Mr. SMITH, of Maryland, rose to express his views of the subject generally, as well as on the particular point under consideration. He appeared to coincide in opinion with Mr. CALHOUN, that the establishment of a Bank of the United States would contribute, better than any other measure, to the resto ration of a general medium of circulation of uniform value: he was afraid, he said, that it was the only remedy. Perhaps, he said, he should not agree with the gentleman in some of his positions, particularly as respected the conduct and state of the banks. It might be prudent on the part of Congress, he remarked, to let down these institutions as gently as they could, and do every thing to enable them to meet their enagements by specie payments, on some future day. With some modification of the plan proposed by this bill, he thought the establishment of a national bank would effectually contribute to that object. The banks, pending the war, were the pillars of the nation, on which, and through whose instrumentality, the Government was enabled to raise money and men to carry on the war, not only by their direct loans, but by enabling individuals to make loans to the Government. Now, that we could do without them, they had been called caterpillars. He would not call those caterpillars now, who in war had been the pillars of the Government. The information of the gentleman in relation to the state of the banks might be very good, but it did not coincide with the information or impression of Mr. S. who took a different view of it. He thought that, as far as he had information, the banks had not issued more notes than, froin the amount of their capitals, they had a fair right to do. Adverting to Mr. C's statement of the number of the banks, (he wished there were not so many) and of their capital, he differed from the view which estimated the amount on which they draw interest, at an hundred and seventy millions. But, deducting from this amount the loans, &c. estimated at forty millions, a hundred and thirty mil lions would remain, as the estimated amount on which the banks draw interest, with a capital of eighty-two millions. Was this too much? With much less, could the banks pay bank expenses, and make a reasonable dividend? But, might not the gentleman have been mistaken, even in this estimate? Mr. S. thought he was, and supported this impression by a reference to such documents on the subject as were within his reach. He referred to the document on the table, showing the state of the chartered banks within the District of Columbia. He was rather inclined to believe, he said, that these banks had gone a little further than most of the banks of the United States in their issues, the cause of which might be traced to the large loans to the Government. The amount of the capital paid in by all these banks was 3,321,600 dollars; the bills and notes discounted 4,830,031 dollars. Was this too large a business on their capital? These banks, than which, perhaps, no banks in the Union had done larger business, had not discounted more than fifty per cent. beyond the amount of their capital paid in. As to the amount of paper which the gentleman estimated to be in circulation, Mr. S. differed widely from him. Instead of two hundred millions of dollars of paper being in circulation on a capital of eighty-two millions, he doubted whether the amount was half that of the capital of the banks, say forty-one millions of dollars. He had some acquaintance with the operations of banks, from his practice in them. Some banks could put out more paper than others, from their particular situation; but, in general, banks did not issue paper to more than half the amount of their capital. The notes of the banks of this district were more depreciated than any others; and if the depreciation was in fact owing to excessive issues, it might be presumed they had issued more largely than banks generally. These banks had notes in circulation to the amount of 2,094,000 dollars-a greater proportion of notes to their capital, than banks generally have in circulation; but only three-fifths of the amount of the capital paid in. There were not now in circulation, Mr. S. said, he verily believed, as many bank notes, properly so called, as there were prior to the stoppage of specie payments. Banks every where were endeavoring to draw in their notes. Mr. S. concluded on this point, that, as the banks had demonstrably not been prodigal in the issue of their paper, its depreciation was not owing to the excess of

