Pi h V i
UNIQ.N THE CONSTITUTION. AND THE LAWS-THE GUARDIANS OF OUR LIBERTY.
Vol. XVIII.
FRIDAY. MARCH 30, 1839.
X. 014.
I
PEDATE IN THE SENATE. .
offfU of TJr. Clay, of Ky.
Oa fbe Smtt-TrtMiry mm
i (Com! ad (4 J I
proceed to another paint of powerful
fTjjc3ef, in the conduct of Mr. Van Bu
rfflt in respect 19 the famous Treasury
rJer. Tbat order hid been promulga
ted. orijnnaJly, in defiance r tha epin
j.,a 4( Congresa, had been continued ii
Wratioa in defiance of the withe an4
u . . .. I L. I i.
eJ by a h'M Pc) last ordinary
,fMion of Congress, by overwhelming
nijoriuee. The fait of that bill ra well
fcaowa. Instead of beiaf returned to the
HmH ia which it originated, according
I) tb requirement of the roosutuiion, it
m teat to one of the pige on-holes of
tie Department of State, to be filexl away
ah an opinion of a eonienienl Attor
Ecy Genera!, always ready to prepare
me ia aupport of Executive encroach
ant. On tha 5th of 51 arch last, not a
JkM was entertained, at fares my know
iN or belief titenda, that Mr. Van Be
iteouU rescind the obnoxiooe order.
ippetl to tha Senator from Missouri,
ho iti near me, Mr. Linn, to the Sen
atar from Mississippi, who aila farthest
from me. Mr. Walker. to the Senator
fr.a Alabama, Mr. Kin;, and to the
bolt of the Administration Senatore, if
iocb wat not the expectation of all of
them! Wat there ever an occasion in
which a new Adminittration had ao fine
23 opportunity to signalize its commence.
a'ni bv an art of rare and wisdom, de
swiJeJ by tha beat interest and most
sswu withes of the people! Put Mr.
Vtt Ituren did not think proper t- em
but it He had shared ton largely in
theeinnJence of his predecessor, agreed
m fully with him In sentiments, hsd
btea ta tnoch united with htm in bis
MJie!, to rescind an order which run
it!iied so essenua! a part nf the system
which hid been deliberately aJopted to
oierihrow the atate banks. ,
Another course pursued by the adni
siitniion, after the catastrophe of the
!upenion of specie payments by the
tmxf, demonstrates the hostile pur
poti towards them of. the present ad
ministration. When a similar event had
spurred during the administration of Mr.
MiJiton, dij he discredit and discounte
msec tha iisuea of the binks, by refu
im; t receive them in payment of the
puMiC dues! Did the Hate governments,
up in the farmer or the late oecaiian, re
fue li receive them in payment of the
tkti in them respectively! And if irre
ilemab!e bank notes are good enough far
i':e s ate governments and the people,
'e t!irr not good enough fur the rde
til (iuvernment of the aanie people? Rv
fTv?tiog specie, in all payments to the
''fncral (iorcrnment, that Government
fffsnlcd itself in the market as a p.w
ful and formidable competitor wit the
demanding specie at a tuiuu-nl
'irn the banks were making uneivn
;'.ej struggles lo strengthen themselves,
n 1 prepare for the resumption of specie
jminent. The eitent of this govern
aeut demand for specie docs not admit
f exact ascertainment; but when we re
e"t that the annual expenditures of the
Tcrnment were at the rate including
t-ie Post office Department, of about thir
iy three millions of dollars, and that its
mcatne, made up either of taxes or loans,
ta'ist be an equal sum, making together
!t aggregate of sixty-six millions, it will
te seen that the amount nf specie requir
ed for the use of government must be im
mensely large. It cannut be precisely
It'-ermined, but would not be less prob
3 than fifteen or twenty millions of
l illars per annum. Now, bow is it pos
lile for the banks, coming into tha ape.
tie market in competition with all the
'an power and influence of the govern
ment, to provide themselves with specie
a reasonable time to resume specie
i'lymentsf That comnctition would have
te'n avoided, if, upon the stoppage of
banks, the notes of those of whose
solidity there was no doubt, had been
continued to be received in payment of
'iie public dues, as was done in Mr. Ma-
"won s administration. And why, Mr.
