time of the suspension, ten or eleven are supposed to have paid over all the public money which was then in their possession, to the credit of the Treasurer. In the custody of more than half of the others, an aggregate of less than $700,000 remains unadjusted. Several of the rest, still possess large sums; but many of them have continued promptly to furnish such payments from time to time, for meeting the public necessities." Mr. Chairman, these payments and these exertions afford most conclusive evidences of the frauds and insolvency of the local banks! Would to God, all fraudulent and insolvent men would furnish a little more evidence of dishonesty and insolvency such as this, sir. The Secretary of the Treasury, from his report, does not expect to lose a single dollar of the public money, so that the disconnexion recommended, cannot have any foundation on this ground. But, sir, the Treasury Department affords us another important fact, in its circular Condition of eighteen of the principal banks when first selected, and up to August 15th, 1837, including three of the prinipal selected banks under the acts of 1836. [SEPT. 25, 1837. to the banks of the 3d of July last, upon the subject of the suspension of specie payments, and additional security for the public dues. He says: "It affords me much gratification to find, so far as regards the inquiry concerning the payment and security, a great willingness expressed to make the United States amply safe for the eventual payment of all that is due, and a strong conviction entertained by the banks, that no loss will be ultimately sustained by the Government." Again he says: "Another portion of that circular communicated information concerning the lenient mode which, under the severe losses experienced by many of the banks from mercantile failures, and under the embarrassments to others, caused by panic and want of confidence, was contemplated to be adopted in recalling the public funds. That mode was by such moderate drafts and transfers as the public necessities should from time to time demand; and an earnest request having been made for a satisfactory compli ance with it on the part of the banks, assurances have generally been given of a readiness to answer those calls with promptitude, and in an acceptable manner." Again he says: "The returns of the condition of the selected banks, which were requested to be continued, have generally been made with promptitude and regularity. But while it is very satisfactory to see, in most cases, a reduction in discounts and circulation, and which course is the most ethcient to cure one of the existing evils in banking, and to enable the institutions which have suspended specie payments to resume them at an early day, and with much greater safety, it is regretted that, in a few instances, this course has not been adopted. But whenever departed from in such a crisis, the error has tended, and must tend hereafter, to impair the confidence of the Department in the sound management of the institution, and to justify such steps as may lead to a more speedy withdrawal of the public money, or to the procurement of increased security." From these evidences, I take it for granted, that the deposite banks are solvent, and that the Government will net lose a single dollar by them. This is not the only evidence afforded by the Secretary of the Treasury of the solvency of many of the deposite banks, and the reliance placed upon them to aid in redeeming the country from its present embarrassed condition. On the 13th of the present month, while the bill authorzing the issue of Treasury notes was depending, the Secre tary addressed the following letter to several of these institutions, proposing to them to purchase the Treasury notes which shall be authorized, and to pass the proceeds to the credit of the Treasury as specie, to be paid as the wants of the Government may require; this is the letter: "TREASURY DEPARTMENT, September 19th, 1837. "SIR: A bill is now before Congress to authorize the President of the United States to cause the issue of Treasury notes for such sum or sums as he may think expedient; but not exceeding, in the whole amount of notes issued, the sum of twelve millions of dollars, and of denominations of not less than one hundred dollars for any one note, to be reimbursed at the Treasury of the United States, after the expiration of one year from the dates of the said notes respectively. 66 "I will thank you to State whether, in the event of the passage of the bill, you will agree to take the said notes from the Government, and give the Treasurer of the United States a credit for the amount; to be drawn for as may be necessary, and payable in specie if required; and, if so, to state what amount you will receive, and the lowest rate of interest to be borne by said note." "I am, very respectfully, your obedient servant, Yes, sir, some of these faithless and unworthy institutions are appealed to, to purchase Treasury notes, and pass the proceeds to the credit of the Government, and hold it until it was wanting by the Government. [H. OF R. an additional heavy demand for specie, which was principally to be drawn from the vaults of the banks. The effect of this demand for specie to pay the foreign debt, necessarily produced a contraction of loans and circulation, corresponding with the extent of the demand. We all remember the gloomy period of 1819, when distress and ruin pervaded the whole community, and filled it with dismay, and as it is fair to judge of the present by the past, I have selected the four years preceding 1819, and the preceding four years, with a view to contrast the state of trade then, with its present state; in order, in part, to account for the present Circulation. revulsion and derangement of commerce, and the effects $91,305,000 now, as then, produced. In the years 1815, '16, '17, and 5,362,165 '18, the state of