Mr. KING, of Alabama, said no Senator was more desirous than he to give the opportunity requested. But he thought the subject so disconnected as to render a postponement of this bill unnecessary. When the subject of the bank and Treasury connexion should come up, a great deal of time would be necessarily consumed upon it. The committee of the Senate had looked into the subject, and had differed upon it. He hoped the Senate would see the necessity of acting on this bill at once; and if any other and better form could be given to it, he hoped it might be done without discussing the great question of bank and Treasury connexion.

Mr. CALHOUN said that this unexpected opposition required that he should go a little into detail. If it was the intention of the Senate, or rather of the administration, to restore gradually the connexion between the Government and the banks, in that event, instead of issuing Treasury notes, they ought at once to resort to a provisional loan, made in notes of the State banks, and then pay off the loan as the means should come in; or, otherwise, they should issue Treasury notes so as to constitute a currency. No Senator could properly know how to act, unless he knew the course to be pursued on the principal point. There never had been a better time to separate the Treasury and the banks; and, if to be done at all, it ought to be done at once. Mr. C. wished to be put in a position that he might vote understandingly on measures for the relief of the country. The demands of the Treasury he considered as trifling, compared with the settlement of this great question. Mr. NILES remarked, that as the gentleman from South | Carolina wished to bring before the Senate his proposition, and as it must come before us and before the country sooner or later, the sooner it came the better; and he would vote in accordance with the wishes of the gentleman.

Mr. WRIGHT said his great objection was to the connexion of these two subjects, which must result unavoidably in injury to the public interest by the delay of this bill. He, therefore, desired that they might be kept separate. He had personally no design gradually to restore the connexion of the Treasury and the banks. As to the design of the administration on this point, he knew no more than the Senator from South Carolina.

The question was then taken on postponing the bill till Monday, and decided in the affirmative by the following

vote :

YEAS-Messrs. Bayard, Black, Brown, Calhoun, Clay of Kentucky, Clayton, Crittenden, Grundy, Kent, King of Georgia, Knight, Linn, McKean, Nicholas, Niles, Preston, Roane, Robbins, Robinson, Ruggles, Sevier, Smith of Connecticut, Southard, Strange, Walker, Wall, White, Young-28.

NAYS-Messrs. Allen, Benton, Buchanan, Clay of Alabama, Fulton, Hubbard, King of Alabama, Lyon, Morris, Norvell, Pierce, Smith of Indiana, Swift, Tallmadge, Tipton, Webster, Williams, Wright-18.

On motion of Mr. CALHOUN, the Senate then adjourned.

MONDAY, SEPTEMBER 18.

Mr. RIVES gave notice that he should to-morrow ask leave to bring in a bill designating the funds to be received by Government in payment of public dues.

Mr. R. observed, that he had, on a former day, intimated his intention of proposing a bill of this description himself, in the event that no similar bill should be reported by the Committee on Finance. He viewed the neglect of this highly important subject likely to be of such serious consequence to the community at large, that he felt himself bound to act on the occasion by bringing in a bill calculated to do justice to the people in this particular.

Mr. WRIGHT presented a petition from the merchants, VOL. XIV.-4

[SENATE.

importers, and other citizens of the city of New York, relating to the extension on revenue bonds.

Mr. W. remarked, that as the Committee on Finance had already instructed him to report a bill on this subject, he should move that the petition be laid upon the table and printed for the use of the Senate. Agreed to.

Mr. WRIGHT also presented a memorial from several merchants and other citizens of the city of New York, sufferers from the great conflagration of 1835, praying for the remission of duties upon goods burnt in that fire.

Mr. W. observed, that though the Senate had expressed a determination to attend to no business in this session, other than that marked out by the message, yet, as this was a subject so intimately connected with the interest and welfare of the mercantile community, he should, if there were no objection, depart from that determination in the present instance, and move that this memorial be referred to the Committee on Finance.

Agreed to unanimously.

The following joint resolution from the House of Representatives was then taken up and adopted unanimously, viz:

Resolved, That the following be added to the standing rules, to wit: No spirituous liquors shall be offered for sale or exhibited in the Capitol, or on the grounds adjacent. TREASURY NOTES.

