the chairman of the Committee of Ways and Means, and consider all the bills upon your table as constituting one system, although contained in different bills. To the bill authorizing the Treasurer to issue Treasury notes, I shall propose, as amendments, that these notes shall bear no interest; and that the Secretary be authorized to issue another kind of paper-bills receivable in payment of the public dues. When the bill regulating the depositories of the public money shall come up for consideration, I shall also move the amendment I send to the Chair, providing for a gradual dissolution of all connexion between the Government and the banks; dispensing entirely, in the course of three years, with the use or reception of their paper; and using them only for the safe keeping of the public money by special deposites. By these amendments, the Government will have the option of issuing either Treasury notes bearing no interest, or bills receivable in payment of the public dues; the Government will be separated from the banks-the public moneys be kept in the banks on special deposite-and the revenue be collected either in Government paper or specie. There is but one other alternative before the committee to this system in this shape, or by other modifications, and that is the project of the gentleman from Virginia, [Mr. GARLAND,] to reunite the Government to the State banks-receive their paper in payment of the public dues-and make them, as heretofore, the general depositories of the money of the country. These are the two projects for consideration.

If, sir, we are to have Treasury notes, I prefer that they should not bear interest. In issuing these notes, it is not our object simply to raise money, or to pay debts; but, in the paralytic state of the country, we want a medium in which the revenues of the country can be easily collected, and domestic exchanges be carried on without embarrassment to the banks. If these notes bear interest, their circulation will be impeded, if not stopped entirely; they will be retained on hand as investments. Nor, sir, do I think the objection that if they do not bear interest they will fall below par, is well founded. Although they cannot be employed like specie in paying debts abroad, they will answer a function which specie cannot perform in carrying on the exchanges of the country. This peculiarity of usefulness, in the present situation of the country, will more than counterbalance any other advantages which either bank notes or specie may possess over them, as a medium of circulation.

But, sir, I prefer, to Treasury notes in any shape, the medium I propose-bills receivable in payment of the public dues. A Treasury note is a promise to pay, for the redemption of which specie must be collected and reserved. A bill receivable in payment of the public dues, is merely a promise to receive, and has its promise fulfilled when received; the one requires the abstraction of a large amount of specie from circulation-the other not only abstracts no specie from circulation, but will actually be equivalent to an additional supply of specie to the amount of the issue. The one may bring the Government in collision with the banks in the delicate position in which they will be placed when they resume specie payments-the other will give the Government the means of collecting its revenue without entrenching in the least upon the resources of the banks. The one is intended as a temporary expedient: it is a debt, and the debt must soon be paid; the other is merely an instrument of collection, and can be kept out forever, and be expanded or contracted as the wants of the country for the purposes of exchange and collection may require. For these reasons, I prefer, to Treasury notes, bills receivable in payment of the public dues.

But, Mr. Chairman, the same objection will be urged to this kind of paper, which has been urged against Treasury notes not bearing interest-they will fall below par. Their appreciation or depreciation will entirely depend upon

[SEPT. 30, 1837.

