tion to be able to add that, while so selected and employed, not a single dollar was lost to the Government by any of them, nor a single failure occured to transmit promptly, and pay out satisfactorily, the public money intrusted to their care." "Nor is it believed that the domestic exchanges of the country were ever lower or more regular than during that period."

These assurances in favor of the State bank system were made to the country near the close of the late administration, and in the last annual communications of its high functionaries, after the practical effects of more than three years' experience had tested their truth, which gives as much force to the opinions expressed as can be imparted. This is not all. The Committee of Ways and Means, during the session of 1834-'5, consisting of Messrs. Polk, (now Speaker,) Wilde, Cambreleng, Gorham, McKim, Binney, Loyall, McKinley, and Hubbard, six of them decided friends of the administration, in their report upon this very subject, evidenced their decided preference for the State bank system in the second and third resolutions which they reported.

“2d. Resolved, That the public deposites ought not to be restored to the Bank of the United States."

"3d. Resolved, That the State banks ought to be continued as the place of deposite of the public moneys; and that it is expedient for Congress to make further provisions by law, prescribing the mode of selection, the securities to be taken, and the manner, and terms on which they are to be employed.

These resolutions were sustained by a very able, and, to my mind, unanswerable argument. It is true, the committee did not enter into a comparison between this and the sub-Treasury system, which has suddenly grown into such high favor, because then it had not merit enough to command the favorable consideration of the friends of the administration, as was proved at the next session of Congress, by a unanimous vote, (save one,) when the scheme was presented by Mr. Gordon.

Mr. Benton, a Senator from Missouri, and distinguished friend of the late and present administrations, in a speech delivered by him, in the Senate of the United States, on the 2d of June, 1834, on the subject of the restoration of the deposites to the Bank of the United States, ably vindicated the State bank system, and defended the State banks against the various attacks of the opposition. I here quote his remarks upon that occasion:

"Mr. BENTON proceeded to state several reason, and to urge many considerations in favor of adopting it. He deprecated the spirit which seemed to have broken out against State banks, and said that it augured badly for the rights of the States. The strongest current of consolidation which was now observable in the Union, was that which set in favor of the federal bank and against the State banks, and threatened to consolidate all moneyed power, and with it all political power, in favor of a great central institution, independent of the States, and able, by its own avowal, to crush the State institutions at its pleasure. He said this spirit against the State banks was an impulsion of modern origin-unknown to the fathers of the Republic, and to the early history of the country, and strongest, now where the spirit of consolidation was strongest and where the defence of States rights was weakest. At the commencement of this Federal Government, (said Mr. B.) | there was no federal bank, and all the public moneys were kept in State banks, or drawn direct, and as fast as they were received, out of the hands of receivers and collectors. General Hamilton, when Secretary of the Treasury, kept the public moneys, for the first year of his administration, in these banks, and kept them safely there. When the federal bank was proposed in 1791, and the keeping of the public moneys was one of the services attributed to it, Mr. Jefferson, then a member of President Washington's cabi

[H. OF R.

net, denied the necessity of a federal bank for any such purpose, and openly declared himself in favor of the State banks. He said that these banks had already done this business for the Government, and done it well, and would, no doubt, enter into arrangements with the Treasury for doing it permanently, and on better terms than it could be done by the federal bank. Mr. B. read an extract from Mr. Jefferson's cabinet opinion, delivered to General Washington at the creation of the first federal bank to sustain what he said of his opinions. The extract was in these words.

"The existing banks will, without a doubt, enter into arrangements for lending their agency; and the more favorably, as there will be a competition among them for it; whereas, the bill delivers us up bound to the national bank, who are free to refuse all arrangement, but on their own terms, and the public not free, on such refusal, to employ any other bank. That of Philadelphia, I believe, now does this business by their post notes, which, by an arrangement with the Treasury, are paid by any other State collector to whom they are presented. This expedient alone suffices to prevent the existence of that necessity which may justify the assumption of a non-enumerated power as a means for carrying into effect an enumerated The thing may be done, and has been done, and well done, without this assumption. Therefore it does not stand in that degree of necessity which can honestly justify it."

one.

