_March 3, 1837_.
The PRESIDENT OF THE UNITED STATES.
SIR: I have had the honor to receive the several questions proposed to
me by you on the bill which has just passed the two Houses of Congress,
entitled "An act designating and limiting the funds receivable for
the revenues of the United States," and which is now before you for
consideration. These questions may be arranged under three general
heads, and in that order I shall proceed to reply to them.
I. Will the proposed bill, if approved, repeal or alter the laws now in
force designating the currency required to be received in payment of the
public dues, for lands or otherwise?
Will it compel the Treasury officers to receive the notes of
specie-paying banks having the characteristics described in its first
and second sections?
In what respect does it differ from and how far will it change the joint
resolution of April 30, 1816?
_Answer_. In order to a correct reply to this question, and indeed to
any other question arising on this obscurely penned bill, we must first
obtain a general view of all its provisions.
The first section requires the Secretary of the Treasury to take
measures for collecting the public revenue, first, in the legal currency
of the United States (i.e., gold and silver), or, second, in the notes
of such specie-paying banks as shall from time to time conform to
certain conditions in regard to small bills, described in the section.
This section does not expressly give the Secretary power to direct that
any particular notes _shall_ be received for lands or for duties, but it
_forbids_ the receipt of any paper currency other than such bank notes
as are described in the section; and it requires the Secretary to adopt
measures, in his discretion, to effectuate that prohibition.
The second section extends the prohibition still further, by forbidding
the receipt of any notes which the banks in which they are to be
deposited shall not, under the supervision and control of the Secretary
of the Treasury, agree to pass to the credit of the United States as
_cash_; to which is added a proviso authorizing the Secretary to
withdraw the public deposits from any bank which shall refuse to receive
as cash from the United States any notes receivable under the law which
such bank receives in the ordinary course of business on general
deposit.
The third and last section allows the receipt, as heretofore, of land
scrip and Treasury certificates for public lands, and forbids the
Secretary of the Treasury to make any discrimination in the funds
receivable (other than such as results from the receipt of land scrip
or Treasury certificates) between the different branches of the public
revenue.
From this analysis of the bill it appears that, so far as regards bank
notes, the bill designates and limits then: receivableness for the
revenues of the United States, first, by forbidding the receipts of any
except such as have all the characteristics described in the first and
second sections of the bill, and, secondly, by restraining the Secretary
of the Treasury from making any discrimination in this respect between
the different branches of the public revenue. In this way the bill
performs, to a certain extent, the office of "designating and limiting
the funds receivable for the revenues of the United States," as
mentioned in its title; but it would seem from what has been stated
that it is only in this way that any such office is performed. This
impression will be fully confirmed as we proceed.
The bill, should it be approved, will be supplementary to the laws now
in force relating to the same subject, but as it contains no repealing
clause no provision of those former laws, except such as may be plainly
repugnant to the present bill, will be repealed by it.
The existing laws embraced in the above question, and applicable to the
subject, are:
_First. As to duties on goods imported_.--The seventy-fourth section
of the collection law of the 2d of March, 1799, the first of which,
reenacting in this respect the act of the 31st of July, 1789, provides
"that all duties and fees to be collected shall be _payable in money of
the United States or in foreign gold and silver coins_ at the following
rates," etc. The residue of the section, as to rates, has been altered
by subsequent laws, and the clause quoted was varied during the
existence of the Bank of the United States, the notes of which were
expressly made receivable in all payments to the United States, and
during the existence of the act making Treasury notes receivable by
such act; but in no other respects has it ever been repealed.
