own interests. A twenty dollar limit would not give a substratum of half specie, even if our banks were compelled to pay all gold; but there is no compulsion on them to pay any part; and the efforts to bring them to half payments in gold would be long and bitterly resisted. Gold is the enemy of paper; it keeps it down when the holder of the paper has a right to demand gold; and thus a paper currency founded upon gold, as it is in England, will always be kept more within bounds than a paper currency founded upon silver. Silver is too cumbrous to hold paper in check. A person would not wish to change even a twenty dollar note into silver to carry in his pocket, but would gladly change it into gold; and so of fifty and hundred dollar notes.

The

The next improvement on the paper currency which Mr. B proposed, was contained in his fifth proposition, namely, that all the notes and paper currency issued by the banks should be payable, not in gold or silver, but in gold and silver; one half of either at the option of the demander, the other half at the option of the bank. This, Mr. B. said, would be perfectly equitable; it would ensure an equal supply of each metal in the country, without requiring the banks to keep enough of both metals to meet their whole circulation. It was also in accordance with the constitution of the United Stateswith the recent law of Congress for the re-establishment of the gold currency-with the nature of the mines in our own country--and with the rights and interests of the people. The constitution intended that gold and silver should continue to be what it was at the time of the framing of that instrument-a concurrent currency in the country. This intention, made clear in all the debates upon the subject, is expressly declared in article 1, section 10. Gold and silver are there joined together. They are joined by the conjunctive particle "and," not separated by the disjunctive particle "or." act of Congress of 1834, for the re-establishment of the gold currency, and the subsequent act for the establishment of three branch mints, all show that it is the intention of the Government, approved by the voice of the people, to have gold as well as silver. The nature of our mines leads to it. We have gold mines, but no silver ones. Gold is, therefore, a domestic production, and should become a national currency. The rights and interests of the people require a gold currency; they have a right to it under the constitution of the country and under the laws of the land; their interest requires it for checking the paper system, regulating exchanges, preventing counterfeiting, furnishing convenient money for travelling, and preserving the most uniform and universal standard of value. Thus stands the constitution, the laws, the products of the country, and the rights and interest of the country in relation to gold. But the banks have a contrary interest! The whole paper system is adverse to gold! Exceptions of particular banks may be found; but the instinct of the paper system is against it; and a bank will pay in the least valuable and most cumbrous metal which it is permitted to offer. Between gold and silver, it will pay in silver; between silver and copper, it will pay in copper; between copper and iron, it will pay in iron. This is the instinct of the system; and now, in these United States, after all that has been done to revive the gold currency, that coin will be withheld from circulation, and sold for exportation, the moment the present excitement is over, and the aid of Jackson is withdrawn. This would be the case even without the impulse of a political motive, and without the instigation of party spirit, and without the regulation of party discipline; but, unfortunately, a powerful political party is opposed to gold in our country! The bank-whig party is opposed to it; and the whole political power and party machinery of these whigs, as they style themselves, will be exerted VOL. XII.-108

[SENATE.

to suppress gold, and encourage small paper, that out of the evils incident to such a state of things, a depreciated currency may ensue, and the Bank of the United States may be called for to remedy the disorder. Law, then, is necessary to compel the banks to pay gold; and no measure more equitable could be devised than that of half payments in either metal; the demander having the first choice, and the bank the next.

