United States. Congress.

Abridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives online

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Online LibraryUnited States. CongressAbridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives → online text (page 42 of 199)
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ment by contractors, agents, deputy post-
masters, &o., who immediately disburse o it
among the community.

Mr. B. said that this bill, though in its terms
a general measure, and professing to act only
on coming events, yet was, in reahty, a measure
rescinding the Treasury order of July last;
and, as such, was greeted and saluted by the
friends of the recision on this floor. They
openly celebrated the advent of the bill as the
triumph of their movement, and announce its
passage as a welcome victory. This may be.
They may carry the bill, but they cannot carry
the argument. They may rescind the order,
but they cannot verify Mr. Biddle's prediction
of the distress it was to create, nor invalidate
President Jackson's statement of the good it
had produced. In the month of November,
Mr. Biddle predicted a world of woe— all to
take place by the time that Congress met, and
all to result from the Treasury order, and the
manner of executing the deposit act — " intense
pecuniary distress ; derangement of exchanges ;
loss of confidence ; destruction of the public
prosperity ; scarcity of money ; fall of prices ;
ruin of the currency ; " and he averred that
the instant repeal of the Treasury order, under
the command of Congress, if the Secretary
would not do it voluntarily, would restore confi-
dence in twenty-four hours, and put an end to
all this mass of woe in twenty-four days. On
the other hand, the President informed us, in
his annual Message, that the same Treasury
order had produced many salutary conse-
quences. He says it has checked the career
of the 'Western banks, and given them addi-
tional strength to meet approaching difficulties ;
that it has cut off the means of speculation in
the public lands; that it has saved the new
States from the evils of a non-resident pro-
prietorship ; that it has kept open the public
lands to the entry of cultivators, and saved
them from competition with those who are
favored with bank facilities ; that it has caused
gold and silver to flow into the new States,
and placed the business of the whole country
on a safer and more solid basis. This is the
representation of the President ; and which is
the true picture ? his statement, or Mr. Biddle's
prediction? Surely the state of the country
wiU answer the question 1 Certainly the per-
sonal knowledge of every individual will enable
him to answer it ! The whole prediction 'for
the panic and pressure has failed ! the edict for
the distress has failed ! It was to no purpose
that the distress was commenced at several



170



ABKIDGMENT OF THE



Senate.]



Treasury Circular — Paper Money.



[Jakuaet, 1837.



places ; that many presses, and several speakers
on this floor, announced and proclaimed it.
The seventy odd millions of hard money which
had heea brought into the country was death
to the operation ; and, after a few vain efforts
to renew the scenes of 1833, after a few abor-
tive demonstrations to alarm the public, the
whole contrivance was abandoned, or, rather,
the performance was postponed ; for it is never
to be forgotten that panic and pressure is part
of the permanent system of the denationalized
national bank, and will be brought to bear,
whenever opportunity will permit, until it shall
be proved to the people that they cannot live
without a national bank. The edict for the
distress, then, has failed; and the failure of
that scheme is itself the proof of the truth of
President Jackson's statement of the good
eifects of the order. That order has been
attended by every good effect which he has
mentioned, and this is universally known in the
"West, and is proved negatively by the total
absence of all complaint from that quarter.
Nobody in the new States complains to us ; no
one in the new States sends here to demand
the recision of the order. That demand comes
from Philadelphia, where there are no public
lands ; from Kentucky, where there are none ;
from Ohio, where there are next to none ; and
from members on this floor, who are backed by
no memorials from home. The letter from the
clerk in the land ofBce at Kalamazoo covers the
whole ground, and proves the wisdom, the
beneficence, and the necessity of that order.
Tlie diminution of the sales after the issuing of
the order is a further proof to the same effect.
Before the sales, that is to say, in the months
of May and June, two months in which the
amount of sales should have been least, they
amounted to the sum of six millions and a
quarter ; the months of October and November,
the two months in which the sales should have
been greatest, the amount was three millions
one hundred thousand. The month of Decem-
ber, though the returns are not complete, shows
a still further decline ; and if gentlemen had
patience to wait for the returns of January,
the first month in which the order had full
effect, they would, no doubt, find it bringing
down the sales to a moderate amount, and
effecting a diminution of income, from that
source of revenue, to as small a degree as could
be desired, and in a manner the most simple,
the most regular, the most effectual, and the
most satisfactory, that can be devised by the
wit of man.

