CHAPTER VI.

This institution having again appeared on the public theatre, politically and financially, and with power to influence national legislation, and to control moneyed corporations, and with art and skill enough to deceive astute merchants and trained politicians,—(for it is not to be supposed that such men would have committed themselves in her favor if they had known her condition,)—it becomes necessary to trace her history since the expiration of her charter, and learn by what means she continued an existence, apparently without change, after having undergone the process which, in law and in reason, is the death of a corporation. It is a marvellous history, opening a new chapter in the necrology of corporations, very curious to study, and involving in its solution, besides the biological mystery, the exposure of a legal fraud and juggle, a legislative smuggle, and a corrupt enactment. The charter of the corporation had expired upon its own limitation in the year 1836: it was entitled to two years to wind up its affairs, engaging in no new business: but was seen to go on after the expiration, as if still in full life, and without the change of an attribute or feature. The explanation is this:

On the 19th day of January, in the year 1836, a bill was reported in the House of Representativesof the General Assembly of Pennsylvania, entitled, "An act to repeal the State tax, and to continue the improvement of the State by railroads and canals; and for other purposes." It came from the standing committee on "Inland navigation and internal improvement;" and was, in fact, a bill to repeal a tax and make roads and canals, but which, under the vague and usually unimportant generality of "other purposes," contained the entire draught of a charter for the Bank of the United States—adopting it as a Pennsylvania State bank. The introduction of the bill, with this addendum, colossal tail to it, was a surprise upon the House. No petition had asked for such a bank: no motion had been made in relation to it: no inquiry had been sent to any committee: no notice of any kind had heralded its approach: no resolve authorized its report: the unimportant clause of "other purposes," hung on at the end of the title, could excite no suspicion of the enormous measures which lurked under its unpretentious phraseology. Its advent was an apparition: its entrance an intrusion. Some members looked at each other in amazement. But it was soon evident that it was the minority only that was mystified—that a majority of the elected members in the House, and a cluster of exotics in the lobbies, perfectly understood the intrusive movement:—in brief, it had been smuggled into the House, and a power was present to protect it there. This was the first intimation that had reached the General Assembly, the people of Pennsylvania, or the people of the United States, that the Bank of the United States was transmigrating! changing itself from a national to a local institution—from a federal to a State charter—from an imperial to a provincial institution—retaining all the while its body and essence, its nature and attributes, its name and local habitation. It was a new species of metempsychosis, heretofore confined to souls separated from bodies, but now appearing in a body that never had a soul: for that, according to Sir Edward Coke, is the psychological condition of a corporation—and, above all, of a moneyed corporation.

The mystified members demanded explanations; and it was a case in which explanations could not be denied. Mr. Biddle, in a public letter to an eminent citizen, on whose name he had been accustomed to hang such productions, (Mr. John Quincy Adams,) attributed the procedure, so far as he had moved in it, to a "formal application on the part of the legislature to know from him on what terms the expiring bank would receive a charter from it;" and gave up the names of two members who had conveyed the application. The legislature had no knowledge of the proceeding. The two members whose names had been vouched disavowed the legislative application, but admitted that, in compliance with suggestions, they had written a letter to Mr. Biddle in their own names, making the inquiry; but without the sanction of the legislature, or the knowledge of the committees of which they were members. They did not explain the reason which induced them to take the initiative in so important business; and the belief took root that their good nature had yielded to an importunity from an invisible source, and that they had consented to give a private and bungling commencement to what must have a beginning, and which could not find it in any open or parliamentary form. It was truly a case in which the first step cost the difficulty. How to begin was the puzzle, and so to begin as to conceal the beginning, was the desideratum. The finger of the bank must not be seen in it, yet, without the touch of that finger, the movement could not begin. Without something from the Bank—without some request or application from it, it would have been gratuitous and impertinent, and might have been insulting and offensive, to have offered it a State charter. To apply openly for a charter was to incur a publicity which would be the defeat of the whole movement. The answer of Mr. Biddle to the two members, dexterously treating their private letter, obtained by solicitation, as a formal legislative application, surmounted the difficulty! and got the Bank before the legislature, where there were friends enough secretly prepared for the purpose to pass it through. The terms had been arranged with Mr. Biddle beforehand, so that there was nothing to be done but to vote. The principal item in these terms was the stipulation to pay the State the sum of $1,300,000, to be expended in works of internal improvements; and it was upon this slender connection with the subject that the whole charter referred itself to the committee of "Inland navigationand internal improvement;"—to take its place as a proviso to a bill entitled, "To repeal the State tax, and to continue the improvements of the State by railroads and canals;"—and to be no further indicated in the title to that act than what could be found under the addendum of that vague and flexible generality, "other purposes;" usually added to point attention to something not worth a specification.

Having mastered the first step—the one of greatest difficulty, if there is truth in the proverb—the remainder of the proceeding was easy and rapid, the bill, with its proviso, being reported, read a first, second, and third time, passed the House—sent to the Senate; read a first, second, and third time there, and passed—sent to the Governor and approved, and made a law of the land: and all in as little time as it usually requires to make an act for changing the name of a man or a county. To add to its titles to infamy, the repeal of the State tax which it assumed to make, took the air of a bamboozle, the tax being a temporary imposition, and to expire within a few days upon its own limitation. The distribution of the bonus took the aspect of a bribe to the people, being piddled out in driblets to the inhabitants of the counties: and, to stain the bill with the last suspicion, a strong lobby force from Philadelphia hung over its progress, and cheered it along with the affection and solicitude of parents for their offspring. Every circumstance of its enactment announced corruption—bribery in the members who passed the act, and an attempt to bribe the people by distributing the bonus among them: and the outburst of indignation throughout the State was vehement and universal. People met in masses to condemn the act, demand its repeal, to denounce the members who voted for it, and to call for investigation into the manner in which it passed. Of course, the legislature which passed it was in no haste to respond to these demands; but their successors were different. An election intervened; great changes of members took place; two-thirds of the new legislature demanded investigation, and resolved to have it. A committee was appointed, with the usual ample powers, and sat the usual length of time, and worked with the usual indefatigability, and made the usual voluminous report; and with the usual "lame and impotent conclusion." A mass of pregnant circumstances were collected, covering the whole case with black suspicion: but direct bribery was proved upon no one. Probably, the case of the Yazoo fraud is to be the last, as it was the first, in which a succeeding general assembly has fully and unqualifiedly condemned its predecessor for corruption.

The charter thus obtained was accepted: and, without the change of form or substance in any particular, the old bank moved on as if nothing had happened—as if the Congress charter was still in force—as if a corporate institution and all its affairs could be shifted by statute from one foundation to another;—as if a transmigration of corporate existence could be operated by legislative enactment, and the debtors, creditors, depositors, and stockholders in one bank changed, transformed, and constituted into debtors, creditors, depositors and stockholders in another. The illegality of the whole proceeding was as flagrant as it was corrupt—as scandalous as it was notorious—and could only find its motive in the consciousness of a condition in which detection adds infamy to ruin; and in which no infamy, to be incurred, can exceed that from which escape is sought. And yet it was this broken and rotten institution—this criminal committing crimes to escape from the detection of crimes—this "counterfeit presentment" of a defunct corporation—this addendum to a Pennsylvania railroad—this whited sepulchre filled with dead men's bones, thus bribed and smuggled through a local legislature—that was still able to set up for a power and a benefactor! still able to influence federal legislation—control other banks—deceive merchants and statesmen—excite a popular current in its favor—assume a guardianship over the public affairs, and actually dominate for months longer in the legislation and the business of the country. It is for the part she acted—the dominating part—in contriving the financial distress and the general suspension of the banks in 1837—the last one which has afflicted our country,—that renders necessary and proper this notice of her corrupt transit through the General Assembly of the State of Pennsylvania.

