to five per cent. I believe local banks at Boston did, in some instances, discount at that rate. In Philadelphia, I think, the local banks discounted paper having nine months to run, and perhaps more. The commerce of the country was reduced from a state of great excitement, such as we have just witnessed, to a state of collapse, such as I fear we may soon suffer. Under these circumstances, the discounts fell off The bank was too safe. It had, at times, I believe, as much specie-perhaps more-in its vaults than it had notes in circulation. Under this want of demand for money, I was so fortunate as to obtain the public loans, to the amount of $6,000,000, which the bank was able to pay for, and retain an abundance of specie in its vaults."

Such is the testimony of Mr. Cheves; and thus easily and rapidly did the recuperative energies of this young, vigorous, athletic country recover from the depression and desolation of that day. The effect cannot be different now; on the contrary, the recovery must be more rapid and easy; for the distress now is not the tithe of what it was then. The real money in the country-the gold and silver-was not the fourth part then of what it is now; the distress then was all real, and no part of it assumed, pretended, artificial, forced, and fictitious, contrived with malice aforethought to govern elections and politics, and to coerce the revivification of a national bank.

I remember the times of which Mr. Cheves speaks. I came to the Senate in 1829; and I know that his picture of the abundance of money, the facility of getting loans, and the low rate of interest, is entirely just. Our own legislation proves it; for a loan of $3,000,000 was authorized in the session of 1819-'20, and another at the ensuing session for $5,000,000, both expressly to defray the current expenses of the Government; and both loans were eagerly bid for by capitalists, and at rates considerably below six per cent. It was six millions out of these eight that Mr. Cheves congratulates himself for having been fortunate enough to obtain for the Bank of the United States. The picture drawn by Mr. Cheves is correct, as applicable to the Atlantic board, for which he intended it; it is not correct as applicable to the West, and was not so intended by him. That great region did not recover for several years after 1819. It had been eviscerated of its gold and silver, to sustain the Bank of the United States! It had been sacrificed to save that bank! At the time that Mr. Cheves refers to, it was, so far as the precious metals were concerned, the empty skin of an immolated victim, sacrificed upon the altar of salvation to a foreign institution. Not so now. Thanks to the ever-glorious Treasury order! That order has saved the West from the fate which overwhelmed her for so many years after the revulsion of 1819. She is not now, in respect to money or any thing else, the empty skin of a sacrificed victim. She has her fair proportion of all the blessings of good government, as well as her fair proportion of all the blessings of Heaven. She is able and willing to pay her share of the public revenue in solid money. The sales of the public lands, since the suspension of specie payments, are fully equal to what they were in the best years before the two years of bank expansions and mad speculations. These sales have gone on in June, July, and August, at a rate to yield near four millions per annum, which is equal to the best years before 1835 and 1836. Mr. Cheves was right in his picture of the moneyed plethora on the Atlantic board. It was a drug there in less than one year after the great catastrophe of 1819; it will be a drug there again, and from the same causes stagnation of trade and collapse of business-within a few months. It is on the Atlantic board that these Treasury notes will be borrowed. Money will be loaned upon them. They will be taken as investiments, to be laid by; not as currency, to be shoved into circulation.

The bill has been denounced as the germe of a new na. tional debt. It certainly proposes the creation of a debt.

[SENATE.

But for what purpose, and under what circumstances? To comply with the maxim, that a public debt is a public blessing? By no means! But to relieve the States from being called upon for a reimbursement of any part of the twentyseven millions of dollars which have been deposited with them; to relieve the merchants from an immediate payment of four millions; and to relieve the late deposite banks from an immediate press for six millions. This is the object. The loan of ten millions on the Treasury notes comes in place of the four and six millions due from merchants and the banks. It is because we cannot collect the one, that we create the other. If we had the ten millions from the merchants and the banks, we should not want the Treasury notes; not being able to collect those ten millions, we give time to our debtors, and borrow an equivalent sum.

The outstanding debt due to the United States is equal to the debt created; it will be a fund to pay it, interest and all; (for the merchants and banks are to pay interest ;) and then the Treasury note debt becomes a mere nominal transaction, so far as debt is concerned, being no burden to the United States, and a relief to her debtors.

