DIVORCE OF BANK AND STATE: MR. BENTON'S SPEECH.
The bill is to divorce the government from the banks, or rather is
to declare the divorce, for the separation has already taken place
by the operation of law and by the delinquency of the banks. The
bill is to declare the divorce; the amendment is to exclude their
notes from revenue payments, not all at once, but gradually, and
to be accomplished by the 1st day of January, 1841. Until then
the notes of specie-paying banks may be received, diminishing
one-fourth annually; and after that day, all payments to and from
the federal government are to be made in hard money. Until that
day, payments from the United States will be governed by existing
laws. The amendment does not affect the Post Office department
until January, 1841; until then, the fiscal operations of that
Department remain under the present laws; after that day they fall
under the principle of the bill, and all payments to and from that
department will be made in hard money. The effect of the whole
amendment will be to restore the currency of the constitution to the
federal government--to re-establish the great acts of 1789 and of
1800--declaring that the revenues should be collected in gold and
silver coin only; those early statutes which were enacted by the
hard money men who made the constitution, who had seen and felt the
evils of that paper money, and intended to guard against these evils
in future by creating, not a paper, but a hard-money government.
I am for this restoration. I am for restoring to the federal
treasury the currency of the constitution. I am for carrying back
this government to the solidity projected by its founders. This
is a great object in itself--a reform of the first magnitude--a
reformation with healing on its wings, bringing safety to the
government and blessings to the people. The currency is a thing
which reaches every individual, and every institution. From the
government to the washer-woman, all are reached by it, and all
concerned in it; and, what seems parodoxical, all are concerned to
the same degree; for all are concerned to the whole extent of their
property and dealings; and all is all, whether it be much or little.
The government with its many ten millions of revenue, suffers no
more in proportion than the humble and meritorious laborer who works
from sun to sun for the shillings which give food and raiment to
his family. The federal government has deteriorated the currency,
and carried mischief to the whole community, and lost its own
revenues, and subjected itself to be trampled upon by corporations,
by departing from the constitution, and converting this government
from a hard-money to a paper money government. The object of the
amendment and the bill is to reform these abuses, and it is a reform
worthy to be called a reformation--worthy to engage the labor of
patriots--worthy to unite the exertions of different parties--worthy
to fix the attention of the age--worthy to excite the hopes of the
people, and to invoke upon its success the blessings of heaven.
Great are the evils,--political, pecuniary, and moral,--which have
flowed from this departure from our constitution. Through the
federal government alone--through it, not by it--two millions and
a half of money have been lost in the last four months. Thirty-two
millions of public money was the amount in the deposit banks when
they stopped payment; of this sum twenty-five millions have been
paid over to government creditors, or transferred to the States.
But how paid, and how transferred? In what? In real money, or its
equivalent? Not at all! But in the notes of suspended banks--in
notes depreciated, on an average, ten per cent. Here then were two
and a half millions lost. Who bore the loss? The public creditors
and the States. Who gained it? for where there is a loss to one,
there must be a gain to another. Who gained the two and a half
millions, thus sunk upon the hands of the creditors and the States?
The banks were the gainers; they gained it; the public creditors
and the States lost it; and to the creditors it was a forced loss.
It is in vain to say that they consented to take it. They had no
alternative. It was that or nothing. The banks forced it upon the
government; the government forced it upon the creditor. Consent was
out of the question. Power ruled, and that power was in the banks;
and they gained the two and a half millions which the States and the
public creditors lost.
I do not pretend to estimate the moneyed losses, direct and
indirect, to the government alone, from the use of local bank notes
in the last twenty-five years, including the war, and covering
three general suspensions. Leaving the people out of view, as a
field of losses beyond calculation, I confine myself to the federal
government, and say, its losses have been enormous, prodigious,
and incalculable. We have had three general stoppages of the local
banks in the short space of twenty-two years. It is at the average
rate of one in seven years; and who is to guaranty us from another,
and from the consequent losses, if we continue to receive their
bills in payment of public dues? Another stoppage must come, and
that, reasoning from all analogies, in less than seven years after
the resumption. Many must perish in the attempt to resume, and
would do better to wind up at once, without attempting to go on,
without adequate means, and against appalling obstacles. Another
revulsion must come. Thus it was after the last resumption. The
banks recommenced payments in 1817--in two years, the failures
were more disastrous than ever. Thus it was in England after the
long suspension of twenty-six years. Payments recommenced in
1823--in 1825 the most desolating crash of banks took place which
had ever been known in the kingdom, although the Bank of England
had imported, in less than four years, twenty millions sterling in
gold,--about one hundred millions of dollars, to recommence upon.
