Daniel D. (Daniel Dewey) Barnard.

Speeches and reports in the Assembly of New York, at the annual session of 1838 online

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SPEECHES AND REPORTS



ASSEMBLY OF NEW-YORK.



ANNUAL SESSION OF 1838



By DANIEL D. BARNARD.



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ALBANY :

PUBLISHED BY OLIVER STEELE

405 SOUTH ilARKET-STREET.

1838,



flls



[Entered according to Act of Congress, in the year one thousand
eight hundred and thirty-eight, by Oliver Steele, in the Clerk's
Office of the Northern District Court of New- York.]



Packard, Vati Benthiivstn &. Co., Printers.



CONTENTS



Page

Speech on the Bill to repeal the Law prohibiting the cir-
culation of small bank-notes — Jan. 9, 1838, 1

Report on the subject of Religious Exercises, and the use

of the Bible, in Schools— Jan. 23, 1838, 49

Speech on Corporations, and the Proposition to make Cor-
porators personally liable — Jan. 30, 1838, €5

Speech on the Resolutions of Mr, HoUey, respecting the

Sub-Treasury Scheme— Feb. 14, 1838, 81

Report on the Subject and System of Public Instruction —

March 7, 1838, 109

Remarks on the Economical Policy of Internal Improve-
ments—March 13, 1838, 137

Speech on Banking, Currency, and Credit, delivered upon
the passage of the General Banking Law — March 29,
1838, 143

APPENDIX— General Banking Law, 215



INTRODUCTION



The Legislature of the State of New- York, elected
in the fall of 1837, convened at Albany, in January,
1838, under circumstances of no common interest.
The opinion of the people, as expressed through the
ballot box, was shown to be in decided disapproval of
the course and policy avowed by the Administration of
the National Government. This was evinced by the
election of a large majority of members of the Assem-
bly, and three-fourths of the candidates for the Senate,
from the party opposed to the declared policy of the go-
vernment. As the executive officers of the State were
intimately hnked in, and connected, as partizan appro-
vers, with the opinions of the national cabinet, the po-
pular election referred to, may, with equal fairness, be
deemed a rebuke of them, in common with their coad-
jutors at Washington city. In this state of things, the
assemblage of a Legislature composed of a majority in



VI INTRODUCTION.

opposition, on joint ballot, to the State and General Go-
vernments, commanded the public attention in no or-
dinary degree. The more particularly, as the topics
which would naturally be presented for their delibera-
tion were of unusual weight and importance.

The suspension of specie payments by the banks of
this State — no matter by whom caused, or by whom
sanctioned — inflicted an almost intolerable inconve-
nience upon the people, from the consequent scarcity of
silver coin. As the laws prohibited the emission of
small notes by our State banks, the people were of neces-
sity subjected to an influx of depreciated paper money
from foreign States, which circulated from hand to hand
by common consent, in despite of the ineffectual laws
which had been enacted to restrain them. This state
of things forced the general conviction upon the public
mind, that it was the wisest policy to return to our an-
cient system, and allow our banks to furnish a better
small-note currency, than that which then filled the
lower channels of business. Upon this conviction the
Legislature acted, and their measures were followed by
the general rehef, from a depreciated currency of which
the people, in the main, knew nothing, and the neces-
sity of practically proclaiming the law which prohibited
it, to be a dead letter.

At an early period of the session a memorial of a
most unexpected and extraordinary character was pre-



INTRODUCTION. VU

sented to the A.ssembly. It prayed neither more nor
less, than that the Legislature would enact a law to pro-
hibit the practice of praying, singing, reading the Bible,
and other religious exercises in such schools, academies,
and seminaries of education, as receive aid from the
public treasury. This subject, of so much importance to
the substantial welfare of the youth of the State, and the
perpetuity of its institutions, was referred to the Commit-
tee on Colleges, Academies and Common Schools. The
report of that Committee, confining its views, with great
strictness, to the question in a solely political light, de-
monstrated with much delicacy and forbearance, and
yet with sufiicient strength, the fallacy of that theory
which forebodes an infringement of republican liberty
as inseparable from a general reading of the Holy Scrip-
tures. The action of the Assembly, subsequent to the
production of this Report, was all but unanimous, in
adopting the recommendation of the Committee, viz:
" that the prayer of the memorialists be not granted."
It is sufficient for the merit of this Report, to say that it
has not only been received with commendation in this
State, but it has commanded for itself an extensive cir-
culation and reprint in other States.

