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the resolution of 1816? The Senator from Massachusetts, in the speech above referred to, informs us that "all duties and taxes were required to be paid in the legal money of the United States, or in Treasury notes." This was the old law. The mischief, we learn from the same authority, was, "that the notes of banks of a hundred different descriptions, and almost as many different values, had been received, and were still received." What, then, was the remedy intended by Congress? To give the Secretary a wider latitude in favor of the debt. or, or to correct the mischief, and instruct him entirely with reference to the production of a more healthy state of the Treasury? Most obviously the latter; and I doubt not that fifteen years ago it would have been esteemed, by gentlemen of all parties, the most wild chimera imaginable, in any public debtor to have set up the pretence of selecting the fund in which he would pay off his responsibility. And yet it is urged, by way of authority upon this point, that the President of the United States has so construed the resolution of 1816, as is evinced by his advising Congress to remove the obligation upon the Treasury to receive United States Bank notes in payment of public dues. But this, I think, does not at all contribute to the proof of the proposition contended for, as it is evident that the obligation alluded to by the President is that contained in the charter of the United States Bank, and not to any command, either express or implied, in the joint resolution of 1816. There is nothing on the score of authority, but, on the contrary, I believe I am warranted in saying that the weight of authority is the other way; as in effect the operations of the United States Bank, while the fiscal agent of the country, amounted to the actual collection of specie from Government debtors, so that the charge of illegality on this ground is not sustained either by argument or authority. And, indeed, I think it is in effect abandoned by the admission that the Secretary of the Treasury might refuse to receive in Maine notes payable in Georgia, and vice versa; or, in other words, that he is at liberty to judge whether the fund offered is worth so much gold and silver at the place offered, although it may be at par, or even above par, at some other place. But another case may be put, for which the resolution would have provided, if it had been intended, in all cases, to deprive the Secretary of the Treasury of any discretion. A bank whose notes have been regularly redeemed with specie exists in the place where the money is to be paid to the public receiver, and those notes are valued at par in the market. The public receiver has, however, certain information that the bank is in critical circumstances, and will unquestionably blow up in a few hours. What is he to do? According to the construction of the resolution of 1816 contended for, he is not at liberty to refuse the money, because this is doubtless a specie-paying bank, and may possibly continue to be so; but the receiver has no right to exercise any judgment upon that question, and must, in the mean time, receive a sum of money, however large, with the strongest conviction upon his own mind that he is receiving worthless rags, which will prove a total loss to the Government. But the Treasury order is further said to be illegal, because it discriminates between actual settlers and others, and indeed it is said to be, in this respect, in violation of the constitution itself. The clause in the eye of the objector is the first of the 2d section of the 4th art cle of the constitution, declaring "that the citizens of each State shall be entitled to all privileges and immunities of citizens in the several States." The acts of nearly if not quite every State in the Union have given construction to this clause of the constitution, by which it seems to have been understood as contemplating nothing more than the defence of the citizens of one State from the disabilities of alienage in another. The pre-emption

[JAN. 9, 1837.

rights recognised in nearly all the land legislation of Congress is a farther precedent and sanction of the principle. But, so far as the present debate is concerned, it is sufficient to say that this discrimination in the Treasury order no longer exists. It has fulfilled the term of duration originally allotted to it, and no longer forms a feature in this executive measure.

But some have further urged the illegality of the Treasury order, upon the ground that its operation is not extended to the customs of the country. This argument would be a very sound one in the mouth of him who was contending for a further extension of the Treas. ury order, so as to embrace the customs, but is certain. ly not at all calculated to impugn the propriety of re quiring the public lands to be paid for in the legal currency. It is to be remembered that this order operates mainly, if not altogether, on sales made after its passage, and surely there cannot be the slightest wrong, injustice, or illegality, in demanding different kinds of payment for debts of a character altogether different. Still less can there be any thing unlawful in one having property to sell saying to purchasers, "if you buy this article, it will suit me to receive payment in current notes; but if you buy this other article, you must pay for it in gold and silver." This brings somewhat under consideration the land law of 1820, which, if an express justification was required for the Treasury order, furnishes it, and sweeps away at once every pretext for charging it with a want of legality. By it the public land is required to be paid for in cash; and as some difficulty has been raised upon the signification of this word, in order to its solution, at least to my own satisfaction, I have had recourse to the dictionary lying on your desk. I there find that cash is ready money; and upon turning to the word money, I find it signifies metals coined for the purposes of commerce; so that in fact, under that law, all the pub. lic lands, without the Treasury order, can now only be paid for in ready money, to wit: metal coined for the purposes of commerce, in Treasury notes, or land scrip. So much for the legality.