_Second. As to public lands.--_The general land law of the 10th of May,
1800, section 5, provided that no lands should be sold, "at either
public or private sale, for less than $2 per acre, and payment may be
made for the same by all purchasers _either in specie or in evidences of
the public debt of the United States,_ at the rates prescribed" by a
prior law. This provision was varied by the acts relative to Treasury
notes and the Bank of the United States in like manner as above
mentioned. The second section of the general land law of the 24th of
April, 1820, abrogated the allowance of credits on the sale of public
lands after the its day of July then next; required every purchaser at
public sale to make complete payment on the day of purchase, and the
purchaser at private sale to produce to the register a receipt from the
Treasurer of the United States or from the receiver of the district for
the amount of the purchase money. The proviso to the fourth section of
the same law enacted, in respect to reverted lands and lands remaining
unsold, that they should not be sold for less price than $1.25 per acre,
"nor on any other terms than that of _cash_ payment." This latter act
has been further modified by the allowing Virginia land scrip to be
received in payment for public lands.
_Third. As to both duties and lands_.--The joint resolution of the 30th
of April, 1816, provides that the Secretary of the Treasury "be required
and directed to adopt such measures as he may deem necessary to cause,
as soon as may be, all duties, taxes, debts, or sums of money accruing
or becoming payable to the United States to be collected and paid in the
legal currency of the United States, or Treasury notes, or notes of the
Bank of the United States, _as by law provided and declared_, or in
notes of banks which are payable and paid on demand in the said legal
currency of the United States, and that from and after the 20th day of
February next no such duties, taxes, debts, or sums of money accruing or
becoming payable to the United States as aforesaid ought to be collected
or received otherwise than in the legal currency of the United States,
or Treasury notes, or notes of the Bank of the United States, or in
notes of banks which are payable and paid on demand in the legal
currency of the United States." According to the opinion given by me as
a member of your Cabinet in the month of July last, and to which I still
adhere, this resolution was mandatory only as it respected the legal
currency of the United States, Treasury notes, and notes of the Bank
of the United States, and in respect to the notes of the State banks,
though payable and paid in specie, was permissive merely in the
discretion of the Secretary; and in accordance with this opinion has
been the practical construction given to the resolution by the Treasury
Department. It is known to you, however, that distinguished names have
been vouched for the opinion that the resolution was mandatory as to the
notes of all specie-paying banks; that the debtor had the right, at his
option, to make payment in such notes, and that if tendered by him the
Treasury officers had no discretion to refuse them.
It is thus seen that the laws now in force, so far as they _positively
enjoin_ the receipt of any particular currency in payment of public
dues, are confined to gold and silver, except that in certain cases
Virginia land scrip and Treasury certificates are directed to be
received on the sale of public lands. In my opinion, there is nothing in
the bill before me repugnant to those laws. The bill does not _expressly
_ declare and enact that any particular species of currency _shall be
receivable _in payment of the public revenue. On the contrary, as the
provisions of the first and second sections are chiefly of a _negative_
character, I think they do not take away the power of the Secretary,
previously possessed under the acts of Congress, and as the agent of
the President, to _forbid_ the receipt of any bank notes which are not
by some act of Congress expressly made absolutely receivable in payment
of the public dues.
The above view will, I think, be confirmed by a closer examination
of the bill. It sets out with the assumption that there is a currency
established by law (i. e., gold and silver); and it further assumes that
the public revenue of all descriptions ought to be collected exclusively
in such legal currency, or in bank notes of a certain character; and
therefore it provides that the Secretary of the Treasury _shall_ take
measures to effect a collection of the revenue "in the legal currency
of the United States, _or_ in notes of banks which are payable and paid
on demand in the said legal currency," under certain restrictions,
afterwards mentioned in the act.
The question then arises: Are bank notes having the requisite
characteristics placed by the clause just quoted on the same footing
with the legal currency, so as to make it the duty of the Secretary of
the Treasury to allow the receipt of them when tendered by the debtor?
In my judgment, such is not the effect of the provision.
