in this city during the panic session had been thus liable, the notes would not have been shaved out of the hands of the holders; if the bank which stopped in Baltimore at the same time, had been subject to this principle, the riots, which have afflicted that city in consequence of that stoppage, would not have taken place. Instead of these losses and riots, law and remedy would have prevailed; every stockholder would have been summoned before a justice of the peace--judgment granted against him on motion-for the amount held by the complainant; and so on, until all were paid, or he could plead that he had paid up the whole amount of his stock. A fourth improvement which Mr. B. had proposed, was to limit the notes issued by the banks to the minimum size of twenty dollars, and to exclude all notes under that minimum, issued by other banks, from circulation within the District. He confessed that he felt an extreme degree of mortification in making a motion in the Congress of the United States to limit the size of bank notes, when this Congress was sitting here, and held its existence by virtue of a constitution which recognised nothing for currency but gold and silver; but he feared he might be subject to a still greater mortification in wit nessing the failure of his motion, and the triumph of the paper system over this small attempt to check one of its greatest abuses. The limit of twenty dollars was the lowest that could be taken to accomplish the great ob. jects in view; and that limit was not assumed arbitrarily, but from a careful observation of the effect of different limits, in different countries, upon the nature and amount of the circulating medium. The great evils of the small paper currency are, 1. To banish gold and silver. 2. To encourage counterfeit ing. 3. To destroy the standard of values. 4. To throw the burdens and the evils of the paper system upon the laboring and small dealing part of the community. The instinct of banks to sink their circulation to the lowest denomination of notes which can be forced upon the community, is a trait in the system universally proved to exist wherever banks of circulation have been permitted to give a currency to a country; and the effect of that instinct has always been to banish gold and silver. When the Bank of England was chartered, in the year 1694, it could issue no note less than £100 sterling; that amount was gradually reduced by the persevering efforts of the bank, to £50; then to £20; then to 15; then to 10; at last to 5; and finally to £2 and 1. Those Jast denominations were not reached until the year 1797, or until one hundred and three years after the institution of the bank; and as the several reductions in the size of the notes, and the consequent increase of paper currency took place, gold became more and more scarce; and with the issue of the one and two pound notes, it totally disappeared from the country. This effect was foretold by all political economists, and especially by Mr. Burke, then aged and retired from public life, who wrote from his retreat, to Mr. Canning, to say to Mr. Pitt, the Prime Minister, these prophetic words: "If this bill for the one and two pounds is permitted to pass, we shall never see another guinea in England." The bill did pass, and the prediction was fulfilled; for not another guinea, half guinea, or sovereign, was seen in England, for circulation, until the bill was repealed two and twenty years afterwards! After remaining nearly a quarter of a century without a gold circulation, England abolished her one and two pound notes, limited her paper currency to £5 sterling, required all Bank of England notes to be paid in gold, and allowed four years for the act to take effect. Before the four years were out, the Bank of England reported to Parliament that it was ready to begin gold payments; and commenced accordingly, and has continued them ever since. The one and two pound [SENATE. notes in England correspond with the five and ten dol lar notes in the United States, and the five pound note is only four dollars above our twenty dollars; so that the analogy is perfect, and the effect must be similar upon our fives, tens, and twenties, that it was in England from the issue and suppression of the one and two pound notes, and the limitation to £5, with the compulsory obligation to pay in gold. The encouragement of counterfeiting was the next great evil which Mr. B. pointed out as belonging to a small note currency; and of all the denominations of notes, he said those of one and two pounds in England, (corresponding with fives and tens in the United States,) were those to which the demoralizing business of counterfeiting was chiefly directed! They were the chosen game of the forging depredator! and that, for the obvi ous reasons that fives and tens were small enough to pass currently among persons not much acquainted with bank paper, and large enough to afford some profit to compensate for the expense and labor of producing the counterfeit, and the risk of passing it? Below fives, the profit is too small for the labor and risk. Too many have to be forged and passed before an article of any value can be purchased; and the change to be got in sil ver, in passing one for a small article, is too little. Of twenty and upwards, though the profit is greater on passing them, yet the danger of detection is also greater. On account of its larger size, the note is not only more closely scrutinized before it is received, and the passer of it better remembered, but the circulation of them is