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27 H CONG.......3D SESS.

law supreme, and a constitutional United States law subordinate.

We are also told, Mr. Speaker, in this report, with some pomp and circumstance, "that in aĺ communities, and in every form in which currency exists, whether as coined money or as paper representative of it, and whether this be issued by banks or by public authority directly, the question of the currency of the country and that of its fiscal affairs are inseparable facts." The committee has deemed it consistent with this strong affirmation to recognise by this twelfth section the authority of the States to separate finance from currency; and compelling them to tolerate the one, allows them to reject the other. But, if they be inseparable facts, it is because they are so blended as not to be capable of severance, without injury, if not destruction, to both; because so dependent each upon the other, that they cannot exist in a separate state; and yet this fatal separation you permit, if you did not invite the States to make it.

We are further informed in the report, that "the radical difficulty in the whole matter of the currency" is, "that of the sovereign function to make, issue, and regulate money, (or its substitute,) the States possess a part in common with the General Government." The exercise by the States of this Sovereign function is, by the report, if not in express terms, yet by the strongest implication, denounced a usurpation. This usurpation the bill proposes to legalize; for, of a paper currency, one of the most important regulations regards its amount or quantity; and, of the sovereign function to make this regulation, you divest yourself, and, by this twelfth section, (to the extent, at all events, of one-half) you transfer it to the States. This "radical difficulty," then, is only stated by the commtttee in their report, to be confirmed and perpetu

ated in the bill.

In a similar spirit we are told, in the report, that the Federal Government can provide a national paper currency of "adequate quantity;" but, by the bill, the State Governments, in direct opposition to the Federal Government, are made the ultimate judges, within certain limitations, of this adequate quantity.

The committee quotes, with approbation, the assertion of Mr. Dallas of the power of the Government to "supply and maintain a paper medium of exchange;" and yet, sir, by their bill, they put it in the power of the States to cut off this supply as caprice or passion may dictate.

Mr. Speaker, I care not what set of words is used; I care not how the phrase may run; this 12th section does, in fact, confer upon the State Legislatures a negative upon parts of this bill. And in what part of the Constitution do strict constructionists (it is they who insist upon this State-right feature) find authority for this Government to give power to the State Legislatures? If the States have this authority by their own constitutions, or by the Constitution of the United States, your law is superfluous; if they have it not, it is inoperative. But why give the States a negative upon parts only of this hill? Why not upon the whole of it? Why may they not exclude from your exchequer public as well as private deposites? There are no degrees of constitutionality. You assert your power to confer upon the exchequer authority to receive both, and yet admit that the States have the power to exclude one.

I will not affect ignorance, Mr. Speaker, of the reason which I presume will be given for this distinction-that Congress, having authority to lay and collect duties, &c., may provide a place for their deposite. But it will be recollected that this same power to lay and collect duties is one of the sources indicated in the report from which is deduced the power to provide and secure a national paper currency-the great object of the exchequer; and surely a place for the execution of this latter power is as necessary as a place for the deposite of the public money.

This section, irreconcilable as it is with the gen. eral principles of the Constitution, and in direct opposition to many of the opinions expressed in the report, was inserted in the bill, beyond all doubt, to avoid collision with "the fixed constitutional fact."

Mr. Speaker, in mere matters of expediency I would not be very tenacious of my own opinions; I would be willing to yield much to the wishes, judgments, and honest prejudices, if you please, of others. In subordinate matters, I would be unwilling, by an obstinate adherence to preconceived

The Exchequer Mr. Pendleton.

notions, to hazard the attainment of any great good. But when asked to surrender the authority of the Federal Government to execute its own powersto give up that part of the Constitution which, more than any other, distinguishes it from the articles of Confederation, of which the want of this very authority was the great defect; when called upon to throw this Government back upon a miserable and imbecile dependence upon the State Legislatures; when invoked to make partition of that authority which the people conferred upon us, with those to whom they most wisely denied it,-I cannot but recollect there are other fixed constitutional facts besides the Executive veto. One of those facts is,. that all legislative power under the Constitution is conferred upon Congress; which power each member is sworn to execute in accordance with the Constitution. Part of those legislative powers-those from which are claimed, and properly claimed, for this Government, the authority to provide a national paper currency--are enumerated in the report. This bill, in execution of that power, provides such a currency; this power we are sworn to execute ourselves; that oath is a perpetual interdict to the surrender of that power, no matter at whose bidding, no matter for what purpose.

This bill recognises two kinds of currency-gold and silver coin, and paper. For reasons given in the report its cheapness and facility of remittancethe paper, it is supposed, will be more desirable, and therefore more valuable, than the coin. If this be true, the convenience which this paper currency is intended to afford the treasury will be lost. Commercial sagacity will absorb, if not the whole, the greater part of it in commercial exchanges, and leave the Government to a more cumbrous and expensive coin.

Having touched upon some of the objectionable points in the plan of an exchequer reported by the committee, permit me to call your attention to that recommended by the Secretary of the Treasury. The remarks which I have already made upon the one, are equally applicable to the same provisions of the other. As a mode of attaining the great object proposed by these bills, as a mere measure of finance and currency, the scheme of the Secretary has great advantages over that of the committee. With the latter, it authorizes the exchequer at the seat of Government, and its agencies in the States, to receive private deposites of gold and silver coin and bullion, and to issue certificates therefor; the amount on deposite at any one time never to exceed fifteen millions of dollars. For the safekeeping of the specie, and issuing the certificate, a premium not exceeding one-half per cent. may be charged. This charge to the depositor, I think, will exclude from the vaults of the exchequer the coin of individuals, so long as the banks continue to do what they always have done-receive such deposites, and issue such certificates, free of expense. The committee, in their bill, made these certificates of individual deposites receivable at the treasury in payment of all dues to the United States, while that of the Secretary excludes them. Thus discredited by the Government, they must be at a discount in market; and I leave it to the financiering skill which devised the project, to point out the collateral advantages which led to the belief that individuals would deposite gold and silver, and receive in exchange depreciated paper. These certificates, with this fatal mark of exclusion upon them, are intended as a circulation for the people; thus recognising and legalizing one of the practical results, and one of the most odious features of the sub-treasury-one currency for the Government, and another for the people. Sir, under these circumstances, there is no risk in the prediction that the anticipated deposites will never be made, and all expectations of relief from that quarter will be utterly disappointed.

