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'SPEECH-

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HON. HENRY CLAY, OF KENTUCKY,
KSTABLISHJNB

K deliberate design, on the part of the late aud present Executive of the United
States,

BREAK DOWN THE WHOLE BANKING SYSTEM
OF T H E UNITED

STATES,

COMMKNCING WITH THE BANK OF THE UNITED STATES, AND
TERMINATING WITH THE STATE BANKS,

CREATE O N THEIR RUINS A G O V E R N M E N T TREASURY BANK,

UNDER THE EXCLUSIVE CONTROL OP THE EXECUTIVE;
AND IX

REPLY TO THE SPEECH OF THE HON. J. C. CALHOUN,
OF SOUTH CAROLINA,

SUPPORTING THAT TREASURY BANK.

Delivered in the Senate of the United States, February 19,* 1838. •

WASHINGTON:
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1838.

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SPEECH.
Mr. CLAY rose, and addressed the Senate as follows: I have seen some
public service, pasted through maoy troubled times, and often addressed pub*
lie assemblies, in this Capitoi and elsewhere; but never before have I
risen in a deliberative body, under more oppressed feelings, or with a deeper
sense of awful responsibility. Never before have I risen to express my opin­
ions upon any public measure, fraught with such tremendous consequences to
the welfare and prosperity of the country, and so perilious to the liberties of
the people, as I solemnly believe the bill under consideration will be. If you
knew, sir, what sleepless hours reflection upon it has cost me, if you knew
with what fervor and sincerity 1 have implored Divine assistance to strengthen
and sustain me in my opposition to it, i should have credit with you, at least,
tar the sincerity of my convictions, if I shall be so unfortunate as not to have
year concurrence as to the dangerous character of the measure. And I
■eve thanked my God that he has prolonged my life until the present time,
to enable me to exert myself in the service of my country, against a project
far transcending in pernicious tendency any.that I have ever had occasion to
consider* 1 thank hint for the health I am permitted to enjoy; I thank him
for the soft and sweet repose which I experienced last night; I thank him for
the bright and glorious sun which shines upon us this day.
It is not my purpose, at this time, Mr. President, to go at large into a con­
sideration of the causes which have led to the present most disastrous state
of public aflaira. That doty was performed by others, and myself, at the
extra session of Congress. It was than clearly shown that it sprung from
the ill-advised and unfortunate measures of executive administration. I
new will content myself with saying that, on the 4th day of March, 1829,
Andrew Jackson, not by the blessing of God, was made President of these
United States; that the country then was eminently prosperous; that its
currency was as sound and safe as any that a people were ever blessed with;
that, throughout the wide extent of this whole Union, it pesseaaed a uniform
value; and that exchanges were conducted with such regularity and perfec­
tion, that lands could be transmitted from one extremity of the Union to the
ether, with the least possible risk or loss. In this encouraging condition of
the business, of the country, it remained for several years, until after the war,
wemooty wages against the late Bank of the United States, was completely
seeoessfui, by the overthrow of that invaluable tnstitul ion. What our present
situation is, it is as needless to describe as it is painful to contemplate. First
felt in our greet commercial marts, distress and embarrassment have pene­
trated into the interior, and now pervade almost the entire Union. It has
bean justly remarked by one of the soundest and most practical writers that I
he*e bad occasion teconsult, that "all convulsions in the circulation and comsnerce of every country must originate in the operations of the Governaseet, or in the mistaken views and erroneous measures of those possessing
the power of inflaeocing credit and circulation; for they ore not otherwise