Its effects reached this country, crushed the cotton houses in New
Orleans, depressed the money market, and injured all business.
The senators from New York and Virginia (Messrs. Tallmadge and
Rives) push this point of confidence a little further; they
address a question to me, and ask if I would lose confidence in
all steamboats, and have them all discarded, if one or two blew
up in the Mississippi? I answer the question in all frankness,
and say, that I should not. But if, instead of one or two in the
Mississippi, all the steamboats in the Union should blow up at
once--in every creek, river and bay--while all the passengers were
sleeping in confidence, and the pilots crying out all is well; if
the whole should blow up from one end of the Union to the other just
as fast as they could hear each other's explosions; then, indeed,
I should lose confidence in them, and never again trust wife, or
child, or my own foot, or any thing not intended for destruction,
on board such sympathetic and contagious engines of death. I
answer further, and tell the gentlemen, that if only one or two
banks had stopped last May in New York, I should not have lost all
confidence in the remaining nine hundred and ninety-nine; but when
the whole thousand stopped at once; tumbled down together--fell in
a lump--lie there--and when ONE of their number, by a sign with
the little finger, can make the whole lie still, then, indeed,
confidence is gone! And this is the case with the banks. They have
not only stopped altogether, but in a season of profound peace,
with eighty millions of specie in the country, and just after the
annual examinations by commissioners and legislative committees, and
when all was reported well. With eighty millions in the country,
they stop even for change! It did not take a national calamity--a
war--to stop them! They fell in time of peace and prosperity! We
read of people in the West Indies, and in South America, who rebuild
their cities on the same spot where earthquakes had overthrown
them; we are astonished at their fatuity; we wonder that they will
build again on the same perilous foundations. But these people
have a reason for their conduct; it is, that their cities are
only destroyed by earthquakes; it takes an earthquake to destroy
them; and when there is no earthquake, they are safe. But suppose
their cities fell down without any commotion in the earth, or the
air--fell in a season of perfect calm and serenity--and after that
the survivors should go to building again in the same place; would
not all the world say that they were demented, and were doomed to
destruction? So of the government of the United States by these
banks. If it continues to use them, and to receive their notes
for revenue, after what has happened, and in the face of what now
exists, it argues fatuity, and a doom to destruction.
Resume when they will, or when they shall, and the longer it is
delayed the worse for themselves, the epoch of resumption is to be a
perilous crisis to many. This stopping and resuming by banks, is the
realization of the poetical description of the descent into hell,
and the return from it. _Facilis descensus Averni--sed revocare
gradum--hic opus, hic labor est._ Easy is the descent into the
regions below, but to return! this is work, this is labor indeed!
Our banks have made the descent; they have gone down with ease; but
to return--to ascend the rugged steps, and behold again the light
above how many will falter, and fall back into the gloomy regions
below.
Banks of circulation are banks of hazard and of failure. It is an
incident of their nature. Those without circulation rarely fail.
That of Venice has stood seven hundred years; those of Hamburgh,
Amsterdam, and others, have stood for centuries. The Bank of
England, the great mother of banks of circulation, besides an
actual stoppage of a quarter of a century, has had her crisis and
convulsion in average periods of seven or eight years, for the last
half century--in 1783, '93, '97, 1814, '19, '25, '36--and has only
been saved from repeated failure by the powerful support of the
British government, and profuse supplies of exchequer bills. Her
numerous progeny of private and joint stock banks of circulation
have had the same convulsions; and not being supported by the
government, have sunk by hundreds at a time. All the banks of the
United States are banks of circulation; they are all subject to the
inherent dangers of that class of banks, and are, besides, subject
to new dangers peculiar to themselves. From the quantity of their
stock held by foreigners, the quantity of other stocks in their
hands, and the current foreign balance against the United States,
our paper system has become an appendage to that of England. As
such, it suffers from sympathy when the English system suffers. In
addition to this, a new doctrine is now broached--that our first
duty is to foreigners! and, upon this principle, when the banks of
the two countries are in peril, ours are to be sacrificed to save
those of England!