"Mr. B. said, that what Mr. Jefferson affirmed in 1791, was afterwards proved under his own administration, and that of Mr. Madison. During the whole of their administrations, a large portion of the public moneys was kept in the State banks, and safely kept there. Mr. Gallatin, in answer to a call made by the House of Representatives, some time before the expiration of the charter of the first bank, showed that the public moneys were then kept in twenty different banks, of which nine were the United States Bank and its branches, and eleven were State banks! Mr. B. thought this point so material, that he would read an extract from Mr. Gallatin's report, to show that he neither overstated nor mistook the facts. He then read the names of the State banks employed by Mr. Gallatin, and the amount of public money in each. They were the Bank of Columbia, $115, 192; the bank of Alexandria, $61,917; the Bank of Newport, Rhode Island, $35,788; the Bank of Pittsburg, $137,462; Roger Williams's Bank, $53,882; the Bank of Pennsylvania, $92,628; the Bank of Saco, $28,528; the Manhattan Bank, $188,670; the Bank of Maine, $50,747; the Marietta Bank, $19,601; and the Bank of Kentucky, $91,061.

"Such, said Mr. B., was the distribution of the deposites of the public moneys in the time of Mr. Gallatin; more State banks employed than the whole number of branches, and the mother Bank of the United States put together! In several instances, a State bank was employed in the same place in which a branch of the federal bank was situated, and some of those employed then are employed now. Of this class, Mr. B. instanced the Manhattan Bank of New York, and stated that the stock of this bank was, at this day, about twenty dollars in the hundred higher than the stock of the United States Bank! And this after all the efforts which had been made to shake public confidence in the State banks, and especially those of New York. The Bank of Alexandria, which, he said, had lately stopped, with a small amount of public money in it, and the payment of which is secured, was also in the list of Mr. Gallatin's deposite banks, and had double as much money in it in his time, as when it lately stopped. That bank had been a deposite bank for forty-five years, and the Govern→ ment had lost nothing by it, notwithstanding the attempt lately made to delude the public with a belief that it had just been selected by Mr. Taney, and had immediately, failed, with an immense loss to the United States.

“Mr. B. said it was thus proved, by an experience of twenty years-an experience running through the whole of the administrations of Jefferson and Madison, and a part of their predecessors-that the public moneys may be safely kept in the State banks; and that Mr. Jefferson was right in his cabinet opinion of 1791, when he gave it as his solemn opinion to President Washington that there was no necessity for chartering a federal bank to act as the fiscal agent of the Federal Treasury, and that the State banks would enter into arrangements for that purpose, and do the business well!

"Mr. B. said it was true that the Federal Government had since lost about a million and a half of dollars by State banks; but that loss took place in a season of universal embarrassment, growing out of a state of war and general stagnation of trade and commerce; a season which cannot be made the rule for judging State banks, without extending it to the federal bank also; and then it would be fatal to that bank, for the United States lost about eleven millions of dollars in sustaining the present federal bank in the same season of embarrassment, and saving that bank from sharing the general fate of the State institutions. This statement, Mr. B. said, was one of those facts which it was good to prove; and, as the proof was in the documents of the Senate, he would use it, and extinguish at once this delusive and deceptive comparison between State banks and the federal bank.'

Mr. Benton was sustained in his preference for the State banks by Mr. Wright, of New York. The present Speaker of the House, in a speech delivered by him on this subject, on the 20th of June, 1834, ably vindicated the State bank system, in the course of which he made the following remarks: "The State banks, then, are to be employed, either under our law as it exists, or under the law as Congress may modify it.