foreign trade was as follows: Judging from the generally admitted principle, that the soundness of a bank is to be determined by the proportion of its actual specie capital to its circulation, the deposite banks are sounder than the Bank of England, or the English joint stock banks. Up to the 25th July last, the relative proportion between the specie capital and its circulation was as follows: Bank of England Specie. $26,150,000 Private and joint stock banks 00,000,000 $26,150,000 U. States deposite banks $11,429,012 $96,667,165 $31,779,804 From this comparison it is manifest that the deposite banks in the United States, were in a condition better to sustain a sound currency and specie payments than the English banks, unless some other cause should operate a different effect. Yet, although the same causes which embarrassed the commerce and credit of the United States existed in England, the Bank of England continued speciepayments, and the Bank of the United States suspended. Why? Four causes are manifest; 1. The Government of England continued their confidence in their institutions, ours withdrew its: 2. A large debt was due from the American to the foreign merchants, and a necessity for large specie exportations produced: 3. The continuance of the specie circular: 4. The execution of the deposite act of the 23d June, 1836. From the connexion which existed between the Government and the State banks, growing out of their adoption as fiscal agents, and the general impression which it produced, that the Government was disposed to cherish and sustain them, the slightest manifestation of the want of confidence on the part of the Government, was calculated to produce the rnost disastrous effects upon their credit, and cripple their operations. It was calculated to impair general confidence, and produce a rush for specie, so sudden and violent that but few banking institutions could be prepared to withstand it. This want of confidence was clearly manifested in the Treasury circular of July, 1836, in which danger was distinctly announced to the country. This measure of itself, however, could not have exerted any very deleterious influence upon the credit of the banks; but, operating in conjunction with other causes, was calculated seriously to impair public confidence, and to produce serious embarrassments in the monetary system of the country. The Treasury circular, which required specie for the payment for the public lands, produced an unusual and unnecessary drain of specie from the Atlantic to the western banks, and, of course, it was incumbent on the eastern banks to use the usual precaution of contraction to meet the demand, whatever, it might be. Independent of this direct operation, emigrants, who were numerous from the eastern to the western States, sought that kind of currency which was receivable at the land offices. Hence, specie being only receivable there, they demanded specie for their notes, which being principally eastern, the eastern banks were bound to pay. These drafts for specie were calculated to produce a corresponding curtailment of the circulation and loans of the banks, which were among the professed objects of the order. The gold and silver thus drawn from the eastern, was deposited in the western banks, and there kept entirely unemployed, to the great detriment of trade, awaiting the drafts of the Government. In addition to the operation of the specie circular, and about the time of its utmost severity, the pressure of a heavy foreign debt created Exports. Imports. $113,041,274 147, 103,000 99,250,000 121,750,000 $481,144,274 310,430,907 Excess of importations over exports $170,713,365 Which, after proper allowance for tonnage and other The effect was, that a expenses, left a heavy balance. bank circulation in 1816, of $110,000,000 was reduced in 1819, to $45,000,000; we all recollect during this year, the immense deduction which property, produce and labor underwent. The foreign trade for 1833, '34, '35, and '36, is as follows: 1833 Exports. Imports. $108,118,311 $90,140,438 126,521,332 151,030,368 189,980,035 The excess of importations, Leaves a large foreign debt; and although the balance now is 37,000,000 less than in 1819, yet it is sufficiently large to render a heavy reduction in bank loans and circulation necessary to meet it; because exchanges, being materially reduced, it could be met in nothing but specie. The heavy importations of specie from England, through the instrumentality of acceptances of American drafts alarmed the Bank of England for its own safety; and to counteract this drain, it refused to discount for any merchant who accepted American bills, thus making it necessary to demand more specie for the payment of the foreign debt than would otherwise have been required. This policy was more rigidly pursued than perhaps it otherwise would have been, had it not been supposed, from the declarations of a great portion of the American press, that it was a part of the policy of our Government to prevent the exportation of specie entirely, and continue, as far as possible, the drain from Europe. Combined with these causes, was the execution of the deposite act of June, 1836. It having been ascertained from the rapid increase of the revenue from the sales of the public lands, and the duties on foreign importations, that there would be a large surplus in the Treasury on the 1st of January, 1837, it was determined to withdraw it from the control of the Federal Gov. ernment, (to which its possession offered so many strong and dangerous temptations,) and from the custody of the deposite banks, to prevent its being made the foundation of dangerous and excessive issues of bank paper; and to place it in the custody of the State Gevernments, thus to remain to be employed for the local benefit of the people, (from where it had been unconstitutionally and improperly drawn,) until needed for the