ON THE SUB-TREASURY SCHEME.IN THE SENATE OF THE UNITED STATES, FEBRUARY 19, 1838.[THEindependent or sub-treasury scheme being pressed upon the consideration of congress, byMr.Van Buren, although public opinion was setting strongly against it,Mr.Clay delivered the following elaborate speech, in which he shows that a deliberate design had existed on the part of general Jackson, and his successor,Mr.Van Buren, to break down the whole banking system of the United States, and to create on their ruins agovernment treasury bank, under the exclusive control of the executive. This speech was partly in reply toMr.Calhoun, of South Carolina, who had become a supporter of the administration.]IHAVEseen some public service, passed through many troubled times, and often addressed public assemblies, in this capitol and elsewhere; but never before have I risen in a deliberative body, under more oppressed feelings, or with a deeper sense of awful responsibility. Never before have I risen to express my opinions upon any public measure, fraught with such tremendous consequences to the welfare and prosperity of the country, and so perilous to the liberties of the people, as I solemnly believe the bill under consideration will be. If you knew, sir, what sleepless hours reflection upon it has cost me, if you knew with what fervor and sincerity I have implored divine assistance to strengthen and sustain me in my opposition to it, I should have credit with you, at least, for the sincerity of my convictions, if I shall be so unfortunate as not to have your concurrence as to the dangerous character of the measure. And I have thanked my God that he has prolonged my life until the present time, to enable me to exert myself in the service of my country, against a project far transcending in pernicious tendency any that I have ever had occasion to consider. I thank him for the health I am permitted to enjoy; I thank him for the soft and sweet repose which I experienced last night; I thank him for the bright and glorious sun which shines upon us this day.It is not my purpose, at this time,Mr.President, to go at large into a consideration of the causes which have led to the present most disastrous state of public affairs. That duty was performed by others, and myself, at the extra session of congress. It was then clearly shown, that it sprung from the ill-advised and unfortunatemeasures of executive administration. I now will content myself with saying that, on the fourth day of March, 1829, Andrew Jackson, not by the blessing of God, was made president of these United States; that the country then was eminently prosperous; that its currency was as sound and safe as any that a people were ever blessed with; that, throughout the wide extent of this whole union, it possessed a uniform value; and that exchanges were conducted with such regularity and perfection, that funds could be transmitted from one extremity of the union to the other, with the least possible risk or loss. In this encouraging condition of the business of the country, it remained for several years, until after the war, wantonly waged against the late bank of the United States, was completely successful, by the overthrow of that invaluable institution. What our present situation is, is as needless to describe as it is painful to contemplate. First felt in our great commercial marts, distress and embarrassment have penetrated into the interior, and now pervade almost the entire union. It has been justly remarked by one of the soundest and most practical writers that I have had occasion to consult, that ‘all convulsions in the circulation and commerce of every country must originate in the operations of the government, or in the mistaken views and erroneous measures of those possessing the power of influencing credit and circulation; for they are not otherwise susceptible of convulsion; and, if left to themselves, they will find their own level, and flow nearly in one uniform stream.’Yes,Mr.President, we all have but too melancholy a consciousness of the unhappy condition of our country. We all too well know, that our noble and gallant ship lies helpless and immovable upon breakers, dismasted, the surge beating over her venerable sides, and the crew threatened with instantaneous destruction. How came she there? Who was the pilot at the helm when she was stranded? The party in power! The pilot was aided by all the science and skill, by all the charts and instruments, of such distinguished navigators as Washington, the Adamses, Jefferson, Madison, and Monroe; and yet he did not, or could not, save the public vessel. She was placed in her present miserable condition by his bungling navigation, or by his want of skill and judgment. It is impossible for him to escape from one or the other horn of that dilemma. I leave him at liberty to choose between them.I shall endeavor,Mr.President, in the course of the address I am about making, to establish certain propositions, which I believe to be incontestable; and, for the sake of perspicuity, I will state them severally to the senate. I shall contend,First, that it was the deliberate purpose and fixed design of the late administration to establish a government bank—a treasury bank—to be administered and controlled by the executive department.Secondly, that, with that view, and to that end, it was its aim and intention to overthrow the whole banking system, as existing in the United States when that administration came into power, beginning with the bank of the United States, and ending with the state banks.Thirdly, that the attack was first confined, from considerations of policy, to the bank of the United States; but that, after its overthrow was accomplished, it was then directed, and has since been continued, against the state banks.Fourthly, that the present administration, by its acknowledgments, emanating from the highest and most authentic source, has succeeded to the principles, plans, and policy, of the preceding administration, and stands solemnly pledged to complete and perfect them.And, fifthly, that the bill under consideration is intended to execute the pledge, by establishing, upon the ruins of the late bank of the United States, and the state banks, a government bank, to be managed and controlled by the treasury department, acting under the commands of the president of the United States.I believe, solemnly believe, the truth of every one of these five propositions. In the support of them, I shall not rely upon any gratuitous surmises or vague conjectures, but upon proofs, clear, positive, undeniable, and demonstrative. To establish the first four, I shall adduce evidence of the highest possible authenticity, or facts admitted or undeniable, and fair reasoning founded on them. And as to the last, the measure under consideration, I think the testimony, intrinsic and extrinsic, on which I depend, stamps, beyond all doubt, its true character as a government bank, and ought to carry to the mind of the senate the conviction which I entertain, and in which I feel perfectly confident the whole country will share.First. My first proposition is, that it was the deliberate purpose and fixed design of the late administration to establish a government bank—a treasury bank—to be administered and controlled by the executive department. To establish its truth, the first proof which I offer is the following extract from president Jackson’s annual message of December, 1829.‘The charter of the bank of the United States expires in 1836, and its stockholders will most probably apply for a renewal of their privileges. In order to avoid the evils resulting from precipitancy, in a measure involving such important principles, and such deep pecuniary interests, I feel that I cannot, in justice to the parties interested, too soon present it to the consideration of the legislature and the people. Both the constitutionality and the expediency of the law creating this bank, arewell questioned by a large portion of our fellow-citizens; and it must beadmitted by all, that it has failed in the great end of establishing a uniform and sound currency.‘Under these circumstances, if such an institution is deemed essential to the fiscal operations of the government,I submit to the wisdom of the legislature, whether a national one, founded uponthe credit of the government and its revenues, might not be devised, which would avoid all constitutional difficulties, and, at the same time, secure all the advantages to the government and the country, that were expected to result from the present bank.’This was the first open declaration of that implacable war against the late bank of the United States, which was afterwards waged with so much ferocity. It was the sound of the distant bugle, to collect together the dispersed and scattered forces, and prepare for battle. The country saw with surprise the statement, that ‘the constitutionality and expediency of the law creating this bank are well questionedby a large portionof our fellow-citizens,’ when, in truth and in fact, it was well known that but few then doubted the constitutionality, and none the expediency, of it. And the assertion excited much greater surprise, that ‘it must beadmitted by all, that it has failed in the great end of establishing a uniform and sound currency.’ In this message, too, whilst a doubt is intimated as to the utility of such an institution, president Jackson clearly first discloses his object to establish a national one, founded upon thecredit of the government and its revenues. His language is perfectly plain and unequivocal. Such a bank, founded upon the credit of the government and its revenues, would secure all the advantages to the government and the country, he tells us, that were expected to result from the present bank.In his annual message of the ensuing year, the late president says:‘The importance of the principles involved in the inquiry, whether it will be proper to recharter the bank of the United States, requires that I should again call the attention of congress to the subject. Nothing has occurred to lessen, in any degree, the dangers which many of our citizens apprehend from that institution, as atpresent organized. In the spirit of improvement and compromise which distinguishes our country and its institutions, it becomes us to inquire,whether it be not possible to secure the advantages afforded by the present bank, through the agency of a bank of the United States, so modified in its principlesas to obviate constitutional and other objections.‘It is thought practicable to organize such a bank, with the necessary officers,as a branch of the treasury department, based on the public and individual deposits, without power to make loans, or purchase property, which shall remit the funds of government; and the expense of which may be paid, if thought advisable, by allowing its officersto sell bills of exchange, to private individuals, at a moderate premium. Not being a corporate body, having no stockholders, debtors, and property, and but few officers, it would not be obnoxious to the constitutional objections which are urged against the present bank; and having no means to operate on the hopes, fears, or interests, of large masses of the community, it would be shorn of the influence which makes that bank formidable.’In this message president Jackson, after again adverting to the imaginary dangers of a bank of the United States, recurs to his favorite project, and inquires, ‘whether it be not possible to secure the advantages afforded by the present bank, through the agency of a bank of the United States, so modified in its principles and structure as to obviate constitutional and other objections.’ And to dispel all doubts of the timid, and to confirm the wavering, he declares, that it is thought practicable to organize such a bank, with the necessary officers, as a branch of the treasury department.As a branch of the treasury department!The very scheme now under consideration. And, to defray the expenses of such an anomalous institution, he suggests, that the officers of the treasury departmentmay turn bankers and brokers, and sell bills of exchange to private individuals at a moderate premium!In his annual message of the year 1831, upon this subject, he was brief and somewhat covered in his expressions. But the fixed purpose which he entertained is sufficiently disclosed to the attentive reader. He announces, that ‘entertaining the opinionsheretoforeexpressed in relation to the bank of the United States,as at present organized, I felt it my duty, in my former messages, frankly to disclose them, in order that the attention of the legislature and the people should be seasonably directed to that important subject, and that it might be considered, and finally disposed of, in a manner best calculated to promote the ends of the constitution, and subserve the public interests.’ What were the opinions ‘heretofore’ expressed, we have clearly seen. They were adverse to the bank of the United States, as at presentorganized, that is to say, an organization with any independent corporate government; and in favor of a national bank which should be so constituted as to be subject to exclusive executive control.At the session of 1831–2, the question of the recharter of the bank of the United States came up; and although the attention of congress and the country had been repeatedly and deliberately before invited to the consideration of it by president Jackson himself, the agitation of it was now declared by him and his partisans to be precipitate and premature. Nevertheless, the country and congress conscious of the value of a safe and sound uniform currency, conscious that such a currency had been eminently supplied by the bank of the United States, and unmoved by all the outcry raised against that admirable institution, the recharter commanded large majorities in both houses of congress. Fatally for the interests of this country, the stern self-will of general Jackson prompted him to risk every thing upon its overthrow. On the tenth of July, 1832, the bill was returned with his veto; from which the following extract is submitted to the attentive consideration of the senate.‘A bank of the United States is, in many respects, convenient for the government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the constitution, subversive of the rights of the states, and dangerous to the liberties of the people, I felt it my duty, at an early period of my administration, to call the attention of congress to the practicabilityof organizing an institution, combining allits advantages, and obviating these objections. I sincerely regret that, in the act before me, I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the constitution of our country.‘That a bank of the United States, competent to all the duties which may be required by government, might be so organized as not to infringe upon our own delegated powers, or the reserved rights of the states, I do not entertaina doubt. Had the executive been called upon to furnishthe project of such an institution, the duty would have been cheerfully performed. In the absence of such a call, it is obviously proper that he should confine himself to pointing out those prominent features in the act presented, which, in his opinion, make it incompatible with the constitution and sound policy.’President Jackson admits, in the citation which has just been made, that a bank of the United States is, in many respects, convenient for the government; and reminds congress that he had, at an early period of his administration, called its attention to the practicability of so organizing such an institution as to secure all its advantages, without the defects of the existing bank. It is perfectly manifest, that he alludes to his previous recommendations of a government, a treasury bank. In the same message he tells congress, that if he had been called upon tofurnish the projectof such an institution, the duty would have been cheerfully performed. Thus it appears, that he had not only settled in his mind the general principle, but had adjusted the details of a government bank, to be subjected to executive control; and congress is even chided for not calling upon him to present them. The bill now under consideration, beyond all controversy, is the very project which he had in view, and is to consummate the work which he began. I think,Mr.President, that you must now concur with me in considering the first proposition as fully maintained. I pass to the second and third, which, on account of their intimate connection, I will consider together.Second, that with the view of establishing a government bank, it was the settled aim and intention of the late administration, to overthrow the whole banking system of the United States, as existing in the United States when that administration came into power, beginning with the bank of the United States, and ending with the state banks.Third, that the attack was first confined, from considerations of policy, to the bank of the United States; but that, after its overthrow was accomplished, it was then directed, and has since been continued, against the state banks.We are not bound to inquire into the motives of president Jackson for desiring to subvert the established monetary and financial system, which he found in operation; and yet some examination into those which probably influenced his mind, is not without utility. These are to be found in his peculiar constitution and character. His egotism and vanity, prompted him to subject every thing to his will; to change, to remould, and retouch every thing. Hence the proscription which characterized his administration, the universal expulsion from office, at home and abroad, of all who were not devoted to him, and the attempt to render the executive department of government, to use a favorite expression of his own, a complete ‘unit.’ Hence his seizure of the public deposits, in the bank of the United States, and his desire to unite the purse with the sword. Hence his attack upon all the systems of policy which he found in practical operation, on that of internal improvements, and on that of the protection of national industry. He was animated by the same sort of ambition which induced the master mind of the age, Napoleon Bonaparte, to impress his name uponevery thing in France. When I was in Paris, the sculptors were busily engaged chiselling out the famous N., so odious to the Bourbon line, which had been conspicuously carved on the palace of the Tuilleries, and on other public edifices and monuments, in the proud capital of France. When,Mr.President, shall we see effaced, all traces of the ravages committed by the administration of Andrew Jackson! Society has been uprooted, virtue punished, vice rewarded, and talents and intellectual endowments despised; brutality, vulgarism, and loco focoism upheld, cherished, and countenanced. Ages will roll around before the moral and political ravages which have been committed, will, I fear, cease to be discernible. General Jackson’s ambition was to make his administration an era in the history of the American government, and he has accomplished that object of his ambition; but I trust that it will be an era to be shunned as sad and lamentable, and not followed and imitated as supplying sound maxims and principles of administration.I have heard his hostility to banks ascribed to some collision which he had with one of them, during the late war, at the city of New Orleans; and it is possible that may have had some influence upon his mind. The immediate cause, more probably, was the refusal of that perverse and unaccommodating gentleman, Nick Biddle, to turn out of the office of president of the New Hampshire branch of the bank of the United States, at the instance of his excellency Isaac Hill, in the summer of 1829, that giant-like person, Jeremiah Mason—giant in body, and giant in mind. War and strife, endless war and strife, personal or national, foreign or domestic, were the aliment of the late president’s existence. War against the bank, war against France, and strife and contention with a countless number of individuals. The wars with Black Hawk and the Seminoles were scarcely a luncheon for his voracious appetite. And he made his exit from public life, denouncing war and vengeance against Mexico and the state banks.My acquaintance with that extraordinary man commenced in this city, in the fall of 1815 or 1816. It was short, but highly respectful, and mutually cordial. I beheld in him the gallant and successful general, who, by the glorious victory of New Orleans, had honorably closed the second war of our independence, and I paid him the homage due to that eminent service. A few years after, it became my painful duty to animadvert, in the house of representatives, with the independence which belongs to the representative character, upon some of his proceedings, in the conduct of the Seminole war, which I thought illegal, and contrary to the constitution and the law of nations. A non-intercourse between us ensued, which continued until the fall of 1824, when, he being a member of the senate, it was sought to bring about an accommodation between us, by the principal part of the delegationfrom his own state. For that purpose, we were invited to dine with them, at Claxton’s boarding-house, on Capitol hill, where my venerable friend from Tennessee, (Mr.White,) and his colleague on the Spanish commission, were both present. I retired early from dinner, and was followed to the door by general Jackson and the present minister of the United States at the court of Madrid. They pressed me earnestly to take a seat with them in their carriage. My faithful servant and friend, Charles, was standing at the door, waiting for me, with my own. I yielded to their urgent politeness, directed Charles to follow with my carriage, and they sat me down at my own door. We afterwards frequently met, with mutual respect and cordiality; dined several times together, and reciprocated the hospitality of our respective quarters. This friendly intercourse continued, until the election, in the house of representatives, of a president of the United States, came on, in February, 1825. I gave the vote which, in the contingency that happened, I told my colleague, (Mr.Crittenden,) who sits before me, prior to my departure from Kentucky, in November, 1824, and told others, that I should give. All intercourse ceased between general Jackson and myself. We have never since, except once accidentally, exchanged salutations, nor met, except on occasions when we were performing the last offices towards deceased members of congress, or other officers of government. Immediately after my vote, a rancorous war was commenced against me, and all the barking dogs let loose upon me. I shall not trace it during its ten years’ bitter continuance. But I thank my God that I stand here, firm and erect, unbent, unbroken, unsubdued, unawed, ready to denounce the mischievous measures of his administration, and ready to denounce this, its legitimate offspring, the most pernicious of them all.His administration consisted of a succession of astounding measures, which fell on the public ear like repeated bursts of loud and appalling thunder. Before the reverberations of one peal had ceased, another and another came, louder and louder, and more terrifying. Or rather, it was like a volcanic mountain, emitting frightful eruptions of burning lava. Before one was cold and crusted, before the voices of the inhabitants of buried villages and cities were hushed in eternal silence, another, more desolating, was vomited forth, extending wider and wider the circle of death and destruction.Mr.President, this is no unnecessary digression. The personal character of such a chief as I have been describing, his passions, his propensities, the character of his mind, should be all thoroughly studied, to comprehend clearly his measures and his administration. But I will now proceed to more direct and strict proofs of my second and third propositions. That he was resolved to break down the bank of the United States, is proved by the same citations from his messages which I have made to exhibit his purpose toestablish a treasury bank, is proved by his veto message, and by the fact that he did destroy it. The war against all other banks was not originally announced, because he wished the state banks to be auxiliaries in overthrowing the bank of the United States, and because such an annunciation would have been too rash and shocking, upon the people of the United States, for even his tremendous influence. It was necessary to proceed in the work with caution, and to begin with that institution against which could be embodied the greatest amount of prejudice. The refusal to recharter the bank of the United States was followed by a determination to remove from its custody the public money of the United States. That determination was first whispered in this place, denied, again intimated, and, finally, in September, 1833, executed. The agitation of the American public which ensued, the warm and animated discussions, in the country and in congress, to which that unconstitutional measure gave rise, are all fresh in our recollection. It was necessary to quiet the public mind, and to reconcile the people to what had been done, before president Jackson seriously entered upon his new career of hostility to the state banks. At the commencement of the session of congress, in 1834, he imagined a sufficient calm had been produced, and, in his annual message of that year, the war upon the state banks was opened. In that message he says:‘It seems due to the safety of the public funds remaining in that bank, and to the honor of the American people, that measures be taken toseparatethe government entirely, from an institution so mischievous to the public prosperity, and so regardless of the constitution and laws. By transferring the public deposits, by appointing other pension agents, as far as it had the power, by ordering the discontinuance of the receipt of bank checks, in payment of the public dues, after the first day of January next, the executive has exerted all its lawful authority, toseverthe connection between the government and this faithless corporation.’In this quotation, it will be seen that the first germ is contained of that separation and divorce of the government from banks, which has recently made such a conspicuous figure. It relates, it is true, to the late bank of the United States, and he speaks of separating and severing the connection between the government and that institution. But the idea, once developed, was easily susceptible of application to all banking institutions. In the message of the succeeding year, his meditated attack upon the state banks, is more distinctly disclosed. Speaking of a sound currency, he says:‘In considering the means of obtaining so important an end, (that is, a sound currency,) we must set aside all calculations oftemporaryconvenience, and be influenced by those only that are in harmony with the true character and permanent interests of the republic. We must recur tofirst principles, and see what it is that has prevented the legislation of congressand the states, on the subject of currency, from satisfying the public expectation, and realizing results corresponding to those which have attended the action of our system, when truly consistent with the great principle of equality upon which it rests, and with that spirit of forbearance and mutual concessionand generous patriotism, which was originally, and must ever continue to be, the vital element of our union.‘On this subject, I am sure that I cannot be mistaken, in ascribing our want of success to the undue countenance which has been afforded to thespirit of monopoly. All the serious dangers which our system has yet encountered, may be traced to the resort to implied powers,and the use of corporationsclothed with privileges, the effect of which is to advance the interests of the few at the expense of the many. We have feltbut one classof these dangers, exhibited in the contest waged by the bank of the United States, against the government, for the last four years. Happily they have been obviated for the present, by the indignant resistance of the people; but we should recollect that the principle whence they sprang is an ever-active one, which will not fail to renew its efforts in the same and in other forms, so long as there is a hope of success, founded either on the inattention of the people, or the treachery of their representatives, to the subtle progress of its influence.’* * * *‘We are now to see whether, in the present favorable condition of the country, we cannot take aneffectual stand against this spiritof monopoly, and practically prove, in respect to the currency, as well as other important interests, that there is no necessity for so extensive a resort to it as that which has been heretofore practiced.’* * * *‘It has been seen, that without the agency of a great moneyed monopoly, the revenue can be collected, and conveniently and safely applied to all the purposes of the public expenditure. It is also ascertained that, instead of being necessarily made to promote the evils of an unchecked paper system, the management of the revenuecan be madeauxiliary to the reform which the legislatures of several of the states have already commenced, in regard to the suppression of small bills; and which has only to be fosteredby proper regulations on the part of congress, to secure a practical return, to the extent required for the security of the currency, to the constitutional medium.’As in the instance of the attack upon the bank of the United States, the approach to the state banks is slow, cautious, and insidious. He reminds congress and the country that all calculations of temporary convenience must be set aside; that we must recur to first principles; and that we must see what it is that has prevented the legislation of congressand the stateson the subject of the currency from satisfying public expectation. He declares his conviction that the want of success has proceeded from the undue countenance which has been afforded to the spirit of monopoly. All the serious dangers which our system has yet encountered, may be traced to the resort to implied powers, andto the use of corporations. We have felt, he says, but one class of these dangers in the contest with the bank of the United States, and he clearly intimates that theotherclass is the state banks. We are now to see, he proceeds, whether in the present favorable condition of the country, we cannot take an effectual stand against this spirit of monopoly. Reverting to his favorite scheme of a government bank, he says it is ascertained, that, instead of being made necessary to promote the evils of an uncheckedpaper system, the management of the revenuecan be made auxiliary to the reform which he is desirous to introduce. The designs of president Jackson against the state banks are more fully developed and enlarged upon in his annual message of 1836, from which I beg leave to quote the following passages.‘I beg leave to call your attention to another subject, intimately associated with the preceding one—the currency of the country.‘It is apparent, from the whole context of the constitution, as well as the history of the times that gave birth to it, that it was the purpose of the convention to establish a currency consisting ofthe precious metals. These, from their peculiar properties, which rendered them the standard of value in all other countries, were adopted in this, as well to establish its commercial standard, in reference to foreign countries, by a permanent rule, as to exclude the use of a mutable medium of exchange, such as of certain agricultural commodities, recognised by the statutes of some states, as a tender for debts, or the still more pernicious expedient of a paper currency.’‘Variableness must ever be the characteristic of a currency of which the precious metals are not the chief ingredient, or which can be expanded or contracted, without regard to the principles that regulate the value of those metals as a standard in the general trade of the world. With us, bank issues constitute such a currency, and must ever do so, until they are made dependent on those just proportions of gold and silver, as a circulating medium, which experience has proved to be necessary, not only in this, but in all other commercial countries. Where those proportions are not infused into the circulation, and do not control it, it is manifest that prices must vary according to the tide of bank issues, and the value and stability of property must stand exposed to all the uncertainty which attends the administration of institutions that are constantly liable to the temptation of an interest distinct from that of the community in which they are established.’‘But although various dangers to our republican institutions have been obviated by the failure of that bank to extort from the government a renewal of its charter, it is obvious that little has been accomplished, except a salutary change of public opinion towards restoring to the country the sound currency provided for in the constitution. In the acts of several of the states prohibiting the circulation of small notes, and the auxiliary enactments of congress at the last session, forbidding their reception or payment on public account, the true policy of the country has been advanced, and a larger portion of the precious metals infused into our circulating medium. These measures will probably be followed up in due time, by the enactment of state laws, banishing from circulation bank notes of still higher denominations; and the object may be materially promoted by further acts of congress, forbidding the employment, as fiscal agents, of such banks as issue notes of low denominations, and throw impediments in the way of the circulation of gold and silver.‘The effects of an extension ofbank creditsand over issues of bank paper have been strikingly illustrated in the sales of the public lands. From the returns made by the various registers and receivers in the early part of last summer, it was perceived that the receipts arising from the sales of public lands were increasing to an unprecedented amount. In effect, however, these receipts amount to nothing more than credits in banks. The banks lent out their notes to speculators; they were paid to the receivers, and immediately returned to the banks, to be lent out again and again, being mere instruments to transfer to speculators the most valuable public land, and pay the government by a credit on the books of the banks. Those credits on the books of some of the western banks, usually called deposits, were already greatly beyond their immediate means of payment, and were rapidly increasing. Indeed, each speculation furnished means for another: for no sooner had one individual or company paid in the notes, than they were immediately lent to another for a like purpose; and the banks were extending their business and their issues so largely as to alarm considerate men, and render it doubtful whetherthese bank credits, if permitted to accumulate, would ultimately be of the least value to the government. The spirit of expansion and speculation was not confined to the deposit banks, but pervaded the whole multitude of banks throughout the union, and was giving rise to new institutions to aggravate the evil.