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SUlments under the deposits Uw became ' i ptyabb, theirowo embarrassments, and I the necessity under which' they lay, Of curtailing their discounts and calling in ffteir debts, increased the general distress, ami contributed, wjth other causes, to hasten the revulsion in which, at length, they, in common with the other banks, ^trere fatally involved. (Jnder these circumstances, It becomes our solemn duty to inquire whether there are not, in any connection between the Government and the banks of issue, evils of great magnitude, inherent in its very nature; and against which no .precautions ?can enecuiany guard. 1 Unforeseen in the organization of the 'Government* ami forced on the Treasury 'by early necessities, the practice of em* ploying banks, was, in truth, from the beginning, more a measure )f 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 utir liberty; bo*, we hesitated to weigh down tne infant industry of the country by resorting to adequate taxation f>r the necessary revenue. The facilities of Banks, in return for the pivileges they acquired, were promptly offered, and perhaps too readily received, by an embarrassed Treasury.? Du ring the long continuance of a nation- < al debt, and the inervening difficulties of < a foreign war, the connection was con- i tinned from motives of convenience; but ' these causes have long since passed away. < Wo have no emergencies that make banks f necessary t? aid the wants of the Treasury; we have 11 load of national debt to i provide for, and we have on actual de- < posite a lanje surplus. No public in s teres!, therefore, now i quires ihe renewal of a connecti -n that circumstances have i dissolved. The complete organization of i our Government, the abundance of our resources, the general harmony which < prevails between the different Slates, and I with foreign Powers, all enable us now to I select the system most consistent with the t Constitution, and most conducive t > the 1 public welfare. Shoultl wc then, connect I the Treasury for a fourth lime with the t local banks, it can only be under a con- \ viction that past failures have arisen from s accidental, not inherent defects. t A d inger, lillicult, if not impossible to i oe avoided tt? surd an arrangement, is I made strikingly evident in the very event I by which it has now been defeated* A I su hlen act of the hanks intrusted with c the funds of the people, deprives the n Treasury, without fault or agency of the r * Government, of the ability to pay its t creditors in the currency they have by law e a right to demand. This circumstance no p fluctuation <?f commerce could have pro- e duccd, if the public revenue had been t collected in the legal currency, ami kept i in that form by the oiliccrs of the Trrasu- < ry. The rit zen whose money was in bunk receives it back, since the suspen-[t sion, at a sacrifice in its amount; whilst I he who kept it in the legal currency of the t country, and in his own possession, pnr- f sues without loss,tire curreutofliis business, j The Government, placed in the situation t of the former, is involved in embarrass- is merits it could not have suffered had it tl pursued the course of the latter. These embarrassments are, moreover, augmcu- n ted by those salutary and just laws which r; forbid it to use a depreciated currency, ti and, by so doing, take from the Govern- t ment the ability which individuals have of ll accommodating their transactions to such f a catastrophe. f A system which can, in a time of pro- v found peace, when there is a large reve- '1 tnue laid by, thus suddenly prevent the ap- <1 plication ami the use of the money of the i people, in the manner and for the objects < they have directed, 'cannot be wise; hut t who can think; without painful reflection, 1 that, under it, the same unforsecn events I might have befallen lis m the midst of a I war, and taken from us, at the moment ( when most wanted, the use of those very < means which weie treasured up to pro- | mote the national welfare and guard our s national rights ? To such embarrassments and to such dangers will this Govern- t ment be always exposed, whilst it takes t the money raised for, and necessary to ? the public service, out of the hands of its 1 own officers, and converts them into a't mere right of action against corporations ? entrusted with the possession of them i Nor can such results be effectually guar- t ded against in such a system, without in < Testing the Executive with n control over | the banks themselves, whether State or i National, that might will) reason be ob- I jected to. Ours is, probably, the only < Government in tho world that is liable, in ' the management of its fiscal concerns, to occurrences like these. But this irnmi- I Dent risk is not the only danger attendantil on the surrender of the public money to J: the custody and control of local eorporalions. Though the object is aid to the 'Treasury, its effects may be introduced into me operations or the U yernment,' influences the most subtle, founded on interests the most selfish. The use by the banks, for their own benefit, of the money deposited tvidi them, has received the sanction of the Government from the commencement of this connection. The money received from < the people, instead of b?'ing kept till it is1 needed for their use, is, in consequence of i this authority, a fund, on which discounts i are made for the profit of those who hap- < pen to be owners of stock in the banks f selected as depositories. The supposed \ and often exaggerated advantages of such r a boon will always cause it to