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susceptible of convulsion, and if left to themselves, they will find their own
level, and flow nearly in pne uniform stream."
Yes, Mr. President, we all have but too melancholy a consciousness of the
unhappy condition of our country. We all too well know, that our noble
and gallant ship lies helpless and immoveable upon breakers, dismasted, the
surge beating over her venerable sides, and the crew threatened with in­
stantaneous destruction. How came she there \ Who was the pilot at the
helm when she was stranded t The party in power! The pilot was aided
by all the science and skill, by all the chart* and instruments of such distin­
guished navigators as Washington, the Adamses, Jefferson, Madison, and
Monroe ; and yet he did not, or could not, save the public vessel. She was
placed in her present miserable condition by his bungling navigation, or by
his want of skill and judgment. It is impossible for him to escape from one
or the other horn of that dilemma. I leave him at liberty to choose between
them.
I shall endeavor, Mr. President, in the course of the address I am about
making, to establish certain propositions, which I believe to be incontesta­
ble ; and, for the sake of perspicuity, I will state them severally to tjie Senate.
I shall contend—
1st That it was the deliberate purpose and fixed design of the late admin­
istration to establish a Government bank—a Treasury bank—to be adminis­
tered and controlled by the Executive department.
2d. That, with that view, and to that end, it was its aim and intention to
overthrow the whole banking system, as existing in the United States when
that administration came into power, beginning with the Bank of the United
States, and ending with the State banks.
3d. That the attack was first confined, from considerations of policy, to
the Bank of the United States; but that, after its overthrow was accomplish­
ed, it was then directed, and has since been continued, against the State
banks.
4th. That the present administration, by its acknowledgments, emanating
from tbe highest and most authentic source, has succeeded to the principles,
plans, and policy, of the preceding administration, and stands solemnly
pledged to complete and perfect them.
And, 5th. That the bill under consideration is intended to execute the
pledge, by establishing, upon the ruins of the late Bank of the United States,
and the State banks, a Government bank, to be managed and controlled by
tbe Treasury Department, acting under the commands of the President of
the United States.
I believe, solemnly believe, the truth of every one of these five proposi­
tions. In the support of them, I shall not rely upon any gratuitous surmises
or vague conjectures, but upon proofs, clear, positive, undeniable, and de­
monstrative. To establish the first four, I shall adduce evidence of the
highest possible authenticity, or facts admitted or undeniable, and fair rea­
soning founded on them. And as to the last, tbe measure under consideration,
I think the testimony, intrinsic and extrinsic, on which I depend, stamps,
beyond all doubt, its true character as a Government bank, and ought to
carry to the mind of the Senate the conviction which I entertain, and in
which I feel perfectly confident the whole country will share.
1. My first proposition is, that it was the deliberate purpose and fixed design
of the late administration to establish a Government bank—a Treasury bank—
to be administered and controlled by the Executive Department. To estab­
lish its troth, the first proof which I offer is tbe following extract from Presi­
dent Jackson's annual message of December, 1829: " Tbe charier of the

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Bask' of the United States expires in 1886, and its stockholders wHl most
probably apply for a renewal of their privileges. In order to avoid the evHs
resulting from precipitancy, in a measure involving such important principles,
and such deep pecuniary interests, I feel that I cannot, in justice to the par­
ties interested, too soon present il to the consideration of the Legislature and
the people. Both the constitutionality and the expediency of the law crea­
ting this bank, are well questioned by a large portion of our fellow-citizens ;
and it must be admitted by all that it has failed in the great end of estab­
lishing a uniform and sound currency.
" Under these circumstances, if such an institution is deemed essential to
the fiscal operations of the Government, I submit to the wisdom of the Legislature, whether a national one, founded upon the credit of the Government
and its revenues, might not be devised, which would avoid all constitutional
difficulties, and, at the same time, secure all the advantages to the Govern­
ment and the country that were expected to result from the present bank.'*
This was the first open declaration of that implacable war against the late
Bank of the United States, which was afterwards waged with so much fero­
city. It was the sound of the distant bugle, to collect together the dispersed
and scattered forces, and prepare for battle. The country saw with surprise
the statement that u the constitutionality and expediency of the law creating
this bank are well questioned by a large portion of our fellow-citizens," when,
in truth and in fact, it was well known that but few then doubted the constitu­
tionality, and none the expediency of it. And the assertion excited much
greater surprise, that u i i must be admitted by all that it has failed in the
great end of establishing a uniform and sound currency." In this message,
too, whilst a doubt is intimated as to the utility of such an institution, Presi­
dent Jackson clearly first discloses his object to establish a national one,
founded upon the credit of the Government and its revenues. His language
is perfectly plain and unequivocal. Such a bank, founded upoti the credit
of the Government and its revenues, would secure all the advantages to the
Government and the country, he tells us, that were expected to result from
the present bank.
In his annual message of the ensuing year, the late President says: u The
importance of the principles involved in the inquiry, whether it will be proper
to recharter the Bank of the United States, requires that I should again call
the attention of Congress to the subject. Nothing has occurred to lessen, in
any degree, the dangers which many of our citizens apprehend from that in­
stitution, as at present organized. In the spirit of improvement and com­
promise which distinguishes our country and its institutions, it becomes us to
inquire whether it be not possible to secure the advantages afforded by the
present bank, through the agency of a Bank of the United States, so modified in its principles as to obviate constitutional and other objections.
" It is thought practicable to organize such a bank, with the necessary
officers, as a branch of the Treasury Department, based on the public and
individual deposites, without power to make loans, or purchase property,
which shall remit the funds of Government; and the expense of which may
be paid, if thought advisable, by allowing its officers to sell bills of exchange,
to private individuals, at a moderate premium. Not being a corporate body,
having no stockholders, debtors, and property, and but few officers, it would
not be obnoxious to the constitutional objections which are urged against the
present bank; and having no means to operate on the hopes, fears, or inter­
ests, of large masses of the community, it would be shorty of the influence
which makes that bank formidable."
In this message, President Jackson, after again adverting to the imaginary
dangers of a Bank of the United States, recurs to his favorite project, and