But the policy of this Treasury order is also assailed; and upon this point I must admit that, having been hurried into this debate somewhat sooner than I had intended, I am unable to do any thing like justice either to myself or the subject. I am under great obligations to gentlemen on both sides for the light they have cast upon it, and am not less indebted to the lightning corruscations of those opposed to the order, than to the calm irradiation which has shone from this quarter. In 1816 the able Senator from Massachusetts was pleased to say:

"There are some political evils which are seen as soon as they are dangerous, and which alarm at once as well the people as the Government. Wars and invasions, therefore, are not always the most certain destroyers of national prosperity. They come in no questionable shape. They announce their own approach, and the general safety is preserved by the general alarm. Not so with the evils of a debased coin, a depreciated paper currency, or a depressed and falling public credit. Not so with the plausible and insidious mischiefs of a papermoney system. These insinuate themselves in the shape of facilities, accommodation, and relief. They hold out the most fallacious hope of an easier payment of debts, and a lighter burden of taxation. It is easy for a portion of the people to imagine that Government may properly continne to receive depreciated paper, because they have received it, and because it is more convenient to obtain it than to obtain other paper, or specie. But on these subjects it is that Government ought to exercise its own peculiar wisdom and caution. It is supposed to possess, on subjects of this nature, somewhat more of foresight than has fallen to the lot of individuals. It is bound to foresee the evil before every man feels it,

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and to take all necessary measures to guard against it, although they may be measures attended with some difficulty, and not without some temporary inconvenience.

* The only power which the Government pos. sesses of restraining the issues of the State banks is to refuse their notes in the receipts of the Treasury. This power it can exercise now, or at least can provide now for exercising it in reasonable time, because the currency of some part of the country is yet sound, and the evil is not yet universal. * But I have expressed my belief on more than one occasion, and I now repeat the opinion, that it is the duty of the Secretary of the Treasury, on the return of peace, to have returned to the legal and proper mode of collecting the revenue. *

It can hardly be doubted that the influence of the Treasury could have effected all this. If not, it could have withdrawn the diposites, and the countenance of Government, from institutions which, against all rule and all propriety, were holding great sums in Government stocks, and making enormous profits from the circulation of their own dishonored paper. That which was most wanted was the designation of a time for the corresponding operation of banks of different places. This could have been made by the head of the Treasury bet ter than by any body, or every body else. This Government has a right, in all cases, to protect its own revenues, and to guard them against defalcation or bad and depreciated paper."

[SENATE.

who control the mammoth bank at Philadelphia and their partisans choose to pronounce a dangerous experiment destroy public confidence? I am certain, Mr. President, we shall never see confidence stable in the money market of this country till that institution has ceased to struggle for an existence authorized by the Congress of the United States. But gentlemen say it produces such a drain for specie, that bank discounts are necessarily curtailed. This is precisely one of the ef fects desired, and it is doubtless to the real interest of the country that it should continue to produce such effects. But that it ought, in the nature of things, to have produced such effects in a very moderate degree is, I think, apparent from the very small quantity of specie (not exceeding $1,800,000, I understand,) which has in fact been transported westwardly. Other causes, much more adequate to produce this effect, have been at work; other abstractions of specie, in much larger quantities, have taken place; and forty millions of money thrown from its former channels of regular trade, and held in a state of readiness to meet the provisions of the deposite act, seem to me far better reasons than the Treasury order for the pressure complained of. What do gentlemen say to the pressure in England? Is that caused by the Treasury order? And has there ever been a pressure in England which has not borne heavily on the mercantile classes in this country? The Senator from New Jersey seems to think that in proportion to the increase of the number of the deposite banks, a correspondent increase of discounts should have taken place. Why se, sir? Is the actual amount of the public revenue increased by the number of banks among which it may be distributed? And is not the amount of this fund the basis of the discounts made upon it? But to sum up the whole upon this point, let it be conceded, for the sake of the argument, that all the alleged inconveniences to the currency really exist; are they any thing more than the dust of the bal ance to the evils which must have flowed from an unlimited encouragement to bank issues, necessarily following the indiscriminate receipt of bank paper nominally rcdeemable in specie? Any gentleman who will cast an unprejudiced eye over the relative condition of the deposite banks at the adoption of the Treasury order and the present time, will, I think, perceive that there is great reason to believe it has been the means of saving the whole paper system from shipwreck, and consequent so intimately connected with it. He will find that either the specie has been increased or the circulation diminished in every instance, and in many both these contributions to strength have taken place. This is the foresce ing the evil before every man feels it, and taking the necessary measures to guard against it, although they may be measures attended with some difficulty, and not without some temporary inconvenience, which the Senator from Massachusetts has pronounced to be the duty of a Government.