The bill before us proposes modifications, limiting and defining, with more precision than has heretofore been done, the Executive discretion and power. It is tendered to the House, and especially to those who have raised the cry of a union in the President of the sword and the purse, when, in fact, he possesses neither. The present Executive does not desire, and never has desired, to retain any discretionary power in the execution of the laws, which, from its nature, is susceptible of being defined by law. The Executive, and his friends upon this floor, who sustain him in the recent executive measure of the removal of the deposites, desire to see him, and not only him, but his successors in the executive office, relieved from the responsibility of exercising discretionary power in relation to the safe-keeping, management, and disbursement of the public money, as far as, by legislative provisions, it can be done. The bill which has been presented contains provisions suited, in the opinion of the committee who prepared and brought it forward, to attain this end. I have invited gentlemen who may think its provisions inadequate, or who may suppose that too much power is still left in the hands of the Executive, to come forward with their modifications, still further limiting and confining his power. If they will neither accept this bill, nor propose to amend and make it more perfect, the conclusion must be, that they prefer the law as it is to any new legislative provision. If they do not co-operate with us in perfecting and passing this bill, the conclusion will be irresistible that the charge which has been made against the President, of a desire to seize upon powers which do not belong to him, was designed to produce an erroneous impression upon the public mind, and is wholly unfounded in fact; that they prefer the existing laws to any amendments which can be made; and, in a word, that the real purpose to be effected by all the violent and impassioned appeals which have been made, charging him with usurpation, was to operate upon the public, with a view to procure a continuance of the present odious bank monopoly."

[SEPT. 25, 1837.

In relation to the sub-Treasury scheme, offered by Mr. Gordon, which seems to be the pioneer of the present, in the same speech, Mr. Polk said:

"Unless the States, and the United States, should both deem it proper, gradually, and in the end entirely, to dispense with the paper system, and which result is not anticipated, the Government cannot escape occasional losses from that quarter, and can never hope to escape all losses from banks as fiscal agents, except by the employment, in their place, of other and individual agents, who will probably be found less responsible, safe, convenient, or economical.

"He concedes that it would be practicable to employ such agents, but does not recommend it, for the reasons stated in the paragraphs of the report which I have read, and because it would not, in the present condition of things, be so eligible a system as the present one.'

"A corporation may be safer than any individual agent, however responsible he may be, because it consists of an association of individuals who have thrown together their aggregate wealth, and who are bound, in their corporate character, to the extent of their whole capital stock, for the deposite. In addition to this, the Secretary of the Treasury may require as heavy collateral security, in addition to their capital paid in, from such a corporation, as he could from an individual collector or receiver, which makes the Government deposites safer in the hands of a bank than it could be with an individual.

"It may be well questioned whether the heaviest security which the most wealthy individual could give, could make the public deposite safe at the point of large collection. In the city of New York, half the revenue is collected. Several millions of the public money may be in the hands of a receiver at one time; and, if he be corrupt, and shall engage in speculation or trade, and meet with a reverse of fortune, the loss sustained by Government would be inevi table.

With ample security, as it was supposed, the Government lost a million or more in the tea case, a few years ago. The losses in three cases alone, as already stated, in 1827 and 1828, when it was supposed ample care had been taken to secure the debt, amounted to near two millions. As then, between the responsibility of a public receiver and bank corporations, as banks do exist, and are likely to exist, under State authority, the latter, upon the ground of safety to the public, are to be preferred.

"Banks, when they are safe, recommend themselves to the service of the Treasury for other reasons:

"1. The increased facility they possess over individual collectors or receivers, in making transfers of public money to distant points for disbursement, without charge to the public. Indeed, this is a service which individuals, to the extent of our large revenues, could not perform.