In addition to this, the Secretary proposes to issue fifteen millions of dollars, in the form of treasury notes, upon a basis of five millions of specie, with a power reserved to the Secretary of the Treasury to enlarge that basis to ten millions, by creating a Government stock redeemable in twenty years. These treasury notes being authorized, it was ne cessary to provide some mode by which they could be put and kept in circulation. For this purpose, the officers of the exchequer are directed to make payment of all drafts upon them (at the option of the creditor) in gold and silver coin, or treasury notes; and it is declared lawful for the board of exchequer, and each of its agencies, to purchase domestic bills of exchange, under certain regulations.

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There is established in the Treasury Department, at the seat of Government, a board, to be. called the exchequer of the United States, to be composed of the Secretary of the Treasury, the Treasurer of the United States, and three commissioners, to be appointed by the President, with the consent of the Senate. The Secretary of the Treasury is authorized to appoint all such inferior officers as, in the judgment of the board, the transaction of its business may require. The board of exchequer is also authorized to establish such agencies or offices as it may judge expedient, not exceeding two in any State or Territory; and the Secretary of the Treasury is also authorized, upon the recommendation of the board, to appoint such officers and agents as the said board may determine to be necessary for the transaction of its business. The board is also authorized to fix the compensation of such oflicers. The exchequer and its officers, thus organized, are declared to be the general agents of the Government of the United States for receiving, safekeeping, and disbursing the public moneys, and transferring and transinitting the same. The exchequer is also authorized to receive private deposites, as we have seen, to the amount of $15,000,000; to issue treasury notes to the amount of $15,000,000; and to purchase domestic bills of exchange, with no other limit than their ability to pay for them.

This, sir, is a concise but accurate description of the exchequer. Let us suppose it in full opera tion. There are, then, the board at Washington, and fifty-eight agencies distributed through the States, having in their custody and control, either on deposite or in circulation, $42,000,000, for which the Government of the United States is at all times responsible; and this sum does not include the ordinary daily accruing revenue. I would not exaggerate the number of persons necessary to the transaction of all this business, When the estimates shall come in from the Treas. ury for the payment of their salaries, you will find they will far exceed three hundred. Suppose them to be that number, he must have more "faith in the integrity and capacity of revenue officers than I have, who has confidence in a scheme of finance dependent for its success upon finding these qualities, in an eminent degree, in so large a number of men. Sir, we have bills upon our calendar for the release of the sureties of defaulting officers, which may give us some wholesome admonitions upon this subject. It is not a very violent presumption, nor one at which I suppose the Administration or its friends will take fire, that these appointments will be made from political considerations. The removal of Jonathan Roberts is a pregnant proof of that. Officers thus appointed can scarcely be supposed to act from higher motives than those which led to their selection. The fate of Jonathan Roberts will prevent that. Political considerations, then, it may be safely assumed, will not be entirely without their influence in determining the direction of exchequer facilities, and who e bills of exchange shall be purchased. Securities of this description are not generally considered the most valuable among cautious and considerate men. When to this temptation-to look beyond the mere value of the bill-we add the consideration that these men have no pecuniary interest in the transactions they control, and that they bear no part of the loss, if loss ensue; we can scarcely, I think, avoid the conclusion, that this boasted plan is destined to as signal a failure as its equally boasted predeces

sors.

But, sir, if this plan be thus full of risk, as a mere matter of dollars and cents, how will you estimate its danger as a political engine? It has long been the policy of the Whigs, and it is the true policy of the country, to restrain and circumscribe Executive power. The President being the constitutional commander-in-chief of the army and navy, it has been justly deemed of the last importance to remove, as far as possible, from his control, the treas ure of the nation. It has grown into a maxim of free government, that the purse and the sword

27TH CONG......3D SESS.

should not be intrusted to the same hands. So jealous were the framers of the Constitution of this Union, that they expressly provided that no appropriation of money, to raise and support armies, should be made for a longer time than two years. Look at the immense sums of money which this bill at all times places in the hands of officers dependent upon the President for their appointment, and at every moment subject to his power of removal. Do you expect independent action from men thus situated? You will be disappointed. The control of the officer is the control of the fund. They are his officers, and, with rare exceptions, will do his bidding. We opposed the sub-treasury-I did, at least-because of this very increase of power which it conferred upon the President. In comparison with this, that fiscal agent was absolutely impotent. The sub-treasury had no authority to receive private deposites, to issue treasury notes, or to grant pecuniary favors, in shape of bills of exchange, in return for political support. In the course of the ordinary business of the Government, there would seldom have been in the treasury at one time more than five or six millions of dollars, and that at every moment liable to treasury drafts. This same amount, and under the same liabilities, will be in deposite in the exchequer, besides the private deposites and specie basis of the treasury notes; which being necessarily of a more permanent character, will be less frequently called for, and therefore more exposed to be withdrawn and squandered.

The gentleman from Massachusetts, [Mr. CusHING,] feeling the force of this objection, has attempted to obviate it by saying, "You could have nothing that was to exert a useful activity without power. If you excluded power, you at once excluded action. Did you want useful action,. how was it to be had without power? To refuse power was to enjoin inactivity. In any possible mode of managing the finances of such a nation as this, power was unavoidable; there must be power." Such phrases as these were never wanting to calm the fears and lull the suspicions of a jealous people; under cover of them, usurpation has ever made its sure advances. Admitting their truth as general' O propositions, I beg leave to say they do not meet ! the case, or remove the objections. That some power is necessary, was never denied; that is not the question. Does not this bill confer upon the President more power than is necessary to the accomplishment of its object? That is the true question. If so, then the power is excessive; and all will agree that it is the duty of Congress to refuse it. By the veto, the President controls the legislation of Congress; give him the exchequer, and he will control the money of the people. What other power is wanting to constitute him a despot?