A great disturbance of course took place in the business of the country, from the stoppage of the banks. Their agreement to receive each others' notes made these notes the sole currency of the country. It was a miserable substitute for gold and silver, falling far below these metals when measured against them, and very unequal to each other in different parts of the country. Those of the interior, and of the west, being unfit for payments in the great commercial Atlantic cities, were far below the standard of the notes of those cities, and suffered a heavy loss from difference of exchange, as it was called (although it was only the difference of depreciation,) in all remittances to those cities:—to which points the great payments tended. All this difference was considered a loss, and charged upon the mismanagement of the public affairs by the administration, although the clear effect of geographical position. Specie disappeared as a currency, being systematically suppressed. It became an article of merchandise, bought and sold like any other marketable commodity; and especially bought in quantities for exportation. Even metallic change disappeared, down to the lowest subdivision of the dollar. Its place was supplied by every conceivable variety of individual and corporation tickets—issued by some from a feeling of necessity; by others, as a means of small gains; by many, politically, as a means of exciting odium against the administration for having destroyed the currency. Fictitious and burlesque notes were issued with caricatures and grotesque pictures and devices, and reproachful sentences, entitled the "better currency:" and exhibited every where to excite contempt. They were sent in derision to all the friends of the specie circular, especially to him who had the credit (not untruly) of having been its prime mover—most of them plentifully sprinkled over with taunting expressions to give them a personal application: such as—"This is what you have brought the country to:" "the end of the experiment:" "the gold humbug exploded:" "is this what was promised us?" "behold the effects of tampering with the currency." The presidential mansion was infested, and almost polluted with these missives, usually made the cover of some vulgar taunt. Even gold and silver could not escape the attempted degradation—copper, brass, tin, iron pieces being struck in imitation of gold and silver coins—made ridiculous by figures and devices, usually the whole hog, and inscribed with taunting and reproachful expressions. Immense sums were expended in these derisory manufactures, extensively carried on, and universally distributed; and reduced to a system as a branch of party warfare, and intended to act on the thoughtless and ignorant through appeals to their eyes and passions. Nor were such means alone resorted to to inflame the multitude against the administration. The opposition press teemed with inflammatory publications. The President and his friends were held up as great state criminals, ruthlessly destroying the property of the people, and meriting punishment—even death. Nor did these publications appear in thoughtless or obscure papers only, but in some of the most weighty and influential of the bank party. Take, for example, this paragraph from a leading paper in the city of New York:

"We would put it directly to each and all of our readers, whether it becomes this great people, quietly and tamely to submit to any and every degree of lawless oppression which their rulers may inflict, merely becauseresistancemay involve us in trouble and expose those who resist, to censure? We are very certain their reply will be, 'No, but at what point is "resistance to commence?"—is not the evil of resistance greater "than the evil of submission?"' We answer promptly, that resistance on the part of a free people, if they would preserve their freedom, should always commence whenever it is made plain and palpable that there has been a deliberate violation of their rights; and whatever temporary evils may result from such resistance, it can never be so great or so dangerous to our institutions, as a blind submission to a most manifest act of oppression and tyranny. And now, we would ask of all—what shadow of right, what plea of expediency, what constitutional or legal justification canMartin Van Burenoffer to the people of the United States, for having brought upon them all their present difficulties by a continuance of thespecie circular, after two-thirds of their representatives had declared their solemn convictions that it was injurious to the country and should be repealed? Most assuredly, none,and we unhesitatingly say, that it is a more high-handed measure oftyrannythan that which costCharlesthe 1st his crown and his head—more illegal and unconstitutional than the act of the British ministry which caused the patriots of the revolution to destroy the tea in the harbor of Boston—and one which calls more loudly for resistance than any act of Great Britain which led to the Declaration of Independence."

Taken by surprise in the deprivation of its revenues,—specie denied it by the banks which held its gold and silver,—the federal government could only do as others did, and pay out depreciated paper. Had the event been foreseen by the government, it might have been provided against, and much specie saved. It was now too late to enter into a contest with the banks, they in possession of the money, and the suspension organized and established. They would only render their own notes: the government could only pay in that which it received. Depreciated paper was their only medium of payment; and every such payment (only received from a feeling of duresse) brought resentment, reproach, indignation, loss of popularity to the administration; and loud calls for the re-establishment of the National Bank, whose notes had always been equal to specie, and were then contrived to be kept far above the level of those of other suspended banks. Thus the administration found itself, in the second month of its existence, struggling with that most critical of all government embarrassments—deranged finances, and depreciated currency; and its funds dropping off every day. Defections were incessant, and by masses, and sometimes by whole States: and all on account of these vile payments in depreciated paper. Take a single example. The State of Tennessee had sent numerous volunteers to the Florida Indian war. There were several thousands of them, and came from thirty different counties, requiring payments to be made through a large part of the State, and to some member of almost every family in it. The paymaster, Col. Adam Duncan Steuart, had treasury drafts on the Nashville deposit banks for the money to make the payments. They delivered their own notes, and these far below par—even twenty per cent. below those of the so-called Bank of the United States, which the policy of the suspension required to be kept in strong contrast with those of the government deposit banks. The loss on each payment was great—one dollar in every five. Even patriotism could not stand it. The deposit banks and their notes were execrated: the Bank of the United States and its notes were called for. It was the children of Israel wailing for the fleshpots of Egypt. Discontent, from individual became general, extending from persons to masses. The State took the infection. From being one of the firmest and foremost of the democratic States, Tennessee fell off from her party, and went into opposition. At the next election she showed a majority of 20,000 against her old friends; and that in the lifetime of General Jackson; and contrary to what it would have been if his foresight had been seconded. He foresaw the consequences of paying out this depreciated paper. The paymaster had foreseen them, and before drawing a dollar from the banks he went to General Jackson for his advice. This energetic man, then aged, and dying, and retired to his beloved hermitage,—but all head and nerve to the last, and scorning to see the government capitulate to insurgent banks,—acted up to his character. He advised the paymaster to proceed to Washington and ask for solid money—for the gold and silver which was then lying in the western land offices. He went; but being a military subordinate, he only applied according to the rules of subordination, through the channels of official intercourse: and was denied the hard money, wanted for payments on debenture bonds and officers of the government. He did not go to Mr. Van Buren, as General Jackson intended he should do. He did not feel himself authorized to go beyond official routine. It was in the recess of Congress, and I was not in Washington to go to the President in his place (as I should instantly have done); and, returning without the desired orders, the payments were made, through a storm of imprecations, in this loathsome trash: and Tennessee was lost. And so it was, in more or less degree, throughout the Union. The first object of the suspension had been accomplished—a political revolt against the administration.

Miserable as was the currency which the government was obliged to use, it was yet in the still more miserable condition of not having enough of it! The deposits with the States had absorbed two sums of near ten millions each: two more sums of equal amount were demandablein the course of the year. Financial embarrassment, and general stagnation of business, diminished the current receipts from lands and customs: an absolute deficit—that horror, and shame, and mortal test of governments—showed itself ahead. An extraordinary session of Congress became a necessity, inexorable to any contrivance of the administration: and, on the 15th day of May—just five days after the suspension in the principal cities—the proclamation was issued for its assembling: to take place on the first Monday of the ensuing September. It was a mortifying concession to imperative circumstances; and the more so as it had just been refused to the grand committee of Fifty—demanding it in the imposing name of that great meeting in the city of New York.

The first session of the twenty-fifth Congress, convened upon the proclamation of the President, to meet an extraordinary occasion, met on the first Monday in September, and consisted of the following members:

SENATE.