legitimate purposes of the Government, a disposition, in my humble opinion, both wise and salutary, both as regards the currency and the purity of the Government. For the purpose of giving the banks timely notice, and to enable them to meet the demands of this law without detriment to themselves or the public, the operation of the act was not to commence until the 1st day of January after its passage, a period of six months, and then to be met in four equal quarterly instalments. This was ample time to prevent any serious derangement of the affairs of the banks, or the commerce of the country. In a short time after the passage of this act, and long before it was ascertained what would be the amount to be distributed, and of course the first instalment, the Secretary of the Treasury issued his orders to the deposite banks, directing them, by a fixed period, to transfer to specified points, about $13,000,000, (as well as I recollect,) instead of giving drafts to the States for their several quotas on the most convenient banks to pay the amount on the day it was due; which might have been met, according to the usual mode of commercial exchange, between creditor and debtor banks, and merchants; and by which they would have been performing but the usual commercial functions; whereas, by the operation of the orders of the Treasury Department, the amount to be transferred was abstracted from commercial employment, from the time of the transfer till the payment; and created a demand, in some instances, for specie, which might have been avoided. Thus was inflicted upon commerce an injury from the injudicious execution of the law, which is dexterously ascribed to the provisions of the law itself! This operation was particularly severe upon the New York banks, which held in the neighborhood of $20 000,000 of the public deposites. The deposite act in itself did not necessarily decrease, or tend to decrease, the active capital of the country; it was taken from banks to be again put into banks. While it reduced the active means of some, it increased that of others. In many instances the credit was only passed from the Federal to the State Governments. There was nothing in it to embarrass the trade and commerce of the country. The effect was produced by its unwise execution, coming in aid of other causes of an embarrassing character. In this opinion I am sustained by the most able and skilful financiers of the country. At about the time of the suspension of specie payments, there were in the banks, (if my estimate be correct,) about $155,000,000 of private deposites. These private deposites were generally made in bank notes; yet the depositors had the right to demand specie for them. When the operation of these causes were perceived, and the diminution of confidence on the part of the Government manifest, the private depositors, in place of their deposited notes, began to demand specie. Brokers also began to demand specie for all the notes which they held, or could purchase, and this was no small amount. The banks in the city of New York, where the storm first began to rage and to produce most serious effects, although ultimately responsible for all their obligations, could not meet this sudden rush upon their vaults, without ruin to themselves, and the people; they therefore suspended specie payments. This suspension, the causes of which were not understood by the country, produced alarm throughout the whole community; and a general suspension of specie payments was the result. By this suspension I do not doubt that the banks have not only saved themselves but the country from utter ruin and destruction. I confidently believe that the withdrawal of the confidence of the Government, so strengthened the operation of all the causes to which I have adverted, that it compelled the banks to a course which, with the fostering care and continued confidence of the Government, could and would have been avoided for the banks have no interest whatever to embarrass their own operations by an act so destructive of [SEPT. 25, 1837. that credit which is so necessary to the successful extension of their business-for sound unsuspected credit is the very soul of their operations, and the foundation of their profits. The truth of this argument is fully sustained by recur rence to the history of the Bank of England as well as our own banking institutions. On many occasions the Bank of England has been sorely pressed, yet it retained the confidence, and was aided by the Government, and was enabled thereby to surmount its embarrassment, and recover from its difficulties. In 1793, particularly, its operations were so embarrassed, and the rush for specie so great, that it was compelled to suspend specie payments; and continued the suspension, without intermission, from that time till 1829; many of the causes which produced the sus pension, continuing to exist during the whole time. this state of embarrassment, its course was justified by the British Government, whose confidence and that of the mercantile community continued, and its suspension was legalized, until finally, by a prudential course of measures, adapted to its true condition, it triumphed over all difficulties; and, in 1829, resumed specie payments, which it still continues. The confidence of the Government and merchants enabled the bank thus to sustain itself; to maintain its solvency and its credit; and to perform, with success, its commercial and fiscal duties. In In 1815, the State banks, from the operation of many causes, suspended specie payments, yet the confidence of the Government was not withdrawn. Mr. Dallas and Mr. Crawford, both able and patriotic men, as Secretaries of the Treasury, having sustained their credit by all the means in their power. Mr. Crawford, particularly, made large deposites of public money in many of them, and thereby enabled them to indulge the people, maintain