be sought's for with avidity. I will not slop to con-;t i f V rider on ttfctobi the patronage'iiieitfent to ii U to bieonfer redwhether'the selec* lion uri^tntroi be trusted tO'Congreas otr in the Executive, either will be subjeeted to tpptill made in eeery form which the sagacity of interest cen suggest. The banks, under such i system, ere stimuli* ted to mjritcr the most of their fortunate acquisition; the depositee ere treated as an incrfgse of capital; loans and circulation are rashly augmented, and when th>* mihlii* aannciM r#>nuiro Miurn St i? attended with embarrassments not provided Cor, nor foreseen. Thus banks that Ihoefiht themselves most fortunate when the public funds were received, find themselves most embarrassed when the season of payment suddenly arrives. Unfortunately, too, the evils af the system are not limited to the batiks. It stimulates a general rashness of enterprise, and aggravates the fluctuations of commerce and the currency. This result was strikingly exhibited during the operations of the lato deposits system, and especially in the purchase of public lands. The order which ultimately directed the payment of gold and silver in such purchases, greatly checked, but could not altogether prevent the evil. Specie was indeed more difficult to be procured than the notes which the banks could themselves ceateat pleasure; but still, being obtained from them as a loan, and returned as a ileposite, which they were again at liberty to use, it only passed round the circle ivit'h diminished speed. This operation oiild not have been performed, had the 'unds of the Government gone into the Freasury, to be regularly disbursed, and not into banks, to be loaned out for their jwn profit, " bile they were permitted to substitute for it a credit in account. In expressing these sentiments, I desire tot to undervalue the benefits of a saluta'v credit to any branch of enterprise, rhe credit bestowed on probity and inlustry is the just reward of merit, and an i'?nor tble incentive to further acquisition. V ?ne oppose it who love their country ind understand its welfare. But when it s unduly encouraged - when it is made o inflime the public mind with tne tempaiions of sudden and unsubstantial wealth, vhen it turns industry into paths that lead tooner or later to disappointment and disress?it becomes liable to censure, and leeds correction. Far from helping pro?fiy and industry,^ the ruin to which it ead-j falls most severely on the great la> ?ring classes, who are thrown suddenly nit of employment, and by the failure of natruificerit schemes never intended to en ich them, are deprived in a moment of heir only resource. Abuse of credit and xcess in speculation will happen in desi?U* of the most salutary laws; no Gov. rnme- t perhaps can altogether prevent hen*; hut surely every Government can -efrain from contributing the stimulous that alls them into life. Since, therefore, experience has shown, hat to lend the public money to the local milks, is hazardous to the operations of he Government, at least of doubtful bene* it to the institutions themselves; and irodiirfive of disastrous derangement in lie business and currency of the country, i it the part of wisdom again to renew . le connection ? 1 It is true that such an agency is in lany respects convenient to the Trcasuy, but it is not indispensable. A limitamn of the expenses of the Government i) its actual wants, and of the revenue to hose expenses, with convenient means or its prompt application to the purposes or which it was rained, arc the objects rhich we should seek to accomplish.? rhe collection, safe-keeping, transfer and lishursement of the public money, can, it s believed, he well managed by officers >f the Government. Its collection, and o a great extent, its disbursement also, lave indeed been hitherto conductedsoley by them ; neither Na'ional nor State >anks when employed, being required to lo more than keep it safely while in their Mistody, and transfer and pay it in such proportions and at such times as the Treautry sh ill direct. Sorely banks are not more able than he Government to secure the money in heir possession against accident, violence, >r fraud.- The assertion that they are so, nust assume that u vault in a bank is Uronger than a vault in the Treasury , md that directors, cashiers, and clerks, run selected by the Government, nor jnder its control, are mote worthy of jonfidcnce than officers selected from the paople and responsible to the Government; officers bound by official oaths and lii nds for a faithful performrncc ?! their Jtilies, and constantly subject to the supervision of Congress. The difficulties of transfer, nrwl heretofore rendered by banks, have been i less than is usually supposed. The actu-' al accounts show that by far the large portion of payments is made within short or convenient distances from the places of J collection ; and the whole number of warrants issued at the Treasury in the year' 1834?a year, the results of which will it I is believed afford a safe test for the future, j fell short of live thousand, or an average' of less than one daily for each Stale ; in i the city of New York they did not aver-' age more than two a day, and at tho city of tViishiMgton only four. The difficulties heretofore existing arc, moreover, daily lessened by an increase in the cheapness and facility of communication; and it may be asserted with conidence, that the necessary transfers, as veil as the safe-keeping and disburse-, ncnts of the public moneys, can be with afety and convenience arcomplishe I thro' he agencies of the Treasury officers.? ffcis opinion