SENATE.] Sub-Treasury Bill. [SEPTEMBER, 1837. suspicion of an undue leaning in favor of that institution as the honorable gentleman. If I mistake not, it was the Senator from South Carolina who introduced and supported the bill for the charter of the United States Bank or by the ordinary circulation, will give them | tion that places me, at least, as much above more trouble than all their other pecuniary transactions, and, being different to the demands made upon them for State taxes, will give to the Federal Government an alien character of tyranny and oppression. He could not conceive, he said, of a measure better cal-in 1816; it was he, also, who brought in a bill culated to give to the Government of the Union the appearance of a foreign Government, and alienate the affections of the people from it, than the measure proposed. Mr. RIVES rose, and said he would ask leave of the Senate to say a few words which he meant to say yesterday, but was prevented by the speaking of another Senator, (Mr. BENTON.) Mr. R. said he rose to protest against the manner in which this question had been, and continued to be, treated by the Senator from South Carolina. That gentleman argued as if there were some proposition before the Senate to reestablish the Bank of the United States, or to confer upon the existing Pennsylvania Bank of the United States some special and important privilege. But, sir, is there any question of that sort really before the Senate? The question presented by the proposition on your table is, whether the notes of banks generally, when they shall have resumed specie payments, ought not, under certain limitations, to be received in payment of the public dues, as they heretofore have been from the origin of the Government down to the present time, or whether they shall be altogether excluded in future, and nothing be received in payment of the public revenue but gold and silver? The question, then, is one which involves alike the whole eight hundred State banks in the Union, constituting that system of credit under which, whatever may have been its occasional excesses, the country has heretofore attained an unparalleled height of prosperity, and has no special reference whatever to the Bank of the United States. It does seem to me, Mr. President, that this perpetual and gratuitous introduction of the Bank of the United States into this debate, with which it has no connection, as if to alarm the imaginations of grave Senators, is but a poor evidence of the intrinsic strength of the gentleman's cause. Much has been said of argument ad captandum in the course of this discussion. I have heard none that can compare with this solemn stalking of the ghost of the Bank of the United States through this hall to "frighten Senators from their propriety." I am as much opposed to that institution as the gentleman or any one else is or can be. I think I may say I have given some proofs of it. The gentleman himeslf acquits me of any design to favor the interest of that institution, while he says such is the necessary consequence of my proposition. The suggestion is advanced for effect, and then retracted in form. What ever be the new-born zeal of the Senator from South Carolina against the Bank of the United States, I flatter myself that I stand in a posi in 1834, to extend the charter of that institu- While I am up, (said Mr. R.,) I beg leave to say a word in answer to an observation of the Senator from Missouri, (Mr. BENTON.) That gentleman said, if I wished to understand the true character of my proposition, I had only to look over my right shoulder, and see who were likely to support it. [Mr. CLAY, Mr. WEBSTER, and other gentlemen of the Opposition, sit in that direction from Mr. RIVES.] I thank God, Mr. President, that I have a higher rule of action on this floor than any consideration of who is, or who is not, to vote with me. I look at the merits of the proposition itself; and if it be for the good of the country, I go for it, whoever may vote with me or against me. If the Senator knows that I am to derive support to my proposition from gentlemen over my right shoulder, he knows more than I do. I have had no communication with any of those gentlemen, which authorizes me to expect their support. Many of them voted, during the last session, for the same proposition, in common with five-sixths of the friends of the adminis tration, and they may do so again. I occupy the same position now that I did then. If other gentlemen have seen cause to change their views, I have not. On the contrary, the present condition of the country furnishes, in my estimation, new motives to bring forward the proposition, which then received nearly the unanimous sanction of both Houses of Con gress. It is impossible that the banking insti SEPTEMBER, 1837.] Sub-Treasury Bill. [SENATE. tutions of the country, on whose speedy return | I now, as then, think they were unnecessarily to specie payment the soundness of the currency and illegally removed, and that it was one of and every other interest of society now depend, the accelerating causes of the catastrophe which can rise up from their prostrate condition, he so much laments. New zeal! A new conwithout some measure of this sort. The peo- vert! I never made stronger declarations in ple wish to see an end of this paper money, my life of the banking system than at that (properly so called when inconvertible into time. I said the whole system was hostile to specie,) which the gentleman from Missouri so liberty. I was then in favor of the Bank of much deprecated. No