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Dec. 19, 1856.)
supplies of the precious metals from twenty-five to forty- the constitutional currency of our America: 1. Twentyfive millions in three years? Mr. B. would subjoin from five thousand sovereigns paid weekly by one bankingthe Treasury report the statement of specie in all the house, for wages to working people. 2. This amount banks in the United States, as far as obtained at the formerly paid in one pound notes. 3. No local bank isTreasury Department, first premising that the report suing paper now in Lancashire. was not complete. The number of barks in the United Confining his remarks to one only of these stalements States and their branches is near one thousand! Their -the amount of weekly payments in gold- Mr. B. said names occupy twelve columns in Bicknell's Counterseit the annual amount was one million three hundred thouDetector, with nearly eighty names in each column! sand sovereigns, equal to six millions and a half of dollars! The Treasury report does not include them all, but the This was paid by a single banking house; and are we to main part, and their specie is reported thus:
believe that the 1,000 banks in the United States cannot October, 1833,
furnish the same amount for the purchase of the public $25,000,000
lands? And are we, after attempting to make them do January, 1834,
it, to be clamored down by a combined cry from specuJanuary, 1835,
lators, a part of the banks, and politicians, that the counJanuary, 1836,
40,000,000 December, 1836,
try was paralyzed and desolated by the experiment, and
that all further attempt must instantly cease? Here is an increase of specie in their vaults, said Mr. Mr. B. would make a short issue with all these com. B., of twenty millions in three years, and of five millions plaining banks; they either have, or have not, their pro. of dollars during the very year of the Treasury order's portion of the forty-five millions of specie which they reexistence-a fact which, of itself, exposes and puts to port is in their vaults. If they bave it, there is no difshame the whole story of their distress and ruin, and in- ficulty in furnishing specie for the land offices; if they ability to aid the community on account of this order, or have it not, then their returns are deceptive-their pe. to furnish the specie which it requires. The fact is con riodical exhibitions of specie are nothing but show moclusive: it stamps the whole contrivance on the part of ney; and the sooner the people find out their hollowness the banks which have engaged in it, as a shameful and and emptiness, the better for the whole community. fraudulent imposition upon the public. It is enough of But, (continued Mr. B.,) let the amount of specie be itself; but the custom house books show that these banks what it may in the banks, the fact is, that there is about would in reality have increased their specie to ten mil. seventy-five millions in the country, and a goodly part of lions this year, had it not been for the sums exported to that is in the hands of the community. In October, 1833, foreign countries. The exports of specie, up to near the when the deposites were removed, the whole amount of end of November, were $4,435,815; of which $312,811 specie in the banks was returned at about twenty-five was in gold. But this is nothing, according to the Philo millions, and that in the hands of the community was adelphia letter. It is nothing; while the one third of computed at only four millions. The community is now that sum going into our land offices, and thence through computed to have twenty-eight millions, and the annual Government payments to the people, is to create intense increase is thus reported by the Secretary of the Treasdistress, derange the exchanges deprive the banks which ury: affect to be injured by the Treasury order of all capacity
Specie in active circulation, to make loans to business men, and justify them in throwing borrowers into the hands of usurers, to be fined at the
12,000,000 rate of 3 per centper month discount (equal to 4 per
1st January, 1834,
18,000,000 cent. interest) for the use of money.