their own credit, redeem their debt to the public, and finally, in 1817, to resume specie payment. I believe if the same benevolent and patriotic policy had been pursued towards the State banks, at the present period, the existing suspension would not have continued to this time, if it had taken place at all. Mr. Dallas nor Mr. Crawford, however, had not conceived the idea of a total separation between the Government and the banking institutions of the country as fiscal agents; and, therefore, felt some inducement to sustain and preserve them; but a different feeling seems to prevail with the present Secretary of the Treasury, who can only expect to succeed in his views by the embarrassments and difficulties of the banks. While I do not ascribe to him any design to produce the embarrassment which has overtaken the banks, and, with them, the commerce of the country, yet I am well satisfied that he has withheld from them that confidence, which might justly have been extended; and which would, before this, have redeemed them from their embarrassing difficulties, and have afforded salutary relief to the people, and the commerce of the country. The charge made by the President, and those who now favor a total separation between the fiscal operations of the Government and the banks, "that they have been guilty of an excessive issue and circulation of their paper," is true-lamentably true. Yet I cannot perceive in all the facts and circumstances connected with the charge, that they have been actuated by any improper or impure motives. These institutions are conducted by men who are liable to be misled by the same impulses which betray the most prudent and the most cautious of mankind into occasional error. A spirit of speculation had extensively spread itself throughout the country; acted and re-acted from the people to the banks, and from the banks to the people, until all, absorbed by brilliant prospects of immeasurable wealth, were beyond the bounds of prudence and discretion; and ruin to many, has been the penalty. These impulses have occasionally produced like effects through all periods, and resulted in like catastrophes, whether their currency was exclusively metallic or not. All these evils carry with them, however, sure antidotes. The current of money has its level; and whenever it exceeds that level, the redundancy runs off, and leaves the current at its proper level. In its reduction, serious and distressing injury is often inflicted; yet the return is gradual and sure. But a question arises, whether the banks are entirely in fault in this matter? Is not the Government itself much in fault? And shall the banks be compelled to take the whole responsibility for an error in which the Government has largely participated? At the time the public deposites were removed from the Bank of the United States, the then Secretary of the Treasury, acting under the impression that the charter of the Bank of the United States was not to be renewed, and that its extensive circulation and discounts were to be called in, in order that no shock to the business of the country might be sustained, urged upon the State banks, in the following note, the duty which would devolve upon them to supply the vacuum which would be created by this withdrawal, growing out of their fiscal connexion with the Government. This the banks attempted to do, and gradually increased their accommodations, and enlarged their circulation. He says: "TREASURY DEPARTMENT, September 26, 1833. "SIR: The Girard Bank has been selected by this Department as the depository of the public money collected in Philadelphia and its vicinity, and the collector at Philadelphia will hand to you the form of a contract proposed to be executed, with a copy of his instructions from this DeExpartment. "In selecting your institution as one of the fiscal agents of the Government, I not only rely on its solidity and established character as affording a suflicient guarantee for the safety of the public money intrusted to its keeping, but I confide, also, in its disposition to adopt the most liberal course which circumstances will admit towards our moneyed institutions generally, and particularly to those in the city of Philadelphia. "The deposites of the public money will enable you to 65 afford increased facilities to commerce, and to extend your accommodations to individuals. And as the duties which are payable to the Government arise from the business and enterprise of the merchants engaged in foreign trade, it is but reasonable that they should be preferred, in the additional accommodation which the public deposites will enable your institution to give, whenever it can be done without injustice to the claims of other classes of the community. ་་ "I am, very respectfully, your obedient servant, "R. B. TANEY, • Secretary of the Treasury." To the PRESIDENT of the Girard Bank, Philadelphia. This recommendation was repeated by the late President in his succeeding annual message. By the deposite act of June, 1836, for proportions of the public money beyond a specific amount, the deposite banks were required to pay interest, which made it a principle of self-defence that they should extend their loans and increase their circulation; because it was not to be expected that they would lock up and keep unemployed the public money, on which they were bound to pay interest! These two causes combined certainly produced an excess in the bank discounts and circulation of the country. This excess has been increased by another cause, which Mr. Taney nor Congress did not, and could not, have anticipated. The vacuum which was anticipated by the refusal to renew the charter of the Bank of the United States, was never produced; for, contrary to all expectation, the capital and stockholders of that bank were subsequently incorporated by the State of Pennsylvania, which continued in circulation its notes, and