This speech is, in my opinion, ample authority for nearly all that I have asserted, or wish to assert, on the present occasion. It expressly declares the insidious and dangerous nature of the paper system. It asserts both the power and the right of the Government to regu late the currency to a great extent, by the refusal at the Treasury of paper money. It enforces the duty of the Government to foresee evils, and take all necessary measures to guard against them, before every man feels them, although such measures may be attended with some difficulty, and not without some temporary inconvenience. It also alleges that Government is supposed to have, on subjects of this nature, somewhat more of foresight than has fallen to the lot of individuals. Thus supported, I do not think I can be very far wrong in having made similar a sertions and declarations. But the framers of our excellent constitution affixed their signet to what seems almost a dictate of nature herself, that the precious metals provided by her for that purpose are the most properly the whole country, which has unfortunately become media for commercial exchanges. They expressly prohibited the States from making any thing but gold and silver a legal tender in the payment of debts, and the States themselves from issuing bills of credit. Irelation to the circulation of the country, it is altogether impossible for the General Government to occupy a neutral stand. She must contribute to the width and depth of this ocean of paper money, as the Senator from Massachusetts has so properly termed it, or by her action dry up the streams continually pouring into it. Gentlemen on the other side agree to this, and tell us that the United States Bank is the only instrument she can successfully use to prevent its overspreading the whole terra firma of the nation. The President of the United States has said that it may be accomplished through the fiscal operations of the Treasury, without the aid of a national bank; and this Treasury order is one of the links in the chain of operations proposed; and now, before time is afforded to test its efficacy, ere six short months have rolled away, we are called upon to arrest its action. But gentlemen say its baneful effects have been already found too serious to be longer endured, under the hope of future advantages; that it has already brought distress and ruin upon the country. How has it brought distress and ruin upon the country? By destroying public confidence, is one response. And would not any thing else which those VOL. XIII.-22

But gentlemen further allege that the Treasury order is oppressive to the purchasers of public lands. One of the avowed objects of the Treasury order is checking the speculations in the public lands. That such is its natural effect, seems to be conceded on all sides; but that end, it is said, is defeated by evasion, and the burden falls chiefly on the bonafide purchaser. That the land speculators are by no means to be encouraged, and that the practice is a serious evil in our country, no one seems to deny; but the argument seems to be that, because it cannot be effectually prevented, no effort is to be made to impose on it a check. Is this sound reasoning? Does it become Congress to thwart the Executive in its attempts to diminish this evil? Ought it not, rather, by co-operation, endeavor to lessen the opportunities for the alleged evasions?

SENATE.]

Treasury Circular.

[JAN. 9, 1837.

ue; when you sell one portion, what remains is worth nearly as much as the whole before that portion was taken off. The expectation of such increase is doubtless the inducement with the speculator to stretch forth his hand with monopolizing sweep over all that you offer for sale. Not so with your deposite with the States. It is a caput mortuum, without any possibility of increase, and for the principal of which there is but faint hope of return, while the very proposal to reclaim it may rend your Union asunder. But justice and good faith require that your public lands should be so husbanded. They were either the voluntary donations ❘ of the old States, avowedly for the first and the last objects in which I have spoken of them as a fund of national wealth, to wit: as a field for population, and a common stock, out of which the debts of the nation should be paid; or they have been acquired by the united blood and treasure of the whole nation, and ought, therefore, to be used for the general good. But if they are to be brought into market now, in unmeasured quantities, while the nation is oppressed with money, we shall be acting like the young profligate who disposes of his paternal domain, that he may profusely scatter the product to the winds, or that he may tempt the cupidity of sharpers. Pursuing this policy, we shall in the end find ourselves in the situation of King Lear, who, having divided his all among his children, and becoming dependent upon their benevolence, was left to perish in the helplessness of senility; or spurred on by our actual necessities, which will then have no other source of sup

