1609 MAY 27, 1836.] Public Deposites. rity any trust, pecuniary or political; but he had designated the commissioners of the sinking fund for the reason that our fathers had designated those high officers, whoever the individuals might chance to be, to discharge much more important duties in reference to the great and vital interests of the Treasury—the payment of the national debt, and not from any personal or political attachment to the gentlemen who now filled the places. If objection was to be seriously made on account of this feature of the propositions, and any Senator would name other public officers, whose duties would permit the requisite attention to the trust, and who could be less exceptionably charged with it, he would most cheerfully consent to the change. He was sure he did not mistake the feelings of any one of the officers he bad named, when he said he could not render to them a more acceptable service than by discharging them from the unpleasant responsibilities which a faithful execution of the proposed trust might impose. He had been unable, however, after the most mature reflection upon the subject, to change the selection of trustees, and must, therefore, wait to hear the suggestions of those who found objection in this part of his propositions. He had heard the objections with patience, and he would endeavor to receive and consider any amendments with impartiality and candor. Mr. W. said when he had originally offered the sections of the bill upon which he was now remarking, seven millions of dollars was named as the sum to be left in the Treasury to meet the disbursements of each quarter. Before he commenced his present observations, he had modified the proposition by striking out the He word "seven," and thus leaving the sum blank. had done this, because he wished the vote might indicate the sense of the Senate upon the principle contained in the section, without involving objections of detail, which, it was most manifest, the fixing of this The counter-proposition already sum would involve. offered by the Senator from South Carolina, [Mr. CALHOUN,] with a much less sum (three millions) inserted, afforded conclusive evidence of a wide difference of opinion upon this point, and proved satisfactorily to his mind that the question between the two propositions ought to be presented to the Senate without reference to this amount; that the principle of each might be disembarrassed from this mere difference of opinion as to the amount to be left in the Treasury, whether the one proposition or the other should be adopted. He thanked the honorable Senator for his agreement with him in this opinion, and for having modified his propositions in conformity with it, by leaving the sum blank in them also. Indeed, Mr. W. said, the fixing of this sum, in any event, ought to be the act of the Senate, and not of any member of the Senate who might choose to submit propositions as to the disposition of any surplus revenue which might be found in the Treasury. This position would be sound, under any circumstances; and was more especially so at this time, when appropriations to a greater extent than usual were not only proposed to be made, but conceded on all hands to be proper, and when, therefore, the amount to be retained for the uses of each quarter would be, to an unusual extent, dependant upon the appropriations actually made. There was, however, (Mr. W. said,) a manifest difference as to the sum which ought to supply the blank in the section he had offered from that which had been ofered by the Senator from South Carolina, [Mr. CALHOUN,] because the rule of action of the two propositions upon the funds in the Treasury was wholly different. That offered by him directed the commissioners of the sinking fund, at the commencement of each quarter of the year, to estimate not only the payments, but the receipts [SENATE. termine the average of moneys to be found in the Treas- In this view of the subject (Mr. W. said) he had no SENATE.] Public Deposiles. [MAY 27, 1836. Treasury with means equal to its wants. At no time, under these propositions, are the means placed beyond the reach and control of the fiscal affairs of this Government, or in a situation in which they cannot be com manded by the action of the officers and agents of this Government, to supply the wants of the national Treasury. The filling of the blank, therefore, in this section, is much less important than in that offered by the Senator from South Carolina, [Mr. CALHOUN.] In this case, the propositions, of themselves, provide a correction for any error which may arise. In the other case, the money is placed in the keeping of the States; is put beyond the reach of this Government or its officers, upon the mere security of a legislative pledge for the repayment of the principal, without interest; and cannot be reclaimed, whatever may be the wants of the national Treasury, but upon the voluntary, separate, and independent ac tion of the Legislatures of all those States which shall receive their respective dividends. Hence, the far great-these remarks, he expressed distrust of the patriotism or er importance that the Senate should direct in this matter; and that these blanks, and especially that in the proposition of the Senator, should be filled with great caution, and with particular reference not only to the outstanding appropriations, but to such future appropriations