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SENATE.]

Treasury Circulur.

[Jan. 9, 1837.

the resolution of 1816? The Senator from Massachusetts, rights recognised in nearly all the land legislation of in the speech above referred to, informs us that “all Congress is a farther precedent and sanction of the prinduties and taxes were required to be paid in the legal ciple. But, so far as ihe present debate is concerned, it money of the United States, or in Treasury notes." is sufficient to say that this discrimination in the Treasu. This was the old law. The mischief, we learn from the ry order no longer exists. It has fulfilled the term of same authority, was, that the notes of banks of a hun. duration originally allotted to it, and no longer forms a dred different descriptions, and almost as many different feature in this executive measure. values, had been received, and were still received." But some have further urged the illegality of the What, then, was the remedy intended by Congress? To Treasury order, upon the ground that its operation is give the Secretary a wider latitude in favor of the debt. not extended to the customs of the country. This arguor, or to correct the mischief, and instruct him entirely ment would be a very sound one in the mouth of him with reference to the production of a more healthy state who was contending for a further extension of the 'Treas. of the Treasury? Most obviously the latter; and I doubt ury order, so as to embrace the customs, but is certain. not that fifteen years ago it would have been esteemed, ly not at all calculated to impugn the propriety of re. by gentlemen of all parties, the most wild chimera im. quiring the public lands to be paid for in the legal curaginable, in any public debtor to bave set up the pre- | rency. It is to be remembered that this order operates tence of selecting the fund in which he would pay off mainly, if not altogether, on sales made after its passage, his responsibility. And yet it is urged, by way of au and surely there cannot be the slightest wrong, injustice, thority upon this point, that the President of the United or illegality, in demanding different kinds of payment for Siates has so construed the resolution of 1816, es is evin. debts of a character altogether different. Still less can ced by his advising Congress to remove the obligation there be any thing unlawful in one having property to upon the Treasury to receive United States Bank notes sell saying to purchasers, "if you buy this article, it in payment of public dues. But tbis, I think, does not will suit me to receive payment in current notes; but if at all contribute to the proof of the proposition contend. you buy this other article, you must pay for it in gold ed for, as it is evident that the obligation alluded to by and silver.” This brings somewhat under consideration the President is that contained in the charter of the the land law of 1820, which, if an express justification United States Bank, and not to any command, either ex was required for the Treasury order, furnishes it, and press or implied, in the joint resolution of 1816. There sweeps away at once every pretext for charging it with is nothing on the score of authority, but, on the contra a want of legality. By it the public land is required ry, I believe I am warranted in saying that the weight to be paid for in cash; and as some difficulty has been of authority is the other way; as in effect the operations raised upon the signification of this word, in order to its of the United States Bank, while the fiscal agent of the solution, at least to my own satisfaction, I have bad re. country, amounted to the actual collection of specie course to the dictionary lying on your desk. I there find from Government debtors, so that the charge of illegal. that cash is ready money; and upon turning to the word ity on this ground is not sustained either by argument or money, I find it signifies metals coined for the purposes authority. And, indeed, I think it is in effect abandon- of commerce; so that in fact, under that