The introduction to the Assembly of a Bill to incor-
porate the Cold Spring Whaling Company, though in
itself of limited public interest, became of importance in
consequence of the discussion which it drew out,, bear-



Vlll INTRODUCTION.

ing upon great abstract questions. Among them was
one as to the propriety of subjecting Corporators to per-
sonal responsibility for the debts of corporations. The
negative ground is strongly taken in a speech contained
in the present volume, which, as an exposition of an
important principle, it has been deemed expedient to re-
tain in a more enduring shape than the columns of a
newspaper.

When the Executive of the United States summoned
Congress to an extra session, in September, 1837, he
promulgated to them, in his special message, an entire
new theory as to the future management of the public
money, and the reciprocal duties between the govern-
ment and the people. He proposed an entire abandon-
ment of what, up to his time, had been considered an
essential power and duty of the government, enjoined
by the constitution, and suggested instead, a system of
individual receivers and custodians of the public mo-
neys, subject generally to the supervision and control of
the President. This, which soon became known as
" The Suh-Treasiiry tScheme,'^ was received with sig-
nal disfavor by the people at large, of both parties. So
unconstitutional was its character and fallacious its logic
considered in this State, that resolutions were introduced
into the House of Assembly, condemnatory of its princi-
ples and policy. The introduction of these resolutions
called out the able and searching examination of this



INTRODUCTION. IX

leading executive measure, which will be found in the
succeeding pages.

In addition to the report on the memorial against the
use of Bibles, the Committee on Colleges, &;c. made a re-
port to the House on that part of the Governor's mes-
sage which relates to Public Instruction. This report
enforced upon the Legislature, with much clearness of
logic and strength of eloquence, the duty, eminent and
obligatory, of providing for the education of the poor —
of enlarging the field of intellectual action — and of se-
curing to the young the means of cultivating the nobler
powers and the purer virtues. It was received with the
due appreciation to which it was entitled, both in and
out of the House.

Upon the important subject of Internal Improvements
the House had the good fortune to be highly gratified,
and it may be added instructed, by a most luminous
and comprehensive Report, from the pen of Mr. Ruggles
of New- York, chairman of the Committee on that subject.
Of the superior abihty, thought, and forecast of this Re-
port it is not necessary here to speak. The people have
pronounced upon it in a language not to be misunderstood.
Some remarks connected with the subject are contained
in the succeeding volume, which present some important
principles, worthy of the consideration of the reader.

The growing distrust, throughout the country, of the
existing system of bank charters, attributable, in the



X INTRODUCTION.

main, to the destructive efforts directed against one in-
stitution by a late public functionary, was increased to
a high degree by the general derangement affecting all
classes of industry, consequent upon the suspension of
specie payments. There was obviously a determination
in the pubhc mind to interpose some remedial legisla-
tion, between the action of bank corporations, and the
people at large. It was contended, that as these insti-
tutions were only willing to lend freely when money
was plenty and people did not want it, and were obdu-
rate in refusing when it was scarce, and their refusal
produced an added pressure, that their real utihty wa^
much lessened, and that their privileges were in fact mo-
nopolies, the benefits of which, at seasons of calamity,
enured only to the few. The mode of relief proposed
was by a repeal of the restraining law, and enacting a
General Banking Law, allowing the privilege of bank-
ing to all^ under certain restrictions. This discussion
called up the whole subject of banking, and the true
principles involved therein. The speech at the close of
the volume discusses and examines these in detail, and
enforces upon the attention of the reader some cardinal
principles, which are not always reverted to, even by re-
puted statesmen of experience, when legislating upon
this intricate and important subject.

