in circulation. The amount of United States Bank notes in circulation, though pushed up a few times to twenty odd millions, were generally below twenty; but take that for the average, and add the silver, which was computed in 1832, by the Senator from Massachusetts, [Mr. WEBSTER,] in the debate on the renewal of the bank charter, at from twenty to twenty-two millions; put these two sums together, and you have about forty millions, or little more than half the gold and silver now in the country. Here, again, the result is satisfactory, and shows that we have more than enough for this purpose. But there is still a third way to arrive at the same result. It is by looking to the actual amount that will be required for the great sources of Government demand-lands, customs, and Post Office. The lands, whether sales are restricted to settlers, or limited to hard-money payments, which would itself be a restriction of sales to settlers, it is certain not more than five or six millions of dollars' worth would be sold; and, as the Government would not eat these five or six millions, but pay them back as fast as received, it would follow that a part only of it would be sufficient to make the whole payment. Then, as to the customs: they may amount to about twenty millions, but would, in reality, require but little specie; for the payments through the customs are seldom made by counting money, but by a transfer of credit on the books of a bank. An order to pay the customs in hard money would make very little difference in the payments as now made. This, every merchant and business man fully understands. Next, as to the Post Office; here the receipts are upwards of four millions per annum; but the Postmaster General does not eat the money, but pays it out immediately, and sends it back into the mass of circulation, in payment for services rendered to the Department by contractors, agents, deputy postmasters, &c., who immediately disburse it among the community. Finally, Mr. B. had positive proof that, so far as the lands were concerned, and that was the main point, there was specie enough to answer the demand. would read a letter from the chief clerk in a land office which is selling more land than any office in the Union, and which would be conclusive on the wisdom, justice, and necessity, of the Treasury circular. came to him yesterday, unsolicited by him, and was delivered through the hands of the Senator from Michigan who sits farthest on the other side of the chamber, [Mr. LYON,] and who, as well as his colleague, [Mr. NORVELL,] he rejoiced to see in the seats to which they had been so long entitled, and from which they had been so long deforced. He rejoiced that Michigan was at last released from the position of a stranger at the gate, cooling her heels at the door of the Capitol, while she had a right to a place within it. As a Missourian, he could feel keenly for her; for it was the fortune of Missouri to have to wait, and cool her heels, in the same manner, for a whole winter, before she could be admitted. Mr. B. then read the following extract from the letter: [EXTRACT.] He It "I am chief clerk in the land office at Kalamazoo, where land, during the year 1836, has been sold to the amount of $2,050,000, being one tenth of the aggregate sales of all the land offices in the United States-sixtyfour, I believe, in number. The great business done at this office has afforded signal opportunities for observation as to the expediency and consequences of the Treasury circular. We are all convinced of the wisdom of the measure, and it is but just that we should endeavor to sustain its propriety by our testimony. "The public lands were fast falling into the hands of speculating bankers. We have seen a president of one of the banks in Massachusetts visit Ka'amazoo with blank notes in the sheet; and we have seen that same president VOL. XIII.-38 [SENATE. lay his monopolizing grasp on miles of the public domain, for which those blanks, filled up at his leisure, were taken as equivalent. This instance was merely e pluribus. This wholesale speculation has been estop. ped by the specie circular. The land is sought after with the same avidity since as before the issue of that order, but by a very different set of purchasers. The actual cultivators of the soil are now selecting farms, which, so soon as entered, they begin to clear, fence, and improve. I am writing this on the 10th of January, 1837; and, at this very time, the office is thronged with hardhanded yeomen from the far East, who have come to settle amongst us in the far West. Nine tenths of the lots now entered are for those who intend to work them; and the 'accustomed' faces of land speculators, which continually haunted the office, have vanished. It is not my business, when so many sagacious statesmen are cogitating it, to offer any opinion as to the constitutionality or unconstitutionality of the specie circular, but I merely venture to set forth its consequences, as daily exhibited to our eyes. "REGISTER'S OFFICE, Kalamazoo, Mich., Jan. 10, 1837. Mr. B. said this letter had been written nearly a month after the order had gone into effect for the total exclusion of paper money from the land offices. It annihila ted all the speeches against that order, made and to be made on this floor. It vindicated the Treasury order in all its practical bearings, and under all its practical as pects. He wished to have had answers from all the land offices on these points; and the Senate, at his motion, had instructed the Committee on Public Lands to address to them the proper interrogatories. The committee chose to report a bili without