law, all the pub. ed by the admission that the Secretary of the Treasury lic lands, wi'hout the Treasury order, can now only be might refuse to receive in Maine notes payable in Geor- paid for in ready money, to wit: metal coined for the gia, and vice versa; or, in other words, that he is at libero purposes of commerce, in Treasury nutes, or land scrip. ty to judge whether the fund offered is worth so much So much for the legality. gold and silver at the place offered, although it may be But the policy of this Treasury order is also assailed; at par, or even above par, at some other place. But and upon this point I must admit that, having been huranother case may be put, for which the resolution would ried into this debate somewhat sooner than I had intend. have provided, if it had been intended, in all cases, to ed, I am unable to do any thing like justice either to deprive the Secretary of the Treasury of any discretion. I myself or the subject. I am under great obligations to A bank whose notes have been regularly redeemed with gentlemen on both sides for the light ihey have cast upon specie exists in the place where the money is to be paid it, and am not less indebted to the lightning corruscato the public receiver, and those notes are valued at par lions of those opposed to the order, than to the calm ir. in the market. The public receiver has, however, cer radiation wbich has shone from this quarter. In 1816 tain information that the bank is in critical circumstan the able Senator from Massachusetts was pleased to say: ces, and will unquestionably blow up in a few hours. "There are some political evils which are seen as What is he to do! According to the construction of the soon as they are dangerous, and which alarm at once as resolution of 1816 contended for, he is not at liberty to well the people as the Government. Wars and invarefuse the money, because this is doubtless a specie.pay. sions, therefore, are not always the most certain destroy. ing bank, and may possibly continue to be so; but the ers of national prosperity. They come in no questionable receiver has no right to exercise any judgment upon that shape. They announce their own approach, and the question, and must, in the mean time, receive a sum of general safely is preserved by the general alarm. Not money, however large, with the strongest conviction so with the evils of a debased coin, a depreciated paper upon his own mind that he is receiving worthless rags, currency, or a depressed and falling public credit.' Not · which will prove a total loss to the Government. But so with the plausible and insidious mischiefs of a paper. the Treasury order is further said to be illegal, because it money system. These insinuate themselves in the shape discriminates between actual settlers and others, and in- of facilities, accommodation, and relief. They hold out the deed it is said to be, in this respect, in violation of the most fallacious hope of an easier payment of debts, and constitution itself. The clause in the eye of the object a lighter burden of taxation. It is easy for a portion of or is the first of the 2d section of the 4th art cle of the the people to imagine that Government may properly constitution, declaring “that the citizens of each State continne to receive depreciated paper, because they shall be entitled to all privileges and immunities of citi- have received it, and because it is more convenient to zens in the several States." The acts of nearly if not obtain it than to obtain other paper, or specie. But on quite every Slate in the Union have given construction these subjects it is that Government ought to exercise to this clause of the constitution, by which it seems to its own peculiar wisdom and caution. It is supposed to have been understood as contemplating nothing more possess, on subjects of this nature, somewhat more of than the defence of the citizens of one State from the foresight than has fallen to the lot of individuals. It is disabilities of alienage in another. The pre-emption I bound to foresee the evil before every man feels it,