‘The safety of the public funds, and the interest of the people generally, required that these operations should be checked; and it became the duty of every branch of the general and state governments, to adopt all legitimate and proper means to produce that salutary effect. Under this view of my duty, I directed the issuing of the order, which will be laid before you by the secretary of the treasury, requiring payment of the public lands sold, to be made in specie, with an exception until the fifteenth of the present month in favor of actual settlers. This measure has produced many salutary consequences. It checked the career of the western banks, and gave them additional strength in anticipation of the pressure which has since pervaded our eastern as well as the European commercial cities. By preventing the expansion of the credit system, it measurably cut off the means of speculation, and retarded itsprogress in monopolizing the most valuable of the public lands. It has tended to save the new states from a non-resident proprietorship; one of the greatest obstacles to the advancement of a new country, and the prosperity of an old one. It has tended to keep open the public lands for entry by emigrants at government prices, instead of their being compelled to purchase of speculators at double or treble prices. And it is conveying into the interior, large sums in silver and gold, there to enter permanently into the currency of the country, and place it on a firmer foundation. It is confidently believed that the country will find, in the motives which induced that order, and the happy consequences which have ensued, much to commend, and nothing to condemn.’It is seen that he again calls the attention of congress to the currency of the country, alleges that it was apparent from the whole context of the constitution, as well as the history of the times that gave birth to it, that it was the purpose of the convention to establish a currency consisting of theprecious metals; imputes variableness and a liability to inordinate contraction and expansion to the existing paper system, and denounces bank issues, as being an uncertain standard. He felicitates himself upon the dangers which have been obviated by the overthrow of the bank of the United States, but declares that little has been yet done, except to produce a salutary change of public opinion towards restoring to the country, the sound currencyprovided for in the constitution. I will here say, in passing, that all this outcry about the precious metals, gold, and the constitutional currency, has been put forth to delude the people, and to use the precious metals as an instrument to break down the banking institutions of the states, and to thus pave the way for the ultimate establishment of a great government bank. In the present advanced state of civilization, in the present condition of the commerce of the world, and in the actual relations of trade and intercourse between the different nations of the world, it is perfectly chimerical to suppose that the currency of the United States should consist exclusively, or principally, of the precious metals.In the quotations which I have made from the last annual message of general Jackson, he speaks of the extension of bank credits, and the over-issues of bank paper, in the operations upon the sales of public lands. In his message of only the preceding year, the vast amount of those sales had been dwelt upon with peculiar complaisance, as illustrating the general prosperity of the country, and as proof of the wisdom of his administration. But now that which had been announced as a blessing, is deprecated as a calamity. Now, his object being to assail the banking institutions of the states, and to justify that fatal treasury order, which I shall hereafter have occasion to notice, he expresses his apprehension of the danger to which we are exposed of losing the public domain, and getting nothing for it butbank credits. He describes, minutely, the circular process by which the notes of the banks passed out of those institutions, to be employed in the purchase of the public lands, and returned again to them in the form of creditsto the government. He forgets thatMr.Secretary Taney, to reconcile the people of the United States to the daring measure of removing the public deposits, had stimulated the banks to the exercise of great liberality in the grant of loans. He informs us, in that message, that the safety of the public funds, and the interests of the people generally, required that these copious issues of the banks should be checked, and that the conversion of the public lands into mere bank credits should be arrested. And his measure to accomplish these objects, was that famous treasury order, already adverted to. Let us pause here for a moment, and contemplate the circumstances under which it was issued. The principle of the order had been proposed and discussed in congress. But one senator, as far as I know, in this branch of the legislature, and not a solitary member, within my knowledge, in the house of representatives, was in favor of it. And yet, in about a week after the adjournment of congress, the principle which met with no countenance from the legislative authority, was embodied in the form of a treasury edict, and promulgated under the executive authority, to the astonishment of the people of the United States!If we possessed no other evidence whatever of the hostility of president Jackson to the state banks of the United States, that order would supply conclusive proof. Bank notes, bank issues, bank credits, were distrusted and denounced by him. It was proclaimed to the people, that they were unworthy of confidence. The government could no longer trust in their security. And at a moment when the banking operations were extended, and stretched to their utmost tension; when they were almost all tottering and ready to fall, for the want of that metallic basis on which they all rested, the executive announces its distrust, issues the treasury order, and enters the market for specie, by a demand of an extraordinary amount to supply the means of purchasing the public lands. If the sales had continued in the same ratio they had been made during the previous year, that is, at about the rate of twenty-four millionsper annum, this unprecedented demand created by government for specie, must have exhausted the vaults of most of the banks, and produced much sooner the catastrophe which occurred in May last. And, what is most extraordinary, this wanton demand for specie upon all the banks of the commercial capitals, and in the busy and thickly peopled portions of the country, was that it might be transported into the wilderness, and, after having been used in the purchase of public lands, deposited to the credit of the government in the books of western banks, in some of which, according to the message, they were already credits to the government ‘greatly beyond their immediate means of payment.’ Government, therefore, did not itself receive, or rather, did not retain, the very specie which it professed to demand as the only medium worthy of the public lands. The specie, which was souselessly exacted, was transferred from one set of banks, to the derangement of the commerce and business of the country, and placed in the vaults of another set of banks in the interior, forming only those bank credits to the government upon which president Jackson placed so slight a value.Finally, when general Jackson was about to retire from the cares of government, he favored his countrymen with a farewell address. The solemnity of the occasion gives to any opinions which he has expressed in that document a claim to peculiar attention. It will be seen on perusing it, that he denounces, more emphatically than in any of his previous addresses, the bank paper of the country, corporations, and what he chooses to denominate the spirit of monopoly. The senate will indulge me in calling its attention to certain parts of that address, in the following extracts.‘The constitution of the United States unquestionably intended to secure to the people, a circulating medium of gold and silver. But the establishment of a national bank by congress, with the privilege of issuing paper money, receivable in payment of the public dues, and the unfortunate cause of legislation in the several states upon the same subject, drove from general circulation the constitutional currency, and substituted one of paper in its place.’‘The mischief springs from the power which the moneyed interest derives from a paper currency, which they are able to control; from the multitude of corporations, with exclusive privileges, which they have succeeded in obtaining in the different states, and which are employed altogether for their benefit; and unless you become more watchful in your states, and check this spirit of monopoly, and thirst for exclusive privileges, you will, in the end, find that the most important powers of government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations.’‘But it will require steady and persevering exertions on your part to rid yourselves of the iniquities and mischiefs of the paper system, and to check the spirit of monopoly and other abuses which have sprung up with it, and of which it is the main support. So many interests are united to resist all reform on this subject, that you must not hope that the conflict will be a short one, nor success easy. My humble efforts have not been spared, during my administration of the government, to restore the constitutional currency of gold and silver: and something, I trust, has been done towards the accomplishment of this most desirable object. But enough yet remains, to require all your energy and perseverance. The power, however, is in your hands, and the remedy must, and will be applied, if you determine upon it.’The mask is now thrown off, and he boldly says that the constitution of the United Statesunquestionablyintended to secure to the people a circulating medium of gold and silver. They have not enjoyed, he says, that benefit, because of the establishment of a national bank,and the unfortunate course of legislation in the several states. He does not limit his condemnation of the past policy of his country to the federal government, of which he had just ceased to be the chief, but he extends it to the states also, as if they were incompetent to judge of the interests of their respective citizens. He tells us that the mischief springs from the power which the moneyed interest derives from a paper currency, which they are able to control, and the multitude of corporations; and he stimulates the people to become more watchful in their several states, to check this spirit of monopoly. To invigorate theirfortitude, he tells the people that it will require steady and persevering exertions on their part, to rid themselves of theiniquitiesand mischiefs of the paper system, and to check the spirit of monopoly. They must not hope that the conflict will be a short one, nor success easy. His humble efforts have not been spared during his administration, to restore the constitutional currency of gold and silver; and although he has been able to do something towards the accomplishment of that object,enough yet remainsto require all the energy and perseverance of the people.Such,Mr.President, are the proofs and the argument on which I rely to establish the second and third propositions which I have been considering. Are they not successfully maintained? Is it possible that any thing could be more conclusive on such a subject?I pass to the consideration of the fourth proposition.Fourth, that the present administration, by acknowledgments emanating from the highest and most authentic source, has succeeded to the principles, plans, and policy, of the preceding administration, and stands solemnly pledged to complete and perfect them.The proofs on this subject are brief; but they are clear, direct, and plenary. It is impossible for any unbiased mind to doubt for a moment about them. You, sir, will be surprised, when I shall array them before you, at their irresistible force. The first that I shall offer is an extract fromMr.Van Buren’s letter of acceptance of the nomination of the Baltimore convention, dated May23d, 1835. In that letter he says:‘I content myself, on this occasion, with saying, that I consider myself the honoredinstrument, selected by the friends of the present administration,to carry out its principles and policy; and that, as well from inclination as fromduty. I shall, if honored with the choice of the American people, endeavor generally to follow in the footsteps of president Jackson; happy if I shall be able toperfect the workwhich he has so gloriouslybegun.’Mr.Van Buren announces that he was the honored instrument selected by the friends of the present administration, to carry out its principles and policy. The honored instrument! That word, according to the most approved definition, meanstool. He was, then, the honored tool—to do what? to promote the honor, and advance the welfare of the people of the United States, and to add to the glory of his country? No, no; his country was not in his thoughts. Party, party, filled the place in his bosom which country should have occupied. He was the honored tool to carry out the principles and policy of general Jackson’s administration; and, if elected, he should, as well from inclination as fromduty, endeavor, generally, to tread in the footsteps of general Jackson; happy if he should be able to perfect the work which he had so gloriously begun. Duty to whom? to the country, to the whole people of theUnited States? No such thing; but duty to the friends of the then administration; and that duty required him to tread in the footsteps of his illustrious predecessor, and to perfect the work which he had begun! Now, the senate will bear in mind that the most distinguishing features of general Jackson’s administration related to the currency; that he had denounced the banking institutions of the country; that he had overthrown the bank of the United States; that he had declared, when that object was accomplished, only one half the work was completed; that he then commenced war against the state banks, in order to finish the other half; that he constantly persevered in, and never abandoned, his favorite project of a great government treasury bank; and that he retired from the office of chief magistrate, pouring out, in his farewell address, anathemas against paper money, corporations, and the spirit of monopoly. When all these things are recollected, it is impossible not to comprehend clearly whatMr.Van Buren means, by carrying out the principles and policy of the late administration. No one can mistake that those principles and that policy require him to break down the local institutions of the states, and to discredit and destroy the paper medium which they issue. No one can be at a loss to understand, that, in following in the footsteps of president Jackson, and in perfecting the work which he begun,Mr.Van Buren means to continue attacking, systematically, the banks of the states, and to erect on their ruins, that great government bank, begun by his predecessor, and which he is the honored instrument selected to complete. The next proof which I shall offer is supplied byMr.Van Buren’s inaugural address, from which I request permission of the senate to read the following extract.‘In receiving from the people the sacred trust twice confided to my illustrious predecessor, and which he has discharged so faithfully and so well, I know that I cannot expect to perform the arduous task with equal ability and success. But,united as I have been in his counsels, a daily witness of his exclusive and unsurpassed devotion to his country’s welfare,agreeing with him in sentimentswhich his countrymen have warmly supported, and permitted to partakelargelyof his confidence, I may hope that somewhat of the same cheering approbation will be found to attend upon my path.’Here we findMr.Van Buren distinctly avowing, what the American people well knew before, that he had been united in the counsels of general Jackson; that he had agreed with him in sentiments, and that he had partaken largely of his confidence. This intimacy and confidential intercourse could not have existed without the concurrence ofMr.Van Buren in all those leading and prominent measures of his friend, which related to the establishment of a government bank, the overthrow of the bank of the United States, the attack upon the state institutions, and the denunciation of the paper currency, the spirit of monopoly, and corporations. Is it credible to believe that general Jackson should haveaimed at the accomplishment of all those objects, and entertained all these sentiments, withoutMr.Van Buren’s participation?I proceed to another point of powerful evidence, in the conduct ofMr.Van Buren, in respect to the famous treasury order. That order had been promulgated, originally, in defiance of the opinion of congress, had been continued in operation, in defiance of the wishes and will of the people, and had been repealed by a bill passed at the last ordinary session of congress, by overwhelming majorities. The fate of that bill is well known. Instead of being returned to the house in which it originated, according to the requirement of the constitution, it was sent to one of the pigeon-holes of the department of state, to be filed away with an opinion of a convenient attorney-general, always ready to prepare one in support of executive encroachment. On the fifth of March last, not a doubt was entertained, as far as my knowledge or belief extends, thatMr.Van Buren would rescind the obnoxious order. I appeal to the senator from Missouri, who sits near me, (Mr.Linn,) to the senator from Mississippi, who sits furthest from me, (Mr.Walker,) to the senator from Alabama, (Mr.King,) and to the whole of the administration senators, if such was not the expectation of all of them. Was there ever an occasion in which a new administration had so fine an opportunity to signalize its commencement by an act of grace and wisdom, demanded by the best interests and most anxious wishes of the people? ButMr.Van Buren did not think proper to embrace it. He had shared too largely in the confidence of his predecessor, agreed too fully with him in sentiments, had been too much united with him in his counsels, to rescind an order which constituted so essential a part of the system which had been deliberately adopted to overthrow the state banks.Another course pursued by the administration, after the catastrophe of the suspension of specie payments by the banks, demonstrates the hostile purposes towards them of the present administration. When a similar event had occurred during the administration ofMr.Madison, did he discredit and discountenance the issues of the banks, by refusing to receive them in payment of the public dues? Did the state governments, upon the former or the late occasion, refuse to receive them in payment of the dues to them, respectively? And if irredeemable bank notes are good enough for state governments and the people, are they not good enough for the federal government of the same people? By exacting specie, in all payments to the general government, that government presented itself in the market as a powerful and formidable competitor with the banks, demanding specie at a moment when the banks were making unexampled struggles to strengthen themselves, and prepare for the resumption of specie payments. The extent