It is often easier to prevent what cannot be remedied, which the present instance strongly illustrates. If the administration had formed a true conception of the danger in time, what After the best reflection, I am of the impres has since happened might have then been easily sion that the Government can do but little in averted. The near approach of the expiration the way of relief, and that it is a case which of the charter of the United States Bank would must be mainly left to the constitution of the have afforded ample means of staying the deso-patient, who, thank God, is young, vigorous, lation, if it had been timely and properly used. and robust, with a constitution sufficient to susI saw it then, and purposed to renew the char- tain and overcome the severest attack. I dread ter, for a limited period, with such modifications the doctor and his drugs much more than the as would have effectually resisted the increas-disease itself. The distress of the country coning expansion of the currency, and, at the same sists in its indebtedness, and can only be relievtime, gradually and finally wear out the con-ed by the payment of its debts. To effect this, nection between the bank and the Government. industry, frugality, economy, and time, are neTo use the expression I then used, "to unbank cessary. I rely more on the growing crop-on the banks; "" to let down the system easily, the cotton, rice, and tobacco, of the Southand so to effect the separation between the than on all the projects or devices of politicians. bank and the Government as to avoid the pos- I am utterly opposed to all coercion by this sibility of that shock which I then saw was in- Government. But Government may do someevitable without some such remedy. The thing to relieve the distress. It is out of debt,

SEPTEMBER, 1837.]

Treasury Notes.

[SENATE.

and is one of the principal creditors both of | sagacity; and history will do it justice. In the banks and of the merchants, and should set that year, as I have stated, the tariff system an example of liberal indulgence. This I am triumphed in the councils of the nation. We willing to give freely. I am also prepared to saw its disastrous political bearings; foresaw vote freely the use of Government credit in its surpluses and the extravagances to which it some safe form, to supply any deficit in the cir- would lead. We rallied on the election of the culation during the process of recovery, as far late President to arrest it, through the influence as its financial wants will permit. I see not of the Executive department of the Governwhat more can be safely done. But my vision ment. In this we failed. We then fell back may be obtuse upon this subject. Those who upon the rights and sovereignty of the States, differ from me, and who profess so much sym- and by the action of a small but gallant State, pathy for the public, seem to think that much and through the potency of its interposition, relief may be afforded. I hope they will pre- we brought the system to the ground, sustained sent their views. I am anxious to hear their as it was by the opposition and the administraprescriptions; and I assure them that what- tion, and by the whole power and patronage ever they may propose, if it shall promise re- of the Government. The pernicious overflow lief, and be not inconsistent with the course of the Treasury, of which it was the parent, which I deem absolutely necessary for the could not be arrested at once. The surplus was restoration of the country to perfect health, seized on by the Executive, and, by its control shall cheerfully receive my support. They may over the banks, became the fruitful source of be more keen-sighted than I am as to the best Executive influence and encroachment. Withmeans of relief, but cannot have a stronger dis-out hesitation, we joined our old opponents on position to afford it.

gallant and successful war against the encroachments of the Executive. That terminated, we part with our late allies in peace; and move forward, lag, or onward who may, to secure the fruits of our long but successful struggle, under the old republican flag of 1798, which, though tattered and torn, has never yet been lowered, and, with the blessing of God, never shall be with my consent.

after the 1st of January, 1839, one-half might be paid in such notes; one-quarter after the 1st of January, 1840; and that, from and after the 1st of January, 1841, all sums due the Government for customs, lands, &c., shall be paid only in the legal currency of the United States, or in such notes, bills, &c., as should by law be ordered.