This is the object of this nominal debt; and under what circumstances is it created? Under the same which occasioned eight millions to be borrowed by direct loan in the two succeeding sessions after the catastrophe of 1819. We have run the career of that period over again, and the parallel is exact in every particular. Then, as now, we had our dream of inexhaustible surpluses, and were waked up to the reality of an empty Treasury. Then, as now, we had our forty-seven millions of revenue-our nine millions of annual surplus-our bank expansions-our mad speculations-our bloated and delusive prosperity; and then, as now, we were called together to borrow eight millions for the support of the Government, to hear the cries of distress and the calls for relief. The eight millions borrowed then, and borrowed with the approving voice of some who now stigmatize a similar loan, under similar circumstances, and for the same object, was not considered as the germe of a new national debt; neither will our loan be so considered by the country.

I trust I have vindicated the bill from the stigma of being a paper currency bill, and from the imputation of being the first step towards the creation of a new national debt. I hope it is fully cleared from the odium of both these imputations. I will now say a few words on the policy of issuing Treasury notes in time of peace, or even in time of war, until the ordinary resources of loans and taxes had been tried and exhausted. I am no friend to the issue of Treasury notes of any kind. As loans, they are a disguised mode of borrowing, and easy to slide into a currency: as a currency, it is the most seductive, the most dangerous, and the most liable to abuse of all the descriptions of paper money. "The stamping of paper (by Government) is an operation so much easier than the laying of taxes, or of borrowing money, that a Government in the habit of paper emissions would rarely fail, in any emergency, to indulge itself too far in the employment of that resource, to avoid as much as possible one less auspicious to present popularity." So said General Hamilton; and Jefferson, Madison, Macon, Randolph, and all the fathers of the republican church, concurred with him. These sagacious statesmen were shy of this facile and seductive resource, "so liable to abuse, and so certain of being abused." They held it inadmissible to recur to it in time of peace, and that it could only be thought of amidst the exigencies and perils of war, and that after exhausting the direct and responsible alternative of loans and taxes. Bred in the school of these great men, I came here at this session to oppose, at all risks, an issue of Treasury notes. I preferred a direct loan, and that for many and cogent reasons. There is clear authority to borrow in the constitution; but, to find authority to issue these notes, we must enter the field of constructive powers. To borrow, is to do a responsible act; it is to in

cur certain accountability to the constituent, and heavy censure if it cannot be justified; to issue these notes, is to do an act which few consider of, which takes but little hold of the public mind, which few condemn and some encourage, because it increases the quantum of what is vainly called inoney. Loans are limited by the capacity, at least, of one side to borrow, and of the other to lend; the issue of these notes has no limit but the will of the makers and the supply of lampblack and rags. The continental bills of the Revolution, and the assignats of France, should furnish some instructive lessons on this head. Direct loans are always voluntary on the part of the lender; Treasury note loans may be a forced borrowing from the Government creditor-as much so as if the bayonet were put to his breast; for necessity has no law, and the necessitous claimant must take what is tendered, whether with or without interestwhether ten or fifty per cent. below par. I distrust, dislike, and would fain eschew, this Treasury note resource. I prefer the direct loans of 1820-21. I could only bring myself to acquiesce in this measure when it was urged that there was not time to carry a loan through its forms; nor even then could I consent to it, until every feature of a currency operation had been eradicated from the face of the bill. I have spoken to the points which induced me to rise, and might here terminate my remarks; but the committee of which I am a member has been assailed, and, being on my feet, I will say a word in its defence. Senators have said that the committee have reported nothing for the relief of the country-nothing, in fact, of any value or consequence. With deference to their judgments, I presume to think otherwise, and, with the indulgence of the Senate, will undertake to convince them of their mistake. First, there is the merchant's bond bill; it relieves a class of debtors to the amount of four millions of dollars, and, through them, it relieves many others. This bill also grants additional credits on bonds to become due for a year hence, and in that grants further relief to the same class and to their numerous dealers. Then there is the deposite bank relief bill. This gives time to another class of debtors to refund six millions, and, through them, it relieves all their debtors, and, besides, enables them to give temporary assistance to the country generally. Then comes the Treasury note bill-a measure of relief to the States to the amount of ten millions, and, through them, a relief to all their citizens, by supplying the Treasury from our own resources, and thus staving off the contingency on which they became subject to reimburse ten out of the twenty-seven million deposite, whilst still in the very act of receiving it. The Senate, on the motion of the Senator from Pennsylvania who sits over the way, [Mr. BUCHANAN,] has since abrogated this contingency, and substituted the will of Congress; but this change, while it admonishes us to say "farewell-a long farewell" to the twenty-seven millions, and even to fear the approaching departure of the nine millions, cannot diminish the merit of the committee, which had first deferred the contingency before the Senator's motion abrogated it forever.

