Register of Debates in Congress

25th CoNG. 1st SESS.]

Pay Members of Congress in Specie, &c.

continued deposite banks were induced from time to time to transfer to the Treasurer, about the sum of $200,000. [See C.] Of this, the interest on Indian stocks, not yet carried into the Treasurer's books, is near $40,000. The advances or payments made by the banks on drafts to individuals, have been considerable; but, as hereafter explained, the amount is entirely conjectural, and cannot be ascertained without much delay. The transfers to the Treasurer constituted about $130,000 of the above aggregate. [See C.]

The places "where" it is "deposited" appear in the same documents, and in statement D, with table R annexed to the report on finances, at the commencement of the present session. The classes of persons to whom it was paid, and "the regulations under which the same" or any part thereof has been disbursed," will now be stated, in connexion with the grounds or "principle of discrimination" which has been adopted, and which, by the resolution, is also requested to be stated.

1. The Department at first offered to pay, and did cause to be paid, when desired, in specie, the debentures of the merchants. It afterwards defrayed, in the same way, some of the expenses pertaining to the custom-houses. It did this, because, as before stated, those claims could by law only be defrayed from the accruing revenue, before it was carried into the Treasury, and not by drafts from the Treasury itself; and that revenue was continued to be required in specie or its equivalent. It has persevered in discharging those claims in that manner till not only all the specie then on hand and since collected for duties was in several places exhausted, but it has caused considerable portions of money, before collected for duties, to be refunded to the collectors, and in specie, if necessary, in order, as far as possible, with promptitude and in a satisfactory manner, to discharge the publice engagements as to debentures and other current expenses connected with the collection of duties.

2. The salaries of all the land officers, and the expenses of collecting the proceeds of the sales, have next been paid in specie, on the same principle; as they could legally be discharged, not in drafts and out of the Treasury, but only from the accruing receipts, and the Department continued to require that those receipts should be in specie.

On the other side of the Alleghanies, the collections amounted to near half a million, which were in hand in specie in the land offices when the suspension of specie payments by the banks there took place. Notice was previously despatched to them by this Department not to deposite more in banks, until receiving further orders, if a suspension took place. Other collections, to a considerable amount, continued to be made during the residue of May, and since, probably equalling one million one hundred thousand dollars more. [C.] The fiscal means of paying in specie in that region, and especially the West, were of course much more ample than elsewhere. The banks in that quarter have also frequently paid out small sums in specie since May, on Treasury drafts, the amount of which cannot be now ascertained, besides in several instances, as before detailed, making transfers of it to the Treasurer, to aid the public operations on the seaboard. Under these circumstances, and in all the United States, the Department has probably, since the middle of May, paid out quite as much specie for meeting ordinary expenditures as has been demanded for that purpose during many periods of similar length before the banks suspended specie payment. By condensing these views, and using more particularity, it appears, and is stated in reply to several inquiries in the last branch of the resolution, that, since the suspension of specie payments, which is the date nearest to the first of May from which we have special returns of specic, the whole amount of it on hand applicable to gen-ceived, but because it had been customary before to give eral purposes has been over $3,000,000. The amount for all purposes has exceeded $4,000,000, including that in the mint and the custom-houses. The sources from which derived, and the amount from each, with "the persons to whom paid, and the sums paid to each," are also detailed, so far as now ascertained on the Treasurer's books, and in conformity to the resolution, in A 2, B, and C. So far as otherwise known, the residue of the receipts not appearing on his books, is given in the above statements, and the residue of the payments is given in the following details. A part of the latter are included in the payments made by the collectors of the customs since the suspension by the banks, and not on drafts of the Treasurer; and which pay-itating the object. ments altogether amounted, as ascertained and estimated, to about $1,500,000. Of this sum about $950,000 have been paid for debentures, and $550,000 for other purposes, chiefly connected with the customs.