I recent, should they , not have been?
hy sliould not this government receive
same descriotion of medium which
" found to answer all tha purposes of
several State governments? i Why
l'uld they have resorted to the expedi
ent of issuing an inferior paper medium,
the form of Treasury notes, and refu
K, lo receive the better notes of safe and
-"'ii banks? Do not misunderstand me,
Mr. President? No man is more averse
'ian I am to a permanent inconvertible
("per medium. It would have been as
'? temporary measure only that I should
."e thought it expedient to receive the
""it's of g rod local banks. If, along with
n measure, iho Treasury order had
been repealed, and other measures adop
ted to encourage and eoerce the resump
tion of specie payments, we should bare
been much Higher that desirable event
than, I fear, wa now are. Indeed. I do
not see when it is possible for tha banks
to resome specie payments, at long as
tha government ia in the field making
war upon them, and in tha market da
man Jiag specie.
Another conclusive evidence of the
hostility to the Stat banks, on the part
of Mr. Van Burert, is lo be found in
that extraordinary recommendation of a
bankrupt law contained in bis message
at tha extra session. According to alt
the principles of any! bankrupt system
with which 1 am acquainted, the banks,'
by the atoppage of specie payment, htd
rendered themselves liable to its opera
tion. If the recommended law bad been
passed, commissions of bankruptcy eoul J
bare been immediately sued out against
all the suspended banks, their assets sei
xed, and the administration of them trans
ferred from the several corporations. t
which it is now entrusted, to commis
sioners appointed by tha President him
self. Thus, by ooe blow, would the
whole ol the state banks hate been com
pletely prostrated, and the way cleared'
lor the introduction of the favored trea
sury baukt and is it not in the same spi
rit of unfriendliness to those banks, and
Ith tha same view of removing all ob
stacle to the establishment of a govern
ment bank, that the bill was presented to
the Senate a few Jays ago by tha Seua-
tQf from 1 ennessee, (Mr. Grundy.)
against the circulation of the notes of thV
old bank of the United Slates? At a time
when there is too much want of confi
dence, and even every tiling that can be
done sliould be done to re me and
strengthen it, we are called upon o pass
a law denouncing the heaviest penalty
and ignominious punishment against all
who shall reynue the nous I the oIJ
I! 4 uk of the United State, i f whirh we
are told that ih iut seven millions of dol
lars are in circulation; and they consti
tute the bent pnrtian of the paper medium
of the e.i;jtry; the only portion of tt
hich has a credit everywhere, and
which serves the purpose of a gencr.l
circulation; the only porliou with which
man can travel from one end vi the
couUneut to the other; and I do not doubt
that the St-nntor who has fulminated these
severe pains and penalties against that
best part of our paper medium, provides
himself with a snmVient anouat of it.
whenever he leaves Nahvule, to take
him to Washington. Here Mr. Grun
dy rose and remarktd: N- :r. 1 atarav
travel n specie. Ah! continued Mr.
Clay, my old Trie id is aUsys specious.
1 am quite sure that members from a
distance in the interior, generally fl.id it
indispisable to supply themselves on
commencing their journey, with an ade
quate a mount ol tho?e identical notes to de
fray us expenses. liy.sir, will any man
in his senses deny that these n "-s are
far better than those which have b.-en is
sued by thai government banker, Mr. Le
vi Woodbury, aided though he be by the
chancellor of the e xchenuer.fl beg his par
don,! mean the ex-ch wt llor.) theSan tor
from New York, Mr. Wright I am not
going to stop here to uiquire into the strict
legality of the re-issue of those notes: that
question, together with the power of the
government to pass the proposed bill, will
be taken up when it is considered. I am
looking into tha motive of such a oiea-
aure. , No body doubts the periect aaiety
of the notes; no one can believe that they
will not be fairly and fully paid. hat,
then, is the design of the bill? . It is to
assail , the only sure genersl medium
which jlhe people possess. It is because
it may come in competition ' with Trea
sury notes, or other government paper.
Sir, if the bill had not been proposed by
my old friend from Tennessee, I would
say its author better deserved a peniten- j
tiary. punishment than tnose against
whom it is directed.'- I remember to have
beard ofao illustrious individual, now in
retirement, having, on some occasion,
burst into the most patriotic indignation,
because of a waggish trick played off up
on him by putting a note of the late Bank
of the Uuited Stales into his silk purse
with bis gold.