the great principle of supply and demand. If there are more bills in circulation than are needed for the purposes of exchange and the collection of the revenue, they will depreciate; if less, they will rise in value. This kind of paper is not an untried experiment, and new in the history of finance. It has been tried and used with success in far worse times, and by far feebler Governments than our own. The very first paper money issued in America was of this kind. Upon the failure of the first expedition against Canada, in 1690, the Province of Massachusetts laid a tax upon the people to meet the expenses; but, as the soldiers were impatient, and would not wait until the tax could be collected, the Government issued notes "which were to be received for payment of the tax and all other payments in the Treasury." Before the time when the taxes were to be collected, the notes of course depreciated, because there was no demand for them; but, "as the time of payment of the tax approached, the credit of the notes was raised, and, the Government allowing five per cent. to those who paid their taxes in notes, they became better than money. The Government, encouraged by the restoration of credit to the bills, afterwards issued others in charges of the Government. They obtained good credit at the time of their being issued. The charges of Government were paid in this manner from year to year. Whilst the sum was small, silver continued the measure, and bills continued their value." Thus, for twenty years in Massachu setts, until the year 1711, the revenue of the Province was collected in bills receivable in payment of the public dues, which maintained an equal value with specie. In this year, to defray the expenses of a second expedition to Canada, these notes were greatly multiplied; of course they fell immediately below par, and went on depreciating with every additional issue; because the supply exceeded the demand. More notes were put into circulation than were needed for the collection of the revenue, and for payments to the Treasury. Another instance of the effects of receivability in payment of the public dues, may be seen in the continental money issued by the Confederation in our revolutionary war; for the coercive enactments were futile in sustaining the paper. So long as the issue was moderate, it sustained its par value with gold and silver. Mr. Jefferson and Mr. Payne testify, that until the issue exceed ed nine millions of dollars, there was no depreciation; and when forty-six millions were issued, the depreciation was but one per cent. ; but, when it reached three hundred and fifty-seven millions, in the midst of a Revolution, of course the depreciation became several hundred per cent. ; and this depreciation would have taken place, (although not to the same, yet to an enermous extent,) if the issue had been gold and silver, instead of paper money. Three hundred and fifty seven millions of specie was probably forty times as much specie as was then used in the country for the circulation of the products of its labor. The effect of such an addition to the circulation, would be, to make forty dollars buy what one purchased before. Although, in relation to each other, the products of labor would remain the same in value-as money became cheaper, every thing would nominally rise in value. The great error of our fathers was, in supposing that money, of any kind, could be multiplied indefinitely, without any regard to the great principles of supply and demand. think, gentlemen, said a member of Congress, that I will consent to load my constituents with taxes when we can send to our printer and get a wagon load of money, one quire of which will pay for the whole ?" Had they proportioned their issues to the amount of taxes to be raised, or limited them to the wants of the circulation, the continental currency would never have materially depreciated. But their situation was a peculiar one. The confederacy could not effect loans; and by the articles of confederation they could * Hutchinson's History of Massachusetts, vol. 1, page 402.

Do you

not tax the people directly. Their only expedients for carrying on the war were fighting and paper money, and they freely used both. Great Britain, also, after the suspension of specie payments by the Bank of England, from 1797 to 1823, exhibits another strong instance of the effect of receivability in payment of the public dues, to sustain a paper issue; the notes of the Bank of England, during this period, were but little more than Government bills receivable in payment of the public dues. The whole capital of the bank, of £14,000,000, had been borrowed by the Government, and the bank had stopped paying specie for its notes. The notes, therefore, had neither bank capital nor specie to support them. The faith of the Government, and their receivability in payment of the public dues, constituted almost their only title to credit; and, for twenty-seven years, this currency sustained that great people through a war for existence, with half of Europe subsidized in the contest; whilst her commerce and her power advanced hand in hand to its present mighty consummation. All these instances are of past times. But we have before us now, in the Treasury drafts lately issued | by the Secretary of the Treasury, a strong exemplification of the effect of receivability in payment of the dues to the Government, in sustaining a paper issue. These drafts are drawn upon the deposite banks who have stopped paying specic; they have been presented and protested, but, being due by the Government, they are of course receivable in payment of debts to the Government. Very few of them have been returned to the Treasury, because they are needed for the purposes of exchange, and are now three per cent. above the best bank paper in value, and but two per cent. below specie. They have thus the reproach, it is true, of being below par, that is, below the value of cie. But I doubt if this language is correct when applied to the subject. Specie is no longer a portion of the currency. It is a commodity for barter, like flour or tobacco, and ought not to be considered, rather than any other commodity, as a standard of value for the currency. If it constituted a portion of the currency of the country, these drafts, unless multiplied beyond the demand, would undoubtedly be of equal value with specie, because they are needed for an operation which specie cannot perform-to conduct the exchanges of the country. But, sir, admit that these drafts are below par, and that the bills I propose to issue will likewise be below par, where is the injury? The only effect will be a mitigation of the tariff, and a proportionate relief to the people. The importer will pay less duty, by this depreciated paper, to the Government, and will charge less to the consumer. The Government will only not collect what it does not want, and what, in strict justice, it ought not to require. The worse evil, then, under the paper issue I propose, will thus be a benefit.