A

The equity of this principle being clear, the next consideration is, as to its practicability. On this point facts and reasons are equally explicit. The banks can pay half their currency in gold in one year from this time, if they please. They could have done it this summer if they had pleased. The Federal Government could have had all its surplus now in gold, if Congress had given, the President authority to supply the mint with gold bullion and foreign coins. The state of the foreign exchanges is, and has been for months, decidedly in favor of the United States, and the importation has been, and continues to be, a profitable business. It is a money-making business to import gold, and the cus tom-house returns show that it is coming of itself, in the course of commerce, independent of the purchases and importations effected by some banking institutions. few of the deposite banks, as he had understood, had ordered importations to the amount of four or five millions. The Government had ordered home the French and Neapolitan indemnities in gold, the total of which will be seven millions. An equal sum of seven millions had been coined at our mint under the new law; and the native southern mines were promising a good product. There could be no doubt, with the slightest exertion on the part of the banks, that one half of the specie currency of the Union might be gold in the course of the ensuing year. It must be nearly twenty millions when President Jackson goes out of service. The whole specie currency was computed by the Secretary of the Treasury at 64,000,000 at the end of the last year. It is probably increased to 70,000,000, and ought to be increased to 100,000,000. The limitation of twenty dollars in the size of notes, and the compulsory obligation on the banks to pay one half in gold, would certainly and quickly augment our specie currency to 100,000,000. We have already doubled it in two years; for it was computed at about 30,000,000 at the time of the panic in 1834. War upon small notes and the introduction of gold has made this great increase. A vigorous prosecution of that war, and further measures for the protection of gold, will certainly add thirty millions more in a short time.

Mr. B. said he here wished to fix the attention of those who were in favor of a respectable paper currency-a currency of respectable sized notes of twenty dollars and upwards-on the great fact, that the larger the specie basis, the larger and safer would be the superstructure of paper which rested upon it; the smaller that specie basis, the smaller and more unsafe must be the paper which rested on it. The currency of England is $300,000,000, to wit: £8,000,000 sterling (near $40,000,000) in silver; £22,000,000 sterling (above $100,000,000) in gold; and about £30,000,000 sterling (near $150,000,000) in bank notes. The currency of the United States is difficult to be ascertained, from the multitude of banks, and the incessant ebb and flow of their issues: calculations vary; but all put the paper circulation at less than 100,000,000; and the proportion of specie and paper, at more than one half paper. This is agreed upon all hands, and is sufficient for the practical result, that an increase of our specie to 100,000,000, and the suppression of small notes, will give a larger total circulation than we now have, and a safer one. The total circulation may then be 200,000,000, in the proportions of half paper and half specie; and the spe

wished the basis of circulation throughout the country to be in hard money. Farmers, laborers, and market people, ought to receive their payments in hard money. They ought not to be put to the risk of receiving bank notes in all their small dealings. They are no judges of good or bad notes. Counterfeits are sure to fall upon their hands; and the whole business of counterfeiting was mainly directed to such notes as they handle-those under twenty dollars."

"After a few remarks from Mr. Foor and Mr. CHAMBERS, the question was taken on filling the blank with twenty dollars; when it was agreed to, and the amendment, thus shaped, was concurred in."

This was one of the recollections which Mr. B. wished to bring to the mind of the Senate; the other was, that President Jackson, in his last annual message to Congress, had fixed upon twenty dollars as the minimum size of bank notes which ought to be tolerated.

Mr. B. took this occasion to express his regret that the true idea of banks seemed to be lost in this country, and that here we had but little conception of a bank, except as an issuer of currency. A bank of discount and deposite, in contradistinction to a bank of circulation, is hardly thought of in the United States; and it may be news to some bank projectors, who suppose that nothing can be done without banks to issue millions of paper, to learn that the great bankers in London and Paris, and other capitals of Europe, issue no paper; and, still more, it may be news to them to learn that Liverpool and Manchester, two cities which happen to do about as much business as a myriad of such cities as this our Washington put together, also happen to have no banks to issue currency for them. They use money and bills of exchange, and have banks of discount and deposite, but no banks of circulation. Mr. Gallatin, in his Essay upon Currency, thus speaks of them:

"There are, however, even in England, where incorporated country banks issuing paper are as numer ous, and have been attended with the same advantages, and the same evils, as our country banks, some extensive districts, highly industrious and prosperous, where no such bank does exist, and where that want is supplied by bills of exchange drawn on London. This is the case in Lancashire, which includes Liverpool and Manchester, and where such bills, drawn at ninety days after date, are endorsed by each successive holder, and circulate through numerous persons before they reach their ultimate destination, and are paid by the drawec." Mr. B. greatly regretted that such banks as those in Liverpool and Manchester were not in vogue in the United States. They were the right kind of banks. They did great good, and were wholly free from mischief. They lent money; they kept money; they trans ferred credits on books; they bought and sold bills of exchange; and these bills, circulating through many hands, and endorsed by each, answered the purpose of large bank notes, without their dangers, and became stronger every time they were passed. To the banks it was a profitable business to sell them, because they got both exchange and interest. To the commercial com. munity they were convenient, both as a remittance and as funds in hand. To the community they were entirely safe. Banks of discount and deposite in the United States, issuing no currency, and issuing no bank note except of $100 and upwards, and dealing in exchange, would be entitled to the favor and confidence of the people and of the Federal Government. Such banks only should be the depositories of the public mo

[SENATE.

the whole community. It is destroying all standard of value. It is subjecting the country to demoralizing and ruinous fluctuations of price. It is making a lottery of property, and making merchandise of money, which has to be bought by the ticket holders in the great lot. tery at two and three per cent. a month. It is equiva lent to the destruction of weights and measures, and like buying and selling, without counting, weighing, or measuring. It is the realization, in a different form, of the debasement and arbitrary alteration of the value of coins practised by the Kings of Europe in former ages, and now by the Sultan of Turkey. It is extinguishing the idea of fixed, moderate, annual interest. Great duties are thus imposed upon the legislator, and the first of these duties is to revive and favor the class of banks of discount and deposite; banks to make loans, keep money, transfer credits on books, buy and sell exchange, deal in bullion, but to issue no paper. This class of banks should be revived and favored; and the United States could easily revive them by confiding to them the public deposites. The next great duty of the legislator is to limit the issues of banks of circulation, and make them indemnify the community in some little degree, by refunding, in annual taxes, some part of their undue gains.

The progress of the banking business is alarming and deplorable in the United States. It is now computed that there are 750 banks and their branches in operation, all having authority to issue currency, and, what is worse, all that currency is receivable by the Federal Government. The quantity of chartered bank capital, as it is called, is estimated at near $800,000,000; the amount of this capital reported by the banks to have been paid in is about $300,000,000; and the quantity of paper money which they are authorized by their charters to issue is about $750,000,000. How much of this is actually issued can never be known with any precision; for such are the fluctuations in the amount of a paper currency, flowing from 750 fountains, that the calculation of one day cannot be relied upon for the next. The amount of capital, reported to be paid in, is, however, well ascertained, and that is fixed at $300,000,000. This, upon its face, and without recourse to any other evidence, is proof that our banking system, as a whole, is unsolid and delusive, and a frightful imposition upon the people. Nothing but specie can form the capital of a bank; there are not above sixty or seventy millions of specie in the country, and, of that, the banks have not the one half. Thirty millions in specie is the extent; the remainder of the capital must have been made up of that undefinable material called "specie funds," or "funds equivalent to specie," the fallacy of which is established by the facts already stated, and which show that all the specie in the country put together is not sufficient to meet the one fifth part of these "specific funds,' or "funds equivalent to specie." The equivalent, then, does not exist! credit alone exists; and any general attempt to realize these "specie funds," and turn them into specie, would explode the whole banking system, and cover the country with ruin. There may be some solid and substantial banks in the country, and undoubtedly there are better and worse among them; but as a whole-and it is in that point of view the community is interested--as a whole, the system is unsolid and delusive! and there is no safety for the country until great and radical reforms are effected.