more confined to Business men and large dealers, and silver change will not be given for them in buying small articles. The fives and tens, then, in the United States, like the £1 and £2 in Eng. land, are the peculiar game of counterfeiters, and this is fully proved by the criminal statistics of the forgery department in both countries. According to returns made to the British Parliament for twenty-two yearsfrom 1797 to 1819-the period in which the one and two pound notes were allowed to circulate, the whole number of prosecutions for counterfeiting, or passing counterfeit notes of the Bank of England, was 998; in that number there were 313 capital convictions; 530 in ' ferior convictions; and 155 acquitals; and the sum of £249,900, near a million and a quarter of dollars, was expended by the bank in attending to prosecutions. Of this great number of prosecutions, the returns show that the mass of them were for offences connected with the one and two pound notes. The proportion may be distinctly seen in the number of counterfeit notes of dif ferent denominations detected at the Bank of England in a given period of time-from the 1st of January, 1812, to the 10th of April, 1818-being a period of six years and three months out of the twenty-two years that the one and two pound notes continued to circulate. The detections were, of one pound notes, the number of 107,238; of two pound notes, 17,787; of five pound notes; 5,826; of ten pound notes, 419; of twenty pound notes, 54. Of all above twenty pounds, 35. The propor tion of ones and twos to the other sizes may be well seen in the tables for this brief period; but to have any idea of the mass of counterfeiting done upon those small notes, the whole period of twenty-two years must be considered, and the entire kingdom of Great Britain taken in; for the list only includes the number of counterfeits detected at the counter of the bank, a place to which the guilty never carry their forgeries, and to which a portion only of those circulating in and about London could be carried. The proportion of crime connected with the small notes is here shown to be enormously and frightfully great. The same results are found in the United States. Mr. B. had looked over the statistics of crime connected with the counterfeiting of bank notes in the United State, and found the ratio between the great and small notes to be about the same that it was in England. He had had recourse to the most authentic data Bicknell's Counterfeit Detector--and there found the editions of counterfeit notes of the local or State banks, to be eight hundred and eighteen, of which seven hundred and fifty-six were of ten dollars and under; and sixty-two editions only were of twenty dollars and upwards. Of the Bank of the United States and its branches, he found eighty-two editions of fives; seventy-one editions of tens; twenty-six editions of twenties; and two editions of fifties; still showing that in the United States, as well as in England, on local banks as well as that of the United States, the course of counterfeiting was still the same; and that the whole stress of the crime fell upon the five and ten dollar notes in this country, and their corresponding classes, the one and two pound notes in England. Mr. B. also exhibited the pages of Bicknell's Counterfeit Detector, a pamphlet covered over column after column with its frightful lists, nearly all under twenty dol lars; and he called upon the Senate in the sacred name of the morals of the country--in the name of virtue and morality--to endeavor to check the fountain of this crime, by stopping the issue of the description of notes on which it exerted nearly its whole force. Mr. B. could not quit the evils of the crime of counterfeiting in the United States without remarking that the difficulty of legal detection and punishment was so great, owing to the distance at which the counterfeits were circulated from the banks purporting to issue them, and the still greater difficulty (in most cases impossible) of getting witnesses to attend in person in States in which they do not reside, the counterfeiters all choosing to practise their crime and circulate their forgeries in States which do not contain the banks whose paper they are imitating. So difficult is it to obtain the attendance of witnesses in other States, that the crime of counterfeiting is almost practised with impunity. The notes under $20 feed and supply this crime; let them be stopped, and ninety-nine hundredths of this crime will stop with them. A third objection which Mr. B. urged against the notes under twenty dollars was, that nearly the whole evils of that part of the paper system fell upon the laboring and small dealing part of the community. Nearly all the counterfeits lodged in their hands, or were shaved out of their hands? When a bank failed, the mass of its circulation being in small notes, sunk upon their hands. The gain to the banks from the wear and tear of small notes, came out of them; the loss from the same cause, falling upon them. The ten or twelve per cent. annual profit for furnishing a currency in place of gold and silver, (for which no interest would be paid to the mint or the Government,) chiefly falls upon them; for the paper currency is chiefly under twenty dollars. These evils they almost exclusively bear, while they have, over and above all these, their full proportion of all the evils resulting from the expansions and contractions which are incessantly going on, totally destroying the standard of value, periodically