These are instances of direct relief-large as well as direct and extending into all the ramifications of society. It is four millions to the merchants, six millions to the banks, and ten millions to the States-in all, twenty millions; and, though nominally to the merchants, to the banks, and to the States, it is in reality to the whole body of the community-to all the citizens to whom merchants, banks, and States resort to collect the money which is to be paid over to the Federal Treasury. To these three bills of immediate, direct, large, and positive relief, the committee have added two others, less general in their scope, and more indirect in their action, but still well entitled to be c'assed among relief measures-one, to abolish credits at the custom-houses after a given time; and the other, to relieve this city, and these ten miles square, in which Congress has exclusive jurisdiction, from the evils of an irre

[SEPT. 18, 1837.

deemable paper currency, and the pestilence of paper ticket change.

The divorce bill-the bill to dissolve the connexion between bank and state, and to enable the Government to keep in its own hands its own means of existence-will certainly be a relief to one of the parties, if not to both. These bills have been reported by the Finance Committee, and will enable the country to judge how far they are obnoxious to the charge of reporting nothing for relief, and nothing of any value. They are six in number-of great value and efficacy, in my estimation; and they comprise all the subjects on which that committee were expected to produce any thing for the action of the Senate.

There is another bill which may come from another committee, (the Judiciary,) and which I shall rejoice to see come from it a bill of most potential and universal relief to the whole country! to relieve us from a most crying imposition, which now afflicts and oppresses every thing in our America, from the Federal and State Governments, and their elevated functionaries, down to the tub of the washerwoman and the cart of the drayman. It is the bill to apply the penalties of bankruptcy to their ancient, original, appropriate, and primitive subject, and the one from which the law itself takes its name. Broken bank-bancus and ruptusis the Roman designation of the law. Broken banks, and not broken merchants, broken tailors, broken lawyers, and broken farmers, were the Roman, the Grecian, the Asiatic, and the Egyptian subjects of this law. The English, and other moderns, have diverted it to humbler game; and President Van Buren is the first in the list of executive magistrates to propose to restore it to its original and most appropriate subjects. I shall rejoice to see that bill come in. It will be tidings of forthcoming relief to an afflicted and prostrate empire. It will fix the day for the general resumption of specie payments, and will furnish a rule, and provide an engine for separating the solvent from the insolvent "promisers to pay."

That bill has been denounced in advance upon this floor, and war to the knife has been declared against it. The assault has even assumed the character of a combined movement against the nervous system of the friends of the measure. It seems as if they would terrify us. I have not communed with others to learn how they stand the shock of this precocious assault; but, for one, my nerves remain unaffected, and my feet do not feel as if they meditated flight, and intended to bear off my body from the perils of the coming conflict.

That bill has been denounced in an unusual, unexpected, and precipitate manner. I do not return the denunciation, nor do I now undertake its defence, by obliquing into an argument foreign to the question before the Senate; but I am free to declare myself friendly to the measure, and ready to support it as soon as it is brought forward. I am not deterred by the imposing apparition of sovereign States, engaged in the trade, or associated in the business, of banking. My own State, even Missouri, has embarked in the perils and mysteries of this trade. She has chartered a moneyed corporation, and gone into partnership with it; and if ever that concern shall dishonor its "promises to pay," I, for one, shall be ready to apply the penalties of bankruptcy to the whole establishment, and shall make no discrimination between the effects of individual stockholders and the effects of the State embarked in the partnership.

I say this, not in defiance, but in candor, in sincerity, and in openness of heart. I am for the measure, and avow it in my place here; and if the consequences of this avowal should be what some seem to think-an extinction of political existence, and a perpetual exclusion from the purlieas of this ten miles square-I stand here now ready to do the deed, and to pay the forfeit-to vote for the bill without faltering and to march from this Capitol without looking back.