New Hampshire—Henry Hubbard and Franklin Pierce.

Maine—John Ruggles and Ruel Williams.

Vermont—Samuel Prentiss and Benjamin Swift.

Massachusetts—Daniel Webster and John Davis.

Rhode Island—Nehemiah R. Knight and Asher Robbins.

Connecticut—John M. Niles and Perry Smith.

New York—Silas Wright and Nathaniel P. Tallmadge.

New Jersey—Garret D. Wall and Samuel L. Southard.

Delaware—Richard H. Bayard and Thomas Clayton.

Pennsylvania—James Buchanan and Samuel McKean.

Maryland—Joseph Kent and John S. Spence.

Virginia—William C. Rives and William H. Roane.

North Carolina—Bedford Brown and Robert Strange.

South Carolina—John C. Calhoun and Wm. Campbell Preston.

Georgia—John P. King and Alfred Cuthbert.

Alabama—Wm. Rufus King and Clement C. Clay.

Mississippi—John Black and Robert J. Walker.

Louisiana—Robert C. Nicholas and Alexander Mouton.

Tennessee—Hugh L. White and Felix Grundy.

Kentucky—Henry Clay and John Crittenden.

Arkansas—Ambrose H. Sevier and William S. Fulton.

Missouri—Thomas H. Benton and Lewis F. Linn.

Illinois—Richard M. Young and John M. Robinson.

Indiana—Oliver H. Smith and John Tipton.

Ohio—William Allen and Thomas Morris.

Michigan—Lucius Lyon and John Norvell.

HOUSE OF REPRESENTATIVES.

Maine—George Evans, John Fairfield, Timothy J. Carter, F. O. J. Smith, Thomas Davee, Jonathan Cilley, Joseph C. Noyes, Hugh J. Anderson.

New Hampshire—Samuel Cushman, James Farrington, Charles G. Atherton, Joseph Weeks, Jared W. Williams.

Massachusetts—Richard Fletcher, Stephen C. Phillips, Caleb Cushing, Wm. Parmenter, Levi Lincoln, George Grinnell, jr., George N. Briggs, Wm. B. Calhoun, Nathaniel B. Borden, John Q. Adams, John Reed, Abbott Lawrence, Wm. S. Hastings.

Rhode Island—Robert B. Cranston, Joseph L. Tillinghast.

Connecticut—Isaac Toucey, Samuel Ingham, Elisha Haley, Thomas T. Whittlesey, Launcelot Phelps, Orrin Holt.

Vermont—Hiland Hall, William Slade, Heman Allen, Isaac Fletcher, Horace Everett.

New York—Thomas B. Jackson, Abraham Vanderveer, C. C. Cambreleng, Ely Moore, Edward Curtis, Ogden Hoffman, Gouverneur Kemble, Obadiah Titus, Nathaniel Jones, John C. Broadhead, Zadoc Pratt, Robert McClelland, Henry Vail, Albert Gallup, John I. DeGraff, David Russell, John Palmer, James B. Spencer, John Edwards, Arphaxad Loomis, Henry A. Foster, Abraham P. Grant, Isaac H. Bronson, John H. Prentiss, Amasa J. Parker, John C. Clark, Andrew D. W. Bruyn, Hiram Gray, William Taylor, Bennett Bicknell, William H. Noble, Samuel Birdsall, Mark H. Sibley, John T. Andrews, Timothy Childs, William Patterson, Luther C. Peck, Richard P. Marvin, Millard Fillmore, Charles F. Mitchell.

New Jersey—John B. Aycrigg, John P. B. Maxwell, William Halstead, Jos. F. Randolph,Charles G. Stratton, Thomas Jones Yorke.

Pennsylvania—Lemuel Paynter, John Sergeant, George W. Toland, Charles Naylor, Edward Davies, David Potts, Edward Darlington, Jacob Fry, jr., Matthias Morris, David D. Wagener, Edward B. Hubley, Henry A. Muhlenberg, Luther Reilly, Henry Logan, Daniel Sheffer, Chas. McClure, Wm. W. Potter, David Petriken, Robert H. Hammond, Samuel W. Morris, Charles Ogle, John Klingensmith, Andrew Buchanan, T. M. T. McKennan, Richard Biddle, William Beatty, Thomas Henry, Arnold Plumer.

Delaware—John J. Milligan.

Maryland—John Dennis, James A. Pearce, J. T. H. Worthington, Benjamin C. Howard, Isaac McKim, William Cost Johnson, Francis Thomas, Daniel Jenifer.

Virginia—Henry A. Wise, Francis Mallory, John Robertson, Charles F. Mercer, John Taliaferro, R. T. M. Hunter, James Garland, Francis E. Rives, Walter Coles, George C. Dromgoole, James W. Bouldin, John M. Patton, James M. Mason, Isaac S. Pennybacker, Andrew Beirne, Archibald Stuart, John W. Jones, Robert Craig, Geo. W. Hopkins, Joseph Johnson, Wm. S. Morgan.

North Carolina—Jesse A. Bynum, Edward D. Stanley, Charles Shepard, Micajah T. Hawkins, James McKay, Edmund Deberry, Abraham Rencher, William Montgomery, Augustine H. Shepherd, James Graham, Henry Connor, Lewis Williams, Samuel T. Sawyer.

South Carolina—H. S. Legare, Waddy Thompson, Francis W. Pickens, W. K. Clowney, F. H. Elmore, John K. Griffin, R. B. Smith, John Campbell, John P. Richardson.

Georgia—Thomas Glascock, S. F. Cleveland, Seaton Grantland, Charles E. Haynes, Hopkins Holsey, Jabez Jackson, Geo. W. Owens, Geo. W. B. Townes, W. C. Dawson.

Tennessee—Wm. B. Carter, A. A. McClelland, Joseph Williams, (one vacancy,) H. L. Turney, Wm. B. Campbell, John Bell, Abraham P. Maury, James K. Polk, Ebenezer J. Shields, Richard Cheatham, John W. Crockett, Christopher H. Williams.

Kentucky—John L. Murray, Edward Rumsey, Sherrod Williams, Joseph R. Underwood, James Harlan, John Calhoun, John Pope, Wm. J. Graves, John White, Richard Hawes, Richard H. Menifee, John Chambers, Wm. W. Southgate.

Ohio—Alexander Duncan, Taylor Webster, Patrick G. Goode, Thomas Corwin, Thomas L. Hamer, Calvary Morris, Wm. K. Bond, J. Ridgeway, John Chaney, Samson Mason, J. Alexander, jr., Alexander Harper, D. P. Leadbetter, Wm. H. Hunter, John W. Allen, Elisha Whittlesey, A. W. Loomis, Matthias Shepler, Daniel Kilgore.

Alabama—Francis S. Lyon, Dixon H. Lewis, Joab Lawler, Reuben Chapman, J. L. Martin.

Indiana—Ratliff Boon, John Ewing, William Graham, George H. Dunn, James Rariden, William Herrod, Albert S. White.

Illinois—A. W. Snyder, Zadoc Casey, Wm. L. May.

Louisiana—Henry Johnson, Eleazer W. Ripley, Rice Garland.

Mississippi—John F. H. Claiborne, S. H. Gholson.

Arkansas—Archibald Yell.

Missouri—Albert G. Harrison, John Miller.

Michigan—Isaac E. Crary.

Florida—Charles Downing.

Wisconsin—George W. Jones.