Another gentleman from Massachusetts, [Mr. WINTHROP,] Speaking of the report of the Committee of Ways and Means, complains that they seem unwilling to place any confidence in the honesty of public officers; and to show that such confidence may be safely extended to them, he disregards the numerous instances of recent defalcations in our own country, which had no doubt awakened the suspicions of the committee, and quotes Montesquieu, who says that fear is the basis of despotic governments, honor of monarchies, and virtue of republics. Does the honorable gentleman understand the great philosopher to refer to the virtue of the people, or their rulers? It is fear in the subject, and not in the king, which is the basis of despotism; and the virtue of the people, not of the rulers, is the basis of republics. The prime virtue of a re publican people is an ever-wakeful jealousy of the power intrusted to the Government; and especially to place little reliance upon the integrity of treasury agents, through whose hands the public money passes; and less, if possible, upon the disinterestedness of politicians who direct its expenditure.

The chairman of the special committee [Mr. CUSHING] tells us he once thought that the exchequer would not furnish so safe a depository of the public funds as a bank of the United States; but adds, "with the ruins in our sight of the old United States Bank-with the proof of its whole capital having been squandered-it surely did not become Congress to say that such an institution was the safest place to keep the public treasure." It cannot have escaped your recollection, sir, thai, at the extra session in 1841, that gentleman, with the same ruins in his eyes, and that same proof of squandered capital before him, voted for two bills chartering United States banks, for the avowed

On funding Treasury Notes- Mr. Woodbury.

purpose of receiving the public deposites. This same idea of the insecurity of a bank of the United States is found in Mr. Forward's report, who admits, however, that it was always faithful to its engagements, and that the Government sustained no loss. I marvel that neither of these gentlemen adverted to the fact that the ruin they deplore was not of a bank chartered by Congress, but a State bank of Pennsylvania, with a capital of thirty-five millions of dollars, which, within its limited sphere of operations, it could not legitimately use in banking, and therefore ran into the wildest speculations; and that was the cause of its ruin.

This exchequer, Mr. Speaker, is, in everything but name, a Government bank. This, to be sure, is denied by its friends, because it is admitted on all hands that such an institution is full of danger to the purity of our Government and the liberties of our people.

That this exchequer will not furnish the relief anticipated from it, is almost admitted by the Secretary in his report, who says: "The exchequer can lend money to nobody; it can furnish capital to no one to begin, carry on, or uphold his business;" "all real borrowing and lending is excluded; and bills are to be taken on such time only as is necessary for ordinary notice and the usual transmission of intelligence."

For these reasons, I cannot support these plans, or either of them.

SPEECH OF MR. WOODBURY,

OF NEW HAMPSHIRE.

In Senate, February 19, 1843-On the amendment to the bill as to treasury notes, proposing to fund them.

Mr. WOODBURY said that the chairman having referred to him as approving the amendment, it became necessary, in order to prevent misapprehension, to state briefly the reasons for his opinion. He did not wish to fund treasury notes when the treasury possessed the means of payment, or was likely soon to have them; or when those in power were willing to go forward wisely, and raise the necessary means within the year to discharge the expenses of the year. But the close of the session had now arrived, without a single effort, on the part of the majority, to raise those means, either by a modification of the present injudicious tariff, or by any other taxes. This had occurred in the face of a resolution, passed at the last session of the Senate, almost or quite unanimously, in these words:

"Resolved, That it is the duty of the General Government to provide an adequate revenue within the year to meet the current expenses of the year; and that any expedient, either by loan or treasury notes, to supply, in time of peace, a deficiency of revenue, especially during successive years, is unwise, and must lead to pernicious consequences."

His own principles, at all times, had been unfavorable to the issue or re-issue of treasury notes, or to a permanent loan, in time of peace, except in a temporary exigency; and when additional revenue to meet the notes, as in 1837, was soon expected; or when, as between that and 1841, all looked forward to a judicious alteration in the tariff, at an early day, suited to redeem any notes which might be outstanding. Indeed, the whole amount out at several dates during that period, was only a single million and a fraction; and at others, two millions and a fraction: while now it exceeded eleven millions; and now none of the majority proposed to raise revenue sufficient, or expressed any hopes of having revenue sufficient, for many years, to redeem them.

It is another alarming fact, that several millions of the treasury notes now out are actually due, and no means whatever are provided which the Administration tends to apply to their redemption. It is further manifest to any one who will take the trouble to examine this subject, that quite eleven millions of the eleven and a half now out will fall due within this calendar year. All that is proposed to be done by the Treasury Department is, not to apply the borrowed money to redeem them as far as it will go-though we permitted it to be borrowed for that very object-but to persevere in a system of re-issue and re-issue, without the least prospect of final payment, under the existing laws, for several years.

We had been gravely told in a high quarter, that, as the notes were on interest, they might not be presented for payment; and hence, perhaps, the department might get along without any provision whatever. But what should we think of an indi

Senate.

vidual, who made no provision to pay his note or bond, when falling due, because it was on interest? What could be more negligent and fatal to credit?

At last, however, it was discovered that, in any fluctuation of the money market, the whole of the notes might be paid in for duties and lands-or payment demanded of those due; and thus the treasury be compelled again, and at once, to stop payment. Hence, the official recommendation now was to give power to re-issue other notes. This was better than nothing, but was not enough for the occasion. Mr. W. was convinced that this would be mere evasion, and shuffling off, and procrastination, without any expectation or ability soon to make final payment. It was done, likewise, at the highest rate (of six per cent.) now, though at a much lower rate formerly.

On the contrary, a permanent loan could probably be now effected at five per cent., or five and a half, and for eight or ten years only; and by authorizing these, or any better terms which can be obtained, through the adoption of this amendment, we should save interest-considering the rate now paid-and (what was much more in importance) should sustain the national faith honorably. He conceded that, for large and permanent deficiencies, a loan like that proposed in the amendment was only a choice of evils. We had to select between that, and bankruptcy or financial disgrace. But, in his view, the true course to meet such deficiencies was taxation, or a reduction of expenses so as to have prevented them.

But we had hitherto refused to reduce the expenses sufficiently; we had neglected to tax sufficiently; we had failed to get means enough, by the panaceas of giving away the land revenue for a time, and of making a high protective tariff, instead of a revenue one.

What, then, was the best measure left? It was, in his opinion, to make the loan, rather than temporize longer, and incur the danger of further discredit, protests, and insolvency, heaped on the public treasury.