spe

Mr. Chairman, there is another aspect in which the paper I propose to be issued by the Treasury should be viewed, in relation to the exchanges of the country. I mean its bearing upon the project of a United States Bank. The great purpose for which such an institution is needed is to equalize exchanges-to afford a general medium of circu lation by which debts can be paid, and money transmitted from one quarter of the Union to another, without great loss and expense. The local banks, if we are to judge from the past, cannot, or will not, furnish such a circulation. The inconvenience and loss, for want of such a medium, are unquestionably great; and I do not think will be long endured. In countries like England, or even France, where the capital of ages has been accumulated, and the facilities of intercourse actually bring the remotest parts of the country almost into contact, the business of exchanges may well be carried on without the aid or intervention of Government or banks. But, in a country like ours, young in the accumulation of capital, and covering such an immense space of territory, it may well be doubted,

[H. OF R.

if one or the other of these instruments will not be necessary to place the exchanges of the country upon an easy and proper footing. By issuing bills receivable in payment of the public dues, I believe a medium will exist, which may be made available in the hands of individuals for all the purposes of exchange, and which will entirely supersede the necessity of a Bank of the United States. To those who believe that such an institution will be unconstitutional, ruinous to the State banks in the process of bringing it into operation, and dangerous to the liberties of the country, when established, this view ought not to be without weight. Here is a safe, constitutional, harınless, self-correcting medium, by which the dues to the Liovernment may be collected; the State banks left free to resume specie payments, with all their resources untouched by the Government; and the great purpose of a United States Bank supplied. You will also perceive that, by this system, all the objections which have hitherto been urged to a Treasury organization, by which the Government is separated from the banks, and its own dues collected, will fall to the ground. It is practicable, beyond doubt, if experience is any test; it is safe, if banks, where the funds may be specially deposited, are safe; it is cheap, for a multiplication of officers, and chests, and vaults, will be unnecessary. Its currency will be that of the people, just that which they most require, consisting of paper and the precious metals, either payable into the Treasury, as the public debtor shall prefer. All the imputations of a design, by this system, of bringing the whole country down to a hard-money currency, (an attempt as wicked as it would be impracticable,) and of destroying the local banks, are rendered pointless.

Let us now turn, Mr. Chairman, to the alternativo scheme before the committee-that submitted by the gentleman from Virginia-the exploded pet bank project. Time, sir, has set its mark upon this system. The Government has twice tried it, and it has twice failed. Indeed, so gross and indisputable was its failure in 1816, that the constitutionality of the United States Bank, then chartered, was based upon the fact, that the State banks were incapable of carrying on the fiscal operations of the Government; and when, in 1833, the experiment was again adopted, its failure was predicted, and the prediction has been realized, And how, sir, can it be otherwise, under such a system? Eight hundred banks, scattered over twentysix sovereign States, who may indefinitely multiply them-irresponsible to the Government-irresponsible to each other-having but one principle of conduct, gain-how can stability and safety for the Government, in connexio with such institutions, in any trying emergency, be expected? And look at their situation now. In New York, the banks have six and a half paper dollars out in circulation to one in specie in their vaults. The banks of Alabama, nine to one; Boston, six to one; Pennsylvania, six to one; Virginia, five to one; and, in this situation, with public confidence shattered, they are yet to go through that difficult process (which, in England, in 1823, prostrated hundreds of banks) of resuming specie payments. Many of these banks must break in the effort to resume specie payments; and, should their paper be received in payments to the Government, or they be used as depositories of the public funds, loss will be inevitable to the Government. Now, what is the constitutional principle upon which alone the Government can connect itself with these institutions! It is the same upon which the United States Bank, in 1816, was established: that they are "necessary and proper" for the collection of the revenue and the fiscal operations of the Government. But, will it be contended, can it be seriously argued, that the State banks, in their present situation, (throwing aside all past experience of their incompetency,) are "necessary and proper" instruments for the collection of the public revenue? But it is said that the

