tion was in terms such as the Senate had, was out of the question; and if it were by a strong vote, incorporated in the bill not, and should be adopted, under existing in relation to the finances sent to the other circumstances, it would prove one of the House; to send it again to them in the greatest calamities that could befal the present form, would be a useless repetition; country. The resolution should undergo that the last clause was on a subject that a full and deliberate investigation. It had constituted a part of the legislation of was contended that the banks, if left to the country from the commencement of themselves, would, under the operation the government, and that an examination of the causes that had produced a partial was proper to see how far the resolution resumption, go on till there was a general would conflict with the existing laws. resumption, without the aid of legislative That the resolution proposed to go farther quackery. than any act of Congress had ever done. Mr. Calhoun urged his conviction there Recent laws (the deposite act of 1836) pre- were but two measures which could possiscribed the notes that might be received, and bly prevent a repetition of the explosion now the provision is that the bills not only which, it was now contended on all sides, shall be received, but shall also be, com- must follow without the application of pulsorily, paid out by it. How far it was some effectual remedy: the first was a designed by the resolution to repeal all le- complete and entire divorce from the gislation on the subject, without saying whole banking system, and the other the so, was not known. No act of Congress establishment of a National Bank; and had ever made it imperative upon the Se- of the two, he considered the former as cretary of the Treasury to receive and by far the most safe and effectual. The pay out bank bills, as contemplated by the resolution proposed an entire abandonresolution; that no delay of the action of ment of the divorce, without substituting the Senate was desired; it was only deem- the Bank or any other preventive measure ed necessary to refer it to the committee, in its place, which was the least defensito satisfy themselves and others on the ble course that could possibly be pursued. points referred to. The first design of the Now was the time for a comparison resolution was to sustain the banks in re- between the Divorce and the establishsuming specie payments; the banks of ment of a National Bank. The country New York had resumed, as had several of could not stand another explosion; it the banks in Boston; that the Custom would not only overthrow the whole Houses and Post Offices received their banking system, but would shake our notes in payment of bonds and postages, institutions to their centre. That the Speand that the resolution therefore was not cie Circular had not caused the late explorequired for any immediate practical good. sion, as had been contended on the other It would be in vain for the government side, but was only a measure of necessity, to issue a notice in advance that it would from the expansion of the paper currency; receive the notes of all banks until they that under its operation the banks were put themselves in a condition to render gradually resuming specie payments; them receivable under existing laws. It that but for it the disease would have was contended that the resolution would become daily more and more bloated, uncause the paper received from the banks til it would have been utterly incurable. of New York to be disbursed throughout the country; this would carry them to the extreme south and west; and then if the public creditor refused them, specie must be transported there at great trouble and expense without any corresponding benefit.

It might be a great advantage to the New York banks to compel their notes to be paid out for one half of the expenditures of the Government, but it would benefit no one else.

It was argued that a reunion with the banks, as proposed by the resolution, would at no distant day be followed by another still more severe shock than that of May last. No act should be done to countenance, in any way, such a reunion. It seemed impossible that those in favor of a reunion could vote for the resolution, unless precautionary measures were first taken to guard against a recurrence of a calamity which would otherwise be inevitable. As for a National Bank, that

Had the resolution been to restore the former state of things, as it existed under the law of 1789, rescinding the resolution of 1816, it would have met with his support. It was argued that the other banks had stopped because the banks of New York had stopped, and that they had pledged themselves to resume whenever those banks should resume; that there were one hundred millions of dollars of specie in the country; that the solvent banks would now resume, and that the political and insolvent banks would not resume, or if they did, it would only be for the purpose of failing again in a short time.