seeking the information. They did more; they chose to send to a committee, of which he was a member, the same motion for interrogatories, after they had reported. This might look like a good joke. It was like saying, "We will report the bill, and pass it, and he may carry on the examinations afterwards;" a sort of of ex post facto or post mortem examination not common in legislation. Very well, said Mr. B. The examinations will go on; and although the proofs will not be here in time to prevent the passage of this bill, yet they may come in time to convince the country that it ought never to have been passed! Mr. B. returned to the amount of specie in the country, and its sufficiency to meet the collections of the Federal Government. He said it was more than sufficient, far Put all the collections together, lands, customs, and Post Office, and the whole will not amount to one half of the specie in the country. Where, then, is the pretext for saying there is not specie enough for the receipts and expenditures of the Federal Government? The fact is that this Government will not require enough to exercise a sufficient influence over the moneyed system of the Union. Auxiliary means, as the suppression of notes under twenty dollars through the deposite banks, a supervision over the amount of their specie, and prompt settlements with all the banks whose notes they take, will have to be resorted to. The federal collections alone will not be sufficient; and in this the Senator from Kentucky [Mr. CLAY] was perfectly right, a few days ago, when he took this very point as an ob jection to the ability of the Federal Government to regulate the currency through its collections of revenue. He was right in the objection, and Mr. Gallatin, who made it before him, was right in the same objection! Specie collections alone will not be sufficient; but they will do a great deal towards it, and, with the aid of auxili ary measures, will accomplish it. Let it not be forgotten that the whole skill and the whole power of the Bank of the United States, in her boasted services of more. SENATE.] Treasury Circular. regulating the local banks, were limited to two simple and obvious measures: first, to receive the notes of no bank in payment of federal dues, unless it was situated in the same town or city which contained her branch; second, to return the notes of all the local banks which she received, for immediate settlement and payment. This is what the Bank of the United States did. Let us also exclude local paper, require prompt settlements between our deposite banks and other banks, enforce the provision in the deposite act, which is a supervision over the amount of specie in the deposite banks, and suppress notes under twenty dollars. Mr. B. said now was the time for the Government to act as the Senator from Massachusetts [Mr. WEBSTER] urged it to act in 1816. This was his language at that time: "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 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, 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 country," [JAN. 27, 1837. the federal constitution from the control which this bill, and especially the proviso to the second section, gives to the banking institutions of the several States over it; a control which will enable them to expel that currency from the country, and to enthrone their own in its place. Mr. B. said that this bill, though in its terms a general measure, and professing to act only on coming events, yet was, in reality, a measure rescinding the Treasury order of July last; and, as such, was greeted and saluted by the friends of the recision on this floor. They openly celebrate the advent of the bill as the triumph of their movement, and announce its passage as a welcome victory. This may be. They may carry the bill, but they cannot carry the argument. They may rescind the or der, but they cannot verify Mr. Biddle's prediction of the distress it was to create, nor invalidate President Jackson's statement of the good it had produced. In the month of November, Mr. Bidd'e predicted a world of wo-all to take place by the time that Congress met, and all to result from the Treasury order, and the manner of executing the deposite act-"intense pecuniary distress; derangement of exchanges; loss of confidence; destruction of the public prosperity; scarcity of money; fall of prices; ruin of the currency;" and he averred that the instant repeal of the Treasury order, under the command of Congress, if the Secretary would not do it voluntarily, would restore confidence in twenty-four hours, and put an end to all this mass of wo in twentyfour days. On the other hand, the President informed us, in his annual message, that the same Treasury order had produced many salutary consequences. He says it has checked the career of the Western banks, and given Mr. B. was free to declare that he concurred fully in the sentiments just quoted, that forty statutes could not make the law in favor of specie payments stronger than it was, and that the whole power of the Government ought to be exerted, to compel the collection of the revenues in the constitutional currency. The commencement of operations by the three new branch mints was the latest moment, in his opinion, at which universal hard-them additional strength to meet approaching difficul money payments to and from the Federal Government ought to be delayed. He concurred in the sentiments quoted, and would now quote other sentiments delivered by the same gentleman, at the same time, and, without fully concurring in them, he would claim the advantage of them on this occasion, when the