Camden commercial courier. (Camden, S.C.) 1837-1838, September 16, 1837, Image 1
/ * , * . *
(?iiata>aa axbsamiaiiiaia A a.
L. M. JONE3. A. Co. Pumi.tmmr**
at T?I rvi^io OOOD Wi Aim." ' =*====-=^
V01" CAnPE^, SOUTH <AKU11YA, HATURBAV SEPTBIBEK IP, 1837. ^ ^
MjCssAttfi
.PRESIDENT OFVHB*5*ITEP8TATES,
To the ta>o House* qf Compress ottke commencement
of the first session jaf the Twenty-fifth Congress.
Fellow-Citizens of the Senate
and House of Representatives:
The act of the 93d of Junfe, 1836, re*
gulatlng the depositee of the public money,
and directing the employment of State,
District, and Territorial banks for that
purpose, made it the dfltv of th?
^ m W ' V ?W
tary of the Treasury to discontinue the
use of such of them as should at any time
refuso to redeem their notes ih specie,
antt to substitute other banks, provided a
sufficient number could be obtained to receive
the public depusiles upon the terms!
and conditions therein prescribed. The
general and almost simultaneous suspen- I
sion of specie payments by the banks in
May last, rendered the performance of
this duty imperative, in respect to those
which had been selected under the act;1
and made it, at the same time, impracticable
to employ live requisite number of
others, upon the prescribed conditions.!
The specific regulations establish* d by
Congreso (or the deposite and sale keep*
ihg oi the public moneys, having thus1
unexpectedly become inoperative, I Celt itto
be my duty to afford you an early opportunity
for the exercise of your super- [
visory powers over the subject.
1 was also led to apprehend that (he'
suspension of specie payments, increas-'
ing the embarrassments before existing
in the pecuniary affairs of the country,
would so far diminish the public revenue, i
that the accruing receipts into the Treasury,
would not, with the reserved five!
millions, be sufficient to defray the unavoidable
expenses of the Government, until
?i.? - <
v.. Mic usuui jicnou i?r tne meeting of
Congress; whilst the authority to cull upon
the Slates, fur a portion of the sums'
deposited with them, was loo restricted to j
enable ihe Department to realize a suffi-1
cient amount from that source. These i
apprehensions have been justified by sub-j
sequent results, vhicli render it certain
that this deticiency will occur, if addition-'
al means be not provided by Congress, i
The difficulties experienced by the mercantile
interest, in meeting their engagements,
induced tliern to apply to me, previously
to the actual suspension of specie
payments; for indulgence upon ilw ir b >nds
for duties; and all the relief authorized
by law was promptly and cheerfully granted.
The dependence of the Treasury
upon the avails of these bonds, to enable
if to make the depositee with the States
required by law, led me in the outset to
limit this indulgence to the first of September,
but it has since been extended to
the first of October, that the matteY might
? * ~
ue submitted to your further direction.
Questions were also expected to arise
in the recess in respect to the October ins
alment of those doposites, requiring the
interposition of Congress.
A provision of another act,passed about
the same time, and intended to secure
a faithful compliance with the obligation
of the United States, to satisfy all demands
upon thern in specie or its equivalent,
prohibited the off? r of-any bank note,
no convertible on the spot into gold or
silver at the will of the holder; and the
ability of the Government, with millions
on deposite, to meet its engagements in a
tnauner thus required by law, was rendered
very doubtful by the event to which
1 have referred*
Sensible that adequate provisions for
those unexpected exigencies could only
be made by Congress convinced that
some of tlipm ii/rttii't --
iiiuin|iriiBaui V
necessary to the public service, before
the regular period of your meeting; and
desirous also to enable you to exercise,
at the earliest moment, your full constitutional
powers for the relief of the country,
I could not, with propriety, avoid
subjecting you to the convenience of as- 1
seuibling at as early a day as the staid of
the popular representation would permit
I am sure that 1 have done but justice to
your feelings, in believing that this inconvenience
will he cheerfully encountered,
in the hope of rendering your meeting
conducive to the good of the country.