prevented any material diminution in its discounts. [H. OF R. I appeal, then, to the good sense of this House to say, whether the excessive issues complained of, have not been produced by causes, calculated in their very nature to mislead, and produce the excess complained of, without the slightest imputation of fraud or corruption against the banks? Mr. Chairman, the connexion which now exists between the finances of the Government and the deposite banks, was produced by the solicitations of the Government itself. The Government found itself engaged in a severe and dubious conflict with the Bank of the United States, which it had determined to overthrow. To do this, it was necessary so to conduct its operations, that the commerce and business of the country might not be materially shocked, and the To effect this, it sought sensibilities of the people excited. the aid and procured the operation of the late deposite banks, without whose aid and co-operation, I have no hesitation in believing the Bank of the United States would have triumphed. Yes, sir, I believe that it would have successfully resisted even Andrew Jackson, with all his The popularity, his acknowledged firmness and courage. State banks came to the aid of the Governinent, and e Government triumphed. For this they incurred the undying hostility of the Bank of the United States, which still pursues them. They incurred the denunciations and prophecies of evils of the opposition, who opened upon them all their batteries. This they withstood; but in the hour of victory, which they so signally contributed to achieve, in the very first hour of their difficulties and perils, the very friends whom they rescued from defeat, have taken possession of the batteries of the enemy, and now pour thick volleys upon their devoted heads. Is this generous? Is it magnanimous? Is it liberal? I leave you, sir, to give the answer. I leave you to determine whether, for causes which makes the act not only excusable, but justifiable, these institutions are to be utterly annihilated for their late suspension of specie payments, when they have, upon trying occasions, afforded seasonable relief to the country, and are entirely solvent. That the State banks are susceptible of such regulations as will secure to the country a sound currency, I do not doubt; for this is clearly proved by experience; and that the revenue of this Government may be so employed as to be a most potent engine in the accomplishment of such a desirable object, by the force with which either their hopes or fears may be addressed, cannot be reasonably doubted. In 1816, when specie payments were suspended, and the evils of a redundant and deranged currency afflicted the country much more severely than now, Mr. Webster, in a speech delivered in this House on the 30th April, 1816, expressed himself thus: "If these banks, (meaning the State banks,) do not resume, what engine, he asked, was Congress to use for the remedying the existing evil? Their only legitimate power was to interdict the paper of such banks as do not pay specie from being received at the custom-house. With a receipt of forty millions a year, he said, if the Government were faithful to itself and the interests of the people, they could control the evil, and it was They should have made it their duty to make the effort. long ago, and they ought now to make it; the evil grows worse by indulgence. If Congress did not now make a stand, and stop the current whilst they might, would they when the current grew stronger and stronger hereafter do it? If this Congress should adjourn without attempting a remedy, he said, it would desert its duty." If then, how much more potently could Congress now operate with the enlarged revenues of the Government? Yet Mr. Webster did not hold over the heads of the banks the terrors of a final and eternal separation. Mr. Biddle, the President of the Bank of the United States, in his tri"And ennial report to the stockholders, in 1831, says: they (the Bank of the United States and branches,) re By receiving freely the notes of the State banks, within convenient reach of the late bank and its branches, and by frequent settlements with them, these institutions are kept in the habitual presence of an accountability, which naturally induces them so to apportion their issues to their means as to secure the soundness of the currency.' I do not doubt the soundness of an opinion, so thoroughly demonstrated by the practice which fell under the observation of him who expressed it, and I do not doubt that the Government, in the employment of its revenues, and the observance of the same rules, may, through the instrumentality of the State institutions, preserve a sound currency, with much more success than the United States Bank did. Frequent periodical, and certain settlements are the efficient instruments by which excessive issues may be avoided, and sound currency preserved. Mr. Chairman, if existing laws, which prohibit the continuance of any deposite bank as a fiscal agent of the Goveriment, and the refusal of their notes in payment of the public revenue, had not sufficient terror to prevent the suspension of specie payments, how much more efficacious do you suppose the adoption of this measure, as the permanent law of the land, will be in restoring specie paymentsso much to be desired, and so necessary to the prosperity and tranquillity of the country? Sir, it will not only not hasten, but greatly prolong that important event. During the suspension of 1816, Mr. Dallas then Secretary of the Treasury, in his annual report to Congress of the 3d of December, 1816, expressing his opinion upon this identical subject, and the propriety of exercising the power of such restriction, said: "The successive attempts made by this department to relieve the administration of the finances from its embarrassments, have been ineffectual. There was no