The only remaining doubt about this loan must be, that some might think the condition of the treasury so flourishing as to be able to redeem these notes as they fall due, or redeem them as soon as the next year, by the current revenue. If either of these were the fact, or were highly probable, he, for one, would not prefer a permanent loan, but a further issue or re-issue of notes during another year.

But, in his view, neither of those events could be justly anticipated. Neither was pretended to be probable by the Treasury Department, or by its organs on the floor of either House of Congress; nor could any Senator expect either, who would look a moment at the real, naked condition of the treasury, though it had been a matter of so much exultation with some gentlemen on the other side, a few days ago, in this body. In truth, so lamentable was its condition, all admit that the expenses of this calendar year would not be met without the use, for that purpose, of the millions of borrowed" money on hand, which had been authorized for the different purpose of redeeming these very notes.

What, sir! boast that we are able to get along this year, in profound peace, and after all reforms, only by the help of five or six millions of borrowed money?--boast that we have been able, at last, to borrow money, though not till after abandoning the finances distributed, and reducing our expenses down to near the standard proposed by us, and violently resisted by our opponents, no longer ago than the last session?

In proof of this, he would submit two or three facts. At this late hour, Mr. W. said he would omit all unimportant details, and merely say that the whole estimated revenue of the year, including the lands, was but $2,600,000 independent of the customs. Now, compute these last at fourteen or sixteen millions, as the Secretary did last December; or at thirteen, as he has since stated; and every one can see that there will not be enough to pay either of his estimated amount of expenditures. One of them was at twenty, and the other at twenty-two millions. How, then, do he and all his friends calculate to meet the expenses of this calendar year-to say nothing now of the next half year, for which we have also made large appropriations with inadequate means? I repeat, sir; they expect it solely by the use of the borrowed money on hand the 1st of January, and that obtained since; and solely, too, by diverting it from its original destination-the redemption of these very notes, which, in part, we are thus

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27TH CONG....... 3D SESS.

forced to fund in the manner proposed by the amendment under consideration.

It is a little remarkable, too, that the data on which even thirteen millions from customs are computed to be likely to be received, as exhibited by a financial report in the other House, do not sustain that estimate. We may, in the end, receive such an amount, or even more. On that he offered no opinion. But the data of $3,116,370, assumed as the accruing duties of the last quarter, on its imports, had since been admitted by the Secretary to be more than half a million too high.

[Mr. EVANS asked where? He wanted to see the documents.]

Mr. W. said here they are. The first one before him was addressed to the Senate, (No. 167;) and the other is in a letter from the Treasury Department (page 10) annexed to that very financial report (No. 227) in the other House. This two million six hundred thousand-or, to give the figures from the report, $2,579,380-being quadrupled for the year, instead of the other larger sum, would show an error of between two and three millions. But the accruing duties-if the term is properly used-are the gross duties, and not the net, which is supposed in the report in the other House; and hence the net duties would be still further less, for the year, by near three millions-showing, perhaps, still another error, quite to that extent.

If the other basis of computation in that report is relied on-which is, that the dutiable imports in 1843 will be $40,000,000, and the duties on them, at 35 per cent. on the average, will yield $14,000,000 and $1,000,000 deducted from that, will give $13,000,000 net revenue. There seems to be another error also in that, approaching $2,000,000. Because the drawbacks of all kinds, and bounties, are likely to be near $2,000,000, and are not deducted; but only the sum of $1,000,000, which is not equal to the mere expenses of collection. But enough of this. Passing over all other details, it must be manifest that the $5,000,000 to $7,000,000 of borrowed money now on hand, must be diverted from the redemption of these notes, in order to defray the current expenses of the year; and hence, that the notes must be funded, or left unpaid, and to be re-issued without end.

The prospect next year is no better than this, for these reasons: To be sure, the expenses last year and this would have been much higher, if the real friends of retrenchment had, not united and reduced the appropriations near $6,000,000 below what the Administration asked. It is true, also, that we have again this year cut them down $2,000,000 or $3,000,000 further below the estimates, if excesses are not run into before we adjourn. But still $18,000,000, including the interest on the debt, will probably be as low a point as will be reached this or the next year; and the customs and lands together are not likely to exceed that amount much, if any, till 1845, when several millions of the permanent debt fall due, and must be paid. In further evidence of this, Mr. W. said he held in his hand a tabular statement of the debt, showing not only its amount, old and new, permanent and temporary, but the amounts soon becoming due. He would not trouble the Senate with reading the details.

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On funding Treasury Notes-Mr. Woodbury.

This differed some, but not very materially, from what had been suggested by the chairman. But it showed a load imposed on our shoulders, for this year and a few coming years, which rendered the redemption of the treasury notes hopeless, unless new taxes, or a further permanent loan, were resorted to. So much for this view of the subject.

Another view-not unimportant to advert to a moment-was, that this is not the entertainment to which we were invited at the extra session in 1841.

It was then stated by the Treasury Department that a permanent loan of twelve millions would redeem all the treasury notes then outstanding, wheth er issued before or since the 4th of March, 1841; pay all the expenses and additional appropriations asked for at the extra session, and all the arrears and peculiar charges growing out of large unexpended appropriations. Recollect that all these were to be covered by only twelve millions; though the Secretary wished a few more, for a convenient balance on hand, &c. Now, mark the lamentable result: the twelve millions were granted; the tariff, in several particulars, was raised in 1841 so as to give more revenue; another high tariff was given in 1842; and the appropriations asked were reduced by Congress five or six millions; and yet the contemplated new debt, instead of being confined to twelve millions, has been increased to more than double-being $25,705,772. At the same time, too, the treasury notes out in March, 1841, (of only five millions and a half,) and what had since been issued, instead of being redeemed and extinguished by the permanent loan, have been doubled in amount since March, 1841. And the whole permanent loan has been applied, or is to be applied, to other purposes. What lame and impotent management! what breach of promise!

Mr. W. said he held in his hand an exhibit of the amount of treasury notes out every month from 1837 till now; and which would show that the average aggregate before March, 1841, had been only about four millions; though, since, it had exceeded eight millions, and was now over eleven millions; and that this increase had been recommended by those who before had denounced the use of such notes, and who proposed, as one of their first steps, to redeem or fund the whole of them.