flowed; and on January last, there were thirty-eight millions of surplus to be deposited with the States. The State banks, where these funds were deposited, were stimulated by them to inordinate issues of their paper; and the free accommodation to individuals, which these issues afforded, fed the rage for speculation. Suddenly the deposites were called for from the banks, by the deposite law. The call met them unprepared, because they could not collect from their customers. They pressed the community, but the community, who had borrowed on the faith of an easy indulgence, were as little prepared as they were for payment. The specie circular came in also with its operation, weakening their vaults and crippling their resources. The result was, distress everywhere, a panic, and the suspension of specie payments. These certainly were not all the causes of our present embarrassment; but, were it not for the legislative usurpations of Congress, I do not believe the catastrophe under which we suffer would have been produced.

And what, sir, would have been the situation of this country, if South Carolina had not nullified your tariff laws, and the compromise bill had not passed? Instead of thirty-eight millions there would have been upwards of one hundred millions of surplus revenue in the banks, under the control of that usurping and corrupt Executive the gentleman has so strongly denounced. Could the liberties of the country have survived such a state of things? Could the deposite banks ever have repaid the money? And if they could, after it had formed the basis of an immense is sue of paper, who will measure the ruin the sudden abstraction of such a capital from the banks would have produced, in combination with the other causes which have prostrated the country? But the gentleman from Kentucky overlooks these immense benefits resulting from the compromise bill; and can only see, in this measure, the design "to arrest treason, and save the genius and chivalry of the South from an ignominious gallows." Sir, to know whether the gallows would have been ignominious in such a cause, it is necessary to understand it. What was it? For ten years, from 1822, (when William Lowndes, filling the very representation I now occupy, declared upon this floor that the South was more heavily taxed than any people upon earth,) in person or through our representatives, we remonstrated against your unjust and unconstitutional oppression. Instead of relaxing, we saw your policy grow stronger by time; and, bribed by its operation, those who were once with us in denouncing it, made common cause with our old opponents in the effort to rivet it upon us forever. At length, all confidence in your justice slowly, reluctantly departed; and the melancholy and stern conviction was forced upon us that we must right ourselves-alone, must right ourselves. South Carolina met the emergency in which you placed her as it became her. She nullified your tariff laws. And did you then enforce them? No! and why? Sir, I will tell you; you dared not. It is one thing to sit here upon well stuffed hair-seated chairs, and legislate the property of the South into the pockets of more lavored sections; and it is another, to collect your black-mail by the sword. And did we commit treason by this act? The gentleman from Kentucky says so, and that the compromise bill was intended to arrest it. Sir, if it was treason, it was treason hatched n Kentucky, that gentleman's native State, and practised by Virginia, when she nullified the sedition laws; and Thomas Jefferson, Madison, Rowan, Nicholas, and Macon, were some of the arch traitors who taught or committed it. Mr. Chairman, I will vindicate the fathers from the aspersion of their sons. These men were not traitors. They were those who, in 1801, in the language of Mr. Jefferson, "saved the constitution in its last gasp" from the strangling hands of consolidationists. They were not traitors; but wise and intrepid statesmen-the great fathers of the republican party, by whose sagacity and energy this union now exists.

[H. OF R.

