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In answer to Mr. BUCHANAN,
Mr. WEBSTER, having obtained and examined the act of 1815, said: The honorable member from Pennsylvania has been kind enough to say that I do not often get into difficulties in debate, and that when I do, I generally extricate myself better than I have done on the present occasion. He partakes in the supposed triumph of his friend from New York, (Mr. Wright,) in having proved me incorrect when I said that this Government had never issued such paper money as the Secretary has now recommended. Now, sir, although I am pleased to see the happiness which the gentleman enjoys, yet I believe I must dash it a little. Most assuredly, sir, it authorizes no such paper as is now proposed. I was persuaded it could not, as I have a pretty good recollection of the proceedings of Congress on such subjects at that time.
The law of 1815 authorized the issue of two classes of Treasury notes : Ist, such as bore no interest, but which, the very hour they were issued, might be funded in a seven per cent. stock, to be redeemed like other stocks of the Government. 2d. Treasury notes bearing an interest of five and two-fifths per cent. capable of being funded in like manner, in a six per cent. stock. These stocks were to be issued on application by any commissioner of the revenue in any State. Now, what comparison is there between either of these classes of Treasury notes and those recommended by the Secretary, which bear no interest, and for which no fixed redemption is provided ?
I affirm again, therefore, sir, all that I have said, namely, that the notes recommended by the Treasury are regular paper issues, like the old emissions of Congress and the States before the adoption of the present Constitution, and that no precedent has been found for them, and I am sure none can be found, in the practice of this Government.
ON THE CURRENCY, AND ON THE NEW PLAN FOR COLLECTING
AND KEEPING THE PUBLIC MONEYS. DELIVERED IN THE SENATE OF THE UNITED STATES, SEPTEMBER 28, 1837.
Mr. PRESIDENT: I am opposed to the doctrines of the Message, to the bill, and to the amendment of the member from South Carolina, (Mr. Calhoun. In all these, I see nothing for the relief of the country; but I do see, as I think, a question involved, the importance of which transcends all the interest of the present occasion.
It is my purpose to state that question ; to present it, as well to the country as to the Senate; to show the length and breadth of it, as a question of practical politics, and in its bearing on the powers of the Goveriment; to exhibit its importance, and to express my own opinions in regard to it.
A short recital of events and occurrences will show how this question has arisen
The Government of the United States completed the forty-eighth year of its existence, under the present constitution, on the third day of March last. During this whole period, it has felt itself bound to take proper care of the currency of the country; and no administration has admitted this obligation more clearly or more frequently than the last. For the fulfilment of this acknowledged duty, as well as to accomplish other useful purposes, a National Bank has been maintained for forty, out of these forty-eight years. Two institutions of this kind have been created by law; one, commencing in 1791, and limited to twenty years, and expiring, therefore, in 1811; the other, commencing in 1816, with a like term of duration, and ending, therefore, in 1836. Both these institutions, each in its time, accomplished their purposes, so far as currency was concerned, to the general satisfaction of the country. But before the last bank expired, it had the misfortune to become obnoxious to the late administration. I need not, at present, speak of the causes of this hostility. My purpose only requires a statement of that fact, as an important one in the chain of occurrences. The late President's dissatisfaction of the bank was intimated in his first annual Message, that is to say, in 1829. But the bank stood very well with the country, the President's known and growing hostility notwithstanding; and in 1832, four years before its charter was to expire, both Houses of Congress passed a bill for its continuance; there being in its favor a large majority of the Senate, and a larger majority of the House of Representatives. The bill, however, was negatived by the President. In 1833, by an order of the President, the public moneys were removed from the custody of the bank, and were deposited with certain selected State banks. This removal was ac. companied with the most confident declarations and assurances, put forth in every form, by the President and the Secretary of the Treasury, that these State banks would not only prove safe depos. itories of the public money, but that they would also furnish the country with as good a currency as it ever had enjoyed, and probably a better; and would also accomplish all that could be wished, in regard to domestic exchanges. The substitution of State banks for a national institution, for the discharge of these duties, was that operation, which has become known, and is likely to be long remembered, as the “ Experiment."
For some years, all was said to go on extremely well, although it seemed plain enough to a great part of the community that the system was radically vicious; that its operations were all inconvenient, clumsy, and wholly inadequate to the proposed ends; and that, sooner or later, there must be an explosion. The administration, however, adhered to its experiment. The more it was complained of, the louder it was praised. Its commendation was one of the standing topics of all official communications; and in his last message, in December, 1836, the late President was more than usually emphatic upon the great success of bis attempts to improve the currency, and the happy results of the experiment upon the important business of exchange. But a reverse was at hand. The ripening glories of the experiment were soon to meet a dreadful blighting. In the early part of May last, these banks all stopped payment. This event, of course, produced great distress in the country, and it produced also singular embarrassment to the administration.