convulsing the country, and in every cycle of five or six years making a lottery of all property, in which all the prizes are drawn by bank managers and their friends. In proposing the limitation of twenty dollars to these District banks, Mr. B. of course coupled with it the concomitant provision for the exclusion of all notes under the same limit issued without the District. This was a precaution as just and natural as it was easy. prohibitory law, with a liability in every passer to pay the amount of the notes, with costs and damages, in specie, and especially in gold, with summary process before a justice of the peace for the recovery, would effectually expel the interdicted and pestiferous paper. A (JUNE 7, 1836. Mr. B. said that the proposed limit of twenty dollars for the minimum size of bank notes was not an arbitrary assumption or a fanciful designation; but was a limit ascertained by experience, and proven by results, to be the lowest that would suffice to accomplish the ends intended. These ends are: 1. To re-establish the gold currency; 2. To make gold and silver the common currency for all the small dealings of the country; 3. To extend and enlarge the specie basis of the paper circulation; 4. To save the laboring and small dealing part of the community from the effects of contractions and expansions from bank issues; 5. To save them from the impositions of counterfeiters, from losses when banks fail, and from bearing the whole burden of the wear and tear of small notes; 6. To save hard money enough in the country to make it safe to have such paper currency as commerce and large dealings may require. These are the objects to be accomplished, and less than twenty dollars will have no adequate effect; far better would be the limit of $100, as it is nearly in France, and where that limit ensures a circulation of nine tenths gold and silver, and one tenth paper; namely, upwards of five hundred millions of dollars of one, and fifty millions of the other. Wise would it be in any single State to adopt this limit, and to exclude all notes under that amount from circulation within its borders; that State would become the richest and the happiest in the Union. It would be, in its moneyed concerns, to the rest of the Union, what France is to the rest of Europe-the absorbent of their precious metals, the perennial fountain of golden supply to its citizens, and the land of rest from the panics and pressures, the ebbs and flows, the feasts and famines, the dearths and deluges, the expansions, contractions, and revulsions, and all the crimes and misfortunes of the paper system! While But to proceed with the twenty dollar limit. England had notes as low as one and two pounds, which we may call five and ten dollars, the specie basis contracted and diminished until silver could only be got for small change, and gold fled entirely from the country. The mint was forever coining; but the guineas and sovereigns went straight to France; and it was testified by Mr. Alexander Baring, before a committee of the House of Commons, that the gold coinage of the British mint, during this period, was regularly recoined in France, often without seeing the light in England; being packed in boxes and shipped as it issued from the mint, delivered in Paris before it was a week old, and swallowed up in the ocean of French currency by passing through the French mint and assuming the stamp and arms of France. The suppression of the one and two pound notes in 1819, and the £5 limit, with the compulsory obligation on the Bank of England to pay all its notes in gold, restored the gold currency in that country, and so extended and enlarged the specie basis, as to make her currency half and half-half specie and half paper-the specie two thirds gold, and one third silver, and the paper all of £5, about $24 and upwards. This has made a paper currency safe in England, for it is dollar for dollar; it has given to the laboring and small-dealing classes a hard money currency, and it has taken from the counterfeiters their chief and favorite classes of notes for imitation. Mr. B. took the great ground, that where a paper currency was tolerated at all, the safety and welfare of the community required the specie proportion to be one half; that it required a £5 limit, and gold payments, to effect that object in England; that a limit of twenty dollars would not effect it in the United States; and he was only restrained from proposing the French limit from the impossibility of contending successfully with the bank power at present, now omnipotent in the country, engrossing the time and governing the legislation, in whatever related to their own interests. A twenty dollar limit would not give a substratum of half specie, even if our banks were compelled to pay all gold; but there is no compulsion on them to pay any part; and the efforts to bring them to half payments in gold would be long and bitterly resisted. Gold is the enemy of paper; it keeps it down when the holder of the paper has a right to demand gold; and thus a paper currency founded upon gold, as it is in England, will always be kept more within bounds than a paper currency founded upon silver. Silver is too cumbrous to hold paper in check. A person would not wish to change even a twenty dollar note into silver to carry in his pocket, but would gladly change it into gold; and so of fifty and hundred dollar notes. The next improvement on the paper currency which Mr. B proposed, was contained in his fifth proposition, namely, that all the notes and paper