The burdens which these 750 banks impose upon the people were then briefly touched by Mr. B. It was a great field, which he had not time to explore, but which could not, in justice, be entirely passed by. First, there were the salaries and fees of 750 sets of bank officers: presidents, cashiers, clerks, messengers, notaries

public to protest notes, and attorneys to sue on them; all these had salaries, and good salaries, paid by the people, though the people had no hand in fixing these salaries; next, the profits to the stockholders, which, at an average of ten per centum gross, would give thirty millions of dollars, all levied upon the people; then came the profits to the brokers, first cousins to the bankers, for changing notes for money, or for other notes at par; then the gain to the banks and their friends on speculations in property, merchandise, produce, and stocks, during the periodical visitations of the expansions and contractions of the currency; then the gain from the wear and tear of notes, which is so much loss to the people; and, finally, the great chapter of Counterfeiting, which, without being profitable to the bank, is a great burden to the people, on whose hands all the counterfeits sink. The amount of these burdens he could not compute; but there was one item about which there was no dispute-the salaries to the officers and the profits to the stockholders--and this presented an array of names more numerous, and an amount of money more excessive, than was to be found in the "Blue Book," with the Army and Navy Register inclusive.

Mr. B. said this was a faint sketch of the burdens of the banking system as carried on in the United States, where every bank is a coiner of paper currency, and where every town, in some States, must have its banks of circulation, while such cities as Liverpool and Manchester have no such banks, and where the paper money of all these machines receive wings to fly over the whole continent, and to infest the whole land, from their universal receivability by the Federal Government in payment of all dues at their custom-houses, land offices, post offices, and by all the district attorneys, marshals, and clerks, employed under the federal Judiciary. The improvidence of the States, in chartering such institutions, is great and deplorable; but their error was trifling, compared to the improvidence of the Federal Government in taking the paper coinage of all these banks for the currency of the Federal Government, maugre that clause in the constitution which recognises nothing but gold and silver for currency, and which was intended forever to defend and preserve this Union from the evils of paper money.

Mr. B. averred, with a perfect knowledge of the fact, that the banking system of the United States was on a worse footing than it was in any country upon the face of the earth; and that, in addition to its deep and dangerous defects, it was also the most expensive and burdensome, and gave the most undue advantages to one part of the community over another. He had no doubt but that this banking system was more burdensome to the free citizens of the United States than ever the feudal system was to the villeins, and serfs, and peasants of Europe. And what did they get in return for this vast burden? A pestiferous currency of small paper! when they might have a gold currency without paying interest, or suffering losses, if their banks, like those in Liverpool and Manchester, issued no currency except as bills of exchange; or, like the Bank of France, issued no notes but those of 500 and 1,000 francs, (say $100 and $500;) or, even like the Bank of England, issued no note under £5 sterling, and payable in gold. And with how much real capital is this banking system, so burdensome to the people of the United States, carried on? About $30,000,000! Yes; on about 30,000,000 of specie rest the 300,000,000 paid in, and on which the community are paying interest, and giving profits to bank. ers, and blindly yielding their faith and confidence, as if the whole 300,000,000 was a solid bed of gold and silver, instead of being, as it is, one tenth part specie, and nine tenths paper credit!

[JUNE 8, 1836.

Mr. B. said the reform of the banking system was a task as difficult as indispensable. The number and pow. er of the banks was the first great impediment; the quantity of independent legislation was the next; but it had been shown that the whole was under the power of Congress, and that the Federal Government could, by the collection of its own revenues, regulate the State currencies, and bring them all to the touchstone of gold. The States themselves could effect the regulation by direct legislation. It is no answer to say, "we will if the rest will." Let one begin, and let it exclude from its borders all the descriptions of notes which its own banks are forbidden to issue; that State will immediately realize the full benefit of its legislation, and others will soon follow the example. If they do not, the benefits to the reformed States will be none the less, but the greater; they will be to the rest of the States what France was to England during the reign of the one and two pound notes; the absorbent of their gold! Above all, Mr. B. said, the Congress of the United States should begin first; that Congress to whose guardian care is committed the constitution, which recognises nothing but gold and silver for money; and here, in this District, where Congress sits, and has exclusive jurisdiction, is the place to begin; and now the time, when seven banks in company have knocked all at once at our doors, and demanded, twice and thrice, renewed charters, without having undergone the investigations which their past conduct requires. Here is the place, this the authority, and now the time, to begin; and as we now act, so will be the influence of our example, for good or for evil, throughout the entire extent of the Union.