whole tenor of the bill before us, and especially the proviso, goes to change this Federal Government from a hard-money to a papermoney Government, and to surrender the federal Treasury to the general reception of State and local bank notes. "Congress can alone coin money; Congress can alone fix the value of foreign coins. No State can coin money; no State can fix the value of foreign coins; no State, not even Congress itself, can make any thing a tender but gold and silver in the payment of debts; no State can emit bills of credit. The exclusive power of regulating the metallic currency of the country would seem to imply, or, more properly, to include, as part of itself, a power to decide how far that currency should be exclusive, how far any substitute should interfere with it, and what that substitute should be. rality and extent of the power granted to Congress, and the clear and well-defined prohibitions on the States, leave little doubt of an intent to rescue the whole sub. ject of currency from the hands of local legislation, and to confer it on the General Government. But, notwithstanding this apparent purpose in the constitution, the truth is that the currency of the country is now, to a very great extent, practically and effectually, under the control of the several State Governments; if it be not more correct to say that it is under the control of the banking institutions created by the States; for the States seem first to have taken possession of the power, and then to have delegated it. Whether the States can constitutionally exercise this power, or delegate it to others, is a point which I do not intend, at present, either to concede or to argue. It is much to be hoped that no controversy on the point may ever become necessary." Mr. B. quoted these sentiments for the purpose of invoking the aid of their author in rescuing the currency of The gene ties; that it has cut off the means of speculation in the The this floor, who are backed by no memorials from home. The letter from the clerk in the land office at Kalamazoo covers the whole ground, and proves the wisdom, the beneficence, and the necessity, of that order. diminution of the sales after the issuing of the order is a further proof to the same effect. Before the sales, that is to say, in the months of May and June, two months in which the amount of sales should have been least, they amounted to the sum of six millions and a quarter; the months of October and November, the two months in which the sales should have been greatest, the amount was three millions one hundred thousand. The month of December, though the returns are not complete, shows a still further decline; and if gentlemen had patience to wait for the returns of January, the first month in which the order had full effect, they would, no doubl, find it bringing down the sales to a moderate amount, and effecting a diminution of income, from that source of revenue, to as small a degree as could be desired, and in a manner the most simple, the most regular, the most effectual, and the most satisfactory that can be devised by the wit of man. Every good consequence stated by the President had resulted from the operation of the order; and the evidence of this was too public and notorious to require illustration, or to admit of enumeration. But there was one point of his statement which was an exception to this remark, and on which it would be profitable to go into some detail; for it concerned not only the lands, but the far more important subject of the currency itself; he alluded to that part of the President's message in which he stated that this order had checked the career of the Western banks, and compelled them to strengthen themselves against the revulsions consequent upon every expansion of the bank issues. This was true to a degree of which no one had a conception but those who had access to a knowledge of the condition of all the banks, and who availed themselves of that right of access to examine into the condition of these banks, and to compare that condition with the approved principles of what is considered safe and sound banking. [SENATE. It might largest, and amongst the oldest in the world. July, July, Specie. $4,984,210 Mr. B. said such was the condition of some of the Western deposite banks in July last, and such their conMr. B. said that, among those things which were con dition in November; very far below the Bank of Engsidered as settled in the science and mystery of banking, land standard at both periods, but greatly improved by there was one principle which required the immediate the operation of the specie order, and doubtless much means of the bank to bear a certain proportion to its more improved by its continued operation to this time. immediate liabilities; below which proportion it was not There were many others of these banks also falling far safe for the bank to descend. The immediate means of below the Bank of England standard in July and Nothe bank are its specie on hand; its immediate liabilities vember, and still below it. Mr. B. was ready to admit, are the circulation and the deposites; and the propor what every business man must understand, that all these tion which these ought to bear to each other has been banks have a list of debts, and of bills of exchange, fallfixed, at the Bank of England, after an experience of ing due from day to day, and amounting in the aggreone hundred and forty years, at the one third. Mr. B. gate to more than all their liabilities; but he must be deemed the verification of this principle so material that permitted to remark, that the Bank of England also has it deserved to