magic in a mere Treasury instruction to the collectors of the revenue, which could by its virtue charm gold and silver into circulation. The people, individually, did ¦ not possess a metallic medium, and could not be expected to procure it throughout the country, as well as in cities, by any exertion unaided by the banks. And the banks, too timid, or too interested, declined every overture to a co operation for reinstating the lawful currency. In this state of things, the Treasury, nay, the legislature remained passive. The power of coercing the banks was limited to the rejection of their notes in the payments of dues and taxes, and to the exclusion of their agency in the custody and distribution of the revenue; but the exercise of that power could not generate a coin currency, although it would certainly act oppressively upon the people, and put at hazard every sum of money which was due to the Government. Until, therefore, a substitute was proposed for the paper of the bank, it would have been a measure of impolitic and useless severity towards the community to insist that all contributions to the expenses of the Government, should be paid in a medium, which, it is repeated, the community did not possess, and could not procure.' In addition to these strong views of Mr. Dallas, which apply with irresistible force to the present state of things, I add those of the able, the patriotic, and practised statesman, William H. Crawford, who succeeded him in the office of Secretary of the Treasury. In a letter dated November 29, 1816, addressed to Wm. Jones, then President of the Bank of the United States, he says: "From this view of the subject, as well as from a gen· eral knowledge of the means with which the Bank of the United States will have to commence its operations, and of the difficulties which it will have to surmount if the State banks do not make a simultaneous effort, it is manifest that, without their co-operation a national currency equal to the indispensable demands of the community cannot be [SEPT. 25, 1837. obtained by the 20th of February next, from the efforts of the bank and Treasury, under the existing legal provis ions." Again-in the same letter he says: "It is, however, most ardently desired by the Govern ment that the necessity of resorting to the issue of Government paper may be avoided, by the resumption of specie payments by the State banks on or before the 20th of February next. As an inducement to this measure, the Government can only aid their operations by withholding from circulation as much of their paper now in the Treasury, or which may hereafter be received, as the demands upon the Treasury during the ensuing year will permit: as the sum which it will be in the power of the Government to retain in the Treasury, will be considerable, it may present a sufficient inducement to change their determination not to resume specie payments before the 1st day of July next. Again-he says: "How far the discrediting of their paper, by refusing to receive it in discharge of dues and taxes, will influence their conduct, can only be ascertained by the experiment." the These views of these two able and distinguished men, expressed in the midst of a pressure more severe and infin itely more alarming than the present, are entitled to the greatest weight. It was then, so it may now be truly said, that this bill will not legislate a coin currency into exist ence, nor put gold and silver into the pockets of the people! Its only effect will be to prolong the resumption of specie payments; reduce and depreciate the already reduced currency of the country, and ruin and oppress people. Sir, if you would secure the resumption of specie payments within a short time, instead of crippling, you must encourage and support the banks in their exertions to resume, which we have good reason to believe they are honestly exerting themselves to do. They now only need a little further reduction of the foreign debt, (which presses on them so severely, but which is rapidly being reduced,) and the restoration of the confidence of the Gov. ernment, to resume specie payments. This I do not doubt they will be able to do by the 1st of April. Let us only imitate the examples, and practise the lessons of Crawford and Dallas, and all will be well; confidence will be restored and commerce resume its usual activity. Even if the scheme proposed by the Committee of Ways and Means were wise and practicable, it cannot be carried into execution at this time, without ruin to the whole mercantile community. Until the vaults of the banks are unlocked by the resumption of specie payments, specie in sufficient quantities cannot be procured. The attempt to enforce this law, in the present state of the metallic cutrency, would produce unparalleled distress. The maximum exchanges of the United States Bank in 1982, amounted to $254,000,000; that of the State banks in 1836, to $324,000,000, which proves the capacity of the State banks, to conduct the exchanges of the country, be yond doubt. From the foregoing considerations I conclude that there is no reason for discontinuing the State banks as fiscal agents of the Government, that did not equally exist against their employment. Notwithstanding the fact that the States, from the foundation of the Government, have chartered, and continue to charter banking institutions, and this Government has been in the uniform practice of employing them as fiscal agents, it is now gravely contended by some that these institutions are unconstitutional. The argument is derived from the constitutional prohibition upon the States to emit If the States had made the notes of the banks which they have incorporated, a legal tender, ther the argument would have been good; but so long as they are not made a legal tender, and every man is at liberty to receive them or not, at his pleasure, then the prohibition "bills of credit.' |