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least, in the country, and much of it many times. The bills drawn against it when shipped, either for Europe or the Atlantic ports, are usually cashed at the place of drawing, commonly, no doubt, by means of bank notes, or bank credits.

I put all these cases but as instances showing the increased value of property and amount of business in the country, and accounting therefore for an expansion of the circulation, without supposing great excess; since it is obvious that the circulating money of a country naturally bears a proportion to the whole mass of property, and to the number and amount of business transactions.

But there is another cause of a less favorable character, which may have had its effect already; or, if not, is very likely to have it hereafter in augmenting the circulation of bank notes; I mean the obstruction and embarrassment of the domestic exchanges. In a proper and natural state of affairs, the place of currency, or money, is filled to a great extent by bills of exchange; and this continues to be the case so long as the rates of the exchange remain low and steady. Nobody, for example, will send bank notes or specie from New York to New Orleans, if he can buy a good bill at par, or near par. But when exchange becomes disturbed, when rates rise and fluctuate, bills cease to be able to performn this function, and then bank notes begin to be sent about from place to place, in quantities, to supply the place of bills of exchange, in payment of debts and balances. All such, and all other, derangements and distractions in the free course of domestic exchanges, necessarily produce an unnatural and considerable increase of the circulation. So far as our circulation has been, or may be, augmented by this cause, so far both the cause and the effect are to be deplored. In my opinion, we have certainly reason to fear this excess hereafter. What is to prevent it? Is it possible that so many State banks, so far apart, so unknown to each other, with no common objects, no common principles of discount, and no general regulation whatever, should act so much in concert, and upon system, as to maintain the currency of the country steady, without either unjust expansion or unnecessary contraction ? I believe it is not possible. I believe many of those who insist so much on hard money circulation believe this also; and that they press their impracticable hard money notions, from a consciousness that the discontinuance of a national institution has brought the country into a condition in which it is threatened with issues of irredeemable paper.

Our present evil, however, is of a different kind. It is, indeed, somewhat novel and anomalous. With high general prosperity, good crops, generally speaking, an abundance of the precious metals, and a favorable state of foreign exchanges, men of business have yet felt, for some months, an unprecedented scarcity of money. That is the state of things; its cause, in my opinion, is expressed in a few words: it is the derangement of internal intercourse, and internal exchange. Our difficulty is not exhaustion, but obstruction Every body has means enough, but nobody can use his means. All the usual channels of commercial dealing are blocked up. The manufacturers of the North cannot obtain from the South the proceeds of the sales of their articles; the South finds money scarce, too, in the midst of its abundant exports.

In a country so extensive and so busy, every merchant's means become more or less dispersed, and exist in various places in the shape of debts. Exchange is the instrument, the wand, by which he reaches forth to these means wherever they are, and uses them for his immediate and daily purposes. But this instrument is broken. He can no longer touch with it his distant debt, and make that debt present money. He seeks, therefore, for expedients; borrows money, if he can, till times change; pays enormous rates of interest to maintain credit; thinks things, when at the worst, must soon change; looks for reaction, and sacrifices to capitalists, brokers, and money-lenders, the hard earnings of years, rather than fail to fulfil his commercial engagements. It is a happy and blessed hour, this, for greedy capital and grasping brokerage; an excruciating one for honest industry. The very rich grow every day richer; the laborious and industrious, every day poorer. Meantime, the highways of commercial dealing and exchanges grow more and more founderous, or are all breaking up.' Specie, always most useful as the basis of a circulation, when most in repose, gets upon the move. Any time the last four months it might have happened, and many times doubtless it has happened, that steam-boats from New York, carrying specie to Boston, have passed in the Sound steam-boats from Boston carrying specie to New York. Boating and carting money backward and forward becomes the order of the day; and there are those who, the more they bear of specie, hauled and transported about from place to place, in masses, the more they flatter themselves with the idea that the country is returning rapidly to a safe and happy specie circulation !

There may be other minor causes. They are not worth enumerating. The great and immediate origin of evil is disturbance in the exchange; and, in my opinion, this disturbance has been caused by the agency of the Government itself. The fifty millions in the Treasury have been agitated by unnecessary transfers. As a large portion of this sum was to be deposited with the States at the beginning of next year, the Secretary seems to have thought it necessary to cut up, divide, and remove assigned portions of it before the time came. It is this idea of removal that has wrought the mischief. In consequence of this, money has been taken from places of active commercial business, where it was much needed,



and all used, and carried to places where it was not needed, and could not be used.

The agricultural State of Indiana, for example, is full of specie; the highly commercial and manufacturing State of Massachusetts is severely drained. In the mean tiine, the money in Indiana cannot be used. It is waiting for the new year. The moment the Treasury grasp is let loose from it, it will tend again to the great marts of business ; that is to say, the restoration of the natural state of things will begin to correct the evil of arbitrary and artificial financial arrangements. The money will go back to the places where it is wanted. It will seek its level, and its place of usefulness. In my opinion, the proper execution of the deposit law did not make it at all necessary for the Treasury to order these previous local changes. The law itself is not answerable for the inconvenience which has resulted. When the time came, the States, all of them, would have been very glad to receive the money where it was. They wanted but an order for it. They desired no carting. Can any thing be more preposterous than to transfer specie from New York to Nashville, when to a man in Nashville specie in New York is two per cent. more valuable than if he had it in his own house? There is always a tendency in specie, not actually in the pockets of the People, towards the great marts and places of exchange. Those who want it, want it there. There the great transactions of commerce are performed, and there the means of those transactions naturally exist, simply because there they are required. Now, what reason was there for disturbing the revenue, thus lying where it had been collected, and thus mingled with the commerce of the country? Why laboriously drag it off, far from its place of useful action, to places where it was not wanted, and could do no good, and there hold it, under the key of the Treasury.