During the earlier stages of the revnl
sion,through which we have just passed,
much acrimonious discussion arose, and
great diversity of opinion existed, as to
its real causes. This was not surprising.
The operations of credit are so diversified,
and the influences which affect them '
so numerous, and often so subtle, that
even impartial and well-informed persons
are seldom found to agree in respect to
them To inherent difficulties were also i
? .?i s? ?
vuuvu viuci iciiiiciicirs, wnirn wcro by
no means favorable to the discovery of
truth, it was hardly to be expected, that i
those who disapproved the policy of the
Government in re ation to the currency,
would, in the excited state of public fee- i
ling produced by the occasion, fail to attribute
to that policy any extensive embarrassment
in the monetary affairs of the
country. The matter thus became connected
with the passions and conflicts of
party; opinions were more or less affected
by political considerations; and differcncies
were prolonged which might other
wise have been determined'by an appeal
to facts, by the exercise of refison, or by
mutual concession. It is,, however, a
cheering reflection, that" circumstances of
this nature cannot prevent a community
so intelligent as ours from ultimately arriving
at correct conclusions. Encouraged
by the firm bfelief of this truth, I proceed
to state my views, so far as may be
necesskry to a clear understanding of the
remedies I feel it my duty to propose,
and Of the reasons by which 1 have been
led to recommend them. .
The history Of trade in the United Stales
for the last three .'or four years, affords
the most convincing evidence that our
present condition is chiefly to be allribuI
f 1 t h IlllO.-n?*!?? I ? ?*1 '? * "
? ? . vtovuuu iu an me uepartmcnis
of business; an over-action deriving, perhaps,
its first impulses from antecedent
causes, but stimulated to its destructive
consequences by excessive issues of bank
paper, and by other facilities, for the
acquisition and enlargement of credit.?
At the commencement of the year 1834,
the hanking capital of the United Slates
including that of the national bank then
existing, amounted to about two hundred
millions of dollars; the bank notes then
in circulation to aboutninety-five millions;
and the loans and discounts of the banks
to three hundred and twenty-foUr millions.
Between that time and the first of January,
1830, being the latest period to
which accurate accounts have been received,
our banking capital was incteased
to more than two hundred and fifty-one
miltiojis; our paper circulation to more
than one hundred and forty millions, and
the loans and discounts to more thun four
hundred and fifty-seven millions. To
this vast increase are to be added the many
millions of credit, acquired by means
ol li>T< ign loans, contracted by the States
and State institutions, and, above all, by
the lavish accommodations extended by
foreign dealers to our merchants.
The consequences of this redundancy
of credit, and of the Spirit of reckless
speculation engendered by it, were a foreign
debt contracted by our citizens, estimated
in March last at more than thirty
millions of dollars; the extension to traders
in the interior of our country of credits
lor supplies, greatly beyond the wants
of the people; the investment of thirtynine
and a half millions of dollars tn unproductive
public lands, in the years 1835
and 1830. whilst in the preceding year
the sales amounted to only four and a hall
millions; the creation of debts, to an almost
countless amount, for real estate in
existing or anticipated cities and villages,
equally unproductive, and at prices now
seen to have been gteaily disproportionn?A
.2 ? 1 1 -1
?? ?" mcir rcai vniue; me expenditure ol
immense sums in improvements which, in
many cases, have been found to be ruinously
improvident; the diversion to other
pursuits of much of the labor that should
have been applied to agriculture, th rcb)
contributing to the expenditure of large
sums in the importation of grain from
Europe?-an expenditure which amounting
in 1831 to about two hundred and
fifty thousand dollars, was, in the first two
quarters of the present year, increased to
more than two millions of dollars; and,
finally, without enumerating other injurious
results, the rapid growth among all
classes, and especially in our great commercial
towns, of luxurious habits, founded
too often on merely fancied wealth,
and. detrimental alike to the industry,
the resources, and the morals of our peo.ple.