The bill for the issue of Treasury notes having been postponed to this day, in order to give Mr. CALHOUN an opportunity of preparing an amendment, and of offering his sentiments generally upon the subject, was now resumed by the Senate.

Mr. CALHOUN rose and addressed the Chair as follows:

Mr. President: An extraordinary course of events, with which all are too familiar to need recital, has separated, in fact, the Government and the banks. What relation shall they bear hereafter? Shall the banks again be used as fiscal agents of the Government-be the depositories of the public money-and, above all, shall their notes be considered and treated as money, in the receipts and expenditures of the Government? This is the great and leading question; one of the first magnitude, and full of consequences. I have given it my most anxious and deliberate attention; and have come to the conclusion that we have reached the period when the interest both of the Government and the banks forbids a reunion. I now propose to offer my reasons for this conclusion. I shall do it with that perfect frankness due to the subject, to the country, and to the position I occupy. All I ask is, that I may be heard with a candor and fairness corresponding to the sincerity with which I shall deliver my sentiments.

Those who support a reunion of the banks and the Government have to overcome a preliminary difficulty. They are now separated by operation of law, and cannot be reunited while the present state of things continues, without repealing the law which has disjoined them. I ask, who is willing to propose its repeal? Is there any one who, during the suspension of specie payments, would advocate their employment as the fiscal agents of the Government, who would make them the depositories of the public revenue, or who would receive and pay away their notes in the public dues? If there be none, then it results that the separation must continue for the present, and that the reunion must be the work of time, depending on the contingency of the resumption of specie payments.

But suppose this difficulty to be removed, and that the banks were regularly redeeming their notes: from what party in this body can the proposition come, or by which can it be supported, for a reunion between them and the Government? Who, after what has happened, can advo

cate the reunion of the Government with the league of State banks? Can the opposition, who for years have been denouncing it as the most dangerous instrument of power, and efficient means of corrupting and controlling the Government and country? Can they, after the exact fulfilment of all their predictions of disastrous consequences from the connexion, now turn round and support that which they have so long and loudly condemned? We have heard much from the opposite side of untried experiments on the currency. I concur in the justice of the censure. Nothing can be more delicate than the currency. Nothing can require to be more delicately handled. It ought never to be tampered with, nor touched, until it becomes absolutely necessary. But if untried experiments justly deserve censure, what condemnation would a repctition of an experiment that has failed deserve?-an experiment that has so signally failed, both in the opinion of supporters and opponents, as to call down the bitter denunciation of those who tried it. If to make the experiment was folly, the repetition would be madness.

But if the opposition cannot support the measure, how can it be expected to receive support from the friends of the administration, in whose hands the experiment has so signally failed as to call down from them execrations deep

and loud?

If, Mr. President, there be any one point fully established by experience and reason, I hold it to be the utter incompetency of the State banks to furnish, of themselves, a sound and stable currency. They may succeed in prosperous times, but the first adverse current necessarily throws them into utter confusion. Nor has any device yet been found to give them the requisite strength and stability, but a great central and controlling bank, instituted under the authority of this Government. I go farther. If we must continue our connexion with the banks-if we must receive and pay away their notes as money, we not only have the right to regulate and give uniformity and stability to their value, but we are bound to do so, and to use the most effective means for that purpose. The constitution makes it our duty to lay and collect the taxes and duties uniformly throughout the Union; to fulfil which, we are bound to give the highest possible equality of value, throughout every part of the country, to whatever medium it may be collected in; and, if that be bank-notes, to adopt the most effective means of accomplishing it, which experience has shown to be a Bank of the United States. This has been long my opinion. I entertained it in 1816, and repeated it in my place here on the deposite question in 1834. The only alternative then is, disguise it as you may, between a disconnexion and a Bank of the United States. This is the real issue to which all must come, and ought now to be openly and fairly met.