The portion of this amount which has been paid in specie, cannot, however, be ascertained from the returns received at the Department with much accuracy, but it is estimated at half a million. It is only the balance after these payments, and after what is necessary to be kept on hand for similar ones, which is reported to the Treasurer as subject to draft for general purposes.

Similar remarks are applicable to the payments, not on drafts of the Treasurer, but which by law are required to be first made at the land offices, of the current expenses of collection, and which probably have equalled, since the middle of May, $70,000.

From all the data in possession of the Department, it is computed that the "amount now on hand," subject to the draft of the Treasurer, is about $2,100,000; and all of it, except half a million of what is in the mint, may be considered as available for public purposes.

3. The moneys refunded from the sales of land which proved to be defective in title, or erroneous, were also paid back to the purchasers in specie, not only because so re

drafts for the amounts on land offices rather than on banks. 4. The fees received for patents and refunded since May have also, when desired, been paid back in specie, on a similar ground of discrimination.

5. The next distinct and very large class of claimants who have been so paid, is the Indians and those connected with their affairs. A portion of their annuities and supplies, as well as a part of the expense of their removal, had in former years been paid in specie, and it was deemed just as well as prudent to continue this practice. Nor was it inconvenient-the amount of specie in the land offices being so large, and many of them so well situated for facil

6. A considerable part of the payment for certain State stocks bought by the War Department, for investment of Indian funds, has, on a similar principle, and to fulfil scrupulously the spirit of the trust confided to the Government, been thus paid. It seemed proper also, under the further consideration of being required by the nature of the contract for purchasing then.

7. This Department has also offered to pay, and has paid out, when requested, specie for all claims on the Chickasaw funds under its peculiar charge, and has done it on the ground that only specie has been received in their behalf for interest on the State stocks purchased for them, and for the sales of their lands.

8. Another class of payments has been made with a view to secure, as far as practicable, the efficient operations of the State, War, and Navy Departments, under the great embarrassments incident to the suspension of specie payments by the banks. Hence, bills of exchange have been purchased here with specie, and the bills seasonably remitted to our agents abroad, where, of course, bank notes could not be used, for the purpose of meeting

Pay Members of Congress in Specie, &c.

On a

the expenses of the State Department. On the same prin-
ciples, the pursers of the navy, in vessels about to sail to
foreign stations, have, as was before usual and indispensa-
ble, without great delay and embarrassment to the public
service, been supplied with sufficient specie to defray ne-
cessary expenses when touching at intermediate ports.
The bills of exchange drawn by them abroad for cash and
provisions furnished there, have also, on the same principle,
when requested, been promptly paid here in specie.
like principle, as well as to prevent serious losses, and dis-
credit to the Government, the bills drawn by pursers on the
navy agents abroad, the advances made by those agents
there, and the contracts to furnish them money here, have
all, when demanded, been met in this country with specie.
It will be the endeavor of the Department that they shall
be so inet in future, while suitable funds remain at its dis-
posal.

[25th CoNG. 1st SESS.

paid in specie. Large portions of money for expenditures for labor on the national road in two of the Western States have been furnished by drafts for specie on the land offices. In numerous other cases, public creditors, living near such offices, have indiscriminately, when desired, been paid in specie by drafts on them. In several instances, where the money had accumulated in particular offices, and claimants, though living at a distance, chose to take drafts on them, instead of banks, they have been offered such drafts, and been paid in specie. But, usually, when claimants resided at a distance, the Treasury drafts on banks have been so near the value of specie that they have been accepted rather than others on land offices more remote. In some cases, drafts on banks in large commercial cities have been preferred even to drafts on land offices situated near the claimants. It will be seen that the discrimination in these last cases has generally arisen from local convenience to the parties and the local origin of the claim, or the abundance of specie beyond the local wants of a few particular points, rather than from any distinction growing out of the nature of the claim itself.

15. The next claimants who have been offered payments in specie, and have received it, are the holders of the debt existing against the cities in the District of Columbia.

