SENATE.]

Sub-Treasury Bill.

[OCTOBER, 1837.

The effect of this measure upon the banks | who were the payers for duties and lands. should next occupy his attention.

It had been considered as a measure of open and violent hostility to those institutions; as fraught with unmixed evil to them. Was this the true view of it? Had it these exclusive tendencies? He thought not, and he would attempt to point out some positive benefits to the banks from its adoption.

Under these circumstances, and this action of the system, excesses were inevitable, and they had visited their consequences sweepingly upon the country and upon the Treasury itself.

Ought not this state of things to be a lesson to the wise not to renew a connection which had been so disastrous to every interest involved? To the Government and the public Treasury, as a creditor of the banks; to the banks, as debtors to the Treasury and creditors to the citizens; and to the people at large, and especially to the commercial community, as debtors to the banks.

It would leave the State banks to operate upon their own means-upon the capitals which the respective State Legislatures had thought proper to give to them, and upon the funds derived from their private depositors. These means would be perfectly certain and uniform, But it is said the withdrawal from the State so far as they consisted of the capital of the banks of our confidence, countenance, and pabanks, and would be subject to no dangerous tronage, in this particular, will prostrate and fluctuations, so far as they consisted of private destroy those institutions; that the attempt to deposits. Hence the action of the institutions separate the finances of this Government from could always be regulated by a certain standard them, is, in effect, a declaration of war against -the extent of their means for the accommo-them, which they cannot survive. Is this, can dation of their customers. This would discharge them from the inducement to those dangerous expansions and contractions, which not only promote, but cause, revulsions such as that under which the country now suffers.

this, be so? Will any sound and solvent State bank fail, because the United States does not entrust to it the safe-keeping of the moneys of the people? Did the State Legislatures, in chartering these banks, expect or intend that their credit or solvency should be sustained by the legislation of Congress, or the use of the funds of the Federal Government. If so, why have they limited and fixed their respective capitals, and attempted to set bounds to their operations? Why have they assigned different amounts of capital to different banks, dependent

The Government has been charged with being the cause of the present pecuniary embarrassments of the country, and he thought not without some foundation; but he considered the connection between the Treasury and the banks the only foundation for such a charge. What had we done? We had deposited our funds in the State banks. A period of unexampled pros-upon their location and business associations! perity had visited our country. Importations Certainly no other answer can be given to these had become excessive, and the duties thereupon interrogatories, than that they intended that had swelled the public revenue from that source each bank should have a capital equal to the beyond all reasonable anticipation. The banks wants of the business community surrounding received the excess of revenue which the wants it, and that all the banks of their creation of the Government and the public appropria- should have a credit and confidence with the tions did not call for. The same causes pro- people, and should transact a business propormoted unusual and unexampled sales of the tioned to the capitals granted to them respectpublic lands, and thus, from both of the great ively, and not beyond that limit. You, then, sources of revenue to the United States, streams by making your deposits with these instituwere poured into the public Treasury, widened tions, destroy the proportions which the State and deepened by their own accumulation and Legislatures have intended to establish and prevelocity. The banks were safe-keepers of the serve. Your deposits are treated as capital by public funds, the fiscal agents of the Treasury, the banks, and an extension of their loans, and and they were also the reservoirs from which an augmentation of their business, beyond that the importing and other merchants drew their which their own means would allow, is the nemeans, and from which the speculating pur-cessary consequence of your patronage. chasers of our immense domain were supplied with funds for their operations. So far as the Government was concerned, the consequences are obvious. The moment the revenue exceeded the wants of the Treasury, the excesses fed the passion they ought to have controlled. The banks were the receivers and the payers. They received, to keep for the Government, and loaned to the merchants and purchasers of our lands. The system, in fact, and in practice, was one of indefinite credit for both duties and lands. The money paid for both went into the banks for safe-keeping. The Treasury did not want it or call for it for payment of the public dues. The banks loaned it to their customers,

Can

this disposition of your moneys fail to promote excessive banking? The members of the State Legislatures have a knowledge of the business wants of all the places at which they locate banks, and their object is to measure the banking capital at any given point by the wants of business at that point. When they have done that, you come in with your deposits, distributed, not upon the basis which governs the State Legislatures, but according to your convenience for receipt or disbursement. The consequence is, that you pour your millions into these State institutions, without reference to the legitimate business calls for banking facilities at the points where your deposits are

made; and thus derange and destroy the proportions, as to these facilities, which the local Legislatures have determined to be safe and proper. In this way your patronage becomes an evil, and not a benefit. It stimulates the cupidity of the banks, and they, in turn, stimulate the cupidity of the business community around them, until excesses on the part of all produces revulsion, distress, and bankruptcy.

[SENATE.

