in their own imaginations. They produce comparison between the two classes of this report with every commendation; of agents. Other considerations of great course they cannot object to its authority; weight, and some of still graver character, and here is a paragraph taken from it belong to the subject. First, in point of which should begin to open their eyes, or amenability, the Government officers are the eyes of the country, to the magnitude amenable to the Government, subject to its of the losses from Government reliance on laws and its orders; liable to summary prolocal banks and their paper money. ceedings for default, and to be pursued by execution wherever they go, and responsible in person and in property, themselves and all their securities, for all that is owing by them. Not so with the banks. They are the creations of the State Governments, subject to State laws, and having great influence over the enactment of State laws which concern themselves. States may protect them, and have protected them against the Federal demands. They have passed acts to prevent the recovery of damages which the charters had fixed; and to prevent execution against the banks themselves, unless the creditor would consent to receive his debt in current bank notes. This is what has been done; it is what is now done; and here is the evidence of it. "The Government, borrowed, during the short period of the war, eighty millions of dollars, at an average discount of fifteen per cent. giving certificates of stock, amounting to eighty millions of dollars, in exchange for sixty-eight millions of dollars in such bank paper as could be obtained. Upon the very face of the transaction, therefore, there was a loss of twelve millions of dollars, which would, in all probability, have been saved, if the Treasury had been aided by such an institution as the Bank of the United States. But the sum of sixty-eight millions of dollars received by the Government was in a depreciated currency, not more than half as valuable as that in which the stock given in exchange for it, has been, and will be redeemed. Here then is another loss of thirty-four millions, resulting incontestably and exclusively, from the depreciation of the currency, and making, with the sum lost by the discount, forty-six millions of dollars." Mr. McDuffie says, and says truly, in his report that this loss of forty-six millions was only one item in the catalogue of losses-that the loss to the communnity, and to the Government creditors, from using depreciated paper was beyond calculation. His remedy for these losses was a National Bank; mine is an adequate supply of gold and silver, and especially of gold; and if it is asked how much gold will be sufficient, I answer, that so far as the currency of a National Bank is concerned, twenty odd millions would be enough; for that is the maximum amount of currency that she ever furnished. A supply thea of twenty odd millions of gold would meet all objections arising from the withdrawal of her currency, and that amount will be in the country before the present term of Mr. Van Buren's Administration expires, and double that amount in seven or eight years. The loss to Government creditors was incredible from the use of depreciated paper during the late war. Even the Tresury notes was depreciated, in some parts, as as low as 33 per cent. The loss to creditors from the use of bank notes, since May last, has also been great. The public moneys in the hands of the deposite banks were then 30 millions; the Government has been paying it out ever since, to the great profit of the banks, to the immense discredit of the Governmont itself, and to the heavy Joss of many of its creditors. But the money test cannot complete the The Mr. B. then exhibited a document, obtained from the Department of State, containing the acts passed by the legislatures of different States since the suspension of specie payments in May last. They were past in States where there were deposite banks, then holding about thirty millions of public money, standing in the name of the Treasurer of the United Sta'es, or in the names of disbursing officers. These acts, in some instances, reduced the damages which depositors and holders of notes were entitled to recover; and, in some instances, denied execution against the bank, unless the creditor would endorse upon it that current notes should be receivable. Mr. B. said he had seen no instance in which these acts made any exception in favor of the United States; and he read the titles of several of the acts, and the names of the States in which they were passed, and referred to the Senators from those States to say whether there were any exception. No Senator answering in the affirmative, Mr. B. resumed, and said that here was an in surmountable objection to the future employment of State banks as public depositories, or to the reception of their notes in the paymennt of the Federal revenue. The States had interposed between the Federal Government and the holders of its moneys. They might interpose again and forever. By so doing, they injured the Uunited time by the intrepid and sagacious Mr. Randolph. This is what he said: "Every man you meet, in this House or out of it, with some rare exceptions, which only served to prove the rule, was either a stockholder, presikeeper, runner, engraver, paper-maker, to a bank. dent, cashier, director, attorney, clerk, or door* * * We are tied hand and foot, and bound to conciliate this great mammoth," [the banking interest.] States, and laid a ground for complaint powerful than in Congress. It's irrésistible and collision with the State Governments. influence here was well described at that Every consideration of harmony and mutual independence, should forbid the possibility of such occurrences for the future. Again: The deposite banks, whether a National Bank or catalogue of