Were it not for the principles of this party, and the watchfulness and opposition of the South, this constitution would long since have been frittered away by constructions; and this Government, becoming one vast and consolidated despotism, would have left no alternative to the free but to dissolve it. We but carried out-conscientiously carried out the great principles of the republican party; and when you thought fit, by your compromise bill, to give way before our armed resistance, the gentleman from Kentucky says, that it was "to save the genius and chivalry of the South from an ignominious gallows." Sir, we certainly should be vastly grateful for the tragic benevolence of these disinterested philanthropists, who manifested on this occasion so noble a disregard for their own safety, and such tender consideration for ours. Whilst passive, "the genius and chivalry of the South" appealed in vain to their sensibilities; but no sooner was it aroused by their selfish oppressions, than all their melting sympathies overflowed for its salvation. Sir, the gentleman has done gross injustice to himself in uttering such sentiments. They are only worthy the bigot or the slave; of a mind which can tolerate no difference of opinion, or which succumbs to any. The gentleman should have vanquished before he vaunted, and possessed himself of the mantle of success, to cover over the hideous lineaments of cowardice and oppression which marked his cause. Had South Carolina been invaded, upon the first gleam of the bayonet along our mountain passes, he would have seen and known what the chivalry of the South really was, not in bloodless tropes and metaphors, but in the stern realities of the tented field. Not only Carolinians, but thousands of volunteers from the whole South, whose names are upon the file, would have met you in that fierce contest; and if the man who lately ruled this confederacy with more than a monarch's power, and his abject followers, (more base than he, for he had personal animosities to gratify,) had not met in the gaps of the Saluda mountains another Thermopyla-if they had penetrated to our plains, and had not found them one vast cemetery for their interment, and with fire and sword Carolina had been desolated, and not one free spirit had been left living or dying to strike for her rights-in her fall liberty would have been avenged; and, like the mighty Nazarite of old, grasping the pillars of the constitution, the Union would have perished in her ruins. Sir, this is no Government of force. No free Government is a Government of force. Fear is essentially the attribute of the slave; and the Government which appeals to this principle for support, is already a despotism. Opinion, free, intelligent public opinion, can alone perpetuate our institutions; and when this fails, all that can maintain them fails. The sword can dissolve, but it cannot cement your Union together by the blood of your citizens; and if it had been drawn against us, however mournful the consequences, we were prepared, fully, firmly prepared, to abide the issue. We knew the mighty inheritance for which we had to contend-that soil over which, for two centuries, we had been the lords; and those altars at which our fathers knelt and we had received our brides. We won it by the sword, and we were prepared to keep it by the sword; or to perish, as millions of our race had done before us, the victims of oppression and power combined. And if we had fallen in the field, or on the scaffold, (as the gentleman supposes,) would our fall have been inglorious? Sir, it is not the manner of death, but the cause which makes death infamous. When Tully thrust his head out of his litter to the lictors of Anthony who decapitated it, and his dead hands were cut off and suspended in that forum, in which they had so often pleaded for liberty and justice, was his death ignominious! Hayne perished on the scaffold-was his death inglorious? Why, in Abbeville district, there still stands the tree upon which, in our Revolution, twenty whigs were hung at one time; did these

men die ignominiously? The youth of Carolina, as they approach such memorials of their country's sanguinary wrongs, tread more lightly upon the turf, whilst their hearts swell with the mighty lesson they inspire, that to die, and to die "ignominiously," in defence of our country, is the duty and the privilege of the patriot. It is the cause which makes death glorious.

But, Mr. Chairman, shall things come to this in the administration of the affairs of this Union? In this free and enlightened age, are differences of opinion to be considered crimes; and the gibbet and the halter be held forth as the great instruments of establishing truth? If so, we had better separate at once, for the Union must be dissolved. God grant that it may long endure a blessing to the powerful people who are growing up beneath its auspices; but, should it be dissolved, history, when all the interests and passions which pervert the views of cotemporaries, shall sleep with the departed-impartial history will record, that the South was ever true to the faith which bound her to the rest of the confederacy. Although, under the mildest and most favorable operation of the constitution, she must bear an unequal portion of the burdens of the Government, at this she has never murmured.

In prosperity she has. upheld, and in adversity she has never abandoned you. All she requires is, that you adhere to your compact to her. Take what is legitimately needed for constitutional purposes; but, in all other things, leave her alone to her own resources and destiny. And is this an unreasonable request; or is it hard to grant it? Must perpetual agitation be the penalty she must ever pay for her connexion with you? And shall the bond of our Union, which was designed by our fathers to be a bond of affection and peace, be sacrilegiously converted into an instrument of bigotry and oppression? After a cycle of forty-eight years, we have arrived apparently at a new era under our constitution. Let us forget the past, excepting in the lessons of forbearance and moderation which its experience affords. For that noble State, which I in part represent, I know I can with confidence anticipate her course. Too generous to remember wrongs-too proud to resent them too great to practise them-she will ever be true to the cause of liberty, the constitution, and the Union.