It w&3 so impossible that such a state
of tilings could long continue, that the
prospect of revulsion was present to the
IVIl ?I/Ii3 * ? ? -- ' ** * "
wi uunM(u:raie (ueii oeiore u actually
came. None, however, had correctly
anticipated its severity. A concurrence
of circumstances inadequate of themselves
to produce such wide-spread and
calamitous embarrassments, tended so
greatly to aggravate them, that they cannot
he overlooked in considering their history.
Among these may be mentioned,
as most prominent, the great loss of capital
sustained by our commercing emporium
in the fire of December, 1833?a loss, the
affects of which were underrated at the
time, because postponed Ibr a Season by
the great facilities of credit then existing;
the disturbing effects, in our commercial
cities, of the transfers of the public moneys
required by the deposite law of
June, 1836; and the measures adopted by
foreign creditors of our merchants to rertiipa
limit* ?wwl t/? iiiitk/l...,. ?
MMVv vit? ?i ami fcw n I villi I a W IIUIIV
the United States u large portion of our
specie.
However unwilling any of'our citizensmny
heretofore have been to assign to
these causes the chief instrumentality in
producing the present state of things, the
developements subsequently made, and
the actual condition of other commercial
countries, must, as it seems to me, dispel
all remaining doubtsupon the subject. It
has since appeared \hat evils, similar to
those suffered by ourselves, have been experienced
in Great Britain, on the continent,
and, indeed, throughout the commercial
world; and that in other countries,
as well as in our own, they have been
uniformly preceded by an-(indue enlargement
of the boundaries of Uradc, promp
ted, all with us, by unprecedented expansions
of the systems of credit. A reference
to the amount of banking capita),
and the issdes of paper credits put in circulation
in Great Britain, by banks, and
in other ways, during the years 1834, 1835
and 1836, will show an augmentation of
the paper currency there, as much disproportioned
to the real wants of trade as in
{the United Stales. With this redundancy
of the paper currency, there arose in that
country also a spirit of adventurous speculation,
embracing the whole range of
human entel-prize. Aid was profusely
given to projected improvements; large
investments were made in foreign stocks
and loans: credits fr?r trn^Ae ????
, guvus irviv giaillCU
with unbounded liberality to merchants in
foreign countries; and all the means of
acquiring and employing credit were put
in active operation, and extended in thejr
effects to every department of business,
and to every quarter of the globe. The
reaction was proportioned in its violcm e
to the extraordinary character of the
events which preceded it. The commercial
community of Great Britain were
subjected to :the greatest difficulties, and
their debtors in this country were not only
suddenly deprived of accustomed and
expected credits, but called upon for payments,
which, iu the actual posture of
things here, could only be made through
a general pressure, and at the most ruinous
sacrifices.
In view of these facts, it would seem
impossible for sincere inquirers after
truth to resist the conviction, that the causes
of the revulsion in both countries have
been substantially the same. Two nations,
the most commercial in the world, enjoying
but recently the highest degree of apparent
prosperity, and maintaining with
each other the closest relations, are suddenly,
in a time of profound peace, and i
without any great nationul disaster, arrested
in their career, and plunged into a
slate of embarrassment and distress. In
both countries we have witnessed the
I- - ->
oaniD icuuiiuuiiuy oi paper money, and
other facilities of credit; the same spirit
of speculation; the same partial successes;
the same difficulties and reverses; am , at
length.nearly t e s nneovenvhelmingcatas
trophe. The most material difference between
the results in the two countries has
only been* that with us there has elso occurred
an extensive derangement in the
fiscal afTairs ot the Federal and State Govern
Dents* occasioned by the suspension
of specie payments by the banks.