be proved as well as stated. He would her list of debtors, and that nearly the whole of these therefore produce the sworn testimony on this point debtors are in the city of London, within thirty minutes' taken before Lord Althorp's committee in 1832, and run of the bank; that she is situated in the moneyed should confine himself to the evidence of the governor metropolis of the universe; that she is supported by the of the bank and one of its directors. The testimony of richest and most numerous body of merchants upon the Mr. Horsley Palmer, the governor of the bank, is this: earth, and backed by the whole power of the British "The average proportion, as already observed, of coin Government, which stands her security for seventy miland bullion which the bank thinks it prudent to keep on lions of dollars, and lends her exchequer bills to the band, is at the rate of a third of the total amount of all amount of millions, and increases their interest to faciliher liabilities, including deposites as well as issues." tate their sale when necessary; and that, with all these Mr. George Ward Noeman, a director of the bank, resources, such as no bank in our America can pretend states the same thing in a different form of words. He to, she yet deems it necessary to have always on hand, says: "For a full state of the circulation and the de-in coin and bullion, the one third of the amount of her posites, say twenty-one millions of notes and six millions of deposites, making in the whole twenty-seven millions of liabilities, the proper sum in coin and bullion for the bank to retain is nine millions." Thus, the average proportion of one third between the specie on hand and the circulation and deposites, must be considered as an established principle at that bank, which is quite the circulation and deposites. What, then, must be thought of the condition of some of the banks referred to, and others which might be referred to, in July last? Instead of one third specie in hand to meet their immediate lia. bilities, the actual proportion in hand was the one twentieth, the one thirtieth, the one fortieth, and the one fiftieth! Mr. B. said it was beyond all human doubt, that if the Treasury order had not been issued, that the Western deposite banks would have exploded in the course of the last fall, and that we should now have been sitting here amidst the wrecks of the paper system. That order prevented this catastrophe; and it is precisely because it did prevent it, that it has excited the rage of Mr. Biddle, and of the whole political party imbodied under the oriflamme of the denationalized national bank. It balked their present hopes of reascension to power through the ruin of the finances; and in their rage for this disappointment, they denounce the President for a violation of the laws and constitution; they charge him with ruining the country; they attempt a new panic and pressure; and they call upon Congress to repeal the order. [JAN. 27, 1837. to ruin the finances of the Federal Government! Certainly to compel the administrations of General Jackson and Mr. Van Buren to repeat the fatal error of Mr. Mad. ison's administration, that of undertaking to make a national currency out of local bank notes. Warned by that fatal error of those who put down the first national bank, those who put down the second one determined to avoid it, and for that purpose to re-establish for the Federal Government the currency of the constitution. When this design was announced, our opponents treated it with derision. They said it could not be done; that a gold and silver currency could not be revived. They ridiculed the attempt; but what is the answer which four years has given to their ridicule? It is the actual revival of the gold currency, of which near twenty milMr. B. said it was curious, and at the same time in-lions of dollars are now in the country; it is in the actual structive, to observe the change which had come over the whole United States Bank party in speaking of the local banks, and especially of the deposite banks. At the veto session of 1832, they were considered unfit to be trusted with the custody of the public moneys, or to furnish any currency; at the panic session of 1833-34, they were stigmatized with every opprobrious epithet, and all the public money was given up as lost that ever entered their vaults; now, at the expunging session, all this is changed, and nothing so kind and coaxing as the manner in which these former scorners now speak of the late despised pets. They absolutely seem to love them! and this great change, now observable to all on this floor, seems to have taken its start in that famous Philadelphia letter, of which repeated mention has so frequently been made. This is the part of the letter which gives the signal for this new change: increase of our specie from twenty or twenty-two mil lions, as computed by the President of the Bank of the United States himself when the charter for that institution was applied for in 1832, to near eighty millions, which it is now known to be. The experiment of getting the gold and silver into the country has succeeded; ridicule has failed of its office. The gold and silver is here, enough, and more than enough, to make all the payments to and from the Federal Government. Ridi. cule will no longer answer; stronger measures must be resorted to, and legislation has become indispensable to the overthrow of the constitutional currency. To prevent the specie in the country from being used, is now the design; and, to accomplish that purpose, it becomes necessary to force the local paper of the States upon the Federal Government. The