The present administration was then only two months old; but it had already become formally pledged to maintain the policy of that which had gone before it. The President had avowed his purpose of treading in the footsteps of his predecessor. Here, then, was difficulty. Here was a political knot, to be either untied or cut. The experiment had failed, and failed, as it was thought, so utterly and hopelessly, that it could not be tried again.
What, then, was to be done ? Committed against a Bank of the United States in the strongest manner, and the substitute, from which so much was expected, having disappointed all hopes, what was the administration to do? Two distinct classes of duties had been performed, in times past, by the Bank of the United States; one more immediately to the Government, the other to the community. The first was the safe-keeping and the transfer, when required, of the public moneys; the other, the supplying of a sound and convenient paper currency, of equal credit all over the country, and every where equivalent to specie, and the giving of most important facilities to the operations of exchange. These objects were highly important, and their most perfect accomplishment by the experiment had been promised, from the first. The State banks, it was declared, could perform all these duties, and should perform them. But the experiment" came to a dishonored end in the early part of May. The deposit banks, with the others, stopped payment. They could not render back the deposits; and so far from being able to furnish a general currency, or to assist exchanges, (purposes, indeed, which they never had fulfilled, with any success,) their paper became immediately depreciated, even in its local circulation. What course, then, was the administration now to adopt? Why, sir, it is plain, that it had but one alternative. It must either return to the former practice of the Government, take the currency into its own hands, and maintain it, as well as provide for the safe-keeping of the public money by some institution of its own ; or else, adopting some new mode of merely keeping the public money, it must abandon all further care over currency and exchange. One of these courses became inevitable. The administration had no other choice. The State banks could be tried no more, with the opinion which the administration now entertained of them; and how else could anything be done to maintain the currency? In no way, but by the establishment of a national institution.
There was no escape from this dilemma. One course was, to go back to that which the party had so much condemned; the other, to give up the whole duty, and leave the currency to its fate. Between these two, the administration found itself absolutely obliged to decide; and it has decided, and decided boldly. It was decided to surrender the duty, and abandon the constitution. That decision is before us, in the Message, and in the measures now under consideration. The choice has been made; and that choice, in my opinion, raises a question of the utmost importance to the people of this country, both for the present and all future time. That question is, WHETHER CONGRESS HAS, OR OUGHT TO HAVE, ANY DUTY TO PERFORM IN RELATION TO THE CURRENCY OF THE COUNTRY, BEYOND THE MERE REGULATION OF THE GOLD AND SILVER COIN.
Mr. President, the honorable member from South Carolina remarked, the other day, with great frankness and good-humor, that in the political classifications of the times, he desired to be considered as nothing but an honest nullifier. That, he said, was his character. I believe, sir, the country will readily concede that character to the honorable gentleman. For one, certainly, I am willing to say, that I believe him a very honest and a very sincere nullifier, using the term in the same sepse in which he used it himself, and in which he meant to apply it to bimself. And I am very much afraid, sir, that (whatever he may think of it himself) it has been under the influence of those sentiments, which belong to his character as a nullifier, that he has so readily and so zealously embraced the doctrines of the President's Message. In my opinion, the Message, the bill before us, and the honorable member's amendment, form, together, a system, a code of practical politics, the direct tendency of which is to nullify and expunge, or, perhaps, more correctly speaking, by a united and mixed process of nullification and expunging, to abolish, a highly-important and useful power of the Government. It strikes down the principle upon which the Government has been administered, in regard to the subject of the currency, through its whole history; and it seeks to obliterate, or to draw black lines around, that part of the Constitution on which this principle of administration has rested. The system proposed, in my opinion, is not only anti-commercial, but anti-constitutional also, and anti-union, in a high degree.
You will say, sir, that this is a strong way of stating an opinion. It is so. I mean to state the opinion in the strongest manner. I do not wish, indeed, at every turn, to say, of measures which 1 oppose, that they either violate or surrender the Constitution. But when, in all soberness and candor, I do so think, in all soberness and candor I must so speak; and whether the opinion which I have now expressed be true, let the sequel decide.
Now, sir, Congress has been called together in a moment of great difficulty. The characteristic of the crisis is commercial distress. We are not suffering from war, or pestilence, or famine ; and it is alleged, by the President and Secretary, that there is no want of revenue. Our means, it is averted, are abundant. And yet the Government is in distress, and the country is in distress; and Congress is assembled, by a call of the President, to provide relief. The immediate and direct cause of all is, derangement of the currency and the exchanges; commercial credit is gone, and property no longer answers the common ends and purposes of property. Government cannot use its own means, and individuals are alike unable to command their own resources. The operations, both of Government and people, are obstructed; and they are obstructed, because the money of the country, the great instrument of commerce and exchange, has become disordered and useless. The Government has funds; that is to say, it has credits in the banks, but it cannot turn these credits into cash; and individual citizens are as bad off as Government. The Government is a great creditor