9. In the domestic operations of the War and Navy Departments, as well as in carrying on the public works not connected with them, specie has likewise been occasionally furnished to pursers, paymasters, and other agents, to enable them to make change and pay small sums in their weekly settlements. These have embraced those persons in public employment, whether seamen, soldiers, laborers or others, at the yards, forts, and other places in which nation- That debt was assumed by the United States in trust, al works were in progress. In several cases, the firmer and on a conditional assignment of certain stock, and the deposite banks have also voluntarily provided a sufficiency interest was ordered to be paid by an act of Congress. As for these purposes. By this discrimination much inconveni- the interest due to the United States on the stocks which ence and dissatisfaction under the pecuniary embarrassment were held against others has been required to be paid, and of the times have been obviated. Considerable sums have has, in most cases since May last, been actually paid in also been drawn for on specie-paying banks, to aid in carry-specie, it was deemed just to make the rule reciprocal, and ing on the necessary preparations for the defence of Florida. pay this interest in specie so far and so long as able to do it. 10. This Department has likewise offered to pay reason- It was supposed, also, that the public faith would suffer able amounts in specie, when requested, towards the large more by a neglect or inability to fulfil scrupulously a trust sums due pensioners, in order, as far as practicable, to ac- like this, than to meet the whole of any ordinary approcommodate so meritorious a class of claimants. In several priation immediately in specie, if demanded, during a peinstances, it has given drafts for that purpose, and has pro- riod of such embarrassment. posed to give more. Some specie has been furnished by the former fiscal bank agents for the same object.

11. It has also, when desired, furnished specie to the War Department to defray travelling expenses of officers, the great inconveniences and losses in using paper for that object being, in the present posture of affaire, very obvious and peculiarly troublesome. It has proposed to do this in all such cases hereafter, when desired, and in its power.

12. On like principles this Department subsequently made the offer as to the payinent in specie of the expenses of members of Congress at the present session, if preferred by any of them to bank notes, or to drafts. The session being special, and supposed likely to be very short, the expenses would chiefly consist of what was due for travel, and it was deemed suitable to offer, while able, a convenient currency for that object, to such as might desire it. Other means of payment were at the time proposed for any who might not deem it proper, under the existing circumstances of the case and of the Treasury, to demand or accept gold and silver, either in full or in part.

13. As the specie at command increased by further returns from the land offices in June and July, and by considerable transfers to the Treasurer at the seat of Government by some of the former deposite banks, (there being no general agent on or near the seaboard except himself competent by law to receive them,) the Department has gradually had greater amounts of specie in this city as well as in the Western land offices, and has been enabled, from time to time, to extend fully or in part, as already enumerated, and even further, its offers of payments in specie to numerous claimants.

14. Where judges and other officers of courts resided near land offices in which there was an ample supply of coin, or near collectors, and a request was made for drafts on them rather than on banks, they have often been given, and

16. The only remaining class of claimants to whom specie is now remembered to have been offered to be paid immediately, is the holders of the scrip for the fifth instalment of the French indemnity. A considerable portion of that had not been adjusted when the banks suspended specie payments; but it having been brought home in specie, and part of it being in the mint, it was requested to be paid in specie, and was so adjusted by the agent with those demanding it.

These various classes do not include two or three transfer orders to States, which were drawn on banks situated near and paying specie. This was done in compliance with notices given before May last, and the Department has not been informed whether in these cases specie was either demanded or paid. In some cases, however, of such tranfers, drawn on other banks, specie has been demanded by the holders of them, and, though occasionally refused, has sometimes been paid, rather than submit to a protest and complaint to this Department. The other banks are also known to have paid specie in many cases, either in full or in part, on common drafts; but as the amounts so paid are not regularly returned here, the aggregate of them is entirely conjectural.