. But it is unnecessary to dwell longer
on the innumerable proofs of the hostili
ty agaiust ihe State banks, and the delib
erate purpose of those in power to over
throw them. We hear and see daily,
ilironrrliniit ilm eniintrv. amonc their nar-
tisana and presses, denunciations against I
banks, corporations, rag barons, the epi-
rit of monopoly, &c.; and the bowl for
gold, hard money, and the constitution
al currency; and do one can listen to the
speeches of honorable members, friends
of the administration, in this House and
the other, without being impressed with
a peifcct conviction that the destruction
of the State banks is meditated.
I have fulfilled my promise, Mr. Presi
dent, to sustain the first four proposition
with which I set out. I cow proceed to
tha fifth proposition.
S. That the bill onder consideration ia
intended to execute Sir. Van Burena
pledge, to complete and perfect the
principles', plans, and policy of the past
administration, by establishing upon the
ruins of the late Bank of the United States
and the State Banks, a Government
Bank, to be managed and controlled by
the Treasury Department, acting under
the commands of the President of the
United States. ,
The first impression made by the
persual of the bill is the prodigal and
boundless discretion which it granta to
ihe Secretary of the Treasury, irrecon
cilable with the genius of our free institu
lionsrand contrary to the former eautioua
practice of the Government. As original
ly reported, he waa authorised by tha
bill to allow any number of clerks he
thought proper to the various receivers
general, and lo fix their salaries. It will
be borne in mind, tbat this is the mere
commencement of a system; and it cannot
be doubled that, if put into operation, the
number nf receivers general and other
depositories of the public money, would
be indefinitely multiplied. He is allowed
to appoint as many examiners of the
MMiblic money, and to fix their salaries.
as he pleases; he is allowed to erert at
pleasure costly buildings; there is no
estimate for any thing; and all who are
conversant with the operations of the ex
ecutive branch of the Government, know
the value anl importance of previous
estimates. ' There is no other cheek up
on wasteful expenditure ' but previous
estimates; and that was a point, siwsys
particularly insisted upon by Mr. Jeffer
son. The Senate will recollect that, a
few days aeo, when the salary of the
receiver general at New York was fixed,
the chairman of the committee on finance
rose in his place and stated that it was
suggested by the Secretaiy of the Trea
sury that it shoull be placed at f J.ouo
and ihe blank was accordingly so filled.
There was n statement of the natnre or
extent of the duties lo be performed, of
the lime thnt he would be occupied, of the
extent of his responsibil iv, or the ex
pene of living at the several prtin; where
1'icv were to be located; nothing but the
suggestion of the Secretary of the Trea
sury, and that was tleemfd all sufficient
by a majority." There is no limit upon
the appropriation whi:h is made to Carry
into effect the bill, contrary o all former
usage, which invariably prescribed a sum
nl to be transceoueu.
A most remarkable feature in the bill
is that to which I have already called ihe
attention of the Senate, and of which no
satisfactory explanation ha been given.
It is thst which proceeds upon the idt a
that the Treasury is a thing distinct from
the treasure of the United States and
gives to the Treasury a local habit jtioii
and a name, in the new building which is
bcin erected for the Treasury Depart
ment in the city of Washington. In the
Treasury, so constituted, is to be placed
that pittance of the puhlie revenue which
is gleaned from the District of Columbia.
All else, thit is to say. nine hundred and
ninety-nine hundredths of the public
revenue of the United States, is to be
placed in the hands of the receivers gen
eral,, an I the other depositories beyond
"the District f Columbia. Now, the
constitution of the United Stales provides
that no money shall be drawn from the
public Treasury but in virtue of a previoua
appropriation by law. That trifling por
tion of it, therefore, which is within the
District of Columbia, will be under the
safeguard of the constitution, and all else
will be at the arbi.rary disposal of the
Secretary of the Treasury, v V
It was deemed necessary, no doubt, to
vest in the Secretary of the Treasury this
f vast and alarming discretionary power,
t A new and immense Government bank is
about to be erected. : How it would work
in ait us pan nram um ihhuu
wiin certainly; anun w uiuiigm pmpcr,
therefore, to bestow a discretion 'com
mensurate with its novelty and complexi
ty, and adapted to any exigencies which
might arise. The 10th section of the
bill is that in which the power to create
a bink is more particularly conferred.
It is short, and 1 will read it to the
Senate. '' ' -' ' :;
Sec. 10. And be it further enacted.