[A further debate ensued, in which Messrs. Calhoun, Webster, and Buchanan, were the speakers, chiefly in support of previously expressed opinions, and in reply to objections.]

The question was put on Mr. CALHOUN'S
amendment, which was as follows:
Add the following as a new section:
Sec.

after the first day of January, eighteen hundred and And be it further enacted, That from and thirty-eight, the resolution of eighteen hundred and sixteen, authorizing the receiving of notes of speciepaying banks in dues to the Government, shall be so modified that only three-fourths of the amount due to the Government for duties, taxes, sales of public lands, or other debts, may be received in the notes of specie-paying banks; and, that from and after the first day of January, eighteen hundred and thirtynine, one-half may be so received; and from and after the first day of January, eighteen hundred and forty, one-fourth; and from and after the first day due for duties, sales of public lands, or other debts of January, eighteen hundred and forty-one, all sums Post Office, shall be paid in gold and silver coin only, to the Government, and all payments to the General or in such notes, bills, or paper, issued under the authority of the United States, as may be directed to be received by law; and from and after the said first day of January, in the year eighteen hundred and fortyone, every officer or agent engaged in making disbursements on account of the United States, or of the General Post Office, shall make all payments in gold and silver coin only, or in such notes, bills, or paper, issued as aforesaid, when authorized by law; and any receiving or disbursing officer, or agent, who shall neglect, evade, or violate the provisions of this section, shall be dismissed the service, and shall for, feit all compensation which may then be due him.

In every light, then, in which he could view this matter, it was his deliberate opinion that the banks would be benefited, and not injured, by making the existing separation between them and the public Treasury perpetual. The passage of this bill, at this time, might have some tendency to weaken the confidence of the community in the institutions; but, if such a consequence must attend this change of our policy, could there be a better time than the present to make that change? The banks are now-he would not say insolvent, for he did not believe that was the condition of any large portion of them-but unable to pay the demands upon them. That fact was avowed by themselves, and known to all the world. They were in a quasi insolvent state, and all the distrust which could grow out of such a condition they had brought upon themselves by their voluntary suspension of specie payments. It was in vain, then, to talk of the delicacy of their present credits. That delicacy had been destroyed by their own act, and before they could ever again restore themselves to the confidence of the community they must be sound in fact, and able to discharge, to the fullest extent, every obligation which general distrust could bring against them. It was erroneous to suppose that they could ever resume and sustain specie payments until they were thus prepared and thus armed. They must build up for themselves a new character, based upon a perfect fulfilment of all their obligations. If, then, we are to separate from them, and that separation is to have any tendency to affect their credit, this is the very period when it is most desirable-24. to them that the declaration of a perpetual divorcement should be made. Now it can do them no harm. They are already in a condition from which main strength alone can raise them; but at a time when their credit was unsuspected, and their operations unembarrassed and unimpeded, the measure might give them an injurious shock. Let it be done now, therefore, that, when they do rise, it may be distinctly known that they rise upon their own strength, unaided by our patronage, and untrammelled by our movements.

TUESDAY, October 3.

Sub-Treasury Bill.

The Senate resumed the consideration of the bill to provide for the collection and keeping of the public money, with the amendment offered by Mr. CALHOUN.

And the amendment was adopted by the following vote:

YEAS.-Messrs. Allen, Benton, Brown, Buchanan, Calhoun, Clay of Alabama, Fulton, Grundy, Hubbard, King of Alabama, Linn, Morris, Niles, Norvell, Pierce, Roane, Sevier, Smith of Connecticut, Strange, Walker, Wall, Williams, Wright, Young

NAYS.-Messrs. Bayard, Black, Clay of Kentucky, Clayton, Crittenden, Kent, King of Georgia, Knight, McKean, Nicholas, Prentiss, Preston, Rives, Robbins, Robinson, Smith of Indiana, Southard, Spence, Swift, Tallmadge, Tipton, Webster, White-23.

The amendment offered by Mr. RIVES as a substitute for the whole bill, (authorizing the reception of the bills of all specie-paying banks not issuing notes of less than $20,) was lost by:

YEAS.-Messrs. Bayard, Black, Clay of Kentucky, Clayton, Crittenden, Kent, King of Georgia, Knight, McKean, Nicholas, Prentiss, Preston, Rives, Robbins, Smith of Indiana, Southard, Spence, Swift, Tallmadge, Tipton, Webster, White-22.

NAYS. Messrs. Allen, Benton, Brown, Buchanan, Calhoun, Clay of Alabama, Fulton, Grundy, Hubbard, King of Alabama, Linn, Lyon, Morris, Niles, Norvell, Pierce, Roane, Robinson, Sevier, Smith of Connecticut, Strange, Walker, Wall, Williams, Wright, Young-26.