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 adment, 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 country. The remedies to which I allude are confining the sales of the public lands to actual settlers, and reducing the revenue by customs to the actual wants of the Government. The public lands constitute for us, in a triple sense, a vast fund of national wealth. They present, in the first place, a wide field in which our multiplying population is to find space to spread itself out; and the very wideness of this field, according to the observations of philosophers and political economists, increases the ratio in which this population will multiply. Our strength as a nation is therefore daily increasing through their instrumentality, our human materiel (so to speak) for fleets and armies becoming more abundant, and productive labor more vast in its amount. In the second place, their products will furnish sustenance to all this multiplying national power, and leave an excess to be exchanged for the valuable products of other climes and soils. Lastly, their fee simple interest is convertible into money, whenever required to supply the demands which may from time to time arise upon our Treasury. These three useful and important objects can only be duly accomplished by confining the sales of the land to the wants of actual settlers. It is true, by throwing them into the market alike for the actual settler and the speculator, there will be a larger immediate influx of money into the Treasury. But does good policy call for such an influx? Is not your national Treasury, so far from requiring such an influx, diseased with plethora? And have not gentlemen, to relieve it, urged on 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 edged by all to be dangerous in precedent, inexpedient as a general principle, and approaching, if not surpassing, the very confines of the constitution? The fear of national corruption, the ruin of so many prosperous States, a ruin which prosperous States have most reason to dread, has sanctified in the eyes of many a sterling patriot that measure called the deposite law, upon which he would have otherwise looked with horror and dismay. But in your public lands you may hold an uncounted treasure, without the apprehension of any such consequei ce. Your forest-covered wilds, still in the possession of the deer and the buffalo, would lie secure until your necessities called for their use, and, unlike your gold and silver, no eye would be fascinated by their glitter, no ear seduced by their musical ring. But when war or any other great national exigency calls for an extraordinary supply of treasure, here is a fund convertible by sale into cash, or the substantial security for a loan; they would be sufficient to repay, without resort. ing to taxation-a measure always odicus to a free people. Your deposites with the States, if otherwise unobjectionable, will never answer a similar purpose. The very seasons when the General Government shall find herself most straitened, the States themselves will be laboring under a like pressure. Already you find many of them disposed to treat the deposite as a gift; and what will they say when, in the unseasonable moment of national calamity, it is demanded of them as a debt? Will you not find them, like the States under the old confederacy, refusing or neglecting the contribution of their quotas? This will unquestionably be the case with many; while others, having honorably complied with their engagements, 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 bas so frequently will these deposites become the subjects of dangerous dis-been made, during the course of this debate, to the in

Government will become the devourer of her own children, and the most glorious and extensive family circle this earth has ever witnessed be broken and destroyed. I trust, however, that we shall be saved from the destinies both of Lear and of Saturn; and that, confining our. selves in the sales of public lands to the actual wants of settlers, the payment for them in specie will either cease to be felt as a grievance, or become unnecessary for the security of the revenue; and a reduction of the tariff being connected with this measure, we shall be relieved from all the evils of an overflowing Treasury.

I have thus glanced at the various considerations presenting themselves to my mind on this exciting and important question. Some of them apply as well to the substitute as to the original resolutions, though with mitigated force. I have offered them to the Senate with great diffidence, conscious that I am in my mere noviciate in matters of national legislation. In conclusion, I would add, that those who have attempted to show the evils produced by the Treasury order have fallen very far short of proving the existence of those evils, or, at least, of connecting them with it as their cause; and some of them have, as I think, almost abandoned the position as untenable. They cannot, therefore, with any propriety, ask its rec'sion upon the mere supposition that evils exist, and that the Treasury order is the cause. I have listened at entively to this discussion, with a sincere desire for instruction, and the result has been to rivet my approbation of the executive course; and while I shall vote for the amendment, as less obnoxious, I could with equal satisfaction have recorded my direct negative upon the original resolutions. When Mr. STRANGE had concluded,

JAN. 10, 1837.]

Treasury Circular.