But there are difficulties in the way of a national bank, no less formidable than a reconnexion with the State banks. It is utterly impracticable, at present, to establish one. There is reason to believe that a majority of the people of the United States are deliberately and unalterably opposed to it. At all events, there is a numerous, respectable, and powerful party-I refer to the old State rights party-who are, and ever have been, from the beginning of the Government, opposed to the bank; and whose opinions, thus long and firmly entertained, ought at least to be so much respected as to forbid the creation of one, without an amendment of the constitution. To this must be added the insuperable difficulty, that the Executive branch of the Government is openly opposed to it, and pledged to interpose his veto, on constitutional grounds, should a bill pass to incorporate one. For four years, at least, then, it will be impracticable to charter a bank. What must be done in the mean time? Shall the Treasury be reorganized to perform the functions which have been recently discharged by the banks; or shall the State instituti be again em

[SEPT. 18, 1837.

ployed until a bank can be created? In the one case, we shall have the so much vilified and denounced sub-treasury, as it is called; and, in the other, difficulties insurmountable would grow up against the establishment of a bank. Let the State institutions be once reinstated, and reunited to the Government as their fiscal agents, and they will be found the first and most strenuous opponents of a national bank, by which they would be overshadowed and curtailed in their profits. I hold it certain, that, in prosperous times, when the State banks are in full operation, it is impossible to establish a national bank. Its creation, then, should the reunion with the State banks take place, will be postponed until some disaster, similar to the present, shall again befall the country. But it requires little of the spirit of prophecy to see that such another disaster would be the death of the whole system. Already it has had two paralytic strokes-the third would prove fatal.

But suppose these difficulties were overcome, I would still be opposed to the incorporation of a bank. So far from affording the relief which many anticipate, it would be the most disastrous measure that could be adopted. As great as is the calamity under which the country is suffering, it is nothing to what would follow the creation of such an institution under existing circumstances. In order to compel the State institutions to pay specie, the bank must have a capital as great, or nearly as great, in proportion to the existing institutions, as the late bank had, when established, to those of that day. This would give it an immense capital-not much less than one hundred millions of dollars; of which a large proportion (say twenty millions) must be specie. From what source is it to be derived? From the State banks? It would empty their vaults, and leave them in the most helpless condition. From abroad, and England in particular? It would reproduce that revulsive current which has lately covered the country with desolation. The tide is still running to Europe, and, if forced back by any artificial cause before the foreign debt is paid, cannot but be followed by the most disastrous consequences.

But suppose this difficulty overcome, and the bank reestablished; I ask, what would be the effects under such circumstances? Where would it find room for business, commensurate with its extended capital, without crushing the State institutions, enfeebled by the withdrawal of their means in order to create the instrument of their oppression? A few of the more vigorous might survive; but the far greater portion, with their debtors, creditors, and stockholders, would be involved in common ruin. The bank would, indeed, give a specie currency, not by enabling the existing institutions to resume, but by destroying them and taking their place.

Those who take a different view, and so fondly anticipate relief from a national bank, are deceived by a supposed analogy between the present situation of the country and that of 1816, when the late bank was chartered, after the war with Great Britain. I was an actor in that scene, and may be permitted to speak in relation to it with some little authority. Between the two periods there is little or no analogy. They stand almost in contrast. In 1816, the Government was a debtor to the banks-now, it is a creditor; a difference of the greatest importance, as far as the present question is concerned. The banks had overissued, it is true, but their over-issues were to the Governmenta solvent and able debtor, whose credit, held by the banks in the shape of stock, was at par. It was their excessive issues to the Government on its stock which mainly caused the suspension; in proof of which, it is a remarkable fact, that the depreciation of bank paper under gold and silver was about equal to the proportion which the Government stock held by the banks bore to their issues. It was this excess that hung on the market and depressed the value of their notes. The solution is easy. The banks took the Government stock, payable in twelve years, and issued

