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MADE IN THE SENATE OF THE UNITED STATES, JANUARY 17, 1838,

IN RELATION TO THE COMMONWEALTH BANK, BOSTON.

MR. WEBSTER rose to submit the following resolution:

Resolved, That the Secretary of the Treasury be requested to obtain information, and lay the same before the Senate, with as little delay as possible, respecting any payments of pensions, by the late pension agent of Boston, or of fishing bounties, recently made by the collector at Boston, in bills of the Commonwealth Bank of that city; and the whole amount of such payments; and that he further inform the Senate by what authority or direction payment of such pensions and bounties has been made in such bills; and that he further inform the Senate whether any, and, if any, how much, of the public money of the United States is in deposit at said bank; and, if any of such money be therein deposited, at what time or times such deposits were made.

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In presenting this resolution, Mr. W. said he felt it to be his duty to call the attention of the Senate to the circumstances here alluded to, at the earliest opportunity, in order to the institution of an official inquiry into the facts of the case, and to obtain information with respect to the manner in which the duty of public officers had been discharged, in reference to the causes, by which a severe loss had been made to fall upon a large number of industrious and meritorious citizens. Mr. W. did not submit this resolution for inquiry on the ground of mere newspaper rumor. He had received letters from highly-respectable private sources, informing him of the general facts of the case. He understood the case to be that, at the period when the fishing bounties became due, - money well and hardly earned, by a laborious, industrious, and worthy class of citizens, — application for payment was made to the collector at Boston, he being the officer charged on the part of the Government with the duty and business of paying this money. That officer paid the fishermen, not as the law directs, in specie, or bills equivalent to specie, but in the bills of this now broken bank, or in checks upon it, which checks, of course, it was known would not be paid in specie. Mr. W. had been given to understand that this officer refused to pay the bounty due in Treasury notes, when asked to do so; and that he refused also to pay the money in specie, although requested ; and that, substantially and in effect,

the parties entitled to payment were put to the option of taking the paper of this bank, or of taking nothing at all! This, he said, was his information.

Mr. W. held in his hand a letter from one of the most considerable fishing towns in the State, namely, Marblehead, and he was thereby informed that, very shortly before this bank failed, that is, within a week or two, or some such period, the money due from Government to these fishermen had been paid in the manner described, a large amount of it entirely in the bills and notes of this bank. The whole amount of bills of this bank paid out by the Government officer on the part of Government, Mr. W. could not tell. In Marblehead alone, his letter mentioned ten thousand dollars; and he had heard of other similar payments, in other towns; the whole amounting, as report said, to fifty or a hundred thousand dollars, and paid out when the bank was on the eve of a total crash, and within a few days of its failure !

Well, sir, (continued Mr. W.) when the money in these large quantities had been paid out, the bank failed; and all that these

poor fishermen had received in payment from the United States is · now dead on their hands.

Mr. W. wished that a proper inquiry should be made by Congress into such a state of things, and for this object he had drawn the attention of the Senate to the circumstances of the case, with a view to the obtaining of information on two points — Ist. As to the facts; how far the public officer of the Government had been engaged in paying out the notes of this bank for the dues of the United States; and 2dly. As to the authority; that is, by what legal authority the officer of the United States' Government had made such payments, and whether it was done by the direction of the Secretary of the Treasury, or whether it had been permitted and allowed by him.

Mr. W. thought that however much gentlemen might differ in opinion as to the resolution of 1816, whether that resolution was the law of the land, or whether it were a mere recommendation or admonition, as some had maintained, (though Mr. W. himself had always considered it to be a law,) however that question might be settled, Mr. W. had thought that the law now existing, respecting payments by the Government, was at least clear and indisputable; so that no one would venture to defend the act of the Government, of paying in notes of banks known to be of less value than specie.

Mr. W. begged to refer to the solemn enactment of Congress, made only two years ago. It would be found in the second section of the Appropriation bill of 14th April, 1836, and is as follows: —

“Sec. 2. And be it further enacted, That hereafter no bank notes of less denomination than ten dollars, and that from and after the third day of March, Anno Domini eighteen hundred and thirty-seven, no bank notes of less denomination than twenty dollars, shall be offered in payment in any case whatsoever in which money is to be paid by the United States or the Post Office Department; nor shall any bank note of any denomination be so offered, unless the same shall be payable, and paid on demand, in gold or silver coin, at the place where issued, and which shall not be equivalent to specie at the place where offered, and convertible into gold or silver upon the spot, at the will of the holder, and without delay or loss to him; Provided, That nothing herein contained shall be construed to make any thing but gold or silver a legal tender by an individual, or by the United States."

Would any gentleman rise up and say, in the very teeth of the law, that the passing of these large amounts of notes, known not to be equivalent to specie, and immediately before the failure of the bank, was legal, was justifiable, either on the part of Government or its officers? The law expressly says, “ No public officer shall offer in payment bank bills not equivalent to specie on the spot where they are offered.” Will it be said that the United States officer in the present instance did not know that these notes were not equivalent to specie? This is not possible ; he knew this bank, like others, had not paid specie since May last ; and that since that time its bills have not been equivalent to specie. Or will it be said he did not know the law ? Certainly the Secretary of the Treasury must have drawn the attention of all disbursing officers to this act of Congress.