one has a stronger sense the United States; but not so as to qualify my of its evils and dangers than I have. But we position relative to banking. I went farther, shall in vain attempt to get rid of it, in my and told the Senator and others, your system humble judgment, without some measure of the will fail if you retain a connection with the character I have proposed. I am unwilling to banks; there must be a Bank of the United go back to my constituents without having first States. With me the question of bank or no done something for the relief of the people, bank had reference to the whole banking as well as the Government. I am unwilling system. Has he any foundation on which he that the American people shall witness an ad- can now call me a convert? No, sir, I have journment of this body without the passage seen, not for four, but fourteen years, that the of some measure of a healing and salutary char- issue must be that the banks will be the Govacter, in relation to the currency of the country. ernment, or the Government the banks; that, When the sub-Treasury scheme was intro- by the constant tendency to increase the issues duced into the House of Representatives in of paper, the banks or the Government must 1834, out of the meagre number of 33 votes it be prostrated. I hardly expected to see that then received, there was but one friend of the issue in my day; but come I knew and declared administration who voted in favor of it. It it would, sooner or later; and when the queswas then denounced, under the auspices and in tion should arise, it would be the greatest of the name of the administration, as revolution- modern times. I would lay a hundred to one, ary, disorganizing, anti-republican, and tending if the Senator's bill should pass, the United to enlarge Executive power, and place in its States Bank will monopolize its benefits. Of hands the means of corruption. Believing his remarks I will only say that they were now, as I did then, that such is the true char- unworthy of him, and the State from which he acter and tendency of the measure, I adhere to comes. the ground taken by the republican party in 1834; and I will use every weapon which reason and agument can furnish in opposition to it. I, for one, will not be afraid to act with any individual, or any party, in resisting a scheme which, however it may be viewed by others, I firmly believe to be fraught with danger to the best interests of my country; and in doing so, so far from abandoning, I but maintain the more closely, my republican faith. Mr. CALHOUN said this attack of the Senator is very extraordinary. Yesterday, in the course of my argument, I endeavored to show that his proposition would inure to the benefit of the Pennsylvania Bank of the United States, and I stated my reasons. I believed he did not contemplate it in that light, but I did; and I said to the Senator, you hold out a powerful temptation to the banks. I stated that the strong banks, and they alone, would take the benefit of this measure, with the United States Bank at their head. Their predominating influence over every other bank was inevitable; and if they got it, they would hold it in perpetuo. They would make the necessary sacrifice in the resumption of specie payments, and this bill would serve as the motive; and, if Mr. Biddle tried, he would get it. And now, twenty-four hours afterwards, I am surprised at this storm of passion and personal attack, when I acquitted the gentleman of all improper intentions. The gentleman says that in 1834 I was in favor of restoring the deposits. I was so; and Mr. BENTON. The Senator from Virginia (Mr. RIVES) repeats what has been often told, and answered, that the friends of the administration voted in a body against Mr. GORDON'S sub-Treasury proposition in 1834. They did so, and for a reason both notorious and good at that time, but not good now. The administration could not cut loose from the local banks then; they were allies against the Bank of the United States, and, as such, had to be saved. They were the "Half-way House" in getting from the National bank to the sub-Treasury; and, as such, had to be maintained. They are no longer allies, or a half-way station, but foes and deserters. They have cut loose from the government, and are weight in favor of a national bank; and as such the government is now done with them. It was expedient to maintain the connection in 1834: it is expedient to let it remain dissolved now. MONDAY, September 25. The Senate resumed the consideration of the bill imposing additional duties, as depositories of the public moneys, on certain officers of the General Government; together with Mr. CALнOUN's and Mr. BENTON'S amendments. Mr. CLAY commenced by observing that, feeling an anxious desire to see some effectual plan presented to correct the disorders in the currency, and to restore the prosperity of the country, he had avoided precipitating himself into the debate now in progress, that he might attentively examine every remedy that should be proposed, and impartially weigh every consideration urged in its support. No period had ever existed in this country, in which the future was covered by a darker, denser, or more impenetrable gloom. None, in which the duty was so imperative to discard all passion and prejudice, all party ties, and previous bias, and look exclusively to the good of our afflicted country. In one respect-and he thought it a fortunate one-our present difficulties are distinguishable from former domestic troubles, and that is their universality. They