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inquires "whether it be not possible to secure the advantages afforded ,by
the present liank, through the agency of a Bank of the United States, so
modified in its principles and structure as to obviate constitutional and other
objections." And to dispel all doubts of the timid, and to confirm the wa­
vering, he declares that it is thought practicable to organize such a bank,
with the necessary officers, as a branch of the Treasury Department. As a
branch of the Treasury Department!
The very scheme now under consi­
deration. And, to defray the expenses of such an anomalous institution, he
suggests that the officers of the Treasury Department may turn bankers and
brokers, and sell bills of exchange to private individuals at a moderate pre­
mium !
In his annual message of the year 1831, upon this subject, he was brief
and somewhat covered in his expressions. But the fixed purpose which he
entertained is sufficiently disclosed to the attentive reader. He announces
that, " entertaining the opinions heretofore expressed in relation to the Bank
of the United States, as at present organized, I felt it my duty, in my for­
mer messages, frankly to disclose them, in order that the attention of the
Legislature and the people should be seasonably directed to that important
subject, and that it might be considered, and finally disposed of, in a manner
best calculated to promote the ends of the constitution, and subserve the
public interests." What were the opinions " heretofore" expressed we have
clearly seen. They were adverse to the Bank of the United States, as at
present organized, that is to say, an organization with any independent cor­
porate Government; and in favor of a national bank which should be sa con­
stituted as to be subject to exclusive executive control.
At the session of 1831-'32, the question of the recharter of the Bank of
the United States came up; and although the attention of Congress and the
country had been repeatedly and deliberately before invited to the consider­
ation of it t\y President Jackson himself, the agitation of it was now declared
by him and his partisans to be precipitate and premature. Nevertheless,
the country and Congress, conscious of the value of a safe and sound uniform
currency, conscious that such a currency had been eminently sopplied by
the Bank of the United States, and unmoved by all the outcry raised against
that admirable institution, the recharter commanded large majorities in both
Houses of Congress. Fatally for the interests of this country, the stern selfwill of General Jackson prompted him to risk every thing upon its overthrow.
On the 10th of July, 1832, the bill was returned with his veto; from which
the following extract is submitted to the attentive consideration of the Sen­
ate : " A Bank of the United States is, in many respects, convenient for the
Government and useful to the people. Entertaining this opinion, and deeply
impressed with the belief that some of the powers and privileges possessed
by the existing bank are unauthorized by the constitution, subversive of the
rights of the States, and dangerous to the liberties of the people, I felt it my
duty, at an early period of my administration, to call the attention of Con­
gress to the practicability of organizing an institution, combining all its ad'
vantages, and obviating these objections. I sincerely regret that, in the act
before me, I can perceive none of those modifications of the bank charter
which are necessary, in my opinion, to make it compatible with justice, with
sound policy, or with the constitution of our country."
" That a Bank of the United States, competent to all the duties which
may be required by Government, might be so organized as not to infringe
upon our own delegated powers, or the reserved rights of the States, I do
not entertain a doubt. Had the Executive been called upon to furnish the
project of such an institution, the duty would have been cheerfully performed*
In the absence of such a call, it is obviously proper that he should confine