If Congress had intended to make so important an alteration of the
existing law as to compel the receiving officers to take payment in the
bank notes described in the bill, the natural phraseology would have
been, "in the legal currency of the United States _and_ in notes of
banks which are payable and paid in the legal currency," etc. And it is
reasonable to presume that Congress would have used such, phraseology,
or would have gone on to make a distinct provision expressly declaring
that such bank notes _should be receivable, _as was done in the bank
charters of 1790 and 1816, and as was also done by the acts relative to
evidences of debt, Treasury notes, and Virginia land scrip. The form of
one of these provisions (the fourteenth section of the act incorporating
the late Bank of the United States) will illustrate the idea I desire
to present:
"SEC. 14. _And be it further enacted, _That the bills or notes of the
said corporation, originally made payable, or which shall have become
payable, on demand, _shall be receivable _in all payments to the United
States, unless otherwise directed by act of Congress."
The difference between the language there used and that employed in the
present bill is too obvious to require comment. It is true that the word
"or," when it occurs in wills and agreements, is sometimes construed to
mean "and," in order to give effect to the plain intent of the parties;
and such a construction of the word may sometimes be given when it
occurs in statutes, where the general intent of the lawmakers evidently
requires it. But this construction of the word in the present case is
not only unnecessary, but, in my opinion, repugnant to the whole scope
of the bill, which, so far from commanding the public officers to
receive bank notes in cases not required by the existing laws,
introduces several new prohibitions on the receipt of such notes.
Nor do I think this one of those cases in which a choice is given to the
debtor to pay in one or other of two descriptions of currency, both of
which are receivable by law. Such a choice was given by the land law of
the 10th of May, 1800, section 5, between specie and the evidences of
the public debt of the United States then receivable by law, and also
by the joint resolution of the 30th of April, 1816, between "the legal
currency of the United States, or Treasury notes, or notes of the Bank
of the United States, as by law provided and declared." The option given
by that resolution continued in force so long as the laws providing and
declaring that Treasury notes and notes of the Bank of the United States
should be receivable in payments to the United States, and ceased when
those laws expired. The distinction between that description of paper
currency which is by law expressly made receivable in payment of public
dues, and the notes of the State banks, which were only _permitted_ to
be received, is plainly marked in the resolution of 1816. While the
former are placed on the same footing with the legal currency, because
by previous laws it had been so "_provided and declared_" the latter
were left to be received or not received, at the discretion of the
Secretary of the Treasury, except that he was restricted from allowing
any to be received which were not payable and paid on demand in the
legal currency. The bank notes spoken of in the bill before me, having
never been made receivable by law, must be regarded as belonging to the
latter class, and not to the former; and there can therefore be no
greater obligation under the present bill, should it become a law, to
receive them in payment than there was to receive the paper of the
State banks under the resolution of 1816.
As to the difference between this bill and the joint resolution of 1816,
the bill differs from that resolution in the following particulars:
First. It says nothing of Treasury notes and the notes of the Bank of
the United States, which by the resolution of 1816 are recognized as
having been made receivable by laws then in force in payment of public
dues of all descriptions.
Second. It abridges the discretion left with the Secretary of the
Treasury by that resolution, by positively forbidding the receipt of
bank notes not having the characteristics described in the first and
second sections of the bill; whereas the receipt of some of the notes so
forbidden might, under the resolution of 1816, have been allowed by the
Secretary.
Third. It forbids the making of any discrimination in respect to the
receipt of bank notes between the different branches of the public
revenue; whereas the Secretary of the Treasury, under the resolution of
1816, was subject to no such restraint, and had the power to make the
discrimination forbidden by the bill, except as to the notes of the Bank
of the United States and Treasury notes.
This bill, if approved, will change the resolution of 1816, so far
as it now remains in force, in the second and third particulars just
mentioned, but in my opinion, as already suggested, will change it in
no other respect.
II. What is the extent of the supervision and control allowed by this
bill to the Secretary of the Treasury over the notes to be received by
the deposit banks?
And does it allow him to direct what particular notes shall or shall not
be received for lands or for duties?
_Answer_. After maturely considering, so far as time has been
allowed me, the several provisions of the bill, I think the following
conclusions may fairly be drawn from them when taken in connection with
the laws now in force, and above referred to, and that should it become
a law they will probably express its legal effect.
First. That the Secretary of the Treasury _can not direct _the receipt
of any notes except such as are issued by banks which conform to the
first section of the law and such as will be passed by the proper
deposit bank to the credit of the United States as _cash_.