[SENATE.

ready said, was to bring the practice back to that stand. ard; and on introducing the resolution, I had no other or further view. By recurrence to the resolution, as originally introduced, it will be seen that it did not contemplate any enlargement of the means of payment. It did not embrace the notes of State banks at all. It confined all payments to coin, Treasury notes, and notes of the Bank of the United States. But this was esteemed too strict and severe; the House of Representatives felt a disposition to legalize the receipt of the notes of specie-paying State banks; and to meet this feeling, the resolution was amended and enlarged, so as to embrace the notes of specie-paying banks. The resolution, as thus amended, embraced two objects, both clear and distinct: first, to compel the Treasury to confine its receipts to such sorts of money as were authorized and sanctioned by law; second, to increase the number of those sorts, or to enlarge the legal means of payment, by making it lawful to receive the notes of specie-paying banks, payable and paid on demand. Both these objects were accomplished by the resolution, which, as amended, passed both Houses, and became the law of the land.

troduction by myself of the joint resolution of 1816 into the other House of Congress, and to my observations then made on that measure. I said nothing on that occasion without deliberation; nothing which I do not now embrace as sound policy; nothing which, as I suppose, is in the least degree inconsistent with the principles which I at this time maintain; and I repel, as wholly unfounded, any intimation that any thing like incongruity or inconsistency is to be found in the sentiments and opinions delivered by me on the two occasions. No such inconsistency, indeed, has been, so far as I know, directly charged; but the repeated quotation of my former remarks might lead to the inference that such inconsistency was intended to be intimated. The resolution of 1816 was accompanied, as originally introduced by me, with an introductory resolution, in the form of a preamble, setting forth the reasons on which the proposed measure was founded. The operations of the Treasury hard at that time become greatly deranged by the war. The duties at the custom-houses were received, in many places, in the paper of non-specie-paying banks; and, as there was a great variety and difference in the value of the notes of those banks, there was, of consequence, a real difference in the amount of duties Now, sir, the question is not whether such 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 debtor, 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 discreand 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 coins, notes of the Bank 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 rate of duties in different places, in plain vio- now stand 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 he 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. 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 statute; at this time, something is refused which porated; and nothing else. But we had just emerged is in the statute. In both cases the law has been defrom the war. The banks had suspended specie pay-parted from; and in both cases I was, and am, for rements in consequence of that war; and the Treasury was establishing its authority. said to have acted under an unavoidable necessity, a sort of vis major, which could not be resisted. This was the sole ground on which its conduct was justified or excused. In the House of Representatives, the introductory resolution or preamble was, however, stricken out, with my consent, which I readily gave, as it was supposed to imply a reproach on the Secretary of the Treasury; and I had not the least intention of casting any thing like reproach upon that officer, for a practice growing out of the absolute necessity of the case, as he and others supposed. All, however, agreed that the mode of paying duties, then in practice, was not according to law. The object of the resolution, as I have a

Mr. RIVES having obtained the floor,

I

On motion of Mr. GRUNDY, the Senate spent some time in executive business, and then adjourned.

TUESDAY, JANUARY 10.

The following message was received from the President of the United States, by Mr. ANDREW JACKSON, Jr., his secretary:

To the Senate of the United States:

Immediately after the passage by the Senate, at a former session, of the resolution requesting the President to consider the expediency of opening negotiations with the

SENATE.]

Treasury Circular.

[JAN. 10, 1837.

a few remarks to the Senate on this subject, I said what I take great pleasure now in repeating, that, in whatever different lights the operation of the Treasury circular may have been viewed, of one thing I was thoroughly persuaded-that the motives which had induced the direct the issuing of it were in perfect consonance with that elevated and patriotic spirit which had so conspicuously marked the whole course of his public life; and that no defect of legality, in my estimation, had been shown in the authority under which it was issued. I added, also, that the measure was properly to be viewed as a temporary one, to continue in operation until the action of Congress on the whole subject could be obtain. ed; and that the President himself, as shown by the evidence of his message at the commencement of the session, attached no importance to its adoption as a permanent rule of policy.

Governments of other nations, and particularly with the Governments of Central America and New Granada, for the purpose of effectually protecting, by equitable treaty stipulations with them, such individuals or companies as might undertake to open a communication between the Atlantic and Pacific oceans, by the construc-high functionary at the head of the Government to tion of a ship canal across the isthmus which connects North and South America, and of securing forever, by such stipulations, the free and equal right of navigating such canal to all such nations, on the payment of such reasonable tells as ought to be established to compensate the capitalists who might engage in such undertaking, and complete the work, an agent was employed to obtain information in respect to the situation and character of the country through which the line of communication, if established, would necessarily pass, and the state of the projects which were understood to be contemplated for opening such communication by a canal or a railroad. The agent returned to the United States in September last, and although the information collected by him is not as full as could have been desired, yet it is sufficient to show that the probability of an early execution of any of the projects which have been set on foot for the construction of the communication alluded to is not so great as to ren der it expedient to open a negotiation at present with any foreign Government upon the subject.