United States treasury notes outstanding on the 1st of each month, from 1837 to 1843.

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- $13,974,445

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11,731,327

-$25,705,772

January February

2,758 331

2,570,340

323,566 1,380,000

March

2,176,981

April

1,422.555

6 301.324

1,703,566

May

1,256,985

June

2,052,056

July

2,123,717

8345.695

27,409,338

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03818

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- $3,722,831

7,371,705 10,039,056

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b. Old debt due now

Making, of notes falling due

in 1843

Now due

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* Estimated.

NOTES. Average issue monthly from October, 1837, to March 4,1841, about four and a half millions; but from March 4, 1841, to March, 1843, over eight millions-or nearly double as much. Whole issues authorized to be put out from October, 1837, to March 4, 1841, about $25,640,000, being a period of about three and a half years; but authorized to be issued from March 4, 1841, to August 3, 1842, less than one and a half year, $16,000,000.

Mr. W. added, that it certainly became the Senate now to do, as far as might be, what ought long before to have been accomplished to redeem or fund these notes. If the majority declined to im

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For these reasons, he had offered the amendment in the committee, and defended it, and should vote for it here.

[Mr. EVANS remarked, that Mr. W. had seemed to scold the Senate on this subject, when nearly all, he believed, were in favor of the amendment. He stated, also, that Mr. W. should not complain of the amount of treasury notes out, when he had voted for them. He went into other observations as to the prospects of the revenue, and said that fifteen millions were likely to be received, and thus his former calculations verified.]

Mr. W. regretted that the chairman had considered his remarks as made with a view to lecture or scold at the Senate. On the contrary, they were made merely to explain why he was in favor of the amendment; and if any felt censured by them impliedly, it was probably from a consciousness of deserving it. He had witnessed, on too many occasions, the disposition, in many quarters, to misrepresent motives and objects of public men in their votes, and he intended to leave no excuse for it here. The Senate and the public should not hold him responsible as an approver of this measure, without, at the same time, being apprized of the grounds on which he sanctioned it, and without his showing that, in doing this, he made no departure from his former views or acts in relation to treasury notes and the finances generally. The propriety of such caution is developed in this very debate. The responsibility for having out and keep ing out so large an amount of treasury notes was attempted to be cast on him; because, under other circumstances, and under great emergencies, Mr. W. had voted for the two last treasury note bills, as well as recommended the old ones.

What, sir! Taunt me as to the old ones, when so small in amount--at times but or and two mil lions--and when means have been given to this Administration to redeem them all, which means have been diverted to other purposes, or not a dollar of them would be now unredeemed!

Taunt me, also, with an assent to the last issues by this Administration! when it was given only after their boasted skill in making their permanent loan had failed; after their boasted skill in distri butions and tariffs had left the treasury empty; after the demands on it had been protested all over the country; and the sailor, soldier, mechanic, contractor, and officer, had all been unpaid; and after a temporary relief by treasury notes seemed indispensable to rescue our national faith from still further discredit, and prevent a harsh resort, in the embarrassed state of the community, to direct taxes, excise, and stamp acts! If this was a fit topic for reproach, let it come.

Nor had the chairman been quite so infallible in his former estimates concerning the revenue as he now seemed to suppose.

The Senate must all recollect that the Secretary of the Treasury, in 1842, calculated to receive $27,000,000 gross revenue from the present tariff, including tea and coffee. This was twenty-two to twenty-three millions net revenue, including them; and nineteen without them. In this, the Secretary was sustained by his organs here-except, as more careful examination was made, some of them found that estimate might prove one or two millions too high.

[Mr. EVANS said the $27,000,000 was computed on the imports of 1840.]

Yes, sir; but the Secretary and his friends computed that the imports would, in 1843, be as high, if not higher, than in 1840.

Yet, now, fifteen millions is the estimate of imposts at the highest, or thirteen at the lowest; instead of the former nineteen millions-not including tea and coffee. A change of five or six millions in estimates, in a single year, is certainly not a matter to be much boasted of for accuracy. But enough of this at so late an hour-or, Mr. W. said, that he would take pleasure in submitting further details as to the prospective condition of the treasury, and the propriety of adopting the amendment under consideration,

27TH CONG.....3D SESS.

SPEECH OF MR. RAYNER,

OF NORTH CAROLINA.

In the House of Representatives, January 12, 1843On the bill proposing to repeal the bankrupt law.

Mr. RAYNER said he wished to state, briefly, the reasons which would induce him to vote for the repeal of the bankrupt law, provided the bill before the House could be put in a proper shape. I voted (said Mr. R.) for the bankrupt law, at the extra session, with some misgiving; but, upon reflection, I then yielded my doubts to the strong con. victions and earnest entreaties of those who, representing commercial sections of the country, urged with so much zeal the passage of the law. It was a question on which I was able to look with an unprejudiced and impartial eye. Although my own State suffered in common with every o her part of the Union, from the financial and pecuniary embarrassments of the Government and the country, yet there was, perhaps, no State that suffered lessowing, in part, to the prudent and economical habits of its people, and in part to the fact that, in consequence of the natural obstructions on its eastern coast, it is less commercial in its pursuits than any other Atlantic State. It was, therefore, a question on which the people of my section of the Union felt comparatively indifferent. I felt at perfect liberty to pursue such a course as, in my judgment, I might think proper, untrammelled by public opinion at home. Although I saw no pressing necessity for the passage of this law, so far as the people of my own State, and especially my own immediate constituents, were concerned; yet I could not shut my eyes to the embarrassment, insolvency, and distress that were preying on all the trading and commercial sections of the country, depressing credit, crippling the energies of industry, tying up the hands of enterprise-and all these, in their results, seriously affecting and reacting on agriculture, manufactures, and every other department of busi

ness.

