American army. The people of the southern country should know why it was that they were so constantly called upon for volunteers and drafted men to march on this unpleasant service. The mechanic should know why he had been called fromhis workshop, and the farmer from his plough, at an unseasonable time, to the loss of his crop, to pursue over the barren sands and through pestilential marshes of Florida-perhaps to fall a victim to disease, and perish an inglorious victim to that insalubrious climate, or perhaps to return toil-worn to his impoverished family. It is true, that the enemy are too weak and contemptible to excite any thing like a national feeling; but still the Seminoles, from their long stand for their independence, must excite the sympathy of every honorable bosom. They, however, cannot remain in independence, even admitting that they could make the Withlacoochie their boundary; and their only safety is in removal west of the Mississippi. Let them execute their treaty, and remove beyond the contamination of the white men, and there is still before them a future which may be a future of happiness to those unsophisticated children of nature. He trusted the result of this investigation might lead to a termination of this war, which had cost the Government much money, and been the means of the loss of so many valuable lives.

Without taking the question, the House, on mo. tion of Mr. CAMBRELENG, proceeded to the orders of the day; and on motion of the same gentleman, went into Committee of the Whole on the state of the Union, Mr. HAYNES in the chair, and resumed the consideration of the bill to POSTPONE THE FOURTHI INSTALMENT WITH THE

STATES.

The question pending was on the amendment of Mr. PICKENS to strike from the bill the indefinite clause "till further provision by law," and insert "the first day of January, 1839."

Mr. C. SHEPARD took the floor, and opposed the bill, on the ground that the thirty-seven millions of surplus actually belonged to the States the moment the deposite act was passed. He granted there was a deficit, but this offered no justifiable reason for withholding the payment. In reference to the deposite act itself, he held it to be constitutional, at least as much so as depositing the public money in the State banks; and said, if he had been a member of the last Congress, he should have voted for giving the whole of the surplus absolutely altogether to the States. Admitting a deficit, the question arose, how the payment should be made. He thought there was no difficulty on that head. The debt of the Bank of the United States might be sold in Europe, or the payment might be met by reducing the salaries of the officers of the Government which had been raised last session, and by restricting a number of extravagant expenditures. In reference to the report of the Secretary of the Treasury, he said that if a Chancellor of the Exchequer in England had presented such a document, it would have been scouted and hissed out of Parliament. Mr. S. ascribed all the embarrassments to the measures of the late administration, but said he should enter more at large into the subject when the other bills came up for consideration.

Mr. SIBLEY also passed some strictures upon the report of the Secretary of the Treasury, opposed the bill, and said the first great question to be decided was, what are the obligations resting upon the Federal Government in the relation it stands to the sovereign States of the Union? The subject, it appeared to him, had been, so far, too much considered as if the Federal Government alone was interested in a wise and just conclusion of the question. Now were they bound to fulfil their obligations? and, if so,means ought and must be found, at all events, to conform to those obligations. The faith and honor of the Federal Government were involved in this question, and bound to the several States for the performance, in good faith, and to the utmost spirit of the engagement, for which the act of June, 1836, was the basis. That act he reviewed at some length. He conceded that that statute did not establish a contract, but it was a proposition for a contract from one party, which, if acceded to by the other party, became part and par

cel of a contract. This had been done in the present case by the States consenting to take upon themselves the obligations of the act, and that assent of theirs made it at once a valid and binding contract, the provisions and requirements of which the Federal Government was bound to fulfil. On this point Mr. S. dwelt at length, and cited a number of precedents in proof of the validity of this contract. He replied to the objection that it had been given without consideration, by adverting to the charge and trouble it involved. In one form or another, it had already cost the people of the State of New York alone above two hundred thousand dollars, independent of the labor and trouble, and the pledge of their faith, for its safe keeping. It had, therefore, all the legal, technical forms of a contract. Moreover, the States had, in consequence, made contracts with their citizens, which contracts they would comply with, whatever might be the loss or inconvenience. He insisted that the question of impairing the contract was not one which ought to be considered by the General Government, for it had no right to prescribe what a sove reign State should do. Hence they had no power to pass a law to withhold this payment. He believed, however, the Government was in a condition to pay the money, for it was not improbable but that the States would receive orders on the deposite banks, and good faith and honor demanded that they should pay it.

Mr. CUSHMAN said, considering the position he occupied at the last session, on this very subject, he hoped the committee would indulge him with making a few remarks. There had been a great number of very ingenious arguments already offered to the consideration of the committee, and he was more and more impressed with the belief that honorable gentlemen who had addressed the committee lost sight of the main question at issue, and entirely mistook the spirit, and meaning, and intention of the deposite law; and it was in corsequence of mistaking the spirit of that law that they had been suffered to range into so wide a field of debate on what he considered an erroneous issue. It had been, time and time again, asserted that that law was a contract, an ob'igation from which the United States were not at liberty to depart. That it was a contract that could be enforced, and legally enforced. He disagreed altogether from this position. He did not go upon technicalities, but on a higher principleas much higher as heaven itself was higher than the earth, he meant the moral one. It was upon that ground he originally voted upon this question. It was because he could not bring himself to believe that Congress had any right to deposite the surplus revenue of this Government with the several States of the Union.

Now was this law a contract as had been alledged? Did it partake of any of the features of a contract? No. It was a mere gratuity; a gratuity which was not the basis, and which could not be made the basis, of a contract. Why, supposing one individual should say to another, that he would make him a donation by a particular time, and something should intervene, some calamity, disappointment, or the loss, perhaps, of the very thing he promised to give, would any one contend that that promise formed a legal, binding contract? No. Would any one pretend that it formed a moral obligation on the part of him who promised to give? No. There was not a gentleman upon that floor, he apprehended, who would make that assertion.

He put another case. Supposing one individual should say to another, "I have the sum of $50,000 now in hand, or soon will have in the hands of an agent of mine, for which I have no use.