their notes for the same, payable on demand, in violation of the plainest principles of banking. It followed, of course, that when their notes were presented for payment, they had nothing but Government stock to meet them. But its stock was at par, and all the banks had to do was to go into market with the stock they held, and take up their notes; and thus the excess which hung upon the market, and depressed their value, would have been withdrawn from circulation, and the residue would have risen to par, or nearly par, with gold and silver; when specie payments might be easily resumed. This they were unwilling to do. They were profiting every way-by drawing interest on the stock, by discounting on it as capital, and by its continued rise in the market. It became necessary to compel them to surrender these advantages. Two methods presented themselves: one a bankrupt law, and the other a national bank. I was opposed to the former then, as I am now. I regarded it as a harsh and unconstitutional measure, opposed to the rights of the States. If they have not surrendered the right to incorporate banks, as is conceded, its exercise cannot be controlled by the action of this Government, which has no power but what is expressly granted, and no authority to control the States in the exercise of their reserved powers. It remained to resort to a national bank as the means of compulsion. It proved effectual. Specie payments were restored; but even with these striking advantages, it was followed by great pressure in 1818,'19 and '20, as all who are old enough to remember that period must recollect. Such, in fact, must ever be the consequence of resumption, when forced, under the most favorable circumstances; and such, accordingly, it proved even in England, with all her resources, and with all the caution she used in restoring a specie circulation, after the long suspension of 1797. What, then, would be its effects in the present condition of the country, when the Government is a creditor instead of a debtor-when there are so many newly-created banks without established credit-when the over-issues are so great, and when so large a portion of the debtors are not in a condition to be coerced? As great as is the tide of disaster which is passing over the land, it would be as nothing to what would follow were a national bank to be established as the means of coercing specie payments.

I am bound to speak without reserve on this important point. My opinion then is, that, if it should be determined to compel the restoration of specie payments by the agency of banks, there is but one way; but to that I have insuperable objections-I mean the adoption of the Pennsylvania Bank of the United States as the fiscal agent of the Government. It is already in operation, and sustained by great resources and powerful connexions, both at home and abroad. Through its agency specie payments might undoubtedly be restored, and that with far less disaster than through a newly created bank; but not without severe pressure. I cannot, however, vote for such a measure. I cannot agree to give a preference and such advantages to a bank of one of the members of this confederacy over those of others a bank dependent upon the will of a State, and subject to its influence and control. I cannot consent to confer such favors on the stockholders, many of whom, if rumor is to be trusted, are foreign capitalists, and without claim on the bounty of the Government. But, if all these and many other objections were overcome, there is still one which I cannot surmount.

There has been, as we all know, a conflict between one of the departments of the Government and that institution, in which, in my opinion, the department was the assailant; but I cannot consent, after what has occurred, to give to the bank a triumph over the Government-for such its adoption as the fiscal agent of the Government would necessarily be considered. It would degrade the Government in the eyes of our citizens and of the world, and go far to make that bank the Government itself.

[SENATE.

But if all these difficulties were overcome, there are others, to me, wholly insurmountable. I belong to the State-rights party, which, at all times, from the beginning of the Government to this day, has been opposed to such an institution as unconstitutional, inexpedient, and dangerous. They have ever dreaded the union of the political and the moneyed power, and the central action of the Government to which it so strongly tends; and at all times have strenuously resisted their junction. Time and experience have confirmed the truth of their principles; and this, above all other periods, is the one at which it would be most dangerous to depart from them. Acting on them, I have never given my countenance or support to a national bank, but under a compulsion which I felt to be imperious, and never without an open declaration of my opinion as unfavorable to a bank.

In supporting the bank of 1816, I openly declared that, as a question de novo, I would be decidedly against the bank, and would be the last to give it my support. I also stated that, in supporting the bank then, I yielded to the necessity of the case, growing out of the then existing and long-established connexion between the Government and the banking system. I took the ground, even at that carly period, that so long as the connexion existed, so long as the Government received and paid away bank-notes as money, they were bound to regulate their value, and had no alternative but the establishment of a national bank.

I

I found the connexion in existence and established before my time, and over which I could have no control. yielded to the necessity, in order to correct the disordered state of the currency, which had fallen exclusively under the control of the States. I yielded to what I could not reverse, just as any member of the Senate now would, who might believe that Louisiana was unconstitutionally admitted into the Union, but who would, nevertheless, feel compelled to vote to extend the laws to that State, as one of its members, on the ground that its admission was an act, whether constitutional or unconstitutional, which he could

not reverse.