When I came to look at the causes of this embarrassment and distress, I saw plainly that the sufferers were not paying the penalty of their own imprudence and folly, but that they had been brought to insolvency and impending ruin by the rash and wicked measures of financial quacks and political gamblers. When Locofoco misrule commenced, it found the country peaceful and quiet, and every department of business pursuing a successful career of prosperity and wealth. Men of business relied on the patriotic conviction, that those who administered the Government would confine themselves to their constitutional functions. and they waked from this dream to find that financial tinkering had unhinged every branch of business, and deranged all their calculations-founded, as those calculations were, on the presumption that Government would not interfere with the pursuits of the citizen. The last administration, instead of profiting by the experience of the past, continued to persevere in this ruinous and oppressive policy— making war upon credit, whilst living on credit itself; experimenting with the currency; and acting on the principle laid down by its chief, that the only business of the Federal Government was to take care of itself, regardless of its effect on the pursuits of industry. At length the crisis, so long predicted by sagacious statesmen, came. The most cautious were unable to provide against it; whilst thousands who had been instigated by the inducements of the Jackson paper-money era to embark in speculating adventures, were, owing to the reaction produced by the measures of the Van Buren specie-currency era, swept away by the sudden crash. Thousands were not only left insolvent, but unable to obtain employment to subsist, much less to pay their debts; whilst thousands of wives, who had been enjoying a life of luxury, were suddenly consigned to poverty; and thousands of children, who had been rocked in the cradle of plenty, were brought to cry for bread. Such is but a faint description of the sufferings and condition of the commercial community, when the bankrupt law was passed.

It was this state of distress, growing out of twelve years of misrule, which aroused the nation in 1840, and in a very great measure contributed to the overthrow of the self-styled Democratic party. The Whig party came into power pledged to relieve the country as far as was in their power. The people expected it at their hands. And when they came to look around them, to those who asked

The Bankrupt Law Mr. Rayner.

and required relief at their hands, they saw that they were not the misers who had hoarded their gold; they were not the wealthy capitalists who had looked with calm complacency on, and reaped a profitable harvest from, the sufferings and misfortunes of others; but they were the enterprising and industrious-those who had used their means in giving labor and employment to thousands, and in advancing the trade, the credit, and the improvements of the country in all its great leading interests who had thus been rutlessly and unexpectedly reduced to want. The Whigs, then, considered it not only their duty, but an injunction imposed on them by the people who had intrusted them with power, to release a suffering community from the thraldom into which they had been plunged by wicked and incompetent rulers. They found the hands of industry and enterprise tied up-not in consequence of imprudence and extravagance, but by the action of the Federal administration; and it was necessary to sever these bonds, in order to enable prosperity and improvement to pursue their onward march. They considered this indispensable to the commencement of a salutary reform. And now, for once and for all, I wish it to be distinctly understood, that we may set ourselves right on this subject:-let those who so much de. nounce the bankrupt law-let this House and the country recollect, that, objectionable as this law may have been, it was forced upon us by Democratic misrule. But for the weakness and corruption of the last and preceding administrations, there would have been no pressing necessity for their passing such a measure. And let those who are disposed to cast censure on it, not blame those who passed it-who, if they did err, erred from the good intention to relieve honest suffering-from a proper regard for the wants and distress of an injured people; but on those, whose misrule forced itfupon uswhose mismanagement and imbecility for years left us no other alternative.

I have briefly stated the reasons which induced me, in the first instance, to yield my doubts as to the propriety of passing such a law, to the pressing emergencies of the times. I will now briefly state the reasons why I shall vote for its repeal.

I have said I voted for this law with some misgivings. I thought I saw then objections to any bankrupt law; but, on reflection, I considered these objections far outweighed by the suffering and embarrassments of the country, brought about by the mismanagement of the Government, which the Whigs had come into power pledged to reform. And since the same causes which induced the pas sage of the law no longer exist-at all events, much less forcibly-the question may well arise, whether a pressing necessity any longer appears for keeping it in operation? The purposes intended by its passage have, in a very great measure, been accomplished. Those who had been plunged into insolvency, from which they could never have relieved themselves, have received its benefits, or, at all events, have had an opportunity of receiving them. If they have failed to do so, it has been the result of their own imprudence; their want of caution in stretching their credit too far in these pressing and unreliable times; or of relying too incautiously on the consistency of legislation in a Government, which events should have caused them to distrust. The prudent and industrious have had time and opportunity to avail themselves of its aid. Those whose enterprise and energy were cramped and destroyed by the ruinous consequences of Federal mismanagement, are left free once more to pursue the paths of industry and wealth. The manacles have been struck from their hands, and the heavy incumbrances of debt under which they labored have been removed. The mechanic has again been sent to his shop, the sailor to his ship, the agriculturist to his field, and the merchant to his counter. The road to prosperity and happiness has been cleared of the obstructions with which Federal misrule has blocked it up; and again presents its beaten track, along which the prudent and industrious may travel, with renewed energy and dearly bought experience. The honest again have a field in which to labor, from the profits of which to pay their debts-which honor has not cancelled, although the law might have done so-debts which they never could have paid, as long as they were subject to the severity and extortion of unrelenting creditors. And many a wife and child, who saw nothing but penury and want before them, have had their sorrow changed to consolation, by the hopes and prospects of better times.

H. of Reps.

And whilst the honest and unfortunate, who were willing to surrender all, have been relieved, the dishonest and the reckless have been brought to accountability and liquidation. The creditor as well as the debtor has enjoyed its benefits; and, while the former has extorted the last cent, he has been prevented from carrying his oppression further. The law has provided a means by which the honest debtor may be enabled ultimately to pay his bond, without allowing the creditor to exact its forfeit.

If I am asked why the embarrassment and pressure which now pervade the country have not dis appeared in consequence of these benefits of the bankrupt law which I have enumerated, my answer is,--that the causes of these difficulties lie much deeper than in debt and insolvency. They spring from the derangement of the currency, and the uncertain and unsettled state of the finances of the Government. These, the bankrupt law cannot remedy, although it has remedied some of the evils growing out of them. And since the unfortunate have been relieved, by the beneficial operation of the bankrupt law, from those overwhelming and unforeseen disasters resulting from Democratic tinkering with the currency and finances, a return to a safe and sound system of currency and exchanges would soon so enhance the price of property, and afford such aids to industry and business, as would soon restore the country to prosperity, and thousands to solvency, who are now unable to pay their debts. As to the pressure and embarrassments which now weigh upon the country, they never can be relieved till there is a change of measures and men. We thought we had effected that change, and that our measures were about to carry "healing on their wings" to the wounds of a bleeding country; but, in the very moment of victory, the laurel was snatched from our brows by the most shameless treachery that ever disgraced the annals of representative government. As long as we have an Executive who, in the weakness and vanity of power, filched by fraud from a confiding people, laughs at the distresses of his suffering countrymen; as long as the recognised organs of those who administer the Government come into this hall and hawk the spoils of office to the highest bidder; as long as Executive vetoes are threatened in advance, not as the means of arresting unconstitutional legislation, but of enlisting recruits, for partisan service-so long will credit and confidence continue to languish, and the country continue to groan under embarrassment and debt.