That it shall be lawful for the Secretary
of the Treasury to transfer the moneys in
the hands of any depository hereby con
stituted, to the Treasury ot the United
Statee; lo the Mint at Philadelphia; to the
Branch Mint at New Orleans; or to the
offices of either of the receivers general
or public moneys, by this act directed to
be appointed; to be there safely kept ac
cording to the provisions of this act; and
also1 to transfer moneys in the hands of
any one depository constituted by this act
to any other depository couslituled by the
aame, at his discretion, and as the safely
of the public moneys, and the convenience
of the public aervice, (hall seem to him
to require. And for the purpose of pay
ments on the public account, it shall be
lawful for the aaiJ Secretary to draw
epon any wf the said depositories, as he
may think most conducive to the pabhe
interests, or to the convenience of the
public creditors,' or both.
It will be seen that it grants a power.
perfectly undefined, to the Secretary ef
the Treasury, to shift and transfer tha
publie money, from depository to de
pository, as he pleases. He ia expressly
authorized to transfer moneys in the
hands of any one depository, constituted
by the act, to any other depository con
stitute I by it, at I.I discretion, and as tha
safety of the public moneys, and the con
venience of the public service, shall seen
to him to require. There is do specifica
tion of any contingency or contingencies
on which be ia to act. All ia left to hie
discretion. He ia to iuJe when the
public service (and more indefinite terms i
could not have been employed) shall :
seem io mm to require u. it nas occn ;
aaid that this is nothing more than the i
costnmsry power of transfer, exercised by
the Treasury Department from the ongin I
of the Government. I deny it, utterly
deny it." It ia a totally different power
from that which was exercised by the
cautious Gallatin and other Secretaries
of the Treasury a'power, by the bye,
which, on more than one occasion, hat
been controverted, and which ia infinitely
more questionable than tha power to
establish a Bank of the United States.
The transfer was made by them rarely,
in large sums, and were left to tha bsnks
to remit. When payments were made,'
they were effected in tha notes of banks
with which the publie money was de
posited, or to which it was transferred.
The rates of exchange were regulated
by the state of the market, and under tha
responsibility of the banks. But here is
a poster given to transfer the public
moneys without limit, as to sum. place,
or lime, leaving every thing to the discre
tion f the Secretary of the Treasury,
receivers general, ana other depositories.
Wbst a scope is allowed in the fixation
of the rates of exchange, whether of
premium or discount, to regulate the
whole domestic exchanges of the country,
to exercise favoritism? These former
tnnite rs wrre not made for disbursement,
but a preparatory lo disbursement; and
when d'fbursed, it was generally in bank
notes. The transfers of this bill are
immediate payments, and payments made
not in bank notes but specie.
The tan paragraph in the section
provides that,, for Ihe purpose of pay
ments on the public account, it shall be
lawful for the Secretary to draw upon
auv of fie said depositaries, aa he may
think most conducive to the publie
interest, or to. the convenience of ihe
public creditors, or both. , It " ill be seen
that no limit whatever is imposed tpon
the amount or form of the drafi, or aa
to the depositary upon which it ia drawn,
tie is made the exclusive judge of what
is " most conducive lo the public inte
rests." Now, let us pause a moment,
and trace the operation of the powera thus
vested. The Government has a revenue
nf from twenty lo thirty millions. The
Secretary may draw It to any one or more
points, as he pleases. . More than a moi
ety of the revenue arising from customs
is receivable at the port of New York, to
which point the Secretary may draw all
portions of it. if he thinks it conducive to
the public interest. A man has to receive
under an appropriation law, $10,000, and
applies to Mr. Secretary for payment.
Where will yon receive it? he is asked.
On New York. How? In drafts from
$5 to $500. Mr.: Secretary will give
him these drafts accordingly, upon bank
note paper, impressed like and simulating
bank notes, having all suitable emblazon
ry, -signed by my friend the Treasurer,
(whose excellent practical sense, and
oiid sound judgment, if he bad been at
Ihe head of ihe Treasury, instead of Mr.
Levi Woodbury, when the suspension of
specie payments took place, would have
relieved or mitigated the pecuniary em
barrassments of the Government and the
people) couutersigned by the Comptrol
ler and filled up in the usual way of bank
notes. Here is one Aof them, aaid Mr.
Clay. He here held op, to the gaze of
the Senate a Treasury note, having all
the appearance of a bank note, colored,
engraved, and executed like any other
bank note, for $50. This, continued
Mr. Clay, is a government post note, put
into circulation, paid out as money, and
prepared and sent forth, gradually to ac
custom the people of this country to go
vernment paper. ' "
v I have supposed $10,000 to be received
in the mode staled, by a person entitled
to receive it under an appropriation law.