The speeches and reports of this volume are from the
pen of D. D. Barnard, now member of the Assembly



INTRODUCTION. XI

from the eity of Albany. It but remains for the Editor
to say, that they were collected by him, and put forth by
him, at the instance of friends, who, in common with
himself, appreciated the sentiments advanced, and the
principles maintained by Mr. Barnard during the win-
ter of 1838. They esteemed these sentiments and
principles as possessing too much of permanent interest
to be lost, (in some sense,) in the ephemeral columns of
the daily press. It was resolved, with the author's con-
sent, to combine them in their present more enduring
shape, and the newspapers in which they had appeared
were accordingly gathered, and placed in the hands of
the book compositor. The result is before the public ;
and if passages of the volume do not often charm the
desultory reader by their eloquence, or instruct by their
inculcation of sound principles, the book will still be
valuable as a book of reference for the important topics
discussed in the New- York Legislature of 1838.

J. B. Y. S.
Albany- June, 1838.



SPEECH

OH THE BILL TO REPEAL THE LAW PROHIBITING THK
CIRCULATION OF SMALL BANK NOTES.; DELIVERED IN
THE ASSEMBLY OF NEW-YORK, JAN. 9, 1838.

Mr. Chairman — The bill before us involves some
principles which I regard as of considerable importance,
and in relation to which I desire personally to be under-
stood. I shall J therefore, with the indulgence of the
committee, undertake to present my views of the real
merits of the measure under debate.

And if the true merits of the bill only had been brought
under review and discussion, my remarks would be con-
fined strictly to those merits; but the debate has taken
a wider range under the lead of gentlemen who have
thought it to be their duty to oppose the bill; and I may
deem it necessary, before I close, as other gentlemen
have done, to notice, I hope not at much length, the po-
sition in which the opponents of this measure have
chosen to place themselves before the committee, and be-
fore the pubhc.

Before proceeding, however, with the discussion, ac-
cording to the views now indicated, I beg leave to offer
a general remark or two, not inappropriate I hope, at
this early stage of the session,

1



2

On this, and on all subjects of any considerable im-
portance, coming before us for action, I am in favor of
discussion. The truth was never injured any where by
full and free discussion. It is the way, and the only
way, in which truth is shown to be mighty, and in
which it comes eventually always to prevail. This is the
only way in which error can be successfully assailed and
beaten down. Falsehood is generally as good as fact —
naked theory as good as a philosophical induction — and
a mere sophism as forcible as a sound argument — until
the right is presented and the wrong exposed. But 1
am in favor of legislative discussion, sir, above discus-
sion in almost every other mode. I think its value is
not generally understood. Even favorite and popular
measures, concerning which there is apt to be so much
impatient demand for action, are none the worse for being
thoroughly discussed. If this course were taken more
generally than it is, I am satisfied that legislation in re-
publican governments would be less liable than it now
is to the charge of capriciousness, and want of steadiness
and consistency. It is in the nature of things, that
large communities of men should act, more or less, from
impulse ; but it is the duty of legislative bodies to act as
little from impulse, and as much from principle and rea-
son, as possible. One way of securing this advantage
is, to deliberate, and to discuss.

The very measure before us, in its history, is, to some
extent, an apt illustration of the manner in which a
community may at different periods, be swayed, first
forward, and then backward, on the same subject. It is
useless to deny, that no longer than three years ago,
there was a current of popular sentiment in this state,



setting in favor of the suppression of small bank bills,
though, because as I think that sentiment was wrong, it
was by no means as strong as it was made to appear to
be, and not half as strong as that which now demands the
repeal of the law. As a legislative measure, that law
was not carried by the votes of any party. Men of all
parties, not all men of all parties, but men of all parties
aided in its passage — many of whom, in common with
those whom they represented, have now become satis-
fied that the measure was erroneous, and desire to see it
changed.

I mention this fact only to show the tendency of
things with us, and to derive from it, as I think b}^ a
just inference, the importance of ample deliberation and
discussion on all questions coming up for legislative ac-
tion, in regard to the policy of which doubts may rea-
sonably be entertained.