1st January, 1835,
23,000,000 But Mr. B. had another test to apply to the capacity
1st January, 1836, of those banks to furnish the small amount of five millions
1st December, 1836,
28,000,000 of dollars per annum for the purchase of public lands. Here, then, is a sum in the hands of the community, It was in ihe contrast exbibited by the one thousand sufficient to supply the public land demand, on account banks of the United States with what is done by a single of actual settlers, four times over. The rapidity with banker in the English county-he might almost say which gold and silver has increased since the comkingdom instead of county-for Lancashire, in point of mencement of the operations to restore the constituwealth, is equal to the second rate kingdoms of Europe tional currency, should banish all doubt on the practica-in the English county of Lancashire, and where there bility of doing it. See what has been done in four years are no local paper-issuing banks or bankers. We would against the powerful opposition, the systematic resistgive the sworn words of Samuel Jones Lloyd, Esq., a ance, and the scoffings and jeerings of a great political banker, examined before the committee of thirty-one and moneyed party. Four years more may be equally members of the House of Commons in 1832; a committee successful, if ihese resolutions can be defeated, and, inof which Lord Althorpe was chairman, and such men as stead of seventy-five millions, one hundred and twenty Sir Robert Peel, Lord John Russell, Mr. Goulburn, Sir millions, and nearly forty millions of it gold, may be in Henry Parnell, Mr. Baring, and more than two dozen the country. But nobody expects this amount to come scarcely their inferiors, were members, and on which into the country, or what is in it now to remain, unless such men as the Governor of the Bank of England, Mr. / the Federal Government can continue its onward course N. M. Rothschild, and a hundred distinguished bankers in the reformation of the currency. If it relapses into a and merchants were witnesses. Mr. Lloyd, among other paper money currency, the whole community must re. things, testified to the quantity of gold paid weekly by lapse into it also; and the result must be, what it has a single banking establishment, (his own,) for wages lo been heretofore, universal banishment of the precious working people in the city of Manchester, one out of inetals, the eventual stoppage of all the State banks, and the many great cities which Lancashire contains. This a call for the re-establishment of the Bank of the United is the part of his evidence relating to this point:
States, as the only safe regulator of the State cur. "A great amount in gold is paid at Manchester, in rencies. wages. Witness's house issues about 25,000 sovereigns The increase of banks and paper money, and the neweekly. That issue was formerly in one pound notes.cessity of restraining the issues of these corporations, as There is no local issue in Lancashire.”
alleged in the President's message, was next adverted Here are three statements (said Mr. B.) which ought to by Mr. B. He referred to the report of the Secre. to bę sterotyped on the head and heart of every friend to tary of the Treasury, which showed ihese results:
(Dec. 19, 1836.
which relates to the currency. He says: Near 1st October, 1833,
$80,000,000 1st January, 1834,
". The progress of an expansion, or rather a depre.
ciation of the currency, by excessive bank issues, is al1st January, 1835,
ways attended by a loss to the laboring classes. This 1st January, 1836,
108,000,000 1st December, 1836,
portion of the community bas neither time nor opportu
nity to watch the ebbs and flows of the money market. Here is an increase of about forty millions of paper Engaged from day to day in their useful toils, they do money in two years. But it is not the whole increase in noi perceive that, although their wages are nominally that time. The computation is principally made from the same, or even somewhat higher, they are greatly the returns of the old banks; while one hundred and six reduced, in fact, by the rapid increase of a spurious curnew ones, with capitals of sixty millions, bad been cre rency, which, as it appears to make money abound, they ated; and twelve millions and three quarters of increased are at first inclined to consider a blessing. It is not so capital to the old banks had been granted during the with the speculator, by whom this operation is better past winter; so that fisty millions of increase of paper understood, and is made to contribute to his advantage. was probably the amount when the Treasury order was It is not until the prices of the necessaries of life become issued, and the increase going on with a deplorable ra. so dear that the laboring classes cannot supply their pidity. The national domain was the object that was wants out of their wages, that the wages rise, and grad. attracting it. The temptation was irresistible. A quire ually reach a justly proportioned rate to that of the proof paper, speckled over with figures, would transmute ducis of their labor. When thus, by the depreciatior, into 100,000 acres of land; a ream of paper into a mil. in consequence of the quantity of paper in circulation, lion of acres. One thousand engines were at work, wages as well as prices become exorbitant, it is soon striking this paper; hosts of speculators, loaded with found that the whole effect of the adulteration is a tariff bales of it, were on their way to all the new States. It on our home industry for the benefit of the countries was evident the national domain was becoming a fund where gold and silver circulate and maintain uniformity for the redemption of all this paper. It was all receiva- and moderation in prices. It is then perceived that the ble in exchange for lands; and the holders of these bills enhancement of the price of land and labor produces a seem to consider them as assignats, like those of the corresponding increase in the price of products, until French national convention, convertible into the terri. these