"That it shall be the duty of the Secretary of the Treasury to prescribe regulations to enforce the presentation of all Government drafts for payment at the place where payable; and to prescribe the time -according to the different distances of the depositories—within which they shall be presented for pay-diate interests of the Government itself, and

OCTOBER, 1837.]

Sub-Treasury Bill.

[SENATE.

Το

imately they ought, would they not, by re- | property, and in too many instances, the imsponding to this invitation and offer on our poverishment and ruin of their customers. part, give greater value to their paper-give it illustrate the correctness of these remarks, I a wider circulation-and adapt it to the use need only refer you to the greater pecuniary and interest of the community? And would distress and embarrassment of communities not such banks as resumed, at once derive all around any of the banks, which have been the advantages of superior credit, furnish the large depositories of the public money, comparcirculating medium, and do the business of the ed with those remote from such institutions. country, to the exclusion of such as failed, or If they have no large sums of public money on refused to comply? The answer is palpable-general deposit, on which to grant accommodano man can doubt on these questions.

Again, sir: The change in the mode of collecting the public revenue, in the kind of money receivable for it, will be so gradual as to occasion no shock whatever to the credit of the banks, or to the commercial community. Before we entirely discontinue receiving bank paper, more than four years will have elapsed. All this time will be allowed for the banks and merchants to adapt their businesss to the new system contemplated, and conform their business to the new state of things. It will give time for the State Legislatures to regulate their banking institutions, so as, in future, to prevent over-issues of paper; to restrain them from generating, or encouraging, a spirit of overtrading and inordinate speculation; to restrain them from making promises they cannot redeem, and thus restore to the country a sound circulating medium, and the just equilibrium of trade, and business of every description.

Moreover, we ourselves shall have time to see how the new system works-to check its velocity, if it be too great-or accelerate it, if it be too slow; and modify it, in all respects, as its results may indicate to be safe and expedient. As already shown, no change in the description of funds, receivable for public dues, will take place for the next fifteen months; for the year 1839, a reduction of one-fourth; for 1840, one-half may be paid in specie-paying bank paper; and so on to the consummation of the plan. If it be discovered that the policy operates injuriously, there will be ample time to amend or modify it.

tions, they will know and understand better the proper limits to prescribe to their liberality; they will have no fluctuations, no augmentations, no diminutions of capital to mislead them; their accommodations will be more uniform, and the amount of their circulation bear some relation to the amount of specie in their vaults. This being brought about, the value of produce, and property of all descriptions, will be more steady and uniform; we shall not have a negro, costing a thousand or fifteen hundred dollars to-day, sold twelve months hence to pay half the amount of consideration |—land at one time worth fifty dollars per acre, at another not more than twenty-and our great staple, one while commanding twenty-five dollars, and then not worth eight.

Sir, the Government ought, always, to be able to command its funds, and have them ever ready to meet any exigency. Experience has taught us, that this cannot be expected while we rely on banks. Gentlemen tell us that, although the State banks have failed to meet our expectations, we ought to continue their agency.

They ask us, would we discontinue the use of steamboats, because a boiler may sometimes explode, and produce fatal results? By no means, sir, while care and skill may reasonably be expected to ensure safety, and prevent such calamities. But, were we to discover that the machinery is entirely uncontrollable, and the boiler liable to spontaneous combustion-carrying universal misery and death among the passengers and crew, in despite of all the science, vigilance, and fidelity of the engineer—would But, sir, I have no apprehension that any in- it be wise or prudent to trust ourselves on jurious result will follow the adoption of this board? What would have been the situation measure. The chief embarrassments of the of the country in May last, when the banks community have arisen out of inordinate expan- suspended specie payments, had we been insions of the circulating medium, excessive ac- volved in war with some powerful foreign commodations, begetting extravagance, and enemy? Whatever might have been the emer, reckless speculations; and then sudden con-gency, we should not have been able to have tractions, withdrawals of those enormous loans, reductions of the amount of circulation, and thus, almost in a moment, reducing the value of property one-third, sometimes one-half. The Government deposits have, doubtless, heretofore, nurtured and increased this propensity of all banks to excessive issues and accommodations. They have loaned out the public money as if their own, and when called upon to pay it over, they have been necessarily compelled to press and coerce payments from their borrowers, who had, in their turn, treated this borrowed money as their own; and have thus occasioned embarrassment, the sacrifice of

commanded the resources of the nation. We might have been without a dollar for the pay or subsistence of an army to resist the invaders; our energies would have been crippled; and the most disastrous consequences might have followed. When we find that such is the unfortunate tendency of "the experiment," as gentlemen choose to call it, it is time we should abandon it, by whomsoever instituted or approved, heretofore.

But, sir, was not the Bank of the United States an "experiment," and has not that also failed to answer just expectation? No other Government but our own, ever did employ

SENATE.]

Mr. Madison's Papers.