In 1834 I acted in conformity to the same principle, in proposing the renewal of the bank charter for a short period. My object, as expressly avowed, was to use the bank to break the connexion between the Government and the banking system gradually, in order to avert the catastrophe which has now befallen us, and which I then clearly perceived. But the connexion, which I believed to be irreversible in 1816, has now been broken by operation of law. It is now an open question. I feel myself free, for the first time, to choose my course on this important subject; and, in opposing a bank, I act in conformity to principles which I have entertained ever since I have fully investigated the subject.

But my opposition to a reunion with the banks is not confined to objections limited to a national or State banks. It goes beyond, and comprehends others of a more general nature, relating to the currency, which to me are decisive. I am of the impression that the connexion has a most pernicious influence over bank currency; that it tends to disturb that stability and uniformity of value which is essential to a sound currency; and is among the leading causes of that tendency to expansion and contraction, which experience has shown is incident to bank-notes as a currency. They are, in my opinion, at best, without the requisite qualities to constitute a currency, even when unconnected with the Government; and are doubly disqualified by reason of that connexion, which subjects them to sudden expansions and contractions, and exposes them to fatal catastrophes, such as the present.

I will explain my views. A bank-note circulates not merely on account of the credit of the institution by which it is issued, but because Government receives it like gold and silver in all its dues, and thus adds its own credit to

that of the bank. It, in fact, virtually endorses on the note of every specie-paying bank, "receivable by the Government in its dues. To understand how greatly this adds to the circulation of bank-notes, we must remember that Government is the great money-dealer of the country, and the holder of immense public domains; and that it has the power of creating a demand against every citizen, as high as it pleases, in the shape of a tax, or duty, which can be discharged, as the law now is, only by bank-notes or gold and silver. This, of course, cannot but add greatly to the credit of bank-notes, and contribute much to their circulation, though it may be difficult to determine, with any precision, to what extent. It certainly is very great. For why is it that an individual of the first credit, whose responsibility is so indisputable that his friend of equal credit endorses his note for nothing, should put his name with his friend's, being their joint credit, into a bank, and take out the notes of the bank, which is, in fact, but the credit of the bank itself, and pay six per cent. discount between the credit of himself and his friend and that of the bank? The known and established credit of the bank may be one reason, but there is another and powerful one: the Government treats the credit of the bank as gold and silver in all its transactions, and does not treat the credit of individuals in the same manner. To test the truth: let us reverse the case, and suppose the Government to treat the joint credit of the individuals as money, and not the credit of the bank; and is it not obvious that, instead of borrowing from the bank, and paying six per cent. discount, the bank would be glad to borrow from them on the same terins? From this we may perceive the powerful influence which bank circulation derives from the connexion with the credit of the Government.

It follows, as a necessary consequence, that to the extent of this influence the issues of the banks expand and contract with the expansion and contraction of the fiscal action of the Government; with the increase of its duties, taxes, income, and expenditure; with the deposites in its vaults, acting as additional capital, and the amount of banknotes withdrawn, in consequence, from circulation; all of which must directly affect the amount of their business and issues, and bank currency, and must, of course, partake of all those vibrations to which the fiscal action of the Government is necessarily exposed; and, when great and sudden, must expose the system to catastrophes such as we now witness. In fact, a more suitable instance cannot be selected to illustrate the truth of what I assert than the present, as I shall proceed to show.

To understand the causes which have led to the present state of things, we must go back to the year 1824, when the tariff system triumphed in Congress-a system which imposed duties not for the purpose of revenue, but to encourage the industry of one portion of the Union at the expense of the other. This was followed up by the act of 1828, which consummated the system. It raised the duties so extravagantly, that out of an annual importation of sixty-four millions, thirty-two passed into the Treasury; that is, Government took one-half for the liberty of introducing the other. Countless millions were thus poured into the Treasury beyond the wants of the Government, which became in time the source of the most extravagant expenditures. This vast increase of receipts and expenditures was followed by a corresponding expansion of the business of the banks. They had to discount and issue freely, to enable the merchants to pay their duty bonds, as well as to meet the vastly-increased expenditures of the Government. Another effect followed the act of 1828, which gave a still further expansion to the action of the banks, and which is worthy of notice. It turned the exchange with England in favor of this country. That portion of the proceeds of our exports, which, in consequence of the high duties, could no longer return with

[SEPT. 18, 1837.