Mr. Benton stated, that to relieve the distress was the avowed object of the resolution, and the mover seemed to be in a hurry to get it through, lest the distress should be all gone, and the glory of relieving it be lost. The resolution was to compel the repetition of an error that had been already so fatal to the country. It was to make the notes of nine hundred

banks the currency of the General Government, and at the same time it was declared by the mover of the resolution that all the banks would fail.

and the Secretary of the Treasury. There was no necessity for reference; there was no objection to the phraseology of the Resolution; it was the principles contained in it which caused the opposition. That to refer it to a committee, a majority of which were known to be decidedly hostile to it, would be contrary to all par

The resolution was pronounced to be a mass of deformity, iniquity, and mischief; that it went to plunder the public lands, to raise the revenue, defraud the public creditors, involve the country in shame liamentary usage. The resolution was,

however, referred, according to the motion of Mr. Wright, by the vote of Yeas 28, Nays 19. (See Table of Yeas and Nays, No. 22)

and disaster, reëstablish a National Bank, and perpetuate a paper-money government; that it went to disgrace and destroy the Administration, to rebuke all who voted for the Independent Treasury On the 16th of May, Mr. Wright, from Bill, and that it contained a modest re- the Committee on Finance, made a long quest that they should stultify themselves and elaborate report on the subject, reby voting for a proposition standing in viewing the whole course of legislation contradiction to every principle contained on the subject of the currency, from the in that Bill. It went to contradict every foundation of the Government to the preprinciple of General Jackson's hardmoney policy, that policy which had received the sanction of an immense majority of the American people.

sent time, and closing with a recommendation that the resolution should not receive the sanction of the Senate; of which report thirty thousand copies were ordered to be printed.

It was contended, on the other hand, especially by Mr. Clay, that the Resolu- On the 25th of May, ( Friday,) the Retion was so simple as to be perfectly un- solution was called up by Mr. Hubbard, derstood by every individual, and that and it gave rise to an earnest debate, therefore it was unnecessary to refer the which engaged the Senate for four daysmatter to the Committee on Finance. He the vote on the final passage of the resowas only anxious for a speedy action on lution, in the shape to which it was rethe subject: now, said he, was the accept- duced by the various amendments proed time to act, and to signify to the whole posed, being taken on the Tuesday folcountry that there was no intention to persevere in a course of invidious discrimination with regard to the money to be received in payment of the revenue.

lowing, Mr. Webster (Mr. Clay assenting) offered an amendment to strike out the first clause of the resolution, after the enacting clause, and to insert the following:-"That it shall not be lawful for the Secretary of the Treasury to make, or to continue in force, any general order which shall create any difference between the different branches of revenue, as to the money or medium of payment in which debts or dues accruing to the United States may be paid." Mr. Wright moved to amend the resolution by striking out the remainder of the original resolution. Mr. Clay, of Kentucky, himself moved to strike out the concluding clause, which was carried with but one dissenting vote, (Mr. Tipton.) Mr. Wright's motion to strike out the second clause of the resolution, which makes the reception of bank notes imperative, also prevailed, by the vote of Yeas 28, Nays 19. (See Table of Yeas and Nays, No. 23.) So that thus no fragment remained of the original resolution, Mr. Webster's substitute for the first clause being alone left standing, the effect of which was simply to re-assert what had been already enacted in the Independent Treasury Bill, repealing the famous Specie Circular.

It was contended by the mover, that the reference was urged, not so much for the purpose of examination into the merits of the resolution, as for the purpose of opposing and defeating it altogether; the New York banks had resumed, not so much on account of their ability to do so, as to comply with the law of the State, which made it imperative for them to do so on the ninth or tenth. There was a wide difference between an actual and a nominal resumption. The Collector and Postmaster, it seemed, were doing without law, what the Resolution proposed they should do by law. That the sending off of the New York notes, to pay disbursements in the south and southwest, would be a bungling operation; the Government might authorize some one to draw for them on New York, and the drafts would sell for a heavy premium. Great benefits would result to New York by the adoption of the Resolution, but nothing but the establishment of a National Bank would effectually remedy the evils of a disordered currency; that without it the country would be perpetually Mr. Morris introduced, as a substitute, exposed to embarrassments, under which a resolution repealing the joint resolution it was now suffering. The Resolution of 1816, on which the vote stood-Yeas 8, proposed to give the sanction of law to Nays 36. (See Table of Yeas and Nays, the measure, and not leave it to the whim No. 24.) And finally, on the question on and caprice of the Postmaster General ordering the resolution, as amended, to

be engrossed for its third reading, the vote was-Yeas 34, Nays 10. (See Table of Yeas and Nays, No. 25.)