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an) 1o take all necessary measures to guard against it, who control the mammoth bank at Philadelphia and although they may be measures allended with some diffi- | their partisans choose to pronounce a dangerous expericulty, and not without some temporary inconvenience. ment destroy public confidence? I am certain, Mr.

* The only power wbick the Government pos. President, wé sball never see confidence stable in the sesses of restraining the issues of the State bauks is to re. money market of this country till that institution has fuse their notes in the receipts of the Treasury. This ceased to struggle for an existence authorized by the power it can exercise now, or at least can provide now Congress of the United States. But gentlemen say it for exercising it in reasonable time, because the curren produces such a drain for specie, that bank discounts are cy of some part of the country is yet sound, and the evil necessarily curtailed. This is precisely one of the efis not yet universal.

But I have expressed my fects desired, and it is doubtless to the real interest of belief on inore than one occasion, and I now repeat the the country that it should continue to produce such efopinion, that it is the duty of the Secretary of the Treas. fects. But that it ought, in the nature of things, to bave ury, on the return of peace, to have returned to the legal produced such effecis in a very muderate degree is, I and proper mode of collecting the revenue.

ihink, apparent from the very small quantity of specie Il can hardly be doubled that the influence of the Treas. (not exceeding $1,800,000, I understand,) which has in ury could have effected all this. If not, it could have fact been transported westwarılly. Other causes, much withdrawn the di posites, and the countenance of Gov more adequate to produce this effect, have been at work; ernment, from institutions which, against all rule and all other abstractions of specie, in much larger quantities, propriety, were holding great sums in Government have taken place; and foriy millions of money thrown stocks, and making enormous profits from the circula- from its former channels of regular trade, and held in a tion of their own dishonored paper. That which was stale of readiness to meet the provisions of the deposite :host wanted was the designation of a lime for the corre acl, seem to me far better reasons than the Treasury sponding operation of banks of different places. This order for the pressure complained of. What do gentlecould have been made by the head of the Treasury bet. inen say to the pressure in England? Is that caused by ter than by any body, or every body else. This the Treasury order? And has there ever been a pres. Government has a right, in all cases, to protect its own sule in England which has not borne heavily on the mer. revenues, and to guard them againsi defalcation or bad cantile classes in this country? The Senator from New and depreciated paper.”

Jersey seems to think that in proportion to the increase This speech is, in my opinion, ample authority for of the number of the deposite banks, a correspondent nearly all that I have asserted, or wish to assert, on the increase of discounts should have taken place. Why so, present occasion. It expressly declares the insidious sir? Is the actual amount of the public revenue increased and dangerous nature of the paper system. It asserts by the number of banks among which it may be distribu. both the power and the right of the Government to regu. led? And is not the amount of tbis fund the basis of the late the currency to a great extent, by the refusal at ihe discounts made upon it? But to sum up the whole upon Treasury of paper money. li enforces the duty of the this point, let it be conceded, for the sake or the argument, Government to foresee evils, and take all necessary meas. that all the alleged inconveniences 10 the currercy really ures to guard against them, before every man feels them, exist; are they any thing more than the dust of the bal. although such measures may be attended with some dif. ance to the evils which must have flowed from an unlimficulty, and not without some temporary inconvenience. ited encouragement to bank issues, necessarily following It also alleges that Government is supposed to have, on the indiscriminate receipt of bank paper nominally resubjecis of this nature, somewhat more of foresighe than Veemable in specie? Any gentleman who will cast an hias fallen to the lot of individuals. Thus supported, I do unprejudiced eye over the relative condition of the denot think I can be very far wrong in having macle similar posite banks at the adoption of the Treasury order a sertions and declarations. But the framers of our ex and the present time, will, I think, perceive that there cellent constitution affixed their signet to what seems al.) is great reason to believe it bas becn the means of saving most a dictate of nalure hersell, that the precious metals the whole paper system from shipwreck, and consequent. provided by ber for that purpose are the most properly the whole country, which has unfortunately become media for commercial exchanges. They expressly pro

so intimately connected wiib it. He will find that either Joibited the States from making any thing but gold and the specie has been increased or the circulation diminish. silver a legal tender in the payment of debis, and the ed in every instance, and in many both these contribuStates themselves from issuing bills of credit. To relations to strength bave taken place. This is the forescetion to the circulation of the country, it is altogether im- ing the evil before cvery man reels it, and taking the ne. possible for the General Government to occupy a neutral cessary measures to guard against it, although they may sland. She must contribute to the width and depth of be measures altended with some difficu!ly, and not willithis ocean of paper money, as the Senator from Massa out some temporary inconvenience, which the Senator chusetts has so properly termed it, or by her action dry from Massachusetts hus pronounced to be the duty of a up the streams continually pouring into it. Gentlemen Government. on the other side agree to ibis, an I tell us that the United But gentlemen further allege that the Treasury order Stales Bank is the only instrument she can successfully is oppressive to the purchasers of public lands. One of use to prevent its overspreading the whole terra firma of the avowed objects of the Treasury order is checking the nation. The President of ihe United States has said the speculations in the public lands. That such is ils that it may be accomplished through the fi cal operations natural effect, seems to be conceded on all sides; but of the Treasury, without the aid of a national bank; and this that end, it is said, is defeated by cvasion, and the bur. Treasury order is one of the links in the chain of opera den falls chiefly on the bonafide purchaser. That the tions proposed; and now, before time is afforded to land speculators are by no means to be encouraged, and test ils efficacy, ere six short months have rolled away, that the practice is a serious evil in cur country, no one we are called upon to arrest its action. But gentlemen seems to deny; but the argument seems to be that, besay its banelulellects have been already found ioo serious cause it cannot be effectuully preventer, no effort is lo to be longer endured, under the hope of fulare adyan. be made to impose on it a check. Is this sound reasonfages; that it has already brought distress and ruin upon ing? Does it become Congress to thwart the Executive the country. How has it brought distress and ruin upon in its attempts to diminish tliis cvil? Ought it not, rather, the country! By destroying public confidence, is one by co-operation, endeavor to lessen the opportunities response. And would not any thing else which those for the alleged cvasions?