Every good consequence stated by the Presi-
dent had resulted from the operation of the
order ; and the evidence of this was too public
and notorious to require illustration, or to admit
of emimeration. But there was one point of
his statement which was an exception to this
remark, and on which it would be profitable to
go into some detail ; for it concerned not only
the lands, but the far more important subject of



the currency itself; he alluded to that part of
the President's Message in which he stated that
this order had checked the career of the "West-
ern banks, and compelled them to strengthen
themselves against the revulsions consequent
upon every expansion of the bank issues. This
was true to a degree of which no one had a
conception but those who had access to a
knowledge of the condition of all the banks,
and who availed themselves of that right of
access to examine into the condition of these
banks, and to compare that condition with the
approved principles of what is considered safe
and sound banking.

Mr. B. said that, among those things which
were considered as settled in the science and
mystery of banking, there was one principle
which required the immediate means of the
bank to bear a certain proportion to its imme-
diate liabilities; below which proportion it
was not safe for the bank to descend. The
immediate means of the bank are its specie on
hand ; its liabilities are the circulation and the
deposits ; and the proportion which these
ought to bear to each other has been fixed, at
the Bank of England, after an experience of
one hundred and forty years, at the one-third.
Mr. B. deemed the verification of this principle
so material that it deserved to be proved as
well as stated. He would therefore produce
the sworn testimony on this point taken before
Lord Althorp's committee in 1832, and should
confine himself to the evidence of the governor
of the bank and one of its directors. The
testimony of Mr. Horsley Palmer, the governor
of the bank, is this : " The average proportion,
as already observed, of coin and bullion which
the bank thinks it prudent to keep on hand, is
at the rate of a third of the total amount of aU
her liabilities, including deposits as well as
issues." Mr. George "Ward Norman, a director
of the bank, states the same thing in a different
form of words. He says : " For a full state
of the circulation and the deposits, say twenty-
one millions of notes and sis millions of de-
posits, making in the whole twenty-seven mil-
lions of liabilities, the proper sum in coin and
bullion for the bank to retain is nine millions."
Thus, the average proportion of one-third be-
tween the specie on hand and the circulation
and deposits, must be considered as an estab-
lished principle at that bank, which is quite
the largest, and amongst the oldest in the
world. It might be well also to remark that
the same proportion, very nearly, prevailed in
the Bank of the United States at the time of
the removal of the deposits in October, 1833 ;
it was, of specie on hand, $10,663,441 ; of cir-
culation and deposits, $37,105,465; being at
the rate of between one-third and one-fourtli
of specie in hand for immediate liabilities. The
proportion of about one-third being then estab-
lished as the principle of safety in banking, let
us apply that principle to some of our Western
deposit banks in July last, to see what was



DEBATES OF CONGRESS.



171



January, 1837.] *



Treasury CircTjUrr — Paper Money.



[Senate.



their condition at that time ; and in November,
to See whether that condition "vras improved,
as stated by the President.

[Here the statements were produced.]