In these ample lists, both of the Senate and of the House, will be discovered a succession of eminent names—many which had then achieved eminence, others to achieve it:—and, besides those which captivate regard by splendid ability, a still larger number of those less brilliant, equally respectable, and often more useful members, whose business talent performs the work of the body, and who in England are well called, the working members. Of these numerous members, as well the brilliant as the useful, it would be invidious to particularize part without enumerating the whole; and that would require a reproduction of the greater part of the list of each House. Four only can be named, and they entitled to that distinction from the station attained, or to be attained by them:—Mr. John Quincy Adams, who had been president;Messrs.James K. Polk, Millard Fillmore and Franklin Pierce, who became presidents. In my long service I have not seen a more able Congress; and it is only necessary to read over the names, and to possess some knowledge of our public men, to be struck with the number of names which would come under the description of useful or brilliant members.

The election of speaker was the first business of the House; and Mr. James K. Polk and Mr. John Bell, both of Tennessee, being put in nomination, Mr. Polk received 116 votes; and was elected—Mr. Bell receiving 103. Mr. Walter S. Franklin was elected clerk.

The message was delivered upon receiving notice of the organization of the two Houses; and, with temperance and firmness, it met all the exigencies of the occasion. That specie order which had been the subject of so much denunciation,—the imputed cause of the suspension, and the revocation of which was demanded with so much pertinacity and such imposing demonstration,—far from being given up was commendedfor the good effects it had produced; and the determination expressed not to interfere with its operation. In relation to that decried measure the message said:

"Of my own duties under the existing laws, when the banks suspended specie payments, I could not doubt. Directions were immediately given to prevent the reception into the Treasury of any thing but gold and silver, or its equivalent; and every practicable arrangement was made to preserve the public faith, by similar or equivalent payments to the public creditors. The revenue from lands had been for some time substantially so collected, under the order issued by the directions of my predecessor. The effects of that order had been so salutary, and its forecast in regard to the increasing insecurity of bank paper had become so apparent, that, even before the catastrophe, I had resolved not to interfere with its operation. Congress is now to decide whether the revenue shall continue to be so collected, or not."

This was explicit, and showed that all attempts to operate upon the President at that point, and to coerce the revocation of a measure which he deemed salutary, had totally failed. The next great object of the party which had contrived the suspension and organized the distress, was to extort the re-establishment of the Bank of the United States; and here again was an equal failure to operate upon the firmness of the President. He reiterated his former objections to such an institution—not merely to the particular one which had been tried—but to any one in any form, and declared his former convictions to be strengthened by recent events. Thus:

"We have seen for nearly half a century, that those who advocate a national bank, by whatever motive they may be influenced, constitute a portion of our community too numerous to allow us to hope for an early abandonment of their favorite plan. On the other hand, they must indeed form an erroneous estimate of the intelligence and temper of the American people, who suppose that they have continued, on slight or insufficient grounds, their persevering opposition to such an institution; or that they can be induced by pecuniary pressure, or by any other combination of circumstances, to surrender principles they have so long and so inflexibly maintained. My own views of the subject are unchanged. They have been repeatedly and unreservedly announced to my fellow-citizens, who, with full knowledge of them, conferred upon me the two highest offices of the government. On the last of these occasions, I felt it due to the people to apprise them distinctly, that, in the event of my election, I would not be able to co-operate in the re-establishment of a national bank. To these sentiments, I have now only to add the expression of an increased conviction, that the re-establishment of such a bank, in any form, whilst it would not accomplish the beneficial purpose promised by its advocates, would impair the rightful supremacy of the popular will; injure the character and diminish the influence of our political system; and bring once more into existence a concentrated moneyed power, hostile to the spirit, and threatening the permanency, of our republican institutions."

Having noticed these two great points of pressure upon him, and thrown them off with equal strength and decorum, he went forward to a new point—the connection of the federal government with any bank of issue in any form, either as a depository of its moneys, or in the use of its notes;—and recommended a total and perpetual dissolution of the connection. This was a new point of policy, long meditated by some, but now first brought forward for legislative action, and cogently recommended to Congress for its adoption. The message, referring to the recent failure of the banks, took advantage of it to say:

"Unforeseen in the organization of the government, and forced on the Treasury by early necessities, the practice of employing banks, was, in truth, from the beginning, more a measure of emergency than of sound policy. When we started into existence as a nation, in addition to the burdens of the new government, we assumed all the large, but honorable load, of debt which was the price of our liberty; but we hesitated to weigh down the infant industry of the country by resorting to adequate taxation for the necessary revenue. The facilities of banks, in return for the privileges they acquired, were promptly offered, and perhaps too readily received, by an embarrassed treasury. During the long continuance of a national debt, and the intervening difficulties of a foreign war, the connection was continued from motives of convenience; but these causes have long since passed away. We have no emergencies that make banks necessary to aid the wants of the Treasury; we have no load of national debt to provide for, and we have on actual deposit a large surplus. No public interest, therefore, now requires the renewal of a connection that circumstances have dissolved. The complete organization of our government, the abundance of our resources, the general harmony which prevails between the different States, and with foreign powers, all enable us now to select the system most consistent with the constitution, and most conducive to thepublic welfare."

This wise recommendation laid the foundation for the Independent Treasury—a measure opposed with unwonted violence at the time, but vindicated as well by experience as recommended by wisdom; and now universally concurred in—constituting an era in our financial history, and reflecting distinctive credit on Mr. Van Buren's administration. But he did not stop at proposing a dissolution of governmental connection with these institutions; he went further, and proposed to make them safer for the community, and more amenable to the laws of the land. These institutions exercised the privilege of stopping payment, qualified by the gentle name of suspension, when they judged a condition of the country existed making it expedient to do so. Three of these general suspensions had taken place in the last quarter of a century, presenting an evil entirely too large for the remedy of individual suits against the delinquent banks; and requiring the strong arm of a general and authoritative proceeding. This could only be found in subjecting them to the process of bankruptcy; and this the message boldly recommended. It was the first recommendation of the kind, and deserves to be commemorated for its novelty and boldness, and its undoubted efficiency, if adopted. This is the recommendation:

"In the mean time, it is our duty to provide all the remedies against a depreciated paper currency which the constitution enables us to afford. The Treasury Department, on several former occasions, has suggested the propriety and importance of a uniform law concerning bankruptcies of corporations, and other bankers. Through the instrumentality of such a law, a salutary check may doubtless be imposed on the issues of paper money, and an effectual remedy given to the citizen, in a way at once equal in all parts of the Union, and fully authorized by the constitution."

A bankrupt law for banks! That was the remedy. Besides its efficacy in preventing future suspensions, it would be a remedy for the actual one. The day fixed for the act to take effect would be the day for resuming payments, or going into liquidation. It would be the day of honesty or death to these corporations; and between these two alternatives even the most refractory bank would choose the former, if able to do so.

The banks of the District of Columbia, and their currency, being under the jurisdiction of Congress, admitted a direct remedy in its own legislation, both for the fact of their suspension and the evil of the small notes which they issued. The forfeiture of the charter, where the resumption did not take place in a limited time, and penalties on the issue of the small notes, were the appropriate remedies;—and, as such were recommended to Congress.

There the President not only met and confronted the evils of the actual suspension as they stood, but went further, and provided against the recurrence of such evils thereafter, in four cardinal recommendations: 1, never to have another national bank; 2, never to receive bank notes again in payment of federal dues; 3, never to use the banks again for depositories of the public moneys; 4, to apply the process of bankruptcy to all future defaulting banks. These were strong recommendations, all founded in a sense of justice to the public, and called for by the supremacy of the government, if it meant to maintain its supremacy; but recommendations running deep into the pride and interests of a powerful class, and well calculated to inflame still higher the formidable combination already arrayed against the President, and to extend it to all that should support him.