I profess to entertain great confidence in the opinions
of the people as quite likely to be right, provided only a
fair opportunity be afforded them to form and mature
their judgments. And at the same time, I recognize the
possibility of their being quite wrong, even though quite
unanimous, when led by demagogues, and acting only
from impulse, or from passion. I hold it to be the im-
perious duty of every member on this floor, who feels
himself capable of doing so, to aid, to the extent of his
powers, in the development and elucidation of all sub-
jects of general importance presented before us. In this
way we may add energy to our own powers of thought
and comprehension ; we may enlighten each other, and
we may aid most materially, through the public audi-
ences with which we are favored, and through the re-



ports that are made of us, in giving a just direction to
public sentiment. In this way, if fortunate and faithful,
we may be continually opening new fountains of hght
on subjects of pubHc interest, and digging deeper and
deeper the wells of clear and unadulterated truth.

It is evident, however, that to secure the best benefits
of discussion, it should be thorough and full. We shall
do httle towards fathoming the deep waters that may
chance to lie beneath us, if we arc content with sporting
ourselves on the frozen surface of subjects only. Yf e
must take care to examine each others positions here,
each others opinions, doctrines and arguments, and we
must be faithful to expose them where we believe them
to be wrong, and where they tend, as we think, to mis-
chief. This, I give gentlemen fair notice, shall be my
course, pursuing it I trust with perfect courtesy, and
the kindest regard for the persons and feelings of those,
of whatever political faith, with whom I have the
gratification to be associated on this floor, and never in-
dulging in crimination or severity, but when the case
shall seem imperatively to demand it; and while I thus
avow my own course towards others, I invite others to
do by me in this regard, as I declare it to be my pur-
pose to do by them.

We have before us, Mr. Chairman, a bill, the object of
which to restore to this community a bank-note curren-
cy, to be furnished by our own banks, of convenient de-
nominations for the common and smaller business trans-
actions of life. A brief history of past legislative action
on this subject will not be out of place. In 1830 a law
was passed, prohibiting the circulation in this state of
the notes of banks out of the state, of a denomination



less than five dollars. This law was wholly ineffectual.
It was scarcely noticed, much less obeyed. The object
was, I suppose, two fold ; it was to get rid of a circula-
tion which was too far from the place of redemption to
be entirely sound, which was often spurious and gene-
rally suspected ; and to clear the channels which that cir-
culation occupied, in order that they might be filled with
the better-known and healthier issues of our ovrn banks.
The law was, however, as I have said, without effect.

In 1835, a policy, entirely new I think in this state,
was proposed. It was an experiment on the currency,
though one which certainly found more favor with the
public generally than some other experiments on the
same subject. A law was passed designed to enforce
obedience to the provisions of the act of 1830 in regard
to foreign bank notes, and at the same time forbidding
the issue and circulation of domestic notes of a similar
description. This law was effective , and we ceased to
have a general bank-note currency in this state, except
of denominations of five dollars and upwards. This oc-
curred, by the provisions of the act, in the fall of 1836.
The operation of the law, according to my observation,
was never, from the first, deemed to be either convenient
or beneficial by any class in the community. Undoubt-
edly, there were individuals in every class with whom
the measure was a favorite one.

The law of 1835 had been in effective operation per-
haps a little more than six months, when the unhappy
suspension of specie payments by the banks took place.
This event, of course, changed the aspect of things en-
tirely, and what might have been a good currency mea-
sure before that occurrence, was not unlikely to prove a

r



6

disastrous one after it. The legislature of this state was
in session when that event happened ; and while it re-
cognized by law, with great unanimity, the necessities
which had driven the banks to suspension, it refused, in
its wisdom, to entertain a proposition for the restoration
of a small bank-note currency to be issued by the banks
of this state. The consequence of this refusal was just
what should have been, and was expected. The state
has been flooded with the small paper issues of banks in
other states, forming, in fact, the only currency of that
description in use amongst us; a currency of a conside-
rable part of which even the genuineness is justly doubt-
ed, much of which is discredited for soundness, and all
of which is, at this time, greatly depreciated as compared
with our own bank paper.

