quire patient attention to be thoroughly understood. Our time permits, only, that we indicate, so that you may pursue, them,

at leisure.

"1. During a series of years of uninterrupted prosperity, the two great classes of the commercial community, the lender and the borrower, the capitalist and the enterprising and industrious operator, who makes capital productive, acquired almost boundless confidence in each other; the banks extended their loans to the utmost bound of safety; the merchant and the manufacturer employed their proper and borrowed funds in enterprizes commensurate in their extent with their pecuniary facilities, and requiring the continued and uninterrupted use of the capital invested. In this condition, any cause which required the lender to withdraw the accustomed accommodation, and particularly the recal of advances, would necessarily produce `embarrassment and distress among men of business, even though there should be little overtrading; and this distress would be greater where its cause could not be foreseen and provided for.

"2. Under the old system of collecting the duties, they did not become payable until about the time when the importer was paid by the consumer. Under the system resulting from the compromise of the tariff, the importers not only collect, as before, but in fact advance to government one-half of the whole amount of duties on importation, which is ultimately paid by the consumer. An additional amount of capital, therefore, equal to that of the duties, is now required, in order to carry on the same quantity of business, in articles on which the duties are payable in cash, or at much shorter periods than formerly.

"3. In New York, and, perhaps, in some other of the Atlantic cities, large amounts of stocks, principally from the southwest, had been purchased, mainly with a view to their sale in the English markets. This had not, of late, answered the expectations of the contractors; and though they may have borrowed abroad, to a considerable extent, on the credit of those stocks, a large amount remained on hand, and absorbed a corresponding portion of capital or credit.

"But the increase of credit, thus required, might, probably, have been supplied by domestic capitalists, by loans from abroad, and, particularly, by a liberal extension of the accommodations of the United States Bank, had not that institution been restrained by prudential reasons from increasing the amount of its discounts. To the causes which imposed on the Bank this duty, are to be ascribed the disastrous effects now visible on the prosperity of the country.

"4. By the act of 10th April 1816, Sec. 15, incorporating the Bank of the United States, it is provided, that, during the continuance of the act, and whenever required by the Secretary of

the Treasury, the Bank should give the necessary facilities for transferring the public funds from place to place, and for distributing them in payment of the public creditors, without charge, and should perform the duties of commissioners of loans, &c.

"By Section 16, the deposits of the money of the United States, in places where the Bank and branches may be established, are to be made in the Bank or branches, unless the Secretary of the Treasury shall, at any time, otherwise order and direct; in which case, he is required immediately to lay before Congress, if in session, and if not, immediately after the commencement of the next session, the reasons of such order or direction.

"And by Section 20, in consideration of the exclusive privileges and benefits conferred by the act, the Bank agreed to pay to the United States one million and a half of dollars.

"Six years before the charter of the Bank would expire, the administration of the government, unprovoked, declared war against the institution, which it has since zealously and unremittedly persecuted. In the summer of 1833, threats were uttered, by officers of the government, of withholding from it the deposits of the public moneys, which compelled the Bank to prepare for the attack, by limiting its business within narrower bounds than would otherwise have been necessary. On the 1st of October the threatened stroke was stricken. The deposits were actually withheld, by order of the Secretary of the Treasury. At this period, however, although the amount of the loans of the Bank had been reduced, voluntarily, and by the ordinary course of business, in this season of the year, about four millions, the public had suffered no inconvenience; nor would this small reduction have given cause of complaint. In the Atlantic districts, especially in the city and state of New York, portions of the Union most obnoxious to commercial distress, the State banks had not decreased their discounts; which were, indeed, greater on the 1st of October 1833, than in January of that year. In the great West, the coming storm had cast no shadow before it; and the echo of its thunders were unheard. But great change in the equilibrium of the atmosphere is not the more certain precursor of the tempest, than is the derangement of the currency the forerunner and the cause of pecuniary distress.

"The hostility of the Government against the Bank, and, more especially, its demonstration in the removal of the deposits, created apprehensions of danger, immediately, to the Bank itself, and remotely, to all the moneyed institutions and concerns of the country. Retrenchment at all, and rigorous enforcement of its claims at some points, were presumed indis

pensable to the safety of the Bank. The extent, being conjectural, was exaggerated. There was communicated everywhere that uncertainty of the future, which impels every man to seek provision for the coming month, as well as for the passing day. The capitalists, more fearful, perhaps, than men of less wealth, withdrew their funds from circulation. Men saw that the relations between the government and the Bank were, thenceforth, to continue hostile; that, between it and the substituted banks, they were to be those of mistrust; and that, without a National Bank, the stability and safety of the whole monetary system of the country would be endangered.

"As a political measure, the attack was alarming, being made in defiance of a solemn vote of the late Congress, at their last session; and, as if with the intention to forestall the opinion of that which must meet within sixty days after the interference was made; and as if to encroach upon its legitimate rights. It was appalling to men of business, who rely for the success of their operations on that stability of those of the Government, which can only be guarantied by law, unexpectedly to discover, that the commerce, the currency, and the moneyed institutions of the country, its credit, and their own credit and fortunes, were, thenceforth, to depend on the private opinions, the presumed wisdom, and the arbitrary will of one man. Minor causes increased the apprehensions, and restricted more and more the use of private capital and private credit; and the alarm became a panic, not dependent upon, or to be explained as a matter of ordinary reason. The banks, indeed, (with some few exceptions,) protected by the impossibility of exporting specie without loss, have preserved their credit, and been enabled, generally, to continue, in some measure, their usual accommodations. Private credit has been most deeply affected; and the leading feature of the present distress is the consequent interruption, and, in many cases, cessation, of business.