issue. This brought Mr. S. to another point of Mr. CALHOUN's speech, in which they concurrred in opinion. To the long loans he agreed, in a great measure might be attributed the depreciation of the paper of this city, of Baltimore, Philadelphia, and of New York. But he was not disposed to censure the banks for having made those loans. On the contrary, said he, they aided you in times of need; I give them credit for it. I would nurse them, and bring them back to the same healthy state as before they reduced themselves to serve you. At the same time Mr. S. said he agreed, that it was the duty of the banks to resume specie payments, so soon as it was possible to do it with-out loss. If they did not do it, they ought to be compelled to do it; and through the instrumentality of a Bank of the United States, the Government might be able to coerce them. The loans made to the Government, he said, had been principally confined to the country between the Hudson and the Potomac; a small amount only had been obtained North and South of these limits. The notes obtained by the treasury by way of loan, were disbursed in other quarters of the country than that in which they were obtained; they had been thrown back upon the banks, and specie demanded for them, with which demand, made in large quantities, the banks found themselves unable to comply. The gentleman had given his opinion how the evil might be remedied. This remedy, Mr. S. went on to observe, he was one of those who had pressed on the directors of the banks of the city he had the honor to represent. All the banks had to do, he said, was to send their millions of stock to the Eastward and Southward, sell their stock, and thus change the balance of exchange and trade in their favor. When they should do that, the cause of the depreciation of their paper being removed, Mr. S. said we should hear no more of it: in less than three months, those States which now had the advantage of the exchange, would be the debtor States. The difference in exchange was little more than nominal-very little specie being paid in any part of the country; where bank notes were nominally at par, the banks did very little or no business, and had comparatively no notes out. If merchants negotiated with those banks, they did not receive or pay them specie, but paper. Mr. S. coincided in Mr. C's view, that, if all the banks agreed to resume specie payments, they might do it; but he would use no coercion now to hasten the period, but suffer them to do it peaceably and quietly, and, therefore, safely.

Adverting to the observation in debate yesterday, respecting an alliancebetween the Secretary of the Treasury and the banks, which had prevented treasury notes from becoming a circulating medium, &c. Mr. SMITH vindicated the conduct of the treasury. Could the Secretary do otherwise, he asked, than receive the public dues in the currency of the country where they were collected? The Secretary had further undertaken (Mr. S. doubted whether that officer had not in this gone too far) to say, that the paper of those banks which did not receive treasury notes and issue them again, should not be received in payment of debts due to the Government. Gentlemen were mistaken, Mr. S. contended, if they supposed that they could make treasury notes a circulating medium; experience had proved it. Referring to the value of treasury notes, depreciated gradually in their progress from this district to Boston, he remarked, that although they were six per cent. above par at Baltimore, they were not there as valuable as the note of a merchant at New York. It would, it was true, be a great convenience, if Government could issue a paper of this sort which would serve as a circulating medium; but it could not; whatever paper was put out, of that sort, would become an article of merchandise, to be bought and sold. The community was now accustomed to bank notes, and partial to them; and their place could not be supplied by Government paper.

As to the motion now under consideration, to reduce the capital, Mr. S. said he had not expected it from a gentleman from Pennsylvania, and particularly not from the gentleman who made it. Reverting to the period of the establishment of the Bank of the United States, he said, ten millions bore a larger proportion to the uses and demands of that day, than thirty-five mil

lions did to those of this. The price of every thing was then very low, commerce in its infancy, the shipping of the United States extremely and almost incredibly limited, &c. It was impossible that any man could suppose that a bank of the same amount could now perform the functions which the Bank of the United States then performed, particularly since the Government had spread taxes over the whole surface of the country, and made the aid of this institution more extensively necessary. With a reduced capital, Mr. S. said, the operations of the bank would be so circumscribed, that it would afford but little aid to merchants. He was not, indeed, very tenacious, he said, about four or five millions of capital, more or less; but he did not think thirtyfive millions at all too much.