Mr. CALHOUN rose to move that the bill be so amend

ed as to prevent the allowance of interest on the notes to be issued by the Treasury; but yielded the floor to

Mr. WALKER, who said he had all along intended to offer a similar amendment, and would now (by leave of Mr. C.) do so. Mr. W. said he was opposed to allowing any interest whatever on the notes to be issued, and for the following reasons: First, because it appeared to him quite unnecessary to allow interest on them. This Government, possessed of a public domain of such vast extent and value, amounting to at least seven hundred millions of acres, and being out of debt, (the only Government of which such a proud circumstance could be related,) was not under the necessity of alluring credit to its notes by the offer of a trifling interest. Notes issued by such a Government would command full credit equal to gold and silver, and would freely pass as such without interest. This was his first reason against these notes bearing any interest.

His second reason was the following: If these notes are made to bear interest, they would, almost immediately on their issue, take their flight to Europe; they would be transmitted there, instead of specie; and, coming from a Government of such undoubted credit, they would be freely received there in payment of our debts, even without bearing any interest. Much more, therefore, would they be made welcome in Europe when they bore interest. This was his second reason for wishing to allow no interest upon them, because it would lead to their more rapid abstraction from circulation here.

A third reason Mr. W. would now state, which, indeed, was a branch of his second reason, but to which he earnestly solicited the attention of Senators. He thought that, in consequence of the issue of these bills, bearing interest, an immediate effect would be produced upon the price of cotton, highly injurious to the interests of planters in the South. There is now (said Mr. W.) a demand for cotton, and consequently, a rise in its price. The cause of this he was disposed to attribute to the fact that cotton was a better remittance to Europe in payment of our debts than specie; and, therefore, merchants who had to remit to Europe, instead of buying specie, bought cotton, and remitted it in the place of specie. Hence a demand for cotton in the market. He (Mr. W.) understood that the Bank of the United States itself had gone into market and bought up cotton to send to Europe, instead of specie, setting the example of a remittance so highly conducive to the interests of the cotton-grower-having purchased (he believed) as much as three millions of dollars worth of cotton.

Now the effects of this issue, with interest, would be, that the whole ten millions issued would be sent to Europe, instead of the produce of the country; and, consequently, ten millions less of cotton, or other produce, would be sold. This he (Mr. W.) considered absolutely the same thing as directly taking so much money out of the pockets of the Southern producers, because, but for this measure, so much money would be expended with them in the purchase of their produce. If the merchants who now remitted cotton instead of specie could find any thing more convenient for them to remit-more easily to be procured and transmitted-they would naturally avail themselves of it. Now these notes bearing interest were precisely this convenient remittance which the merchants wanted; and, therefore, instead of buying up any more cotton, they will possess themselves of these notes, and remit them. And, on the other hand, they in Europe would prefer these notes to our cotton, as coming from a Government such as he (Mr. W.) had described, and bearing interest besides, which the cotton did not. Thus the effect would be to throw the cotton of the South out of the market, and thereby cause a fall in its price ruinous to the already ruined producers. Such a measure he, as coming from the great cotton-growing State, felt himself called upon most strenuously to oppose.

[SENATE.

Another reason he would state why he wished this issue of notes bearing an interest should not take place; it was this: these notes being remitted to Europe, (as undoubtedly they would be,) would create a debt abroad against us. Our Government would thus be made a debtor to foreign Governments and people-a thing in his view by no means desirable. Mr. W. concluded by moving that so much of the bill as relates to allowing interest upon the notes be stricken out.

Mr. WRIGHT expressed himself taken by surprise with the amendment offered by the Senator from Mississippi. From the discussion which had already taken place on this bill, it was evident that there was much difference of opinion among Senators on this subject; some differed from views of policy, others on principle. He confessed it was his hope that the amendment just offered would not be agreed to. The object which he was anxious to attain was, to make these notes, as far as practicable, equal to gold and silver, and as acceptable to the public creditor. Now, it did not appear to him that this object could be attained unless the discretion allowed by this bill to the Secretary was retained in the bill. Mr. W. did not think that the country, at this peculiar juncture, was in a condition to bear the emission of notes without interest. The effect of such an issue would be to cause the notes to sink in value in the market; but if they bore interest, no risk of this kind he thought would be run. It was to be borne in mind that the interest was not fixed; it was only limited not to exceed 6 per cent.; in every other respect, the question was left entirely to the discretion of the Secretary.