State banks, were the friends of high taxes and low appropriations. They went for surpluses, for the accommodation of themselves and a few of their friends. They went for taxing the nation to the uttermost, and stinting appropriations to the minimum, that enormous surpluses should remain in their hands for loans to themselves and friends. He (Mr. B.) had a table in his hand, obtained from the Treasury Depart ment, and showing the annual amount of balances in the Treasury from the foundation of the Government to the present time, and which he would read. It was valua ble for two purposes: 1. To show how little need the Government has for large balances; 2. How large these balances became when the banks were pwerful and the Government connected with them. In the first years of the Government, the banks were few in number, and comparatively weak; and then the surpluses stood thus: Such was the power of the banks at that time; and the consequence was, an average surplus of near seventeen millions per annum. To be sure it only lasted three years; and the reason was, that the banks only ruled the country for three years. It was a short ride, and a merry one; and now for a plunge. Let us see the next four or five years. Year. 1818 1819 1820 1821 1822 Balance. $1,478,526 2,079,992 1,198,461 1,681,592 4,237,427 Here the average is reduced to about two millions per annum; and why? Because the banks had lost their dominion over the Country and the Government, and had neither the means nor the influence to inflate the Treasury. It was the season of their first catastrophe in time of peace; and every thing went down in proportion to their own great fall. It was the season of a general collapse. Let us pass on to the next ascension, to the next perihelion, of this ballooning of the banks. Ahout the year 1833, when the National Bank had lost the prospect of a re-charter, but expanded its business, and when local banks were increased in unprecedented numbers, and as many as ninety of them became the depositories of the public moneys, their power and influence again became immense. The result, on the Federal Treasury, was: These three years covered the brief sea- Here is another season of five years of son of bank omnipotence after the conclu- great power in the banks, and of close cons sion of the late war. The second National nection with them by the Federal GovernBank, with its thirty-five millions of capi- ment. The result is, an average balance, tal, was then just created; State Legisla- that is to say, an annual surplus, of about tures littered local institutions by the forty twenty-seven millions of dollars! What at a tine. Bank influence was predomi- a comment upon the connection between mant every where; and no where more Bank and State! A connection which exD hibits the Federal Treasury as a mere appendage to a rising, flying, plunging and falling balloon. We who have been here for some years have seen the inside working of this connection, and have seen the votes which created these enormous sur pluses; votes to promote all taxation-to prevent all reduction of taxes-and to prevent all possible appropriations, even for the defence of the country, and for the cempletion of the fortifications; and we have seen these votes regularly coming from the friends of the banks. To complete the picture, it is sufficient to say that the banks had their second catastrophe, in time of peace, in May last; and that now the balance in the Treasury is low enough! Mr. B. said, he ha! for years pointed out the Bank of the United States, while the depository of the public moneys, as the ally of taxes, and the enemy of appropriations; he had made the same remark upon the local deposite banks almost as soon as they were in operation; and he had now given the evidence to show the justice of the application of this character to them both. It was a most fatal objection to all connection with those banks; an objection from which the Government agents would be wholly free. With the mints and individual officers, to keep the public moneys, there would be no interest here to create supluses for the benefit of banks and their favorites. I have read explodes this objection. It shows that the Government has no balances of any consequence, except when it is connected with banks. When free from that connection, or when the banks are too weak to exert an influence over the public counsels, the surplus on hand is next to nothing; a million per annum in the earlier stages of the Government, and two millions per annum in later times. The table shows how little need there is for any surplus; for it is notorious that the Government machine worked far better when it was a touch-andgo business with the Treasury, than it ever did with its ten, twenty, thirty, and forty millions of surpluses. There will be no surplus to be hoarded if the Government can succeed in breaking its connection with the banks. Economy can then be practiced, as well as professed. It can then be practised by those who are really in favor of it. Mr. B. said, that at the extra session he had given it as his opinion, that the payment of the Federal revenues in gold and silver would not occasion more than four or five millions of dollars to be taken out of circulation; in other words, that four or five millious would accomplish the annual payinent of the whole revenue. A further study of the subject, and a view of the table of balances which he had just presented, indduced him to believe that two or three millions would be sufficient. One million was found to be sufficient in the first twelve A third answer to this objection is, that years of the Government, and two millions it goes to the form of our Government, and in the five years from 1818 to 1822, inimpeaches the capacity of the people to clusive. The same amount would have administer their own Government. The been