Mr. RICE GARLAND raised a question whether it was in order for the chairman of the Committee of Ways and Means to move the Senate's bill as an amendment to this bill.

Mr. CAMBRELENG then modified his amendment so as to bring it within the rules of the House.

Mr. BELL made some remarks in favor of taking up the bill for the extension of duty bonds, and pass upon it before this bill was passed, so that they might actually know what the amount of deficit in the Treasury would be. He thought it a novel proceeding to take up this bill before the passage of the other bill, because the amount of deficit would depend in some measure upon the passage of the bill to extend the merchants' bonds. When the bill was acted upon, we could tell what the deficit in the Treasury would be, and then we could act accordingly.

Mr. CAMBRELENG said he did not hold himself responsible for the very extraordinary delay in the passage of the bill to postpone the fourth instalment which passed last night. But gentlemen would not drive him from the course he had taken in bringing these bills before the House. The first object of the Committee of Ways and Means was to bring the bill to postpone the fourth instalment before the House, and have it acted upon. Their next object was to supply the deficiency in the Treasury to enable it to go on with its disbursements; and with great deference to the gentleman from Tennessee, [Mr. BELL,] who had become very lately the advocate of the merchants, he must say, that he inust provide for the

[SEPT. 30, 1837.

wants of the Government before he did any thing else. We have been told but yesterday by the gentleman from | Pennsylvania, [Mr. SERGEANT,] and it was repeated again to-day, that he could not obtain, for a friend of his, the payment of a draft for $811. He would not budge from the position he had taken, and he felt very confident that this committee would not do so. Gentlemen understood this question perfectly. It was simply whether Congress would authorize the issue of Treasury notes with or without interest. The bill was printed in various forms, both in this House and the Senate; and gentlemen would make up their minds on the subject as well now as a month hence.

Mr. BELL made a few remarks in explanation, contending that the course he had suggested before was the proper course now to be pursued.

After a few remarks by Messrs. HAYNES and MER.

CER,

On motion of Mr. BELL, the committee rose and reported.

The SPEAKER having resumed the chair,

On motion of Mr. PICKENS, the amendments to the bill were ordered to be printed.

The SPEAKER laid before the House the following report from the Secretary of the Treasury:

TREASURY DEPARTMENT, Sept. 30, 1837. SIR: This report is submitted in compliance with the following resolution, passed on the 28th instant, and received at the Department this day:

"Resolved, That the Secretary of the Treasury be required to furnish this House with a statement of the number of sub-treasuries which will be required, if the bill imposing additional duties as depositaries in certain cases on public officers should become a law; and, further, how many new officers must be created, if any; how many new buildings to be erected, and what will be, as nearly as he can estimate it, the annual expense of the system; what the salaries to be paid the officers; or what will be the commissions to which they will be entitled."

In answer to the first inquiry, I would state, that I have had recurrence to the printed bill of the House of Representatives "imposing additional duties as depositaries in certain cases on public officers and for other purposes," and which is supposed to be the bill referred to in the resolution. Under that bill, if in its present form it should become a law, I should not feel authorized to appoint any number of "new officers," whether called sub-treasurers, or otherwise, and created either to keep or disburse the public money. The bill seems merely to impose further duties as depositaries on the officers now existing and employed in the collection of the customs and lands, and in the post office and mint. The number of those in each of these establishments, if that information be desired, appears, with a few exceptions, and more accurately than could otherwise be stated without delay, in the last Biennial Register, published by the State Department under the direction of Congress, and to which I would respectfully refer for that purpose.

As to the second inquiry, it may be observed, that in one the plans suggested by this Department in the report at the commencement of the session, it was proposed that from four to ten "new officers," separate from and independent of those now in existence, might be authorized to act as commissioners, or keepers of the public money, at those important points where it should accumulate much beyond the current expenditures.

But that plan does not appear to be incorported into the bill before me.

In reply to the third question, I would state, that no "new buildings" seem to be contemplated by this bill, nor have any been considered necessary by this Department.