2. It may happen, in the fluctuation of the amount of revenue and expenditures, that there will be, at some times, a considerable surplus in the Treasury; which, though it may be temporary, if it be withdrawn from circulation, and placed in the strong-box of a receiver, the amount of circulation will be injuriously disturbed, by hoarding the deposite, by which the value of every article of merchandise and property would be affected. So that, inasmuch as we cannot anticipate or estimate what the exact amount of revenue or expenditure may be from year to year, there may occur an excess of revenue in the Treasury, not immediately called for to be disbursed, which it would be very inconvenient to abstract from trade and circulation. Whilst

the deposite is in a bank, the bank may use it, keeping itself, at the same time, ready to pay when demanded, and it is not withdrawn from the general circulation as so much money hoarded and withdrawn from the use of the community.

"If in the hands of receivers, they must either hoard it, by keeping it locked up in a strong-box, or use it, at their own risk, in private speculation or trade; or they must, for their own security, or on their own responsibility, place it at last on deposite in banks for safe-keeping, until they are called on by the Government for it.

"This temporary use of the money on deposite in a bank constitutes the only compensation which the bank receives for the risk of keeping it, and for the service it performs. If receivers be employed, they cannot perform any other service than to keep the money, and must be paid a compensation from the Treasury.'

These evidences, added to the fact, that upon the question of adopting the sub-Treasury plan proposed by Mr. Gordon, every friend of the administration, save one, (Mr. Beale, of Virginia,) voted against it, as did a majority of the opposition, are conclusive of the preference of the late administration for the State bank over any other system. It has been said that the friends of the administration voted against this scheme with a view of trying the sufficiency of the State bank system, that is, to make an experiment; but General Jackson's, Mr. Woodbury's, Mr. Benton's, and Mr. Polk's assertions are at war with this imputation. Each of them attested that the State bank system had been well tried, and found amply sufficient for all the purposes of fiscal agency, domestic exchanges, and sound currency. I cannot believe that the friends of the administration would thus have experimented upon such an important and delicate subject as the currency, when there was presented for their adoption a scheme so constitutional, so republican, so wise, and so efficient, as the Treasury scheme is now thought to be.

But, Mr. Chairman, I am not without further evidence from very high authority. Although the President of the United States, in his message to this Congress, represents that this is the third fiscal connexion between the State banks and the Government which has failed, yet he certainly did not regard the two previous failures as constituting any serious objection to the system; for in August, 1836, preceding the last presidential election, in a letter to the honorable Sherrod Williams, of Kentucky, he ably sustained the State bank system. In that letter he used the following language:

"Although I have always been opposed to the increase of banks, I would nevertheless pursue towards the existing institutions a just and liberal course-protecting them in the rightful enjoyment of the privileges which have been granted to them, and extending to them the good will of the community, so long as they discharge with fidelity the delicate and important public trusts with which they have been invested."

These evidences, which have been afforded from the foundation of the Government to the present hour, of the value of the State banks as fiscal agents, are mainly of fered by those who now seek to destroy that fiscal agency, and refuse their notes in the receipts of the public dues. This system, which was sound democracy in 1835, is bank rag aristocracy in 1837. While defending this system, in 1835, I was a good democrat; but, in 1837, for still defending the same system, I have become a bank aristocrat: from this it would seem that democratic principles, like deranged currency, are somewhat fluctuating.

Mr. Chairman, experience, which is the most unerring of all human guides, one truth tested by which is worth a thousand theories, has taught us that credit is a plant of a delicate character, and cannot, with safety, be rudely handled; it must be touched as cautiously as you would touch VOL XIV.-52

[H. OF R.

the sensitive plant. Often has the soundest credit, with the most ample, though not immediately available means, withered and sunk beneath the breath of unjust and unwarranted suspicion. No credit and no credit system can be sustained without confidence: confidence is its very essence, and whenever withdrawn, whether justly or not, seriously affects it. The banking institutions of the country are sustained entirely by confidence; without it their notes would have no circulation, and they would not be able to conduct their business profitably. Want of confidence, then, or withdrawal of existing confidence, must, in the nature of things, greatly prejudice these institutions, and derange and embarrass their operations.