the tariff question, but under our own flag, and We have, Mr. President, arrived at a remark-without merging in their ranks, and made a able era in our political history. The days of legislative and executive encroachments, of tariffs and surpluses, of bank and public debt, and extravagant expenditure, are past for the present. The Government stands in a position disentangled from the past, and freer to choose its future course than it ever has been since its commencement. We are about to take a fresh start. I move off under the State-rights banner, and go in the direction in which I have On concluding his speech Mr. C. submitted been so long moving. I seize the opportunity his amendment, which provided that from and thoroughly to reform the Government; to bring after the 1st of January next, three-fourths of it back to its original principles; to retrench the money due to the Government may be paid and economize, and rigidly to enforce account-in notes of specie-paying banks; that from and ability. I shall oppose strenuously all attempts to originate a new debt; to create a national bank; to reunite the political and money power-more dangerous than that of church and state-in any form or shape; to prevent the disturbances of the compromise, which is gradually removing the last vestige of the tariff system; and, mainly, I shall use my best efforts to give an ascendency to the great conservative principle of State sovereignty, over the dangerous and despotic doctrine of consolidation. I rejoice to think that the Executive department Mr. CALHOUN replied, to one called the diof the Government is now so reduced in pow-vorce bill between the Government and the er and means, that it can no longer rely on its banks, which he said was just ahead. influence and patronage to secure a majority. Mr. BENTON, after expressing his entire conHenceforward it can have no hope of support-currence in the amendment of Mr. CALHOUN, ing itself but on wisdom, moderation, patriot- sent to the Chair two amendments of his own, ism, and devoted attachment to the constitution, which he said comprised the substance of which I trust will make it, in its own defence, the bill introduced by him two years ago, an ally in effecting the reform which I deem re-establish the constitutional currency of the indispensable to the salvation of the country country." His first amendment provides that, and its institutions. after a day to be specified, all the public dues should be paid in gold and silver only, and in Treasury notes and land scrip, as might by law be authorized; and the second provides that, after the resumption of specie payments by the banks, the Treasury should begin with specie payments.

I look, sir, with pride to the wise and noble bearing of the little State-rights party, of which it is my pride to be a member, throughout the eventful period through which the country has passed since 1824. Experience already bears testimony to the patriotism, firmness, and

Mr. WEBSTER rose, and inquired of Mr. C. to what bill it was proposed to make this an amendment.

to

[These amendments, together with Mr. CALHOUN's, were ordered to be printed.]

Mr. B. said he should not have risen in this debate, had it not been for the misapprehensions which seemed to pervade the minds of some Senators as to the character of the bill. It is called by some a paper-money bill, and by others a bill to germinate a new national debt. These are serious imputations, and require to be answered, not by declamation and recrimination, but by facts and reasons, addressed to the candor and to the intelligence of an enlightened and patriotic community.

I dissent from the imputations on the character of the bill. I maintain that it is neither a paper-money bill, nor a bill to lay the foundation for a new national debt; and will briefly give my reasons for believing as I do on both points.

There are certainly two classes of Treasury notes-one for investment, and one for circulation; and both classes are known to our laws, and possess distinctive features, which define their respective characters, and confine them to their respective uses.

[SEPTEMBER, 1837.

These are the distinctive features of the two classes of notes. Now try the committee's bill by the test of these qualities. It will be found that the notes which it authorizes belong to the first-named class; that they are to bear an interest, which may be six per cent.; that they are transferable only by endorsement; that they are not re-issuable; that they are to be paid at a day certain, to wit, within one year; that they are not to be issued of less denomination than one hundred dollars; are to be cancelled when taken up; and that the Secretary of the Treasury is expressly authorized to raise money upon them by loaning them.

These are the features and qualities of the notes to be issued, and they define and fix their character as notes to raise loans, and to be laid by as investments, and not as notes for currency, to be pushed into circulation by the power of the Government, and to add to the curse of the day by increasing the quantity of unconvertible paper money.

The execution of the act, and especially the cardinal feature of the quantum of interest, is left to the President and the Secretary of the Treasury. I presume it will be executed as a law to borrow money; and in that point of view the interest was left open, under a maximum limit, as is proper to be done in all propositions for loans. Bids may be invited by advertisement; the competition of lenders may fix the interest; capitalists may fix it by competition, though nominally left to the discretion of the President and Secretary; and at whatever rate it is thus fixed-at whatever rate a loan of gold and silver is commanded—at that rate the whole issue, made at any one time, ought to go. There should not be two rates of interest-a high one for the independent and opulent capitalist, and a low one for the helpless and necessitous public creditor.