Mr. W. thought it possible that it might be said, in excuse of this transaction, that these poor fishermen and pensioners took this now worthless money voluntarily, or at their own option. But whether the individual who is to be paid may be made willing to take such irredeemable paper or not, the law is direct and peremptory, and prohibits the officer from offering it. The consent of an individual, therefore, to take it, especially when he can get nothing else, will not justify that violation in any quarter. But what consent can that be esteemed, what voluntary taking is there in such cases, where a man, because he cannot get all that is due to him, is compelled to take part, rather than have none? What is there voluntary about it ? This is coercion, and not consent. Congress has not yet admitted the notion, and Mr. W. hoped it never would, that the receipt of paper under par was voluntary, whenever officers of Government could prevail on those who were entitled to the payment of money from the United States to take it, under the penalty of getting nothing. His letter, indeed, said that specie had been asked for, and was refused; but whether asked for or not, or whether the fishermen knew they were entitled to specie or not, it was equally the duty of the officer to refrain from offering these bills. Mr. W. therefore wished to know by what authority Government, or the officers of Government, dispensed with the law. By what

VOL. III. 31

authority they repealed the statute, or disregarded it. By what license they had obtained the dispensing power.

It is (said Mr. W.) a notorious fact that no bank paper was, in the present state of the currency, equivalent to specie ; it was refused by the Government, who demanded and obtained specie, or Treasury notes, for debts due to itself. How, then, could the collector of Boston be justified in passing bad money in fulfilment of one of the most sacred duties of the Government, namely, the payment of the pensions of the aged and destitute revolutionary pensioners ?

It is said (though Mr. W. did not himself know the fact to be so) that there was a large amount of United States' money in that bank. This was also a subject on which Mr. W. was desirous that some information should be given to the Senate, for he had heretofore understood that the public money had all, or nearly all, been drawn out of the bank. Mr. W. wished to know when, and by whom, this sum, now understood to be there, was deposited, or how it came there.

Mr. W. did not wish to anticipate debate on the Treasury system bill, which was to be brought forward a fortnight bence; but he would, nevertheless, make a remark or two upon two points which he wished, as being important truths, might be kept in the constant view of Congress and the country.

The first was, that every notion and idea of justice required that there should be one mode of payment by the United States to all who were entitled to payments from Government or its officers. There was, at present, no uniform medium. Even the Treasury notes, which were issued to public creditors, were not all of equal value. Some of them carried interest at the rate of five per cent., some at the rate of two per cent., and soine at the rate of one mill per cent. But an interest of one mill!! Mr. W. could not but consider it in the highest degree derogatory to the dignity and character of any Government, to create such a difference in its payments, whereby the public creditor received a more or less valuable compensation, not according to his just demands, but according to his skill in making a bargain, according to his facility or difficulty of being put off with a larger or smaller amount !

The other point which he wished now and always to urge, was, that, in his opinion, however desirable it might be, as some imagined it, to have gold and silver for Government use, so long as there is a paper circulation in the country, it is not possible, in the nature of things, that Government can so conduct its transactions with the People, or keep itself safe, and keep them safe, while the general currency of the country is depreciated or deranged. In other words, there can be no safety, there can be no security nor confidence, even in transactions with Government, except by reforming and restoring the whole currency of the country, and establishing a general and uniform medium of payment. It is not possible for Government, with any practical utility, to have a sound currency only for itself; there must be such a currency for the People, and for the country generally. It will not be possible for the Government to stand apart, and strengthen itself, and take care of itself, and those who deal with it, and secure its own safety and theirs, while it neglects to provide for the safety, security, and wellbeing of the whole country.

He would add nothing to these remarks, further than to say, that in this case, and in all similar cases, if loss should turn out to have been suffered by individuals in consequence of illegal payments made by officers of Government, or in consequence of payments made in a depreciated inedium, if the officers themselves were not liable to make it good, he, for one, should vote to make good every such deficiency, to the utmost farthing, out of the Treasury.

The following is a copy of one of the letters referred to by Mr. WEBSTER, in the course of his remarks, when he also, in referring to it, said, that it was at the service of every Senator to see and examine it.

“Sir: You will, I am satisfied, excuse the liberty I take in addressing you these few lines, the subject being of the utmost importance to my fellowtownsmen. The Government have lately paid to the fishermen of this town their bounty money, amounting to something like $20,000. Something like $10,000 of this amount was paid in Commonwealth Bank bills, the remaining $10,000 in bills of other banks. Now, sir, just look at the distress that is likely to come upon this poor town by this specie-paying Government of ours. The Commonwealth Bank has stopped, and $100 would not buy a loaf of bread. The collector of Boston was solicited by a number of gentlemen of this town for specie, or even Treasury notes. No; he'd pay in no other way but by a check on the Commonwealth Bank. This, sir, is a hard case for the poor fishermen of this town, and I am satisfied, you, sir, will do what lies in your power (if any thing can be done) for their relief. The poor widow and revolutionary soldier come in also for their part in the distress of the town; many of them, who have received pensions, have been paid in Commonwealth Bank bills, and, having full reliance upon the Government, have kept the money they had paid them by the Government, believing that the Government would not pay them in bad money.

“ I am, dear sir, your obedient servant."

In Senate, FEBRUARY 6, 1838.

Mr. WEBSTER rose to move that the report of the Secretary of the Treasury, in answer to the resolution of the Senate, calling for information respecting the amount of the public moneys in the Commonwealth Bank, at Boston, be referred to the Committee on Finance.

In this report, said Mr. WEBSTER, the Secretary says that no in

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