of this government demand forspecie does not admit of exact ascertainment; but when we reflect that the annual expenditures of the government were at the rate, including the post-office department, of about thirty-three millions of dollars, and that its income, made up either of taxes or loans, must be an equal sum, making together an aggregate of sixty-six millions, it will be seen that the amount of specie required for the use of government must be immensely large. It cannot be precisely determined, but would not be less, probably, than fifteen or twenty millions of dollars per annum. Now, how is it possible for the banks, coming into the specie market in competition with all the vast power and influence of the government, to provide themselves with specie, in a reasonable time to resume specie payments? That competition would have been avoided, if, upon the stoppage of the banks, the notes of those of whose solidity there was no doubt, had been continued to be received in payment of the public dues, as was done inMr.Madison’s administration. And why,Mr.President, should they not have been? Why should not this government receive the same description of medium which is found to answer all the purposes of the several state governments? Why should they have resorted to the expedient of issuing an inferior paper medium, in the form of treasury notes, and refusing to receive the better notes of safe and solid banks? Do not misunderstand me,Mr.President. No man is more averse than I am, to a permanent, inconvertible paper medium. It would have been as a temporary measure only, that I should have thought it expedient to receive the notes of good local banks. If, along with that measure, the treasury order had been repealed, and other measures adopted to encourage and coerce the resumption of specie payments, we should have been much nigher that desirable event, than, I fear, we now are. Indeed, I do not see when it is possible for the banks to resume specie payments, as long as the government is in the field, making war upon them, and in the market demanding specie.Another conclusive evidence of the hostility to the state banks, on the part ofMr.Van Buren, is to be found in that extraordinary recommendation of a bankrupt law, contained in his message at the extra session. According to all the principles of any bankrupt system with which I am acquainted, the banks, by the stoppage of specie payment, had rendered themselves liable to its operation. If the recommended law had been passed, commissions of bankruptcy could have been immediately sued out against all the suspended banks, their assets seized, and the administration of them transferred from the several corporations to which it is now intrusted, to commissioners appointed by the president himself. Thus, by one blow, would the whole of the state banks have been completely prostrated, and the way cleared for the introduction ofthe favorite treasury bank; and is it not in the same spirit of unfriendliness to those banks, and with the same view of removing all obstacles to the establishment of a government bank, that the bill was presented to the senate a few days ago by the senator from Tennessee, (Mr.Grundy,) against the circulation of the notes of the old bank of the United States? At a time when there is too much want of confidence, and when every thing that can be done, should be done, to revive and strengthen it, we are called upon to pass a law denouncing the heaviest penalty and ignominious punishment against all who shall reissue the notes of the old bank of the United States, of which we are told that about seven millions of dollars are in circulation; and they constitute the best portion of the paper medium of the country; the only portion of it which has a credit every where, and which serves the purpose of a general circulation; the only portion with which a man can travel from one end of the continent to the other; and I do not doubt that the senator who has fulminated these severe pains and penalties against that best part of our paper medium, provides himself with a sufficient amount of it, whenever he leaves Nashville, to take him to Washington.[HereMr.Grundy rose and remarked, no, sir; I always travel on specie.]Ah! continuedMr.Clay, my old friend is alwaysspecieous. I am quite sure that members from a distance in the interior generally find it indispensable to supply themselves, on commencing their journey, with an adequate amount of these identical notes to defray its expenses. Why, sir, will any man in his senses deny, that these notes are far better than those which have been issued by that government banker,Mr.Levi Woodbury, aided though he be by the chancellor of the exchequer, (I beg his pardon, I mean the ex-chancellor,) the senator from New York, (Mr.Wright?) I am not going to stop here to inquire into thestrictlegality of the reissue of these notes; that question, together with the power of the government to pass the proposed bill, will be taken up when it is considered. I am looking into the motive of such a measure. Nobody doubts the perfect safety of the notes; no one can believe that they will not be fairly and fully paid. What, then, is the design of the bill? It is to assail the only sure general medium which the people possess. It is because it may come in competition with treasury notes or other government paper. Sir, if the bill had not been proposed by my old friend from Tennessee, I would say its author better deserved a penitentiary punishment than those against whom it is directed. I remember to have heard of an illustrious individual, now in retirement, having, on some occasion, burst out into the most patriotic indignation, because of a waggish trick played off upon him, by putting a note of the late bank of the United States into his silk purse with his gold.But it is unnecessary to dwell longer on the innumerable proofs of the hostility against the state banks, and the deliberate purpose of those in power to overthrow them. We hear and see daily, throughout the country, among their partisans and presses, denunciations against banks, corporations, rag barons, the spirit of monopoly, and so forth; and the howl for gold, hard money, and the constitutional currency; and no one can listen to the speeches of honorable members, friends of the administration, in this house and the other, without being impressed with a perfect conviction that he destruction of the state banks is meditated.I have fulfilled my promise,Mr.President, to sustain the first four propositions with which I sat out. I now proceed to the fifth proposition.Fifth, that the bill under consideration is intended to executeMr.Van Buren’s pledge, to complete and perfect the principles, plans, and policy, of the past administration, by establishing, upon the ruins of the late bank of the United States and the state banks, a government bank, to be managed and controlled by the treasury department, acting under the commands of the president of the United States.The first impression made by the perusal of the bill is the prodigal and boundless discretion which it grants to the secretary of the treasury, irreconcilable with the genius of our free institutions, and contrary to the former cautious practice of the government. As originally reported, he was authorized by the bill to allow any number of clerks he thought proper to the various receivers-general, and to fix their salaries. It will be borne in mind that this is the mere commencement of a system; and it cannot be doubted that, if put into operation, the number of receivers-general, and other depositaries of the public money, would be indefinitely multiplied. He is allowed to appoint as many examiners of the public money, and to fix their salaries, as he pleases; he is allowed to erect at pleasure costly buildings; there is no estimate for any thing; and all who are conversant with the operations of the executive branch of the government know the value and importance of previous estimates. There is no other check upon wasteful expenditure but previous estimates; and that was a point always particularly insisted upon byMr.Jefferson. The senate will recollect, that, a few days ago, when the salary of the receiver-general at New York was fixed, the chairman of the committee of finance rose in his place and stated, that it wassuggestedby the secretary of the treasury, that it should be placed at three thousand dollars; and the blank was accordingly so filled. There was no statement of the nature or extent of the duties to be performed, of the time that he would be occupied, of the extent of his responsibility, or the expense of living at the several points where they were to be located; nothing but thesuggestionof the secretary of the treasury,and that was deemed all-sufficient by a majority. There is no limit upon the appropriation which is made to carry into effect the bill, contrary to all former usage, which invariably prescribed a sum not to be transcended.A most remarkable feature in the bill is that to which I have already called the attention of the senate, and of which no satisfactory explanation has been given. It is that which proceeds upon the idea, that the treasury is a thing distinct from the treasure of the United States, and gives to the treasury a local habitation and a name, in the new building which is erecting for the treasury department in the city of Washington. In the treasury, so constituted, is to be placed that pittance of the public revenue which is gleaned from the District of Columbia. All else, that is to say, nine hundred and ninety-nine hundredths of the public revenue of the United States, is to be placed in the hands of the receivers-general, and the other depositaries beyond the District of Columbia. Now, the constitution of the United States provides that no money shall be drawn from the public treasury, but in virtue of a previous appropriation by law. That trifling portion of it, therefore, which is within the District of Columbia, will be under the safeguard of the constitution, and all else will be at the arbitrary disposal of the secretary of the treasury.It was deemed necessary, no doubt, to vest in the secretary of the treasury this vast and alarming discretionary power. A new and immense government bank is about to be erected. How it would work in all its parts could not be anticipated with certainty; and it was thought proper, therefore, to bestow a discretion commensurate with its novelty and complexity, and adapted to any exigencies which might arise. The tenth section of the bill is that in which the power to create a bank is more particularly conferred. It is short, and I will read it to the senate.‘Section 10. And be it further enacted, that it shall be lawful for the secretary of the treasury to transfer the moneys in the hands ofanydepositary hereby constituted, to the treasury of the United States; to the mint at Philadelphia; to the branch mint at New Orleans; or to the offices of either of the receivers-general of public moneys, by this act directed to be appointed; to be there safely kept, according to the provisions of this act; andalso to transfer moneys in the hands of any one depositary constituted by this act to any other depositary constituted by the same,AT HIS DISCRETION, and as the safety of the public moneys,and the convenience of the public serviceshall seem to him to require. And for the purpose of payments on the public account, it shall be lawful for the said secretaryto draw upon any of the said depositaries, as he may think most conducive to the public interests, or to the convenience of the public creditors, or both.’It will be seen, that it grants a power, perfectly undefined, to the secretary of the treasury, to shift and transfer the public money, from depositary to depositary, as he pleases. He is expressly authorized to transfer moneys in the hands of any one depositary constituted by the act, to any other depositary constituted by it,at his discretion, and as the safety of the public moneys,and theconvenience of the public service, shall seem to him to require. There is no specification of any contingency or contingencies, on which he is to act. All is left to his discretion. He is to judge when the public service, (and more indefinite terms could not have been employed,) shall seem to him to require it. It has been said, that this is nothing more than the customary power of transfer, exercised by the treasury department, from the origin of the government. I deny it; utterly deny it. It is a totally different power from that which was exercised by the cautious Gallatin, and other secretaries of the treasury—a power, by-the-bye, which, on more than one occasion, has been controverted, and which is infinitely more questionable than the power to establish a bank of the United States. The transfer was made by them rarely, in large sums, and were left to the banks to remit. When payments were made, they were effected in the notes of banks with which the public money was deposited, or to which it was transferred. The rates of exchange were regulated by the state of the market, and under the responsibility of the banks. But here is a power given to transfer the public moneys without limit, as to sum, place, or time, leaving every thing to the discretion of the secretary of the treasury, the receivers-general, and other depositaries. What a scope is allowed in the fixation of the rates of exchange, whether of premium or discount, to regulate the whole domestic exchanges of the country, to exercise favoritism? These former transfers were not made for disbursement, but as preparatory to disbursement; and when disbursed, it was generally in bank notes. The transfers of this bill are immediate payments, and payments made not in bank notes, but specie.The last paragraph in the section provides, that, for the purpose of payments on the public account, it shall be lawful for the secretaryto draw upon any of the said depositaries, as he may think most conducive to the public interest, or to the convenience of the public creditors, or both. It will be seen, that no limit whatever is imposed upon the amount or form of the draft, or as to the depositary upon which it is drawn. He is made the exclusive judge of what is ‘most conducive to the public interests.’ Now, let us pause a moment, and trace the operation of the powers thus vested. The government has a revenue of from twenty to thirty millions. The secretary may draw it to any one or more points, as he pleases. More than a moiety of the revenue arising from customs is receivable at the port of New York, to which point the secretary may draw all portions of it, if he think it conducive to the public interest. A man has to receive, under an appropriation law, ten thousand dollars, and applies toMr.Secretary for payment. Where will you receive it? he is asked. On New York. How? In drafts from five dollars to five hundred dollars.Mr.Secretary will give him these drafts accordingly, upon bank note paper, impressed like andsimulating bank notes, having all suitable emblazonry, signed by my friend the treasurer, (whose excellent practical sense, and solid and sound judgment, if he had been at the head of the treasury, instead ofMr.Levi Woodbury, when the suspension of specie payments took place, would have relieved or mitigated the pecuniary embarrassments of the government and the people,) counter-signed by the comptroller, and filled up in the usual way of bank notes. Here is one of them, saidMr.Clay. (He here held up, to the gaze of the senate, a treasury note, having all the appearance of a bank note, colored, engraved, and executed, like any other bank note, for fifty dollars.) This, continuedMr.Clay, is a governmentpostnote, put into circulation, paid out as money, and prepared and sent forth, gradually to accustom the people of this country to government paper.I have supposed ten thousand dollars to be received in the mode stated by a person entitled to receive it under an appropriation law. Now, let us suppose what he will do with it. Any where to the south or west it will command a premium of from two to five per centum. Nowhere in the United States will it be under par. Do you suppose that the holder of these drafts would be fool enough to convert them into specie, to be carried and transported at his risk? Do you think that he would not prefer that his money should be in the responsible custody of the government, rather than in his own insecure keeping? Do you think he will deny to himself the opportunity of realizing the premium of which he may be perfectly sure? The greatest want of the country is a medium of general circulation, and of uniform value every where. That, especially, is our want in the western and interior states. Now, here is exactly such a medium; and, supposing the government bank to be honestly and faithfully administered, it will, during such an administration, be the best convertible paper money in the world, for two reasons. The first is, that every dollar of paper out will be the representative of a dollar of specie in the hands of the receivers-general, or other depositaries; and, secondly, if the receivers-general should embezzle the public money, the responsibility of the government to pay the drafts issued upon the basis of that money would remain unimpaired. The paper, therefore, would be as far superior to the paper of any private corporation as the ability and resources of the government of the United States are superior to those of such corporations.The banking capacity may be divided into three faculties: deposits, discount of bills of exchange, and promissory notes, or either, and circulation. This government bank would combine them all, except that it will not discount private notes, or receive private deposits. In payments for the public lands, indeed, individuals are allowed to make deposits, and to receive certificates of their amount. To guard against their negotiability, a clause hasbeen introduced to render them unassignable. But how will it be possible to maintain such an inconvenient restriction, in a country where every description of paper importing an obligation to pay money or deliver property is assignable, at law or in equity, from the commercial nature and trading character of our people.
IN THE SENATE OF THE UNITED STATES, FEBRUARY 19, 1838.