It is at

present of no sort of benefit to myself. I, as your friend, will let you have the use of it until I call for it." Then supposing the money to be paid in four instalments of one, two, three, and four months, and he got the first three instalments, but the one who promised the money is overtaken by an unforeseen calamity; his property engulfed in a flood, or fire consumed his dwelling, he would have a use for that money, or some of it instantly. Let me ask (said Mr. C.) if that individual were to ge to his friend, and tell him "It is true I agreed to

hand over to you $50,000 for your use and benefit, till I should want it, but I am visited by a calamity, and I cannot do without this sum". I ask, sir, (said Mr. C.) if he would have the hardihood to look his friend in the face, and say that that friend was under a moral obligation to give him the money? No, he would blush to make a charge of that

sort.

Now let him bring to the attention of gentlemen what he considered a test question upon this subject. In passing the law of June '36, what did Congress say to the several States of the Union? Why, that they had a surplus revenue which they had then no use for, and they offered it to the several States for their use and benefit, until they should be under the necessity of calling for it, or until they wanted it. It was under these circumstances, and these circumstances alone, that the deposite act was passed. He put another case: Supposing that, on the first of January, 1837, when the amount of the surplus in the Treasury was ascertained to be upwards of thirty millions, on the very next day the whole of that sum should be annihilated, what then? Why, forsooth, according to the argument used in that House, according to the declarations they had heard repeated over and over again, the United States would be bound, legally bound, say some gentlemen, to borrow money to make the deposite; ay, they go further, and say they are morally bound to contract a de bt to deposite mosey! Mr. C. entreated gentlemen not to do this. He implored gentlemen not to incur a debt, not to tax the people, for the purpose of raising money to deposite with the States. Would an individual borrow money for the sake of depositing it in a bank, or in any other institution? Assuredly not. Mr. C. denied again that the act partook of the nature of a contract, and concluded by saying that it would be no breach of honor or good faith to withhold, the payment of the fourth instalment.

Mr. HOLSEY went into a minute examination of the state of the Treasury, in order to show that there would be an excess of expenditure over the income of the present year, and that there would be no surplus remaining in the Treasury at the end of the year. Mr. H. said he had read the Report of the Secretary of the Treasury, which had been so much animadverted upon, and believe that if there was mist (as it was asserted) any where, it was in those minds who had not understood it, for it was certainly not in that document. He would venture to say, that if that report was submitted to a tribunal of foreign ministers of finance, they would pronounce it as plain, clear, and lucid a document as had ever been written on the subject. But the Secretary of the Treasury had himself divested it of all obscurity, by leaving out every technical phrase; and Mr. H. would venture to assert, that in less than twelve months from this time there was not an intelligent farmer in the whole country who would not comprehend it.

Mr. H. then entered into a variety of statements in support of the propositions he assumed. The result on the first point showed there would be, at the end of the year, an excess of expenditure over the means of the Government of somewhere about twelve millions of dollars. He then examined the proposition for borrowing money to make the fourth payment, and showed how contradictory it was to the intent of the framers of the Constitution to raise money for such an object. In reference to the deposite act, if a contract, it was a contract based alone upon the distribution of an existing surplus, not wanted for the ordinary or extraordinary expenditures of the Government. The structure was reared upon that rock, and was so understood at the time the statute was enacted. The money to be distributed was out of a surplus fund. Where was there a surplus fund. There was none. Therefore there was no obligation on the part of the Government to carry out the provisions of that The surplus being gone, the obligation to distribute went with it; and now, were they to tax the people for the purpose of raising a fund to pay out this surplus, or pretended surplus? Was such an exercise of the taxing power ever contemplated by the framers of the Constitution? It was not, nor would the people sanction it.

act.

As to the power of Congress to pass such a bill

as the one under discussion, he had no doubt, for be held that one Legislature had the power to repeal the acts of the preceding one, no matter what rights had been given under it, except the right of property. Some gentlemen contended that the surplus was a gift to the States. But he contended that there were not the slightest grounds for such an assumption. One gentleman had said that the States had acquired a right to it, as a matter of equity. Why, he might as well contend that an individual to whom had been loaned a sum of money, had acquired a right to keep it, from that fact. Had the people in 1836 understood the bill to be otherwise than a deposite act, it would never have passed? No member would have dared to go home to his constituents, and tell them that he had voted their money out of the Treasury, and given it to the people. The people of Georgia would spurn the idea of receiving the money under such cirHe had no desire to contaminate his fingers with a fund which had been drawn from the people without any necessity.

cumstances.

Mr. FAIRFIELD, of Maine, addressed the committee as follows: Mr. Chairman, it is with great reluctance that I ever rise to say any thing upon this floor, and that reluctance is increased at the present time, by the reflection that so many gentlemen distinguished for their talents and eloquence have preceded me in this debate. But, sir, I feel impelled by a sense of duty which I cannot overcome, to present my views very briefly to the committee, however far I may fall behind other gentlemen, either in the matter or in the manner of presenting it.

The gentleman from North Carolina, (Mr. Shepard,) who has just given us a very handsome speech upon this subject, commenced with an eulogy upon the deposite act of 1836. Sir, I cannot agree with that gentleman as to the character of that act, either as to its expediency, or the principles involved in its passage. Its tendency to lessen the dignity and independence of the States, by rendering them, to some extent at least, dependants upon the bounty of the General Government. Its covert and insidious introduction of an erroneous and dangerous principle into our system of legislation-the right of taxation for purposes of distribution. Its tendency to keep up, if not to raise a high tariff. The inequality in its ratio of distribution, being directly at variance with the principle of taxation recognised in the Constitution of the United States. These, to say nothing of numerous other objections to the act, stamp it with a character very different, to my mind, from that bestowed upon it by the gentleman from North Carolina. Sir, I voted against its passage, finding myself in a small minority of forty-one upon that occasion. My position was then taken after I had brought to the subject the best lights of my understanding, with the sincerest desire to learn what was true and to do what was right; and I have never seen cause to regret the result to which I was brought, nor has any thing since occurred to change, in any degree, my views of the law alluded to. Its reception by the citizens of my own State, and its operation there, certainly were not calculated to produce that effect. There was, I believe, but one voice among the democracy upon that subject. At all events, it was so in my own district. If gentlemen say that the late election in Maine indicates a change of opinion, I answer that this question, so far as my knowledge extends, was not involved in any way in the late political contest; and I will add that an election took place a few months after the passage of the law, and in my own district, at least, a most emphatic approval of my vote was given by the people. But, in passing, let me say one word upon the subject of our late election, as some gentlemen seem disposed to introduce it here, and to make it a matter of triumph, particularly the gen. tleman from Pennsylvania, (Mr. Biddle.) Let me tell gentlemen that it may yet appear that they have been "hallooing before they were out of the woods." The news of our defeat comes from an opposition course, and, in the course of my short experience, I have generally found the first accounts coming from that quarter to be inaccurate; and I feel justified in this remark by the general