equally sufficient at all other objection is, that the agents selected by the times. He was against surpluses;— Government, and responsible to it, cannot he was against any financial calculation be trusted to keep the public moneys; and, therefore, the custody of the money must be confided to bank directors, who are not appointed by the Government, nor responsible to the people. This is the objection; and, upon its face, it impeaches the capacity of the people to administer their own Government, and to take care of their own property. This is an inevitable inference; and, erhaps, another inference will also result; namely, that if banks are necessary to the Federal Government, she will have the same power to create as to adopt these institutions. A fourth objection made to the Independent Treasury is, that it will hoard specie that it will cause the Government to become an immense miser, hoarding in the deep recesses of vaults, and confining with bolts, bars, and safes, a vast accumulation of gold and silver. Sir, the table of balances which for leaving any amount whatever in the Treasury; he was opposed to any scheme of finance which had for its basis any reserve of money in the Federal Treasury. This was an old subject with him [Mr. B.] He had made his acquaintance with it twelve years ago. He had then tried his young hand, for the first time, on a financial subject, and on resolutions submitted by himself to repeal so much of the Sinking Fund act of 1817 as directed a reserve of two millions per annum to be kept in the Treasury. He had then shown it to be an unnecessary precaution; that it was far better to cut down taxes to the estimated expenditure, and invest the Government with a contingent authority to borrow the two millions in the event of a need for it to meet appropriations before Congress would assemble. This was his opinion twelve years ago; it was his opinion now. Ile was opposed to any plan for leaving a sur Every body knows better. Neither indiplus dollar in the Treasury; he was op-viduals, or nations, ever lost time in countposed to the issue of Treasury notes to sup- ing masses of specie. Ordinary sums are ply deficiencies; he was for the contin- counted without loss of time, and masses are gent authority to borrow, if necessa- transferred by weight, or in kegs or bags. ry, a small sum to meet appropriations, and then paying it off out of the first surplus. In this way, and by increasing and diminishing the amount for the flexible objects of expenditure, such as fortifications, ships, harbors, light-houses, &c. the small, occasional, and alternate deficiencies and excesses in the revenue could be easily, safely, and economically inet and provided for. With respect to the other part of the objection-the impossibility of getting an ade quate supply-it is an objection refuted by the experience of all nations, and particu larly by our own experience. At the close of the Revolution we had nothing but depreciated paper; in six or seven years afterwards we had an adequate supply of gold and silver. So of France: In 1800 she had nothing but assignats, depreciated as low Not specie enough in the world to sup- as our old continental bills. In seven years ply the demand which this bill would create, afterwards she had a specie currency of five and not time enough in the year to count it, hundred and fifty millions of dollars. So of if there was enough, is another of the ob- England: In 1819 she had nothing but dejections to this bill. This is relied upon by preciated paper; Parliament passed an act many speakers, and grave calculations are for the resumption of specie payments, and gone into to show that the three hundred allowed four years for the banks to supply and sixty-five days in the year would be too themselves. In two years the Bank of short a time to suffice for the counting in England reported an acquisition of twenty and counting out the Government revenues, millions sterling in gold-one hundred if paid in gold and silver. Sir, there is a millions of dollars-and that she was ready species of argument which the logicians call to resume. The same bank now, at this the argumentum ad ignorantiam—an ar- moment, has made an acquisition of six gument to ignorance; but this argument millions sterling-thirty millions of dollars goes beyond that, for it is an argument to in the brief space of nine months. In the lowest degree of ignorance. If any an- May last, her supply was three and a half swer was due to it-the counting part of it millions sterling; in January, it was nine -it might be found in the act of 1789, when and a half. But to come to our own counthe revenues were directed to be paid in try. Our custom-house returns show that gold and silver coin only; and also, in a specie flows in upon us annually in large speech delivered on the floor of the House masses, and either remains with us, or goes some years ago, when the collection of the off again, precisely as it sui's our own policy revenues in hard money was so strenuously to retain it or not. Our correct returns of urged by a gentleman, now so entirely op- imports and exports of specie go back to the posed to it. But no answer is due to it. year 1821, and this is the result: *Extract from Dr. Webster' speech on the Bank of the United States Charter Bill, Feb. 1816. "As to the evils of the present state of things, Mr. W. admitted it in its fullest ex ent If he No nation had a better currency than the U. was not mistaken, there were some millions in States. There was no nation which had guarded the Treasury of paper which were nearly worthits currency with more care; for the framers of less, and were now wholly useless to the Governthe Constitution, and those who enacted the ment, by which an actual loss of considerable early statutes on this subject, were HARD MO- amount must certainly be sustained by the TreaNEY MEN; they