It is now proposed, by the bill before us, to return
again in this state, unconditionally, to the use of a small-
note currency to be furnished by our own banks; and
from the brief recital now made, it will be seen that
this measure presents itself to us in two aspects. In one,
we may regard it as a measure of temporary relief, de-
signed to afford a remedy for a temporary and pressing
evil; in the other aspect, it involves the serious and im-
portant question, whether it be the true policy of this
state, as a settled and permanent measure, to supply to
the community a bank-note currency, rather than an
exclusive specie currency, for business requiring money
of a denomination over one and under five dollars? I
am in favor of the bill on both grounds ; as a measure
of temporay rehef, and also as a measure of sound poli-
cy for all time to come.

Considered as a measure of immediate relief, I hold



it to be the imperative duty of the legislature to pass the
bill, and to pass it as promptly as is at all consistent with
due deliberation. Sir, what was the condition of things
in this state in regard to the currency, when the banks
had suspended specie payments ? x\nd what was the
duty of the legislature, then in session, on the subject ?
Why, sir, this community presented the extraordinary
spectacle of a people actually without a legal currency,
of any description, for all its business requiring money
under five dollars. The instant the suspension occurred,
the metals ceased to circulate. They ceased to be the
practical measure of value, and by necessity they ceased
to be capable of use as the common medium of exchange.
They bore at once a heavy premium, as compared with
that which alone filled the channels of circulation as
money ; and they became an article of trade. When
the banks suspended payments in specie, the necessary
effect was, as it always has been and always will be in
like cases, that the whole community followed the ex-
ample, and suspended payments in specie likewise. In
such cases, foreign commercial balances may still be paid
in specie ; but domestic commercial balances generally,
and nearly all the ordinary payments and exchanges
are made not only without specie, but without any more
regard to it than if it had been still in the mines. With
the suspension in May last, specie ceased to be money,
because it ceased to possess the peculiar attributes which
alone fit it for the uses of money. It was still nominally
the legal currency of the whole country, but the common
use of it as such, either in making present exchanges,
or in the performance of contracts, was at once suspend-
ed by universal consent, except only in cases where legal



8

coercion was resorted to ; and to this the banks were liable
as well as individuals.

Now with specie withdrawn from circulation, what
was the community to do, without legislative aid ? By
the laws of trade, metal had ceased to be money, and
by our own statute law, applicable to small bills, the use
of a paper substitute was so far forbidden. Our own
banks could not furnish it under pain of a forfeiture of
their charters, and to offer in payment a small note of
a foreign bank subjected the offender to a heavy fine.
And that, at such a time, with such a condition of things
and such a state of the law, a legislature should have
actually been in session, a legislature claiming to repre-
sent an intelligent community, nay, claiming itself to be
both intelligent and honest, and yet that that legislature,
with the whole subject before it and pressed on its atten-
tion, should have utterly refused any action whatever
upon it — all this I confess almost passes belief Sir, con-
ceive of a people numbering two millions — an industri-
ous people — an enterprising people — a trading people —
literally without an authorized currency for the daily and
common transactions of hfe ! And such was this peo-
ple — specie withdrawn, and paper refused, and nothing
remaining but to come down to a condition of barter, in
obedience to law, or to defy the government, and seize a
currency of some sort, or of any sort, wherever it was
to be found.

Sir, as money is a primary want of a civilized com-
munity, so 1 hold it to be the first duty of government
to see that that want is supphed. Since the period
of the first introduction of the precious metals for gene-
ral use as money, it does not occur to me, that any gc-



vernment, in any part of the civilized and trading world,
has thought it could safely leave the subject of its cur-
rency to take care of itself; much less has any such go-
vernment ever ventured so to decree or legislate, as that
a whole people should be effectually denied the use of a
currency, whether for larger or smaller transactions, un-
less in defiance of a highly penal enactment. It is, in
this enlightened age, and in this enlightened and happy
country, that the first example of the sort has been set.
And I charge it on the last legislature of this state,
and on that party in the state, w^hose will it came
here to perform ; that 1 can recall to mind no parallel


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