The recommendations of the President and the Secretary of the Treasury, to discontinue the present deposite system, and the receipt of the notes of the banking institutions, is based upon the allegation that these institutions have been unfaithful to their high obligations, and therefore not worthy of continued confidence. The present suspension of specie payments and its consequences, is the ground upon which this recommendation is founded. I propose, Mr. Chairman, briefly to examine whether the present condition of the banks, both as relates to their ability to meet all their liabilities, and the propriety of the suspension of specie payments, justify this charge, and the entire withdrawal of public confidence. That the deposite banks will be able to redeem all their liabilities, and that at no very distant period, is very manifest, not only from the report of the Secretary of the Treasury, but from their actual condition as ascertained and reported to this House. After the cautious and rigid scrutiny instituted into the condition of the State banks, when they were about to be selected, I suppose it will not be doubted that the selected banks were entirely responsible, and in high credit. I have selected eighteen of the principal banks in which the public money was deposited, and three others selected in 1835. The following comparison of their aggregate condition, in relation to circulation and specie, when they were at first selected, and now, according to the last returns, proves most conclusively that, in relation to specie and circulation, their condition is materially improved.-[For the statement here referred to, see next page.]

All other liabilities and responsibilities are improved in nearly the same ratio. I refer to the last returns from the Treasury Department, and those officially published by the different and most important banks, to prove that there has been a general improvement in the condition of nearly all the banking institutions. I have before me an official statement of the condition of the banks of Virginia, exhibiting an improved, and improving condition, and entire solvency. I might refer to others, but time will not admit. The Treasury reports prove that, notwithstanding the suspension of specie payments, the deposite banks have rapidly reduced, and have nearly extinguished their debt to the Government. On the first day of January last, there was in the deposite banks to the credit of the Treasury, $42,468,859 97, of this sum there has been transferred and paid to the States, under the deposite act, $27,063,430 80, leaving a balance of $15,405,429 17; of that balance and of all deposites made since, there now remains only the sum of $12,418,041 due to the Government; of this there only remains $8, 166,492 85 subject to draft, drafts having been issued for the remainder; and I do not doubt the amount is now much less. Of this amount, there is due less than $1,000,000 from the banks in the Atlantic States. Since the 1st of May, about the time specie payments were suspended, according to the report of the Secretary of the Treasury, the deposite banks have reduced their discounts $20,388,776, their circulation $4,991,791, their public deposites $15,607,316, while their specie has diminished less than $3,000,000. The Secretary further informs us that, "of the number of eighty-six banks employed at the

time of the suspension, ten or eleven are supposed to have paid over all the public money which was then in their possession, to the credit of the Treasurer. In the custody of more than half of the others, an aggregate of less than $700,000 remains unadjusted. Several of the rest, still possess large sums; but many of them have continued promptly to furnish such payments from time to time, for meeting the public necessities." Mr. Chairman, these payments and these exertions afford most conclusive evidences of the frauds and insolvency of the local banks! Would to God, all fraudulent and insolvent men would furnish a little more evidence of dishonesty and insolvency such as this, sir. The Secretary of the Treasury, from his report, does not expect to lose a single dollar of the public money, so that the disconnexion recommended, cannot have any foundation on this ground. But, sir, the Treasury Department affords us another important fact, in its circular Condition of eighteen of the principal banks when first selected, and up to August 15th, 1837, including three of the prinipal selected banks under the acts of 1836.

[SEPT. 25, 1837.

to the banks of the 3d of July last, upon the subject of the suspension of specie payments, and additional security for the public dues. He says:

"It affords me much gratification to find, so far as regards the inquiry concerning the payment and security, a great willingness expressed to make the United States amply safe for the eventual payment of all that is due, and a strong conviction entertained by the banks, that no loss will be ultimately sustained by the Government." Again he says:

"Another portion of that circular communicated information concerning the lenient mode which, under the severe losses experienced by many of the banks from mercantile failures, and under the embarrassments to others, caused by panic and want of confidence, was contemplated to be adopted in recalling the public funds. That mode was by such moderate drafts and transfers as the public necessities should from time to time demand; and an earnest request having been made for a satisfactory compliance with it on the part of the banks, assurances have generally been given of a readiness to answer those calls with promptitude, and in an acceptable manner."

