SENATE.]

Treasury Circular.

[DEC. 19, 1836.

Government but specie; and yet no regard was paid to the imperative injunctions of the law in this respect. The whole strength of the Government, be was of opinought to be put forth to compel the payment of the duties and taxes to the Government in the legal currency of the country."

resolution of 1816 was conceived and passed. The au-
thor of the resolution said at the time that the success of
the resolution depended upon the Treasury Department,
and expressed his fear that it might fail of its objection,
through the fault of that Department—a fear in which
the gentleman's misgivings were prophetic, until the
splendid and beneficent administration of General Jack-
son rose upon the political horizon, to bless and exalt his
country; to command the admiration of the world, civi-
lized and barbarian, and to realize the gentleman's own
cherished and adored vision of 1816--the constitutional
currency restored, and the bloated and pestilential car-
cases of the paper system expelled from the doors of the
Federal Treasury.

Mr. B. repeated the date of the speech from which he had read an extract; it was the 26th of April, 1816, four days before the passage of the joint resolution of that year. He now had another extract from another speech of the same gentleman, also delivered before that joint resolution was passed, and clearly indicative of his intention in bringing forward that measure, to compel, as soon as possible, the complete re-establishment of the currency of the constitution as the sole and exclusive currency of the Federal Government. It was a speech delivered in February, on the passage of the charter of the Bank of the United States, and in which the speaker took the great and true ground that the law and Treasury Department, and not the bank, ought to be the true regulator of currency. Mr. B. only read the parts which were applicable to the point in debate, namely, the legal currency of the United States, and the speedy and compulsory payment of the whole revenue in that currency. Extract from Mr. Webster's speech on the Bank of the

United States Charter Bill, February, 1816. "No nation had a better currency than the United States. There was no nation which had guarded its currency with more care; for the framers of the constitution, and those who enacted the early statutes on this subject were hard money men; they had felt, and therefore duly appreciated, the evils of a paper medium; they, there fore, sedulously guarded the currency of the United States from debasement. The legal currency of the United States was gold and silver coin; this was a subject in regard to which Congress bad run into no folly.

Mr. W. declined occupying the time of the House to prove that there was a depreciation of the paper in circulation; the legal standard of value was gold and silver; the relation of paper to it proved its state, and the rate of its depreciation. Gold and silver currency, he said, was the law of the land at home, and the law of the world abroad; there could, in the present state of the world, be no other currency. In consequence of the immense paper issues having banished specie from circulation, the Government had been obliged, in direct violation of existing statutes, to receive the amount of their taxes in something which was not recognised by law as the money of the country, and which was, in fact, greatly depreciated.

*

"As to the evils of the present state of things, Mr. W. admitted it in its fullest extent. If he was not mistaken, there were some millions in the Treasury of paper which were nearly worthless, and were now wholly useless to the Government, by which an actual loss of considerable amount must certainly be sustained by the Treasury. This was an evil which ought to be met at once, because it would grow greater by indulgence. In the end, the taxes must be paid in the legal money of the country, and the sooner that was brought about the If Congress were to pass forty statutes on the subject, he said they would not make the law more conclusive than it now was, that nothing should be received in payment of duties to the

better.

*

*

*

Now (said Mr. B.) the Senate will doubtless be willing to hear what was said by the friends of the administration in 1816, to those powerful appeals from the gentleman who so strenuously plead the cause of the laws, the constitution, and hard money. He had looked over the speeches of that day, and found the whole of their answers compressed into a short paragraph by Mr. Sharpe, of Kentucky, a gentleman of genius and ability, and whose tragical death had since attracted so much public notice and commiseration.