The notes for investment bear an interest sufficient to induce capitalists to exchange gold and silver for them, and to lay them by as a productive fund. This is their distinctive feature, but not the only one; they possess other subsidiary qualities, such as transferability only by endorsement-payable at a fixed time-not re-issuable-nor of small denomination-and to be cancelled when paid. Notes of this class are, in fact, loan notes-notes to raise loans on, by selling them for hard money-either immediately by the Secretary of the Treasury, or, secondarily, by the creditor of the Government to whom they have been paid. In a word, they possess all the qualities which invite investment, and forbid and impede circulation. The act of 1812 authorized an issue of notes of this This is my opinion of the character of these description. They bore five and two-fifths per Treasury notes, and of the mode of using them. cent. interest, with an express clause that the I cannot doubt but that lenders will present Secretary of the Treasury might raise money themselves, and that the whole ten millions upon them by loan. I presume there are Sen- may be borrowed in gold and silver just as fast ators present who were members of the House as the Government needs it. That opinion is of Representatives in 1812, who gave the sanc-formed upon data-upon the great amount of tion of their approbation to the Treasury note law of that year, and who would be very unwilling to hear the epithets applied to that law which are lavished upon this bill, which is copied from it.

specie now in the country, its unproductiveness to its present holders, and the facility with which large amounts of specie were borrowed immediately after the bank suspensions and the commercial revulsions of 1819. The specie in The Treasury notes for currency are distin- the United States cannot now be less than it guished by features and qualities the reverse of was six months ago, to wit, eighty millions of those which have been mentioned. They bear dollars; for it is shown by the Custom-house little or no interest. They are payable to bear- reports, and other data, that, notwithstanding er-transferable by delivery--re-issuable-of the efforts to ship it to Europe, the imports and low denominations and frequently reimburs-exports are about even during that time; and ible at the pleasure of the Government. They are, in fact, paper money, and possess all the qualities which forbid investment, and invite to circulation. The Treasury notes of 1815 were of that character, except for the optional clause to enable the holder to fund them at the interest which commanded loans-at seven per cent.

that, taking the whole fiscal year together, the imports now exceed the exports by nearly four millions of dollars; and that near $900,000 in gold have been coined in the first three quarters of the present calendar year. The specie in the country cannot, therefore, be less than $80,000,000, and, upon the calculation of last

SEPTEMBER, 1837.]

Treasury Notes.

[SENATE.