products do not sustain a competition with similar tory of the republic at the will of the possessor, and the ones in other countries, and thus both manufacturing and faster the better. This was the state of things on the agricultural productions cease to bear exportation from rise of Congress, and the two balls of that body had the country of this spurious currency, because they can. resounded with the denunciation of the ruinous aspect not be sold for cost. This is the process by which speof this exchange of land for paper, four months before cie is banished by the paper of the banks. Their vaults the adjournment took place. The President, acting are soon exhausted pay for foreign commodities: the under ihe constitution and laws of the country, applied next step is a stoppage of specie payment--a total deg. the remedy which the crisis required, and which the radation of paper as a currency; unusual depression of Jaws and constitution authorized. He saved the national prices, the ruin of debtors, and the accumulation of domain; he checked the expansion of the paper system; property in the hands of creditors and cautious capitalhe saved the Treasury from a frightful accumulation of ists.". "unavailable funds;" and he prevented that catastro. This (said Mr. B.) is the progress and effect of a dephe in the State banks to which the Bank of the United preciated paper currency. The imprudence and the States is anxiously looking, systematically, promoting criminality of banks of issue are equally the sources of and impatiently awaiting that catastrophe in the local this depreciation; and the community is equally the vicbanks which would again disgrace and discredit them, tiim of their misconduct, whether it results from accident, and bring forth the whole United States Bank party to folly, or design. It is established in England that a sud. exclaim, We told you so! we told you this would be the den increase of one million sterling, by Bank of England consequence of not renewing our charter! and now you issues, will, in many states of the moneyed system, pro. all see it! and we demand ihe re-establishment of the duce a depreciation in the value of money which will be national bank as the only means of regulating the State sensibly felt in ihe kingdom. What, then, is to be the banks! President Jackson has prevented all this; and effect of an increase of fifty millions of paper dollars, in has shown that the constitutional currency can regulate two years, in this country? It must be what every perthe State banks; and for this he has drawn upon him. son sees and feels it to be-a depreciation of at least one self the denunciations of disappointed speculaiors, dis- third of the value of paper money! so that all persons appointed politicians, and disappointed bankers. He living on salaries, fixed incomes, and wages, are in the has prevented many and great evils, and, among others, condition of baving suffered a diminution of one ibird of the furiber depreciation of the currency. Fifty millions their income. Living is becoming as dear in our young of additional paper, put out in two years, has enabled and prolific America as in the aged and crowded coun.. the banks to imprison forty-five millions of specie, and tries of Europe. Let no one delude himself with ibe the whole one hundred and thirty millions of paper mo. belief that there is no depreciation while bank notes ney afloat during the summer has depreciated the gen- continue to be convertible into gold and silver; this eral currency; wbich is seen by the importation of wheat would be a great error; for it is of the very nature of de. from Germany and the Black sea, by the importation of preciating paper to carry down gold and silver with it, beef and pork from Ireland, hay from Scotlan:), and until things reach that point when prudent men begin to many other necessaries of life from Europe; wbich is
exact payments in hard money, or, which is the same seen in the rise of price in every article which depends thing, to carry home in silver at night the amount of for sale on its depreciated currency; for articles u hose
every note received during the day. When things have price depends upon foreign markets, where the notes of
reached that point, and about the time when all prudent our one thousand banks are not taken for money, as to men have taken care of themselves, the public mind be. bacco and cotton have not risen. The progress and the gins to get uneasy. Some cause, no matter what, starts evils of this depreciation, which commenced before the an alarm; and in a few weeks the explosion is universal. Treasury order, which that order has checked, but Such was the point to which we were rapidly tending in which must recommei ce with its recision, is powerfuly 1 July last. President Jackson has arrested this depreci
Dec. 19, 1836.)
ation, and saved the country from a dire calamity. His Here (said Mr. B.) is a period of sixteen years, diviTreasury order has saved it. It has stopped the issues ded into portions of four years each, by the administraof a host of banks, and bound up the elements of deso- tions of different Presidents. The first showed a heavy lation in their own caverns. The raging winds are now export of specie, and the loss of near twelve millions of imprisoned: Boreas, Eurus, and Auster, are now con. dollars; the second, a loss of about a million and a half; fined. The fabulous conception of the father of poets the third, a gain of about six millions; the fourth, a gain is realized, not upon the ocean of waters, but upon the of near forty millions, and upwards of that amount, when ocean of paper money. The elements of destruction the produce of our native gold mines were added. are tied up; and wo to those who, imitating the rash con. These were the results; and, without embarrassing his duct of the companions of Ulysses, shall untie the faled remarks with complicated details, he would take the pe. bag, and turn loose tempests, storms, and desolating fury riods of strongest contrast, the first and last four years upon the land.