"In reply to the argument of Mr. Webster, that the remedy for the evil was in the power of the Secretary of the Treasury, by requiring payment of the dues to the Government in specie, Mr. S. said the gentleman had not demonstrated that there was specie enough in the country for the purposes of the payment of the revenue to the Treasury, nor that the banks have not the means ultimately to force the Government to take their paper in payments to the Treasury. The disposition was not wanting in the officer at the head of that Department to apply the remedy, if it was in his power." This was the answer! a deplorable confession of the condition to which the Federal Treasury had been reduced by receiving State bank paper in payment of the federal revenues! That policy had begun under General Hamilton, and been folowed up by other Secretaries, in violation of the laws and constitution, until nothing but inconvertible paper remained in the Treasury, and little else in the country. All their fine phrases about specie-paying banks, and paper equivalent to specie, and no paper but what the collectors and depositories of the revenue would receive as cash-all these holiday phrases had ended, as such schemes must forever end, in the eventual general use of paper, the eventual general banishment of specie, and the eventual general stoppage of banks, and universal depreciation of paper money. This was the only answer which could be given in 1816, and the only one that could be given until President Jackson's measures for restoring the constitutional currency shall have raised that currency to seventy-five millions of dollars. There is now specie enough in the country to make all revenue payments in gold and silver; and the purchasers of the public land, speculators and bank borrowers excepted, have found no difficulty in getting specie to make their payments. Land office returns prove this. The sum of $1,463,656 was paid into the land of fices, in gold and silver, from the 15th of August, when the order took effect, down to the middle of November, to which the returns were made up. This was a million and a half for three months, being at the rate of about six millions per annum. This would buy near five millions of acres of land at the present minimum price; and five millions of acres of public lands, in addition to other sources of supply, is double as much as the progressive settlement of the country has ever required. Does the demand for this small sum-a sum which does not go out of the country, but enters immediately into general cir culation through the Government payments-cannot such a demand be supplied out of the seventy-five millions in the country, especially when four and a half millions were exported to foreign parts this very year, not to return again? Of the seventy-five millions of specie in the country, the banks alone were computed by the Secre tary of the Treasury to have forty-five millions in their vaults. Can they not spare a few millions for the ser. vice of the country, especially when the measures of President Jackson's administration have increased their

supplies of the precious metals from twenty-five to fortyfive millions in three years? Mr. B. would subjoin from the Treasury report the statement of specie in all the banks in the United States, as far as obtained at the Treasury Department, first premising that the report was not complete. The number of banks in the United States and their branches is near one thousand! Their names occupy twelve columns in Bicknell's Counterfeit Detector, with nearly eighty names in each column! The Treasury report does not include them all, but the main part, and their specie is reported thus:

[SENATE.

the constitutional currency of our America: 1. Twentyfive thousand sovereigns paid weekly by one bankinghouse, for wages to working people. 2. This amount formerly paid in one pound notes. 3. No local bank issuing paper now in Lancashire.

Confining his remarks to one only of these statements -the amount of weekly payments in gold-Mr. B. said the annual amount was one million three hundred thousand sovereigns, equal to six millions and a half of dollars! This was paid by a single banking house; and are we to believe that the 1,000 banks in the United States cannot furnish the same amount for the purchase of the public lands? And are we, after attempting to make them do it, to be clamored down by a combined cry from speculators, a part of the banks, and politicians, that the country was paralyzed and desolated by the experiment, and that all further attempt must instantly cease?

Mr. B. would make a short issue with all these com

portion of the forty-five millions of specie which they report is in their vaults. If they have it, there is no difficulty in furnishing specie for the land offices; if they have it not, then their returns are deceptive-their periodical exhibitions of specie are nothing but show money; and the sooner the people find out their hollowness and emptiness, the better for the whole community.

Here is an increase of specie in their vaults, said Mr. B., of twenty millions in three years, and of five millionsplaining banks; they either have, or have not, their pro. of dollars during the very year of the Treasury order's existence-a fact which, of itself, exposes and puts to shame the whole story of their distress and ruin, and inability to aid the community on account of this order, or to furnish the specie which it requires. The fact is conclusive: it stamps the whole contrivance on the part of the banks which have engaged in it, as a shameful and fraudulent imposition upon the public. It is enough of But, (continued Mr. B.,) let the amount of specie be itself; but the custom-house books show that these banks what it may in the banks, the fact is, that there is about would in reality have increased their specie to ten mil- seventy-five millions in the country, and a goodly part of lions this year, had it not been for the sums exported to that is in the hands of the community. In October, 1833, foreign countries. The exports of specie, up to near the when the deposites were removed, the whole amount of end of November, were $4,435,815; of which $312,811 specie in the banks was returned at about twenty-five was in gold. But this is nothing, according to the Phil-millions, and that in the hands of the community was adelphia letter. It is nothing; while the one third of computed at only four millions. The community is now that sum going into our land offices, and thence through computed to have twenty-eight millions, and the annual Government payments to the people, is to create intense increase is thus reported by the Secretary of the Treasdistress, derange the exchanges deprive the banks which ury: affect to be injured by the Treasury order of all capacity to make loans to business men, and justify them in throwing borrowers into the bands of usurers, to be fined at the rate of 3 per cent. per month discount (equal to 4 per cent. interest) for the use of money.