currency issued by the banks should be payable, not in gold or silver, but in gold and silver; one half of either at the option of the demander, the other half at the option of the bank. This, Mr. B. said, would be perfectly equitable; it would ensure an equal supply of each metal in the country, without requiring the banks to keep enough of both metals to meet their whole circulation. It was also in accordance with the constitution of the United Stateswith the recent law of Congress for the re-establishment of the gold currency-with the nature of the mines in our own country--and with the rights and interests of the people. The constitution intended that gold and silver should continue to be what it was at the time of the framing of that instrument-a concurrent currency in the country. This intention, made clear in all the debates upon the subject, is expressly declared in article 1, section 10. Gold and silver are there joined together. They are joined by the conjunctive particle "and," not separated by the disjunctive particle "or." The act of Congress of 1834, for the re-establishment of the gold currency, and the subsequent act for the establishment of three branch mints, all show that it is the intention of the Government, approved by the voice of the people, to have gold as well as silver. The nature of our mines leads to it. We have gold mines, but no silver ones. Gold is, therefore, a domestic production, and should become a national currency. The rights and interests of the people require a gold currency; they have a right to it under the constitution of the country and under the laws of the land; their interest requires it for checking the paper system, regulating exchanges, preventing counterfeiting, furnishing convenient money for travelling, and preserving the most uniform and universal standard of value. Thus stands the constitution, the laws, the products of the country, and the rights and interest of the country in relation to gold. But the banks have a contrary interest! The whole paper system is adverse to gold! Exceptions of particular banks may be found; but the instinct of the paper system is against it; and a bank will pay in the least valuable and most cumbrous metal which it is permitted to offer. Between gold and silver, it will pay in silver; between silver and copper, it will pay in copper; between copper and iron, it will pay in iron. This is the instinct of the system; and now, in these United States, after all that has been done to revive the gold currency, that coin will be withheld from circulation, and sold for exportation, the moment the present excitement is over, and the aid of Jackson is withdrawn. This would be the case even without the impulse of a political motive, and without the instigation of party spirit, and without the regulation of party discipline; but, unfortunately, a powerful political party is opposed to gold in our country! The bank-whig party is opposed to it; and the whole political power and party machinery of these whigs, as they style themselves, will be exerted VOL. XII.-108 [SENATE. to suppress gold, and encourage small paper, that out of the evils incident to such a state of things, a depreciated currency may ensue, and the Bank of the United States may be called for to remedy the disorder. Law, then, is necessary to compel the banks to pay gold; and no measure more equitable could be devised than that of half payments in either metal; the demander having the first choice, and the bank the next. The equity of this principle being clear, the next consideration is, as to its practicability. On this point facts and reasons are equally explicit. The banks can pay half their currency in gold in one year from this time, if they please. They could have done it this summer if they had pleased. The Federal Government could have had all its surplus now in gold, if Congress had given the President authority to supply the mint with gold bullion and foreign coins. The state of the foreign exchanges is, and has been for months, decidedly in favor of the United States, and the importation has been, and continues to be, a profitable business. It is a money-making business to import gold, and the custom-house returns show that it is coming of itself, in the course of commerce, independent of the purchases and importations effected by some banking institutions. A few of the deposite banks, as he had understood, had ordered importations to the amount of four or five millions. The Government had ordered home the French and Neapolitan indemnities in gold, the total of which will be seven millions. An equal sum of seven millions had been coined at our mint under the new law; and the native southern mines were promising a good product. There could be no doubt, with the slightest exertion on the part of the banks, that one half of the specie currency of the Union might be gold in the course of the ensuing year. It must be nearly twenty millions when President Jackson goes out of service. The whole specie currency was computed by the Secretary of the Treasury at 64,000,000 at the end of the last year. It is probably increased to 70,000,000, and ought to be increased to 100,000,000. The limitation of twenty dollars in the size of notes, and the compulsory obligation on the banks to pay one half in gold, would certainly and quickly augment our specie currency to 100,000,000. We have already doubled it in two years; for it was computed at about 30,000,000 at the time of the panic in 1834. War upon small notes and the introduction of