Notwithstanding the benefits which I have mentioned as having resulted from the bankrupt law, yet there are objections and evils attending it, as there are attending every finite system, every human invention. Although these objections were more than counterbalanced, at the time of the passage of the law, by the considerations I have alluded to; yet, as these considerations no longer exist --at all events, in nothing like as full force-1 incline to the opinion that the inherent evils of the system, together with the state of the public mind, are such as no longer to create a necessity for its continuance. In the first place, I fear it is calculated to affect personal confidence, which, after all, is the secret of our unparalleled prosperity in this country. It is calculated to beget, and I fear is already begetting, a disregard for the sacredness of obligations; without which, no well-established system of credit can exist in any country. For it is not the compulsory process of the law which enables the young man, whose only fortune is his good name, to obtain credit with the rich; but it is the sanctity with which public opinion regards an obligation thus incurred. And any system which has a tendency to destroy this confidence, or beget a disregard for a faithful compliance with its conditions, is well calculated to lock up the coffers of the rich, to keep capital unemployed, and consequently to repress the energies of the enterprising and industrious, by depriving them of the opportunities and means of exertion. It may be said that this will affect only the imprudent and the faithless, but that those who deserve confidence and credit will still be able to obtain them. Then the question will arise, Who are to be trusted? Who can withstand the temptation, when the chances of being absolved from his obligations are so ready at hand? Who will rely upon the labor and perseverance of years to relieve him from the pressure of debts he cannot pay, when the tribunals of the country are so easy of access?

If, however, this should not be the result-if th

7TH CONG........3D SESS.

means of obtaining credit be not thus taken away, and confidence not be destroyed, as I have supposed,--then it must be admitted that the bankrupt law will tend to the opposite extreme. It will open the door for rash speculation and heedless adventure, which will unsettle and disturb the quiet and peaceful pursuits of life. It is the sense of responsibility, the fear of irremediable ruin, that prevents most men from embarking in hazardous enterprises of trade, and compels them to pursue the slow and more certain ends of industry and economy. Take away these restraints-hold out to them the dazzling temptation of speedy wealth by hazardous speculation-offer to them the lure of such easy relief from accountability, and the penalties accompanying it,-and what will be i's effect upon a people as enterprising and adventurous as ours? Men will cease laboring with their hands, and attempt to live by their wits; speculation will run riot through the land; and the sober avocations of industry be abandoned for the reckless pursuit of instant gain. Habits of idleness and extravagance will thus be contracted; the public morals become corrupted; the public mind familiarized with the idea of discharging obligations other than by the means of honest industry; and debt ultimately lose all its terrors for those who have everything to gain, and nothing to lose by it.

Another serious objection to the bankrupt law is, that it comes in conflict with, unsettles, and disturbs the various insolvent laws which the respective States of the Union have adopted for the regu lation of their internal police. All the States have established the relations of debtor and creditor, in accordance with the peculiar opinions of each. This is a most important subject of legislation, which varies in every State according to the peculiar interests and pursuits of its people. It is indispensable to good government and domestic prosperity that these relations of debtor and creditor should be clearly defined, and settled on a firm and stable basis; for they are more or less interwoven with the whole system of jurisprudence in every State of the Union. Any general system, therefore, which comes in conflict with these various regulations in the respective States, must, in a measure, disturb their whole systems of internal policy; jostle against the peculiar pursuits and habits of their people; and thus be the means of perpetual annoyance and vexation. It is the policy of some of the States that a very enlarged and liberal system of credit should prevail, that every stimulus should be given to enterprise and adventure; of others, that these should be restrained within more moderate limits. Some States may deem it their policy to visit the severest penalties on a failure to discharge liabilities incurred; others may consider it the part of humanity to extend a much greater degree of lenity to the unfortunate debtor. Some States are commercial, some manufacturing, some agricultural. Experience may have proven that these various interests require different relations of debtor and creditor, in order to their successful pursuit. When we reflect that debts and liabilities in every State have been contracted with a view to the domestic policy and regu lations of each, so far as the rights of the creditor and the responsibility of the debtor are concerned, it should be a most imperious case of necessity which should induce the General Government to interpose and disturb these various regulations, even temporarily, for the removal of en overwhelming evil--such an evil as did exist when the bankrupt law was passed, and which it was intended to remedy. And, owing to the causes I have mentioned, I doubt very much whether, under any circumstances, a uniform bankrupt law ever should become a permanent part of our system of national jurisprudence.

There is another reason-a strong reason, toowhich will induce me to vote for the repeal of the bankrupt law. I believe that public opinion has pronounced against its further existence, and that the fact cannot be disguised. The large and commercial cities may, perhaps, still be in favor of it; but, as to the great mass of the people throughout the country, I am compelled to think that there is a decided majority against it. Of course, I can speak, of my own knowledge, only so far as the people of my own State and district are concerned; and there is, perhaps, no people whose opinions present a fairer test of the unprejudiced decision of the public mind. They cared comparatively little about the passage of the law at first, and have therefore been the better able to watch its operation

The Bankrupt Law-Mr Rayner.

with an impartial eye. And, although I feel sure the large Whig majority in my State will appreciate and sanction the motives of those who passed it; yet, since the great good contemplated has been mainly accomplished, I have as little doubt that a majority of the people of the State, and of my own constituents, wish its repeal. From the best information I can obtain, I am led to believe that the same state of feeling and opinion generally prevails in other sections of the Union. I wish to be distinctly understood on this point. I am not one of those who believe that legislation here should be swayed by the temporary impulses of popular feeling. I believe that it is the duty of the Representative to array himself against the effervescent violence of the public mind, when stimulated and excited by the reckless spirit of faction and innovation. As long as I am a Representative, I trust I shall have firmness enough to resist the demands of temporary impulse in the popular mind, when, in my deliberate judgment, I believe them to be wrong. But then, on the other hand, I do believe that the theory of our institutions is based on the principle that the wishes of the constituency, dispassionately entertained and calmly expressed, are binding on the Representative, on questions of mere expediency. Whether the popular opinion is the result of impulse, or of cool and deliberate judgment, the Representative must judge. It is enough for me to say, that I do believe the calm and reflective judg ment of my constituents is against the further continuance in operation of the bankrupt law.