The immediate cause for convoking the extraordinary session—the approaching deficit in the revenue—was frankly stated, and the remedy as frankly proposed. Six millions of dollars was the estimated amount; and to provide it neither loans nor taxes were proposed, but the retention of the fourth instalment of the deposit to be made with the States, and a temporary issue of treasury notes to supply the deficiency until the incoming revenue should replenish the treasury. The following was that recommendation:

"It is not proposed to procure the required amount by loans or increased taxation. There are now in the treasury nine millions three hundred and sixty-seven thousand two hundred and fourteen dollars, directed by the Act of the 23d of June, 1836, to be deposited with the States in October next. This sum, if so deposited, will be subject, under the law, to be recalled, if needed, to defray existing appropriations; and, as it is now evident that the whole, or the principal part of it, will be wanted forthat purpose, it appears most proper that the deposits should be withheld. Until the amount can be collected from the banks, treasury notes may be temporarily issued, to be gradually redeemed as it is received."

Six millions of treasury notes only were required, and from this small amount required, it is easy to see how readily an adequate amount could have been secured from the deposit banks, if the administration had foreseen a month or two beforehand that the suspension was to take place. An issue of treasury notes, being an imitation of the exchequer bill issues of the British government, which had been the facile and noiseless way of swamping that government in bottomless debt, was repugnant to the policy of this writer, and opposed by him: but of this hereafter. The third instalment of the deposit, as it was called, had been received by the States—received in depreciated paper, and the fourth demanded in the same. A deposit demanded! and claimed as a debt!—that is to say: the word "deposit" used in the act admitted to be both by Congress and the States a fraud and a trick, and distribution the thing intended and done. Seldom has it happened that so gross a fraud, and one, too, intended to cheat the constitution, has been so promptly acknowledged by the high parties perpetrating it. But of this also hereafter.

The decorum and reserve of a State paper would not allow the President to expatiate upon the enormity of the suspension which had been contrived, nor to discriminate between the honest and solvent banks which had been taken by surprise and swept off in a current which they could not resist, and the insolvent or criminal class, which contrived the catastrophe and exulted in its success. He could only hint at the discrimination, and, while recommending the bankrupt process for one class, to express his belief that with all the honest and solvent institutions the suspension would be temporary, and that they would seize the earliest moment which the conduct of others would permit, to vindicate their integrity and ability by returning to specie payments.

Under the first two of our Presidents, Washington, and the first Mr. Adams, the course of the British Parliament was followed in answering the address of the President, as the course of the sovereign was followed in delivering it. The Sovereign delivered his address in person to the two assembled Houses, and each answered it: our two first Presidents did the same, and the Houses answered. The purport of the answer was always to express a concurrence, or non-concurrence with the general policy of the government as thus authentically exposed; and the privilege of answering the address laid open the policy of the government to the fullest discussion. The effect of the practice was to lay open the state of the country, and the public policy, to the fullest discussion; and, in the character of the answer, to decide the question of accord or disaccord—of support or opposition—between the representative and the executive branches of the government. The change from the address delivered in person, with its answer, to the message sent by the private secretary, and no answer, was introduced by Mr. Jefferson, and considered a reform; but it was questioned at the time, whether any good would come of it, and whether that would not be done irregularly, in the course of the debates, which otherwise would have been done regularly in the discussion of the address. The administration policy would be sure to be attacked, and irregularly, in the course of business, if the spirit of opposition should not be allowed full indulgence in a general and regular discussion. The attacks would come, and many of Mr. Jefferson's friends thought it better they should come at once, and occupy the first week or two of the session, than to be scattered through the whole session and mixed up with all its business. But the change was made, and has stood, and now any bill or motion is laid hold of, to hang a speech upon, against the measures or policy of an administration. This was signally the case at this extra session, in relation to Mr. Van Buren's policy. He had staked himself too decisively against too large a combination ofinterests to expect moderation or justice from his opponents; and he received none. Seldom has any President been visited with more violent and general assaults than he received, almost every opposition speaker assailing some part of the message. One of the number, Mr. Caleb Cushing, of Massachusetts, made it a business to reply to the whole document, formally and elaborately, under two and thirty distinct heads—the number of points in the mariner's compass: each head bearing a caption to indicate its point: and in that speech any one that chooses, can find in a condensed form, and convenient for reading, all the points of accusation against the democratic policy from the beginning of the government down to that day.

Mr. Clay and Mr. Webster assailed it for what it contained, and for what it did not—for its specific recommendations, and for its omission to recommend measures which they deemed necessary. The specie payments—the disconnection with banks—the retention of the fourth instalment—the bankrupt act against banks—the brief issue of treasury notes; all were condemned as measures improper in themselves and inadequate to the relief of the country: while, on the other hand, a national bank appeared to them to be the proper and adequate remedy for the public evils. With them acted many able men:—in the Senate, Bayard, of Delaware, Crittenden, of Kentucky, John Davis, of Massachusetts, Preston, of South Carolina, Southard, of New Jersey, Rives, of Virginia:—in the House of Representatives, Mr. John Quincy Adams, Bell, of Tennessee, Richard Biddle, of Pennsylvania, Cushing, of Massachusetts, Fillmore, of New York, Henry Johnson, of Louisiana, Hunter and Mercer, of Virginia, John Pope, of Kentucky, John Sargeant, Underwood of Kentucky, Lewis Williams, Wise. All these were speaking members, and in their diversity of talent displayed all the varieties of effective speaking—close reasoning, sharp invective, impassioned declamation, rhetoric, logic.

On the other hand was an equal array, both in number and speaking talent, on the other side, defending and supporting the recommendations of the President:—in the Senate, Silas Wright, Grundy, John M. Niles, King, of Alabama, Strange, of North Carolina, Buchanan, Calhoun, Linn, of Missouri, Benton, Bedford Brown, of North Carolina, William Allen, of Ohio, John P. King, of Georgia, Walker, of Mississippi:—in the House of Representatives, Cambreleng, of New York, Hamer, of Ohio, Howard and Francis Thomas, of Maryland, McKay, of North Carolina, John M. Patton, Francis Pickens.

The treasury note bill was one of the first measures on which the struggle took place. It was not a favorite with the whole body of the democracy, but the majority preferred a small issue of that paper, intended to operate, not as a currency, but as a ready means of borrowing money, and especially from small capitalists; and, therefore, preferable to a direct loan. It was opposed as a paper money bill in disguise, as germinating a new national debt, and as the easy mode of raising money, so ready to run into abuse from its very facility of use. The President had recommended the issue in general terms: the Secretary of the Treasury had descended into detail, and proposed notes as low as twenty dollars, and without interest. The Senate's committee rejected that proposition, and reported a bill only for large notes—none less than 100 dollars, and bearing interest; so as to be used for investment, not circulation. Mr. Webster assailed the Secretary's plan, saying—

"He proposes, sir, to issue treasury notes of small denominations, down even as low as twenty dollars, not bearing interest, and redeemable at no fixed period; they are to be received in debts due to government, but are not otherwise to be paid until at some indefinite time there shall be a certain surplus in the treasury beyond what the Secretary may think its wants require. Now, sir, this is plain, authentic, statutable paper money; it is exactly a new emission of old continental. If the genius of the old confederation were now to rise up in the midst of us, he could not furnish us, from the abundant stores of his recollection, with a more perfect model of paper money. It carries no interest; it has no fixed time of payment; it is to circulate as currency, and it is to circulate on the credit of government alone, with no fixed period of redemption! If this be not paper money, pray, sir, what is it? And, sir, who expected this? Who expected that in the fifth year of theexperiment for reforming the currency, and bringing it to an absolute gold and silver circulation, the Treasury Department would be found recommending to us a regular emission of paper money? This, sir, is quite new in the history of this government; it belongs to that of the confederation which has passed away. Since 1789, although we haveissued treasury notes on sundry occasions, we have issued none like these; that is to say, we have issued none not bearing interest, intended for circulation, and with no fixed mode of redemption. I am glad, however, Mr. President, that the committee have not adopted the Secretary's recommendation, and that they have recommended the issue of treasury notes of a description more conformable to the practice of the government."