of the sixteen. Every person would recollect the period Mr. B. said it would be unjust, after saying so much of 1821, -22,-'23,-'24. It was the season of bank stop. of the expansion of the paper currency, and the over pages; of depreciated paper money; of stop laws, relief issues of the local banks, not to add, that the picture was laws, tender laws, loan laws, property laws; the season not intended to be applicable to the whole of these of depressed prices of property and produce, of ruin to banks; that he knew of many honorable exceptions, and debtors, and harvests to money-holders and cautious there might be many more that he did not know of. His capitalists. It was the time when a creditor who should means of information were limited to the official returns receive from his debtor ten dollars in Kentucky paper, of the deposite banks, now about ninety in number; and and gave five dollars in change, would bave received while, of these, he saw many whose paper dollars in cir- nothing, and the debtor would bave paid nothing. It culation, to say nothing of their deposites, were five, was the time when two bills for the same article were ter, fifteen, to one for their specie dollars in their vaults, made out in the West: one for silver, and one for paper, yet there were others where the proportion was the the latter being the former multiplied by two. Now, look other way. The Merchants’ Bank, Boston, had $284,000 to the table. This disastrous season will be seen to have specie, and $256,000 in circulation; the Bank of Ameri- | been the period of least importation and greatest exca, New York, bad $1,490,000 in specie, and $572,000 portation of specie. Search the memory, and it will innotes out; the Manhattan, in the same place, had form you that the Bank of the United States, then just $690,000 specie, and $566,000 paper out; the Planters' recovered from its own crisis of 1819, and just strong Bank, Georgia, had $497,000 specie, $361,000 paper; enough to do mischief, was employed in eviscerating the and many others whose issues but slightly exceeded their whole interior country of its gold and silver, and collectspecie in band. It was due to these banks, and doubt. ing it on the seaboard, where it was exported to counless to many more, whose returns were not accessible to tries unaflicted with the pestilence of paper money. him, lo except them from the censure and the complaint Look to the last period, the present time; and it will be which lies against those whose unjustifiable issues have seen that, dating from that era which should become naproduced the expansion and depreciation of currency tional, and receive perennial honors in anniversary cele. which is now visible to all.
brations—the most glorious era of the removal of the Adverting to President Jackson's great design of in deposites--dating from that era, and it will be seen that creasing the specie in the country, Mr. B. said there was we have gained near forty millions of specie by importaan indissoluble connexion between the state of the spe. tions, and that the gain exceeds forty millions, when the cie in a country and its prosperity or distress. They domestic supplies are added. The present period, then, were cause and effect, and rose and fell together. On is the season of the greatest increase of specie ever this point he had a table to produce, which must carry known; and such also is the national prosperity. Never conviction to every mind which was open to the influe before did the prosperity of any country equal the presence of facts and reasons. It was a table which covered ent time; never was there such exuberance of prosperithe most disastrous and the most prosperous period of ty; and that, after making due allowance for what is ficour time; and which required but the application of titious, from the excess of paper and the effect of a de. every one's own knowledge of events to lead to just and preciated currency. This excess and depreciation would inevitable conclusions.
be fatal, were it not for the sevenly five millions of spe.
cie in the country. But these threescore and fifteen Table of import and export of gold and silver coin and millions are the safety of the land. They make the peo. bullion from 1821 to 1836.
ple independent of the banks; they make them inde. pendent of panics; they prepare them for the present
panic, this starveling concern, now in a course of prepYears. Imported. Exported.
