V.

TREASURY DEPARTMENT, July 3, 1837. SIR Replies having, in most cases, been received to my circular, addressed in May last to the cashiers of those deposite banks which had suspended specie payments, I now propose to submit a few remarks to your consideration, growing out of those replies, and out of events which have since transpired in connexion with your relations to the Treasury Department.

[25th CoNG. 1st SESS.

public creditor, if insisted on by him; it being due, in both honor and good faith, as well to him as to the Treasury. It is true that the difficulty of procuring it when wanted has been somewhat enhanced, and this, at the time when demands for it are increased, and the ability of some of the banks is weakened by the failures of some of their customBut these are obstacles which are by no means insuperable, and which, when occurring, it is the duty, and it is hoped will be the desire, of every bank to make efforts to remove, at any reasonable expense and trouble.

ers.

2. Another portion of that circular communicated information concerning the lenient mode which, under the severe losses experienced by many of the banks from mercantile failures, and under the embarrassments to others, caused by panic and want of confidence, was contemplated to be adopted in recalling the public funds. That mode was by such moderate drafts and transfers as the public necessities should, from time to time, demand; and an carnest request having been inade for a satisfactory compliance with it on the part of the banks, assurances have generally been given of a readiness to answer those calls with promptitude, and in an acceptable manner. But, though it is gratifying to add that, in most cases, these assurances have since been fulfilled, and something like three millions of dollars of public money have been paid over by the discontinued banks since the 12th of May last, and, in a few instances, all which was on hand; and though about nine millions more are expected to be paid early in July, yet, in some cases, proper efforts and sacrifices do not appear to have been made to discharge their important obligations to the Treasury. In such cases, and especially where the neglect produced serious inconvenience to our fiscal operations, or injury to the public credit, the Department has felt compelled, by its responsibility to the Government, to take preparatory measures suitable to obtain indemnity for the past, and enforce those obligations in future. It will feel obliged to adopt such measures hereafter in all similar instances; and, though its moderation and lenity have been, and will be, as great as is supposed to be justifiable, they must not be misconstrued into indifference or forgetfulness of what is due as well from the banks as to the public creditors and the United States.

The location of several of the banks, and the small amount of public money in their possession, will exempt them from many calls at present, and enable them easily to meet such as are hade. But the situation of others will, under all just forbearance, render the calls upon them more frequent and imperative, and will require, as it is hoped they will receive, a correspondent exertion to answer them. Such exertion, it is believed, will in the end be far better for all concerned, though accompanied by some temporary sacrifices, than to suffer loss of character, by incurring the imputation of a continued violation of essential duties, and by exposing the Treasury to embarrassment, and the public creditors and officers to severe injury.

The Department cannot recognise the right of any former depository to be exempted from paying specie to the VOL. XIV.A 7

3. The returns of the condition of the selected banks, which were requested to be continued, have generally been made with promptitude and regularity. But while it is very satisfactory to see, in most cases, a reduction in discounts and circulation, and which course is the most efficient to cure one of the existing evils in banking, and to ments to resume them at an early day, and with much greater safety, it is regretted that, in a few instances, this course has not been adopted. But whenever departed from in such a crisis, the error has tended, and must tend hereafter, to impair the confidence of the Department in the sound management of the institution, and to justify such steps as may lead to a more speedy withdrawal of the public money, or to the procurement of increased security.

4. Such a departure, also, is likely to delay the resumption of specie payments, concerning which the views of the former deposite banks were requested in that circular, and have generally been since presented. Without claiming the right to interfere on this subject beyond the deep solicitude and interest felt by the Treasury Department conceruing the condition and conduct of all its debtors, and beyond its duty vigilantly to examine into those points when indulgences are sought or granted, the inquiries before mentioned were made on these accounts alone. It has been a matter of regret to find, in most of the explanations on the subject of suspending as well as resuming specie payments, that the action of one bank has been made to depend so exclusively on that of others. The location, losses, liabili ties, and means of the banks, were and still are very dif ferent among themselves, as well as in different quarters of the country. In illustration of this remark, it may be mentioned that several of them, as in the Eastern States in 1814, have actually continued to pay specie, and many others appear to have had ample ability to do it, if more courage, energy, and independence had fortunately been united with their great available means. Since the panic has in some degree subsided, and the opportunity has been enjoyed for lessening balances, discounts, and circulation, and when so much more can be done, in this respect, without causing distress, in consequence of the diminished business of the community, and the smaller demand for money, it is to be lamented that a more general effort has not been made to resume specie payments at the carliest day practicable and safe. It is true that a few banks very commend. ably have already resumed, and are in the successful discharge of their plain legal obligations, though on a reduced scale in business and profits; and that others are efficiently attempting to place themselves in a similar position. from the replies to my inquiries, the inclination seems to be too prevalent for the banks in one city, county, State, or large region of country, to postpone the measure till all others in the Union are ready and willing to unite. Their positions, in various respects, are essentially unlike, though in general very strong, The condition of the former deposite banks, as a whole, is believed to be stronger now, as to specie compared with circulation, or immediate means to meet immediate liabilities, so as readily to sustain specie payments under ordinary circumstances, than has been the condition of all the banks in the United States at any former period for the last quarter of a century. Their specie, on an average, is about one to three of their circulation, and

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their immediate means nearly one to two and a half of their immediate liabilities. But, in some large sections of country, the specie is in a ratio quite 30 per cent. greater, while in others it is less. The want of confidence in some places, and the effects of losses in others, and which constitute the only other principal differences in the ability, at different periods, to sustain such payments, have not extended in the same degree to all places, and have already diminished much more in some of them than in others.