Mr. W. hoped, therefore, that the Senate would let the bill pass as it now stood, without embarrassing it with this amendment. In a very short time after the close of this session Congress would meet again; and then, if it should appear that he and the committee had erred in their suggestion of this measure, the error might be rectified. For his part, he must confess he had been greatly struck with the force of the remarks made by the Senator from South Carolina, [Mr. CALHOUN,] in the course of his speech this morning. He could not say he differed from him: he thought such notes as that honorable Senator had described might, and perhaps ought to be issued; but he found that many of his friends entertained objections-he meant to say political friends. Some of the most distinguished also of his opponents strongly objected to it; their objections went against the principle of the thing; and, as it was his desire to make the bill as far as possible unobjectionable in all respects, he was anxious that it should pass in its present shape.

Mr. KING, of Georgia, must profess the high respect he entertained for the sentiments and opinions of the Senator from South Carolina, [Mr. CALHOUN,] and of the Senator from Mississippi, [Mr. WALKER.] It was, therefore, somewhat painful to his feelings to be obliged, on the present occasion, to differ from those honorable gentlemen. There was one principle of finance which appeared to him incontrovertible: namely, that whenever there existed two sorts of currency in circulation, of which the one, from any cause, possessed any advantages above the other, by answering any one purpose more than the other, then that would always command a small premium over the other. This truth was fully evidenced at the present moment, when drafts which had even been protested, yet coming from the Government, commanded a premium little inferior to that of gold and silver. In order to place these Treasury notes in the most favorable position, and to prevent their depreciation, Mr. K. thought that the discretion allowed by the bill ought to be left with the Secretary, to be used according to the emergency of circumstances. The Secretary might then attach to the notes what interest might be necessary to make them acceptable to the creditors of the Government. He did not entertain the appre

SENATE.]

hensions of his honorable friend from Mississippi [Mr. WALKER] that these notes would find their way to Europe. We had had kites enough, (and, indeed, too many,) which had been made to fly across the Atlantic; and now he thought no more of our paper would find its way to Europe at least until our debt was paid off there.

Mr. K. proceeded further to combat the opinion of Mr. WALKER, urging that at the present state of the exchanges between the two countries, a better state of things could not perhaps be expected.

Mr. WALKER briefly replied, repeating his views that the price of this year's crop would be considerably diminished by the issue of Treasury notes bearing interest, serving as a remittance to Europe, which would be taken as a substitute for cotton, to the great loss of the South.

Mr. W. said, however, that as he found all his friends opposed to the issue of notes without interest, he would modify his amendment so as to reduce the discretion of the Secretary from 6 to 3 per cent.

Mr. WEBSTER said he would briefly remark, that it was of little consequence as to the results apprehended by the Senator from Mississippi, [Mr. WALKER,] whether the notes bore interest or not; for if they bore interest, $100 would go for $106; and if they bore no interest, there would be the discount, and $100 would at that rate only go for $94. The thing was simple enough, and of very little consequence, as a foreign remittance.

Mr. WALKER briefly explained.

Mr. CALHOUN, in reply to Mr. KING, of Georgia, said he thought it not a desirable thing that these notes should be equal to gold or silver.

Mr. KING, of Georgia, expressed his apprehension that it would not be possible for Government to induce the public creditors to take these notes at all, unless they bore in

terest.

Mr. CALHOUN. If the banks resume, these notes will be equal to gold and silver.

Mr. BENTON asked for the yeas and nays on Mr. WALKER'S motion; which were ordered, and the amendment was rejected: Ayes 6, Noes 40, as follows:

YEAS-Messrs. Black, Calhoun, McKean, Strange, Walker, Young-6.

NAYS-Messrs. Allen, Bayard, Benton, Brown, Buchanan, Clay of Alabama, Clay of Ky., Clayton, Fulton, Grundy, Hubbard, Kent, King of Ala., King of Georgia, Knight, Lyon, Morris, Nicholas, Niles, Norvell, Pierce, Preston, Rives, Roane, Robbins, Robinson, Ruggles, Sevier, Smith of Conn., Smith of Ind., Southard, Spence, Swift, Tallmadge, Tipton, Wall, Webster, White, Williams, Wright-40.