[Остовка, 1837.

on landing from the boat, and repairing to the hotel, a collection of people, assembled without our procurement or knowledge. We each addressed a few observations to them on the ab

together; and this we felt bound to do out of
respect to them, and as the readiest, mode of
restoring to the day the quiet and repose which
are so important to its proper observance. But
no such language and no such sentiment as the
member has quoted or alluded to to-day escap-
ed from either of us.
I should not, of course,
have noticed in my place here the original slan-
der if it had not been alluded to by others.

such a fiscal agent, with powers of the same magnitude. It was, indeed, a fearful experiment, and well nigh fatal in its results. Yet, the recharter of the late United States Bank, or the establishment of a new one, is now an-sorbing public topics which had drawn them nounced as the only efficient remedy-the sovereign panacea for existing evils. The Senator from Kentucky (Mr. CLAY) has, to my astonishment, gone so far as to identify the establishment of such an institution with the permanency of the Union! It would seem, the question of a national bank is always portentous involving consequences of a most alarming character. Shortly after the removal of the deposits from the late Bank of the United Mr. CLAY rejoined that he believed, whatStates, we were told, by the same distinguished ever might be the character of the report, it gentleman, that we were then "in the midst had emanated from newspapers which supportof a revolution!" and the sentiment was re-ed the correctness of the gentleman's position; sponded to, by the presses and politicians of that he spoke from the newspaper account, the opposition, from one end of the Union to which he had never before heard controvertthe other. We were told, on the very floors ed. of Congress, that the deposits must be restored, or a revolution was at hand. The same sentiment was announced, when two members of Congress, during the same panic session, addressed an assembled multitude in Baltimore on Sunday. According to the newspapers of the day, it was said, by way of justification, "there were no Sabbaths in revolutionary times!" Sir, the subject of a national or United States bank cannot be touched without an attempt to produce excitement and agitation. It affords one of the most conclusive reasons against the establishment of such an institution, that it has the ability to produce such tremendous effects. The concentration of such an immense moneyed power in the hands of a few individuals, is at war with our peace and quiet; too dangerous to our liberties. It would soon control all our elections, from the highest to the lowest, and direct the operations, nay, usurp the powers,

of the Government itself.

When Mr. CLAY, of Alabama, concluded his speech

Mr. WEBSTER rose, and said that perhaps he ought to feel obliged to the member from Alabama for his quotation and adoption of a report, wholly without foundation, which had been circulated in the newspapers several years ago. That report was, that at a meeting of many citizens on a Sunday in Baltimore, at the time of the excitement in the country, created by the withdrawing of the deposits, he had said that there were no Sabbaths in revolutionary times. That, sir, (said Mr. W.,) was a vile falsehood and slander. I never said any such thing either then or at any other time. Having been home, on indispensable business, I was hastening back to my seat here to vote on very important measures then pending, and in regard to which friends had written to me to lose no time. When I arrived in Baltimore, on a Sunday evening, being in company with the distinguished and honorable gentleman who represented, at that time, the city of Philadelphia in the other House of Congress, we found,

Mr. WEBSTER said he pronounced the whole story a vile slander, whether reported of himself or his friend. Neither of us, sir, (said Mr. W.,) expressed any such sentiment, nor any thing like it. The whole matter was original and unmixed calumny.

Mr. CLAY, of Alabama, in reply, stated that, if it was a mistake or a calumny, it proceeded entirely from the papers in favor of the political principles advocated by Mr. W., and it had not proceeded from, or been circulated in, papers of the other side. This was the first time he had heard it contradicted; and, hearing it from such a source, he was satisfied he must have been misinformed.

The question was put on the passage of the bill, and decided in the affirmative by the following vote:

YEAS.-Messrs. Allen, Benton, Brown, Buchanan, Calhoun, Clay of Alabama, Fulton, Grundy, Hubbard, King of Alabama, Linn, Lyon, Morris, Niles, Norvell, Pierce, Roane, Robinson, Sevier, Smith of Connecticut, Strange, Walker, Wall, Williams, Wright, Young-26.

NAYS.-Messrs. Bayard, Black, Clay of Kentucky, Clayton, Crittenden, Davis, Kent, King of Georgia, Knight, McKean, Nicholas, Prentiss, Robbins, Smith of Indiana, Southard, Swift, Tallmadge, Tipton, Webster, White-20.

So the bill was passed, and sent to the House of Representatives for concurrence.

WEDNESDAY, October 11.

Mr. Madison's Papers. Mr. WALL, from the Joint Committee on the Library, reported a bill relinquishing to Mrs. Madison the copyright in foreign countries to the late President Madison's Journal of the Debates of the Convention which formed the Constitution; and also the avails of such contracts as had been made by her relative to its publication, prior to the law of the last session, which authorized the purchase of those papers by Government.