Mr. Benton, though opposed to the policy of issuing these notes, and preferring himself a direct loan in this case, yet defended the particular bill which had been brought in from the character and effects ascribed to it, and said:

"He should not have risen in this debate, had it not been for the misapprehensions which seemed to pervade the minds of some senators as to the character of the bill. It is called by some a paper-money bill, and by others a bill to germinate a new national debt. These are serious imputations, and require to be answered, not by declamation and recrimination, but by facts and reasons, addressed to the candor and to the intelligence of an enlightened and patriotic community."I dissent from the imputations on the character of the bill. I maintain that it is neither a paper-money bill, nor a bill to lay the foundation for a new national debt; and will briefly give my reasons for believing as I do on both points."There are certainly two classes of treasury notes—one for investment, and one for circulation; and both classes are known to our laws, and possess distinctive features, which define their respective characters, and confine them to their respective uses."The notes for investment bear an interest sufficient to induce capitalists to exchange gold and silver for them, and to lay them by as a productive fund. This is their distinctive feature, but not the only one; they possess other subsidiary qualities, such as transferability only by indorsement—payable at a fixed time—not re-issuable—nor of small denomination—and to be cancelled when paid. Notes of this class are, in fact, loan notes—notes to raise loans on, by selling them for hard money—either immediately by the Secretary of the Treasury, or, secondarily, by the creditor of the government to whom they have been paid. In a word, they possess all the qualities which invite investment, and forbid and impede circulation."The treasury notes for currency are distinguished by features and qualities the reverse of those which have been mentioned. They bear little or no interest. They are payable to bearer—transferable by delivery—re-issuable—of low denominations—and frequently reimbursable at the pleasure of the government. They are, in fact, paper money, and possess all the qualities which forbid investment, and invite to circulation. The treasury notes of 1815 were of that character, except for the optional clause to enable the holder to fund them at the interest which commanded loans—at seven per cent."These are the distinctive features of the two classes of notes. Now try the committee's bill by the test of these qualities. It will be found that the notes which it authorizes belong to the first-named class; that they are to bear an interest, which may be six per cent.; that they are transferable only by indorsement; that they are not re-issuable; that they are to be paid at a day certain—to wit, within one year; that they are not to be issued of less denomination than one hundred dollars; are to be cancelled when taken up; and that the Secretary of the Treasury is expressly authorized to raise money upon them by loaning them."These are the features and qualities of the notes to be issued, and they define and fix their character as notes to raise loans, and to be laid by as investments, and not as notes for currency, to be pushed into circulation by the power of the government; and to add to the curse of the day by increasing the quantity of unconvertible paper money."

"I dissent from the imputations on the character of the bill. I maintain that it is neither a paper-money bill, nor a bill to lay the foundation for a new national debt; and will briefly give my reasons for believing as I do on both points.

"There are certainly two classes of treasury notes—one for investment, and one for circulation; and both classes are known to our laws, and possess distinctive features, which define their respective characters, and confine them to their respective uses.

"The notes for investment bear an interest sufficient to induce capitalists to exchange gold and silver for them, and to lay them by as a productive fund. This is their distinctive feature, but not the only one; they possess other subsidiary qualities, such as transferability only by indorsement—payable at a fixed time—not re-issuable—nor of small denomination—and to be cancelled when paid. Notes of this class are, in fact, loan notes—notes to raise loans on, by selling them for hard money—either immediately by the Secretary of the Treasury, or, secondarily, by the creditor of the government to whom they have been paid. In a word, they possess all the qualities which invite investment, and forbid and impede circulation.

"The treasury notes for currency are distinguished by features and qualities the reverse of those which have been mentioned. They bear little or no interest. They are payable to bearer—transferable by delivery—re-issuable—of low denominations—and frequently reimbursable at the pleasure of the government. They are, in fact, paper money, and possess all the qualities which forbid investment, and invite to circulation. The treasury notes of 1815 were of that character, except for the optional clause to enable the holder to fund them at the interest which commanded loans—at seven per cent.

"These are the distinctive features of the two classes of notes. Now try the committee's bill by the test of these qualities. It will be found that the notes which it authorizes belong to the first-named class; that they are to bear an interest, which may be six per cent.; that they are transferable only by indorsement; that they are not re-issuable; that they are to be paid at a day certain—to wit, within one year; that they are not to be issued of less denomination than one hundred dollars; are to be cancelled when taken up; and that the Secretary of the Treasury is expressly authorized to raise money upon them by loaning them.

"These are the features and qualities of the notes to be issued, and they define and fix their character as notes to raise loans, and to be laid by as investments, and not as notes for currency, to be pushed into circulation by the power of the government; and to add to the curse of the day by increasing the quantity of unconvertible paper money."

Though yielding to an issue of these notes in this particular form, limited in size of the notes to one hundred dollars, yet Mr. Benton deemed it due to himself and the subject to enter a protest against the policy of such issues, and to expose their dangerous tendency, both to slide into a paper currency, and to steal by a noiseless march into the creation of public debt, and thus expressed himself:

"I trust I have vindicated the bill from the stigma of being a paper currency bill, and from the imputation of being the first step towards the creation of a new national debt. I hope it is fully cleared from the odium of both these imputations. I will now say a few words on the policy of issuing treasury notes in time of peace, or even in time of war, until the ordinary resources of loans and taxes had been tried and exhausted. I am no friend to the issue of treasury notes of any kind. As loans, they are a disguised mode of borrowing, and easy to slide into a currency: as a currency, it is the most seductive, the most dangerous, and the most liable to abuse of all the descriptions of paper money. 'The stamping of paper (by government) is an operation so much easier than the laying of taxes, or of borrowing money, that a government in the habit of paper emissions would rarely fail, in any emergency, to indulge itself too far in the employment of that resource, to avoid as much as possible one less auspicious to present popularity.' So said General Hamilton; and Jefferson, Madison Macon, Randolph, and all the fathers of therepublican church, concurred with him. These sagacious statesmen were shy of this facile and seductive resource, 'so liable to abuse, and so certain of being abused.' They held it inadmissible to recur to it in time of peace, and that it could only be thought of amidst the exigencies and perils of war, and that after exhausting the direct and responsible alternative of loans and taxes. Bred in the school of these great men, I came here at this session to oppose, at all risks, an issue of treasury notes. I preferred a direct loan, and that for many and cogent reasons. There is clear authority to borrow in the constitution; but, to find authority to issue these notes, we must enter the field of constructive powers. To borrow, is to do a responsible act; it is to incur certain accountability to the constituent, and heavy censure if it cannot be justified; to issue these notes, is to do an act which few consider of, which takes but little hold of the public mind, which few condemn and some encourage, because it increases the quantum of what is vainly called money. Loans are limited by the capacity, at least, of one side to borrow, and of the other to lend: the issue of these notes has no limit but the will of the makers, and the supply of lamp-black and rags. The continental bills of the Revolution, and the assignats of France, should furnish some instructive lessons on this head. Direct loans are always voluntary on the part of the lender; treasury note loans may be a forced borrowing from the government creditor—as much so as if the bayonet were put to his breast; for necessity has no law, and the necessitous claimant must take what is tendered, whether with or without interest—whether ten or fifty per cent. below par. I distrust, dislike, and would fain eschew, this treasury note resource. I prefer the direct loans of 1820-'21. I could only bring myself to acquiesce in this measure when it was urged that there was not time to carry a loan through its forms; nor even then could I consent to it, until every feature of a currency character had been eradicated from the face of the bill."