[THEindependent or sub-treasury scheme being pressed upon the consideration of congress, byMr.Van Buren, although public opinion was setting strongly against it,Mr.Clay delivered the following elaborate speech, in which he shows that a deliberate design had existed on the part of general Jackson, and his successor,Mr.Van Buren, to break down the whole banking system of the United States, and to create on their ruins agovernment treasury bank, under the exclusive control of the executive. This speech was partly in reply toMr.Calhoun, of South Carolina, who had become a supporter of the administration.]
IHAVEseen some public service, passed through many troubled times, and often addressed public assemblies, in this capitol and elsewhere; but never before have I risen in a deliberative body, under more oppressed feelings, or with a deeper sense of awful responsibility. Never before have I risen to express my opinions upon any public measure, fraught with such tremendous consequences to the welfare and prosperity of the country, and so perilous to the liberties of the people, as I solemnly believe the bill under consideration will be. If you knew, sir, what sleepless hours reflection upon it has cost me, if you knew with what fervor and sincerity I have implored divine assistance to strengthen and sustain me in my opposition to it, I should have credit with you, at least, for the sincerity of my convictions, if I shall be so unfortunate as not to have your concurrence as to the dangerous character of the measure. And I have thanked my God that he has prolonged my life until the present time, to enable me to exert myself in the service of my country, against a project far transcending in pernicious tendency any that I have ever had occasion to consider. I thank him for the health I am permitted to enjoy; I thank him for the soft and sweet repose which I experienced last night; I thank him for the bright and glorious sun which shines upon us this day.
It is not my purpose, at this time,Mr.President, to go at large into a consideration of the causes which have led to the present most disastrous state of public affairs. That duty was performed by others, and myself, at the extra session of congress. It was then clearly shown, that it sprung from the ill-advised and unfortunatemeasures of executive administration. I now will content myself with saying that, on the fourth day of March, 1829, Andrew Jackson, not by the blessing of God, was made president of these United States; that the country then was eminently prosperous; that its currency was as sound and safe as any that a people were ever blessed with; that, throughout the wide extent of this whole union, it possessed a uniform value; and that exchanges were conducted with such regularity and perfection, that funds could be transmitted from one extremity of the union to the other, with the least possible risk or loss. In this encouraging condition of the business of the country, it remained for several years, until after the war, wantonly waged against the late bank of the United States, was completely successful, by the overthrow of that invaluable institution. What our present situation is, is as needless to describe as it is painful to contemplate. First felt in our great commercial marts, distress and embarrassment have penetrated into the interior, and now pervade almost the entire union. It has been justly remarked by one of the soundest and most practical writers that I have had occasion to consult, that ‘all convulsions in the circulation and commerce of every country must originate in the operations of the government, or in the mistaken views and erroneous measures of those possessing the power of influencing credit and circulation; for they are not otherwise susceptible of convulsion; and, if left to themselves, they will find their own level, and flow nearly in one uniform stream.’
Yes,Mr.President, we all have but too melancholy a consciousness of the unhappy condition of our country. We all too well know, that our noble and gallant ship lies helpless and immovable upon breakers, dismasted, the surge beating over her venerable sides, and the crew threatened with instantaneous destruction. How came she there? Who was the pilot at the helm when she was stranded? The party in power! The pilot was aided by all the science and skill, by all the charts and instruments, of such distinguished navigators as Washington, the Adamses, Jefferson, Madison, and Monroe; and yet he did not, or could not, save the public vessel. She was placed in her present miserable condition by his bungling navigation, or by his want of skill and judgment. It is impossible for him to escape from one or the other horn of that dilemma. I leave him at liberty to choose between them.
I shall endeavor,Mr.President, in the course of the address I am about making, to establish certain propositions, which I believe to be incontestable; and, for the sake of perspicuity, I will state them severally to the senate. I shall contend,
First, that it was the deliberate purpose and fixed design of the late administration to establish a government bank—a treasury bank—to be administered and controlled by the executive department.
Secondly, that, with that view, and to that end, it was its aim and intention to overthrow the whole banking system, as existing in the United States when that administration came into power, beginning with the bank of the United States, and ending with the state banks.
Thirdly, that the attack was first confined, from considerations of policy, to the bank of the United States; but that, after its overthrow was accomplished, it was then directed, and has since been continued, against the state banks.
Fourthly, that the present administration, by its acknowledgments, emanating from the highest and most authentic source, has succeeded to the principles, plans, and policy, of the preceding administration, and stands solemnly pledged to complete and perfect them.
And, fifthly, that the bill under consideration is intended to execute the pledge, by establishing, upon the ruins of the late bank of the United States, and the state banks, a government bank, to be managed and controlled by the treasury department, acting under the commands of the president of the United States.
I believe, solemnly believe, the truth of every one of these five propositions. In the support of them, I shall not rely upon any gratuitous surmises or vague conjectures, but upon proofs, clear, positive, undeniable, and demonstrative. To establish the first four, I shall adduce evidence of the highest possible authenticity, or facts admitted or undeniable, and fair reasoning founded on them. And as to the last, the measure under consideration, I think the testimony, intrinsic and extrinsic, on which I depend, stamps, beyond all doubt, its true character as a government bank, and ought to carry to the mind of the senate the conviction which I entertain, and in which I feel perfectly confident the whole country will share.
First. My first proposition is, that it was the deliberate purpose and fixed design of the late administration to establish a government bank—a treasury bank—to be administered and controlled by the executive department. To establish its truth, the first proof which I offer is the following extract from president Jackson’s annual message of December, 1829.
‘The charter of the bank of the United States expires in 1836, and its stockholders will most probably apply for a renewal of their privileges. In order to avoid the evils resulting from precipitancy, in a measure involving such important principles, and such deep pecuniary interests, I feel that I cannot, in justice to the parties interested, too soon present it to the consideration of the legislature and the people. Both the constitutionality and the expediency of the law creating this bank, arewell questioned by a large portion of our fellow-citizens; and it must beadmitted by all, that it has failed in the great end of establishing a uniform and sound currency.
‘Under these circumstances, if such an institution is deemed essential to the fiscal operations of the government,I submit to the wisdom of the legislature, whether a national one, founded uponthe credit of the government and its revenues, might not be devised, which would avoid all constitutional difficulties, and, at the same time, secure all the advantages to the government and the country, that were expected to result from the present bank.’
This was the first open declaration of that implacable war against the late bank of the United States, which was afterwards waged with so much ferocity. It was the sound of the distant bugle, to collect together the dispersed and scattered forces, and prepare for battle. The country saw with surprise the statement, that ‘the constitutionality and expediency of the law creating this bank are well questionedby a large portionof our fellow-citizens,’ when, in truth and in fact, it was well known that but few then doubted the constitutionality, and none the expediency, of it. And the assertion excited much greater surprise, that ‘it must beadmitted by all, that it has failed in the great end of establishing a uniform and sound currency.’ In this message, too, whilst a doubt is intimated as to the utility of such an institution, president Jackson clearly first discloses his object to establish a national one, founded upon thecredit of the government and its revenues. His language is perfectly plain and unequivocal. Such a bank, founded upon the credit of the government and its revenues, would secure all the advantages to the government and the country, he tells us, that were expected to result from the present bank.
In his annual message of the ensuing year, the late president says:
‘The importance of the principles involved in the inquiry, whether it will be proper to recharter the bank of the United States, requires that I should again call the attention of congress to the subject. Nothing has occurred to lessen, in any degree, the dangers which many of our citizens apprehend from that institution, as atpresent organized. In the spirit of improvement and compromise which distinguishes our country and its institutions, it becomes us to inquire,whether it be not possible to secure the advantages afforded by the present bank, through the agency of a bank of the United States, so modified in its principlesas to obviate constitutional and other objections.
‘It is thought practicable to organize such a bank, with the necessary officers,as a branch of the treasury department, based on the public and individual deposits, without power to make loans, or purchase property, which shall remit the funds of government; and the expense of which may be paid, if thought advisable, by allowing its officersto sell bills of exchange, to private individuals, at a moderate premium. Not being a corporate body, having no stockholders, debtors, and property, and but few officers, it would not be obnoxious to the constitutional objections which are urged against the present bank; and having no means to operate on the hopes, fears, or interests, of large masses of the community, it would be shorn of the influence which makes that bank formidable.’
In this message president Jackson, after again adverting to the imaginary dangers of a bank of the United States, recurs to his favorite project, and inquires, ‘whether it be not possible to secure the advantages afforded by the present bank, through the agency of a bank of the United States, so modified in its principles and structure as to obviate constitutional and other objections.’ And to dispel all doubts of the timid, and to confirm the wavering, he declares, that it is thought practicable to organize such a bank, with the necessary officers, as a branch of the treasury department.As a branch of the treasury department!The very scheme now under consideration. And, to defray the expenses of such an anomalous institution, he suggests, that the officers of the treasury departmentmay turn bankers and brokers, and sell bills of exchange to private individuals at a moderate premium!
In his annual message of the year 1831, upon this subject, he was brief and somewhat covered in his expressions. But the fixed purpose which he entertained is sufficiently disclosed to the attentive reader. He announces, that ‘entertaining the opinionsheretoforeexpressed in relation to the bank of the United States,as at present organized, I felt it my duty, in my former messages, frankly to disclose them, in order that the attention of the legislature and the people should be seasonably directed to that important subject, and that it might be considered, and finally disposed of, in a manner best calculated to promote the ends of the constitution, and subserve the public interests.’ What were the opinions ‘heretofore’ expressed, we have clearly seen. They were adverse to the bank of the United States, as at presentorganized, that is to say, an organization with any independent corporate government; and in favor of a national bank which should be so constituted as to be subject to exclusive executive control.
At the session of 1831–2, the question of the recharter of the bank of the United States came up; and although the attention of congress and the country had been repeatedly and deliberately before invited to the consideration of it by president Jackson himself, the agitation of it was now declared by him and his partisans to be precipitate and premature. Nevertheless, the country and congress conscious of the value of a safe and sound uniform currency, conscious that such a currency had been eminently supplied by the bank of the United States, and unmoved by all the outcry raised against that admirable institution, the recharter commanded large majorities in both houses of congress. Fatally for the interests of this country, the stern self-will of general Jackson prompted him to risk every thing upon its overthrow. On the tenth of July, 1832, the bill was returned with his veto; from which the following extract is submitted to the attentive consideration of the senate.
‘A bank of the United States is, in many respects, convenient for the government and useful to the people. Entertaining this opinion, and deeply impressed with the belief that some of the powers and privileges possessed by the existing bank are unauthorized by the constitution, subversive of the rights of the states, and dangerous to the liberties of the people, I felt it my duty, at an early period of my administration, to call the attention of congress to the practicabilityof organizing an institution, combining allits advantages, and obviating these objections. I sincerely regret that, in the act before me, I can perceive none of those modifications of the bank charter which are necessary, in my opinion, to make it compatible with justice, with sound policy, or with the constitution of our country.
‘That a bank of the United States, competent to all the duties which may be required by government, might be so organized as not to infringe upon our own delegated powers, or the reserved rights of the states, I do not entertaina doubt. Had the executive been called upon to furnishthe project of such an institution, the duty would have been cheerfully performed. In the absence of such a call, it is obviously proper that he should confine himself to pointing out those prominent features in the act presented, which, in his opinion, make it incompatible with the constitution and sound policy.’
President Jackson admits, in the citation which has just been made, that a bank of the United States is, in many respects, convenient for the government; and reminds congress that he had, at an early period of his administration, called its attention to the practicability of so organizing such an institution as to secure all its advantages, without the defects of the existing bank. It is perfectly manifest, that he alludes to his previous recommendations of a government, a treasury bank. In the same message he tells congress, that if he had been called upon tofurnish the projectof such an institution, the duty would have been cheerfully performed. Thus it appears, that he had not only settled in his mind the general principle, but had adjusted the details of a government bank, to be subjected to executive control; and congress is even chided for not calling upon him to present them. The bill now under consideration, beyond all controversy, is the very project which he had in view, and is to consummate the work which he began. I think,Mr.President, that you must now concur with me in considering the first proposition as fully maintained. I pass to the second and third, which, on account of their intimate connection, I will consider together.
Second, that with the view of establishing a government bank, it was the settled aim and intention of the late administration, to overthrow the whole banking system of the United States, as existing in the United States when that administration came into power, beginning with the bank of the United States, and ending with the state banks.
Third, that the attack was first confined, from considerations of policy, to the bank of the United States; but that, after its overthrow was accomplished, it was then directed, and has since been continued, against the state banks.
We are not bound to inquire into the motives of president Jackson for desiring to subvert the established monetary and financial system, which he found in operation; and yet some examination into those which probably influenced his mind, is not without utility. These are to be found in his peculiar constitution and character. His egotism and vanity, prompted him to subject every thing to his will; to change, to remould, and retouch every thing. Hence the proscription which characterized his administration, the universal expulsion from office, at home and abroad, of all who were not devoted to him, and the attempt to render the executive department of government, to use a favorite expression of his own, a complete ‘unit.’ Hence his seizure of the public deposits, in the bank of the United States, and his desire to unite the purse with the sword. Hence his attack upon all the systems of policy which he found in practical operation, on that of internal improvements, and on that of the protection of national industry. He was animated by the same sort of ambition which induced the master mind of the age, Napoleon Bonaparte, to impress his name uponevery thing in France. When I was in Paris, the sculptors were busily engaged chiselling out the famous N., so odious to the Bourbon line, which had been conspicuously carved on the palace of the Tuilleries, and on other public edifices and monuments, in the proud capital of France. When,Mr.President, shall we see effaced, all traces of the ravages committed by the administration of Andrew Jackson! Society has been uprooted, virtue punished, vice rewarded, and talents and intellectual endowments despised; brutality, vulgarism, and loco focoism upheld, cherished, and countenanced. Ages will roll around before the moral and political ravages which have been committed, will, I fear, cease to be discernible. General Jackson’s ambition was to make his administration an era in the history of the American government, and he has accomplished that object of his ambition; but I trust that it will be an era to be shunned as sad and lamentable, and not followed and imitated as supplying sound maxims and principles of administration.