as any measures of national policy now to be adopted may require. He had felt it to be his duty (Mr. W. said) to throw out these suggestions; and he would content himself with their expression, until some specific motion to fill the blank in the one or the other proposition should bring the question more directly before the Senate. Mr. W. said he had two insuperable objections to prefer against the propositions offered by the Senator from South Carolina, [Mr. CALHOUN,] for a disposition of the surplus revenue. The first was, that he considered them, in substance and in effect, propositions to make a general distribution to the States of all the revenues in the national Treasury, from whatever source derived, and, in that sense, to embrace the adoption of a principle which he considered more dangerous to our civil institutions, State and national, than any other which could be presented for the sanction of Congress. The taxing powers of this Government were to be used to accumulate money for distribution to the sovereign and independent States of the confederacy. Those States were to be taught to look to this Government for the means to supply their wants; for the money to sustain their institutions; for the funds to meet their legislative appropriations. Can relations of this sort be established, and the independence of the States be preserved? Can the Government of a State feel or exercise an independence of the power which feeds and sustains it by direct and gratuitous contributions from its Treasury? What step can be so eminently calculated as this, to produce speedy and perfect consolidation? Mr. W. said he knew he should be answered that it was not proposed to give, but to loan, this money to the States; to take their bonds or securities for its repayment, upon the call of Congress. It would be further said that the omission to charge interest was a matter of entire discretion with Congress, and of justice to the States, inasmuch as the money had been collected from the people of the States; and, if not wanted for the uses of this Government, ought to be submitted to the States for their use, without charge. These were specious answers, to which the form of the propositions gave countenance; but what would be their practical effect? The money was to go to the States upon a rule of distribution prescribed, and claimed to be equal and just; it was to go to them for any uses they may choose to make of it, and without interest. In return for the money, the several State Legislatures are to pass laws declaring that the State will repay the prin cipal when Congress shall, by law, call for the pay- 1613 MAY 27, 1836.] Public Deposites. proportion of the money, distributed when its relative position among the States was higher. On the contrary, the relatively increasing States, those whose population shall bear a higher proportion to the whole when the call comes than when the distribution took place, will favor a call instead of a tax, because the proportion of money falling to their share will have been less than their proportion of the tax when they shall have become relatively more populous. The preponderance of these interests will, of course, determine the action of Congress when the crisis shall have arrived. If this view of the subject be sound and practical, will any one contend that the disposition of the surplus, according to these propositions, is, in effect, any thing less than a general and unrestricted distribution of it to the States? The repayment is submitted to their action, and is subject to their pleasure; and all the constitutional means for a supply of money to the Treasury, separate from a call for this money, will be constantly as open to them and to their representatives here, as they now are, and will remain, if this distribution be not made. Is, then, the position sound, that Congress will never make the call until a necessity either of levying a direct tax, or of making it, shall exist? And if it be, is the position of the general Government made, in any respect, better, by having required the promise of payment as a condition precedent to dividing out the moneys of the Treas ury to the States? Mr. W. said he could not see that it was, while he could see the most fearful evils which might arise from this debtor and creditor relation between the States and this Government. He could foresee incalculable evils which might grow out of the conflicting and contrary interests of the different States, whenever it should be proposed by the federal Government to make the call for this money, and thus attempt to render the promises to pay operative. He was compelled further to apprehend, in consequence of these propositions, should they be adopted, an early agitation of the tariff controversy, and the revival of local questions which have so recently tried the strength of this Union more severely than it had ever before been tried, and given to our institutions a shock which every patrio! would long remember, and labor, to the utmost of his power, to avoid in future. His second objection, Mr. W. said, was against the rule of distribution adopted. It was directed to be made according to the representation of each State in the Senate and House of Representatives. He must suppose, if Congress possess the power, under the constitution, to divide out the moneys in the public Treasury to the States, or to the people of the