Mr. B. said such was the condition of some
of the Western deposit banks in July last, and
such their condition in November ; very far
below the Bank of England standard at both
periods, but greatly improved by the operation
of the specie order, and doubtless much more
improved by its continued operation to this
time. There were many others of these banks
also falling far below the Bank of England
standard in July and November, and still below
it. Mr. B. was ready to admit, what every
business man must understand, that all these
banks have a Hst of debts, and of bills of
exchange, falling due from day to day, and
amounting in the aggregate to more than all
their liabilities ; but he must be permitted to
remark, that the Bank of England also has
her list of debtors, and that nearly the whole
of these debtors are in the city of London,
within thirty minutes' run of the bank ; that
she is situated in the moneyed metropolis of
the universe; that she is supported by the
richest and most numerous body of merchants
upon the earth, and backed by the whole power
of the British Government, which stands her
security for seventy millions of dollars, and
lends her exchequer bills to the amount of
millions, and increases their interest to facili-
tate their sale when necessary ; and that, with
all these resources, such as no bank in our
America can pretend to, she yet deems it neces-
sary to have always on hand, in coin and bul-
lion, the one-third of the amount of her circula-
tion and deposits. What, then, must be thought
of the condition of some of the banks referred
to, and others which might be referred to, in
July last ? Instead of one-third specie in hand
to meet their immediate liabilities, the actual
proportion in hand was the one-twentieth, the
one-thirtieth, the one-fortieth, and the one-
flftieth ! Mr. B. said it was beyond all human
doubt, that if the Treasury order had not been
issued, that the Western deposit banks would
have exploded in the course of the last fall,
and that we should now have been sitting here
amidst the wrecks of the paper system. That
order prevented this catastrophe; and it is
precisely because it did prevent it, that it has
excited the rage of Mr. Biddle, and of the
whole political party imbodied under the ori-
flamme of the denationalized national bank.
It balked their present hopes of reascension to
power through the ruin of the finances ; and
in their rage for this disappointment, they de-
nounce the President for a violation of the laws
and the constitution; they charge him with
ruming the country ; they attempt a new panic
and pressure ; and they call upon Congress to
repeal the order.

[Here Mr. Benton read a bank letter of Mr.



Biddle, in favor of the local banks and against the
specie circular, and showing that he chalked out
the plan for tliis attack upon that circular, and in
favor of imposing paper money upon the federal
treasury, just as he had chalked out all the measures
for the panic session.]

Mr. B. said that the views and sentiments
disclosed in this extract were of great moment,
and ought to be carefully considered by all
whose duty it is, here or elsewhere, to legislate,
or to act, upon the subject of the currency.
The design is here disclosed to stir up the local
banks against the Federal Government, to make
alliance with them, and to force the Govern-
ment to receive their paper in payment of all
federal dues. This is the design disclosed ;
and with what motive ? Certainly to ruin the
finances of the Federal Government ! Certainly
to compel the administrations of General Jack-
son and Mr. Yan Buren to repeat the fatal error
of Mr. Madison's administration, that of under-
taking to make a national currency out of local
bank notes. Warned by that fatal error of
those who put down the first national bank,
those who put down the second one determined
to avoid it, and for that purpose to re-establish
for the Federal Government the currency of the
constitution. When this design was announced,
our opponents treated it with derision. They
said it could not be done ; that a gold and silver
currency could not be revived. They ridiculed
the attempt; but what is the answer which
four years have given to their ridicule ? It is
the actual revival of the gold currency, of
whioh near twenty millions of dollars are now
in the country ; it is in the actual increase of
our specie from twenty or twenty-two millions,
as computed by the President of the Bank of
the United States himself, when the charter for
that institution was applied for in 1832, to
near eight millions, which it is now known to
be. The experiment of getting the gold and
silver into the country has succeeded ; ridicule
has failed of its ofiice. The gold and silver is
here, enough, and more than enongh, to make
all the payments to and from the Federal Gov-
ernment. Ridicule will no longer answer;
stronger measures must be resorted to, and
legislation has become indispensable to the
overthrow of the constitutional currency. To
prevent the specie in the country from being
used, is now the design ; and, to accomplish



that purpose, it becomes necessary to force the
local paper of the States upon the Federal Gov-
ernment. The passage of this bill is indispens-
able to the success of Mr. Biddle's design, dis-
closed in the letter from which an extract had
been read. He wants the question made be-
tween a national currency of United States
Bank notes, and a national currency of local
bank notes. He knows that between these two
the United States Bank notes will prevail ; that
they wiU conquer, that they wiU whip, yes,
whip like a dog, your national currency of local



172



ABRIDGMENT OF THE



Senate.]



Retirement of the Vice President.



' [Jandaet, 1837.



bank notes. We, on tlie other hand, want
the question made between paper and gold,
knowing that the country will sustain gold
against paper ; and these are the questions
which are now to be decided by this bill. This
bill will make the question in the form wished
by the friends of the Bank of the United States,
and will insure them the triumph to which they
look for the re-establishment of the Bank of
the United States and restoration of its political
friends to power.