The power of a few banks over the whole presents a new feature of
danger in our system. It consolidates the banks of the whole Union
into one mass, and subjects them to one fate, and that fate to be
decided by a few, without even the knowledge of the rest. An unknown
divan of bankers sends forth an edict which sweeps over the empire,
crosses the lines of States with the facility of a Turkish firman,
prostrating all State institutions, breaking up all engagements,
and levelling all law before it. This is consolidation of a kind
which the genius of Patrick Henry had not even conceived. But while
this firman is thus potent and irresistible for prostration, it
is impotent and powerless for resurrection. It goes out in vain,
bidding the prostrate banks to rise. A _veto_ power intervenes.
One voice is sufficient to keep all down; and thus we have seen
one word from Philadelphia annihilate the New York proposition for
resumption, and condemn the many solvent banks to the continuation
of a condition as mortifying to their feelings as it is injurious to
their future interests.
Again, from the mode of doing business among our banks--using
each other's paper to bank upon, instead of holding each other to
weekly settlements, and liquidation of balances in specie, and
from the fatal practice of issuing notes at one place, payable at
another--our banks have all become links of one chain, the strength
of the whole being dependent on the strength of each. A few govern
all. Whether it is to fail, or to resume, the few govern; and not
only the few, but the weak. A few weak banks fail; a panic ensues,
and the rest shut up; many strong ones are ready to resume; the weak
are not ready, and the strong must wait. Thus the principles of
safety, and the rules of government, are reversed. The weak govern
the strong; the bad govern the good; and the insolvent govern the
solvent. This is our system, if system it can be called, which has
no feature of consistency, no principle of safety, and which is
nothing but the floating appendage of a foreign and overpowering
system.
The federal government and its creditors have suffered great
pecuniary losses from the use of these banks and their paper; they
must continue to sustain such losses if they continue to use such
depositories and to receive such paper. The pecuniary losses have
been, now are, and must be hereafter great; but, great as they
have been, now are, and may be hereafter, all that loss is nothing
compared to the political dangers which flow from the same source.
These dangers affect the life of the government. They go to its
existence. They involve anarchy, confusion, violence, dissolution!
They go to deprive the government of support--of the means of
living; they strip it in an instant of every shilling of revenue,
and leave it penniless, helpless, lifeless. The late stoppage might
have broken up the government, had it not been for the fidelity
and affection of the people to their institutions and the eighty
millions of specie which General Jackson had accumulated in the
country. That stoppage presented a peculiar feature of peril which
has not been brought to the notice of the public; it was the
stoppage of the sums standing in the names of disbursing officers,
and wanted for daily payments in all the branches of the public
service.--These sums amounted to about five millions of dollars.
They had been drawn from the Treasury, they were no longer standing
to the credit of the United States; they had gone into the hands of
innumerable officers and agents, in all parts of the Union, and were
temporarily, and for mere safe-keeping from day to day, lodged with
these deposit banks, to be incessantly paid out to those who were
doing work and labor, performing contracts, or rendering service,
civil or military, to the country. These five millions were stopped
with the rest! In an instant, as if by enchantment, every disbursing
officer, in every part of the Union, was stripped of the money which
he was going to pay out! All officers of the government, high and
low, the whole army and navy, all the laborers and contractors,
post offices and all, were suddenly, instantaneously, left without
pay; and consequently without subsistence. It was tantamount to a
disbandment of the entire government. It was like a decree for the
dissolution of the body politic. It was celebrated as a victory--as
a conquest--as a triumph, over the government. The least that was
expected was an immediate civil revolution--the overthrow of the
democratic party, the change of administration, the reascension
of the federal party to power, and the re-establishment of the
condemned Bank of the United States. These consequences were counted
upon; and that they did not happen was solely owing to the eighty
millions of hard money which kept up a standard of value in the
country, and prevented the dishonored bank notes from sinking too
low to be used by the community. But it is not merely stoppage of
the banks that we have to fear: collisions with the States may
ensue. State legislatures may sanction the stoppage, withhold the
poor right of suing, and thus interpose their authority between the
federal government and its revenues. This has already happened, not
in hostility to the government, but in protection of themselves;
and the consequence was the same as if the intention had been
hostile. It was interposition between the federal government and
its depositories; it was deprivation of revenue; it was an act the
recurrence of which should be carefully guarded against in future.