hat been, in come degree, confirmed by actual experience ainee the | (IUcontl?uabc(H)i the banks at fiscal tgeon, 1 in May lest; a period which from the emI barrassmente in commercial intercourse* presented obstacles as ubt as any that may be hereafter apprehended. The manner of keeping thespubKc money since that period, is ftilly slated in the report of the (Secretary of the Treasury. That officer also suggests the propriety of aasigoing by law, certain additional du* ties to existing establishments and officers, which, with the modifications and safeguards referred to by him, will, he thinks, enable the Department to continue to perform this branch of the public service, without any material addition either to ?k.!a niltnko. A. tn tkn .iaaaam. i iiuilli/i v* IMV j/irpcill CA I'CIIOr* The extent of the business to be transacted has already been stated1; and in respect to the amount of money with which the officers employed would be entrusted at any one time, it appears that, assuming a balance of five millions to be at all times kept in the Treasury, and the whole of it) left in the hands of the collectors and receivers, the proportion of each would not1 exceed an average of thirty thousand dollars; but that, deducting one million for the use of the mint, and assuming the remaining four millions to be in the hands' of one-half of the present number of officers?a supposition deemed more likely to correspond with the fact?the sum in the hands of each would still be loss than the amount of most of the bonds now, taken from the receivers of public money. Every apprehension, however, on the subject, either in respect to the safety of the money, or the faithful discharge of these fiscal transactions, may, it appears to me, be effectually removed by adding to the present means ol the Treasury the establishment by law, at a few important points, of the offices for the deposite and disbursement of such portions of the public revenue as cannot, without obvious safety and convenience, be left in the possession of the collecting officers until paid over by them to the public creditors. [ Neither the amounts retained in their; . I -1 ! 1 - - aims, nwr ulUbU ueposilCU in Hie OI11C6S, would, ill an ordinary condition of the i revenue, be larger in most cases than 1 those often under the control of disbursing 1 officers of the Army and Navy, and might be made entirely safe, by requiring such securities,and exercising such controlling i supervision, as Congress may by law pre- i scribe. The principal officers whose op- 1 poiuttncnis would become necessary under i this plan, taking the largest number sug- < gested by the Secretary of the Treasury, would not exceed ten; nor the additional I expenses, at the same estimate, sixty thou- 1 sand dollars a year. 1 There can be no doubt of the obligation | of those who are entrusted with the alfairs ' of the Govei nment, to conduct them with < as little cost to the nation as is consistent I with the public interest ; and it is for Con- < grcss, and ultimately for the people, to I decide whether the benefits to be derived i from keeping our fiscal concerns apart, I and severing the connection which has t hitherto existed between the Government < aud banks, offer sufficient ndvaulngcs to I justify the necessary expenses. If the n object to be accomplished is deemed im. c portant to the future welfare of the coun-j try, I cannot allow myself to believe that the addition of the public expenditure of comparatively so small an amount as will be necessary to effect it, will be objected to by the people. It will be seen by the report of the Postmaster General, herewith communicated, that the fiscal affairs of that Department have been successfully conducted since May last, upon the principle of dealing only in the legal currency of the United States, and that it needs no legislation to maintain its credit, and facilitate the management of its concerns; the existing laws being, in the opinion of that officer, ai iple for those < bjects. Difficulties will doubtless be encountered for a season, and increased services required from the public functionaries ; such arc usually incident to the commencement of every system, but they will he greatly lessened in the progress of its operations. The power and influence supposed to be connected w ith the custody and disbursement of the public money are topics ? u:^i. .L. ... ?iii wmrii me puonc inimi is naturally 1 and, and with great propriety, peculiarly ? sensitive. M ucli has been said on them, < in reference to the proposed separation of t the Cover imenl from the banking institu- ? lions; and surely no one can object to any < appeals or animadversions on the subject, J which are consiste nt with facts,and evince i a proper respect for the intelligence of the people. If a Chief Magistrate may I be allowed to speak for himself, on such t a point, 1 can truly suv, that to me, noth- ? ing would-be more acceptable, than the t withdrawal from the Executive, to theit greatest practicable extent, of all concern < in the custody and disbursement of the | public revenue ; not that I would shrink i from any responsibility cast upon me by t the duties of my office, but because it is < my firm belief, that its capacity for useful- < ness is in no degree prompted by the pos- ( session of any patronage not actually ne- ' I cessarv to the performance of those duties. < But under our present form of Govern- ? nicnt, the intervention of the Executive < officers in the custody and disbursement t of the public money seems to be unavoid- ' able; and before it can be admitted that ' the influence and power of the Executive i would be increased by dispensing with < the agency of banks, the nature of that < I intervention in such an agency must be I |carefully regarded, and a comparison most be instituted between its extent in in the two eit?