incredulity which is now manifested by all parties in regard to these accounts from Maine. It may be, however, that we are beaten; but if it should so prove, and gentlemen are rejoicing over a permanent change in the politics of the State, let me say, "lay not that flattering unction to your souls." The election, if lost, has been lost by a combination of personal and local questions and interests, not involving the great political questions of the day. Maine is essentially democratic, and the democracy will yet rise in their strength, redeem the State, and effectually throw off any odium that may have been incurred in the late contest. Yes, sir, "the star in the East," though its lustre may now be dimmed, will yet shine forth with renewed and increased effulgence.

But to return to the pending question, I need not say that being opposed to the original act in its inception, and in all its subsequent stages and processes, I am of course in favor of the bill now proposing the postponement of the payment of the fourth instalment. But it is said by several gentlemen that we cannot lawfully withhold this instalment. That the States have acquired a vested right in it, by virtue of a contract. Sir, I had thought that the doctrine of vested rights had become sufficiently odious through the indiscreet use of it by its friends, without attempting to apply it to this case. The gentleman from Massachusetts (Mr. Briggs) has labored to show that there is a contract between the States and the Government of the United States, and upon the establishment of that point, seemed to consider the right of the States to the instalment as clearly made out. Now, sir, does one follow the other? It appears to me not. If it be a contract, the next inquiry is, what are its terms, and is it a binding and valid one? And for the purposes of this argument, it may be addmitted to be a contract. All bailments are contracts. This is one kind of bailment, and, therefore, a contract. It falls within that class of bailments, technically denominated in the law "deposite," which is the bailment of a thing by one to another, to be returned when the bailor calls for it. By this, the bailee acquires no right or title in the thing bailed, or to its use, but is bound to restore it when called for.

On the part of the United States this bailment of money to the States was merely gratuitous; and there was no such consideration in the case as to render the contract a legal and valid one. But it is said there was a promise on the part of the States to pay back the money, and this constituted a good consideration. Sir, as well might I set up a legal claim to my neighbor's horse-ay, to a vested right in him, because my neighbor, in the exercise of a spirit of courtesy and kindness, said I might have the use of his horse at any time, on my promise to return him. But the gentleman from New York (Mr. Sibley) has undertaken to show that there was a good consideration upon strict common law principles, and has quoted from the old books the definition of a good consideration to be, "a charge or trouble to one party, or a benefit to the other;" both of which, he says, exist in this case. The States, it is said, incurred charges and trouble in receiving and keeping this money, and the Gencral Government derived a benefit in having it kept for them. Sir, I must confess I was not prepared to hear such a position as this taken. Can it, in any sense, be said to be a charge or trouble to a State to receive a large sum of money, and use it for an indefinite period without paying interest for it? If so, I know of a great many people who would like to be troubled in the same way; and I cannot say that I should have any very serious objections to it myself. Again: how can it be said, in any proper sense of the term, that the United States Government derive a benefit from the transaction? Just look at the facts. The Government have a large surplus, which they do not want to use, lying in the deposite banks, and for which the Government is drawing in'erest. This surplus the Government withdraws from the banks, and deposites with the States, to be kept by them without the payment of interest. And this the gentleman from New York calls a benefit to the United States Government! Sir, 1 cannot conceive of a more palpable perversion; of our mother tongue.

.

But, to strengthen his position, that the charge or trouble incurred by the States constitutes a good consideration, the gentleman from New York goes on to show how the Government of his State disposed of the money after it was received, and how various expenses were incurred. Sir, is this a legitimate and proper mode of construing a contract, or for ascerta ning whether there be a legal consideration or not upon which it is founded? I think A contract, illegal or invalid at the time of its creation, cannot be purged of its illegal qualities, and made valid by any thing which may subsequently be done by either party.

not.

The gentleman from New York has also urged upon us, in an eloquent and forcible manner, the moral obligation which it is said we are under to pay over this fourth instalment. Upon this point, however, I will not occupy the time of the committee, as it has been fully and ably replied to by others. At the best, for those taking this ground, there may be said to be conflicting claims upon the same fund. That of the Government, to carry on its necessary functions and operations, and that of the States, as borrowers without interest. Which of these claims is paramount, I will leave for each member to decide for himself, constituting as he does an important part of the Government itself.