This is what we have seen; this is a danger which we have just
escaped; and if these banks shall be continued as depositories of
public money, or, which is just the same thing, if the government
shall continue to receive their "paper promises to pay," the same
danger may be seen again, and under far more critical circumstances.
A similar stoppage of the banks may take place again--will
inevitably take place again--and it may be when there is little
specie in the country, or when war prevails. All history is full of
examples of armies and navies revolting for want of pay; all history
is full of examples of military and naval operations miscarried
for want of money; all history is full of instances of governments
overturned from deficits of revenue and derangements of finances.
And are we to expose ourselves recklessly, and with our eyes open,
to such dangers? And are we to stake the life and death of this
government upon the hazards and contingencies of banking--and of
such banking as exists in these United States? Are we to subject
the existence of this government to the stoppages of the banks,
whether those stoppages result from misfortune, improvidence, or bad
faith? Are we to subject this great and glorious political fabric,
the work of so many wise and patriotic heads, to be demolished in
an instant, and by an unseen hand? Are we to suffer the machinery
and the working of our boasted constitution to be arrested by a
spring-catch, applied in the dark? Are men, with pens sticking
behind their ears, to be allowed to put an end to this republic? No,
sir! never. If we are to perish prematurely, let us at least have a
death worthy of a great nation; let us at least have a field covered
with the bodies of heroes and of patriots, and consecrated forever
to the memory of a subverted empire. Rome had her Pharsalia--Greece
her Chæronca--and many barbarian kingdoms have given immortality to
the spot on which they expired; and shall this great republic be
subjected to extinction on the contingencies of trade and banking?
But what excuse, what apology, what justification have we for
surrendering, abandoning, and losing the precise advantage for which
the present constitution was formed? What was that advantage--what
the leading and governing object, which led to the abandonment of
the old confederation, and induced the adoption of the present form
of government? It was revenue! independent revenue! a revenue under
the absolute control of this government, and free from the action
of the States. This was the motive--the leading and the governing
motive--which led to the formation of this government. The reason
was, that the old confederation, being dependent upon the States,
was often left without money. This state of being was incompatible
with its existence; it deprived it of all power; its imbecility was
a proverb. To extricate it from that condition was the design--and
the cardinal design--of the new constitution. An independent
revenue was given to it--independent, even, of the States. Is it
not suicidal to surrender that independence, and to surrender it,
not to States, but to money corporations? What does history record
of the penury and moneyed destitution of the old confederation,
comparable to the annihilation of the revenues of this government in
May last? when the banks shut down, in one night, upon a revenue, in
hand, of thirty-two millions; even upon that which was in the names
of disbursing officers, and refuse a nine-pence, or a picaillon in
money, from that day to this? What is there in the history of the
old confederation comparable to this? The old confederation was
often reduced low--often near empty-handed--but never saw itself
stripped in an instant, as if by enchantment, of tens of millions,
and heard the shout of triumph thundered over its head, and the
notes of exultation sung over its supposed destruction! Yet, this
is what we have seen--what we now see--from having surrendered
to corporations our moneyed independence, and unwisely abandoned
the precise advantage which led to the formation of this federal
government.
I do not go into the moral view of this question. It is too obvious,
too impressive, too grave, to escape the observation of any one.
Demoralization follows in the train of an unconvertible paper
money. The whole community becomes exposed to a moral pestilence.
Every individual becomes the victim of some imposition; and, in
self-defence, imposes upon some one else. The weak, the ignorant,
the uninformed, the necessitous, are the sufferers; the crafty and
the opulent are the gainers. The evil augments until the moral sense
of the community, revolting at the frightful accumulation of fraud
and misery, applies the radical remedy of total reform.
Thus, pecuniary, political, and moral considerations require the
government to retrace its steps, to return to first principles,
and to restore its fiscal action to the safe and solid path of the
constitution. Reform is demanded. It is called for by every public
and by every private consideration. Now is the time to make it.