$. The revehtie Ceo only be collected by officers appointed by the President, with the advioe and consent of the Senate.?The public moneys, in the first instance, most therefore, in all cases, pass through hands selected "by the 'executive. Other offices appointed in 4he same/way, or, as 111 some cascf, by the President alone, moat also be entrusted with them when drawn for the. purpose of disbursement. It is Ayt sqen that, even when the barbs are~employe<Vthe public funds must twice pass through the hands of the Executive officers^ Besides tl>is, the head of the Treasury Department, who also holds his office at the pleasure of the President, and Some other officers of the same department, must neceesarilv be inve?n?H with more or less power in the selection, continuance and supervision, -of the hanks that may he 'Employed. The question is then narrowed to the single point, whether in the intermediate stage between the collection and disbursement of the public money, the agency of banks is necessary to avoid a dangerous extension of the Katfonage and influence of the Executive? >ut is it clear that the connection of the executive with powerful moneyed institutions, capable of ministering to the interests of men in points where they arc most accessible to corruption, is less liable to abuse, than his constitutional agency in the appointment and control of the ie\y public officers required by the proposed plan? Will the public money, when in their hands be necessarily exposed to any improper interference on the part of the Executive? May it not be hoped that a 1 prudent fear of public jealousy and disapprobation, in a matter so peculiarly exposed to them, will deter him from any such interference, even if higher motives be found inoperative? May not Congress so regulate, by law, the duty of those officers, and subject it to such supervision and publicity, as to prevent the possibility of any seriou3 abuse on the part of the Executive? and is there equal room for such supervision and publicity in a connection with banks, acting under the i_ r v* snieiu 01 corporate immunities, and conducted by persons irresponsible to the Government and the people? It is believed that & considerate and candid investigation of these questions will result in the conviction, that the proposed plan is far less liable to objection, on the score of Executive patronage and control, than any bank agency that has been, or can be, devised. With these views, I leave to Congress llie measures necessary to regulate, in the present emergency, the safe-keeping and rausfer of the public moneys. In the performance oi constitutional duty, I have stated to them, without reserve, the result' if my own reflections. The subject is of great importance ; and one on which we ;an scarcely expect to he as united in sentiment as we arc in interest. It deserves t full an I free discussion, and cannot fail 1 o be benefitted by u dispassionate com* /daiouii *'* >> cii aware mysell' >f ihe duly of reciprocal concession among he co-ordinate branches of* the Governnent, I ran promise a reasonable spirit of :o-operation, so lar as it can be indulged n without the surrender of constitutional ibjections* which I believe to be well ounded. Any system that may be adoptd should be subjected to the fullest legal trovision, so as to leave nothing to the Executive but what is necessary to the lischarge of the duties imposed on him ; nid whatever plan may be ultimately esablished, my own part shall be so dis:har?zed as to give it a fair trial, and the >est prospect of success. The character of the funds to be received ind disbursed in the transactions of the ! lovcrnment, likewise demands your most areful consideration. There can be no doubt tbat those who' rarned and adopted the Constitution, ha- | ring in immediate view the depreciated . in lor (if ll?*? f'diifoiloi'o'." "' ?? " V/WMIVMV. J I VI n HIV II live tundred dollars in paper were, at limes, mly equal to one dollar in coin?intended 0 prevent the recurrence of similar evils, | 10 far at least as related to the transac- j ions of the new Government. Theyj javc to Congress express powers to coin 1 noney, and to regulate the value thereof, tnd of foreign coin; they refused to give t power to establish corporations?the ige.nts, then as now, chiefly employed to reale a paper currency; they prohibited | he Stales from making any thing but gold ind silver a legal tender in payment of lebts ; and the first Congress directed, by j positive law, that the revenue should be ereived in nothing but gold and silver. i Public exigency at the outset of the jovernment, without direct legislative auliority, led to the use of banks as fiscal , lids to the.Treasury. In admitted devia- j ion from the law, at the same period, and ! 1 n/lni* I k A r. A 1 A Aaa U - ? 4 ' uuvsi IIIC name i IIJC? ncCTflHry j )f the Treasury teceived ihrir notes in j payment of duties. The sole ground on ; which the practice, thus commenced, was hen, or has since been justified, is the *ertain, immediate and convenient exchange of such notes for specie. The government did indeed receive the inconvertible notes of State banks during the JifTiculties of war; and the community submitted without a murmur to iheune-, jual taxation and multiplied evils of which tuch a course was productive. With the war, this indulgence ceased, and the hanks were obliged again to redeem their notes in gold and silver. The Treasury, in accordance with previous practice, continued to dispense'with the currency required by the act of 1789, and took the notes of banks in full conlidence of their being paid in specie on demand ; and Congress to guard against the slightest violation of this principle, have declared, by law, that if notes are paid in the transactions of the Government, it must be under each circumstances as to enable the holder to convert them into specie without depreciation or delay. 