When Mr. BENTON had concluded-

Mr. KING, of Alabama, again vindicated the bill and the banks, and urged especially the distressing results to the District of the failure of the bill, or of any great and sudden change in the currency of the District.

After some farther remarks from Mr. WALKER, The question was then taken on the passage of the bill, and decided as follows:

YEAS-Messrs. Black, Buchanan, Calhoun, Clay, Crit. tenden, Cuthbert, Davis, Ewing of Ohio, Goldsborough, Hendricks, Hubbard, Kent, King of Alabama, Knight, Leigh, Naudain, Nicholas, Porter, Prentiss, Rives, South, ard, Swift, Tallmadge, Tomlinson, Walker, Webster-26

NAYS-Messrs. Benton, Ewing of Illinois, King of Geor gia, Linn, McKean, Mangum, Morris, Niles, Robinson, Ruggles, Shepley, Wall, White, Wright—14. After transacting some other business, The Senate adjourned.

WEDNESDAY, JUNE 8.

INDIAN APPROPRIATIONS.

Mr. WHITE, from the Committee on Indian Affairs, reported the amendments of the House to the bill making appropriations for the expenses of the Indian Department, for Indian annuities, &c. Several of the amendments of the House were concurred in.

One of the amendments of the House was an increase of the appropriation for the removal of the Creeks, so as to embrace the whole of them, being about twenty-one thousand, at thirty dollars a head. The first estimate was for twelve thousand, at a lower rate. It was asked of the chairman of the committee if it was possible to effect this operation of removing the Creeks during the present year, and the reply was, that if they could be got into the humor, their removal might be effected before the next meeting of Congress.

While this amendment was pending, on motion of Mr. CALHOUN, the further consideration of the subject was arrested, by a motion made by Mr. CALHOUN to lay the whole matter on the table; which was agreed to.

JUNE 8, 1836.]

INCENDIARY FUBLICATIONS.

On motion of Mr. CALHOUN, the Senate then proceeded to consider the bill to prohibit deputy postmasters from receiving and transmitting certain papers described therein, in the States in which they are, or may be, prohibited by law.

[The following is a copy of the bill:

Be it enacted, &c., That it shall not be lawful for any deputy postmaster, in any State, Territory, or District of the United States, knowingly to deliver to any person whatever, any pamphlet, newspaper, handbill, or other printed paper or pictorial representation, touching the subject of slavery, where, by the laws of the said State, Territory, or District, their circulation is prohibited; and any deputy postmaster who shall be guilty thereof shall

be forthwith removed from office.

SEC. 2. And be it further enacted, That nothing in the acts of Congress to establish and regulate the Post Office Department shall be construed to protect any deputy postmaster, mail carrier, or other officer or agent of said Department, who shall knowingly circulate, in any State, Territory, or District, as aforesaid, any such pamphlet, newspaper, handbill, or other printed paper or pictorial representation, forbidden by the laws of such State, Territory, or District.

SEC. 3. And be it further enacted by the authority aforesaid, That the deputy postmasters of the offices where the pamphlets, newspapers, handbills, or other printed papers or pictorial representations aforesaid, may arrive for delivery, shall, under the instructions of the Postmaster General, from time to time give notice of the same, so that they may be withdrawn by the person who deposited them originally to be mailed; and if the same shall not be withdrawn in one month thereafter, shall be burnt or otherwise destroyed.]