Mr. S. said he was not entirely satisfied with the plan of the bank, proposed by the committee; but might not the plan be so modified as to meet the views of a large majority of the House? He could find but few gentlemen, he said, who, in conversation, did not appear favorable to the establishment of a bank. Some preferred a plan less complex than the present; some were hostile to the control of the Government in it, in which, perhaps, they were right. Others were hostile to treasury notes forming any part of the capital; in which, Mr. S. said, he concurred. Where was the difficulty in yielding those minor points, for the sake of obtaining a general concurrence in favor of the bill? Other features were objected to: the power to authorize suspension of payments in specie, &c.; these he would also give up, rather than that they should defeat the bill altogether. As to the question, when the specie payments of the bank should commence, Mr. S. said, according to the proposed mode of payment, it would not be very soon, &c. To remedy this objection, he proposed that, for the seven millions of treasury notes to be paid in on account of the United States, there should be substituted a stock to be created for the purpose, bearing an interest of 5 per cent. per annum, which would leave a gain to the United States (the bank dividing eight per cent.) of three per cent. per annum on that amount; which would, by its accumulation and proper application, in the course of twenty years, absorb the whole of that stock, and operate as a bonus to the United States to that amount. He also showed, by calculation, that the United States, in this mode, by merely advancing their credit, might absorb twelve millions of the war debt; which he believed would be no unpalatable thing to the People, nor unwise in the Government. Further, Mr. S. said, he wished to see the bank go immediately into operation; that, while he lived, he might derive some advantage from it. He would, therefore, wish to see the whole of the specie part of the stock paid in within a given number of months. With seven millions of dollars in its vaults, the bank would have neither fear nor trembling in commencing specie operations; they would have time to send their stock to Europe for sale, or make such other arrangements as, in their opinion, might be proper. The specie thus to be paid in, would not drain the State banks, but would be imported for the purpose, from Europe and elsewhere, &c. In the mean time, he said, until all the specie payments were made to the bank, he did not think it would do any harm if the bank were to commence its operations without specie, but with an assurance in its charter, of payment of specie at a particular day. Such an assurance would make the bank notes equally good, in his eyes at least, as gold and silver. With these views of the subject, Mr. S. concluded his practical speech.

Mr. SERGEANT next addresssed the Chair, in support of his motion to reduce the proposed capital of the bank. In reply to Mr. SMITH'S expression of surprise at his having made this motion, he said, it was no reason why a representative from one part of the country should not move an amendment to a bill, that the bill in its present shape was more agreeable to another section. Mr. SERGEANT said, he had made the motion for two reasons; first, because, from the showing of the gentleman from South Carolina, the banking capital of the country was already large enough; and, secondly, that he might have an opportunity of hearing gentlemen explain their views on this subject, which

he believed was the correct mode of procedure, when members could not see their way very clearly on any subject, particularly when it was proposed to legislate without the power of repeal for twenty years to come, and when that legislation was to create a vast machine, the direction of whose momentum is to be put into the hands of we know not whom. A similar question, less extensive in its nature, on the proposition to renew the charter of the Bank of the United States, had agitated the country from one extreme of the continent to the other, and Congress particularly. This agitation had been so recent, that the proposition of a similar character ought to give rise, at this time, to serious reflection, at least, if half that had been then said on the subject was true. The present measure, Mr. S. said, presented itself to him in an infinitely worse aspect than that to which he had referred, and the two gentlemen who had discussed the question. had shown, that the best informed and most zealous in favor of the measure, did not understand its bearings, or agree in its effects or principles, &c. The question was yet to be decided between those gentlemen, he said, whether this was to be a specie, or a paper bank; but, for his part, he protested against the establishment of any bank which was not, from the beginning, a specie bank. He saw a wide distinction between the bank now proposed to be established, and the old Bank of the United States; the object of the latter was to increase the active capital of the country, and to facilitate the operations of the Government in the collec tion of the taxes, whilst the motive of this bank was directly the reverse; it was not to increase, but to diminish the paper medium of the country. The surcharged circulation of paper, Mr. S. then argued, would not be removed by throwing in the additional quantity of paper to be issued by this bank. The great extent of the proposed capital of the bank, three and an half times that of the late Bank of the United States, (with the privilege to increase it to five times the amount) imposed it as a duty on those who advocated it, to show the use of so large a capital. In answer to the argument that our commercial transactions had increased since 1791, in the proportion of five to one, Mr. S. said gentlemen appeared to have entirely lost sight of a consideration which was essential in the discussion of this subject; that, in 1791, we had but three banks, and now, we had two hundred and sixty, supplying a capital of more than twenty times the amount then in existence. This additional capital was, therefore, he argued, not necessary to the purposes of commerce. As the means of establishing an uniform medium of circulation, Mr. S. contended, that a capital of twenty millions would be large enough for any useful purpose, and would be able to throw into circulation a larger amount than that of depreciated paper, which the gentleman from South Carolina proposed to withdraw from circulation, in order to appreciate the notes of existing banks. This bank, established on true commercial principles, (and such he wished it to have) would be guided by that instinct of gain which the gentleman had ascribed to banking institutions, and, with a capital of twenty millions, would do a business quite extensive enough to answer any useful purposes.