"The importers diminish, greatly, their orders and their purchases of foreign exchange: which, for the first time for many years, is at a discount. The intermediate wholesale merchants, fearful to contract new engagements, are anxious only about the remittances necessary to discharge those already contracted. Those engaged in the exportation of the produce of the country, doubtful whether they can sell the foreign bills, on which that exportation depends, give but limited orders for it. The country merchants and the manufacturers are no longer permitted to draw, as formerly, in advance, on the cities for the products of the soil or of their industry. Men, with small capitals, if at all extended, when disappointed in the remittances they naturally expected, are crushed. New enterprizes and engagements of every description are avoided; and in many in

stances, workmen are discharged, or a reduction of wages required. The actual evils are aggravated by general appre hension; but the alarm can scarce be greater than the true state of things justifies. In every aspect of the subject, the true and efficient remedy consists in restoring confidence and credit, which might be almost instantaneously effected by replacing the Bank in the situation it had heretofore occupied, and assuring its continuance; thus enabling it to resume its functions to their usual extent.

"In addition to these remarks, we give you the views of Mr. Webster, a distinguished Senator, as exhibited in his speech on this subject:

The Treasury, in a very short time, has withdrawn from the Bank 8,000,000 dollars, within a fraction. This call, of course, the Bank has been obliged to provide for, and could not provide for without more or less inconvenience to the public. The mere withdrawing of so large a sum from hands actually holding and using it, and the transferring of it, through the bank collecting, and through another bank loaning it, if it can loan it, into other hands, is itself an operation which, if conducted suddenly, must produce considerable inconvenience. And this is all that the Secretary seems to have anticipated. But this is not the one-hundredth part of the whole evil. The great evil arises from the new attitude in which the Government places itself toward the, Bank. Every thing is now in a false position. The Government, the Bank of the United States, the State banks, are all out of place. They are deranged and separated, and jostling against each other. Instead of amity, reliance, and mutual succour, relations of jealousy, of distrust, of hostility even, are springing up between these parties. All act on the defensive; each looks out for itself; and the public interest is crushed between the upper and the nether millstone. All this should have been foreseen. It is idle to say that these evils might have been prevented by the Bank, if it had exerted itself to prevent them. That is a mere matter of opinion; it may be true, or it may not; but it was the business of those who proposed the removal of the deposits, to ask themselves how it was probable the Bank would act, when they should attack it, assail its credit, and allege the violation by it of its charter; and thus compel it to take an attitude, at least, of stern defence. The community have certainly a right to hold those answerable, who have unnecessarily got into this quarrel with the Bank, and thereby occasioned the evil, let the conduct of the Bank, in the course of the controversy, be what it may.

In my opinion, sir, the great source of the evil is the shock which the measure has given to confidence in the commercial world. The credit of the whole system of the currency of the country seems shaken. The State banks have lost credit, and lost confidence. They have suffered vastly more than the Bank of the United States itself, at which the blow was aimed.

'The derangement of internal exchanges is one of the most disastrous consequences of the measure. By the origin of its charter, by its unquestioned solidity, by the fact that it was at home every where, and in perfect credit every where, the Bank of the United States accomplished the internal exchanges of the country with vast facility, and at an unprecedented cheap rate. The State banks can never perform this equally well; they cannot act with the same concert, the same identity of purpose. Look at the prices current, and see the change in the value of the notes of dis

tant banks in the great cities. Look at the depression of the stocks of the State banks, deposit banks and all. Look at what must happen the moment the Bank of the United States, in its process of winding up, or to meet any other crisis, shall cease to buy domestic bills, especially in the Southern, Southwestern, and Western markets. Can any man doubt what will be the state of exchange when that takes place? Or can any one doubt its necessary effect on the price of produce? The Bank has purchased bills to the amount of sixty millions a year, as appears by documents heretofore laid before the Senate. A great portion of these, no doubt, was purchased in the South and West, against shipments of the great staples of those quarters of the country. Such is the course of trade. The produce of the Southwest and the South is shipped to the North and the East for sale; and those who ship it draw bills on those to whom it is shipped; and these bills are bought and discounted, or cashed by the Bank. When the Bank shall cease to buy, as it must cease, consequences cannot but be felt, much severer even than those now experienced. This is inevitable. But, sir, I go no further into particular statements. My opinion, I repeat, is, that the present distress is immediately occasioned, beyond all doubt, by the removal of the deposits; and that just such consequences might have been, and ought to have been, foreseen from that measure, as we do now perceive and feel around us.

'Sir, I do not believe, nevertheless, that these consequences were foreseen. With such foresight, the deposits, I think, would not have been touched. The measure has operated more deeply and more widely than was expected. We all may find proof of this, in the conversations of every hour. No one, who seeks to acquaint himself with the opinions of men, in and out of Congress, can doubt that, if the act were now to be done, it would receive very little encouragement or support.'

"In the meanwhile, in this deepest depth of darkness, there is no reason for despair. The usual channels of circulation are, indeed, obstructed; but the products of the national industry, though stagnant, are abundant. The actual capital of the country still remains unimpaired, although the nominal value of property be for a time lessened. There is no foreign pressure, and the skill and activity of our intelligent merchants must, after awhile, renew the broken chain of operations. The evil, through a painful process, is gradually working its remedy:In proportion as no new engagements are contracted, the whole mass is daily lessened, and we must, after a period of severe and protracted suffering, unnecessarily inflicted, be placed in a situation better adapted to a new order of things. These consolatory anticipations are confirmed by the fact, that the eyes of the people are opening upon their true interests; and at their command, the chains which bind many of their representatives to the car of the administration, will be broken like the cords upon the Nazarite."

Having thus explained to our inquiring emigrant, chiefly from the pen of one of the most distinguished statesmen and able financiers of the nation," the causes generally assigned for the lament

* Mr. Gallatin. Report of New York Union Committee.