The drafts given here are also often in favor of agents, pursers, paymasters, &c., in large amounts; and though their names and the gross sums paid to them have been ascertained and stated, yet, to ascertain the names of all the workmen, seamen, soldiers, and officers, as well as pensioners, Indian traders, and their assignees, who have been the real creditors, and in the end received the specie, and the amounts paid to each, would require the opening of a correspondence with almost every public station and public agency in the United States. So, the merchants to whom debenture certificates have been paid in specie, as well as the other persons, and amounts to whom it has

25th CoNG. 1st Sess.]

Pay Members of Congress in Specie, &c.

been paid out of the accruing revenue, whether from duties or lands, and whether to officers in the customs and land offices, or to laborers and contractors under them, cannot, though now ascertained elsewhere, be known here without special applications to most of the ports and land offices in the United States, and without a delay of several months. All claimants who have not resided near land offices and had offers of drafts on them, or who, when residing at a distance, have declined to take drafts on them or on banks not paying specie, and thus have not been paid in full or in part, under any of the above classes of cases, must be considered as not having received any other offer of immediate payment in specie. But they have, when inquiring, been informed that the Department did not request them to accept any other medium of payment, unless more satisfactory than to wait till sufficient specie could be collected, or be provided by Congress for all public creditors and officers demanding it. They have been assured, also, that the Department would spare no proper effort to have this accomplished at the earliest day practicable, and in the mean time, (that all should be paid in specie to the extent of its means, without endangering the ability to continue thus,) to discharge such occasional demands of an imperative character as have been described under some of the

above classes.

It is due, however, to the public claimants generally to state that, whether creditors or officers, the demands actually made by them on the Department for specie have not, in most rases, been characterized by any wish to increase the existing difficulties, and have not much exceeded its ability to discharge them, increased as it has been from time to time by increased receipts in specie.

In several of the above cases, also, the offer by the Department to pay in specie, has been voluntarily made, or without any previous request. This was done from a conviction that, under all the circumstances, the offer was just; but leaving to the claimant himself the propriety and the election to accept it or not, considering the nature of his claim, the place at which the specie was situated, and the other modes of payment proposed instead of it.

The undersigned cannot allow himself to apprehend that, in thus making all reasonable efforts in his power to pay specie to the public creditors instead of a depreciated currency, and, where not enough specie could be collected for the whole of them, to pay it to as many as practicable, and in the manner explained, he has mistaken the requirements of either the acts of Congress or his official duty.

The last part of the call on this Department relates to another subject, and is "whether, since the date above, the public dues, or any portion thereof, have been received in protested drafts, or any funds other than those prescribed by the joint resolution of the 30th April, 1816." In answer to this, the undersigned would state that, since the 1st of May, no instructions have been given to receive for public dues any kind of money except specie or the notes of banks paying specie. But on the 15th of that month, as stated in the report at the commencment of this session, a circular, which is thereto annexed, was issued to collectors and receivers, requesting them to redeem or take up in behalf of the Treasury, by receiving for duties and lands, such drafts of the Treasurer on the banks as the latter did not pay satisfactorily when presented.

est period, sometimes to draw such drafts in the first instance on receivers and collectors as well as on banks, may be seen in a report of the House of Representatives on the mode of doing business in the Treasury Department, 22d May, 1794, and in a report from this Department to the Senate, 12th January, 1835.