Again he says:

"The returns of the condition of the selected banks, which were requested to be continued, have generally been made with promptitude and regularity. But while it is very satisfactory to see, in most cases, a reduction in discounts and circulation, and which course is the most efficient to cure one of the existing evils in banking, and to enable the institutions which have suspended specie payments to resume them at an early day, and with much greater safety, it is regretted that, in a few instances, this course has not been adopted. But whenever departed from in such a crisis, the error has tended, and must tend hereafter, to impair the confidence of the Department in the sound management of the institution, and to justify such steps as may lead to a more speedy withdrawal of the public money, or to the procurement of increased security."

From these evidences, I take it for granted, that the deposite banks are solvent, and that the Government will not lose a single dollar by them.

This is not the only evidence afforded by the Secretary of the Treasury of the solvency of many of the deposite banks, and the reliance placed upon them to aid in redeeming the country from its present embarrassed condition. On the 13th of the present month, while the bill authorizing the issue of Treasury notes was depending, the Secretary addressed the following letter to several of these institutions, proposing to them to purchase the Treasury notes which shall be authorized, and to pass the proceeds to the credit of the Treasury as specie, to be paid as the wants of the Government may require; this is the letter:

"TREASURY DEPARTMENT, "September 19th, 1837. "SIR: A bill is now before Congress to authorize the President of the United States to cause the issue of Treasury notes for such sum or sums as he may think expedient; but not exceeding, in the whole amount of notes issued, the sum of twelve millions of dollars, and of denominations of not less than one hundred dollars for any one note, to be reimbursed at the Treasury of the United States, after the expiration of one year from the dates of the said notes respectively.

"I will thank you to State whether, in the event of the passage of the bill, you will agree to take the said notes from the Government, and give the Treasurer of the United States a credit for the amount; to be drawn for as may be necessary, and payable in specie if required; and, if so, to state what amount you will receive, and the lowest rate of interest to be borne by said note."

"I am, very respectfully, your obedient servant,
"LEVI WOODBURY."

Yes, sir, some of these faithless and unworthy institutions are appealed to, to purchase Treasury notes, and pass the proceeds to the credit of the Government, and hold it until it was wanting by the Government.

Judging from the generally admitted principle, that the soundness of a bank is to be determined by the proportion of its actual specie capital to its circulation, the deposite banks are sounder than the Bank of England, or the English joint stock banks. Up to the 25th July last, the relative proportion between the specie capital and its circulation was as follows: Bank of England

Specie. $26,150,000

Private and joint stock banks 60,000,000

$26,150,000

U. States deposite banks $11,429,012

Circulation. $91,305,000 5,362,165

$96,667,165

$31,779,804

From this comparison it is manifest that the deposite banks in the United States, were in a condition better to sustain a sound currency and specie payments than the English banks, unless some other cause should operate a different effect. Yet, although the same causes which embarrassed the commerce and credit of the United States existed in England, the Bank of England continued speciepayments, and the Bank of the United States suspended. Why? Four causes are manifest; 1. The Government of England continued their confidence in their institutions, ours withdrew its: 2. A large debt was due from the American to the foreign merchants, and a necessity for large specie exportations produced: 3. The continuance of the specie circular: 4. The execution of the deposite act of the 23d June, 1836.