The bill was then ordered to be engrossed and read a third time by the following vote:

YEAS-Messrs. Allen, Bayard, Benton, Black, Brown, Buchanan, Calhoun, Clay of Alabama, Clayton, Fulton, Grundy, Hubbard, Kent, King of Ala., King of Georgia, Knight, Lyon, McKean, Morris, Nicholas, Niles, Norvel, Pierce, Rives, Roane, Robbins, Robinson, Ruggles, Sevier, Smith of Connecticut, Smith of Indiana, Strange, Swift, Tallmadge, Tipton, Walker, Wall, Webster, White, Williams, Wright, Young-42.

NAYS-Messrs. Clay of Kentucky, Crittenden, Preston, Southard, Spence-5.

MERCHANTS' BONDS.

The bill extending the time for the payment of merchants' revenue bonds, was next taken up.

Mr. WEBSTER rose for the purpose of proposing an amendment to the bill, in which, after reflection, he hoped the chairman of the committee [Mr. WRIGHT] would concur. The bill proposed a delay of six months; but, unless a longer period should be granted, it would be utterly impossible to compel payment. By this provision, large

[SEPT. 18, 1837.

sums would fail due in October, in November, in December, and in January. It was to be considered that the obligors on these bonds could not pay them unless they had time to receive their own dues; and the exchanges and business of the country were so much obstructed, and so fallen off from their usual amount, that they could not pay the Government even, on that account, with their usual promptitude. If the Government pressed them, they would be compelled to press their customers in the interior; and they, in turn, to press the people generally. It was a question, therefore, whether these debts had not thus become a matter of public interest and importance.

All, Mr. W. doubted not, might be paid promptly. But a reasonable time must be given. It had been suggested that the bonds, if necessary, might be renewed. But there were objections to that expedient; it was, at best, a troublesome and expensive process. On the whole, with a desire that there should be no absolute pressure in relation to these bonds, and at the same time that nothing like extraordinary indulgence should be granted, Mr. W. would assume the medium of the two periods which had been suggested, and propose an extension of nine months instead of six, as now in the bill. In the mean time, if that should be deemed insufficient, it would at least give ample time and opportunity for bringing the subject again before Congress at the ensuing session. Mr. W. would be extremely gratified if the chairman of the committee would assent to this amendment.

Mr. WRIGHT said he had received a memorial from merchants of New York, strongly urging an extension of twelve months; and they had stated a single fact, which must have a great influence on Congress in this matter: which was, that the principal importations took place semiannually; and at such times, that the six months in the bill would bring the Government demands upon them when they were most pressed for money; whereas, nine months would bring them to the period when they had the least call for money. Mr. W. believed the Treasury would not be essentially incommoded by this arrangement, and he was therefore in favor of a change of the time to nine months.

Mr. SEVIER called for the yeas and nays on the question, which were ordered, and it was carried in the affirmative:"Ayes 44, Noes 1; Mr. SEVIER only voting in the negative.

So the bill was ordered to be engrossed for a third reading.

CLAIMS ON DEPOSITE BANKS.

The bill for adjusting the claims on the deposite banks having been read a second time,

Mr. WALKER moved to insert in the room of "two, five, and eight," the words "four, six, and nine" months; which was adopted, and the bill ordered to be engrossed for a third reading.

MERCHANDISE IN PUBLIC STORES.

The Senate then proceeded to consider, as in Committee of the Whole, the bill to authorize merchandise to be deposited in the public stores, and for other purposes.

Mr. BUCHANAN said he relied so much on the benefit of this bill to the country, that he wished to record his vote in its favor. He therefore called for the yeas and nays on its engrossment; which were ordered.

Mr. CLAY, of Kentucky, said he was entirely in favor of the object of the bill, and thought it would be beneficial ultimately to the commerce of the country, and immediately to the manufacturing and other interests. He would, therefore, vote for it with pleasure. He suggested, however, that it was proper to strike out the exception in relation to fruits.

Mr. CALHOUN said it appeared to him that the bill required more consideration, and that it ought to be post