States, that the rule of distribution must follow that which governs the collection of the same money. That rule is the rule of representation and taxation; is the rule of federal numbers; is the rate of representation, as nearly as may be, by which the States are represented in the House of Representatives. It has never before been proposed to include the Senate in any calculation of equality between the States. The constitution has in no instance included it; and he must think that its inclusion here was against the spirit and against the express provisions of that inHow had this money been accumulated? By taxation, direct or indirect. From whom had it been collected? From the people of the States. stitution prescribed the rule by which, and by which only, Congress might tax them; and that was in proporIf the money is not tion to their federal numbers. wanted for the uses of the federal Government, to whom does it belong? and to whom should it be returned? Most certainly to the people from whom it has been collected, and in the same proportions which governed its collection from them. It should be distributed, then, upon the federal numbers of the States, or upon their strument. The con [SENATE. representation in the House of Representatives alone; Another argument against the adoption of this rule of What Mr. W. said he must, in justice to himself, state that the fact, that the rule proposed to be adopted would work the greatest injustice to his own State, had very little influence with him in urging this objection. If a distribution was to be made, and New York was to be a recipient, it was his duty to contend for her rights; but in debt as she was, if all her citizens entertained his feelings and opinions upon this subject, they would look, as they most safely might, to her wealth, to her enterprise, to her immense advantages and resources, to pay her debts and carry her on to her high destiny, and would not prostrate her before the national Treasury, for the miserable boon of a few hundred thousand dollars. Were he permitted to advise, his State would never accept the money proposed to be intrusted to her upon the terms prescribed. Another objection (Mr. W. said) remained to be answered, which had been very generally urged against the propositions he had offered upon this subject. It was, that an investment of the surplus in the manner he had proposed would be unequal, as between the different States; and that those States which had no debt, which had issued no stock, or securities of any description, would obtain no part of the moneys to be invested. A perfect and conclusive answer to this objection might be, that it was at the option of the States to issue stocks or not; and therefore it was at their option to participate or not in these investments, as any Slate which would issue stocks, and offer them in the market upon the most favorable terms, would, of course, be most likely to obtain investments. This, however, was not the answer upon which he chose to rest his defence to the objection. The objection had arisen from the fact that gentlemen had yielded all their reflections to the various plans for an equal distribution of these moneys to the States; and they had connected, in their minds, the propositions he had made, with reflections of this char acter. There was no connexion between the two subjects, and he hoped to be able to convince every Senafor that the objection was wholly inapplicable, in practice, to the plan of investment he had suggested. There was nothing in the nature of a distribution among the SENATE.] Resignation of Mr. Hill—Public Deposites. States connected with the plan. No transaction with the States, of any sort, was proposed. The adoption of the propositions could not benefit or injure any State, or give any one State any possible advantage over any other State. The investments were to be made by a purchase of the stocks in the market, at the market value; and before they could come there, they must have been sold by the State issuing them. That State, therefore, must have received its money, and could have no interest whatever in the sale to the United States, and the purchase by them. It must have taken upon itself the obligation to pay the interest upon the stock at a given time and place, and to redeem the principal at a specified day. No change could be made in these obligations by a transfer of the stocks to the United States, any more than by a similar transfer to any private individual; and whatever premium the Government may pay does not go to the benefit of the State issuing the stock, but to the holder, of whom the purchase is made. So, also, if the Government sell the stock of any State which it may have purchased, the State, or its interests, are in no way affected by the sale: its obligations and responsibilities are unchanged. Mr. W. said, the better to illustrate his meaning, the Senate must permit him to take a simple business example. I give my note to you, Mr. President, for the sum of $100, payable at the expiration of twenty years from its date, with interest at the rate of five per cent. per annum; the interest to be paid annually at a specified place, and the principal to be paid at the same place when it falls due; and I make the note negotiable. Can it, by any possibility, interest me whether you hold that note, or sell it; or whether it be negotiated but once in the whole twenty