From the connexion which existed between the Government and the State banks, growing out of their adoption as fiscal agents, and the general impression which it produced, that the Government was disposed to cherish and sustain them, the slightest manifestation of the want of confidence on the part of the Government, was calculated to produce the most disastrous effects upon their credit, and cripple their operations. It was calculated to impair general confidence, and produce a rush for specie, so sudden and violent that but few banking institutions could be prepared to withstand it. This want of confidence was clearly manifested in the Treasury circular of July, 1836, in which danger was distinctly announced to the country. This measure of itself, however, could not have exerted any very deleterious influence upon the credit of the banks; but, operating in conjunction with other causes, was calculated seriously to impair public confidence, and to produce serious embarrassments in the monetary system of the country.

The Treasury circular, which required specie for the payment for the public lands, produced an unusual and unnecessary drain of specie from the Atlantic to the western banks, and, of course, it was incumbent on the eastern banks to use the usual precaution of contraction to meet the demand, whatever, it might be. Independent of this direct operation, emigrants, who were numerous from the eastern to the western States, sought that kind of currency which was receivable at the land offices. Hence, specie being only receivable there, they demanded specie for their notes, which being principally eastern, the eastern banks were bound to pay. These drafts for specie were calculated to produce a corresponding curtailment of the circulation and loans of the banks, which were among the professed objects of the order. The gold and silver thus drawn from the eastern, was deposited in the western banks, and there kept entirely unemployed, to the great detriment of trade, awaiting the drafts of the Government. In addition to the operation of the specie circular, and about the time of its utmost severity, the pressure of a heavy foreign debt created'

[H. OF R.

an additional heavy demand for specie, which was principally to be drawn from the vaults of the banks. The effect of this demand for specie to pay the foreign debt, necessarily produced a contraction of loans and circulation, corresponding with the extent of the demand. We all remember the gloomy period of 1819, when distress and ruin pervaded the whole community, and filled it with dismay, and as it is fair to judge of the present by the past, I have selected the four years preceding 1819, and the preceding four years, with a view to contrast the state of trade then, with its present state; in order, in part, to account for the present revulsion and derangement of commerce, and the effects now, as then, produced. In the years 1815, '16, '17, and '18, the state of foreign trade was as follows:

Imports. $113,041,274 147,103,000

99,250,000

121,750,000

$481,144,274

310,430,907

$170,713,365

Excess of importations over exports Which, after proper allowance for tonnage and other expenses, left a heavy balance. The effect was, that a bank circulation in 1816, of $110,000,000 was reduced in 1819, to $45,000,000; we all recollect during this year, the immense deduction which property, produce and labor underwent. The foreign trade for 1833, '34, '35, and '36, is as follows:

Imports. $108,118,311 126,521,332

104,336,973

118,955, 239

151,030,368

128,663,040

189,980,035

$575,650,046

442,095,690

$442,095,690

$133,554,356

The excess of importations, Leaves a large foreign debt; and although the balance now is 37,000,000 less than in 1819, yet it is sufficiently large to render a heavy reduction in bank loans and circulation necessary to meet it; because exchanges, being materially reduced, it could be met in nothing but specic. The heavy importations of specie from England, through the instrumentality of acceptances of American drafts alarmed the Bank of England for its own safety; and to counteract this drain, it refused to discount for any merchant who accepted American bills, thus making it necessary to demand more specie for the payment of the foreign debt than would otherwise have been required. This policy was more rigidly pursued than perhaps it otherwise would have been, had it not been supposed, from the declarations of a great portion of the American press, that it was a part of the policy of our Government to prevent the exportation of specie entirely, and continue, as far as possible, the drain from Europe. Combined with these causes, was the execution of the deposite act of June, 1836.

It having been ascertained from the rapid increase of the revenue from the sales of the public lands, and the duties on foreign importations, that there would be a large surplus in the Treasury on the 1st of January, 1837, it was determined to withdraw it from the control of the Federal Government, (to which its possession offered so many strong and dangerous temptations,) and from the custody of the deposite banks, to prevent its being made the foundation of dangerous and excessive issues of bank paper; and to place it in the custody of the State Geverniments, thus to remain to be employed for the local benefit of the people, (from where it had been unconstitutionally and improperly drawn,)