But again, in relation to the construction of this alleged contract, it is said by the gentleman from Massachusetts, (Mr. Briggs) and others, that this noncy deposited with the States cannot be called back, except in the mode prescribed in the proviso of the 13th section of the deposite act; that is, in sums not exceeding $30,000 per month. If this position be correct, then this law is not what its title imports, a deposite law, but is, in fact, with regard to some of the States, at least, a distribution. In New York, for instance, the amount thus drawn would amount to only about the legal interest on the amount deposited. So that, in about seventeen years, the claim of the United States will have become entirely satisfied, while every dollar of the principle will remain untouched in the hands of that State. Now, was this the intention of those who enacted this law? No, sir. Its friends repelled the charge that it was distribution in disguise, and strenuously maintained, while the bill was undergoing discussion in this House, that it created a deposite merely. Such also is the title of the bill. But if the construction of the gentleman from Massachusetts obtains, then this law is made what its framers never intended it should be, and will make the title as perfect a misnomer as can be conceived. Under this view, therefore, I contend that the construction sought to be fixed upon this law is incorrect, and cannot be sustained. What, then, is the true contract between the parties? The gentleman from New York (Mr. Sibley) says that the statute constitutes the contract. It appears to me to be otherwise. The statute, I admit, prescribes the contract, but nothing more. This contract is to be in writing, and its terms are set forth in the statute. What are they? The language of the statute is as follows:

"Be it further enacted, That the money which shall be in the Treasury of the United States, on the first day of January, 1837, reserving the sum of five millions of dollars, shall be deposited with the several States in proportion to their respective representation in the Senate and House of Representatives of the United States, as shall, by law, authorize their Treasurers, or other competent authorities, to receive the same on the terms hereinafter specified, and the Secretary of the Treasury shall deliver the same to such Treasurer, or other competent authorities, on receiving certificates of deposite therefor, signed by such competent authorities, in such form as may be prescribed by the Secretary aforesaid, which certificates shall express the usual and legal obligations, and pledge the faith of the State, for the safe-keeping and repayment thereof, and shall pledge the faith of the States receiving the same, to ray the said moneys, and every part thereof, from time to time, whenever the same sha'l be required by the Secretary of the Treasury, for the purpose of defraying any of the wants of the public treasury beyond the amount of the five millions aforesaid." Here, so far as regards the terms of the contract,

which is to be in writing, the statute stops. The States are to pay back, not in sums of $10,000, or $20,000, nor at any particular times, but in any sums, at any times, whenever the Secretary of the Treasury shall require it. To be sure, in a proviso to the law, the Secretary of the Treasury is prohibited from calling back the deposite except upon notice of thirty days, and then only in limited amounts, But with this the States have nothing to do, any farther than they are indirectly benefited by the regulations imposed by the Government for its own purposes. This proviso does not constitute a part of the contract, but was a restriction imposed by Congress upon the Secretary, who, they had reason to believe, was hostile to the law, and, they perhaps feared, would call back the deposite more rapidly than they might deem necessary.

But I do not take this ground, sir, because I am in favor of calling this money back from the States, so far as the deposite has been made. And here I differ with the gentleman from Georgia (Mr. Holsey) who has just taken his seat. I do not believe a vote can ever be obtained for calling it back; and, with my present views, I should not be willing to be instrumental in effecting that object. The mischief has been done, and it cannot be remedied by insisting upon a repayment of the money.

If my views of the legal rights of the parties to this contract be correct, then the only question is, whether it is expedient to withhold the payment of the fourth instalment. And, in regard to this question, I cannot conceive how there can be two opinions, except as between those who hold that a national debt is a_national_blessing, and those who hold otherwise. For we are shown, most clearly, in the report of the Secretary, that there will be a deficit in the Treasury if this instalment be paid to the States. I know that gentlemen talk about this report being a Cretan labyrinth that they cannot understand how there is to be any deficit; that they are in à mist and cannot see clearly. Sir, is the Secretary to blame for this? If gentlemen are groping their way in the mists of error, let them make haste to reach those elevated grounds, where the clear sunlight of truth will chase away all mists, and enable them to see clearly. The report of the Secretary appears to me to state the facts in a manner perfectly clear and intelligible, so that he who runs may read. These facts have also been placed before us in different modes by the gentleman from Virginia, (Mr. Jones,) and by the gentleman from Georgia, (Mr. Holsey,) all arriving at the same result, and showing, most conclusively, that if this instaliment be paid over, there will necessarily be a deficit in the Treasury. The only question then is, whether we shall resort to a loan to raise money for the purpose of depositing it with the States. Sir, what would be thought of the man who should hire money from one bank for the purpose of depositing it in another without interest? Would he not be regarded as a fit subject for an insane hospital? And why should we not be exhibiting a similar spectacle, by refusing to pass this bill, and resorting to a loan to raise money for deposite with the States?

ment.

In every view which I can take of this case, it seems to me that a postponement of the payment of this instalment is called for by every consideration of common sense, prudence, and patriotism. But shall the postponement be indefinite, as by the bill, or to January, 1839, as proposed by the amendment? Sir, I prefer the bill without the amendWe are told here of the disappointments to which the States will be subjected by withholding this money; how it will thwart their plans and multiply the troubles which are already sufficiently abundant. I ask, then, if we should not by adopting the amendment be probably subjecting the States to the same disappointments and troubles over again. If we fix a definite time when the instalment is to be paid, will not States go on as heretofore, laying their plans, and arranging their affairs in correspondence with such holding out on our part? And if so, will they not be destined to disappointment? For one, sir, I trust that such a policy is to be pursued that we are to have no more large surpluses; that the people are no longer to be taxed that Go

vernment may be enabled to return to them again the amount thus levied, deducting a large propor tion of it for expenses, losses, etc. The gentleman from North Carolina, (Mr. Shepard,) regrets the disagreeable scrambles that have been witnessed for appropriations for internal improvements in the States, and yet is in favor, as it seems to me, of a policy whose necessary tendency is to renew those scrambles. Go on with your system of division, and you directly and powerfully strengthen the motives to create a surplus; and whenever there is a surplus, there will be witnessed a disagreeable scrambling for its possession. Sir, I dread a surplus nearly as much as I do a national debt. Neither of them are compatible with the interests of our people. The one imposes taxes, and often very unequally, to pay interest and the salaries of a horde of petty officers; while the tendency of the other is to corrupt all the streams of legislation, and to generate a low and mercenary spirit among the people. I would then avoid them both. Let the Government be administered in plain republican simplicity and economy. Let no more money be abstracted from the pockets of the people, either directly or indirectly, than is wanted for this purpose; and let the States preserve their dignity and independence, by relying upon their own resources for internal improvements or other objects, instead of being humble suppliants for the bounty of the General Government. But, sir, I have detained the committee much longer than I had intended, and will now close, thanking them for the attention which they have given me

Mr. PARKER said it had not been his intention to take any part in the discussion of this bill, and he should not now do so, if he had not learned from the remarks of his colleague, (Mr. Sibley,) that some of the delegation from the State of New York entertained on this subject sentiments very different from his own. He therefore considered it a duty he owed to his constituents, as well as his colleagues, to state briefly to the committee the reasons that would induce him to vote in favor of the bill.