The question being on the passage of the bill

Mr. WEBSTER addressed the Senate at length in opposition to the bill, commencing his argument against what he contended was its vagueness and obscurity, in not sufficiently defining what were the publications the circulation of which it intended to prohibit. The bill provided that it should not be lawful for any deputy postmaster, in any State, Territory, or District of the United States, knowingly to deliver to any person whatever, any pamphlet, newspaper, handbill, or other printed paper or pictorial representation, touching the subject of slavery, where, by the laws of the said State, District, or Territory, their circulation was prohibited. Under this provision, Mr. W. contended that it was impossible to say what publications might not be prohibited from circulation. No matter what was the publication, whether for or against slavery, if it touched the subject in any shape or form, it would fall under the prohibition. Even the constitution of the United States might be prohibited; and the person who was clothed with the power to judge in this delicate matter was one of the deputy postmasters, who, notwithstanding the difficulties with which he was encompassed in coming to a correct decision, must decide correctly, under pain of being removed from office. It would be necessary, also, he said, for the deputy postmasters referred to in this bill to make themselves acquainted with all the various laws passed by the States, touching the subject of slavery, and to decide on them, no matter how variant they might be with each other. Mr. W. also contended that the bill conflicted with that provision in the constitution which prohibited Congress from passing any law to abridge the freedom of speech or of the press. What was the liberty of the press? he asked. It was the liberty of printing as well as the liberty of publishing, in all the ordinary modes of publication; and was not the circulation of papers through the mails an ordinary mode of publication? He was afraid

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that they were in some danger of taking a step in this matter that they might hereafter have cause to regret, by its being contended that whatever in this bill applies to publications touching slavery, applies to other publications that the States might think proper to prohibit; and Congress might, under this example, be called upon to pass laws to suppress the circulation of political, religious, or any other description of publications which produced excitement in the States. Was this bill in accordance with the general force and temper of the constitution and its amendments? It was not in accordance with that provision of the instrument under which the freedom of speech and of the press was secured. Whatever laws the State Legislatures might pass on the subject, Congress was restrained from legislating in any manner whatever, with regard to the press. It would be admitted, that if a newspaper came directed to him, he had a property in it; and how could any man, then, take that property and burn it without due form of law? and he did not know how this newspaper could be pronounced an unlawful publication, and having no property in it, without a legal trial.

Mr. W. argued against the right to examine into the nature of publications sent to the post office, and said that the right of an individual in his papers was secured to him in every free country in the world. In England, it was expressly provided that the papers of the subject shall be free from all unreasonable searches and seizures

language, he said, to be found in our constitution. This principle established in England, so essential to liberty, had been followed out in France, where the right of printing and publishing was secured in the fullest extent; the individual publishing being amenable to the laws for what he published; and every man printed and published what he pleased, at bis peril. Mr. W. went on at some length to show that the bill was contrary to that provision of the constitution which prohibits Congress to pass any law abridging the freedom of speech or of the press.

Mr. BUCHANAN said that, as he had voted for the engrossment of this bill, and should vote for its final passage, he felt himself bound to defend and justify his vote against the argument of the Senator from Massachusetts, [Mr. WEBSTER.] In doing so, he would imitate that Senator, if in no other respect, at least in being brief.

It is indispensable to the clear and distinct understanding of any argument, to know precisely what is the question under discussion. Without this knowledge, we cannot tell whether in any or in what degree the argument is applicable to the subject. What, then, is the naked question now under discussion, stripped of all the mist which has been cast around it? This bill embraced but a single principle, though this principle was carried out through three sections. It provides that deputy postmasters, within the limits of such slaveholding States as have found it necessary for their own safety to pass laws making it penal to circulate inflammatory publications and pictorial representations, calculated to excite the slaves to insurrection, shall not be protected by the laws of the United States, in violating these State laws. Postmasters within these States, who shall knowingly distribute such publications, are liable to be removed from office. The bill also provides that the post office laws of the United States shall not protect postmasters, mail carriers, or other officers or agents of the Department, who shall knowingly circulate such incendiary publications, from the penalties denounced against this offence under the laws of the States. This is the spirit and principle of the bill. It does no more than to withdraw the protection of the laws of the United States, establishing the Post Office Department, from postmasters and other agents of this Government who