aration by the authors of the old one. Thanks to the wisdom, ihe foresight, the energy, of President Jackson,
be bas prepared the country for this second panic; he 1821 $8,064,890 $10,478,059 has fortified it, and arined it for the contest. Seventy1622
3,369,846 10,810,180 five millions of specie puis paper at defiance, and ena. 1823
5,097,896 6,372,987 bles the country to stand the shock of the encounter. 1824
8,379,835 7,014,552 No longer can banks set themselves up above law and C1825
6,150,765 8,797,055 above Government. No longer can they stop payment, 1826
6,880,960 4,704,533 and force their dishonored paper upon the country. The 1827
8,151,130 8,014,880 bank that would now attempt it would instantly be put 1828
7,489,741 8,243,476 to the test of insolvency, and subjected to the law of the -1829
7,403,612 4,924,020 land as well as to the law of public opinion. Her dis1830
8,155,964 2,178 773 honored paper would be driven in upon her, and the last 1831
7,305,945 9,014,931 hard dollar extracted from her vaulis. These being the 1832
5,907,504 5,656,340 fruits of President Jackson's great measure for restoring 1833
7,170,368 2,614,952 a specie currency, who can justify the opposite course 1834 17,911,632 1,676,258 which is now proposed? a course by which specie is to 1835 13,131,447 5,748,174 be dispensed with by the Federal Government, paper to | 1835 12, 166,372 4,435,815 take its place, specie again to become an article of mer. VOL. XIII, -4
[Dec. 19, 1836.
chandise for exportation to foreign countries, and the attended to, and would be discussed with all the brevity
present hour. Gold and silver, though not without a
The answer for this question (said Mr. B.) carries us Mr. B. said he had stated in the commencement of his up to the time of General Hamilton, to the first year of speech that two great objects were to be accomplished his administration of the Treasury Department, and to by this rescinding resolution: first, the condemnation of the foundation of the political school of which he was President Jackson for a violation of the laws and consti- the head. As the Secretary of the Treasury, it became tution, and the destruction of the public prosperity; and, bis duty to carry into effect the act of 1789, for the col. secondly, the overlbrow of the constilutional currency, lection of the custom-house duties in gold and silver coin and the imposition of the paper money of all the State only. Instead of carrying the law into effece, he nulli. Governments upon the Federal Government. le had fied it by construction. He interpreted "gold and silver spoken to the first of these objects, and, as he lioped, coin only" lo be the notes of specie-paying banks; and a successfully vindicated the President from all the chari deposite of bank notes, as cashi, to be a deposite of spe. ges on which it rested; the second object was now to be 'cie. This was his construction, ard the order which he
Dec. 19, 1836.)
issued to the collectors of the revenue corresponded | made it easy to inundate the Treasury, through the land with it. At the ensuing session of Congress, he justified offices, with local bank paper; and the spirit of speculathis construction in an argumentative report; and a few tion, co-operating with this political design, turned an extracts from this report will show how the plain mean immense food of paper upon the national domain. It ing of a law can be turned upside down by construction, was easy to see that ihis mass of paper, though credited and will reveal the source of the first imposition of pa- to the Government on the books of the deposite banks per money upon the Federal Government, and the rea as specie, was not cash, but only promises to pay cash; sons for that imposition.
and that, in fact, it was destined to become a new and “ This section (30th of the revenue act of 1789] pro second accumulation of unavailable funds. A crisis in vides for the receipt of the duties in gold and silver coin the federal finances was evidently approaching, and only. The Secretary has considered this provision as there was every reason to believe-ihe floors of the two having for its object the exclusion of payments in the Houses of Congress daily attested the fact--that swarms paper emissions of the particular States, and the securing of speculators, loaded with paper money, were to alight the immediate or ultimate collection of the duties in spe. upon the public lands immediately after the rise of Con. cie, as intended to prohibit to individuals the right of gress. It was probable that many tens of millions of pa. paying in any thing except gold or silver coin; but not to per would thus have been converted into land, and that hinder the Treasury from making such arrangements as the banks which issued it, being unable to redeem it, its exigencies, the speedy command of the public re and the deposite banks which had improvidently credit. sources, and the convenience of the community, might ed it as cash, being unable to cash it, the whole would dictate; these arrangements being compatible with the have sunk upon the hands of tbe Federal Government. eventual receipt of the duties in specie.