gold has made this great increase. A vigorous prosecution of that war, and further measures for the protection of gold, will certainly add thirty millions more in a short time. Mr. B. said he here wished to fix the attention of those who were in favor of a respectable paper currency-a currency of respectable sized notes of twenty dollars and upwards-on the great fact, that the larger the specie basis, the larger and safer would be the superstructure of paper which rested upon it; the smaller that specie basis, the smaller and more unsafe must be the paper which rested on it. The currency of England is $300,000,000, to wit: £8,000,000 sterling (near $40,000,000) in silver; £22,000,000 sterling (above $100,000,000) in gold; and about £30,000,000 sterling (near $150,000,000) in bank notes. The currency of the United States is difficult to be ascertained, from the multitude of banks, and the incessant ebb and flow of their issues: calculations vary; but all put the paper circulation at less than 100,000,000; and the proportion of specie and paper, at more than one half paper. This is agreed upon all hands, and is sufficient for the practical result, that an increase of our specie to 100,000,000, and the suppression of small notes, will give a larger total circulation than we now have, and a safer one. The total circulation may then be 200,000,000, in the proportions of half paper and half specie; and the spe cie, half gold and half silver. This would be an immense improvement upon our present condition, both in quantity and in quality; the paper part would become respectable from the suppression of notes under twenty dollars, which are of no profit except to the banks which issue them, and the counterfeiters who imitate them; the specie part would be equally improved by becoming one half gold. Mr. B. could not quit this important point, namely, the practicability of soon obtaining a specie currency of 100,000,000, and the one half gold, without giving other proofs to show the facility with which it has been every where done when attempted. He referred to our own history immediately after the Revolution, when the disappearance of paper money was instantly followed, as if by magic, by the appearance of gold and silver; to France, where the energy of the great Napoleon, then first consul, restored an abundant supply of gold and silver in one year; to England, where the acquisition of gold was at the rate of $24,000,000 per annum for four years after the notes under five pounds were ordered to be suppressed; and he referred with triumph to our own present history, when, in defiance of an immense and powerful political and moneyed combination against gold, we will have acquired about 20,000,000 of that metal in the two concluding years of President Jackson's administration. Resting upon the general notoriety of the facts which he had stated relative to the rapid and easy acquisition of gold in all the instances referred to, he would economize time, and adduce proof in one instance only, that of England in 1819, after the suppression of the one and two pound notes, and the resumption of gold payments. Of many authors at hand, he would use, for its brevity and precision, the statement of Mr. Gallatin (Dec. 1830) in his Essay upon Banks and Cur rency: [JUNE 7, 1836. four dollars) in England, Wales, and Ireland, the amount of the circulating metallic currency has become equal to that of bank notes of every description. The metallic currency consists of eight millions sterling in silver, (which is not a tender in any payment exceeding forty shillings,) and in twenty-two millions sterling in gold. This measure (suppression of notes under five pounds) has given a better security against fluctuations in the currency, and a renewal of the suspension of specie payments, than had been enjoyed during the thirty preceding years. In France, where the Bank of France is alone authorized to issue bank notes, and none of a denomination less than 500 francs, its circulation of notes hardly ever reaches £10,000,000 sterling, or about one tenth part of the currency of the country." That Mr. B. having read this paragraph from Mr. Gallatin, relative to the suppression of small notes, to show the effect of the first step towards enlarging the specie basis of the currency, also referred to other passages relative to the next step, that of bringing back gold into circulation. The only measure for restoring this metal, in addition to the suppression of small notes mentioned by Mr. Gallatin, was that of correcting the erroneous standard of our gold, that of 15 to 1 of silver. has been done, and the standard raised higher than proposed by Mr. Gallatin; but the effect desired is not yet produced; gold is not yet in common and general use. An additional measure is therefore necessary, and that is a compulsory obligation on all the banks to pay their notes in gold and silver, one half each-the demander to have the first choice, the bank the second. At the time that Mr. Gallatin wrote (1830) three measures were necessary to bring back gold into circulation: 1st. Suppression of notes under twenty dollars; 2d. Correction of the erroneous standard of gold; and, 3d. Compulsory obligation on banks to pay gold. One of these measures, a correction of the standard, has been adopted, and has partially restored gold; but its effect will be transient and inadequate unless the other two are added. "For the same reasons, any accidental inequality in the distribution of the precious metals amongst the several countries, in