But Mr. B. had another test to apply to the capacity of those banks to furnish the small amount of five millions of dollars per annum for the purchase of public lands. It was in the contrast exhibited by the one thousand banks of the United States with what is done by a single banker in the English county-he might almost say kingdom instead of county-for Lancashire, in point of wealth, is equal to the second rate kingdoms of Europe in the English county of Lancashire, and where there are no local paper-issuing banks or bankers. He would give the sworn words of Samuel Jones Lloyd, Esq., a banker, examined before the committee of thirty-one members of the House of Commons in 1832; a committee of which Lord Althorpe was chairman, and such men as Sir Robert Peel, Lord John Russell, Mr. Goulburn, Sir Henry Parnell, Mr. Baring, and more than two dozen scarcely their inferiors, were members, and on which such men as the Governor of the Bank of England, Mr. N. M. Rothschild, and a hundred distinguished bankers and merchants were witnesses. Mr. Lloyd, among other things, testified to the quantity of gold paid weekly by a single banking establishment, (his own,) for wages to working people in the city of Manchester, one out of the many great cities which Lancashire contains. This is the part of his evidence relating to this point:

A great amount in gold is paid at Manchester, in wages. Witness's house issues about 25,000 sovereigns weekly. That issue was formerly in one pound notes. There is no local issue in Lancashire."

Here are three statements (said Mr. B.) which ought to be sterotyped on the head and heart of every friend to

Dates.
October, 1833
1st January, 1834,
1st January, 1835,
1st January, 1836,
1st December, 1836,

Specie in active circulation,

$4,000,000

12,000,000

18,000,000

23,000,000

28,000,000

Here, then, is a sum in the hands of the community, sufficient to supply the public land demand, on account of actual settlers, four times over. The rapidity with which gold and silver has increased since the commencement of the operations to restore the constitutional currency, should banish all doubt on the practica. bility of doing it. See what has been done in four years against the powerful opposition, the systematic resistance, and the scoffings and jeerings of a great political and moneyed party. Four years more may be equally successful, if these resolutions can be defeated, and, instead of seventy-five millions, one hundred and twenty millions, and nearly forty millions of it gold, may be in the country. But nobody expects this amount to come into the country, or what is in it now to remain, unless the Federal Government can continue its onward course in the reformation of the currency. If it relapses into a paper money currency, the whole community must relapse into it also; and the result must be, what it has been heretofore, universal banishment of the precious metals, the eventual stoppage of all the State banks, and a call for the re-establishment of the Bank of the United States, as the only safe regulator of the State currencies.

The increase of banks and paper money, and the necessity of restraining the issues of these corporations, as alleged in the President's message, was next adverted to by Mr. B. He referred to the report of the Secretary of the Treasury, which showed these results:

Treasury Circular.

ation, and saved the country from a dire calamity. His Treasury order has saved it. It has stopped the issues of a host of banks, and bound up the elements of desolation in their own caverns. The raging winds are now imprisoned: Boreas, Eurus, and Auster, are now confined. The fabulous conception of the father of poets is realized, not upon the ocean of waters, but upon the ocean of paper money. The elements of destruction are tied up; and wo to those who, imitating the rash conduct of the companions of Ulysses, shall untie the fated bag, and turn loose tempests, storms, and desolating fury upon the land.

[SENATE.

Here (said Mr. B.) is a period of sixteen years, divided into portions of four years each, by the administrations of different Presidents. The first showed a heavy export of specie, and the loss of near twelve millions of dollars; the second, a loss of about a million and a half; the third, a gain of about six millions; the fourth, a gain of near forty millions, and upwards of that amount, when the produce of our native gold mines were added. These were the results; and, without embarrassing his remarks with complicated details, he would take the periods of strongest contrast-the first and last four years of the sixteen. Every person would recollect the period Mr. B. said it would be unjust, after saying so much of 1821,-22,-'23,-'24. It was the season of bank stopof the expansion of the paper currency, and the over- pages; of depreciated paper money; of stop laws, relief issues of the local banks, not to add, that the picture was laws, tender laws, loan laws, property laws; the season not intended to be applicable to the whole of these of depressed prices of property and produce, of ruin to banks; that he knew of many honorable exceptions, and debtors, and harvests to money-holders and cautious there might be many more that he did not know of. His capitalists. It was the time when a creditor who should means of information were limited to the official returns receive from his debtor ten dollars in Kentucky paper, of the deposite banks, now about ninety in number; and and gave five dollars in change, would have received while, of these, he saw many whose paper dollars in cir- nothing, and the debtor would have paid nothing. It culation, to say nothing of their deposites, were five, was the time when two bills for the same article were ten, fifteen, to one for their specie dollars in their vaults, made out in the West: one for silver, and one for paper, yet there were others where the proportion was the the latter being the former multiplied by two. Now, look other way. The Merchants' Bank, Boston, had $284,000 to the table. This disastrous season will be seen to have specie, and $256,000 in circulation; the Bank of Ameri- been the period of least importation and greatest exca, New York, had $1,490,000 in specie, and $572,000 portation of specie. Search the memory, and it will innotes out; the Manhattan, in the same place, had form you that the Bank of the United States, then just $690,000 specie, and $566,000 paper out; the Planters' recovered from its own crisis of 1819, and just strong Bank, Georgia, had $497,000 specie, $361,000 paper; enough to do mischief, was employed in eviscerating the and many others whose issues but slightly exceeded their whole interior country of its gold and silver, and collectspecie in hand. It was due to these banks, and doubt-ing it on the seaboard, where it was exported to coun. less to many more, whose returns were not accessible to him, to except them from the censure and the complaint which lies against those whose unjustifiable issues have produced the expansion and depreciation of currency which is now visible to all.