Many powerful efforts were made by distinguished individuals on both sides.

dle and Albert Gallatin, and stated that there might also be other individuals equally competent to preside over a national institution, but that he did not know them. He argued that a National Bank was required by the common good of the whole country, and although, if it were practicable, an existing state institution might form a basis for it, still a new bank, chartered by Congress, with power to create branches, would, he considered, be preferable. His projet was substantially as follows.

2nd. The organization of the Corporation to be such as to blend public and private control in fair proportions, combining public and private interests. All foreigners to be excluded from the ownership of the stock.

The debate on this Resolution, at its successive stages, took a very wide range, embracing not only the subject of the currency generally, but all the leading party topics which have of late years agitated the country, growing out of that subject. It was participated in, more or less, by most of the Senate, and called forth some of the most powerful efforts 1st. The Bank to have a capital of that were made during the course of the $50,000,000, the stock to be distributed Session. Much of it turned on the fa- between the General Government and mous Specie Circular, which was alter- the States, according to Federal populanately attacked and defended with great tion, and individual subscribers; the poranimation, though it was admitted by tion assigned to the latter to be distrimany of its friends, that, having dis- buted at auction or by private subscripcharged its function at the time when it tion. was both useful and necessary, there existed now no objection on their part to its repeal, in the mode effected by this resolution as finally amended. In the shape to which it was reduced, many of the friends of the original resolution declared themselves quite indifferent to its fate. In 3d. The bank to set apart an adeits original shape, making the reception quate portion of its capital in producand disbursement of paper-money imper- tive stocks placed in permanent security ative instead of discretionary, as hereto- beyond the reach of the corporationfore, it was very severely denounced as a with the exception of the accruing profitsfarther step of submission to the ascend- as a safety fund to redeem the circulaancy of the banking power, than had ever ting paper in case of failure-this was yet been taken; and as designed, by pre- to guard the general mass of note holdparing the way for another expansion ers, who had no interest in the bank, and explosion, and by leaving the Govern- from loss, and was borrowed from the ment entirely powerless to defend itself, New York safety fund system to which only to lead back to the abandoned policy due reference was made. of a National Bank, with especial reference to the great projet submitted a few days before by Mr. Clay, of Kentucky, of which the following was the general outline.

4th. The bank to make periodically a public statement in regard to all of its transactions, and to spread out for inspection a list showing the names and responsibilities of its drawers, endorsers and debtors.

5th. The bank to limit the dividends so as not to authorize more thanper cent to be struck at one time.

6th. To restrict the rate of interest to

MR. CLAY'S NATIONAL BANK PROJECT. A number of petitions were presented during the course of the session in favor of the establishment of a National Bank, which led to no action requiring 6, or even 5, per cent. special notice, excepting on the occasion of the presentation of a petition by Mr. Clay, of Kentucky, on the 21st of May, when he took the opportunity to lay before the Senate an outline of his views, and of the position which he assumed 8th. To provide against the exercise before the country in relation to this im- of improper influence on the part of the portant question. He stated that it was executive upon the bank and on the part not the intention of the petitioners that of the bank upon the elections of the an existing State institution, having an country.

7th. To lay a restriction on the premium demanded for post notes and checks used for remittances, so that the maximum shall not exceed 11 per cent. between any two points of the Union.

eminent individual at its head, should He contended that the constitutional be chartered by Congress and transform- power to charter the bank ought no longed into a Bank of the United States. er to be considered an open question-that He denied that he had any such pur- there should be some bounds to human pose, notwithstanding he entertained controversy-that stability was a necesgreat respect for the individual at the sary want of society-that many who dehead of the institution alluded to. He nied the power to create, admitted the passed a high encomium upon Mr. Bid- benefits of, a Bank of the United States