Vol. XIII.-22

SENATE.)

Treasury Circular.

[Jan. 9, 1837.

Allow me, in conclusion, to suggest remedies for the cord at those very seasons when union will be most neevils complained of under the Treasury order, (sup- cessary to our safety, and when, but for some such adposing them to exist in all the magnitude contended for verse incident, it would be most certain to exist. Your on the other side;) remedies which, in my humble judg. public lands, as your preserved treasure, have this admeni, Congress is bound to apply upon other considera. ditional advantage, that they are daily increasing in valtions than their mere effect upon the currency of the ue; when you sell one portion, wbat remains is worth country. The remedies to which I allude are confining nearly as much as the whole before that portion was the sales of the public lands to actual selilers, and re taken off. The expectation of such increase is doubt. ducing the revenue by customs to the actual wants of less the inducement with the speculator to stretch forib the Government. The public lands constitute for us, in his hand with monopolizing sweep over all that you a triple sense, a vast fund of national wealth. They offer for sale. Not so with your deposite with the present, in the first place, a wide field in wbich our mullio Staies. It is a caput mortuum, without any possibility plying population is to find space to spread itself out; of increase, and for the principal of which there is but and the very wideness of this field, according to the ob- faint hope of relurn, while the very proposal to reclaim servations of philosophers and political economists, in. it may rend your Union asunder. But justice and creases the ratio in which this population will multiply. good faith require that your public lands should be so Our strength as a nation is therefore daily increasing husbanded. They were either the voluntary donations through their instrumentality, our human materiel (so to of the old States, avowelly for the first and ihe last ob. speak) for fleets and armies becoming more abundant, jecis in which I have spoken of them as a fund of nation. and productive labor more vast in ils amount. In the al wealth, to wit: as a field for population, and a comsecond place, their products will furnish sustenance to mon stock, out of which tbe debts of the nation should all this multiplying national power, and leave an excess be paid; or they have been acquired by the united blood to be exchanged for the valuable products of other and treasure of the whole nation, and ought, therefore, climes and soils. Lastly, their fee simple interest is con. to be used for the general good. But if they are to be vertible into money, whenever required to supply the brought into market now, in unmeasured quantities, demands which may from time to time arise upon our while the nation is oppressed with money, we shall be Treasury. These ihree useful and important objects acting like the young profligate who disposes of his can only be duly accomplished by confining the sales of paternal domain, ihat he may profusely scaiter the prothe land to the wants of actual settlers. it is true, by duct to the winds, or that he may tempt the cupidity of throwing them into the market alike for the actual set. sharpers. Pursuing this policy, we shall in the end find tler and the speculator, there will be a larger immediate ourselves in the situation of King Lear, who, having influx of money into the Treasury. But does good polis divided his all among his children, and becoming de. cy call for such an influx? Is not your national Treas. | pendent upon their benevolence, was left to perish in ury, so far from requiring such an influx, diseased with the helplessness of senility; or spurred on by our actual plethora? And have not gentlemen, to relieve it, urged necessities, which will then have no other source of supon by the necessity of the case, either real or supposed, ply, like the fabled progenitor of the gods, the General voted at the last session of Congress for a law, acknowl. Government will become the devourer of her own chil. edged by all to be dangerous in precedent, inexpedient dren, and the most glorious and extensive family circle as a general princ'ple, and approaching, if not surpassing, this earth bas ever witnessed be broken and destroyed. the very confines of the constitution? The fear of na I trust, however, that we shall be saved from the desti. tional corruption, the ruin of so many prosperous States, nies both of Lear and of Saturn; and that, confining our. a ruin which prosperous States have most reason to selves in the sales of public lands to the actual wants of dread, las sanctified in the eyes of many a sterling pa. settlers, the payment for them in specie will either triot that measure called the deposite law, upon which cease to be felt as a grievance, or become unnecessary he would have otherwise looked with horror and dis. for the security of the revenue; and a reduction of the