I have heard his hostility to banks ascribed to some collision which he had with one of them, during the late war, at the city of New Orleans; and it is possible that may have had some influence upon his mind. The immediate cause, more probably, was the refusal of that perverse and unaccommodating gentleman, Nick Biddle, to turn out of the office of president of the New Hampshire branch of the bank of the United States, at the instance of his excellency Isaac Hill, in the summer of 1829, that giant-like person, Jeremiah Mason—giant in body, and giant in mind. War and strife, endless war and strife, personal or national, foreign or domestic, were the aliment of the late president’s existence. War against the bank, war against France, and strife and contention with a countless number of individuals. The wars with Black Hawk and the Seminoles were scarcely a luncheon for his voracious appetite. And he made his exit from public life, denouncing war and vengeance against Mexico and the state banks.
My acquaintance with that extraordinary man commenced in this city, in the fall of 1815 or 1816. It was short, but highly respectful, and mutually cordial. I beheld in him the gallant and successful general, who, by the glorious victory of New Orleans, had honorably closed the second war of our independence, and I paid him the homage due to that eminent service. A few years after, it became my painful duty to animadvert, in the house of representatives, with the independence which belongs to the representative character, upon some of his proceedings, in the conduct of the Seminole war, which I thought illegal, and contrary to the constitution and the law of nations. A non-intercourse between us ensued, which continued until the fall of 1824, when, he being a member of the senate, it was sought to bring about an accommodation between us, by the principal part of the delegationfrom his own state. For that purpose, we were invited to dine with them, at Claxton’s boarding-house, on Capitol hill, where my venerable friend from Tennessee, (Mr.White,) and his colleague on the Spanish commission, were both present. I retired early from dinner, and was followed to the door by general Jackson and the present minister of the United States at the court of Madrid. They pressed me earnestly to take a seat with them in their carriage. My faithful servant and friend, Charles, was standing at the door, waiting for me, with my own. I yielded to their urgent politeness, directed Charles to follow with my carriage, and they sat me down at my own door. We afterwards frequently met, with mutual respect and cordiality; dined several times together, and reciprocated the hospitality of our respective quarters. This friendly intercourse continued, until the election, in the house of representatives, of a president of the United States, came on, in February, 1825. I gave the vote which, in the contingency that happened, I told my colleague, (Mr.Crittenden,) who sits before me, prior to my departure from Kentucky, in November, 1824, and told others, that I should give. All intercourse ceased between general Jackson and myself. We have never since, except once accidentally, exchanged salutations, nor met, except on occasions when we were performing the last offices towards deceased members of congress, or other officers of government. Immediately after my vote, a rancorous war was commenced against me, and all the barking dogs let loose upon me. I shall not trace it during its ten years’ bitter continuance. But I thank my God that I stand here, firm and erect, unbent, unbroken, unsubdued, unawed, ready to denounce the mischievous measures of his administration, and ready to denounce this, its legitimate offspring, the most pernicious of them all.
His administration consisted of a succession of astounding measures, which fell on the public ear like repeated bursts of loud and appalling thunder. Before the reverberations of one peal had ceased, another and another came, louder and louder, and more terrifying. Or rather, it was like a volcanic mountain, emitting frightful eruptions of burning lava. Before one was cold and crusted, before the voices of the inhabitants of buried villages and cities were hushed in eternal silence, another, more desolating, was vomited forth, extending wider and wider the circle of death and destruction.
Mr.President, this is no unnecessary digression. The personal character of such a chief as I have been describing, his passions, his propensities, the character of his mind, should be all thoroughly studied, to comprehend clearly his measures and his administration. But I will now proceed to more direct and strict proofs of my second and third propositions. That he was resolved to break down the bank of the United States, is proved by the same citations from his messages which I have made to exhibit his purpose toestablish a treasury bank, is proved by his veto message, and by the fact that he did destroy it. The war against all other banks was not originally announced, because he wished the state banks to be auxiliaries in overthrowing the bank of the United States, and because such an annunciation would have been too rash and shocking, upon the people of the United States, for even his tremendous influence. It was necessary to proceed in the work with caution, and to begin with that institution against which could be embodied the greatest amount of prejudice. The refusal to recharter the bank of the United States was followed by a determination to remove from its custody the public money of the United States. That determination was first whispered in this place, denied, again intimated, and, finally, in September, 1833, executed. The agitation of the American public which ensued, the warm and animated discussions, in the country and in congress, to which that unconstitutional measure gave rise, are all fresh in our recollection. It was necessary to quiet the public mind, and to reconcile the people to what had been done, before president Jackson seriously entered upon his new career of hostility to the state banks. At the commencement of the session of congress, in 1834, he imagined a sufficient calm had been produced, and, in his annual message of that year, the war upon the state banks was opened. In that message he says:
‘It seems due to the safety of the public funds remaining in that bank, and to the honor of the American people, that measures be taken toseparatethe government entirely, from an institution so mischievous to the public prosperity, and so regardless of the constitution and laws. By transferring the public deposits, by appointing other pension agents, as far as it had the power, by ordering the discontinuance of the receipt of bank checks, in payment of the public dues, after the first day of January next, the executive has exerted all its lawful authority, toseverthe connection between the government and this faithless corporation.’
In this quotation, it will be seen that the first germ is contained of that separation and divorce of the government from banks, which has recently made such a conspicuous figure. It relates, it is true, to the late bank of the United States, and he speaks of separating and severing the connection between the government and that institution. But the idea, once developed, was easily susceptible of application to all banking institutions. In the message of the succeeding year, his meditated attack upon the state banks, is more distinctly disclosed. Speaking of a sound currency, he says:
‘In considering the means of obtaining so important an end, (that is, a sound currency,) we must set aside all calculations oftemporaryconvenience, and be influenced by those only that are in harmony with the true character and permanent interests of the republic. We must recur tofirst principles, and see what it is that has prevented the legislation of congressand the states, on the subject of currency, from satisfying the public expectation, and realizing results corresponding to those which have attended the action of our system, when truly consistent with the great principle of equality upon which it rests, and with that spirit of forbearance and mutual concessionand generous patriotism, which was originally, and must ever continue to be, the vital element of our union.
‘On this subject, I am sure that I cannot be mistaken, in ascribing our want of success to the undue countenance which has been afforded to thespirit of monopoly. All the serious dangers which our system has yet encountered, may be traced to the resort to implied powers,and the use of corporationsclothed with privileges, the effect of which is to advance the interests of the few at the expense of the many. We have feltbut one classof these dangers, exhibited in the contest waged by the bank of the United States, against the government, for the last four years. Happily they have been obviated for the present, by the indignant resistance of the people; but we should recollect that the principle whence they sprang is an ever-active one, which will not fail to renew its efforts in the same and in other forms, so long as there is a hope of success, founded either on the inattention of the people, or the treachery of their representatives, to the subtle progress of its influence.’
* * * *‘We are now to see whether, in the present favorable condition of the country, we cannot take aneffectual stand against this spiritof monopoly, and practically prove, in respect to the currency, as well as other important interests, that there is no necessity for so extensive a resort to it as that which has been heretofore practiced.’
* * * *‘It has been seen, that without the agency of a great moneyed monopoly, the revenue can be collected, and conveniently and safely applied to all the purposes of the public expenditure. It is also ascertained that, instead of being necessarily made to promote the evils of an unchecked paper system, the management of the revenuecan be madeauxiliary to the reform which the legislatures of several of the states have already commenced, in regard to the suppression of small bills; and which has only to be fosteredby proper regulations on the part of congress, to secure a practical return, to the extent required for the security of the currency, to the constitutional medium.’
As in the instance of the attack upon the bank of the United States, the approach to the state banks is slow, cautious, and insidious. He reminds congress and the country that all calculations of temporary convenience must be set aside; that we must recur to first principles; and that we must see what it is that has prevented the legislation of congressand the stateson the subject of the currency from satisfying public expectation. He declares his conviction that the want of success has proceeded from the undue countenance which has been afforded to the spirit of monopoly. All the serious dangers which our system has yet encountered, may be traced to the resort to implied powers, andto the use of corporations. We have felt, he says, but one class of these dangers in the contest with the bank of the United States, and he clearly intimates that theotherclass is the state banks. We are now to see, he proceeds, whether in the present favorable condition of the country, we cannot take an effectual stand against this spirit of monopoly. Reverting to his favorite scheme of a government bank, he says it is ascertained, that, instead of being made necessary to promote the evils of an uncheckedpaper system, the management of the revenuecan be made auxiliary to the reform which he is desirous to introduce. The designs of president Jackson against the state banks are more fully developed and enlarged upon in his annual message of 1836, from which I beg leave to quote the following passages.
‘I beg leave to call your attention to another subject, intimately associated with the preceding one—the currency of the country.
‘It is apparent, from the whole context of the constitution, as well as the history of the times that gave birth to it, that it was the purpose of the convention to establish a currency consisting ofthe precious metals. These, from their peculiar properties, which rendered them the standard of value in all other countries, were adopted in this, as well to establish its commercial standard, in reference to foreign countries, by a permanent rule, as to exclude the use of a mutable medium of exchange, such as of certain agricultural commodities, recognised by the statutes of some states, as a tender for debts, or the still more pernicious expedient of a paper currency.’
‘Variableness must ever be the characteristic of a currency of which the precious metals are not the chief ingredient, or which can be expanded or contracted, without regard to the principles that regulate the value of those metals as a standard in the general trade of the world. With us, bank issues constitute such a currency, and must ever do so, until they are made dependent on those just proportions of gold and silver, as a circulating medium, which experience has proved to be necessary, not only in this, but in all other commercial countries. Where those proportions are not infused into the circulation, and do not control it, it is manifest that prices must vary according to the tide of bank issues, and the value and stability of property must stand exposed to all the uncertainty which attends the administration of institutions that are constantly liable to the temptation of an interest distinct from that of the community in which they are established.’
‘But although various dangers to our republican institutions have been obviated by the failure of that bank to extort from the government a renewal of its charter, it is obvious that little has been accomplished, except a salutary change of public opinion towards restoring to the country the sound currency provided for in the constitution. In the acts of several of the states prohibiting the circulation of small notes, and the auxiliary enactments of congress at the last session, forbidding their reception or payment on public account, the true policy of the country has been advanced, and a larger portion of the precious metals infused into our circulating medium. These measures will probably be followed up in due time, by the enactment of state laws, banishing from circulation bank notes of still higher denominations; and the object may be materially promoted by further acts of congress, forbidding the employment, as fiscal agents, of such banks as issue notes of low denominations, and throw impediments in the way of the circulation of gold and silver.
‘The effects of an extension ofbank creditsand over issues of bank paper have been strikingly illustrated in the sales of the public lands. From the returns made by the various registers and receivers in the early part of last summer, it was perceived that the receipts arising from the sales of public lands were increasing to an unprecedented amount. In effect, however, these receipts amount to nothing more than credits in banks. The banks lent out their notes to speculators; they were paid to the receivers, and immediately returned to the banks, to be lent out again and again, being mere instruments to transfer to speculators the most valuable public land, and pay the government by a credit on the books of the banks. Those credits on the books of some of the western banks, usually called deposits, were already greatly beyond their immediate means of payment, and were rapidly increasing. Indeed, each speculation furnished means for another: for no sooner had one individual or company paid in the notes, than they were immediately lent to another for a like purpose; and the banks were extending their business and their issues so largely as to alarm considerate men, and render it doubtful whetherthese bank credits, if permitted to accumulate, would ultimately be of the least value to the government. The spirit of expansion and speculation was not confined to the deposit banks, but pervaded the whole multitude of banks throughout the union, and was giving rise to new institutions to aggravate the evil.
‘The safety of the public funds, and the interest of the people generally, required that these operations should be checked; and it became the duty of every branch of the general and state governments, to adopt all legitimate and proper means to produce that salutary effect. Under this view of my duty, I directed the issuing of the order, which will be laid before you by the secretary of the treasury, requiring payment of the public lands sold, to be made in specie, with an exception until the fifteenth of the present month in favor of actual settlers. This measure has produced many salutary consequences. It checked the career of the western banks, and gave them additional strength in anticipation of the pressure which has since pervaded our eastern as well as the European commercial cities. By preventing the expansion of the credit system, it measurably cut off the means of speculation, and retarded itsprogress in monopolizing the most valuable of the public lands. It has tended to save the new states from a non-resident proprietorship; one of the greatest obstacles to the advancement of a new country, and the prosperity of an old one. It has tended to keep open the public lands for entry by emigrants at government prices, instead of their being compelled to purchase of speculators at double or treble prices. And it is conveying into the interior, large sums in silver and gold, there to enter permanently into the currency of the country, and place it on a firmer foundation. It is confidently believed that the country will find, in the motives which induced that order, and the happy consequences which have ensued, much to commend, and nothing to condemn.’