It has been said, Mr. Chairman, by the honorable gentleman from Tennessee, (Mr. Bell,) that this measure has originated in a settled hostility to the deposite act of 1836. I do not know, sir, what facts within the knowledge of that gentleman may have led him to that conclusion, but I am bound to say no such inference can be fairly drawn from the history of the deposite act, or of the bill now under discussion. That act was passed on the 23d of June, 1836, and during the whole session which intervened between that time and the present, no effort was made by the administration or its friends to repeal any portion of it. Since the close of the last session, the revulsions and pecuniary embarrassments, so prevalent throughout the commercial world, have reached even the finances of the Government. The revenue arising from duties has been greatly diminished, and the sales of public lands lessened. The Treasury has become nearly exhausted, and we are expressly told by the Secretary of the Treasury in his report, that the funds in the Treasury on the 1st October next will be entirely insufficient for the pa: ment of the fourth instalment under the deposite act. Such is the state of the finances of the United States, that the Secretary of the Treasury finds it necessary to recommend the issuing of Treasury notes to meet temporarily the expenses of Government. With all these facts before me, sir, I am led irresistibly to the conclusion, that the measure origi nates from the actual necessity of the case, and not from any hostility to the deposite act. may be the fate of this bill, therefore, the fourth instalment cannot be paid. There are no funds to meet it.

Whatever

But it is said by some honorable members of this committee, that it is the duty of Congress to authorize a loan for this purpose. I admit this is the only alternative; and the consideration of this proposition involves questions of a most grave and important character.

In the first place, it is very doubtful whether Congress have power to borrow money for such a purpose. The eighth section of the Constitution

gives to Congress "the power to borrow money on the credit of the United States." Taken in connection with the tenor of the other provisions, it seems fair to infer the true construction to be, that money may be borrowed to pay the debts, and provide for the common defence and general welfare, of the United States. It cannot be supposed that the framers of that instrument intended this power should be exercised in the manner proposed--that money should be borrowed-that a national debt should be created, for the sole purpose of depositing the money with the States. A strict constructien of that instrument would hardly warrant such an inference.

But, sir, even if such a law were not unconstitutional, it would be a precedent entirely new, and in my opinion, of the most dangerous tendency. The act of 1836 only proposed that a surplus actually in the Treasury should be deposited with the States. A very different question is now presented. We are now asked to go a step farther, and borrow money for that purpose. To borrow money and pay interest on it, and loan it to the States without interest. If nine millions may be borrowed by the General Government for such a purpose-if this principle is once established by such a precedent-loans for hundreds of millions may yet be effected for distribution among the States. Sir, this would be an alluring bait-a golden prize. It would endanger the independence of the sovereign States. It would place them in a situation of dependence on the General Government incompatible with their true interests, if not with their separate existence; and these immense debts of the General Government could only be paid by an excessive tariff, or by other direct or indirect taxation of the people.

But it is said by some, that withholding this instalment is a breach of contract; and by others, that it is a violation of good faith towards the States. On this point, Mr. Chairman, I am compelled to dissent entirely from the honorable gentlemen who oppose this bill. There is no debt existing from the General Government to the States. The act authorized no distribution of money-it was merely a deposite. It is so expressed in the act of 1836; it was so urged by its supporters at the time; and it was so recognised in the acts of the Legislatures of the several States by which their consent was given to the acceptance of the deposites. It has been said by my colleague on my left, (Mr. Sibley,) to be a rule of law, that where an arrangement is made of such a nature as affords a benefit to one party, and imposes a burden or trouble on the other party, there is a good consideration, and a valid contract is created; and he applies this doctrine to the case under consideration, by saying that the General Government were to enjoy the benefit of having their funds kept safely by the States, and the several States were subjected to the trouble of taking charge of, and loaning out, the money; and he proceeded to say, that the State of New York had expended nearly two hundred thousand dollars in passing the act of acceptance, and in paying the expenses of loaning the money to the different counties of that State. If, sir, this common law doctrine is correctly stated, it cannot be applicable to the case under consideration. The General Government derive no benefit from the transaction, for they receive no interest on the sums deposited; and the State of New York will complain of no trouble imposed, when the interest which it actually enjoys on the sum already deposited with that State, amounts annually to nearly double the sum alleged by the gentleman to have been expended.

No agreement has been made between the General Governinent and the States, except in regard to the money already deposited; and, on receiving that money, the States severally agreed to refund it whenever required by the Secretary of the Treasury. No act has yet been done by the States by which they hold themselves responsible for the fourth instalment. They have only signified their willingness to accept it; and if the condition of the Treasury is such that the deposite cannot be made, there is surely no contract broken-no violation of good faith.

But admit for a moment that there is a contract, a substantial contract, invested with all the legal forms, and three-fourths of it executed on the part

of the General Government. If the fourth instalment can only be paid by committing a palpable violation of the Constitution, or by a disregard of principle, which would endanger the safety and welfare of the States, as well as of the General Government, such a contract would be void by the well settled rules of law, as well as by the acknowledged principles of justice.

In the course of this debate it was said by my colleague on my right (Mr. Foster) that postponing the fourth instalment will operate more injuriously upon the State of New York than on many of the other States. I have great reason to doubt the correctness of this conclusion; but I should undervalue the patriotism of the people of my State if I supposed they would not cheerfully submit to inconvenience under such an emergency. I know my own constituents too well to believe that they will expect their representative on this floor to vote for a measure fraught with so much danger.