Mr. S. further objected to the plan of the bank embraced in this bill, that there was nothing in it which would save this national bank from the same extremity of difficulty, bankruptcy if gentlemen chose to call it so, in which other banks had been involved; it had no other liability or responsibility for its engagements than those which are common to every other bank. Mr. S. did not join in the censure of banks for that which was said to have been the cause of suspension of specie payments, viz. the loans to Government, which the pressure of Government and public sentiment had urged them to make to the Government in a greater extent than they ought to have done. He was willing to coerce the banks to pay specie, if they were not disposed to do it when they could; but, he intimated, he was unwilling to try an experiment, which, if it did not operate as he wished, would only have a tendency to ag gravate the evil.

If the State banks had violated their faith, how, he asked, did the Government stand in that respect? Let the Government set the example of redeeming its plighted faith. How was the public creditor paid at Philadelphia du

ring the war? Instead of being paid in gold and silver, or their equivalent, they were paid in notes of the banks of Baltimore, which had depreciated five or six per cent. at that very time. This mischievous example having been set by the Government to the banks, ought fault to be found with them that they did not pay their notes, when Government had given them the example? With regard to the present time, he said he should be glad to know why the treasury of the United States had not now the command of the specie payments and rate of exchange in its own hands? How much better, if the Government had this power, as he believed they had, that they should exercise it to compel the resumption of specie payments?

Mr. S. then proceeded to examine the composition of the thirty-five millions of capital of this bank. Referring to the report of the state of the banks of Pennsylvania, he said the Philadelphia banks, confessedly not specie banks, were in very nearly the same situation as this bank would be when it commenced operations. The Bank of Pennsylvania, for instance, with a capital of 2,500,000 dollars, had 1,800,000 of public stock, 400,000 of specie, &c. How was that bank worse off than this bank of the United States would be, with three-fourths of its stock public debt and treasury notes, and one-fourth specie? &c.

In every view this was a measure of doubtful expediency, and it would be sufficient if he were to say he would not grope in the dark, on a measure of so doubtful a character; especially as it proposed to throw into circulation a quantity of paper on principles which he saw, in existing establishments possessing the same materials, could not be redeemed with specie, &c. He wished explicitly to understand whether this was to be a bank for commercial purposes, or a Government bank. He could not for the life of him conceive, he said, why the Government was to become a partner to a scheme of this sort at all. He was willing to have a bank on plain intelligible principles; not a bank of deposite merely :for at this time of day people could not be found who would willingly embark their funds in any thing so limited; but he would not authorize the bank to issue any paper beyond the amount which it could redeem with specie. The notes should express on their face the currency or paper with which they should be redeemed, specie, treasury notes, or stock: for, as he showed, by various elucidations, money only could justly redeem a note given for money by an individual or by a government, &c. Prior to 1814, it had not been supposed that the banks had not conducted themselves on fair principles; the very instant, however, a state of things arose to create alarm, or when, from whatever cause, their notes were presented for payment, that moment the banks were unable to proceed in specie payments. This bank being put in operation on the same principles, how would it succeed better? Mr. S. concluded the speech, of which the preceding is a mere skeleton, by saying that he yet reinained to be convinced that twenty millions were not a sufficient capital for all the purposes for which the bank could be wanted.

Note by the editors of the National Intelligencer.

[We are requested by Mr. SERGEANT to give the following as a statement of what he said, or meant, on one point of his remarks on the bank question. It is scarcely necessary to say, that the reporter, in the hasty sketch of that debate, does not aim at any thing like verbal accuracy or amplitude-the limits of a newspaper, connected with the desire to place the substance of the arguments and proceedings promptly before the readers of the National Intelligencer, forbid it.]

Mr. SERGEANT Said, that it was necessary first to decide whether we would have a specie bank or a paper bank. If we are to have a specie bank, I cannot consent to any bill for that purpose, unless it contains such provisions as will afford a reasonable certainty that it will be able to pay specie. If it should commence its operations as a specie bank, and afterwards be obliged to suspend specie payments, when its notes shall have gone extensively into circulation, it will produce all the consequences, so strongly described, which have followed the suspension by the State banks, in a still greater degree. I should