Now, Mr. Speaker, I am not to be understood as expressing any regret for the vote which I originally gave for the passage of this law. Under similar circumstances, I should feel it my duty to do so again. I yielded to the great and urgent necessities of the country, and the sufferings of the people. Great as may have been the evils of a bankrupt law, yet I considered it called for by the extraordinary emergencies of the times. I thought it best to submit to one evil, in order to cure one still greater. Powerful and sickening as this medicine may have been, yet I thought it was called for as an extreme remedy for the distempered state of the nation.

Whilst I am willing to vote for the repeal of the bankrupt law, however, I cannot vote for the bill before the House, unless it is amended. The bill proposes to date back in its operation to the 5th of December last, so as to exclude from its benefits all those who had not then taken the inceptive measures towards taking advantage of its provisions. Now, this appears to me improper and unjust. It seems to me to be somewhat retrospective at least negatively, if not positively. If not positively retrospective in its operation, it is so in its exclusion from the benefit of another law, which will have been in operation for months, after the period mentioned as the date of its repeal. All those who may have commenced the initiatory steps towards taking the benefit of the bankrupt law, even up to the day of its passage, will have done so under the guaranty of the Government; they may be said to have a vested right to the benefits of the law. All their arrangements, for months, may have been tending to this. All their hopes and calculations of coming relief and future comfort may have been built upon the pledges tendered by this Government in the passage of the law. Many may have been struggling, with all their energy and strength, to sustain their credit, in hopes of avoiding the necessity of resorting to the relief tendered by this law. Since the 5th of December, they may have been compelled to yield to the pressing storm, and may have just commenced measures for availing themselves of the benefits of the law. On the other hand, many an indulgent creditor may have failed, up to the 5th December, to have commenced compulsory process against their debtors, under the involuntary clause of the act, who, since then, or before the passage of the bill before the House, may have commenced process. Should these be deprived of the benefits of the bankrupt law, merely because, from a feeling of humanity, they may have extended time and indulgence to their embarra sed debtors; relving in security upon the law of the land, as tendering its benefits whenever they might be disposed to resort to it?

The retrospective operation, or rather exclusion of this bill, will operate as a punishment to the most worthy-to those who, from industry and pride, may have failed to take advantage of the voluntary portion of the bankrupt law; and those

H. of Reps.

who, from feelings of kindness and forbearance towards the unfortunate, may have postponed taking advantage of the involuntary clause. This retrospective legislation is calculated to destroy all confidence in the action of the Government, and to sow the seeds of distrust and alarm throughout the land. I cannot vote for the bill before the House, unless it is amended in this particular. I question its constitutionality-1 am convinced of its injustice and partiality.

Neither can I vote for the amendment which has been offered, proposing to include corporations of the respective States within its operation. I am too much of a State-rights man for that. The respective States have established corporations within their limits, for various purposes, with various powers, and subject to various restrictions. The powers and existence of the State corporations emanate from sovereign State authority; they are responsible to the same authority, to a varied extent, according to the peculiar interests and pursuits of each. The General Government has no power to establish a corporation within the limits of any State, except as a necessary means of carrying into operation a granted power. And yet, wid it be pretended that it has power to destroy those created by the States; or, what is the same thing, establish rules and regulations fixing the conditions on which their existence shall continue? It is very evident, that the great anxiety for the passage of this amendment springs from a violent and furious hatred of the State banks of the country, and a pretended zeal for their destruction. And those who are most rabid in their hatred of banks, are the very men who generally make most pretensions about their State rights republicanism. Let them recollect that these State banks exist by State authority. If they are not sufficiently restricted in their charters, it is by the choice or neglect of the State authorities that chartered them; if they have violated their charters, they are responsible to State laws and State tribunals; if they are guilty of abuses, fraud, and peculation, still they are sub ject to their own domestic legislative restraint, and to their own domestic public opinion.

Then, if the public opinion, the laws, and the institutions of the respective States, will tolerate the abuses, the suspensions, the contractions and expansions of the State banks, about which gentlemen descant so much-why should this General Government attempt to bring them to punishment? and that, too, according to one uniform rule for every part of the country. The abuses of the State banks are felt most sensibly at home; there the evil is best understood, and there the remedy can best be applied. I warn gentlemen who make professions of devo tion to State rights, to beware how they allow this General Government to bring within the scope of its control the institutions of the States. If it can establish the conditions on which they shall cease to exist, it may next pass regulations how they shall exist. And as it is the nature of power to advance, we may next have, not only our banks, but our col leges, our manufacturing companies, our railroad and canal corporations, brought within the scope cf Federal supremacy.

It has been said, by way of taunt, during this de bate, that this bankrupt law is the last of the Whig measures of the extra session, and that its repeal will give the finishing stroke to all of our labors at that eventful session. It is true that little will be left on the statute-book; but that is not the fault of the Whigs; and history must say so. They could not prevent the treachery of John Tyler; and the secret of our disasters is, that the people of the country-the Whig majority-blame us for having palmed such a man as John Tyler upon them. Yes, sir, the Whigs did commit a most grievous erroria the election of John Tyler; and most grievously have they suffered for it.

The gentleman from Kentucky [Mr. MARSHALL] has spoken of the history of this Administration being written in a parenthesis. Not so. If there is any truth in the maxim of Shakspeare, that "the evil that men do lives after them," then it will require massy volumes to portray the pro gacy and corruption of this Administration. And if the concluding part of the sentence be also true that the "good is oft interred with their bones," then John Tyler's gravestone should bear this single inscription: "Here lies John Tyler."

I have, till very lately, indulged in the fall fab that the Whig party was only undergoing a purta cation that they were passing through an ordeal of trial, from which they would emerge "redeemed,

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