But in your public lands you may bold an un. tariff being connected with this measure, we shall be recounted treasure, without the apprehension of any such lieved from all the evils of an overflowing Treasury. conse quei ce. Your forest-covered wilds, still in the I have thus glanced at the varivus considerations pre. possession of the deer and the buffalo, would lie secure senting themselves to my mind on this exciting and imuntil your necessities called for their use, and, unlike portant ques:ion. Some of them apply as well to the your gold and silver, no eye would be fascinated by their substitute as to the original resolutions, though with glitter, no ear seduced by their musical ring. But mitigated force. I have offered them to the Senate when war or any other great national exigency calls for with great diffidence, conscious that I am in my mere an extraordinary supply of treasure, here is a fund con noviciale in matters of national legislation. In conclu. vertible by sale into cash, or the substantial security for sion, I would add, that those who have attempted to show a loan; they would be sufficient to repay, without resort. the evils produced by the Treasury order bave fallen ing to taxation-a measure always odicus to a free peo. very far short of proving the existence of those evils, or, ple. Your deposites with the States, if otherwise un. at least, of connecting them with it as their cause; and objectionable, will never answer a similar purpose. some of them have, as I think, almost abandoned the The very seasons when the General Government shall position as untenable. They cannot, therefore, with find herself most straitened, the States themselves will any propriety, ask its recision upon the mere supposi. be laboring under a like pressure. Already you find tiun ihai evils exist, and that the Treasury order is the many of them disposed to treat the deposite as a gift; cause. I have listened at'entively to this discussion, and what will they say when, in the unseasonable mo with a sincere desire for instruction, and the result has ment of national calamity, it is demanded of them as a been to rivet my approbation of the executive course; debı? Will you not find them, like the States under and while I shall vote for the amendmen', as less obthe old consederacy, refusing or neglecting the contri- noxious, I could with equal satisfaction have recorded bution of their quotas?. This will unquestionably be the my direct negative upon the original resolutions. case with many; while others, having honorably com When Mr. STRANGE bad concluded, plied with their eng:gements, being more fortunate or Mr. WEBSTER said: I will take this occasion, as more willing than the rest, will begin to murmur if their probably no more fit one may occur, to say a few words sister States are not compelled to do likewise; and thus in consequence of the reference which has so frequently will these deposites become the subjects of dangerous dis. I been made, during the course of this debate, to ihe in

may,

Jan. 10, 1837.)

Treasury Circular.