passage of this bill is indis pensable to the success of Mr. Biddle's design, disclosed in the letter from which an extract had been read. He wants the question made between a national currency of United States Bank notes, and a national currency of local bank notes. "The Bank of the United States has not ceased to exist more than seven months, and already the whole currency and exchanges are running into inextricable confusion, and the industry of the country is burdened He knows that between these two with extravagant charges on all the commercial inter- the United States Bank notes will prevail; that they will course of the Union. And now, when these banks have conquer, that they will whip, yes, whip like a dog, been created by the Executive, and urged into these your national currency of local bank notes. We, on the excesses, instead of gentle and gradual remedies, a other hand, want the question made between paper and fierce crusade is raised against them, the funds are gold, knowing that the country will sustain gold against harshly and suddenly taken from them, and they are paper; and these are the questions which are now to be forced to extraordinary means of defence against the decided by this bill. This bill will make the question in very power which brought them into being. They re- the form wished by the friends of the Bank of the ceived, and were expected to receive, in payment for United States, and will insure them the triumph to the Government, the notes of each other and the notes which they look for the re-establishment of the Bank of of other banks, and the facility with which they did so the United States and restoration of its political friends was a ground of special commendation by the Governto power. Mr. B. appealed to gentlemen on the other ment; and now that Government has let loose upon them side of the House to rise above the character of partisans, a demand for specie to the whole amount of these notes. and to act as patriots on this occasion. He and they I go further. There is an outcry abroad, raised by fac- had always agreed in condemning local bank notes as a tion, and echoed by folly, against the banks of the Uni-national currency; and why not agree together in their ted States. Until it was disturbed by the Government, the banking system of the United States was at least as good as that of any other commercial country. What was desired for its perfection was precisely what I have so long striven to accomplish-to widen the metallic basis of the currency by a greater infusion of coin into the smaller channels of circulation. This was in a gradual and judicious train of accomplishment. But this miserable foolery about an exclusively metallic currency is quite as absurd as to discard the steamboats, and go back to poling up the Mississippi.” Mr. B. said that the views and sentiments disclosed in this extract were of great moment, and ought to be carefully considered by all whose duty it is, here or else. where, to legislate, or to act, upon the subject of the currency. The design is here disclosed to stir up the local banks against the Federal Government, to make alliance with them, and to force the Government to re ceive their paper in payment of all federal dues. This is the design disclosed; and with what mo ive? Certainly He beseeched them votes now in rejecting them. He knew that, as a party, as there then was to compel the restoration of the depos. ites. Mr. B. said the objection to the inadequacy of the specie supplies in the deposite banks was no new objection with him. He had made it at the last session, and, with the leave of the Senate, would refer to some passages on this point in the speech which he then made in opposition to the deposite bill-that bill against which it was his pride to speak and to vote, though he spoke and voted in a small minority of some half dozen Senators. The following are the passages referred to: "The other part of the deposite bill proper, to which I object, is the want of a clause requiring the deposite banks to keep on hand a certain amount of specie, bearing some reasonable, average, fixed proportion to their immediate liabilities. The bill was drawn with such a clause; but it was the will of the majority to strike it out, and to substitute the discretion of the Secretary of the Treasury for the time being for the proposed legal enactment. The proportion of specie on hand, in the several deposite banks, is now to be whatever may be satisfactory to the officer at the head of the Treasury. To this I object; because, without reference to the opinions of any Secretary, I hold it to be a case in which the inflexible rule of law, and not the variable dictate of individual discretion, should prevail. It concerns the currency of the country, and law should govern the currency. It is a case in which discretion is subordinate to systems, as well as to personal temperament. A hard-money Secretary would require a heavy proportion of specie; a paper-system Secretary would be content with a very light proportion. Besides, some of the deposite barks need regulation upon this point at present. Some of them are far in arrear of what would be deemed a safe proportion of specie, and threatening the Treasury with another edition of unavailable funds.' As a whole, they are far behind the point of specie responsibility at which the Bank of the United States stood at the time of the removal of the deposites, though some are up to that mark, or above it; but, as a whole, (and it is in that point of view that the public is concerned,) they are far behind it. On the 1st day of October, 1833, when the deposites