Now let ua suppose what he will do with
it. Any wher 10 lne South or West it
will Command a premium of from two to
five per cent. Nowhere in the United
States will it be under par. Do you sup
pose that the holder of these drafts would
be fool enough to convert them into spe
cie, to be carried and transported at bia
risk? Do yon' think tbat he would not
prefer that this money ahouli he in lbs
responsible custody of the government,
rather than in his own inseccrt keep
in? Do you think he will deny to him
self the opportunity of realizing the pre
rnium of which he may be perfectly sure?
The greatest want of tha country ia a me
dium of general circulation, and of uni
form ealue every where. That, espe
cially, is our want in the western and in
terior states. Now, bers is exactly such
a medium; and supposing the government
bank to be honestly aod faithfully admi
nistered, tt will, during tfch an adminis
tration, be tha best convertible paper mo
ney in ihe world, for two reasons. Tie
first is, that every dollar of paper out will
be the representative of a dollar of specie
in the hands of the receivers general, or
other depositories; and. secondly, if the
receivera general should embezzle tha
public money, the responsibility of the
government to pay the drafts issued upon
the basis of that money would remain un
impaired. The 'paper, therefore, would
be as far superior to the paper of any
private corporation aa the ability and re
sources of the government of the United
States are ruperior to those of such cor
porations. '
The banking capacity may be divided
into three facilities; deposites, discount of
bills of exchange, and promissory notes,
or either and circulation. This Govern
ment bank would combine them all, ex
cept that it will not discount private notes,
nor receive private deposites. In pay
ments for the publie lands, indeed, indi
viduals are "allowed to make deposites,
and receive certificates of their amount.
To guard against their negotiability, a
clause has been introduced to render them
unassignable. But how will it be possi
ble to maintain such an inconvenient re
striction, in a country where every de
scription of paper imposing an obligation
to pay money or deliver property ia as
signable, at law or in equity, from tho
commercial nature and trading character
of our people? - -
Of all the faculties which I have stated
of a bank, that which createa a circulation
is the most important to the community
at large. It ia that in which thousands
may be interested, who never obtained a
discount, or made a deposile with a bank.
' Whatever a government agrees to receive
I in payment of the publie dues is a medi-
urn of circulation, is money, current mo 2,
f ney, no mailer what its form may be,
Treasury notes, drafts drawn at. Wash
ington, by the treasurer or receiver ge
neral at New York, or to use the lan
guage employed in various parts of this
i bill, " such notes, bills, or paper, issued
under the authority of the United States."
These Tarious provisions were probably
inserted not only to coyer the case of trea- - '
aury notes, but that of these drafts, in
due season. But if there were no ex
pressed provision of law, that these drafts
should be receivable in payment of pub
lie dues, they would, necessarily, be so
employed, from their own intrinsic value.
The, want of the community of a go
neral circulation of uniform value every -
where in the United States, would occa
sion vast amounts of the species of drafts
which I have described to remain in cir
culation. The appropriations this year,
will probably fall not much short of thir
ty million. Thirty millions ol treasury
drafts oa' receivers general, of every de
nomination, and to any' amount, may be
issued by the Secretary of the Treasury. , .
What amount would remain in circulation
cannot be determined a priori. I sup
pose not less than ten or fifteen millions;
at the end "of another year aome ten or
fifteen millions more; ihey would fill all
the channels of circulation. The war be
tween the government and slate banks con
tinning, and this mammoth government
bank being in tha market, constantly de-,
manding specie for its varied and ramified " ..
operations, confidence would be lost in .
the notes of the local banks, their paper
would gradually cease to circulate, and
the banks themselves would ba Crippled
and broken. The paper of the 'govern
ment bank would ultimately fill the va- .
cuum, as it would instantly occupy the
place of the notes of the late Bank of tho
United Slates.
' I am aware, Mr. President, that by the
25th section of the bill, in order to dis
guise the purpose of the vast machinery
which we are about constructing, it ia
provided that it shall be the duty of tha
Secretary of tha Treasury to issue and
publish regulations to enforce the speedy
presentation of all government drafts for
payment at the place where payable, &o.
Now, what a tremendous power is hero
vested in the Secretary! He ia to pre
scribe rules and regulations to enforce Uio
speedy presentation of all government
drafts for payment at the place where pay
able. The speedy presentation! In the
case 1 hadsupposed, a man has his g 10.0CC
(Continual! on fourth page ) '
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