1839.] National Bank.—Modification of the Deposite Act. 155

that four times Congress had deliberately, make the new bank more powerful than under the sway of all parties, affirmed its the old one ever was; we should have a existence-that every department of the popular government in form, but a monied Government had again and again asserted government in fact. New York would it. That forty years acquiescence by the indeed be the seat of "empire." He repeople, uniformity in the value of the cur- marked there was no allusion to gold and rency, facility and economy in domestic silver throughout the whole projet; it was exchanges, and unexampled prosperity in to be exclusively a paper bank, and would the general business of the country, with probably prove the greatest humbug of the bank-and without it, wild disorder modern times. To create a bank was in the currency, ruinous irregularity in the highest act of sovereignty; not to dedomestic exchanges, and general pros- fine its specie basis, was like going to sea tration in the commerce and business of without a compass. The Bank of Engthe nation-would seem to put the ques- land, where one dollar in every three was tion at rest, if it were not to be perpe- specie, could not regulate the paper curtually agitated. That the power had been rency of England alone according to its sustained by Washington, the Father of standard. How then, it was asked, could his Country, by Madison, the Father of this bank with no specie basis regulate the the Constitution, and by Marshall, the paper currency of this widely extended Father of the Judiciary-that precedents country? The old Bank, it was averred, were neither to be blindly followed or had not regulated the exchanges; they wantonly despised. Mr. Clay declared had at former periods been as much disthat he had no intention of formally ordered, under the United States Bank, presenting any proposition to establish as at present. a Bank of the United States; composed The power to establish an United States as Congress and the Executive now are, Bank had not been settled by former preit would be useless to offer such a pro- cedent; that while the law that establishposal; a bank should not be established ed it was in existence, good citizens subunless clearly called for by public opin- mitted to it without contending against ion; he believed a majority of the peo- its constitutionality, though many disbe ple now desired it, but had no conclu- lieved it; that the Supreme Court dodged sive evidence. He expressed his wil- the question, and left it for Congress to lingness to submit to the will of the decide. To be slaves to precedent in such majority, and closed by moving to lay a case would be to abandon the cause of the petition on the table. human liberty. The judiciary had deciNo general debate grew out of this ded the old alien and sedition laws to be occasion, Mr. Buchanan alone making constitutional-would the passage of ansome remarks in reply to this new po- other such act be deemed constitutional litical manifesto of the distinguished now? The Senate at this very session Senator from Kentucky. He argued that had determined to refund a fine inflicted it would prove a great evil to the country under the old sedition law, upon the prin wherever it might be located, that under ciple that the law was unconstitutional. Mr. Gallatin at New York it would have The petition was then laid on the table the same effect as under Mr. Biddle at without a division. The projet submitPhiladelphia. If it must be established, ted by Mr. Clay was generally regarded he preferred Philadelphia to New York. as one of the most important political deIf established at New York with $50,000- velopements of the session. 000, capital, the whole Union would become tributary to that city; that three-fifths of the revenue from customs was now collected at that port, and this amount would 1st. Mr. Webster's Bill. become the foundation of immense discounts and of commanding influence On the 31st May, a resolution was throughout the country. The Senator adopted, on motion of Mr. Webster, infrom Kentucky had came out boldly with structing the Committee on Finance to hisprojet,' and parties could now tell consider the act of June 23, 1836, known how they stood on one side a $50,000,000 as the Deposite Act-and to inquire National Bank, on the other a divorce of whether the Secretary of the Treasury the Government from all banks. It was could employ any of the Deposite Banks a work of supererogation to have any pro- which since the passage of that act have vision to prevent the government from suspended specie payments; and also, inwarring upon the bank, or the bank from to the expediency of repealing the proviwarring upon the government-with such sions of that act which prohibit the receipt, a bank establishment, no divorce could by the United States, of the bills of all ever be had, or even attempted. It would banks issuing notes of a less denominabe a consolidation of the money power tion than five dollars, and to report their and the political power of the country, opinion thereon. and would perpetuate the administration On the 8th of June, Mr. Wright, from that called it into existence. It would the Committee on Finance, made a full

MODIFICATION OF THE DEPOSITE ACT.