On the 31st day of July last, a circular was issued by the Comptroller of the State of New York, stating that he had made arrangements to borrow money from the Erie and Champlain Canal fund to supply any deficiency that might exist in case of the non-payment of the fourth instalment; and that the holders of certificates-all of whom had executed mortgages for the full amount— might rely on receiving their money on the first Tuesday in October. Of course the people of that State will not be disappointed in receiving their money according to their certificates.

But my colleague proceeded to say that the State banks who have a portion of this Erie and Champlain Canal fund on deposite would be required to furnish the requisite funds from their vaults, and must, of course, call upon their debtors and curtail their discounts to that amount, and thus produce serious embarrassment. This cannot be the case to any great extent, for more than ninetenths of the money borrowed by the people on bond and mortgage under the late act is paid immediately to the banks. It is borrowed, in most instances, for the very purpose of paying bank debts. It is changing the indebtedness from the banks to the State, and on much mo aredvantageous terms. In place of a credit of ninety days from the bank, the borrower obtains from the State a credit of at least one or two years, and that portion borrowed from the canal fund will not be called in till 1845.

The canal fund will also be the gainer by this arrangement; its moneys on deposite in the banks draw only 4 and 5 per cent. interest; but that portion taken to supply the present deficiency, will draw 7 percent. thus adding to that fund more than thirty thousand dollars per annum over and above its present receipts, without exacting from the borrower any more interest than would be paid if the United States Treasury had furnished the money.

How much soever, therefore, we may all regret the inability of the General Government to deposit the fourth instalment with the States, according to its original design, I cannot admit that its being postponed will operate with so much severity upon the people of New York as has been represented on this floor.

The honorable gentleman from Ohio, (Mr. Loomis) in his zeal to defeat the passage of this bill, took occasion yesterday to speak with great freedom of what he is pleased to denominate "New York politics," and said that the measures of the President, and of the administration party in that State, have been of a bold and daring character. Among other instances cited by that gentleman, he asserted that "a bill had been urged through the Legislature of New York, in the short space of a few hours, pledging the faith of the State to the amount of six millions of dollars, for the purpose of sustaining the local banks."

The act, Mr. Chairman, to which he proba bly refers, was passed in the spring of 1834, during the famous panic which the honorable gent'eman cannot yet have forgotten. At a time when the expiring agonies of the late United States Bank convulsed the business world to its very centre; when that powerful minstitution was attempting to extort from the fears of the public, what the calm deliberation of the American peo

ple had denied it-its recharter; when panic speeches were made on this floor, aud echoed through the bank-bought presses of the country; when doubt and dismay were pictured upon the countenances of a large portion of the community. It was then, sir, that the capable and efficient Chief Magistrate of New York, in a special message, submitted to the Legislature the project alluded to, and that body passed the law by an unusually large majority, not in the space of a few hours-promptly I admit-but after due deliberation and reflection.

By that law the State interposed its credit as a shield between the United States Bank and the people. Its object was to restore confidence, and that object was fully attained by it, without the necessity for borrowing or loaning out a single dollar by virtue of its provisions. I think the honorable gentleman cannot have forgotten that this law encountered the most bitter opposition from the political party to which he belongs. It was called by that party "Marcy's Mortgage," and the people were told by the opposition press, that their farms were mortgaged to the amount of six millions of dollars. But, sir, it was a senseless and unavailing clamor-vox et preterea nihil; for in about six months after the enacting of that law, Governor Marcy was re-elected to the executive chair, by a majority of nearly thirteen thousand votes.

So far as the act referred to operates as a precedent, it is against the position assumed by those who oppose this bill. It shows that the power of borrowing money to loan out to the people, may be properly exercised by the States. It does not show that that power has been conferred on the General Government.

I am happy to perceive, sir, that the old and stale cry of "non-committalism" is now abandoned by that party which the gentleman from Ohio represents; but before he charges upon our distinguished Chief Magistrate and his supporters in his native State, that their measures are too bold and decided, he ought to have examined into the effect of those measures in that State. He would have found that it was under the influences of the party composed of the President's political friends, that the resources of that State have been developed-that her forests have become cultivated fields, and her villages have grown into cities-that her great works of internal improvement have been projected and constructed-that her banking institntions have been regulated and restricted, and the safety fund system adopted, affording more ample security to the public, than any other system yet devised. In short, he would have found that it was under administrations of the same political character, that New York has become what the honorable gentleman thought proper to call her, the "Empire State." If the gentleman had rightly understood "New York politics" and "New York politicians," he would perhaps have formed a higher estimate of the wisdora of their measures and the correctness of their principles.

Mr. Chairman, I have already occupied the attention of the committee longer than I intended. I am constrained, by a thorough conviction of duty, to vote for this bill. I should prefer it without the amendment offered by the gentleman from South Carolina, (Mr. Pickens,) because I do not think that amendment postpones the fourth instalment sufficiently long to enable the public finances to meet it, and because I am unwilling to see the expectations of the States again disappointed. But I shall vote for the bill, whether the amendment be adopted or rejected.

Mr. SMITH then took the floor, and several members calling out "rise," "rise," Mr. S. made teat motion.

Mr. CAMBRELENG, understanding that Mr. S. had withdrawn the motion, said he would mention some circumstances that, he thought, might induce a more speedy action on the various bills now in Committee of the Whole. He said that, unless they acted on some of those measures, in one week, the Treasury would be stopped for want of funds.

Mr. SMITH here interposed, and said he had not withdrawn the motion or yielded the floor. He said he himself had no personal wish on the matter of the rising of the committee, but had

made the motion from the expressed wish of seve

ral members.

Mr. CAMBRELENG hoped the committee would not rise at that hour, at all events.

The motion, however, prevailed, and the committee rose and reported.

The SPEAKER laid before the House a report from the Secretary of the Treasury, of the amount of appropriations and expenditures for the current year; which, on motion of Mr. BRIGGS, was laid on the table, and ordered to be printed.

Mr. PATTON then moved that the House adjourn.

Mr. CAMBRELENG called for the yeas and nays, which were ordered, and were-yeas 96, nays 85.