(SENATE.

troduction by myself of the joint resolution of 1816 into ready said, was to bring the practice back to that stand. the other House of Congress, and to my observations ard; and on introducing the resolution, I had no other or then made on that measure. I said nothing on that oc further view. By recurrence to the resolution, as oricasion without deliberation; nothing which I do not ginally introduceri, it will be seen that it did not connow embrace as sound policy; nothing which, as I sup. template any enlargement of the means of payment. It pose, is in the least degree inconsistent with the princi- did not embrace the notes of State banks at all. It conples which I at this time maintain; and I repel, as wholly fined all payments to coin, Treasury notes, and notes of unfounded, any intimation that any thing like incongrui. the Bank of the United States. But this was esteemed ty or inconsistency is to be found in the sentiments and too strict and severe; the House of Representatives felt opinions delivered by me on the two occasions. No a disposition to legalize the receipt of the noles of spe. such inconsistency, indeed, has been, so far as I know, cie-paying State banks; and to meet this feeling, ibe directly charged; but the repeated quotation of my for resolution was amended and enlarged, so as to embrace mer remarks might lead to the inference that such incon. the notes of specie.paying banks. The resolution, as sistency was intended to be intimated. The resolution thus amended, embraced two objects, both clear and of 1816 was accompanied, as originally introduced by distinct: first, to compel the Treasury to confine its reme, with an introductory resolution, in the form of a ceipts to such sorts of money as were authorized and preamble, setting forth the reasons on which the pro- sanctioned by law; second, to increase the number of posed measure was founded. T operations of the those sorts, or to enlarge the legal means of payment, Treasury harl at that time become greatly deranged by by making it lawful to receive the notes of specie.paythe war. The duties at the custom-houses were re. ing banks, payable and paid on demand. Both these ceived, in many places, in the paper of non-specie.pay- objects were accomplished by the resolution, which, as ing banks; and, as there was a great variety and differ. amended, passed both Houses, and became the law of ence in the value of the notes of those banks, there was, the land. of consequence, a real difference in the amount of duties Now, sir, the question is not whether sich a legalizing paid in different ports. In some cities the discount upon of bank notes was safe or dangerous, wise or unwise. those notes, to bring them to the value of legal coin, Congress saw fit, in fact, to sanction their reception, and was five per cent. on their nominal value; in other that is enough. From that moment it became the legal places ten per cent., and in some, indeed, as high as right of every deblor, and every purchaser of land, to twenty per cent. That was the fact in this city. In the pay in those notes. And, sir, all I said then, I say now, years 1814 and 1815, bills on Boston could often not be viz: that it is a subject to be provided for, and which had here under a premium of twenty per cent.; since always has been provided for, by law; that it has been, all the paper of the Boston banks was equal to specie, is, and ought to be, above the reach of executive discre. and the paper here depreciated to the extent stated. tion; that, by the law, as it stood before 1816, notes of This was all in the course of things, as some banks had State banks were not receivable; that, by the law of suspended specie payments and others had not; and as 1816, they were made receivable, and put on the same the duties at the custom-house were received in the pa.ground with coing, notes of the Bink of the United per chiefly of the local banks, the result was, in effect, States, and Treasury notes. And what is the ground I a different rale of duties in different places, in plain vio now stiind on? Simply this: that this is a matter of law, lation of the constitution and of all justice. And this dif- and not of discretion; that the Secretary has no more ference was great enough to turn the whole commerce right, now, to strike any thing out of the law that is in of the country from the Northern to the Southern States. it, than he had, before 1816, to put any thing into the