year, is more. The whole of this vast amount | seductive resource, "so liable to abuse, and so is lying idle, barren, and unproductive to its certain of being abused." They held it inadowners-not that they are all unwilling to lend missible to recur to it in time of peace, and it, and to receive interest, but for want of bor- that it could only be thought of amidst the rowers in whom they have confidence. The exigencies and perils of war, and that after exUnited States will present that borrower, and hausting the direct and responsible alternative will bring forth the hoarded treasures which of loans and taxes. Bred in the school of these the lack of general confidence now consigns to great men, I came here at this session to oppose, sterility in private chests and in special bank at all risks, an issue of Treasury notes. I predeposits. Thus it was in 1819-20. The com- ferred a direct loan, and that for many and mercial and bank catastrophe of that period cogent reasons. There is clear authority to took place in 1819; in less than a year after- borrow in the constitution; but, to find auwards, from the collapse of business and the thority to issue these notes, we must enter the stagnation of commerce, money in the Atlantic field of constructive powers. To borrow, is to cities was abundant, idle, and seeking invest-do a responsible act; it is to incur certain acment at four or five per cent. So says Mr. countability to the constituent, and heavy cenCheves-so we can all remember. sure if it cannot be justified; to issue these The bill has been denounced as the germ of a notes, is to do an act which few consider of, new national debt. It certainly proposes the which takes but little hold of the public mind, creation of a debt. But for what purpose, and which few condemn and some encourage, beunder what circumstances? To comply with cause it increases the quantum of what is vainly the maxim, that a public debt is a public bless- called money. Loans are limited by the capaing? By no means! But to relieve the States city, at least, of one side to borrow, and of from being called upon for a reimbursement of the other to lend; the issue of these notes has any part of the twenty-seven millions of dollars no limit but the will of the makers and the which have been deposited with them; to re- supply of lamp-black and rags. The conlieve the merchants from an immediate payment tinental bills of the Revolution, and the assigof four millions; and to relieve the late de- nats of France, should furnish some instructive posit banks from an immediate press for six lessons on this head. Direct loans are always millions. This is the object. The loan of ten voluntary on the part of the lender; Treasury millions on the Treasury notes comes in place note loans may be a forced borrowing from the of the four and six millions due from merchants Government creditor-as much so as if the bayand the banks. It is because we cannot collect onet were put to his breast; for necessity has the one, that we create the other. If we had no law, and the necessitous claimant must take the ten millions from the merchants and the what is tendered, whether with or without inbanks, we should not want the Treasury notes; terest-whether ten or fifty per cent. below not being able to collect those ten millions, we par. I distrust, dislike, and would fain èsgive time to our debtors, and borrow an equiv-chew, this Treasury note resource. alent sum.

I prefer

the direct loans of 1820-'21. I could only bring myself to acquiesce in this measure when it was urged that there was not time to carry a loan through its forms; nor even then could I consent to it, until every feature of a currency operation had been eradicated from the face of the bill.

I trust I have vindicated the bill from the stigma of being a paper currency bill, and from the imputation of being the first step towards the creation of a new national debt. I hope it is fully cleared from the odium of both these imputations. I will now say a few words on the policy of issuing Treasury notes in time of Mr. WALKER said he had all along intendpeace, or even in time of war, until the ordi- ed to offer a similar amendment, and would nary resources of loans and taxes had been tried now (by leave of Mr. C.) do so. Mr. W. said and exhausted. I am no friend to the issue of he was opposed to allowing any interest whatTreasury notes of any kind. As loans, they ever on the notes to be issued, and for the folare a disguised mode of borrowing, and easy lowing reasons: First, because it appeared to to slide into a currency: as a currency, it is the him quite unnecessary to allow interest on most seductive, the most dangerous, and the them. This Government, possessed of a public most liable to abuse of all the descriptions of pa- domain of such vast extent and value, amountper money. "The stamping of paper (by Gov-ing to at least seven hundred millions of acres, ernment) is an operation so much easier than the and being out of debt, (the only Government laying of taxes, or of borrowing money, that of which such a proud circumstance could be a Government in the habit of paper emissions related,) was not under the necessity of allurwould rarely fail, in any emergency, to indulge ing credit to its notes by the offer of a trifling itself too far in the employment of that re-interest. Notes issued by such a Government source, to avoid as much as possible one less auspicious to present popularity." So said General Hamilton; and Jefferson, Madison, Macon, Randolph, and all the fathers of the republican church, concurred with him. These sagacious statesmen were shy of this facile and

would command full credit equal to gold and silver, and would freely pass as such without interest. This was his first reason against these notes bearing any interest.

His second reason was the following: If these notes are made to 'bear interest, they

SENATE.]

Treasury Notes.

[SEPTEMBER, 1837.

would, almost immediately on their issue, take | felt himself called upon most strenuously to their flight to Europe; they would be transmit- oppose. ted there, instead of specie; and, coming from a Government of such undoubted credit, they would be freely received there in payment of our debts, even without bearing any interest. Much more, therefore, would they be made welcome in Europe when they bore interest. This was his second reason for wishing to allow no interest upon them, because it would lead to their more rapid abstraction from circulation here.