So the House adjourned.

IN SENATE,

SATURDAY, September 23, 1837.

A message was received from the President of the United States, enclosing a report from the Secretary of War; which was ordered to lie on the table, and be printed.

Mr. CALHOUN presented a petition from citizens of Mobile, praying the establishment of a national bank.

Mr. SWIFT presented two memorials from citizens of Vermont, remonstrating against the annexation of Texas.

ORDER OF THE DAY.

The Senate then took up, in committee of the Whole, the bill imposing additional duties on certain officers, as depositories in certain cases. Mr. CALHOUN'S amendment being under consideration

Mr. KING of Georgia addressed the Senate in a speech of upwards of three hours' length. He said there appeared two projects before the Senate; the one was the deposite system of 1834, and the other in relation to a divorce from all banks. Mr. K. professed himself not altogether in favor of either. The magnitude of the questions, and the great interest involved, made it rather incumbent on them, in his opinion, to postpone the whole subject until an opportunity could be had to commune with their constituents, and learn their wishes upon the relative merits of the antagonist questions.

The deposite system had never been a favorite of his, and he had, at the very onset, predicted, step by step, all the evils that had resulted. Mr. K. here made some allusions to certain banks in the South, that had despatched agents to New York with specie for certain purposes, which banks had realized immense profits out of the laboring classes. Such institutions, he thought, were beneficial to no class save the large capitalists, and were not likely to be reached by the fluctuations incident to their mismanagement.

The idea that had been held out of putting down banking capital by sacrificing the Bank of the United States, was as preposterous as the idea of a certain president of a temperance society, who proposed to prostrate a respectable grocer in Chestnut street, on whose ruin five hundred grog shops were established in the Northern Liberties. He had been opposed to the deposite system from its commencement, though some of its friends were induced to believe it had not a fair trial; he was not prepared to say that if the banks had been let alone, and not been tormented and tampered with as they were, they might have done better; though, in his opinion, they never would have constituted so safe and politic a depository of the public revenue as the national bank. It was experiment after experiment that had sunk the currency to its preseat degradation, and no nation ever had or could survive such trickery, if it were tried to the end of time.

The gentleman from Missouri (Mr. Benton) had said that his was not an experiment. He had collected a mass of historical facts, on which date he had based his position. He has told us of the free and enlightened empires of Rome, Turkey and Spain, and of Roman heroines, an 1 of that great lover of national liberty, Napoleon. He could tell the gentleman that he had read a little Roman history, though he did not pretend to be as well versed in historicalilore as his friend, and from what he had read the Romans would be the last people

he would quote to sustain any position. They were the plunderers and murderers of the human race, which for aught he knew might have been a part of their financial system. As for Napoleon, who found his coffers empty on his ascendancy to the throne, and had them soon filled to redundancy, how did he effect it? Let the blood and tears of the German States answer; let him look to the plunder of the bank at Antwerp, one of the most commercial and free cities of Europe. Possibly he (Mr. K.) might have voted for the bill as amended; but really the reminiscences of his friend from Missouri had "frighted him from his propriety," and made him more than ever wish the whole subject postponed until the regular ses

sion.

It was the duty, he said, of every Senator, on a momentous question like the present, to give his free, unbiassed opinion. Though he had not time to look into the subject as he ought, he had not, like his friend from North Carolina, (Mr. Strange,) taken for granted the views laid down by the President. As to the causes of the distress, as set forth by this high functionary, he confessed himself never more astonished than when he saw them. Mr. K. said he did not embark in the business before him with any very pleasant feeling. He had helped the present Executive by his vote to the place he now occupied: that step he did not regret; and he hoped he might still be able to sustam him. Mr. K. said he must express his regret, however, that the President had not taken the trouble to make himself acquainted with the facts in the case; and he regretted that cur public men should prepare their State papers so loosely. The whole Message appears to him to be made up from stump speeches, paragraphs of editors of newspapers, and saws from quack politicians.

It never occurred to the President that the administration might have been the cause of all the mischief. [Mr. K. here read parts from the President's Message. This he said was very pretty, very captivating, but, unfortunately, there was not one word of truth in the whole matter. So far from the issues of the English banking establishments proceeding pari passu with those of the United States, it was proved, from the most undoubted authority, that from the first of January, 1834, to the same month in 1837, the increase was not more than one and a half' per cent. say about four hundred thousand pounds, while the increase in the United States was upwards of one hundred millions of dollars. In England there was a remarkable increase of trade, while there was no speculative rise of prices. In this country it was widely different. While every thing was advancing in price, we were importing largely from England-importing specie on credit, when we had nothing to pay with, and which went into banks to increase the paper issues, thus keeping up an unnatural state of exchange. Mr. K. read extracts from evidence taken before the British Parliament, to show that there had been a gradual increase in the value of money, which was accounted for by the vast exportation of bullion from the British shores. There was a great increase of wealth in England, while there was not a corresponding increase of money. This could not be accounted for at the time, but had they known that we had been increasing our issues at the rate of two hundred per cent. and dealing with them at the same rate we did on credit, their surprise at this state of things would have vanished in a moment.

As soon as the United States Bank was prostrated, banks sprung up all through the country like magic. The bank system, he admitted, had been abused, and he was ready to grant that the Senator from Missouri had not overrated that abuse in his remarks; still he was willing to concede that some were honest and faithful among them, and he could not bear to hear that torrent of abuse and invective that had been lavished indiscriminately against them all. Their issues were called paper trash, rags, shin-plasters, and the like; but would they not buy as much now of any articles in market as they would beforeprovisions, clothing, land, houses, etc.? Could not this money be loaned out at a higher rate of interest than it could be before the suspension?