Such The evil of such a state of things is too obvious to be were the reflections of the Secretary with regard to the depicted. Not only the Federal Government would authority to permit bank notes to be taken in payment bave lost its land, and lost its revenues, but the whole of the duties. The expediency of doing it appeared to community would have suffered. But here the energy him to be still less questionable. The extension of their , and foresight of President Jackson was again victorious circulation by the measure is calculated to increase both over the designs of enemies and the imprudence of the ability and inclination of the banks to aid the Gov. friends. He determined to arrest the floods of paper ernment.
Bank notes being a convenient spe- which were ready to inundate the Treasury. The specie cies of money, whatever increases their circulation in order was issued, and the country was saved. The creases the quantity of current money.
But, wrath which the miscarriage of so many fine schemes occonvinced as the Secretary is of the usefulness of the casioned burst forth upon the President's head; the regulation, yet, considering the nature of the clause speculator for the loss of his myriad of acres; the politiupon which these remarks arise, he thought it his duty cian for the escape of the Government from the danger to bring the subject under the eye of the House. The that menaced it; the local banks for the loss of the nameasure is understood by all concerned to be temporary. tional domain to bank upon; and the Bank of the United Indeed, whenever a national bank shall be instituted, States for the loss of its anticipated opportunity of prosome new disposition of the thing will be a matter of ving that a national bank was indispensable to the safe course."
collection of the federal revenues. To make distress in Such was the argument, and such was the object for the country, and charge it upon the Treasury order, was departing from the act of 1789, and from the constitution, now the resort of all the disappointed parties. The of wbich it was the faithful expositor. The effect was Kentucky speech, and the Philadelphia letter, were the the gradual and general diffusion of a paper currency signal guns for a new panic; and the old drama of 1833 over the country, and a corresponding general and grad. was immediately put in rehearsal for performance on the ual disappearance and banishment of gold and silver; so Washington boards as soon as Congress met.
In every that when the first national bank charter expired, in respect this second panic was a servile copy of the for1811, the Federal Government was left without a nation. mer; the same plot, ihe same scenes, the same incidents, al currency, having neither the United States Bank
the same performers. No fertility of invention characnotes nor gold, and but little silver in the country. Mr. ierized any part of it; no touch of genius enlivened the Madison's administration was then driven to the deplora- dull copy with the novelty even of a single new concepble necessity of using State bank paper for a national | lion or new phrase. Here we have it now, more like currency; and the result is too well known in the ten a starved wolf at the door, than a roaring lion; and lend. years' convulsions of the paper system which ensued. ing its feeble aid to the cause of this rescinding resolu. The effect of the whole was the speedy resort to another tion. That resolution is to open the doors of the Treasnational bank. This bank came to its conclusion under ury again to the inundation of paper money, that the cathe administration of President Jackson; and he, avoiding tastrophe averted last summer may be produced next the error into which President Madison's administration spring; and the question now is, sball Congress give up had fallen in 1811, resolved to re-establish the constitu- the public lands io spoil, and the public Treasury to intional currency, and especially to revive the circulation convertible paper, after President Jackson has saved of gold, which bad ceased for more than twenty years. the country from both evils? This is the point we are The success of this great plan was truly flattering. The now at; and if any one wishes proof of the design to gold currency, in three years, had risen from nothing to overthrow the constitutional currency and to impose pa. about fifteen millions of dollars, and the silver currency per money upon the Government, let him look at the had increased in the same brief space from less than universality of the abuse now lavished upon gold and silthirty millions to about sixty millions, and both against ver, and the applause bestowed upon paper money, by the determined opposition of a powerful political and all that great party now palpably discriminated by the moneyed party. The success of the experiment was es. distinctive features of the Hamiltonian school. Here is tablished, and it was clear that the party opposed to gold a specimen, taken from the Philadelphia letter, the force and silver could no longer effect any thing by direct op. and beauty of which will be fully comprehended by the position. A new mode of making head against it was boatmen of the Mississippi river. iten fallen upon, and that new mode was to expand the “ But this miserable foolery about an exclusive metalpaper system until it bursted, and thus to ruin the party lic currency is quite as absurd as to discard the steamin power by ruining the finances and the currency.' The boats and go back to poling up the Mississippi.” general receivability of local paper for public lands, This is the manner in which this great party speak of