Second. That he _may direct_ the receipt of notes issued by banks which
conform to the first section, provided the deposit bank in which the
notes are to be deposited shall agree to credit them as cash.
Third. That if the deposit bank in which the money is to be deposited
shall refuse to receive as cash the notes designated by the Secretary,
and which such bank receives in the ordinary course of business on
general deposit, he may withdraw the public deposits and select another
depository which will agree to receive them.
Fourth. That if he can not find a depository which will so agree, then
that the Secretary can not direct or authorize the receipt of any notes
except such as the deposit bank primarily entitled to the deposits will
agree to receive and deposit as cash.
Fifth. That although a deposit bank might be willing to receive from
the collectors and receivers, and to credit as _cash_, notes of certain
banks which conform to the first section, yet, for the reasons before
stated, I am of opinion that the Secretary is not _obliged_ to allow the
receipt of such notes.
Sixth. The Secretary is forbidden to make any discrimination in
_the funds receivable _"between the different branches of the public
revenue," and therefore, though he may forbid the receipt of the notes
of any particular bank or class of banks not excluded by the bill, and
may forbid the receipt of notes of denominations larger than those named
in the bill, yet when he issues any such prohibition it must apply to
_all_ the branches of the public revenue.
Seventh. If I am right in the foregoing propositions, the result will be
that the proposed law will leave in the Secretary of the Treasury power
to _prohibit_ the receipt of particular _notes provided his prohibition
apply to both lands and duties, _and power to _direct_ what particular
notes allowed by the law shall be received _provided he can find a
deposit bank which will agree to receive and [credit] them as cash_.
III. Are the deposit banks the sole judges under this bill of what
notes they will receive, or are they bound to receive the notes of every
specie-paying bank, chartered or unchartered, wherever situated, in any
part of the United States?
_Answer_. In my opinion the deposit banks, under the bill in question,
will be the sole judges of the notes to be received by them from any
collector or receiver of public money, and they will not be bound to
receive the notes of any other bank whose notes they may choose to
reject, provided they apply the same rule to the United States which
they apply to their own depositors. In other words, the general rule as
to what notes are to be received as cash, prescribed by each deposit
bank for the regulation of its ordinary business, must be complied with
by the collectors and receivers whose moneys are to be deposited with
that bank. But it will not therefore follow that those officers will be
bound to receive what the bank generally receives, because, as already
stated, they may refuse of their own accord, or under the direction of
the Secretary of the Treasury, any bank notes not expressly directed by
act of Congress to be received in payment of the public dues.
I have thus answered the several questions proposed on the bill before
me; and though I have been necessarily obliged to examine the subject
with much haste, I have no other doubts as to the soundness of the
construction above given than such as belong to discussions of this
nature and to a proper sense of the fallibility of human judgment. It
is, however, my duty to remind you that very different opinions were
expressed in the course of the debates on the proposed law by some of
the members who took part therein. It would seem from these debates that
the bill, in some instances at least, was supported under the impression
that it would compel the Treasury officers to receive all bank notes
possessing all the characteristics described in the first and second
sections, and that the Secretary of the Treasury would have no power
to forbid their receipt. It must be confessed that the language is
sufficiently ambiguous to give some plausibility to such a construction,
and that it seems to derive some support from the refusal of the House
of Representatives to consider an amendment reported by the Committee of
Ways and Means of that House, which would substantially have given the
bill, in explicit terms, the interpretation I have put on it, and have
removed the uncertainty which now pervades it. Under these circumstances
it may reasonably be expected that the true meaning of the bill, should
it be passed into a law, will become a subject of discussion and
controversy, and probably remain involved in much perplexity and doubt
until it shall have been settled by a judicial decision. How far these
latter considerations are to be regarded by you in your decision on the
bill is a question which belongs to another place, and on which,
therefore, I forbear to enlarge in this communication. I have the honor
to be, sir, with high respect, your obedient servant,