report, which set forth that the Secretary rules, regulations and restrictions under of the Treasury can, under the law, em- which they shall have accepted the said ploy any banks formerly used as depo- special deposites, and the compensation, sitories which shall resume specie pay- if any, for which they shall respectively ments, unless they have issued bills of a have agreed to perform this service. less denomination than five dollars, since the 4th of July, 1836; but at the same time the majority of the Committee refrained from recommending any such employment. In consequence of these proceedings, on Tuesday, June 12th, Mr. Webster introduced a bill making further provisions for the collection of the public revenues. The first section repealed so much of the Deposite Act as prohibited the receipt of the paper of specie paying Banks which may have issued, since July 4th, 1836, notes of less denomina

The second section prohibited the depositing, either on general or special deposite, with any bank, such bank notes as may be received in payment of the public dues under the provisions of the resolution of 1816; but require that the balance of such notes remaining on hand, after satisfying the drafts of the Treasury, drawn before the end of the several periods at which they were directed to make special deposites under the first section of this act, and for the payment of which the holders thereof may, bona fide, elect to receive bank notes, should be converted into The second and third sections autho- specie, to be placed on special deposite at rized the Secretary of the Treasury to the times and in the manner prescribed by select and employ any specie, paying this act. Provided, that no notes or bills banking institutions created by State of any bank shall be received or dislaw, as depositaries under that act, not- bursed, which shall, after the 1st of Ocwithstanding their haing suspended.

tion than five dollars.

act to regulate the deposites of the public money," approved, 23d June, 1836, except so far as to enable the Treasury Department to collect any debts which may be due or owing from the late Deposite Banks.

toher next, issue, re-issue, or pay out any The fourth section suspended the second note or bill of a less denomination than section of the act of 14th April, 1836, five dollars, and after 1st of October, 1841, making appropriations for the payment of of a less denomination than ten dollars. revolutionary pensioners. On the sug- The third section repealed the first gestion of Mr. Wright that it would twelve sections of the act, entitled "An be useless to refer it, the bill was laid on the table, to be called up at a future day. On the 27th June, (the fate of the Independent Treasury in the House having been decided), the bill was called up by Mr. Webster; when Mr. Buchanan offered, as a substitute amendment, a bill which he had himself introduced, on leave, the day before, supplementary_to the act to establish the Treasury De partment, of which the following was the substance:

It provided that the safe keeping of the public money should continue to be entrusted to the Treasurer of the United States under the provisions of the law of 1789, and it required the said Treasurer, under the direction of the Secretary of the Treasury, to order the Collectors and Receivers of the public money, at least once in sixty days, and as much of tener as in his judgment the safe keeping of the same might render necessary, to make special deposites in gold and silver of the balances then on hand, to the credit of the said Treasurer, in such banks as he may select, and under such rules, regulations and restrictions as the said Treasurer, under the direction of the Secretary of the Treasury, may deem best calculated to secure the safe keeping of the said special deposites, and to render him at all times acquainted with the condition of the said banks; the Secretary of the Treasury being directed to report to Congress, within one week after the commencement of their next session, the names of the banks thus selected, and the

This bill was introduced by Mr. Buchanan, not as what he would prefer, but as a practicable measure to bring the public revenue under the custody of law, and to relieve the Executive from a burthen of responsibility which it was essentially wrong in principle to impose upon it. He brought this forward as own individual movement, without party concert, and contrary to the views of some of his political friends.

The bill was amended, on motion of Mr. Clay, of Alabama, so as to prohibit the banks from discounting upon, or otherwise using, the money that may be placed with them on special deposite.

Some difference of opinion existed among the friends of the policy of the separation of the Government from the banks, whether, since the Independent Treasury Bill had failed, any other less complete measure ought to be adopted, to supply the entire absence of legal provision at present existing for the custody of the public revenues, and substitute some law or other, good or bad, for the mere Executive discretion on which the whole system now depended. Mr. Calhoun opposed strenuously both the bill and the amendment, preferring to go before the country on the broad naked question of the Di