proportion to their respective wants, is promptly and easily repaired; and any extraordinary demand from a particular country met without difficulty, or sensibly affecting the price of the metal required. The general supply or stock on hand is always sufficient to meet such demand, and the expenses and charges of transportation are, on account of the greater value of an equal bulk, far less than those of any other commodity-recommendation of President Jackson. hardly ever exceeding, in time of peace, one per cent. on the value, even when brought from the most distant countries of the civilized world. During the four years which immediately followed the resumption of specie payments in England, that occurrence occasioned an extraordinary demand of more than £20,000,000 sterling in gold, (about $100,000,000, to be supplied in four years,) or about $24,000,000 per annum; being three times as much as the annual supply of that metal; and this demand was met without any difficulty, or sensibly affecting the price of gold." Mr. B. took leave of this important and all-essential point, (the suppression of bank notes below twenty dollars,) with bringing to the memory of the Senate two most pertinent and weighty recollections-one founded upon the action of the Senate itself, the other on the Four years ago, at the veto session, and when a modified recharter passed both Houses in favor of the Bank of the United States, the sum of twenty dollars was agreed upon as the minimum size of the notes to be issued under the renewed charter. The proceedings of the Senate on this point appear thus in Gales & Seaton's Register of Debates for Monday, the 28th of May, 1832: "The Senate then again proceeded to consider the bill to modify and continue the charter of the Bank of the United States. The question being on the amendments proposed by Mr. WEBSTER, being in substance: "1st. That the Secretary of the Treasury, when directed by the President, have the power to purchase additional stock in the bank to an amount not exceedthree millions; and, Mr. B. held this testimony to be entirely conclusive of the perfect facility and extreme promptitude with which any commercial nation can supply itself with a gold currency. He would quote from the same authoring a paragraph on the means of increasing the specie circulation of the United States: "We perceive but two means of enlarging the circulating metallic currency: 1. The suppression of small notes. 2. The measures necessary to bring gold again into circulation." "The first measure is that which, after long experience, a most deliberate investigation, and notwithstand ing a strenuous opposition by the parties interested, has been finally adopted and persevered in by the Govern ment of Great Britain. By the suppression of all notes of a denomination less than five pounds sterling (twenty 2d. That it should not be lawful for the bank, after the 4th day of March, 1836, to issue any notes of a less value than dollars. "Mr. WEBSTER said a few words in defence of his second amendment, which imposed no restriction until after the expiration of the present charter. The effect of his proposition would be to introduce more specie into circulation, and to banish the small notes with which the country is inundated. He moved to fill the blank with ten dollars, but expressed his willingness to vote for a higher restriction if any Senater should move it." "Mr. BENTON would propose twenty dollars. He wished the basis of circulation throughout the country to be in hard money. Farmers, laborers, and market people, ought to receive their payments in hard money. They ought not to be put to the risk of receiving bank notes in all their small dealings. They are no judges of good or bad notes. Counterfeits are sure to fall upon their hands; and the whole business of counterfeiting was mainly directed to such notes as they handle-those under twenty dollars." "After a few remarks from Mr. FooT and Mr. CHAMBERS, the question was taken on filling the blank with twenty dollars; when it was agreed to, and the amendment, thus shaped, was concurred in." This was one of the recollections which Mr. B. wished to bring to the mind of the Senate; the other was, that President Jackson, in his last annual message to Congress, had fixed upon twenty dollars as the minimum size of bank notes which ought to be tolerated. Mr. B. took this occasion to express his regret that the true idea of banks seemed to be lost in this country, and that here we had but little conception of a bank, except as an issuer of currency. A bank of discount and deposite, in contradistinction to a bank of circulation, is hardly thought of in the United States; and it may be news to some bank projectors, who suppose that nothing can be done without banks to issue millions of paper, to learn that the great bankers in London and Paris, and other capitals of Europe, issue no paper; and, still more, it may be news to them to learn that Liverpool and Manchester, two cities which happen to do about as much business as a myriad of such cities as this our Washington put together, also happen to have no banks to issue currency for them. They use money and bills of exchange, and have banks of discount and deposite, but no banks of circulation. Mr. Gallatin, in his Essay upon Currency, thus speaks of them: "There are, however, even in England, where incorporated country banks issuing paper are as numer. ous, and have been attended with the same advantages, and the same evils, as our country banks, some extensive districts, highly