It is therefore earnestly hoped that, by prudent and persevering efforts, a resumption of specie payments can be effected at no very remote day, and successfully maintained by many of those institutions indebted to the Treasury. So far as this Department has power to encourage such efforts, it has done, and cheerfully will do it, while the existing laws remain unrepealed, by giving a decided preference for holding all kinds of public deposites to such banks as pay specie. But, beyond that, Congress and the States alone can lawfully extend other assistance.

You will more readily excuse my anxiety on this topic, when, besides the reasons before stated, you are assured of the strong convictions entertained by this Department that the resumption of specie payments, as soon as it can be accomplished by any reasonable exertions or sacrifices, would not only increase the facilities of our fiscal operations, and much promote the convenience of the public creditors, but tend to remove many reproaches from the banking institutions themselves, and to preserve a strong sense of moral obligation to discharge faithfully, so far as able, every duty imposed by law.

To the CASHIER of ·

Respectfully, yours,

LEVI WOODBURY, Secretary of the Treasury.

UNEXPENDED APPROPRIATIONS.

Letter from the Secretary of the Treasury, transmitting the information required by a resolution of the House of the 11th instant, in relation to the amount of appropriations of the pust and the present years remaining unexpended, &c. September 15, 1837. Read, and laid upon the table.

TREASURY DEPARTMENT,
September 14, 1837.

SIR: This report is submitted in compliance with the following resolution, passed on the 11th instant:

"Resolved, That the Secretary of the Treasury be directed, with as little delay as possible, to communicate to this House the amount of the appropriations of the past and present years remaining unexpended; the amount required to fulfil all existing engagements contracted prior to the first day of June last, and all existing engagements contracted since that time; also, the amount of money drawn from the Treasury and placed in the hands of disbursing officers or agents on the first day of May last and at the present time; and that he also report what objects of public expenditure can with the least injury to the public service be either wholly dispensed with during the present year, or bear any material reduction."

the

The tabular statement annexed shows, as desired, amount of the appropriations of the past and present years remaining unexpended" to be $24,075,239 37. (A.)

In reply to the inquiry as to "the amount of money drawn from the Treasury and placed in the hands of disbursing officers or agents on the first day of May last, and at the present time," I would state that, at the former period, it appears to have been $5,264,052 95, and at the latter $5,049,540 76. It may be useful to add, that both sums are much larger than they would otherwise be, in

consequence of the unusual amount of deposites by officers of the mint.

In relation to "what objects of public expenditure can, with least injury to the public service, be either wholly dispensed with during the present year, or bear any material reduction," I would observe that a minute and critical examination on this point was instituted in May last by this Department.

The result of it was, that enough could and would be postponed till next year, to amount to about $15,000,000. Consequently, the expenditures during the present year were estimated in my recent report upon that basis. After every delay of them which the public interests may permit, it is therefore expected that, of the outstanding appropriations, now exceeding $24,000,000, not much over nine millions will necessarily be required to be expended during the residue of the year.

Since this resolution passed, further inquiries on this point were instituted, in connexion with the other Departments of the Government; but the result cannot be essentially varied from that to which the Department arrived last spring.

The particular heads of appropriations that it is supposed need not and will not be expended in full during the year, and the amounts under cach, are very numerous and difficult to be prepared; but, if desired, will be submitted (hereafter) with as little delay as practicable.

The only remaining inquiry is the amount required to fulfil all existing engagements contracted prior to the first day of June last, and all existing engagements contracted since that time."

Each Department has been requested to furnish a statement on this subject as early as it can be completed. But some delay being unavoidable, it has in the mean time been deemed advisable to submit immediately the answers to the other portions of the resolution. Those statements will be made as comprehensive as possible, but can of course relate to only a small part of the whole appropriations of Congress, which it has been and will be necessary to expend during the year. All salaries of judicial, executive, or other officers-the expenses of foreign intercourscthe pay and subsistence in both the army and navy-all pensions-all Indian annuities-all private bills which have passed-many miscellaneous appropriations, with several other items-stand independent of any special engagements or contracts made by any public officers, and cannot therefore enter into this computation. Respectfully, yours,

.A

LEVI WOODBURY, Secretary of the Treasury. Speaker of the House of Representatives.

Hon. J. K. POLK,