It is seen that he again calls the attention of congress to the currency of the country, alleges that it was apparent from the whole context of the constitution, as well as the history of the times that gave birth to it, that it was the purpose of the convention to establish a currency consisting of theprecious metals; imputes variableness and a liability to inordinate contraction and expansion to the existing paper system, and denounces bank issues, as being an uncertain standard. He felicitates himself upon the dangers which have been obviated by the overthrow of the bank of the United States, but declares that little has been yet done, except to produce a salutary change of public opinion towards restoring to the country, the sound currencyprovided for in the constitution. I will here say, in passing, that all this outcry about the precious metals, gold, and the constitutional currency, has been put forth to delude the people, and to use the precious metals as an instrument to break down the banking institutions of the states, and to thus pave the way for the ultimate establishment of a great government bank. In the present advanced state of civilization, in the present condition of the commerce of the world, and in the actual relations of trade and intercourse between the different nations of the world, it is perfectly chimerical to suppose that the currency of the United States should consist exclusively, or principally, of the precious metals.
In the quotations which I have made from the last annual message of general Jackson, he speaks of the extension of bank credits, and the over-issues of bank paper, in the operations upon the sales of public lands. In his message of only the preceding year, the vast amount of those sales had been dwelt upon with peculiar complaisance, as illustrating the general prosperity of the country, and as proof of the wisdom of his administration. But now that which had been announced as a blessing, is deprecated as a calamity. Now, his object being to assail the banking institutions of the states, and to justify that fatal treasury order, which I shall hereafter have occasion to notice, he expresses his apprehension of the danger to which we are exposed of losing the public domain, and getting nothing for it butbank credits. He describes, minutely, the circular process by which the notes of the banks passed out of those institutions, to be employed in the purchase of the public lands, and returned again to them in the form of creditsto the government. He forgets thatMr.Secretary Taney, to reconcile the people of the United States to the daring measure of removing the public deposits, had stimulated the banks to the exercise of great liberality in the grant of loans. He informs us, in that message, that the safety of the public funds, and the interests of the people generally, required that these copious issues of the banks should be checked, and that the conversion of the public lands into mere bank credits should be arrested. And his measure to accomplish these objects, was that famous treasury order, already adverted to. Let us pause here for a moment, and contemplate the circumstances under which it was issued. The principle of the order had been proposed and discussed in congress. But one senator, as far as I know, in this branch of the legislature, and not a solitary member, within my knowledge, in the house of representatives, was in favor of it. And yet, in about a week after the adjournment of congress, the principle which met with no countenance from the legislative authority, was embodied in the form of a treasury edict, and promulgated under the executive authority, to the astonishment of the people of the United States!
If we possessed no other evidence whatever of the hostility of president Jackson to the state banks of the United States, that order would supply conclusive proof. Bank notes, bank issues, bank credits, were distrusted and denounced by him. It was proclaimed to the people, that they were unworthy of confidence. The government could no longer trust in their security. And at a moment when the banking operations were extended, and stretched to their utmost tension; when they were almost all tottering and ready to fall, for the want of that metallic basis on which they all rested, the executive announces its distrust, issues the treasury order, and enters the market for specie, by a demand of an extraordinary amount to supply the means of purchasing the public lands. If the sales had continued in the same ratio they had been made during the previous year, that is, at about the rate of twenty-four millionsper annum, this unprecedented demand created by government for specie, must have exhausted the vaults of most of the banks, and produced much sooner the catastrophe which occurred in May last. And, what is most extraordinary, this wanton demand for specie upon all the banks of the commercial capitals, and in the busy and thickly peopled portions of the country, was that it might be transported into the wilderness, and, after having been used in the purchase of public lands, deposited to the credit of the government in the books of western banks, in some of which, according to the message, they were already credits to the government ‘greatly beyond their immediate means of payment.’ Government, therefore, did not itself receive, or rather, did not retain, the very specie which it professed to demand as the only medium worthy of the public lands. The specie, which was souselessly exacted, was transferred from one set of banks, to the derangement of the commerce and business of the country, and placed in the vaults of another set of banks in the interior, forming only those bank credits to the government upon which president Jackson placed so slight a value.
Finally, when general Jackson was about to retire from the cares of government, he favored his countrymen with a farewell address. The solemnity of the occasion gives to any opinions which he has expressed in that document a claim to peculiar attention. It will be seen on perusing it, that he denounces, more emphatically than in any of his previous addresses, the bank paper of the country, corporations, and what he chooses to denominate the spirit of monopoly. The senate will indulge me in calling its attention to certain parts of that address, in the following extracts.
‘The constitution of the United States unquestionably intended to secure to the people, a circulating medium of gold and silver. But the establishment of a national bank by congress, with the privilege of issuing paper money, receivable in payment of the public dues, and the unfortunate cause of legislation in the several states upon the same subject, drove from general circulation the constitutional currency, and substituted one of paper in its place.’
‘The mischief springs from the power which the moneyed interest derives from a paper currency, which they are able to control; from the multitude of corporations, with exclusive privileges, which they have succeeded in obtaining in the different states, and which are employed altogether for their benefit; and unless you become more watchful in your states, and check this spirit of monopoly, and thirst for exclusive privileges, you will, in the end, find that the most important powers of government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations.’
‘But it will require steady and persevering exertions on your part to rid yourselves of the iniquities and mischiefs of the paper system, and to check the spirit of monopoly and other abuses which have sprung up with it, and of which it is the main support. So many interests are united to resist all reform on this subject, that you must not hope that the conflict will be a short one, nor success easy. My humble efforts have not been spared, during my administration of the government, to restore the constitutional currency of gold and silver: and something, I trust, has been done towards the accomplishment of this most desirable object. But enough yet remains, to require all your energy and perseverance. The power, however, is in your hands, and the remedy must, and will be applied, if you determine upon it.’
The mask is now thrown off, and he boldly says that the constitution of the United Statesunquestionablyintended to secure to the people a circulating medium of gold and silver. They have not enjoyed, he says, that benefit, because of the establishment of a national bank,and the unfortunate course of legislation in the several states. He does not limit his condemnation of the past policy of his country to the federal government, of which he had just ceased to be the chief, but he extends it to the states also, as if they were incompetent to judge of the interests of their respective citizens. He tells us that the mischief springs from the power which the moneyed interest derives from a paper currency, which they are able to control, and the multitude of corporations; and he stimulates the people to become more watchful in their several states, to check this spirit of monopoly. To invigorate theirfortitude, he tells the people that it will require steady and persevering exertions on their part, to rid themselves of theiniquitiesand mischiefs of the paper system, and to check the spirit of monopoly. They must not hope that the conflict will be a short one, nor success easy. His humble efforts have not been spared during his administration, to restore the constitutional currency of gold and silver; and although he has been able to do something towards the accomplishment of that object,enough yet remainsto require all the energy and perseverance of the people.
Such,Mr.President, are the proofs and the argument on which I rely to establish the second and third propositions which I have been considering. Are they not successfully maintained? Is it possible that any thing could be more conclusive on such a subject?
I pass to the consideration of the fourth proposition.
Fourth, that the present administration, by acknowledgments emanating from the highest and most authentic source, has succeeded to the principles, plans, and policy, of the preceding administration, and stands solemnly pledged to complete and perfect them.
The proofs on this subject are brief; but they are clear, direct, and plenary. It is impossible for any unbiased mind to doubt for a moment about them. You, sir, will be surprised, when I shall array them before you, at their irresistible force. The first that I shall offer is an extract fromMr.Van Buren’s letter of acceptance of the nomination of the Baltimore convention, dated May23d, 1835. In that letter he says:
‘I content myself, on this occasion, with saying, that I consider myself the honoredinstrument, selected by the friends of the present administration,to carry out its principles and policy; and that, as well from inclination as fromduty. I shall, if honored with the choice of the American people, endeavor generally to follow in the footsteps of president Jackson; happy if I shall be able toperfect the workwhich he has so gloriouslybegun.’
Mr.Van Buren announces that he was the honored instrument selected by the friends of the present administration, to carry out its principles and policy. The honored instrument! That word, according to the most approved definition, meanstool. He was, then, the honored tool—to do what? to promote the honor, and advance the welfare of the people of the United States, and to add to the glory of his country? No, no; his country was not in his thoughts. Party, party, filled the place in his bosom which country should have occupied. He was the honored tool to carry out the principles and policy of general Jackson’s administration; and, if elected, he should, as well from inclination as fromduty, endeavor, generally, to tread in the footsteps of general Jackson; happy if he should be able to perfect the work which he had so gloriously begun. Duty to whom? to the country, to the whole people of theUnited States? No such thing; but duty to the friends of the then administration; and that duty required him to tread in the footsteps of his illustrious predecessor, and to perfect the work which he had begun! Now, the senate will bear in mind that the most distinguishing features of general Jackson’s administration related to the currency; that he had denounced the banking institutions of the country; that he had overthrown the bank of the United States; that he had declared, when that object was accomplished, only one half the work was completed; that he then commenced war against the state banks, in order to finish the other half; that he constantly persevered in, and never abandoned, his favorite project of a great government treasury bank; and that he retired from the office of chief magistrate, pouring out, in his farewell address, anathemas against paper money, corporations, and the spirit of monopoly. When all these things are recollected, it is impossible not to comprehend clearly whatMr.Van Buren means, by carrying out the principles and policy of the late administration. No one can mistake that those principles and that policy require him to break down the local institutions of the states, and to discredit and destroy the paper medium which they issue. No one can be at a loss to understand, that, in following in the footsteps of president Jackson, and in perfecting the work which he begun,Mr.Van Buren means to continue attacking, systematically, the banks of the states, and to erect on their ruins, that great government bank, begun by his predecessor, and which he is the honored instrument selected to complete. The next proof which I shall offer is supplied byMr.Van Buren’s inaugural address, from which I request permission of the senate to read the following extract.
‘In receiving from the people the sacred trust twice confided to my illustrious predecessor, and which he has discharged so faithfully and so well, I know that I cannot expect to perform the arduous task with equal ability and success. But,united as I have been in his counsels, a daily witness of his exclusive and unsurpassed devotion to his country’s welfare,agreeing with him in sentimentswhich his countrymen have warmly supported, and permitted to partakelargelyof his confidence, I may hope that somewhat of the same cheering approbation will be found to attend upon my path.’
Here we findMr.Van Buren distinctly avowing, what the American people well knew before, that he had been united in the counsels of general Jackson; that he had agreed with him in sentiments, and that he had partaken largely of his confidence. This intimacy and confidential intercourse could not have existed without the concurrence ofMr.Van Buren in all those leading and prominent measures of his friend, which related to the establishment of a government bank, the overthrow of the bank of the United States, the attack upon the state institutions, and the denunciation of the paper currency, the spirit of monopoly, and corporations. Is it credible to believe that general Jackson should haveaimed at the accomplishment of all those objects, and entertained all these sentiments, withoutMr.Van Buren’s participation?
I proceed to another point of powerful evidence, in the conduct ofMr.Van Buren, in respect to the famous treasury order. That order had been promulgated, originally, in defiance of the opinion of congress, had been continued in operation, in defiance of the wishes and will of the people, and had been repealed by a bill passed at the last ordinary session of congress, by overwhelming majorities. The fate of that bill is well known. Instead of being returned to the house in which it originated, according to the requirement of the constitution, it was sent to one of the pigeon-holes of the department of state, to be filed away with an opinion of a convenient attorney-general, always ready to prepare one in support of executive encroachment. On the fifth of March last, not a doubt was entertained, as far as my knowledge or belief extends, thatMr.Van Buren would rescind the obnoxious order. I appeal to the senator from Missouri, who sits near me, (Mr.Linn,) to the senator from Mississippi, who sits furthest from me, (Mr.Walker,) to the senator from Alabama, (Mr.King,) and to the whole of the administration senators, if such was not the expectation of all of them. Was there ever an occasion in which a new administration had so fine an opportunity to signalize its commencement by an act of grace and wisdom, demanded by the best interests and most anxious wishes of the people? ButMr.Van Buren did not think proper to embrace it. He had shared too largely in the confidence of his predecessor, agreed too fully with him in sentiments, had been too much united with him in his counsels, to rescind an order which constituted so essential a part of the system which had been deliberately adopted to overthrow the state banks.