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 ox its equivalent; ana every practicable arrangement was made . to preserve the public faith, by similar or equivalent payments to the public crcdi tors. Th'3 revenue from lands had been for some time substantially so cdwected, under the order is*u?d by the directions of iny predecessor. Th^^effects of that order had been so ualutary/aod its foreenst in regard to the increasing insecurity of bank puper had become so apparent, that, even before the catastrophe, I had resolved not to interfere with its opera| lion. Congiess is now to decide whether the revenue shall continue to be so collected or not. The receipts into the Treasury, of bank notet, not redeemed in specie on demand, will not, I presume, be sanctioned. It would destroy, without the excuse of war or public distress, that equality of imports, and identity of commercial regulatien, which lie at the foundation of our Conj federacy, and would offer to each State a direct temptation to increase its foreign trade, by depreciating the currency received for duties in its ports. Such a proceeding would also, in a great degree, frustrate the policy, so highly cherished, of infusing into our circulation a larger proportion of the precious metals ; a policy, the wisdom of which none can doubt* (though tlieie may be different opinions as to the extent to which it should be carried. Its results have been already too.auspicious, and its success is too closely interwoven w ith the future prosperity of the country, to permit us for a moment to contemplate its abandonment. We have seen, under its influence, our specie augmented beyond eighty millions ; our coinage increased so as to make that of gold amount, between August, 1834 and December, 1836, to ten millions of dollars ; exceeding the whole coinage at the mint during the thirty-one previous years. The prospect oi lurtner improvement continued without abatement, until the moment of the suspension of specie payments. This policy has now indeed been suddenly checked, but is still fai from being over* thrown. Amidst all conflicting theories* one position is undeniable : the precious metals will invariably disappear when there ceases to be a necessity for their use, as a circulating medium. It was irt strict accordance with this truth, that whilst, in the month of May last, they were every where seen, and were current for all ordinary purposes, they-disappeared from circulation the moment the payment of specie was refused by the banks, and the community tacitly agreed to dispense with its employment. Their plucc was supplied by a currency exclusively of paper, and in many cases, of the worst description. Already are the bank notes now in _ i_. -i : 1 __j .? ?. ivulaiiuii jjri'ci ij urpri-viuiru, auu inev fluctuate in value between one place and another; thus diminishing and making uncertain the worth of property and the puce of labor, and failing to subserve, except at a heavy loss, the purposes of business. With each succeeding day the metallic currency decreases ; by some it is hoarded in the natural fear, that, once parted with, it cannot be replaced ; while by others it is diveited from its more legitimate uses, for the 6ake of gain. Should Congress sanction this condition of things, by making irredeemable paper money receivable in payment of public dues, a temporary check to a wise and salutary polU cy, will, in all probability, be converted into its absolute destruction. It is true thut bank notes actually convertible into specie may be received in payment of the revenue, without being liable to all these objections, and that such a course may, to some extent, promote individual convenience ; an object always to be considered where it does not conflict with the principles of our Government or the general welfare of the country. If such notes only were received, and always tinder circumstances allowing their early piesentation for payment, and if, at short and fixed periods, they were converted into specie, to be kept by the officers of the Treasury, some of the most serious obstacles to their reception would, perhaps, be removed. To retain the notes in the Treasury would be to renew, under another form, the loans of public money to the banks,-and the evils consequent thereon. It is, however, a mistaken impression, that any large amount of specie is required for public payments. Of the seventy or eighty millions now estimated to be in the country, ten millions would be abun danily sulticient lor that purpose, provided an accumulation of a large amount of revenue, beyond the necessary wanis of the Government, be hereafter prevented. If to these considerations be added the facilities which will arise from enabling tho Treasury to satisfy the public creditors, by its drafts or notes received in payment of the public dues, it may be safely assumed that no motive of convenience to the citizen requires the reception of bank paper. To say that the refusal of paper money by the Government, introduces an unjust discrimination between the currency received by it, and that used by individuals