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himsejf to pointing toat those prominent features in the act presented, which,
in his opinion, make it incompatible with the constitution and sound policy."
President Jackson admits, in the citation which has just been made, that
a Bank of the United States is, in many respects, convenient for the Gov­
ernment ; and reminds Congress that he had, at an early period of his ad­
ministration, called its attention to th^ practicability of so organizing such
an institution as to secure all ks advantages, without the defects of the exist­
ing bank. It is perfectly manifest that he alludes to his previous recommend­
ations of a Government—a Treasury bank. In the same message he tells
Congress* that if he had been called upon to furnish the project of such an
institution, the duty would have been cheerfully performed. Thus it appears
that he had not only settled in his mind the general principle, but had adjust*
ed the details of a Government bank, to be subjected to executive control;
and Congress is even chided for not calling upon him to present them. The
bill now under consideration, beyond all controversy, is the very project
which he had in view, and is to consummate the work which he began. I
think, Mr. President, that you must now concur with me in considering the
first proposition as fully maintained. I pass to the second and third, which,
on account of their intimate connexion, I will consider together.
2. That, with the view of establishing a Government bank, it was the set­
tled aim and intention of the late administration to overthrow the whole
banking system of the United States, as existing in the United States when
that administration came into power, beginning with the Bank of the United
States, and ending with the State banks.
3. That the attack wasfirstconfined, from considerations of policy, to the
Bank of the United States ; but that, after its overthrow was accomplished,
it was then directed, and has since been continued, against the State banks,
We are not bound to inquire into the motives of President Jackson for de­
siring to subvert the established monetary and financial system which be
found in operation; and yet some examination into those which probably in­
fluenced his mind, is not without utility. These are to be found in his pecu­
liar constitution and character. His egotism and vanity prompted him to
subject every thing to his will; to change, to remould, and retouch, every thing.
Hence the proscription which characterized his administration, the universal
expulsion from office, at home and abroad, of all who were not devoted to
him, and the attempt to render the Executive department of Government, to
use a favorite expression of his own, a complete "unit." Hence his seizure
of the public deposites in the Bank of the United States, and his desire to
unite the purse with the sword. Hence his attack upon all the systems of
policy which he found in practical operation; on that of internal improve­
ments, and on that of the protection of national industry. He was animated
by the same sort of ambition which induced the master-mind of the age, Na)leon Bonaparte, to impress his name upon every thing in France. When
was in Paris, the sculptors were busily engaged chiselling out the famous
N., sp odious to the Bourbon line, which had been conspicuously carved
on the palace of the Tuilleries, and on other public edifices and monu­
ments in the proud capital of France. When, Mr. President, shall we see
effaced all traces of the ravages committed by the administration of Andrew
Jackson! Society has been uprooted, virtue punished, vice rewarded,
and talents and intellectual endowments despised ; brutality, vulgarism, and
loco-focoism upheld, cherished, and countenanced. Ages will roll around
before the moral and political ravages which have been committed will, I
fear, cease to be discernible. General Jackson's ambition was to make
bis administration an era in the history of the American Government, and
he has accomplished that object of his ambition ; but I trust that it will be