are felt, it is true, in different degrees, but they reach every section, every State, every interest, almost every man in the Union. All feel, see, hear, know their existence. As they do not array, like our former divisions, one portion of the confederacy against another, it is to be hoped that common sufferings may lead to common sympathies and common counsels, and that we shall, at no distant day, be able to see a clear way of deliverance. If the present state of the country were produced by the fault of the people; if it proceeded from their wasteful extravagance and their indulgence of a reckless spirit of ruinous speculation; if public measures had no agency whatever in bringing it about, it would nevertheless be the duty of Government to exert all its energies and to employ all its legitimate powers to devise an efficacious remedy. But if our present deplorable condition has sprung from our rulers; if it is to be clearly traced to their acts and operations, that duty becomes infinitely more obligatory; and Government would be faithless to the highest and most solemn of human trusts should it neglect to perform it. And is it not too true that the evils which surround us are to be ascribed to those who have had the conduct of our public affairs? In glancing at the past, (continued Mr. C.,) nothing can be further from my intention than to excite angry feelings, or to find grounds of reproach. It would be far more congenial to my wishes that, on this occasion, we should forget all former unhappy divisions and animosities. But, in order to discover how to get out of our difficulties, we must ascertain, if we can, how we got into them. Prior to that series of unfortunate measures which had for its object the overthrow of the Bank of the United States, and the discontinuance of its fiscal agency for the Government, no people upon earth ever enjoyed a better currency, or had exchanges better regulated, than the people of the United States. Our monetary system appeared to have attained as great perfection as any thing human can possibly reach. The combination of United States and local banks presented a true image of our system of General and State Governments, and worked quite as well. Not only within the country had we a local and a general currency, perfectly sound; but, in whatever [SEPTEMBER, 1837. quarter of the globe American commerce had penetrated, there also did the bills of the Bank of the United States command unbounded credit and confidence. Now we are in danger of having fixed upon us, indefinitely as to time, that medium-an irredeemable paper currency, which, by the universal consent of the commercial world, is regarded as the worst. How has this reverse come upon us? Can it be doubted that it is the result of those measures to which I have adverted? When at the very moment of adopting them, the very conse quences which have happened were foretold as inevitable, is it necessary to look elsewhere for their cause? Never was prediction more distinctly made; never was fulfilment more literal and exact. Let us suppose that those measures had not been adopted; that the Bank of the United States had been rechartered; that the public deposits had remained undisturbed; and that the Treasury order had never issued: is there not every reason to believe that we should be now in the enjoyment of a sound currency; that the public deposits would be now safe and forthcoming; and that the suspension of specie payments in May last would not have hap pened? The Message, to reconcile us to our misfortunes, and to exonerate the measures of our own Government from all blame in producing the present state of things, refers to the condition of Europe, and especially to that of Great Britain. It alleges, that "in both countries we have witnessed the same redundancy of paper money, and other facilities of credit; the same spirit of speculation; the same partial suc cesses; the same difficulties and reverses; and, at length, nearly the same overwhelming catas trophe." Whatever of embarrassment Europe has recently experienced may be satisfactorily explained by its trade and connection with the United States. The degree of embarrassment has been marked, in the commercial countries there, by the degree of their connection with the United States. All, or almost all, the great failures in Europe have been of houses engaged in the American trade. Great Britain, which, as the Message justly observes, maintains the closest relations with us, has suffered most; France next, and so on, in the order of their greater or less commercial intercourse with us. Most truly was it said by the Senator from Georgia, that the recent embarrassments of Europe were the embarrassments of a creditor, from whom payment was withheld by the debtor, and from whom the precious metals have been unnecessarily withdrawn by the policy of the same debtor. Since the intensity of suffering, and the disastrous state of things in this country, have far transcended any thing that has occurred in Europe, we must look here for some peculiar and more potent causes than any which have been in operation there. They are to be found SEPTEMBER, 1837.] Sub-Treasury Bill. [SENATE, in that series of measures to which I have the exchanges and revive the business of the already adverted. country. 1st. The veto of the bank. 2d. The removal of the deposits, with the urgent injunction of Secretary Taney upon the banks to enlarge their accommodations. 3d. The gold bill, and the demand of gold for the foreign indemnities. 