The connection between Bank and State is actually dissolved. It
is dissolved by operation of law, and by the delinquency of these
institutions. They have forfeited the right to the deposits, and
lost the privilege of paying the revenue in their notes, by ceasing
to pay specie. The government is now going on without them, and
all that is wanting is the appropriate legislation to perpetuate
the divorce which, in point of fact, has already taken place. Now
is the time to act; this the moment to restore the constitutional
currency to the federal government; to restore the custody of the
public moneys to national keepers; and to avoid, in time to come,
the calamitous revulsions and perilous catastrophes of 1814, 1819,
and 1837.
And what is the obstacle to the adoption of this course, so
imperiously demanded by the safety of the republic and the welfare
of the people, and so earnestly recommended to us by the chief
magistrate? What is the obstacle--what the power that countervails
the Executive recommendation, paralyzes the action of Congress, and
stays the march of reform? The banks--the banks--the banks, are
this obstacle, and this power. They set up the pretension to force
their paper into the federal Treasury, and to force themselves to
be constituted that Treasury. Though now bankrupt, their paper
dishonored, their doors closed against creditors, every public and
every private obligation violated, still they arrogate a supremacy
over this federal government; they demand the guardianship of the
public moneys, and the privilege of furnishing a federal currency;
and, though too weak to pay their debts, they are strong enough to
throttle this government, and to hold in doubtful suspense the issue
of their vast pretensions.
The President, in his message, recommends four things: first, to
discontinue the reception of local bank paper in payment of federal
dues; secondly, to discontinue the same banks as depositories of
the public moneys; thirdly, to make the future collection and
disbursement of the public moneys in gold and silver; fourthly, to
take the keeping of the public moneys into the hands of our own
officers.
What is there in this but a return to the words and meaning of the
constitution, and a conformity to the practice of the government in
the first years of President Washington's administration? When this
federal government was first formed, there was no Bank of the United
States, and no local banks, except three north of the Potomac. By
the act of 1789, the revenues were directed to be collected in gold
and silver coin only; and it was usually drawn out of the hands of
collectors by drafts drawn upon them, payable at sight. It was a
most effectual way of drawing money out of their hands; far more so
than an order to deposit in banks; for the drafts must be paid, or
protested, at sight, while the order to deposit may be eluded under
various pretexts.
The right and the obligation of the government to keep its own
moneys in its own hands, results from first principles, and from
the great law of self-preservation. Every thing else that belongs
to her, she keeps herself; and why not keep that also, without
which every thing else is nothing? Arms and ships--provisions,
munitions, and supplies of every kind--are kept in the hands of
government officers; money is the sinew of war, and why leave this
sinew exposed to be cut by any careless or faithless hand? Money
is the support and existence of the government--the breath of its
nostrils, and why leave this support--this breath--to the custody of
those over whom we have no control? How absurd to place our ships,
our arms, our military and naval supplies in the hands of those who
could refuse to deliver them when requested, and put the government
to a suit at law to recover their possession! Every body sees the
absurdity of this; but to place our money in the same condition,
and, moreover, to subject it to the vicissitudes of trade and the
perils of banking, is still more absurd; for it is the life blood,
without which the government cannot live--the oil, without which no
part of its machinery can move.
England, with all her banks, trusts none of them with the
collection, keeping, and disbursement of her public moneys. The Bank
of England is paid a specific sum to manage the public debt; but the
revenue is collected and disbursed through subordinate collectors
and receivers general; and these receivers general are not subject
to the bankrupt laws, because the government will not suffer its
revenue to be operated upon by any law except its own will. In
France, subordinate collectors and receivers general collect, keep,
and disburse the public moneys. If they deposit any thing in banks,
it is at their own risk. It is the same thing in England. A bank
deposit by an officer is at the risk of himself and his securities.
Too much of the perils and vicissitudes of banking is known in these
countries to permit the government ever to jeopard its revenues in
their keeping. All this is shown, fully and at large, in a public
document now on our tables. And who does not recognize in these
collectors and receivers general of France and England, the ancient
Roman officers of quæstors and proquæstors? These fiscal officers
of France and England are derivations from the Roman institutions;
and the same are found in all the modern kingdoms of Europe which
were formerly, like France and Britain, provinces of the Roman
empire. The measure before the Senate is to enable us to provide
for our future safety, by complying with our own constitution, and
conforming to the practice of all nations, great or small, ancient
or modern.