It was under these circumstances, and at this time, law which was not in it. That was my doctrine then; that the resolution of 1816 was introduced by me, with a that is my doctrine now. Where is any inconsistency? sort of preamble, alleging the impropriety, inequality, At that time the Secretary was receiving bank notes and illegality, of this state of things; and what was its contrary to law; now be is refusing bank notes contrary object? Simply to bring back the administration of the to law. I was for correcting the illegal proceeding then, finances to the rule of law. The law was plain. There and I am for correcting the illegal proceeding now. I was no authority, not a particle, for receiving those take back nothing of what I then said-not a syllable. I bank notes. There was, in truth, no discretion vested believe now as I did then; and, indeed, I believe more in the Secretary of the Treasury as to what should be firmly, as a man is not likely, as he advances in years and received in payment for duties. All this was settled by observation, to grow less anxious on the subject of a plain statute provisions. The difficulty arose from no stable and uniform currency, or less resolute to fix it on deficiency of enactments by Congress.' The law made a permanent basis of law. I felt then the necessity of it the duty of the Secretary to receive, in payments to maintaining a legal currency in payment of the dues of the United States, the gold and silver coins of the United | the Government; I feel the same necessity now. At that States, certain foreign coins, and Treasury notes, and time, something was admitted in payment which was not notes of the Bank of the United States then lately incor- in the statuite; at this time, somelling is refused which porated; and nothing else. But we had just emerged is in the statute. In boih cases the law has been de. from the war. The banks had suspended specie pay parted from; and in both cases I was, and am, for re. ments in consequence of that war; and the Treasury was establishing its authority. said to have acted under an unavoidable necessity, a sort Mr. RIVES having obtained the floor, of vis major, which could not be resisted. This was the On motion of Mr. GRUNDY, the Senate spent some sole ground on which its conduct was justified or ex. time in executive business, and then adjourned. cuised. In the House of Representatives, the introductory resolution or preamble was, however, stricken out, with my consent, which I readily gave, as it was sup

TUESDAY, JANUARY 10. posed to imply a reproach on the Secretary of the The following message was received from the PresiTreasury; and I had not the least intention of casting dent of the United States, by Mr. ANDREW JACKSON, Jr., any thing like reproach upon that officer, for a practice his secretary: growing out of the absoluie necessi'y of the case, as he To the Senate of the United States : and others supposed. All, however, agreed that the Immediately after the passage by the Senate, at a formnode of paying duties, then in practice, was not accord. mer session, of the resolution requesting the President to ing to law. Tlie object of the resolution, as I have a!. / consider the expediency of opening negotiations with the

Senate.)

Treasury Circular.

[Jax. 10, 1837.

Governments of other nations, and particularly with a few remarks to the Senate on this subject, I said what tie Governments of Central America and New Granada, I take great pleasure now in repeating, ihal, in whatever for the purpose of effectually protecting, by equitable different lights the operation of the Treasury circular trealy stipulations with them, such individuals or com may have been viewed, of one thing I was thoroughly panies as might undertake to open a communication be- persuaded—that the motives which had induced the iween the Ailantic and Pacific oceans, by the construc- high functionary at the head of the Government to tion of a ship canal across the isthinus which connects direct the issuing of it were in perfect consonance with North and South America, and of securing forever, hy such that elevated and patriotic spirit which had so conspicustipulations, the free and equal right of navigating such caously marked the whole course of his public life; and nal to all such nations, on the payment of such reasonable thit no defect of legality, in my estimation, had been tills as ought to be establislied to compensate the capital shown in the authority under which it was issued. I ists who might engage in such undertaking, and complete added, also, that the measure was properly to be viewed the work, an agent was employed to wbtain information in as a temporary one, to continue in operation until the acrespect to the situation and character of the country tion of Congress on the whole subject could be obtain. tirough which the line of communication, if established, ed; and that the President himself, as shown by the eviwould necessarily pass, and the state of the projects which dence of his message at the commencement of the seswere understood to be contemplated for opening such sion, attached no importance to its adoption is a permacommunication hy a canal or a railroad. The agent re. nent rule of policy. turned to the Uniteil States in September last, and al. One of the leading objects of the Treasury circular, though the information collecled by him is not as full as at the time it w-s issued, was to check thal tendency could have been desired, yet it is sufficient to show that to extravagant bank issues and bank credits which the probability of an early execution of any of the pro- has so signally marked the history of the last twelve jects which have been set on foot for the construction of or eighteen months. But, so far as that object is conthe communication alluded to is not so great as to ren. cerned, the same effect will now be produced in a man. der it expedien! toopen a negotiation at present with any ner not less certain, though by a process more gradual, foreign Government upon the subject.

and therefore easier and safer to the community, by the ANDREW JACKSON. operation of the deposite act. No one can doubt, Mr. WASHINGTON, January 9, 1837.