The bill passed the Senate by a general vote, only Messrs. Clay, Crittenden, Preston, Southard, and Spence of Maryland, voting against it. In the House of Representatives it encountered a more strenuous resistance, and was subjected to some trials which showed the dangerous proclivity of these notes to slide from the foundation of investment into the slippery path of currency. Several motions were made to reduce their size—to make them as low as $25; and that failing, to reduce them to $50; which succeeded. The interest was struck at in a motion to reduce it to a nominal amount; and this motion, like that for reducing the minimum size to $25, received a large support—some ninety votes. The motion to reduce to $50 was carried by a majority of forty. Returning to the Senate with this amendment, Mr. Benton moved to restore the $100 limit, and intimated his intention, if it was not done, of withholding his support from the bill—declaring that nothing but the immediate wants of the Treasury, and the lack of time to raise the money by a direct loan as declared by the Secretary of the Treasury, could have brought him to vote for treasury notes in any shape. Mr. Clay opposed the whole scheme as a government bank in disguise, but supported Mr. Benton's motion as being adverse to that design. He said:

"He had been all along opposed to this measure, and he saw nothing now to change that opinion. Mr. C. would have been glad to aid the wants of the Treasury, but thought it might have been done better by suspending the action of many appropriations not so indispensably necessary, rather than by resorting to a loan. Reduction, economy, retrenchment, had been recommended by the President, and why not then pursued? Mr. C.'s chief objection, however, was, that these notes were mere post notes, only differing from bank notes of that kind in giving the Secretary a power of fixing the interest as he pleases."It is, said Mr. C., a government bank, issuing government bank notes; an experiment to set up a government bank. It is, in point of fact, an incipient bank. Now, if government has the power to issue bank notes, and so to form indirectly and covertly a bank, how is it that it has not the power to establish a national bank? What difference is there between a great government bank, with Mr. Woodbury as the great cashier, and a bank composed of a corporation of private citizens? What difference is there, except that the latter is better and safer, and more stable, and more free from political influences, and more rational and more republican? An attack is made at Washington upon all the banks of the country, when we have at least one hundred millions of bank paper in circulation. At such a time, a time too of peace, instead of aid, we denounce them, decry them, seek to ruin them, and begin to issue paper in opposition to them! You resort to paper, which you profess to put down; you resort to a bank, which you pretend to decry and to denounce; you resort to a government paper currency, after having exclaimed against every currency except that of gold and silver! Mr. C. said he should vote for Mr. Benton's amendment, as far as it went to prevent the creation of a government bank and a government currency."

"It is, said Mr. C., a government bank, issuing government bank notes; an experiment to set up a government bank. It is, in point of fact, an incipient bank. Now, if government has the power to issue bank notes, and so to form indirectly and covertly a bank, how is it that it has not the power to establish a national bank? What difference is there between a great government bank, with Mr. Woodbury as the great cashier, and a bank composed of a corporation of private citizens? What difference is there, except that the latter is better and safer, and more stable, and more free from political influences, and more rational and more republican? An attack is made at Washington upon all the banks of the country, when we have at least one hundred millions of bank paper in circulation. At such a time, a time too of peace, instead of aid, we denounce them, decry them, seek to ruin them, and begin to issue paper in opposition to them! You resort to paper, which you profess to put down; you resort to a bank, which you pretend to decry and to denounce; you resort to a government paper currency, after having exclaimed against every currency except that of gold and silver! Mr. C. said he should vote for Mr. Benton's amendment, as far as it went to prevent the creation of a government bank and a government currency."

Mr. Webster also supported the motion of Mr. Benton, saying:

"He would not be unwilling to give his support to the bill, as a loan, and that only a temporary loan. He was, however, utterly opposed to every modification of the measure which went to stamp upon it the character of a government currency. All past experience showed that such a currency would depreciate; that it will and must depreciate. He should vote for the amendment, inasmuch as $100 bills were less likely to get into common circulation than $50 bills. His objection was against the old continental money in any shape or in any disguise, and he would therefore vote for the amendment."

The motion was lost by a vote of 16 to 25, the yeas and nays being:

Yeas—Messrs. Allen, Benton, Clay, of Kentucky, Clayton, Kent, King, of Georgia, McKean, Pierce, Rives, Robbins, Smith, of Connecticut, Southard, Spence, Tipton, Webster, White—16.Nays—Messrs. Buchanan, Clay, of Alabama, Crittenden, Fulton, Grundy, Hubbard, King, of Alabama, Knight, Linn, Lyon, Morris, Nicholas, Niles, Norvell, Roane, Robinson, Smith, of Indiana, Strange, Swift, Talmadge, Walker, Williams, Wall, Wright, Young—25.

Yeas—Messrs. Allen, Benton, Clay, of Kentucky, Clayton, Kent, King, of Georgia, McKean, Pierce, Rives, Robbins, Smith, of Connecticut, Southard, Spence, Tipton, Webster, White—16.

Nays—Messrs. Buchanan, Clay, of Alabama, Crittenden, Fulton, Grundy, Hubbard, King, of Alabama, Knight, Linn, Lyon, Morris, Nicholas, Niles, Norvell, Roane, Robinson, Smith, of Indiana, Strange, Swift, Talmadge, Walker, Williams, Wall, Wright, Young—25.

The deposit with the States had only reached its second instalment when the deposit banks, unable to stand a continued quarterly drain of near ten millions to the quarter, gave up the effort and closed their doors. The first instalment had been delivered the first of January, in specie, or its equivalent; the second in April, also in valid money; the third one demandable on the first of June, was accepted by the States in depreciated paper: and they were very willing to receive the fourth instalment in the same way. It had cost the States nothing,—was not likely to be called back by the federal government, and was all clear gains to those who took it as a deposit and held it as a donation. But the Federal Treasury needed it also; and likewise needed ten millions more of that amount which had already been "deposited" with the States; and which "deposit" was made and accepted under a statute which required it to be paid back whenever the wants of the Treasury required it. That want had now come, and the event showed the delusion and the cheat of the bill under which a distribution had been made in the name of a deposit. The idea of restitution entered no one's head! neither of the government to demand it, nor of the States to render back. What had been delivered, was gone! that was a clear case; and reclamation, or rendition, even of the smallest part, or at the most remote period, was not dreamed of. But there was a portion behind—another instalment of ten millions—deliverable out of the "surplus" on the first day of October: but there was no surplus: on the contrary a deficit: and the retention of this sum would seem to be a matter of course with the government, only requiring the form of an act to release the obligation for the delivery. It was recommended by the President, counted upon in the treasury estimates, and its retention the condition on which the amount of treasury notes was limited to ten millions of dollars. A bill was reported for the purpose, in the mildest form, not to repeal but to postpone the clause; and the reception which it met, though finally successful, should be an eternal admonition to the federal government never to have any money transaction with its members—a transaction in which the members become the masters, and the devourers of the head. The finance committee of the Senate had brought in a bill to repeal the obligation to deposit this fourth instalment; and from the beginning it encountered a serious resistance. Mr. Webster led the way, saying:

"We are to consider that this money, according to the provisions of the existing law, is to go equally among all the States, and among all the people; and the wants of the Treasury must be supplied, if supplies be necessary, equally by all the people. It is not a question, therefore, whether some shall have money, and others shall make good the deficiency. All partake in the distribution, and all will contribute to the supply. So that it is a mere question of convenience, and, in my opinion, it is decidedly most convenient, on all accounts, that this instalment should follow its present destination, and the necessities of the Treasury be provided for by other means."