years, or every week in the term; whether it be held by individuals or bodies politic; by a pauper or by the United States? Mr. W. said he was unable to comprehend how his interests could be affected in the supposed case, and he was equally unable to discover how the interests of the States were to be affected, either beneficially or injuriously, by permitting the United States to purchase their stocks in the market, as a mere investment of money in the Treasury. He was sure gentlemen must see that the objection was groundless, and had proceeded from the mistaken idea that the States, whose stocks should be purchased, were to be materially benefited, and that, therefore, there ought to be some provision to make the purchases equal among the States; whereas, neither the purchase nor sale could affect, in any way, the interests of the State issuing the stocks. So far from desiring this equality, (Mr. W. said,) the very certain inequality was, to his mind, one of the highest merits of the propositions. It was not likely that the United States would hold the stocks of a large number of States at the same time, and those would be held in very unequal quantities. This fact would cause the representatives of the States against which no securities were held, to attend vigilantly to the collection or disposition of those held against other States, and, in an equal degree, would induce the representatives from those States against which small amounts were held, to see that those against which the amounts were large were made punctually to meet their payments. his most important objections to any plan of distribution, with a view to repayment, was predicated upon the fact that all would be equally interested against a repayment; that there would be none to exercise vigilance, because all would resist collection; that repayment would never be made, because there would be no one to demand it. Investments in the manner he proposed would be free from these objections, and would stimulate the majority to watchfulness and care that collections were promptly One of [MAY 28, 1836. He wished to to make, and he would resume his seat. inquire of those gentlemen who had voted for the land bill, and who now proposed to support the propositions offered by the Senator from South Carolina [Mr. CAL HOUN] to distribute the surplus revenue among the States, whether the two measures would, or would not, conflict with each other? whether they were, or were not, intended as antagonist measures? That bill provides for the distribution of the proceeds of the sales of the public lands on specified days, and extends through the year 1837. These propositions make the same disposition of all the revenues in the Treasury, over a given sum to be named, upon specified days, without regard to the sources from which the moneys may have been derived, and extends its action through the year 1841. If he was not mistaken, the distributions under the two bills were to take place, in some instances at least, on the same day. What he wished gentlemen to inform him was, which bill would take the money; for he supposed either would take all which could be called surplus. The rule of distribution was very different in the two cases, and he would be glad to learn whether it was intended, by this measure, to repeal in effect the land bill. His inquiries were particularly directed to the author of this scheme for distribution, and he should await his answer. When Mr. W. had concluded Mr. LEIGH called the attention of the Senate to a provision of the substitute, by which the Secretary of the Treasury, though he cannot change the places of deposite during the session of Congress without its consent; yet, during the recess of Congress, absolute power of such change is given him beyond the remedy of Congress, the Secretary being only required to make a fruitless report of his reasons for the change. Mr. WRIGHT acknowledged this to be a feature of his substitute for the bill. On motion of Mr. CALHOUN, SATURDAY, MAY 28. RESIGNATION OF Mr. HILL. The CHAIR communicated the following letter of resignation from the Hon. ISAAC HILL; which was read: WASHINGTON, May 28, 1836. SIR: Having been elected by the citizens of New Hampshire to the office of Chief Magistrate of that State, without waiting a formal official communication of the canvass; and it being expedient that I should enter on ensuing week, I communicate to you, and through you the discharge of the duties of the new office during the to the Senate, information that on Monday next I shall resign my seat in the Senate. With the best wishes of happiness to yourself, and to the Senators with whom I have been associated, I am, with great respect, Your obedient servant, ISAAC HILL. Hon. MARTIN VAN BUREN, Vice President of the United States. PUBLIC DEPOSITES. The Senate then proceeded to the consideration of the bill to regulate the deposites of the public money. After some words from Mr. WRIGHT, in explanation, Mr. CALHOUN said: This bill, which the Senator from New York proposes to strike out, in order to substitute his amendment, is no stranger to this body. It was reported at the last session by the select committee on Executive patronage, and passed the Senate, after a full and deliberate investigation, by a mixed vote of Mr. W. said he had but one single further suggestion | all parties, of twenty to twelve. As strong as is this made. 1617 