This appeared to settle the only principle involved in the measure under consideration; as a general direction to take up certain drafts seemed as competent as a special direction in a draft itself, or in a letter to pay any particular draft. Beside the obvious propriety and good faith in causing its drafts for debts to be paid in any prompt way, the course of taking them for duties was likewise directed as early as 1789. (See F 1, annexed to report from this Department made to Congress on the 5th instant.) It was supposed then, as well as now, not to be a question of currency, or relating to the kind of money receivable for public dues; but a question of paying or satisfying our own debts in the most punctual, convenient, and faithful manner which was practicable under numerous existing difficulties. On the same principle, debenture certificates were directed to be redeemed in the same way. When the undersigned, in the emergencies of the last spring, reflected that the usage had been to adopt the course of directing its protested or unpaid drafts to be taken up by collectors or other agents, in such individual cases as had occasionally occurred in ordinary times, he could see no objection; but rather, in such a crisis, when such cases were likely to occur often, a great propriety in requiring them, by a general rule, to be redeemed in all similar instances. When he had caused drafts to be given to public creditors, payable on demand, and in gold and silver, he considered the Treasury bound in law and common honesty to treat them as equivalent to gold and silver. When the fiscal agent on which they were drawn refused thus to pay them, if specie was demanded, at the place where payable, it was remembered that, in the common transactions of life, as well as in the practice of the Department, the act was deemed commendable, as well as legal, for other agents, though without special instructions, to step forward and pay such drafts promptly, for the honor, credit, and benefit of the drawer, which in this case was the Treasury. Hence it seemed, in times like the present, peculiarly proper to request others to do it by general instructions.

It was furthermore considered that, if any debtor should decline to take up, by receiving in payment, a draft or bill of his own, given for a debt and payable on demand in specie, and which the agent on whom it was drawn had refused to pay, the conduct of such a debtor would, in most cases, be regarded as not a little reprehensible.

Under these circumstances, the undersigned would have felt himself unworthy of the high trust confided to his charge, if, in the great peril to public credit, and the heavy losses threatened to the public creditors, under the suspension of specie payments by most of the Treasury depositories, he had not exerted his best efforts, and made the most diligent researches, to discover and devise legal modes of relief. After doing that, he adopted the course above explaineda course which seemed not only justified by precedents and sound legal principles, but enabled the banks holding public money to discharge their engagements to the United States to that extent, by satisfactory arrangements with the public This was done to prevent delays and losses to the public creditors; and, at the same time, was calculated to remove creditors, which would have resulted from a return of the any dishonorable stigma from the Government, by protectdrafts, when not paid, and the issue of new ones on another ing its obligations as far as possible from discredit, and by bank, or on a collector or receiver, as in former times has preventing much delay and loss to the claimants on the often been done by this Department. It saved, also, the Treasury. The amount of drafts so redeemed or paid by procrastination and trouble of writing a special letter, as collectors and receivers, at the request and in behalf of the had occasionally been practised, in some such cases, to Treasury, from the 15th of May to the 11th instant, accordanother bank, or to a collector, to take up the first drafting to the returns received to that date, was $1,237,288. when it had not been paid in behalf of the Treasury by the first drawee. The usage of this Department, from the earli

In this way, the public creditors to that extent have been so far relieved as to realize an amount sometimes near and

Pay Members of Congress in Specie, &c.

seldom much below the par of specie, to which they were entitled. They have obtained this, instead of being subjected to a total loss of ten or fifteen per cent. on every dollar, and which, in one view of the subject, the banks would otherwise have gained at their expense.

Some of the banks, at the same time, have thus, with great usefulness to the community, been induced to make more vigorous exertions to renew specie payments at an early day, finding that all their obligations could not be discharged in a depreciated paper. Respectfully,

Hon. JAMES K. POLK,

LEVI WOODBURY,
Secretary of the Treasury.

Speaker of the House of Representatives.

A 1.

TREASURY DEPARTMENT, August 16, 1837. SIR: The near approach of the session of Congress makes it proper for me to apprize you, in order that the information may be used for the benefit and accommodation of the members of the House of Representatives, that this Department will be prepared to furnish funds for their payment in notes of the city banks, or specie, or to give drafts upon several of the collectors of the customs and receivers of the public money, or the former deposite banks, in suitable sums, as may be most convenient to any of them. I am, very respectfully, your obedient servant,

LEVI WOODBURY,
Secretary of the Treasury.

W. 8. FRANKLIN, Esq.
Clerk of the Ho. of Reps. of the U. S.

A. 2.

Statement of drafts drawn on collectors.