He did not think, if gentlemen had their notes in possession, they would conceive them altogether so worthless as they were disposed to represent them. The great object to be gained was to reach the evil of the system. As well might gentlemen undertake to make a full-grown, rational thinking man, with mortar and pestle, as to regulate currency by the iron hand of Government. It was that attempt which had produced the ills we were now laboring under, the effects of which were tremendons. Mr. K. here went into an argument to show how detrimentally the Specie circular had operated in counteracting the natural course of trade, and that the New York merchants, to their eternal honor, had paid thirteen or fourteen per cent. for money, rather than run upon their banks, when so much of the specie had been abstracted to send to the West. The measure, he said, had been opposed in the cabinet, and in both houses of Congress; yet the President had taken it into his head, that whoever opposed his political plans were conspiring against him, and hence had determined to persevere in his scheme. It was understood as a boon to the West, though the people of that section of country were unpatriotic enough not to thank him for it; and he must confess, for himself, that he would not like to be fuddled even with Champagne. Yes! it was this Specie circular, that had struck down this young and vigorous Republic; had rendered bankrupt her merchants, had ruined the planters, and thrown two thirds of the laborers of the country out of employ; yet this was what the gentleman from Missouri termed that "ever glorious Specie circular!" He thought glory must have depreciated in a more fearful ratio than the bank ragg against which the gentleman vented so much of his spleen.

He [Mr. K.] could but express his astonishment and regret at the remark of the gentleman from South Carolina [Mr. Calhoun] that the United States Bank of Pennsylvania might restore specie payments, but he was unwilling to employ it as an agent, because it would afford that bank a triumph over the Government!" What Government? did the gentleman mean the Government at the Hermitage, or the White House?

He professed himself shocked at such a remark, and asked if the blood of '76 had all evaporated, that he was induced to believe more grey hairs had made their appearance on the head of the Republic within the last five years than might have been expected in a century. Mr. K. said he was a democrat in principle, and did not use the term as

a catchword; they would never find him with democracy on his tongue and federalism in his heart. He owed every thing to the republican party, and had no sympathies with any other. He had found it necessary to take a stand against Executive encroachments, and wanted his friends to rally with him. The Executive financiering which this country had been subjected to within the last few years, was such as no nation ever had, or ever could, prosper under, and if the present President was determined to tread in the same footsteps, he for one would try to jostle him. So long as the banking system of the country remained as it did, to return at any time to a pure metallic currency would confiscate more than one-third of the property of the nation. Specie vanished, it was no used as currency, but was had found in the hands of brokers and large capitalists, where it was kept as a commodity for barter. Under such a state of things, to compel an entire specie circulation would be to make ruin and desolation stalk through the country. Although he was a hard money man in principle, and had as much antipathy as any man could have to the multiplication of banks, yet he thought there had been a great deal of unreasonable clamor against these institutions; they were doing all they could to bring about a healthful action, and had already reduced their circulation a hundred millions since the suspension of specie payments. To bring the power of the Government to bear upon them now, would be to ruin the people. Mr. K. moved to postpone the whole subject until the regular session.

Mr. STRANGE replied to the various arguments urged by Mr. King in relation to the recoin. mendations of the President's Message, and the causes given therein as having produced the exist

ing distress. He contended that neither the measures of the late administration nor of the present had led to a derangement in the currency, and originated all the difficulties under which the country was now suffering. He maintained that the banking operations of England, as well as those of the United States, had brought them about. He defended the course pursued by the President in having brought forward his measures for the relief of the country. He said that if the Executive had not done so, we should have heard much of his being non-committal, and not evincing a disposition to afford some cure for the existing evils. The gentleman from Georgia had argued that it was the duty of the Executive to follow, and not to lead. This position he (Mr. S.) begged leave to controvert. It was the constitutional duty of the President to lead, instead of to follow.

Mr. KING of Georgia made a few explanatory remarks in reference to what he had before said.

Mr. NILES replied at some length to the remarks of the Senator from Georgia. He denied that the Message was not based on correct information, and contended that the very arguments of the Senator himself proved that the President was right in all his deductions.

રી

Mr. TIPTON said the question now under consideration was of so much importance to the people of the State from which he came, that he felt it to be his duty to claim the indulgence of the Senate while he gave his views on some of the topics that engage public attention at this time. In time of profound peace, surrounded, as we thought, by all the elements of prosperity, we are suddenly overtaken by a wide spread calamity, our commerce crippled, public credit injured, private fortunes ruined, and the public treasure bankrupt. The late session of Congress had but just closed; the members had scarce reached their homes, when we were summoned to return to this city to legislate the Government out of its difficulties; and we find ourselves here in September, instead of December, engaged in deliberating on the mode and manner of relieving the distresses of our country. The inquiry naturally addresses itself to every mind, why is this so, what has produced it, and what the remedy to be adopted. The honorable Senator from South Carolina, (Mr. Calhoun,) when he proposed his amendment to the bill under consideration a few days ago, told us that this question should be met boldly, manfully; to use his own words, let every one, said he, show his hand. I, said Mr. T. respond to the noble sentiment of the honorable Senator; the question should be met boldly and fairly; it is a time of deep anxiety with the people; there should be no skulking among their public servants, every one should speak freely of the causes which have produced the present embarrassment, and act promptly on measures to relieve the people.

It was his opinion that the putting down of the Bank of the United States was the first step to the present embarrassment. The transfer of the public deposites from that bank to the local or State banks, stimulated these institutions to extravagant issues, far beyond their ability of redemption. They discounted notes on the public deposites, extending their lines of discounts beyond the bounds of prudence. The people in the neighborhood of the banks, finding that bank accommodations could be had with great facility, entered largely into speculations in public lands, town lots and other property. Extravagance in living as well as in dressing, increased their indebtedness. In a word, sir, said Mr. T. the whole country overtraded, ceased to labor, and contracted debts beyond their ability of payment. Speculations were uppermost in the mind of every one.

The Executive of the United States, seeing the public domain rapidly exchanging for credits on the books of the banks, by the process I have described, determined to check it, and issued his Treasury order of the 11th of July, 1836, directing the receipt of nothing but gold and silver in payment for the public lands. Under the operations of this order, those engaged in the purchase of public lands had to procure bank paper, draw the specie from the banks, and transport it to the land