The history of those causes and effects
in great Britain and the United States, is
subriautialU the liustory of the revulsion
in all other commercial countries.
The present ?rtd visible eWVcia of these
[ circumstances on the operations of the
Government, and on the industry of the
people, point out the objects which cull
tor your immediate attention.
| They ate?to regulate by law the safe
keeping, transfer, and disbursement, of
the public moneys; to desig ale the funds
to be received and paid by the Government;
to enable the Treasury to rrfeet promptly
every demand upon it; to prescribe the
terms of indulgence, and the mode of
settlement to be udonted. as well in
leciing from individuals the revenue that
has accrued, as in withdrawing it from
former depositories, and to devise and
adopt such further measures, within the
constitutional competency of Congress,
i as will bo best calculated to revive the
enterprise and to promote the prosperity
of the country.
For the deposite, transfer, and disbursement
ot the revenue. National and State
banks have always, with temporary and
limited exceptions, been heretofore employed;
hut, although advocates of each
system are still to he found, it is apparent
that the events of the last few months
have greilly augmented the desire, long
existing among the people of the United
Slates, to senerate ihn fincnl
f- ?/ j'v i u?|i'IID III
the Government from those of individuals
or corporations.
Again to create a national bank, as a
fiscal agent, would he to disregard the
popular will, twice solemnly and unequivocally
exptes^ed. On no question of
domestic polie ' is there stronger evidence
that the si niiiiiems of a large majority
ore deliberately fixed; and 1 cannot concur
with those w ho think they see, in recent
events, a proof that these sentiments
are, or a reason that tiny should be
changed.
Events, timila in their origin and character,
have heretofore frequently occurred,
without producing any such change;
and the lessons of experience must be forgotten,
if we suppose ihat the nreaent
overthrow of credit would have been prevented
by the existence of a national
bank. Pronenest to excessive issues has
ever been the vice of the banking system;
a vice as prominent in National as in State
institutions. This propensity is as subservient
to the advancement of private ininterests
in the one as in the other; and
those who dir ctthem both, being principally
guided by the same views, and influenced
by the same motives, will be
equally ready to stimulate extravagance
of enterprise by improvidence of credit.
How strkinglyjis this conclusion sustained
by experience. The Dank of the Uni
ted States, with the vast powers conferred
on it by Congress, did not or could not
prevent former and similar embarrassmerits;
nor has the stifl greater strength
it has been said to possess, under its present
charter, enabled it, in the existing
emergency, to check other institutions, or
even to save itself. In Great Britain,
where, it has been seen, the same causes
have been attended with the same effects,
a national bank, possessing powers Tar
greater than arc asked for by the warmest
advocates of stirh ait institution here,
has also proved unable to prevent an undue
expansion of credit, and the evils that
(low from it. Nor can I find any tenhble
ground for the re-establishment of a ha
(tional bank, in the derangement alledged
i at present to exist in the domestic ex'changes
of the country, or in the facilities
it may he capable of affording them. Although
advantages "f this sort were in*
ticiputed when the lirst Bank of the United
Stales was cve-ue I, they were regard-'
ed us an incidental accommodation; not
one whriMt the Federal Government :
bound, or could be called upon, to furnish.