Sir, I have performed a duty to myself, not
pleasant, but necessary. This bill is to be an
era in our legislation and in our political his-
toi-y. It is to be a point upon which the future
age wiU be thrown back, and from which future
consequences will be traced. I separate my-
self from it ; I wash my hands of it ; I oppose
it. I am one of those who promised gold, not
paper. I promised the currency of the consti-
tution, not the currency of corporations. I did
not join in putting down the Bank of the
United States, to put up a wilderness of local
banks. I did not join in putting down the
paper currency of a national bank, to put up a
national paper currency of a thousand local
banks. I did not strike Offisai", to make An-
tony master of Rome.

President and Vice President elect.

Mr. Geundt moved to lay the bill on the
table, for the purpose of taking up and acting
on the resolution submitted by him for the
appointment of a joint committee to count the
votes for President and Vice President. This
motion having been agreed to, and Mr. Gktjn-
dy's resolution being before the Senate,

Mr. Geundy had no objections to the inquiry
proposed by the amendment ; and he thought
that some such provision as that proposed by
the Senator from Kentucky would be very
proper. He had seen in the public papers a
statement charging that some of the electors
who voted in the late presidential election held
offices under the General Government, and had
made inquiries for the purpose of ascertaining
the truth of the matter. The information he
had been able to collect related to two cases
only ; and as to these, the report had been
founded altogether on a misapprehension.

Mr. Glat offered the following amendment :

" And, also, to inquire into the expediency of
ascertaining whether any votes were given at the
recent election, contrary to the prohibition contained
in the second section of the second article of the
constitution. And if any such votes wore given,
what ought to be done with them ; and whether any,
and what,' provision ought to be made for securing
the faithful observance, in future, of that section of
the constitution."

Mr. Hdbbaed wished a strict inquiry to be
instituted, and measures to be adopted to guard
against the occurrence of such a violation of
the constitution as the Senator from Kentucky
referred to. As it had been stated that two of
the electors In his State (Sfew Hampshire) held



offices under the General Government, and
were consequently ineligible, he was happy to
state to the Senate that there was no foundation
whatever for the report.

The amendment of Mr. Clay was adopted,
and the resolution, thus amended, was agreed to.

Mr. Htibbaed moved that the committee be
appointed by the Chair ; and Messrs. Geundy,
Clay, and Weight, were selected.



Satueday, January 28.

Petirement of the Vice President.

The Vice Peesidbnt, after the reading of the
journal, addressed the Senate as follows:

Senators : The period is at hand which is to ter-
minate the official relation that has existed between
us, and I leave, probably never to return to it, a
body with which I have been long connected ; where
some remain whom I found here fifteen years ago,
and where, in the progress of pubhc duties, personal
associations have arisen never to be forgotten. From
such scenes I cannot retire without emotion. Nor
can I give to the Senate the usual opportunity of
choosing another to preside for a time over their
deliberations, without referring to the manner in
which I have endeavored to discharge a most gratify-
ing and honorable trust connected with the office to
which my country called me.

Entering upon it with unaffected diffidence, well
knowing how little my studies had been directed to
its peculiar duties, I was yet strengthened by the
determination, then expressed, so to discharge
the authority with which I was invested, as " best to
protect the rights, to respect the feelings, and to
guard the reputations, of all who would be affected
by its exercise." I was sure that, if successful in
this, I should be pardoned for errors which I could
hardly expect to avoid.

In the interval that has since elapsed, it has been
our lot in this assembly to pass through scenes of
unusual excitement : the intense interest on absorb-
ing topics, which has pervaded our whole community,
could not be unfelt within these walls. The warmth
of political parties, natural in such times, the un-
guarded ardor of sudden debate, and the collisions
seldom to be separated from the invaluable privilege
of free discussion, have not been unfrequently
mingled with the more tranquil tenor of ordinary
legislation. I . cannot hope that, in emergencies like
these, I have always been so fortunate as to satisfy
every one around me ; yet I pernait myself to think
that the extent to which my decisions have been
approved by the Senate is some evidence that my
efforts justly to administer their rules have not been
vain ; and I conscientiously cherish the convic-
tion, that on no occasion have I departed from my
early resolution, or been regardless of what was due
to the rights or the feelings of the members of this
body.