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an era to be shunned as sad and lamentable, and not followed and imitated
as supplying sound maxims and principles of administration.
[ have heard his hostility to banks ascribed to some collision which he had
with one of them, during the late war, at the city of New Orleans; and it is
possible that may have had some influence upon his mind. The immediate
cause, more probably, was the refusal of that perverse and unaccommodating
gentleman, Nick Biddle, to turn out of the office of President of the New
Hampshire branch of the Bank of the United States, at the instance of his
Excellency Isaac Hill, in the summer of 1829, that giant-like person, Jere­
miah Mason—giant in body, and giant in mind. War and strife, endless war
and strife, personal or national, foreign or domestic, were the aliment of the
late President's existence. War against the bank, war against France, and
strife and contention with a countless number of individuals. The wars with
Black Hawk and the Seminoleg were scarcely a luncheon for his voracious
appetite. And he made his exit from public life, denouncing war and ven­
geance against Mexico and the State banks.
My acquaintance with that extraordinary man commenced in this city, in
the fall of 1815 or 1816. It was short, but highly respectful, and mutuallycordial. I beheld in him the gallant and successful general, who, by the glo­
rious victory of New Orleans, bad honorably closed the second war of our
independence, and I paid him the homage due to that eminent service* A
few years after, it became my painful duty to animadvert, in the House of
Representatives, with the independence which belongs to the representative
character, upon some of his proceedings in the conduct of the Seminole war,
which I thought illegal and contrary to the constitution and the law of nations.
A non-intercourse between us ensued, which continued until the fall of 1824,
when, he being a member of the Senate, an accommodation between us was
sought to be brought about by the principal part of the delegation from his
own State. For that purpose, we were invited to dine with them at Claxton's
boarding-house, on Capitol hill, where my venerable friend from Tennessee
[Mr. WHITE] and his colleague on the Spanish commission, were both present.
I retired early from dinner, and was followed to the door by General Jackson
and the present minister of the United States at the court of Madrid. They
pressed me earnestly to take a seat with them in their carriage. My faithful
servant and friend, Charles, was standing at the door, waiting for me, with
my own. I yielded to their urgent politeness, directed Charles to folldw
with my carriage, and they sat me down at my own door. We afterwards
frequently met, with mutual respect and cordiality; dined several times to­
gether, and reciprocated the hospitality of our respective quarters. This
friendly intercourse continued until the election, in the House of Representa­
tives, of a President of the United States came on in February, 1825. I
gave the vote which, in the contingency that happened, 1 told my colleague,
[Mr. CRITTENDEN,] who sits before me, prior to my departure from Kentucky,
in November, 1824, and told others, that I should give. All intercourse
ceased between General Jackson and myself. We have never since, except
once accidentally, exchanged salutations, nor met except on occasions when
we were performing the last offices towards deceased members of Congress or
other officers of Government. Immediately after my vole, a rancorous war
was commenced against me, and all the barking dogs let loose upon me. I
shall not trace it during its ten years1 bitter continuance. But I thank my
God that I stand here, firm and erect, unbent, unbroken, unsubdued, unawed,
ready to denounce the mischievous measures of his administration, and ready
to denounce this, its legitimate offspring, the most pernicious of them all.
His administration consisted of a succession of astounding measures,

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which fell on the public ear like repeated bursts of loud and appalling thun­
der. Before the reverberations of one peal had ceased, another and another
came, louder and louder, and more terrifying. Or rather, it was like a vol­
canic mountain, emitting frightful eruptions of burning lava. Before one
was cold and crusted ; before theyoices of the inhabitants of buried villages
and cities were hushed in eternal silence, another, more desolating, was
vomited forth, extending wider and wider the circle of death and destruction.
Mr. President, this is no unnecessary digression. The personal character
of such a chief as I have been describing, his passions, his propensities, the
character of his mind, should be all thoroughly studied, to comprehend clearly
his measures and his administration. But I will now proceed to more direct
and strict proofs of my second and third propositions. That he was resolved
to break down the Bank of the United States, is proven by the same citations
from Wis messages which I have made, to exhibit his purpose to establish a
Treasury bank, is proven by his veto message, and by the fact that he did
destroy it. The war against all other banks was not originally announced,
because he wished the State banks to be auxiliaries in overthrowing the
Bank of the United States, and because such an annunciation would have
been too rash and shocking upon the people of the United States for even his
tremendous influence. It was necessary to proceed in the work with cau­
tion, and to begin with that institution against which could be imbodied the
greatest amount of prejudice. The refusal to recharter the Bank of the
United States was followed by a determination to remove from its custody
the public money of the United States. That determination was first whis­
pered in this place, denied, again intimated, and finally, in September, 1833,
executed. The agitation of the American public which ensued, the warm
and animated discussions in the country and in Congress, to which that
unconstitutional measure gave rise, are all fresh in our recollection. It was
necessary to quiet the public mind, and to reconcile the people to what had
been done, before President Jackson seriously entered upon his new career of
hostility to the State banks. At the commencement of the session of .Con­
gress in 1834, he imagined a sufficient calm had been produced, and, in
his annual message of that year, the war upon the State banks was opened.
In that message he says:
" It seems due to the safety of the public funds remaining in that bank, and to the hon­
or of the American People, that measures be taken to separate the Government entirely
from an institution so mischievous to the public prosperity, and so regardless of the Constitniura and laws. By transferring the public depositee, by appointing other pension agents,
atfiurss it had the power, by ordering the discontinuance of the receipt of bank checks in
payment of the public dues after the first day of January next, the Executive has exerted
all its lawful authority to sever the connexion between the Government and this faithless
corporation."