MAY 27, 1836.] Public Deposites. rants. [SENATE. presumptive evidence in its favor, I would, notwith-compensation the banks ought to make to the public for standing, readily surrender the bill, and adopt the amendment of the Senator from New York, if I did not sincerely believe that it was liable to strong and decisive objections. I seek no lead on this important subject; my sole aim is to aid in applying a remedy to what I honestly believe to be a deep and dangerous disease of the body politic; and I stand prepared to co-operate with any one, be he of what party he may, who may propose a remedy, provided it shall promise to be safe and efficient. I, in particular, am desirous of co-operating with the Senator from New York, not only because I desire the aid of his distinguished talents, but, still more, of his decisive influence with the powerful party of which he is so distinguished a member, and which now, for good or evil, holds the destiny of the country in its hands. It was in this spirit that I examined the amendment proposed by the Senator; and, I regret to say, after a full investigation, I cannot acquiesce in it, as I feel a deep conviction that it will be neither safe nor efficient. So far from being substantially the same as the bill, as stated by the Senator, I cannot but regard it as essentially different, both as to objects and means. The objects of the bill are, first, to secure the public interest, as far as it is connected with the deposites; and, next, to protect the banks in which they are made against the influence and control of the Executive branch of this Government, with the view both to theirs and the public interest. Compared with the bill, in respect to both, the proposed amendment will be found to favor the banks against the people, and the Executive against the banks. I do not desire the Senate to form their opinion on my authority. I wish them to examine for themselves; and, in order to aid them in the examination, I shall now proceed to state, and briefly illustrate, the several points of difference between the bill and the proposed amendment, taking them in the order in which they stand in the bill. The first section of the bill provides that the banks shall pay at the rate of two per cent. per annum on the This prodeposites for the use of the public money. vision is entirely omitted in the amendment, which proposes to give to the banks the use of the money without interest. That the banks ought to pay something for the use of the public money, all must agree, whatever diversity of opinion there may be as to the amount. According to the last return of the Treasury Department, there was, on the 1st of this month, $45,000,000 of public money in the thirty-six depository banks, which they are at liberty to use as their own, for discount or business, till drawn out for disbursements; an event that may not happen for years. In a word, this vast amount is so much additional banking capital, giving the same, or nearly the same, profit to those institutions as their permanent chartered capital, without rendering any other service to the public than paying away from time to time the portion that might be required for the service of the Government. Assuming that the banks realize a profit of six per cent. on these deposites, (it cannot be estimated at less,) it would give, on the present amount, nearly three millions of dollars per annum, and, on the probable average public deposites of the year, upwards of two millions of dollars; which enormous profit is de rived from the public by comparatively few individuals, without any return or charge, except the inconsiderable service of paying out the drafts of the Treasury when presented. But it is due to the Senator to acknowledge that his amendment is predicated on the supposition that some disposition must be made of the surplus revenue, which would leave in the banks a sum not greater than would be requisite to meet the current expenditure-a supposition which necessarily must affect, very materially affect, the decision of the question of the amount of VOL. XII.-102 With the use of its funds; but, let the disposition be what it The professed object of both the bill and the amendment is to place the safe keeping of the public moneys under the regulation and control of law, instead of being However strange it may seem, the fact is nevertheless left, as it now is, at the discretion of the Executive. so, that the amendment entirely fails to effect the object that it may be distinctly seen that what I state is the case, which it is its professed object to accomplish. In order it will be necessary to view the provisions of the bill and the amendment in reference to the deposite separately, as they relate to the banks in which the public funds are now deposited, and those which may hereafter be selected to receive them. The bill commences with the former, which it adopts as banks of deposite, and prescribes the regulations and conditions on the observance of which they shall continue such; while, at the same time, it places them beyond the control and influence of the executive department, by continue faithfully to perform their duty as fiscal agents placing them under the protection of law so long as they It next authorizes the Secretary of the Treasury to select, under certain circumstances, adof the Government. ditional banks of deposite, as the exigency of the public ! |