4th. The clumsy execution of the deposit law; and 5th. The Treasury order of July, 1836. [Here Mr. CLAY went into an examination of these measures to show that the inflated condition of the country, the wild speculations, which had risen to their height when they began to be checked by the preparations of the local banks necessary to meet the deposit law of June, 1836, the final suspension of specie payments, and the consequent disorders in the currency, commerce, and general business of the country, were all to be traced to the influence of the measures enumerated. All these causes operated immediately, directly, and powerfully upon us, and their effects were indirectly felt in Europe.] The Message imputes to the deposit law an agency in producing the existing embarrassments. This is a charge frequently made by the friends of the administration against that law. It is true, that the banks having increased their accommodations, in conformity with the orders of Secretary Taney, it might not have been convenient to recall and pay them over for public use. It is true, also, that the manner in which the law was executed by the Treasury Department, transferring large sums from creditor to debtor portions of the country, without regard to the commerce or business of the country, might have aggravated the inconvenience. But what do those who object to the law think ought to have been done with the surpluses which had accumulated, and were daily augmenting to such an enormous amount in the hands of the deposit banks? Were they to be incorporated with their capitals, and remain there for the benefit of the stockholders? Was it not proper and just that they should be applied to the uses of the people from whom they were collected? And whenever and however taken from the deposit banks, would not inconvenience necessarily happen? The great evil under which the country labors is the suspension of the banks to pay specie, the total derangement in all domestic exchanges, and the paralysis which has come over the whole business of the country. In regard to the currency, it is not that a given amount of bank notes will not now command as much as the same amount of specie would have done prior to the suspension; but it is the future, the danger of an inconvertible paper money being indefinitely or permanently fixed upon the people, that fills them with apprehensions. Our great object should be to re-establish a sound currency, and thereby to restore The first impression which the measures brought forward by the administration make, is, that they consist of temporary expedients, looking to the supply of the necessities of the Treasury; for so far as any of them possess a permanent character, its tendency is rather to aggravate than alleviate the sufferings of the people. None of them purpose to rectify the disorders in the actual currency of the country; but the people, the States, and their banks, are left to shift for themselves as they may or can. The administration, after having intervened between the States and their banks, and taken them into the federal service, without the consent of the States; after having puffed and praised them; after having brought them, or contributed to bring them, into their present situation, now suddenly turns its back upon them, leaving them to their fate! It is not content with that; it must absolutely discredit their issues. And the very people who were told by the administration that these banks would supply them with a better currency, are now left to struggle as they can with the very currency which the Government recommended to them, but which it now refuses itself to receive! The professed object of the administration is to establish what it terms the currrency of the constitution, which it proposes to accomplish : by restricting the Federal Government, in all receipts and payments, to the exclusive use of specie, and by refusing all bank paper, whether convertible or not. It disclaims all purposes of crippling or putting down the banks of the States; but we shall better determine the design or the effect of the measures recommended, by considering them together as one system. 1. The first is the sub-Treasuries, which are to be made the depositories of all the specie collected and paid out for the service of the General Government, discrediting and refusing all the notes of the States, although payable and paid in specie. 2. A bankrupt law for the United States, levelled at all the State banks, and authorizing the seizure of the effects of any of them that stop payment, and the administration of their effects under the federal authority exclusively. 3. A particular law for the District of Columbia, by which all the corporations and people of the District, under severe pains and penalties, are prohibited from circulating, sixty days after the passage of the law, any paper whatever, not convertible into specie on demand, and are made liable to prosecution by indictment. 