profit in the usual articles which we had been in the habit of receiving principally from that country in exchange for our exports, returned in gold and silver, in order to purchase similar articles at the North. This was the first cause that gave that western direction to the precious metals, the revulsive return of which has been followed by so many disasters. With the exchange in our favor, and consequently no demand for gold and silver abroad, and the vast demand for money attendant on an increase of the revenue, almost every restraint was removed on the discounts and issues of the banks, especially in the northern section of the Union, where these causes principally operated. With their increase, wages and prices of every description rose in proportion, followed, of course, by an increasing demand on the banks for further issues. This is the true cause of that expansion of the currency, which began about the commencement of the late administration, but which was erroneously charged by it to the Bank of the United States. It arose out of the action of the Government.

The bank, in increasing its business, acted in obedience to the condition of things at the time, and in conformity with the banks generally in the same section. It was at this juncture that the late administration came into power; a juncture remarkable in many respects, but more especially in relation to the question of the currency. Most of the causes which have since terminated in the complete prostration of the banks and the commercial prosperity of the country were in full activity.

Another cause, about that time, (I do not remember the precise date,) began to produce powerful effects. I refer to the last renewal of the charter of the Bank of England. It was renewed for ten years, and, among other provisions, contained one making the notes of that bank a legal tender in all cases except between the bank and its creditors. The effect was to dispense still further with the use of the precious metals in that great commercial country, which, of course, caused them to flow out in every direction through the various channels of its commerce. A large portion took their direction hitherward, and served still further to increase the current which, from causes already enumerated, was flowing in this direction; and which still further increased the force of the returning current, on the turn of the tide.

The administration did not comprehend the difficulties and dangers which surrounded it. Instead of perceiving the true reason of the expansion of the currency, and adopting the measures necessary to arrest it, they attributed it to the Bank of the United States, and made it the cause or pretext of waging war on that institution. Among the first acts of hostility, the deposites were removed, and transferred to selected State banks; the effect of which, instead of resisting the tendency to expansion, was to throw off the only restraint that held the banking institutions of the country in check; and, of course, gave to the swelling tide, which was destined to desolate the country, a powerful impulse. Banks sprung up in every direction; discounts and issues increased almost without limitation; and an immense surplus revenue accumulated in the deposite banks, which, after the payment of the public debt, the most extravagant appropriations could not exhaust, and which acted as additional banking capital. The value of money daily depreciated; prices rose; and then commenced those unbounded speculations, particularly in public lands, which were transferred, by millions of acres, from the public to the speculators for worthless bank-notes, till at length the swelling flood was checked, and the revulsive current burst its barriers, and overspread and desolated the land.

The first check came from the Bank of England, which, alarmed at the-loss of its precious metals, refused to discount American bills, in order to prevent a further decrease

of its cash means, and cause a return of those which it had lost. Then followed the execution of the deposite act, which, instead of a remedial measure, as it might have been made if properly executed, was made the instrument of weakening the banks at the point of pressure, especially in the great commercial metropolis of the Union, where so large a portion of the surplus revenue was accumulated. And, finally, the Treasury order, which still further weakened those banks, by withdrawing their cash means to be invested in public lands in the West.

It is often easier to prevent what cannot be remedied, which the present instance strongly illustrates. If the administration had formed a true conception of the danger in time, what has since happened might have then been easily averted. The near approach of the expiration of the charter of the United States Bank would have afforded ample means of staying the desolation, if it had been timely and properly used. I saw it then, and purposed to renew the charter, for a limited period, with such modifications as would have effectually resisted the increasing expansion of the currency, and, at the same time, gradually and finally wear out the connexion between the bank and the Government. To use the expression I then used, "to unbank the banks;" to let down the system easily, and so to effect the separation between the bank and the Government as to avoid the possibility of that shock which I then saw was inevitable without some such remedy. The moment was eminently propitious. The precious metals were flowing in on us from every quarter, and the vigorous measures I purposed to adopt in the renewal of the charter would have effectually arrested the increase of banks, and checked the excess of their discounts and issues; so that the accumulating mass of gold and silver, instead of being converted into bank capital, and swelling the tide of paper circulation, would have been substituted in the place of bank-notes, as a permanent and wholesome addition to the currency of the country.