This accommodation is now, indeed, after i
the lapse of not mahv voire. <!?"<? ' '
- J J ? -. . M' II
J from it us among its first dntie?: ami an
omission to aid and regulate commercial i
exchange, is treated as t ground of loud i
ojjd serious complaint. Such results only
serve to exemplify the constant desire, i
among some of our ci<iz<'tis, to enlarge <
the powers of the Oovernmeur, and ex- <
tend its control to subjects with which
it should not interf* re. They can never 1
justify the creation of an instituti6n tpromote
such objects. On the contrary
they justly excite among the community u
more diligent inquiry into the chnructer
of 'hose operations of trade, towards
which it is desired to extend such peculiar
favors. , i
The various transactions which bear the
name of domestic exchanges, differ essentially
in their nature, operation, and utili- <
ly One class of them consists of bills of
exchange, drawn for the purpose if trans- I
ferring actual capital front one part of <
the country to another. i?r 1.1 i
w - ? |fU n ^IIC I
proceeds of property actually transiqiited. I
Bills of this description are highly useful <
in the movements of trade, and well de
serve all the encouragement which can
[rightfully be given to them. Another class
is made up of bills of exchange, not drawn
to transfer actual capital, nor ?.n the credit
of property transmitted, hut lo'create
fictitious capital, partaking at once of the
character of notes discounted in hank, and
of bank notes in circulation, and swelling
the inass of paper credits t<> a vast extent
in the most objectionable manner. These
' bills have formed-, for toe last few years,,
a large proportion of what are termed the <
domestic exchange s of the coumrv, ser- i
ving as the means of usurious profit, and <
constituting the most unsafe and prerari- i
ous paper in circulation. This species of |
traffic, instead ?>f being upheld, ought to t
be discountenanced by the Government i
and the people. i
In transferring its funds from place to I
place, the Govrrnmtwi is on the same t
footing with the private citizen, and may I
resort to the same legal mean's. It may \
do so through the medium.of hills drawn <
by itself, or purchased from others; and \
in these operations it may, in a manner t
undoubtedly constitutional and legitimate, i
facilitate and assist exchanges of indivi- c
duals founded 011 real transactions of t
, j rn? ' -
iruue. i ne extent lo which this may be i
done, and the best means of efb cti ig it, |
are enticed to the fullest consideration. I
This has been bestowed by the Secretary
of the Treasury, ai d his views Will be t
submitted to \ oil in his report. i
But it was designed by the Constitution <
that the Government should assume the t
management of domestic or foreign x- I
change. It is indeed authorized t<> regu- t
late by law the commerce between the t
Slabs, and to provide a general stanilartl s
of va'.ue, or medium of exchange, in gold t
and silver; but it is not its province to <
aid individuals in the transfer of their e
funds, otherwise than through the facilities t
afforded by the Post OHioe Department, i
as justly might it be called on to provide f
for the transportation of their merehan- I
dise. These are operations of trade.? r
They ought to be conduct" d by those who <
are interested in them, in the same man- e
ner that the incidental difficulties of other r
pursuits are encountered by other classes y
of citizens. Such aid has not been deemed t
nect ssary in other countries. Throughout t
Europe, the domestic as well as the foreign I
exchanges are carried on by private houses i
often, if not gene ally, without the assist- i
ance of hanks. Yet they extend thro'oui t
distinct sovereignties, and far exceed in 1
nm xint the real exchanges of the United ri
Stales. There is no reason why our own t
may not be conducted in the same manner t
with equal cheapness and safety. Cer- c
tainly this might be accomplished, if it *
were favored by those m-st deeply inter- I
eated ; and few can doubt that their own 1
interest, as well as the general welfare of (
the country, would be promoted by leaving j
such a subject in the hands of those t< t
whom it properly belongs. A system i
founded on private interest, enterprise end \
competition, without the aid of legislative 1
grants or regulations by law, would rapidly 1
prosper; it would be free from the influence
of political agitation, und extend the
same exemption to trade itself; and it
would put an end to those complaints of
neglect, partiality, injustice, and oppression,
which arc the unavoidable results of
interference by the Government, in the
prOper concerns nf 4,1
- ... uavtMiiaiO# 111 iurmer
attempts ??n the part of the Government
to carry it* legislation, in this respect ;
further than was ite*ign*d by the Constitution,
have in the end proved injurious,
and have served only to convince the great
body of the people, more and more, of the
certain dangers of blending private interests
with the operations of public business;
and there is no reason to suppose that a
repetition of them now would be more
successful* .