4. And lastly, the bill to suspend the payment of the fourth instalment to the States, by the provisions of which the deposit banks indebted to the Government are placed at the discretion of the Secretary of the Treasury. It is impossible to consider this system without perceiving that it is aimed at, and, if carried SENATE.] Sub-Treasury Bill. [SEPTEMBER, 1837. which we have been so long familiar, is forbidden by the principles of eternal jutice. Assuming the currency of the country to consist of two-thirds of paper and one of specie; and as out, must terminate in the total subversion of the State banks; and that they will be all placed at the mercy of the Federal Government. It is in vain to protest that there exists no design against them. The effect of these meas-suming also that the money of a country, whatures cannot be misunderstood. And why this new experiment or untried expedient? The people of this country are tired of experiments. Ought not the administration itself to cease with them. Ought it not to take warning from the events of recent elections? Above all, should not the Senate, constituted as it now is, be the last body to lend itself to further experiments upon the business and happiness of this great people? According to the latest expression of public opinion in the several States, the Senate is no longer a true exponent of the will of the States or of the people. If it were, there would be thirty-two or thirty-four whigs to eighteen or twenty friends of the administration. ever may be its component parts, regulates all values, and expresses the true amount which the debtor has to pay to his creditor, the effect of the change upon that relation, and upon the property of the country, would be most ruinous. All property would be reduced in value to one-third of its present nominal amount; and every debtor would, in effect, have to pay three times as much as he had contracted for. The pressure of our foreign debt would be three times as great as it is, whilst the six hundred millions, which is about the sum now probably due to the banks from the people, would be multiplied into eighteen hundred millions. But there are some more specific objections We are told that it is necessary to separate, to this project of sub-treasuries, which deserve divorce the Government from the banks. Let to be noticed. The first is its insecurity. The us not be deluded by sounds. Senators might sub-treasurer and his bondsmen constitute the as well talk of separating the Government from only guaranty for the safety of the immense the States, or from the people, or from the sums of public money which pass through his country. We are all-people-States-Union hands. Is this to be compared with that which -banks, bound up and interwoven together, is possessed through the agency of banks? united in fortune and destiny, and all, all en- The collector, who is to be the sub-treasurer, titled to the protecting care of a parental Gov-pays the money to the bank, and the bank to ernment. You may as well attempt to make the Government breathe a different air, drink a different water, be lit and warmed by a different sun from the people! A hard-money Government and a paper-money people! A Government, an official corps-the servants of the people-glittering in gold, and the people themselves, their masters, buried in ruin, and surrounded with rags. No prudent or practical Government will in its measures run counter to the long-settled habits and usages of the people. Religion, language, laws, the established currency and business of the whole country, cannot be easily or suddenly uprooted. After the denomination of our coin was changed to dollars and cents, many years elapsed before the old method of keeping accounts, in pounds, shillings, and pence, was abandoned. And, to this day, there are probably some men of the last century who adhere to it. If a fundamental change becomes necessary, it should not be sudden, but conducted by slow and cautious degrees. The people of the United States have always been a paper-money people. It was paper money that carried us through the Revolution, established our liberties, and made us a free and independent people. And, if the experience of the revolutionary war convinced our ancestors, as we are convinced, of the evils of an irredeemable paper medium, it was put aside only to give place to that convertible paper which has so powerfully contributed to our rapid advancement, prosperity, and greatness. The proposed substitution of an exclusive metallic currency, to the mixed medium with the disbursing officer. Here are three checks; you propose to destroy two of them, and that most important of all, the bank, with its machinery of president, directors, cashier, teller, and clerks, all of whom are so many sentinels. At the very moment when the Secretary of the Treasury tells us how well his sub-Treasury system works, he has communicated to Congress a circular, signed by himself, exhibiting his distrust in it; for he directs, in that circular, that the public moneys, when they amount to a large sum, shall be specially deposited with those very banks which he would repudiate. In the State of Kentucky, (other gentlemen can speak of their respective States,) although it has existed but about forty-five years, three treasurers, selected by the Legislature for their established characters of honor and probity, proved faithless. And the history of the delinquency of one is the history of all. It commenced in human weakness, yielding to earnest solicitations for temporary loans, with the most positive assurances of a punctual return. In no instance was there originally any intention to defraud the public. We should not expose poor weak human nature to such temptations. How easy will it be, as has been done, to indemnify the sureties out of the public money, and squander the residue ? 2. Then there is the liability to favoritism. In the receipts, a political partisan or friend may be accommodated in the payment of duties, in the disbursement, in the purchase of bills, in drafts upon convenient and favorable offices, and in a thousand ways. 3. The fearful increase of Executive patron |