were removed, the immediate liabilities of the United States Bank, in public and private deposites, and in its circulation, was $37,105,465, and the specie on hand was $10,663,441; being at the rate of more than one to four. "At the close of the last month, which is the date of the latest returns of the deposite banks, their immediate liabilities in the same items-public and private deposites, and circulation was $84,401,880, and the gold and silver on hand was $10,202,245; being at the rate of less than one to eight. This certainly is a progress in the wrong direction for us, who have undertaken to strengthen the gold and silver foundations of the currency. It is travelling on the wrong end of the road, and that rather fast. The rejection from the bill of the clause which was intended to bold the deposite banks up to the possession of a certain fixed proportion of specie looks like an abandonment of our hard-money professions, and a relapsing tendency into the wide and bottomless ocean of paper. It is certainly a great decline from the doctrines of President Jackson's message of December last-those doctrines which were then hailed with approbation by an immense majority of the American people, and received as landmarks in the whole democratic camp, and in which the President expressly treated the regulation of the deposites as the regulation of the cur. rency, and looked to the increased circulation of gold and silver, and the suppression of all bank notes under twenty dollars, as two of the great results which were to flow from the connexion of the federal Treasury with the local banks, and the consequent influence of the Government over the currency. Hear his words: [SENATE. "Connected with the condition of the finances and the flourishing state of the country in all its branches of industry, it is pleasing to witness the advantages which have already been derived from the recent laws regulalating the value of the gold coinage. These advantages will be more apparent in the course of the next year, when the branch mints authorized to be established in North Carolina, Georgia, and Louisiana, shall have gone into operation. Aided, as it is hoped they will be, by further reforms in the banking systems of the States, and by judicious regulations on the part of Congress, in relation to the custody of the public moneys, it may be confidently anticipated that the use of gold and silver as a circulating medium will become general in the ordinary transactions connected with the labor of the country. The great desideratum in modern times is an efficient check upon the power of the banks, preventing that excessive issue of paper whence arise those fluctuations in the standard of value which render uncertain the rewards of labor.' 'It has been seen that, with * out the agency of a great moneyed monopoly, the reve nue can be collected and conveniently and safely applied to all the purposes of the public expenditure. It is also ascertained that instead of being necessarily made to promote the evils of an unchecked paper system, the management of the revenue can be made auxiliary to the reform which the Legislatures of several of the States have already commenced in regard to the suppression of small bills and which has only to be fostered by proper regulations on the part of Congress to secure a practical return, to the extent required for the security of the currency, to the constitutional medium.' "The collection and custody being a source of credit to them, will increase the security which the States provide for a faithful execution of their trusts, by multiply. ing the scrutinies to which their operations and accounts will be subjected. Thus disposed, as well from interest as the obligations of their charters, it cannot be doubted that such conditions as Congress may see fit to adopt re specting the deposites in these institutions, with a view to the gradual disuse of the small bills, will be cheerfully complied with; and that we shall soon gain, in place of the Bank of the United States, a practical reform of the whole paper sy stem of the country. If by this policy we can ultimately witness the suppression of all bank bills below twenty dollars, it is apparent that gold and silver will take their place, and become the principal circulating medium in the common business of the country. The attainment of such a result will form an era in the history of our country, which will be dwelt upon with delight by every true friend of its liberty and independ. ence. It will lighten the great fax which our paper system has so long collected from the earnings of labor, and do more to revive and perpetuate those habits of economy and simplicity, which are so congenial to the character of republicans, than all the legislation which has yet been attempted.' "The rejection of the clause referred to, continued Mr. B., has lost the advantages so confidently looked to by the President in this wise and patriotic message. Nothing is done in this deposite bill to fulfil his enlight. ened and noble views, nothing to enlarge and extend the specie basis; nothing to promote the diffusion of gold; nothing to effect the suppression of notes under twenty dollars; nothing to check the paper system; nothing to regulate the currency; on the contrary, we have a virtual abandonment of all control over the moneyed system, and a virtual surrender of the constitutional power and the constitutional duty of Congress over the currency to the discretion of the Secretary of the Treasury, and the private and interested arrangements of the deposite banks." Mr. B. said these were his sentiments delivered eight |