But neither the administration nor the opposition sustained me, and the precious opportunity passed unseized. I then clearly saw the coming calamity was inevitable; and it has neither arrived sooner, nor is it greater, than I anticipated.

Such are the leading causes which have produced the present disordered state of the currency. There are others of a minor character, connected with the general condition of the commercial world, and the operations of the Executive branch of the Government, but which, of themselves, would have produced but little effect. To repeat the causes in a few words: the vast increase which the tariffs of 1824 and 1828 gave to the fiscal action of the Government, combined with the causes I have enumerated, gave the first impulse to the expansion of the currency. These, in turn, gave that extraordinary impulse to overtrading and specu lation (they are effects, and not causes) which has finally terminated in the present calamity. It may thus be ultimately traced to the connexion between the banks and the Government; and it is not a little remarkable that the suspension of specie payments in 1816 in this country, and that of 1797 in Great Britain, were produced by like

causes.

There is another reason against the union of the Government and the banks, intimately connected with that under consideration, which I shall next proceed to state. It gives a preference to one portion of citizens over another, that is neither fair, equal, nor consistent with the spirit of our institutions.

That the connexion between the banks and the Government, the receiving and paying away their notes as cash, and the use of the public money from the time of the collection to the disbursement, is the source of immense profit to the banks, cannot be questioned. It is impossible, as I said, to ascertain with any precision to what extent their

[SENATE.

issues and circulation depend upon it, but it certainly constitutes a large proportion. A single illustration may throw light upon this point. Suppose the Government were to take up the veriest beggar in the street, and enter into a contract with him that nothing should be received in payment of its dues or for the sale of its public lands in future except gold and silver and his promissory notes, and that he should have the use of the public funds from the time of their collection until their disbursement: can any one estimate the wealth which such a contract would confer? His notes would circulate far and wide over the whole extent of the Union; would be the medium through which the exchanges of the country would be performed; and his ample and extended credit would give him a control over all the banking institutions and moneyed transactions of the community. The possession of a hundred millions would not give a control more effectual. I ask, would it be fair, would it be equal, would it be consistent with the spirit of our institutions, to confer such advantages on any individual? And if not on one, would it be if conferred on any number? And if not, why should it be conferred on any corporate body of individuals? How can they possibly be entitled to benefits so vast, which all must acknowledge could not be justly conferred on any number of unincorporated individuals?

I state not these views with any intention of bringing down odium on banking institutions. I have no unkind feeling towards them whatever. I do not hold them responsible for the present state of things. It has grown up gradually, without either the banks or the community perceiving the consequences which have followed the connexion between them. My object is to state facts as they exist, that the truth may be seen in time by all. This is an age of investigation. The public mind is broadly awake upon this all-important subject. It affects the interests and condition of the whole community, and will be investigated to the bottom. Nothing will be left unexplored, and it is for the interest both of the banks and of the community that the evils incident to the connexion should be fully understood in time, and the connexion be gradually terminated, before such convulsions shall follow as to sweep away the whole system, with its advantages as well as its disadvantages.

But it is not only between citizen and citizen that the connexion is unfair and unequal. It is as much so between one portion of the country and another. The connexion of the Government with the banks, whether it be with a combination of State banks or with a national institution, will necessarily centralize the action of the system at the principal point of collection and disbursement, and at which the mother bank, or the head of the league of State banks, must be located. From that point the whole system, through the connexion with the Government, will be enabled to control the exchanges both at home and abroad; and with it, the commerce, foreign and domestic, including exports and imports.

After what has been said, these points will require but little illustration. A single one will be sufficient; and I will take, as in the former instance, that of an individual.

Suppose, then, the Government, at the commencement of its operation, had selected an individual merchant, at any one point in the Union, (say New York,) and had connected itself with him, as it has with the banks, by giving him the use of the public funds from the time of their collection until their disbursement, and of receiving and paying away, in all its transactions, nothing but his promissory notes, except gold and silver: is it not manifest that a decisive control would be given to the port where he resided over all the others? that his promissory notes would circulate everywhere, through all the ramifications of commerce? that they would regulate exchanges? that they would be the medium of paying duty bonds? and that they would attract