Another course pursued by the administration, after the catastrophe of the suspension of specie payments by the banks, demonstrates the hostile purposes towards them of the present administration. When a similar event had occurred during the administration ofMr.Madison, did he discredit and discountenance the issues of the banks, by refusing to receive them in payment of the public dues? Did the state governments, upon the former or the late occasion, refuse to receive them in payment of the dues to them, respectively? And if irredeemable bank notes are good enough for state governments and the people, are they not good enough for the federal government of the same people? By exacting specie, in all payments to the general government, that government presented itself in the market as a powerful and formidable competitor with the banks, demanding specie at a moment when the banks were making unexampled struggles to strengthen themselves, and prepare for the resumption of specie payments. The extent of this government demand forspecie does not admit of exact ascertainment; but when we reflect that the annual expenditures of the government were at the rate, including the post-office department, of about thirty-three millions of dollars, and that its income, made up either of taxes or loans, must be an equal sum, making together an aggregate of sixty-six millions, it will be seen that the amount of specie required for the use of government must be immensely large. It cannot be precisely determined, but would not be less, probably, than fifteen or twenty millions of dollars per annum. Now, how is it possible for the banks, coming into the specie market in competition with all the vast power and influence of the government, to provide themselves with specie, in a reasonable time to resume specie payments? That competition would have been avoided, if, upon the stoppage of the banks, the notes of those of whose solidity there was no doubt, had been continued to be received in payment of the public dues, as was done inMr.Madison’s administration. And why,Mr.President, should they not have been? Why should not this government receive the same description of medium which is found to answer all the purposes of the several state governments? Why should they have resorted to the expedient of issuing an inferior paper medium, in the form of treasury notes, and refusing to receive the better notes of safe and solid banks? Do not misunderstand me,Mr.President. No man is more averse than I am, to a permanent, inconvertible paper medium. It would have been as a temporary measure only, that I should have thought it expedient to receive the notes of good local banks. If, along with that measure, the treasury order had been repealed, and other measures adopted to encourage and coerce the resumption of specie payments, we should have been much nigher that desirable event, than, I fear, we now are. Indeed, I do not see when it is possible for the banks to resume specie payments, as long as the government is in the field, making war upon them, and in the market demanding specie.
Another conclusive evidence of the hostility to the state banks, on the part ofMr.Van Buren, is to be found in that extraordinary recommendation of a bankrupt law, contained in his message at the extra session. According to all the principles of any bankrupt system with which I am acquainted, the banks, by the stoppage of specie payment, had rendered themselves liable to its operation. If the recommended law had been passed, commissions of bankruptcy could have been immediately sued out against all the suspended banks, their assets seized, and the administration of them transferred from the several corporations to which it is now intrusted, to commissioners appointed by the president himself. Thus, by one blow, would the whole of the state banks have been completely prostrated, and the way cleared for the introduction ofthe favorite treasury bank; and is it not in the same spirit of unfriendliness to those banks, and with the same view of removing all obstacles to the establishment of a government bank, that the bill was presented to the senate a few days ago by the senator from Tennessee, (Mr.Grundy,) against the circulation of the notes of the old bank of the United States? At a time when there is too much want of confidence, and when every thing that can be done, should be done, to revive and strengthen it, we are called upon to pass a law denouncing the heaviest penalty and ignominious punishment against all who shall reissue the notes of the old bank of the United States, of which we are told that about seven millions of dollars are in circulation; and they constitute the best portion of the paper medium of the country; the only portion of it which has a credit every where, and which serves the purpose of a general circulation; the only portion with which a man can travel from one end of the continent to the other; and I do not doubt that the senator who has fulminated these severe pains and penalties against that best part of our paper medium, provides himself with a sufficient amount of it, whenever he leaves Nashville, to take him to Washington.
[HereMr.Grundy rose and remarked, no, sir; I always travel on specie.]
Ah! continuedMr.Clay, my old friend is alwaysspecieous. I am quite sure that members from a distance in the interior generally find it indispensable to supply themselves, on commencing their journey, with an adequate amount of these identical notes to defray its expenses. Why, sir, will any man in his senses deny, that these notes are far better than those which have been issued by that government banker,Mr.Levi Woodbury, aided though he be by the chancellor of the exchequer, (I beg his pardon, I mean the ex-chancellor,) the senator from New York, (Mr.Wright?) I am not going to stop here to inquire into thestrictlegality of the reissue of these notes; that question, together with the power of the government to pass the proposed bill, will be taken up when it is considered. I am looking into the motive of such a measure. Nobody doubts the perfect safety of the notes; no one can believe that they will not be fairly and fully paid. What, then, is the design of the bill? It is to assail the only sure general medium which the people possess. It is because it may come in competition with treasury notes or other government paper. Sir, if the bill had not been proposed by my old friend from Tennessee, I would say its author better deserved a penitentiary punishment than those against whom it is directed. I remember to have heard of an illustrious individual, now in retirement, having, on some occasion, burst out into the most patriotic indignation, because of a waggish trick played off upon him, by putting a note of the late bank of the United States into his silk purse with his gold.
But it is unnecessary to dwell longer on the innumerable proofs of the hostility against the state banks, and the deliberate purpose of those in power to overthrow them. We hear and see daily, throughout the country, among their partisans and presses, denunciations against banks, corporations, rag barons, the spirit of monopoly, and so forth; and the howl for gold, hard money, and the constitutional currency; and no one can listen to the speeches of honorable members, friends of the administration, in this house and the other, without being impressed with a perfect conviction that he destruction of the state banks is meditated.
I have fulfilled my promise,Mr.President, to sustain the first four propositions with which I sat out. I now proceed to the fifth proposition.
Fifth, that the bill under consideration is intended to executeMr.Van Buren’s pledge, to complete and perfect the principles, plans, and policy, of the past administration, by establishing, upon the ruins of the late bank of the United States and the state banks, a government bank, to be managed and controlled by the treasury department, acting under the commands of the president of the United States.
The first impression made by the perusal of the bill is the prodigal and boundless discretion which it grants to the secretary of the treasury, irreconcilable with the genius of our free institutions, and contrary to the former cautious practice of the government. As originally reported, he was authorized by the bill to allow any number of clerks he thought proper to the various receivers-general, and to fix their salaries. It will be borne in mind that this is the mere commencement of a system; and it cannot be doubted that, if put into operation, the number of receivers-general, and other depositaries of the public money, would be indefinitely multiplied. He is allowed to appoint as many examiners of the public money, and to fix their salaries, as he pleases; he is allowed to erect at pleasure costly buildings; there is no estimate for any thing; and all who are conversant with the operations of the executive branch of the government know the value and importance of previous estimates. There is no other check upon wasteful expenditure but previous estimates; and that was a point always particularly insisted upon byMr.Jefferson. The senate will recollect, that, a few days ago, when the salary of the receiver-general at New York was fixed, the chairman of the committee of finance rose in his place and stated, that it wassuggestedby the secretary of the treasury, that it should be placed at three thousand dollars; and the blank was accordingly so filled. There was no statement of the nature or extent of the duties to be performed, of the time that he would be occupied, of the extent of his responsibility, or the expense of living at the several points where they were to be located; nothing but thesuggestionof the secretary of the treasury,and that was deemed all-sufficient by a majority. There is no limit upon the appropriation which is made to carry into effect the bill, contrary to all former usage, which invariably prescribed a sum not to be transcended.
A most remarkable feature in the bill is that to which I have already called the attention of the senate, and of which no satisfactory explanation has been given. It is that which proceeds upon the idea, that the treasury is a thing distinct from the treasure of the United States, and gives to the treasury a local habitation and a name, in the new building which is erecting for the treasury department in the city of Washington. In the treasury, so constituted, is to be placed that pittance of the public revenue which is gleaned from the District of Columbia. All else, that is to say, nine hundred and ninety-nine hundredths of the public revenue of the United States, is to be placed in the hands of the receivers-general, and the other depositaries beyond the District of Columbia. Now, the constitution of the United States provides that no money shall be drawn from the public treasury, but in virtue of a previous appropriation by law. That trifling portion of it, therefore, which is within the District of Columbia, will be under the safeguard of the constitution, and all else will be at the arbitrary disposal of the secretary of the treasury.
It was deemed necessary, no doubt, to vest in the secretary of the treasury this vast and alarming discretionary power. A new and immense government bank is about to be erected. How it would work in all its parts could not be anticipated with certainty; and it was thought proper, therefore, to bestow a discretion commensurate with its novelty and complexity, and adapted to any exigencies which might arise. The tenth section of the bill is that in which the power to create a bank is more particularly conferred. It is short, and I will read it to the senate.
‘Section 10. And be it further enacted, that it shall be lawful for the secretary of the treasury to transfer the moneys in the hands ofanydepositary hereby constituted, to the treasury of the United States; to the mint at Philadelphia; to the branch mint at New Orleans; or to the offices of either of the receivers-general of public moneys, by this act directed to be appointed; to be there safely kept, according to the provisions of this act; andalso to transfer moneys in the hands of any one depositary constituted by this act to any other depositary constituted by the same,AT HIS DISCRETION, and as the safety of the public moneys,and the convenience of the public serviceshall seem to him to require. And for the purpose of payments on the public account, it shall be lawful for the said secretaryto draw upon any of the said depositaries, as he may think most conducive to the public interests, or to the convenience of the public creditors, or both.’
It will be seen, that it grants a power, perfectly undefined, to the secretary of the treasury, to shift and transfer the public money, from depositary to depositary, as he pleases. He is expressly authorized to transfer moneys in the hands of any one depositary constituted by the act, to any other depositary constituted by it,at his discretion, and as the safety of the public moneys,and theconvenience of the public service, shall seem to him to require. There is no specification of any contingency or contingencies, on which he is to act. All is left to his discretion. He is to judge when the public service, (and more indefinite terms could not have been employed,) shall seem to him to require it. It has been said, that this is nothing more than the customary power of transfer, exercised by the treasury department, from the origin of the government. I deny it; utterly deny it. It is a totally different power from that which was exercised by the cautious Gallatin, and other secretaries of the treasury—a power, by-the-bye, which, on more than one occasion, has been controverted, and which is infinitely more questionable than the power to establish a bank of the United States. The transfer was made by them rarely, in large sums, and were left to the banks to remit. When payments were made, they were effected in the notes of banks with which the public money was deposited, or to which it was transferred. The rates of exchange were regulated by the state of the market, and under the responsibility of the banks. But here is a power given to transfer the public moneys without limit, as to sum, place, or time, leaving every thing to the discretion of the secretary of the treasury, the receivers-general, and other depositaries. What a scope is allowed in the fixation of the rates of exchange, whether of premium or discount, to regulate the whole domestic exchanges of the country, to exercise favoritism? These former transfers were not made for disbursement, but as preparatory to disbursement; and when disbursed, it was generally in bank notes. The transfers of this bill are immediate payments, and payments made not in bank notes, but specie.
The last paragraph in the section provides, that, for the purpose of payments on the public account, it shall be lawful for the secretaryto draw upon any of the said depositaries, as he may think most conducive to the public interest, or to the convenience of the public creditors, or both. It will be seen, that no limit whatever is imposed upon the amount or form of the draft, or as to the depositary upon which it is drawn. He is made the exclusive judge of what is ‘most conducive to the public interests.’ Now, let us pause a moment, and trace the operation of the powers thus vested. The government has a revenue of from twenty to thirty millions. The secretary may draw it to any one or more points, as he pleases. More than a moiety of the revenue arising from customs is receivable at the port of New York, to which point the secretary may draw all portions of it, if he think it conducive to the public interest. A man has to receive, under an appropriation law, ten thousand dollars, and applies toMr.Secretary for payment. Where will you receive it? he is asked. On New York. How? In drafts from five dollars to five hundred dollars.Mr.Secretary will give him these drafts accordingly, upon bank note paper, impressed like andsimulating bank notes, having all suitable emblazonry, signed by my friend the treasurer, (whose excellent practical sense, and solid and sound judgment, if he had been at the head of the treasury, instead ofMr.Levi Woodbury, when the suspension of specie payments took place, would have relieved or mitigated the pecuniary embarrassments of the government and the people,) counter-signed by the comptroller, and filled up in the usual way of bank notes. Here is one of them, saidMr.Clay. (He here held up, to the gaze of the senate, a treasury note, having all the appearance of a bank note, colored, engraved, and executed, like any other bank note, for fifty dollars.) This, continuedMr.Clay, is a governmentpostnote, put into circulation, paid out as money, and prepared and sent forth, gradually to accustom the people of this country to government paper.
I have supposed ten thousand dollars to be received in the mode stated by a person entitled to receive it under an appropriation law. Now, let us suppose what he will do with it. Any where to the south or west it will command a premium of from two to five per centum. Nowhere in the United States will it be under par. Do you suppose that the holder of these drafts would be fool enough to convert them into specie, to be carried and transported at his risk? Do you think that he would not prefer that his money should be in the responsible custody of the government, rather than in his own insecure keeping? Do you think he will deny to himself the opportunity of realizing the premium of which he may be perfectly sure? The greatest want of the country is a medium of general circulation, and of uniform value every where. That, especially, is our want in the western and interior states. Now, here is exactly such a medium; and, supposing the government bank to be honestly and faithfully administered, it will, during such an administration, be the best convertible paper money in the world, for two reasons. The first is, that every dollar of paper out will be the representative of a dollar of specie in the hands of the receivers-general, or other depositaries; and, secondly, if the receivers-general should embezzle the public money, the responsibility of the government to pay the drafts issued upon the basis of that money would remain unimpaired. The paper, therefore, would be as far superior to the paper of any private corporation as the ability and resources of the government of the United States are superior to those of such corporations.
The banking capacity may be divided into three faculties: deposits, discount of bills of exchange, and promissory notes, or either, and circulation. This government bank would combine them all, except that it will not discount private notes, or receive private deposits. In payments for the public lands, indeed, individuals are allowed to make deposits, and to receive certificates of their amount. To guard against their negotiability, a clause hasbeen introduced to render them unassignable. But how will it be possible to maintain such an inconvenient restriction, in a country where every description of paper importing an obligation to pay money or deliver property is assignable, at law or in equity, from the commercial nature and trading character of our people.