This anticipation of the operation of the deposit law — this attempt at local distribution — this arbitrary system of transfer, which seems to forget at once the necessities of commerce, and the real uses of money, I regard as the direct and prime cause of the pressure felt by the community. But the Treasury order came powerfully in aid of this. This order checked the use of bank notes in the West, and made another loud call for specie. The specie, therefore, is transferred to the West to pay for lands; being received for lands, it becomes public revenue, is brought to the East for expenditure, and passes, on its way, other quantities going West, to buy lands also, and in the same way to return again to the East. Now, Sir, how does all this improve the currency? What fraud does it prevent, what speculation does it arrest, what monopoly does it suppress? I am very much mistaken if all this does not embarrass the small purchaser of land much more than the large one. He who has fifty or a hundred thousand dollars to lay out, may collect his specie, not without some charge, it is true, but without a very beavy charge. But, if there be a man, with a hundred or two dollars, waiting to take up a small parcel for actual settlement, and his money be in bank notes, and the bank, perhaps, at a great distance, what has he to do? He must send far to exchange a little money; or else he must submit to any brokerage which he may find established in the neighborhood of the land-office. Upon the local operation of this order, however, I say the less, as on that point Western gentlemen are better informed and better judges.

I am willing to hope, Sir, and, indeed, I do hope and believe, that when the first payment or deposit under the act of last session shall have been made, and the States shall have found some use and employment for the money, and when this unnatural transfer system shall cease, money will seek its natural channels, and commercial business resume, in some measure, its accustomed habits. But this Treasury order will be a disturbing agent, every hour it is suffered to exist. Indeed, it cannot be allowed to exist long. It is not possible that the West can submit to a measure at once so injurious and so partial. Hard money at the land-office, and bank notes at the custom-house, must make men open their eyes after a while, whatever degree of political confidence weighs down their lids. I look upon it, therefore, as certain, that the order will not be permitted long to remain in force.

If I am now asked, Sir, whether, supposing this order to be rescinded, and the deposit law executed, and the transfers discontinued, affairs will return to their former state, I answer, with all candor, that though I look, in those events, for a great improvement, I do not expect to see the domestic exchanges and the currency return entirely to their former state. I do not believe there is any agency at work, at present, competent to bring about this desirable end. In other words, I do not believe that the deposit banks, however well administered, can fully supply the place of a national institution ; and I am very much mistaken if intelligent men, connected with those institutions themselves, believe any such thing. I find, that in 1828, 1829, 1830, 1831, and 1832, exchange at New York, in the southern and south-western cities, averaged three fourths of one per cent. discount, or thereabouts. Now, I doubt' whether the most sanguine of those connected with the deposit banks expect to be able, through their means, to bring back exchanges to that state, or any thing like it.

The deposit banks are separate and distinct institutions, many of them strangers to each other, without full confidence in each other, and all acting without uniformity of purpose. Their objects are distinct, their capitals distinct, their interests distinct. If one of them has connection with some others, it yet has no unbroken chain of connection. They have nothing which runs through the whole

circle of the exchanges, as that circle is drawn through the great commercial cities of the Union. They can only act in the business of exchange to the extent of funds, or not much beyond it, actually existing. A national institution, with branches or agencies at different points, may deal in exchanges between these points in amounts to meet the convenience of the Public, without reference to the fact of the existence of local funds. One institution, therefore, with branches, has facilities which never can be possessed by different institutions, however honorably or ably conducted.

For myself, I am of the same opinion as formerly, that for the administration of the finances of the country, for the facility of internal exchanges, and for the due control and regulation of the actual currency, a national institution, under proper guards and limits, is by far the best means within our reach. And I am, as I always have been, of opinion, that Congress, having the power of regulating commerce, and the power over the coinage, has power, also, which it is bound to exercise, by lawful means, over that currency in which the revenue is to be collected, and which is to carry on that commerce, external and internal, which is thus committed to its regulation and protection. All the duties of this Government are, in my judgment, not fulfilled, while it leaves these great interests, thus confided to its own care, to the discretion of others, or to the results of chance. But I will not go farther into these subjects at the present time.

Mr. President, I am indifferent to the form in which the Treasury order may be done away. Gentlemen may please themselves in the mode. I shall be satisfied with the substance. Believing it to be both illegal and injurious, I shall vote to rescind, to revoke, to abolish, to supersede, to do any thing which may have the effect of terminating its existence.

In Senate, JANUARY 30, 1837.

The bill to limit and designate the funds in which dues to the United States shall be receivable, having been read a third time, and the question being on its passage, Mr. MORRIS having concluded an argument against the constitutionality of the bill,

Mr. Webster said, when the resolution moved by the Senator from Ohio, (Mr. Ewing,) to rescind the Treasury order of July last, was under discussion, I expressed the sentiments which I then entertained, and which I hold now, in regard to that measure. My great object, as I then said, and now say, is to get rid of the order. I was not, and am not now, very solicitous as to the particular mode. When the subject was sent to the Committee on the Public Lands,

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