Mr. Preston opposed the repealing bill, principally on the ground that many of the States had already appropriated this money; that is to say, had undertaken public works on the strength of it; and would suffer more injury from not receiving it than the Federal Treasury would suffer from otherwise supplying its place.Mr. Crittenden opposed the bill on the same ground. Kentucky, he said, had made provision for the expenditure of the money, and relied upon it, and could not expect the law to be lightly rescinded, or broken, on the faith of which she had anticipated its use. Other senators treated the deposit act as a contract, which the United States was bound to comply with by delivering all the instalments.

In the progress of the bill Mr. Buchanan proposed an amendment, the effect of which would be to change the essential character of the so called, deposit act, and convert it into a real distribution measure. By the terms of the act, it was the duty of the Secretary of the Treasury to call upon the States for a return of the deposit when needed by the Federal Treasury: Mr. Buchanan proposed to release the Secretary from this duty, and devolve it upon Congress, by enacting that the three instalments already delivered, should remain on deposit with the States until called for by Congress. Mr. Niles saw the evil of the proposition, and thus opposed it:

"He must ask for the yeas and nays on the amendment, and was sorry it had been offered. If it was to be fully considered, it would renew the debate on the deposit act, as it went to change the essential principles and terms of that act. A majority of those who voted for that act, about which there had been so much said, and so much misrepresentation, had professed to regard it—and he could not doubt that at the time they did so regard it—as simply a deposit law; as merely changing the place of deposit from the banks to the States, so far as related to the surplus. The money was still to be in the Treasury, and liable to be drawn out, with certain limitations and restrictions, by the ordinary appropriation laws, without the direct action of Congress. The amendment, if adopted, will change the principles of the deposit act, and the condition of the money deposited with the States under it. It will no longer be a deposit; it will not be in the Treasury, even in point of legal effect or form: the deposit will be changed to a loan, or, perhaps more properly, a grant to the States. The rights of the United States will be changed to a mere claim, like that against the late Bank of the United States; and a claim without any means to enforce it. We were charged, at the time, of making a distribution of the public revenue to the States, in the disguise and form of a deposit; and this amendment, it appeared to him, would be a very bold step towards confirming the truth of that charge. He deemed the amendment an important one, and highly objectionable; but he saw that the Senate were prepared to adopt it, and he would not pursue the discussion, but content himself with repeating his request for the ayes and noes on the question."

Mr. Buchanan expressed his belief that the substitution of Congress for the Secretary of the Treasury, would make no difference in the nature of the fund: and that remark of his, if understood as sarcasm, was undoubtedly true; for the deposit was intended as a distribution by its authors from the beginning, and this proposed substitution was only taking a step, and an effectual one, to make it so: for it was not to be expected that a Congress would ever be found to call for this money from the States, which they were so eager to give to the States. The proposition of Mr. Buchanan was carried by a large majority—33 to 12—all the opponents of the administration, and a division of its friends, voting for it. Thus, the whole principle, and the whole argument on which the deposit act had been passed, was reversed. It was passed to make the State treasuries the Treasurypro tantoof the United States—to substitute the States for the banks, for the keeping of this surplus until it was wanted—and it was placed within the call of a federal executive officer that it might be had for the public service when needed. All this was reversed. The recall of the money was taken from the federal executive, and referred to the federal legislative department—to the Congress, composed of members representing the States—that is to say, from the payee to the payor, and was a virtual relinquishment of the payment. And thus the deposit was made a mockery and a cheat; and that by those who passed it.

In the House of Representatives the disposition to treat the deposit as a contract, and to compel the government to deliver the money (although it would be compelled to raise by extraordinary means what was denominated a surplus), was still stronger than in the Senate, and gave rise to a protracted struggle, long and doubtful in its issue. Mr. Cushing laid down the doctrine of contract, and thus argued it:

"The clauses of the deposit act, which appertain to the present question, seem to me to possess all the features of a contract. It provides that the whole surplus revenue of the United States, beyond a certain sum, which may be in the Treasury on a certain day, shall be deposited with the several States; which deposit theStates are to keep safely, and to pay back to the United States, whenever the same shall be called for by the Secretary of the Treasury in a prescribed time and mode, and on the happening of a given contingency. Here, it seems to me, is a contract in honor; and, so far as there can be a contract between the United States and the several States, a contract in law; there being reciprocal engagements, for a valuable consideration, on both sides. It is, at any rate, a quasi-contract. They who impugn this view of the question argue on the supposition that the act, performed or to be performed by the United States, is an inchoate gift of money to the States. Not so. It is a contract of deposit; and that contract is consummated, and made perfect, on the formal reception of any instalment of the deposit by the States. Now, entertaining this view of the transaction, I am asked by the administration to come forward and break this contract. True, a contract made by the government of the United States cannot be enforced in law. Does that make it either honest or honorable for the United States to take advantage of its power and violate its pledged faith? I refuse to participate in any such breach of faith. But further. The administration solicits Congress to step in between the United States and the States as a volunteer, and to violate a contract, as the means of helping the administration out of difficulties, into which its own madness and folly have wilfully sunk it, and which press equally upon the government and the people. The object of the measure is to relieve the Secretary of the Treasury from the responsibility of acting in this matter as he has the power to do. Let him act. I will not go out of my way to interpose in this between the Executive and the several States, until the administration appeals to me in the right spirit. This it has not done. The Executive comes to us with a new doctrine, which is echoed by his friends in this House, namely, that the American government is not to exert itself for the relief of the American people. Very well. If this be your policy, I, as representing the people, will not exert myself for the relief of your administration."

Such was the chicanery, unworthy of apie-poudrecourt—with which a statute of the federal Congress, stamped with every word, invested with every form, hung with every attribute, to define it a deposit—not even a loan—was to be pettifogged into a gift! and a contract for a gift! and the federal Treasury required to stand and deliver! and all that, not in a low law court, where attorneys congregate, but in the high national legislature, where candor and firmness alone should appear. History would be faithless to her mission if she did not mark such conduct for reprobation, and invoke a public judgment upon it.

After a prolonged contest the vote was taken, and the bill carried, but by the smallest majority—119 to 117;—a difference of two votes, which was only a difference of one member. But even that was a delusive victory. It was immediately seen that more than one had voted with the majority, not for the purpose of passing the bill, but to gain the privilege of a majority member to move for a reconsideration. Mr. Pickens, of South Carolina, immediately made that motion, and it was carried by a majority of 70! Mr. Pickens then proposed an amendment, which was to substitute definite for indefinite postponement—to postpone to a day certain instead of the pleasure of Congress: and the first day of January, 1839, was the day proposed; and that without reference to the condition of the Treasury (which might not then have any surplus), for the transfer of this fourth instalment of a deposit to the States. The vote being taken on this proposed amendment, it was carried by a majority of 40: and that amendment being concurred in by the Senate, the bill in that form became a law, and a virtual legalization of the deposit into a donation of forty millions to the States. And this was done by the votes of members who had voted for a deposit with the States; because a donation to the States was unconstitutional. The three instalments already delivered were not to be recalled until Congress should so order; and it was quite certain that it never would so order. At the same time the nominal discretion of Congress over the deposit of the remainder was denied, and the duty of the Secretary made peremptory to deliver it in the brief space of one year and a quarter from that time. But events frustrated that order. The Treasury was in no condition on the first day of January, 1839, to deliver that amount of money. It was penniless itself. The compromise act of 1833, making periodical reductions in the tariff, until the whole duty was reduced to anad valoremof twenty per cent., had nearly run its course, and left the Treasury in the condition of a borrower, instead of that of a donor or lender of money. This fourth instalment could not be delivered at the time appointed, nor subsequently;—and was finally relinquished, the States retaining the amount they had received: which was so much clear gain through the legislative fraud ofmaking a distribution under the name of a deposit.

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