tries unafflicted with the pestilence of paper money. Look to the last period, the present time; and it will be seen that, dating from that era which should become national, and receive perennial honors in anniversary celebrations-the most glorious era of the removal of the deposites--dating from that era, and it will be seen that we have gained near forty millions of specie by importations, and that the gain exceeds forty millions, when the domestic supplies are added. The present period, then, is the season of the greatest increase of specie ever known; and such also is the national prosperity. Never before did the prosperity of any country equal the present time; never was there such exuberance of prosperi ty; and that, after making due allowance for what is fictitious, from the excess of paper and the effect of a depreciated currency. This excess and depreciation would be fatal, were it not for the seventy-five millions of specie in the country. But these threescore and fifteen Table of import and export of gold and silver coin and millions are the safety of the land. They make the peo

Adverting to President Jackson's great design of increasing the specie in the country, Mr. B. said there was an indissoluble connexion between the state of the specie in a country and its prosperity or distress. They were cause and effect, and rose and fell together. On this point he had a table to produce, which must carry conviction to every mind which was open to the influence of facts and reasons. It was a table which covered the most disastrous and the most prosperous period of our time; and which required but the application of every one's own knowledge of events to lead to just and inevitable conclusions.

bullion from 1821 to 1836.

1821

1822

$8,064,890
3,369,846

1823

5,097,896

1824

8,379,835

(1825

6,150,765

1826

6,880,960

1827

8,151,130

8,014,880

1828

1829

1830

8,155,964

2,178,773 9,014,931 5,656,340 2,614,952 1,676,258 5,748,174 4,435,815

VOL. XIII.-4

ple independent of the banks; they make them independent of panics; they prepare them for the present panic, this starveling concern, now in a course of preparation by the authors of the old one. Thanks to the wisdom, the foresight, the energy, of President Jackson, he has prepared the country for this second panic; he has fortified it, and armed it for the contest. Seventyfive millions of specie puts paper at defiance, and enables the country to stand the shock of the encounter. No longer can banks set themselves up above law and above Government. No longer can they stop payment, and force their dishonored paper upon the country. The bank that would now attempt it would instantly be put to the test of insolvency, and subjected to the law of the land as well as to the law of public opinion. Her dishonored paper would be driven in upon her, and the last hard dollar extracted from her vaults. These being the fruits of President Jackson's great measure for restoring a specie currency, who can justify the opposite course which is now proposed? a course by which specie is to be dispensed with by the Federal Government, paper to take its place, specie again to become an article of mer

SENATE.]

Treasury Circular.

chandise for exportation to foreign countries, and the disastrous scenes of 1821,-22,-'23,-24 again realized. The crisis had approached in July; paper was pouring into the Treasury, specie was departing for foreign climes; President Jackson checked the inundation of paper, and he compelled the departing specie to countermarch-to face West instead of East--to our land offices instead of foreign ports; and, in doing this, he has benefited his country, and drawn upon himself the denunciation of those who now attack him.

[DEC. 19, 1836.

attended to, and would be discussed with all the brevity and despatch which the magnitude of the subject permitted.