Coming nearer home, and looking into our own early history, what
were the "continental treasurers" of the confederation, and the
"provincial treasurers and collectors," provided for as early as
July, 1775, but an imitation of the French and English systems,
and very near the plan which we propose now to re-establish! These
continental treasurers, and there were two of them at first,
though afterwards reduced to one, were the receivers general; the
provincial treasurers and collectors were their subordinates.
By these officers the public moneys were collected, kept, and
disbursed; for there were no banks then! and all government drafts
were drawn directly upon these officers. This simple plan worked
well during the Revolution, and afterwards, until the new government
was formed; and continued to work, with a mere change of names
and forms, during the first years of Washington's administration,
and until General Hamilton's bank machinery got into play. This
bill only proposes to re-establish, in substance, the system of the
Revolution, of the Congress of the confederation, and of the first
years of Washington's administration.
The bill reported by the chairman of the Committee on Finance
[Mr. WRIGHT of New York] presents the details of the plan for
accomplishing this great result. That bill has been printed and
read. Its simplicity, economy, and efficiency strike the sense
of all who hear it, and annihilate without argument, the most
formidable arguments of expense and patronage, which had been
conceived against it. The present officers, the present mints,
and one or two more mints in the South, in the West, and in the
North, complete the plan. There will be no necessity to carry
masses of hard money from one quarter of the Union to another.
Government drafts will make the transfer without moving a dollar.
A government draft upon a national mint, will be the highest order
of bills of exchange. Money wanted by the government in one place,
will be exchanged, through merchants, for money in another place.
Thus it has been for thousands of years, and will for ever be. We
read in Cicero's letters that, when he was Governor of Cilicia, in
Asia Minor, he directed his _quæstor_ to deposit the tribute of
the province in Antioch, and exchange it for money in Rome with
merchants engaged in the Oriental trade, of which Antioch was one
of the emporiums. This is the natural course of things, and is too
obvious to require explanation, or to admit of comment.
We are taunted with these treasury notes; it seems to be matter of
triumph that the government is reduced to the necessity of issuing
them; but with what justice? And how soon can any government that
wishes it, emerge from the wretchedness of depreciated paper,
and stand erect on the solid foundations of gold and silver? How
long will it take any respectable government, that so wills it,
to accomplish this great change? Our own history, at the close of
the Revolution, answers the question; and more recently, and more
strikingly, the history of France answers it also. I speak of the
French finances from 1800 to 1807; from the commencement of the
consulate to the peace of Tilsit. This wonderful period is replete
with instruction on the subject of finance and currency. The whole
period is full of instruction; but I can only seize two views--the
beginning and the end--and, for the sake of precision, will read
what I propose to present. I read from Bignon, author of the civil
and diplomatic history of France during the consulate and the first
years of the empire; written at the testamentary request of the
Emperor himself.
After stating that the expenditures of the republic were six
hundred millions of francs--about one hundred and ten millions of
dollars--when Bonaparte became First Consul, the historian proceeds:
"_At his arrival at power, a sum of 160,000 francs in money
[about $32,000] was all that the public chests contained. In the
impossibility of meeting the current service by the ordinary
receipts, the Directorial Government had resorted to ruinous
expedients, and had thrown into circulation bills of various
values, and which sunk upon the spot fifty to eighty per cent. A
part of the arrearages had been discharged in bills two-thirds
on credit, payable to the bearer, but which, in fact, the
treasury was not able to pay when due. The remaining third had
been inscribed in the great book, under the name of consolidated
third. For the payment of the forced requisitions to which they
had been obliged to have recourse, there had been issued bills
receivable in payment of the revenues. Finally, the government,
in order to satisfy the most imperious wants, gave orders upon
the receivers general, delivered in advance to contractors,
which they negotiated before they began to furnish the supplies
for which they were the payment._"
This, resumed Mr. B., was the condition of the French finances
when Bonaparte became First Consul at the close of the year 1799.