Another reason he would state why he wished this issue of notes bearing an interest should not take place; it was this: these notes being remitted to Europe, (as undoubtedly they would be,) would create a debt abroad against us. Our Government would thus be made a debtor to foreign Governments and people—a thing in his view by no means desirable. Mr. W. concluded by moving that so much of the bill as relates to allowing interest upon the notes be stricken out.

Mr. WRIGHT expressed himself taken by surprise with the amendment offered by the Senator from Mississippi. From the discussion which had already taken place on this bill, it was evident that there was much difference of opinion among Senators on this subject; some differed from views of policy, others. on principle. He confessed it was his hope that the amendment just offered would not be agreed to. The object which he was anxious to attain was, to make these notes, as far as practicable, equal to gold and silver, and as acceptable to the public creditor. Now, it did not appear to him that this object could be attained unless the discretion allowed by this bill to the Secretary was retained in the bill. Mr. W. did not think that the country, at this peculiar juncture, was in a condition to bear the emission of notes without interest. The effect of such an issue would be to cause the notes to sink in

A third reason Mr. W. would now state, which, indeed, was a branch of his second reason, but to which he earnestly solicited the attention of Senators. He thought that, in consequence of the issue of these bills, bearing interest, an immediate effect would be produced upon the price of cotton, highly injurious to the interests of planters in the South. There is now (said Mr. W.) a demand for cotton, and, consequently, a rise in its price. The cause of this he was disposed to attribute to the fact that cotton was a better remittance to Europe in payment of our debts than specie; and, therefore, merchants who had to remit to Europe, instead of buying specie, bought cotton, and remitted it in the place of specie. Hence a demand for cotton in the market. He (Mr. W.) understood that the Bank of the United States itself had gone into market and bought up cotton to send to Europe, instead of specie, setting the example of a remittance so highly conducive to the interests of the cotton-value in the market; but if they bore interest, grower-having purchased (he believed) as much as three millions of dollars worth of cotton.

no risk of this kind he thought would be run. It was to be borne in mind that the interest was not fixed; it was only limited not to exceed six per cent.; in every other respect, the question was left entirely to the discretion of the Secretary.

Now, the effects of this issue, with interest, would be, that the whole ten millions issued would be sent to Europe, instead of the produce of the country; and, consequently, ten millions Mr. KING, of Georgia, must profess the high less of cotton, or other produce, would be sold. respect he entertained for the sentiments and This he (Mr. W.) considered absolutely the opinions of the Senator from South Carolina, same thing as directly taking so much money (Mr. CALHOUN,) and of the Senator from Misout of the pockets of the Southern producers, sissippi, (Mr. WALKER.) It was, therefore, because, but for this measure, so much money somewhat painful to his feelings to be obliged, would be expended with them in the purchase on the present occasion, to differ from those of their produce. If the merchants who now honorable gentlemen. There was one principle remitted cotton instead of specie could find any of finance which appeared to him incontrovertthing more convenient for them to remit-more ible: namely, that whenever there existed two easily to be procured and transmitted-they sorts of currency in circulation, of which the would naturally avail themselves of it. Now, one, from any cause, possessed any advantages these notes bearing interest were precisely this above the other, by answering any one purconvenient remittance which the merchants pose more than the other, then that would alwanted; and, therefore, instead of buying up ways command a small premium over the other. any more cotton, they will possess themselves This truth was fully evidenced at the present of these notes, and remit them. And, on the moment, when drafts which had even been proother hand, they in Europe would prefer these tested, yet, coming from the Government, comnotes to our cotton, as coming from a Govern-manded a premium little inferior to that of gold ment such as he (Mr. W.) had described, and bearing interest besides, which the cotton did not. Thus the effect would be to throw the cotton of the South out of the market, and thereby cause a fall in its price ruinous to the already ruined producers. Such a measure he, as coming from the great cotton-growing State,

and silver. In order to place these Treasury notes in the most favorable position, and to prevent their depreciation, Mr. K. thought that the discretion allowed by the bill ought to be left with the Secretary, to be used according to the emergency of circumstances. The Secretary might then attach to the notes what in