This design (said Mr. B) to overthrow the hard money system of the constitution, and to enthrone the paper money system in its place, is as old as the constitution itself, and has been the leading policy of a great political party, from the foundation of that party, near fifty years ago, and under all its mutations of name, down to the present hour. Gold and silver, though not without a struggle for a national bank and a national paper currency, were made the currency of the Federal Government by the convention which created this Government. So fixed and jealous was the mind of the convention on this point, that even the power of coining gold and silver, which had been left to the States under the articles of confederation, was taken away from them by the new constitution. The members of that great convention were not only fixed upon having gold and silver for the currency of the new Government, but also determined upon its uniformity, so that the same piece should be the same thing in form, name, device, and value, throughout the Union. The exclusion of paper money was as carefully enforced by the constitution as the adoption of gold and silver was sedulously guarded. The words of the constitution, and the history of the times, and especially the forty-fourth number of the Federalist, written by Mr. Madison, all prove this. The early legislation of Congress conformed to the words and spirit of the constitution, and adopted the plainest and strongest language to guard the currency which it had adopted. The two acts fundamental for the collection of the two great branches of the revenue--lands and customs, that of 1789 for the latter, and 1800 for the former-were express that gold and silver coin only should be received for the customs, and specie and evidences of the public debt only for the public lands. These two great acts, being faithful interpreters of the constitution, have never been openly attacked in either House of Congress. In all the changes which subsequent legislation has made in the laws, of which the hard money enactments are part, these clauses have been retained in the same, or equivalent expressions; so that a hard money currency still remains the constitutional and the statutory currency of the Federal Government: Temporary enactments in favor of Treasury notes and United States Bank notes have ceased; and the joint resolution of 1816 neither does nor can repeal a law. Resolutions, whether joint or several, are not the mode of

Mr. B. would conclude his observations on this part of the subject, with calling the attention of the Senate to the public imputation of wicked motives, attributed to President Jackson in the Kentucky speech and Philadelphia letter, from which extracts had been read. Christian charity forbids, and gentlemanly breeding avoids, the gratuitous imputation of malignant motives. There are cases in which delicacy recoils from a public and insulting reference from one man to another. But where was Christian charity, gentlemanly breeding, or delicacy of feeling, when such words as these were used in reference to President Jackson? "I have little doubt that the specie order was the revenge of the President upon Congress for passing the distribution law." Here, said Mr. B., is not only a personal outrage to the President, but an attempt to excite the resentment of Congress against him, and to mark him for the vengeance of all who are disposed to pervert the deposite act into a distribution law; and all this, too, upon the gratuitous imputation of a wicked motive for a measure just, wise, legal, and indispensably necessary within itself! Motives, continued Mr. B., are within the cognizance of the Searcher of all hearts. He can see them as they are; the mortal eye may mistake them. It is good, then, for frail humanity to be slow in charging a bad molive for even a questionable action; he had, therefore refrained from all reference to motives for the design of those coincident and twin productions from which he had made quotations-the Kentucky speech and the Philadelphia letter! He had not said that they were the revenge of disappointed ambition for a lost presidential chair, nor of disappointed avarice for a lost national bank charter. He had not even intimated that the marble palace in Chesnut street, and the shady groves of Ashland, might be conscious to the embraces from which this rescinding resolution bas sprung; or that the imperative requisition upon this Congress to command the instant repeal of the Treasury order was founded in any scheme to obtain, from the representatives of the people, a triumph over that man to whom the people themselves have granted so many tri-national legislation. They are only declaratory of facts umphs over the same pursuers. For himself, he had omitted all such intimations, and should drop all further notice of them now. Leaving, then, the actors and accessories to this proceeding, its origin and their motives, to the phasis under which they themselves have exhibited it, he should join President Jackson in the confident belief expressed by him in the concluding paragraph of that part of his message which relates to the issuance of the Treasury order, "that his country would find, in the motives which had induced it, and in the happy consequences which have ensued, much to commend, and nothing to condemn."

Mr. B. said he had stated in the commencement of his speech that two great objects were to be accomplished by this rescinding resolution: first, the condemnation of President Jackson for a violation of the laws and constitution, and the destruction of the public prosperity; and, secondly, the overthrow of the constitutional currency, and the imposition of the paper money of all the State Governments upon the Federal Government. He had spoken to the first of these objects, and, as he hoped, successfully vindicated the President from all the charges on which it rested; the second object was now to be

or principles, or expressive of the opinions and purposes of the House or Houses from which they emanate. The joint resolution differs from the single in nothing but in being the declaration, the opinion, or the purpose, of both Houses instead of one. This being the case, and the two fundamen'al enactments of 1789 and 1800 being still in force, as retained in subsequent alterations of the laws to which they belong, the question is, how comes it they have been treated as dead letters on the statute book, and paper moncy received in place of the hard money which they imperatively require?

The answer for this question (said Mr. B.) carries us up to the time of General Hamilton, to the first year of his administration of the Treasury Department, and to the foundation of the political school of which he was the head. As the Secretary of the Treasury, it became his duty to carry into effect the act of 1789, for the col lection of the custom-house duties in gold and silver coin only. Instead of carrying the law into effect, he nullified it by construction. He interpreted "gold and silver coin only" to be the notes of specie-paying banks; and a deposite of bank notes, as cash, to be a deposite of specie. This was his construction, and the order which he