The currency was in the same condition--no specie--a degraded
currency of assignats, ruinously depreciated, and issued as low as
ten sous. That great man immediately began to restore order to the
finances, and solidity to the currency. Happily a peace of three
years enabled him to complete the great work, before he was called
to celebrate the immortal campaigns ending at Austerlitz, Jena, and
Friedland. At the end of three years--before the rupture of the
peace of Amiens--the finances and the currency were restored to
order and to solidity; and, at the end of six years, when the vast
establishments, and the internal ameliorations of the imperial
government, had carried the annual expenses to eight hundred
millions of francs, about one hundred and sixty millions of dollars;
the same historian copying the words of the Minister of Finance,
thus speaks of the treasury, and the currency:
"_The resources of the State have increased beyond its wants;
the public chests are full; all payments are made at the day
named; the orders upon the public treasury have become the most
approved bills of exchange. The finances are in the most happy
condition; France alone, among all the States of Europe, has no
paper money._"
What a picture! how simply, how powerfully drawn! and what a change
in six years! Public chests full--payments made to the day--orders
on the treasury the best bills of exchange--France alone, of all
Europe, having no paper money; meaning no government paper money,
for there were bank notes of five hundred francs, and one thousand
francs. A government revenue of one hundred and sixty millions of
dollars was paid in gold and silver; a hard money currency, of five
hundred and fifty millions of dollars, saturated all parts of France
with specie, and made gold and silver the every day currency of
every man, woman and child, in the empire. These great results were
the work of six years, and were accomplished by the simple process
of gradually requiring hard money payments--gradually calling in the
assignats--increasing the branch mints to fourteen, and limiting the
Bank of France to an issue of large notes--five hundred francs and
upwards. This simple process produced these results, and thus stands
the French currency at this day; for the nation has had the wisdom
to leave untouched the financial system of Bonaparte.
I have repeatedly given it as my opinion--many of my speeches
declare it--that the French currency is the best in the world.
It has hard money for the government; hard money for the common
dealings of the people; and large notes for large transactions. This
currency has enabled France to stand two invasions, the ravaging of
300,000 men, two changes of dynasty, and the payment of a _milliard_
of contributions; and all without any commotion or revulsion in
trade. It has saved her from the revulsions which have afflicted
England and our America for so many years. It has saved her from
expansions, contractions, and ruinous fluctuations of price. It
has saved her, for near forty years, from a debate on currency.
It has saved her even from the knowledge of our sweet-scented
phrases: "sound currency--unsound currency; plethoric, dropsical,
inflated, bloated; the money market tight to-day--a little easier
this morning;" and all such verbiage, which the haberdashers' boys
repeat. It has saved France from even a discussion on currency;
while in England, and with us, it is banks! banks! banks!--morning,
noon, and night; breakfast, dinner, and supper; levant, and
couchant; sitting, or standing; at home, or abroad; steamboat, or
railroad car; in Congress, or out of Congress, it is all the same
thing: banks--banks--banks; currency--currency--currency; meaning,
all the while, paper money and shin-plasters; until our very brains
seem as if they would be converted into lampblack and rags.
The bill before the Senate dispenses with the further use of banks
as depositories of the public moneys. In that it has my hearty
concurrence. Four times heretofore, and on four different occasions,
I have made propositions to accomplish a part of the same purpose.
_First_, in proposing an amendment to the deposit bill of 1836,
by which the mint, and the branch mints, were to be included in
the list of depositories; _secondly_, in proposing that the public
moneys here, at the seat of Government, should be kept and paid
out by the Treasurer; _thirdly_, by proposing that a preference,
in receiving the deposits, should be given to such banks as should
cease to be banks of circulation; _fourthly_, in opposing the
establishment of a bank agency in Missouri, and proposing that the
moneys there should be drawn direct from the hands of the receivers.
Three of these propositions are now included in the bill before the
Senate; and the whole object at which they partially aimed is fully
embraced. I am for the measure--fully, cordially, earnestly for it.
