through the medium of their hired orators and stipendary presses. But, sir, the efforts of the people through their executive, to conquer this monied leviathan has been modestly called by our president (Mr. Sergeant) "executive usurpation begun in 1833;" and he has also told us that "that there are now

debts and credits belonging to the banks of the United States, of which the government wishes to deprive them." What an awful government we must have! Worse than the grand Turk, or the autocrat of Russia! Who would believe it! That our rulers elected by Permit me, Mr. Chairman, to call the the people should seriously wish to deattention of the Committee to another stroy all the monied institutions in the evil of our present banking system: an country? I certainly should not, had I evil that I deprecate, and dread the con- not been told so by our honorable presequences of, more than any that has.sident; nor can I yet believe it, notyet been mentioned, and that is, the ten- withstanding the authority. It is not so.

President Jackson, like those who elect- that banks are necessary. I am not so ed him, only wishes to stay the encroach- Uutopian as to imagine that we ought ments of the money power and to more to destroy all banks immediately, or that effectually secure the liberties of the the evil can be cured in a short period. productive classes; and Mr Van Buren Banking is like a cancer. It has struck wishes to separate the government from its roots into the vitals of society & seems the banks, and to suffer the banks and incapable of immediate cure without bankers to manage their own affairs in endangering the body politic. I theretheir own way without giving them the fore only hope for some present ameliotaxes raised from the people, as a fund ration from the worst evils, and a gradto speculate on. But our president (Mr ual cure of the disease as time and Sergeant) consoles himself with the opin- opportunity may offer. The present ion that the high handed measnres which amendment which proposes the ultimate have been enacted by this tyranical gov- restriction of any issue below $20 will ernment of ours, and those which it pro- go far to remedy some of the worst poses yet to enact against the interests evils. It will leave bank notes of the of the people, will be put a stop to. He large denominations for the use of mertells us that "every where the voice of chants and traders, and will provide a the people is heard against their despoil sound specie basis for the wages of laers." I know, sir, that the friends of the bor. But, sir, if we have no other rembank have had a recent triumph in the edy, 1 am half inclined to believe that state of New York; but how, let me we must adopt the method resorted to ask, has that been effected? Was it not in new countries to stay a conflagration that the speculators operating through in the forest, that is, to combat fire with their democratic Legislature, succeeded fire. I mean by making banking a free from time to time in inundating the state commercial business, open alike to all with banks combined on the safety fund who may embark in it and comply with system; and that these banks true to the requirements imposed by law. Such their principles, united with the aristoc- a system with severe penalties and reracy against the government of their strictions may after all, be found most country, when it was proposed to with- beneficial, but in such cases pecuniary draw the people's funds on which they penalties ought to be imposed on stockspeculated. Sir, the bankers seem now holders, and the managers of such instito be in ecstacies with the result of that tutions ought to answer criminally for election, and however paradoxical it violating the restrictions imposed by law. may appear, I also am pleased with the I believe that this system is not new. result. I am pleased because it will It is practised now in Europe with adteach the democrats of New York and vantage to the community. It would of the Union, how dangerous is a mul- have at least one good tendency, to tiplication of banks, and how little trust make banking purely commercial and is to be placed in bankers. I have known to separate it from politics. The preseveral instances in this state, where de- sent system of chartered companies lead mocrats were induced to procure an act those who wish to get a new charter, or of incorporation for a bank and the in- an old charter renewed, to take an active stitution afterwards fell into the hands part in the politics of the dictrict, in orand under the control of their opponents. der to secure representation agreeable I have always rejoiced when they got to their designs. But if men embark rapped across the knuckles for having into banking, as into other pursuits, unany thing to do with these shaving der a general law, there would be no shops. In the present condition of soci- inducement for bankers to make comety it appears to be generally conceded mon cause, to elevate one party and