industrious and prosperous, where no such bank does exist, and where that want is supplied by bills of exchange drawn on London. This is the case in Lancashire, which includes Liverpool and Manchester, and where such bills, drawn at ninety days after date, are endorsed by each successive holder, and circulate through numerous persons before they reach their ultimate destination, and are paid by the drawee." Mr. B. greatly regretted that such banks as those in Liverpool and Manchester were not in vogue in the United States. They were the right kind of banks. They did great good, and were wholly free from mischief. They lent money; they kept money; they transferred credits on books; they bought and sold bills of exchange; and these bills, circulating through many hands, and endorsed by each, answered the purpose of large bank notes, without their dangers, and became stronger every time they were passed. To the banks it was a profitable business to sell them, because they got both exchange and interest. To the commercial com. munity they were convenient, both as a remittance and as funds in hand. To the community they were entirely safe. Banks of discount and deposite in the United States, issuing no currency, and issuing no bank note except of $100 and upwards, and dealing in exchange, would be entitled to the favor and confidence of the people and of the Federal Government. Such banks only should be the depositories of the public moneys. It is the faculty of issuing paper currency which makes banks dangerous to the country, and the height to which this danger has risen in the United States, and the progress which it is making, should rouse and alarm [SENATE. the whole community. It is destroying all standard of value. It is subjecting the country to demoralizing and ruinous fluctuations of price. It is making a lottery of property, and making merchandise of money, which has to be bought by the ticket holders in the great lot. tery at two and three per cent. a month. It is equivalent to the destruction of weights and measures, and like buying and selling, without counting, weighing, or measuring. It is the realization, in a different form, of the debasement and arbitrary alteration of the value of coins practised by the Kings of Europe in former ages, and now by the Sultan of Turkey. It is extinguishing the idea of fixed, moderate, annual interest. Great duties are thus imposed upon the legislator; and the first of these duties is to revive and favor the class of banks of discount and deposite; banks to make loans, keep money, transfer credits on books, buy and sell exchange, deal in bullion, but to issue no paper. This class of banks should be revived and favored; and the United States could easily revive them by confiding to them the public deposites. The next great duty of the legislator is to limit the issues of banks of circulation, and make them indemnify the community in some little degree, by refunding, in annual taxes, some part of their undue gains. The progress of the banking business is alarming and deplorable in the United States. It is now computed that there are 750 banks and their branches in operation, all having authority to issue currency, and, what is worse, all that currency is receivable by the Federal Government. The quantity of chartered bank capital, as it is called, is estimated at near $800,000,000; the amount of this capital reported by the banks to have been paid in is about $300,000,000; and the quantity of paper money which they are authorized by their charters to issue is about $750,000,000. How much of this is actually issued can never be known with any precision; for such are the fluctuations in the amount of a paper currency, flowing from 750 fountains, that the calculation of one day cannot be relied upon for the next. The amount of capital, reported to be paid in, is, however, well ascertained, and that is fixed at $300,000,000. This, upon its face, and without recourse to any other evidence, is proof that our banking system, as a whole, is unsolid and delusive, and a frightful imposition upon the people. Nothing but specie can form the capital of a bank; there are not above sixty or seventy millions of specie in the country, and, of that, the banks have not the one half. Thirty millions in specie is the extent; the remainder of the capital must have been made up of that undefinable material called "specie funds," or "funds equivalent to specie," the fallacy of which is established by the facts already stated, and which show that all the specie in the country put together is not sufficient to meet the one fifth part of these "specific funds," or "funds equivalent to specie." The equivalent, then, does not exist! credit alone exists; and any general attempt to realize these "specie funds," and turn them into specie, would explode the whole banking system, and cover the country with ruin. There may be some solid and substantial banks in the country, and undoubtedly there are better and worse among them; but as a whole-and it is in that point of view the community is interested--as a whole, the system is unsolid and delusive! and there is no safety for the country until great and radical reforms are effected. The burdens which these 750 banks impose upon the people were then briefly touched by Mr. B. It was a great field, which he had not time to explore, but which could not, in justice, be entirely passed by. First, there were the salaries and fees of 750 sets of bank officers; presidents, cashiers, clerks, messengers, notaries |