Congress has a sacred duty to perform in reforming the finances,
and the currency; for the ruin of both has resulted from federal
legislation, and federal administration. The States at the formation
of the constitution, delivered a solid currency--I will not say
sound, for that word implies subject to unsoundness, to rottenness,
and to death--but they delivered a solid currency, one not liable
to disease, to this federal government. They started the new
government fair upon gold and silver. The first act of Congress
attested this great fact; for it made the revenues payable in gold
and silver coin only. Thus the States delivered a solid currency to
this government, and they reserved the same currency for themselves;
and they provided constitutional sanctions to guard both. The
thing to be saved, and the power to save it, was given to this
government by the States; and in the hands of this government it
became deteriorated. The first great error was General Hamilton's
construction of the act of 1789, by which he nullified that act,
and overturned the statute and the constitution together. The next
great error was the establishment of a national bank of circulation,
with authority to pay all the public dues in its own paper. This
confirmed the overthrow of the constitution, and of the statute of
1789; and it set the fatal example to the States to make banks,
and to receive their paper for public dues, as the United States
had done. This was the origin of the evil--this the origin of the
overthrow of the solid currency which the States had delivered to
the federal government. It was the Hamiltonian policy that did the
mischief; and the state of things in 1837, is the natural fruit
of that policy. It is time for us to quit it--to return to the
constitution and the statute of 1789, and to confine the federal
Treasury to the hard money which was intended for it.
I repeat, this is a measure of reform, worthy to be called a
reformation. It goes back to a fundamental abuse, nearly coeval
with the foundation of the government. Two epochs have occurred
for the reformation of this abuse; one was lost, the other is now
in jeopardy. Mr. Madison's administration committed a great error
at the expiration of the charter of the first Bank of the United
States, in not reviving the currency of the constitution for the
federal Treasury, and especially the gold currency. That error threw
the Treasury back upon the local bank paper. This paper quickly
failed, and out of that failure grew the second United States
Bank. Those who put down the second United States Bank, warned
by the calamity, determined to avoid the error of Mr. Madison's
administration: they determined to increase the stock of specie,
and to revive the gold circulation, which had been dead for thirty
years. The accumulation of eighty millions in the brief space of
five years, fifteen millions of it in gold, attest the sincerity of
their design, and the facility of its execution. The country was
going on at the rate of an average increase of twelve millions of
specie per annum, when the general stoppages of the banks in May
last, the exportation of specie, and the imposition of irredeemable
paper upon the government and the people, seemed to announce the
total failure of the plan. But it was a seeming only. The impetus
given to the specie policy still prevails, and five millions are
added to the stock during the present fiscal year. So far, then,
as the counteraction of the government policy, and the suppression
of the constitutional currency, might have been expected to result
from that stoppage, the calculation seems to be in a fair way to be
disappointed. The spirit of the people, and our hundred millions of
exportable produce, are giving the victory to the glorious policy
of our late illustrious President. The other great consequences
expected to result from that stoppage, namely, the recharter of
the Bank of the United States, the change of administration, the
overthrow of the republican party, and the restoration of the
federal dynasty, all seem to be in the same fair way to total
miscarriage; but the objects are too dazzling to be abandoned by
the party interested, and the destruction of the finances and the
currency, is still the cherished road to success. The miscalled
Bank of the United States, the soul of the federal dynasty, and the
anchor of its hopes--believed by many to have been at the bottom
of the stoppages in May, and known by all to be at the head of
non-resumption--now displays her policy on this floor; it is to
compel the repetition of the error of Mr. Madison's administration!
Knowing that from the repetition of this error must come the
repetition of the catastrophes of 1814, 1819, and 1837; and out of
these catastrophes to extract a new clamor for the revivification of
herself. This is her line of conduct; and to this line, the conduct
of all her friends conforms. With one heart, one mind, one voice,
they labor to cut off gold and silver from the federal government,
and to impose paper upon it! they labor to deprive it of the keeping
of its own revenues, and to place them again where they have been so
often lost! This is the conduct of that bank and its friends. Let
us imitate their zeal, their unanimity, and their perseverance. The
amendment and the bill now before the Senate, embodies our policy.
Let us carry them, and the republic is safe.
The extra session had been called to relieve the distress of the
federal treasury, and had done so by authorizing an issue of
treasury notes. That object being accomplished, and the great
measures for the divorce of Bank and State, and for the sole use of
gold and silver in federal payments, having been recommended, and
commenced, the session adjourned.