It cannot be concealed that there exists,
in otir community, opinions and feelings
on this subject in direct opposition to each
other. \ large portion of them, combining
great intelligence, activity, and influence,
are 110 douhi sincere in their belief
that the opeiations of trade ought to
he assisted by such a connexion ; they
regard a national bank as necessary for
litis purpose, and they are disinclined to
ev ry measure that does not tend 'sooner
or Inter, to the establishment >>f such ah
institution. On the other hand a majority
of the people are believed to be irreconcilably
opposed to that measure : they
consider such a concentration of power
dangerous to their liberties ; and many
of them regard it as a violation of the
n *
v>wii9iiiiin<?n. i ins collision of opinion
has, doubtless, caused much of the embarrassment
to which the commercial transactions
of th?? country have lately been
exposed. Banking has become a political
topic of the bight st interest, and trade
has suffered in the conflict of parties. A.
speedy termination of his state of things,
however de<irahle. Is scarcely lo he expected.
We have seen for nearly half a
century, that those who advocate a na?
tional hank, by whatever motive they may.
be influenced, constitute a portion of our
community too numerous to allow us to
liope f <r nil early abandonment of their
favorite plan. On the other hand, they
oust indeed f? rm an erroneous estimate
<f the intelligence and temper of the
Ametican people, who suppose that they
have continued, on slight or insufficient
grounds, their persevering opposition to
such an ustitution ; or that they can be
induced by pecuniary pressure, or by
any other combination of circumstances,
to surrender principles they have so long
and 8(? inflexibly maintained*
,My own ?iews of the subject ore tin*
changed. They have been repeatedly
iiki unreservedly announce*! to my fellow
citizens; who, with full knowledge of
hern, eonferre.I upon me the two highest
>flicrs of the (J vernment. On the last
?f these occasions. 1 #elt ii due to the
>en|>l" to apprize them distinctly, that, in
he event of my election. I would not be
tble to co-operate in the re-establishment
i?f a national hank. To these sentiments,
I have now only to add the expression of
in increased conviction, that the re-establishment
of such a bank, in any form,
whilst it would not accomplish the benefi'i?l
purpose promised by its advocates,
would impair the rightful supremacy of
he popular w ill ; injure the churacter
ind diminish the influence of our political
iVQtPNi a?'l
v ...m mint um-e mnre mio exis,ence
a concentrated moneyed power,
rostile to the spirit, and threatening the
[lernianency, of our republican instituions.
. .
Local banks have been employed for
he deposite and distribution of the revcitte,
at all limes partially, and, on three
JiflVrent occasions, exclusively ; first', anerior
to the establishment of the first
3auk of the Tnited States; secondly, in
e interval between the termination of
hat institution and the charter of its
iticcessors; and, thirdly, during the limied
period which has now so abruptly
doted. The connection thus repeatedly
illempted, proved unsatisfactory on each
tuccessive occasion, notwithstanding the
;ariou9 measures which were adopted to
acilitate or insure its success. On the
ast occasion, in the year 1833, the emdoyment
of the State banks was guarded
jspecially in every way which experience
md c oition could supgi'st. Personal se uriy
wus required lor the safe-keeping
ind prompt payment of the moneys to be
eceived, and full returns of their condiion
were, from time to lime, to be made.
?y the depositories. In the first staff e* *
he measure was eminently successful,
inlwithslanding 0 e violent opposition of
he Bank of the United Slates, and the
inreasing efforts made to overthrow it.
fhe selected Ranks performed with fid-eliy,
and without any embarrassment to
hemselves or t<> the community, their
mgagements to the Government, and the
system promised to he permanently uscul.
But when, it becomes necessary,
inder the act of June, 183G, to withdraw
rom the public money, for the purpose of
daring it in additioal institutions, or of
ransferring it to the Htates, they found it
n many cases, inconvenient to comply
villi the demands of the Treasury, and
numerous and pressing applications were
made fcr indulgence or relief. \ ? the in'
t _