Though I may henceforth be separated from the
Senate, I can never cease to revert with peculiar
interest to my long connection with it. In every
situation in my future life I shall remember with a
just pride the evidences of approbation and con-
fidence which I have here received ; and as an
American citizen, devotedly attached to the institu-
tions of my country, I must always regard with



DEBATES OF CONGKESS.



173



Jantiabt, 1837.]



Treasury Circulat — Funds receivable far Public Dues.



[Senate.



becoming and sincere respect a branch of our Gov-
ernment invested with such extensive powers, and
designed by our forefathers to accomplish such
important results.

Indulging an ardent wish that every success may
await you in performing the exalted and honorable
duties of your public trust, and offering my warmest
prayers that prosperity and happiness may be con-
stant attendants on each of you, along the future
paths of life, I respectfully bid you farewell.

Election of President pro. tem.

On motion of Mr. Geundt, the Senate pro-
ceeded to ballot for a President pro tem.

The number of votes cast was 37 ; necessary
to a choice 19. Mr. Knra of Alabama had 26,
Mr. Southard 7, Mr. Olat 1, Mr. Pebntiss 1,
Mr. E-wmo of Ohio, 1, Mr. Btjohastak 1.

Mr. King, of Alabama, being thus duly
elected President pro tem. of the Senate, was
conducted to the Chair by Mr. Benton, and
addressed the Senate nearly as follows :

Gentlemen of the Senate ; To be again called to
preside over the deliberations of this august assembly
fills my heart with the liveliest emotions of gratitude.
When at the last session it pleased the Senate to
place me in this exalted situation, I solemnly pledged
myself to discharge the duties it devolved on me,
without favor and without partiality. I felt con-
scious that I had done so ; but could any thing add to
the grateful sense I entertain of the honor you have
again conferred on me, it will be found in the
unequivocal testimony you have this day borne, that
I had .faithfully redeemed that pledge. The Senate
of the United States, gentlemen, is, from its very
organization, the great conservative body in this
republic. Here is the strong citadel of liberty.
To this body the intelligent and the virtuous,
throughout our wide-spread country, look with con-
fidence for an unwavering and unflinching resistance
to the encroachments of power on the one hand, and
the effervescence ofpopular excitement on the other.
XJnawed and unseduced, it should firmly maintain
the constitution in its purity, and present an im-
pregnable barrier against every attack on that
sacred instrument, come it from what quarter it may.
The demon of faction should find no abiding place in
this chamber, but every heart and every head should
be wholly occupied in advancing the general welfare,
and preserving, unimpaired, the national honor. To
insure success, gentlemen, in the discharge of our
high duties, we must command the confidence and
receive the support of the people. Calm deUbera-
tion, courtesy towards each other, order and decorum
in debate, will go far, very far, to inspire that con-
fidence and command that support. It becomes
my duty, gentlemen, to banish (if practicable) from
this hall all personal altercation ; to check, at once,
every remark of a character personally offensive ; to
preserve order, and promote harmony. These duties,
as far as my powers will permit, I shall unhesita-
tingly perform. I earnestly solicit your co-operation,
gentlemen, in aiding my efforts promptly to put down
every species of disorder. For your kindness,
gentlemen, I tender you my grateful acknowledg-
ments.

On motion of Mr. Gkundt, it was

Ordered, That the Secretary of the Senate inform



the President of the United States and the House of
Representatives that the Senate have elected the
Hon. WiLHAM R. Kins their President pro tem.

Treasury Circular.

The bill designating and limiting the funds
which shaU be receivable in payment for the
public revenues -was taken up, being on its third
reading.

Mr.^ Walkeb said : Before replying to the
indictment preferred by the honorable Senator
from Missouri, (Mr. Benton,) against the Com-
mittee on Public Lands, it is proper to recur to
the facts and circumstances under which this



Online LibraryUnited States. CongressAbridgment of the Debates of Congress, from 1789 to 1856. From Gales and Seatons' Annals of Congress; from their Register of debates; and from the official reported debates, by John C. Rives → online text (page 42 of 199)