ANDREW JACKSON.

WASHINGTON, January 9, 1837.

TREASURY CIRCULAR.

The Senate proceeded to the further consideration of the joint resolution to rescind the Treasury order of July, 1836, &c., together with the substitute offered therefor by Mr. RIVES, in the following words:

One of the leading objects of the Treasury circular, at the time it was issued, was to check that tendency to extravagant bank issues and bank credits which has so signally marked the history of the last twelve or eighteen months. But, so far as that object is concerned, the same effect will now be produced in a man. ner not less certain, though by a process more gradual, and therefore easier and safer to the community, by the operation of the deposite act. No one can doubt, Mr. President, that one of the chief causes of the recent over-action of the banking system in this country is to be found in the immense sums of public moneys left in the deposite banks, and which have been used and traded upon by them, as an addition of so much to their banking capitals. This is a state of things which has been eminently pernicious in all its bearings. The correction of so great an evil formed in my mind one of the strongest considerations for giving the cordial support I did to the deposite act of the last session; a measure which, however much misconceived or misrepresented in reupon the country a double benefaction of the highest value: first, in putting out of the way of the Government the temptation, whose powerful influence we were already beginning to feel, to useless, extravagant, and anti-republican expenditure; and, secondly, in taking from the deposite banks that gratuitous and artificial increment of their capitals, which has been a main cause of the unnatural distention of our paper currency, and of that inordinate spirit of speculation which has prevailed through the country. In gradually withdrawing, as we now are doing by the act of the last session, these large amounts of the public treasure from the possession of the deposite banks, and in avoiding, as, I trust, by a wise and provident legislation, we shall de, the accumulation of any idle surplus in future, the Government will take away the stimulus which itself has given to the excessive issues and credits of the banks; and we may then hope that, under the salutary control of the laws of trade, they will return within those safe, proper, and natural limits which the business of the community requires.

"Resolved, That hereafter all sums of money accruing or becoming payable to the United States, whether from customs, public lands, taxes, debts, or otherwise, shall be collected and paid only in the legal currency of the United States, 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 the following restrictions and conditions in regard to such notes: that is, from and after the passage of this res olution, the notes of no bank which shall issue bills or notes of a less denomination than five dollars shall be received in payment of the public dues; from and after the first day of July, 1839, the notes of no bank which shall issue bills or notes of a less denomination than ten dollars shall be receivable; and from and after the first of July, 1841, the like prohibition shall be extended to the notes of all banks issuing bills or notes of a less denomination than twenty dollars: Provided, however, That no notes shall be taken in payment by the collectors or receivers, which the banks in which they are to be deposited shall not, under the supervision and control of the Secretary of the Treasury, agree to pass to the credit of the United States as cash."

The question being on the adoption of his substitute, Mr. RIVES said that, in asking the indulgence of the Senate, it was not his design to abuse their patience by rearguing the questions which had already been so fully and so ably discussed, in relation to the legality or the policy of the Treasury circular. It was his wish only to state, somewhat more at large than he had yet had an opportunity of doing, the views under the influence of which he had offered the proposition which is now pending before the Senate, as an amendment to the resolution of the Senator from Ohio, [Mr. EwING.] In reference to the most important objects of the Treasury circular, he regarded that measure as having done its office; and the interests of the country are now much more concerned in the provision we shall make for the future, than in any decision we may pronounce upon the past. When I had the honor some days ago, said Mr. R, of addressing

While on this branch of the subject, Mr. President, I will make one other observation. However necessary or desirable the contraction of our paper circulation-may be, (if it be, indeed, in the large excess which is supposed by many,) it must be borne in mind that there is no operation more delicate than the reduction of the currency of a country. A decreasing circulating medium, it is agreed alike by theoretical writers and by enlightened practical men, is precisely that condition in the moneyed affairs of a community which is the most critical and distressing. It is a transition from high to low prices, from a certain and liberal reward of labor to diminished wages and precarious employment, from active and prospering industry to general languor and de

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