had felt, and therefore duly sury. This was an evil which ought to be met appreciated, the evils of a paper medium; they at once, because it would grow greater by indultherefore, sedulously guarded the currency of the gence. In the end, the taxes must be paid in the United States from debasement. The legal cur- legal money of the country, and the sooner that was rency of the United States was gold and silver brought about the better. coin; this was a subject, in regard to which Congress had run into no folly. Gold "If Congress were to pass forty statutes on the and silver currency, he said, was the law of the subject, he said, they would not make the law land at home, and the law of the world abroad; more conclusive than it now was that nothing there could, in the present state of the world, be no should be received in payment of duties to the ther currency. In consequence of the inmense Government but specie; and yet no regard was paper issues having banished specie from circu- paid to the imperative injunctions of the law in lation, the Government had been obliged in direct this respect. The whole strength of the Govern. violation of existing statutes, to receive the amount of their taxes in something which was not recog. nized by law as the money of the country, and which was, in fact, greatly depreciated. * * * * * * * * * ment, he was of opinion, ought to be put forth to compel the payment of the duties and taxes to the Government in the legal currency of the coun try." 1832 5,907,554 $10,468,059 This includes a period of twelve years. The imports for that period amount to the large sum of $83,356,000. The average import was about seven millions of dollars If the specie policy of Gen. per annum. Jackson had then been in force, a large proportion of this import would have remained in the country; but the paper money policy was then in the ascendant. The Bank of the United States was then omnipotent; and her policy was to export specie, for the double purpose of making a profit on the export, and creating a vacuum at home, to be filled by her own notes; and, above all, to deprive the country of specie, and reduce the local banks to the use of her notes for their capital; so that when she wished to upset the Government, to rule the elections, or to convulse the moneyed world, she would have nothing to do but to order a curtailment of two or three millions a month, and charge it upon any act, no matter what, of the Federal Go vernment. This was the policy which then prevailed, and accordingly, large as the import of specie was in these twelve years, the export was still larger: it was $84,280,000. Thus, instead of retaining any part of what came in for the use of the country, there was actually sent out about a million more than came in. The nex' period of five years shows the effect of the specie policy. The imports and exports for this period stand thus: Exports. 1,676,258 Behold the difference! Our imports for five years amounting to sixty-two millions; our exports almost nothing. The average import for the whole five years, including 1837, amounting to about twelve millions and a half of dollars; and our exports, ex cept for the extraordinary year of 1837, only averaging a little over three millions. This is the state of our own experience. It shows that, without any demand for specie, it flows in upon us at the rate of seven millions per annum, but flows out again; that with a demand for it, it flows in at the rate of twelve and a half millions per annum, and nearly all remains with us. This is the effect of a demand for specie for the Federal Treasury. Let that demand continue. Let the Government continue to collect, and above all, to pay out specie and in a few years the national supply will be complete. The country will possess as much as it can use, be it a hundred, a hundred and twenty, or a hundred and fifty millions. The supply will find its own level, and the excess will flow off. These, sir, are the main objections to the bill. They are the principal ones which have been urged. They will not bear examination. Every argument resulting from them is an argument in favor of the bill, instead of being against it. And what is the alternative proposed by those who object to this bill? By the Federal gentlemen the alternative is openly proclaimed to be a National Bank: that is to say, Mr. Biddle's bank; for they mean no other. By a few of the Republicans, a resort to the State banks is the alternative. The Federal gentlemen agree to take this latter alternative for the present-as so much gained towards their National Bank-as a half-way house to that institution. This is candid in those gentlemen. It is candid, if it is not wise. They will go with a few of our friends to the half-way house, knowing that Mr. Biddle can blow up that house any night that he pleases, and that the Chesnut street palace must then become the refuge of the terrified inmates of the demolished stopping place. Mr. B would not dilate upon the dangers of this alternative. To learn danger to take warning from an enemy, is a maxim of great antiquity, and one which has its full application on this occasion. If neither the conduct of the Opposition, their language, their speeches on this floor, can warn gentlemen, it would seem to be almost in vain to appeal to past experience, to witness the present, or to contemplate the future. The State bank deposite system, with the use of their paper money, has failed us in time of war and in time of peace. It has twice failed in time of peace. It is now in a state of failure. The late deposite banks now owe the Government six and a half millions of dollars, which an empty Treasury in vain calls for. To rely upon them again, is to walk into the pit in broad day with the eyes wide open. Our banking system, always on fallacious principles→→ always unsolid and delusive-is now be |