President, that one of the chief causes of the receit TREASURY CIRCULAR.

over-action of the banking system in this country is to be

found in the immense sums of public moneys left in the The Senale proceeded to the further consideration of deposite banks, and which have been used and cradledd the joint resolution to rescind the Treasury order of upon by them, as an addition of so much to their bankJuly, 1836, &c., together with the substitute offered ing capitals. This is a state of things which has been thercfor by Mr. Rives, in the following words:

eminenily pernicious in all its bearings. The correction Resolved, that hereafter all sums of money accruing of so great an evil formed in my mind one of the strong. or becoming payable to the United Stales, whether from est considerations for giving the cordial support I did io customs, public lands, taxes, debts, or otherwise, shall the deposite act of the last session; a measure which, be collected and paid only in the legal currency of the however much misconceived or misrepresented in re. United S'ales, or in the notes of banks which are paya- gard to its true character, has, in my opinion, conferred ble and paid on demand in the said legal currency, under upon the country a double benefaction of the highest the following restrictions and conditions in regard to value: first, in puiting out of the way of ihe Government such noies: that is, from and after the passage of ihis res. the templation, whose powerful influence we were al. olution, the notes of no bank which shall issue bills or rearly beginning to feel, to useless, extravagant, and annotes of a less denomination than five dollars shall be ti-republican expenditure; and, secondly, in taking from received in payment of the public dues; from and after the deposite banks that gratuitous and artificial increment the first day of July, 1899, ihe notes of no bank which of their capitals, which has been a main cause of the unshall issue bills or notes of a less denomination than ten natural distention of our paper currency, and of that in. dollars shall be receivable; and from and after the first ordinate spirit of speculation which has prevailed through of July, 1841, the like prohibition shall be extended to the country. In gradually withdrawing, as we now are the notes of all banks issuing bills or roles of a less de coing by the act of the last session, these large amounts nomination than twenly dollars: Provided, however, That of the public treasure from the possession of the deposite no notes shall be taken in payment by the collec!ors or banks, and in avoiding, as, I trust, by a wise and provireceivers, which the banks in which they are to be de- dent legislation, we shall dr, the accumulation of any posited shall not, under the supervision and control of idle surplus in fulure, the Government will take away ihe Secretary of the Treasury, agree to pass to the credit the stimulus which itself has given to the excessive issues of the United States as cash.”

and credits of the banks; and we may then hope that, The question being on the adoption of his substitute, under the salutary control of the laws of trade, they will

Mr. RIVES said that, in asking the indulgence of the relurn within those safe, proper, and natural limits which Senate, it was not his design to abuse their patience by the business of the community requires. rearguing the questions which had already been so fully While on this branch of the subject, Mr. President, I and so ably discussed, in relation to the legality or the will make one other observation. However necessary policy of ihe Treasury circular. It was his wish only to or desirable the contraction of our paper circulation may state, somewhat more at large than he had yet had an op. be, (if it be, indeed, in the large excess which is supportunity of doing, the views under the influence of posed by many,) it must be borne in mind that there is w bich lie bad offered the proposition which is now pendono operation more delicate than the reduction of the ing before the Senale, as an amendiment to the resolution currency of a country. A decreasing circulating me. of ihe Senator from Ohio, (Mr. Ewrxo.] la reference to Jium, it is agreed alike hy theoretical writers and by the most important objects of the Treasury circular, he enlightened practical men, is precisely that condition in regarded that measure as having done its office; and the the moneyed affairs of a community which is the most interests of the country are now much more concerned critical and distressing. It is a transition from high 10 in the provision we shall make for the future, than in W. w prices, from a certain and liberal reward of labor to any decision we may pronounce pon the past. When I diminished wages and precarious employment, from hadline bonor some days ag“, said Mr. R , of addressing active and prospering industry to general languor and de

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