In this quotation it will be seen that the first germe is contained of that
separation and divorce of the Government from banks, which has recently
made such a conspicuous figure. It relates, it is true, to the late Bank of
the United States, and he speaks of separating and severing the connexion
between the Government and that institution. But the idea, once developed,
was easily susceptible of application to all banking institutions. In the mes­
sage of the succeeding year, his meditated attack upon the State banks is
more distinctly disclosed. Speaking of a sound currency, he says:
" In considering the means of obtaining so important an end, [that is, a sound currency,]
we most set aside all calculations of temporary convenience, and be influenced by those
only that ale in harmony with the true character and permanent interests of the Republic.
We must recur Xofirst principles, and see what it is that has prevented the legislation of
Congress and the States on the subject of currency from satisfying the public expectation,
and realising results corresponding to those which have attended the action of our system

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when truly consistent with the great principle of equality upon which tit rests, find wifth
that spirit of forbearance and mutual concession and generous patriotism which w*s origin­
ally, and must ever continue to be, the vital element of our Union.
41
On this subject, I am sure that I cannot be mistaken in ascribing our want of suc­
cess to the undue countenance which has been afforded to the spirit of monopoly. AM
the serious dangers which our system has yet encountered may be traced to the resort to
implied powers, and the use qf corporations clothed with privileges, the effect of which is
to advance the interests of the few at the expense of the many. W e have felt but one
class of these dangers, exhibited in the contest waged by the Bank of the United States
against the Government for the last four years. Happily they have been obviated for the
present by the indignant resistance of the People; but we should recollect that the princi­
ple whence they sprang is an ever-aciive one, which will not fail to renew its efforts in the
same and in other forms, so long as there is a hope of success, founded either on the inat­
tention of the People, or the treachery of their representatives to the subtle progress of ite
influence."
♦ * * ♦ « We are now to see whether, in the present favorable condition of the
country, we cannot take an effectual stand against this spirit of monopoly, and practically
prove, in respect to the currency, as well as other important interests, that there is n# ne­
cessity for so extensive a resort to it as that which has been heretofore practised."
* * ♦ * " It has been seen that without the agency of a great moneyed monopoly
the revenue can be collected, and conveniently and safely applied to all the purposes of the
public expenditure. It is also ascertained that, instead of being necessarily made to pro­
mote the evils of an unchecked paper system, the management of the revenue can be made
auxiliary to the reform which the Legislatures of several of the States have already com­
menced in regard to the suppression of small bills; and which has only to be fostered by
proper regulations on the part of Congress^ to secure a practicat return, to the extent re­
quired for the security of the currency, to the constitutional medium."
As in the instance of the attack upon the Bank of the United States, the
approach to the State banks is slow, cautious, and insidious. He reminds
Congress and the country that all calculations of temporary convenience must
be set aside ; that we must recur to first principles; and that we must see
what it is that has prevented the legislation of Congress and the States on
the subject of the currency from satisfying public expectation. He declares
his conviction that the want of success has proceeded from the undue coun­
tenance which has been afforded to the spirit of monopoly. All the serious
dangers which our system has yet encountered may be traced to the resort
to implied powers, and to the use of corporations. We have felt, he says,
but one class of these dangers in the contest with the Bank of the United
States, and he clearly intimates that the other class is the State banks. W e
are now to see, he proceeds, whether in the present favorable condition of
the country, we cannot take an effectual stand against this spirit of monopoly*
Reverting to his favorite scheme of a Government bank, he says it is ascer­
tained that, instead of being made necessary to promote the evils of an
unchecked paper system^ the management of the revenue can be made
auxiliary to the reform which he is desirous to introduce. The designs of
President Jackson against the State banks are more fully developed and
enlarged upon in his annual message of 1836, from which I beg leave to
quote the following passages:
" I beg leave to call your attention to another subject intimately associated with the
preceding onfi—the currency of the country.
" It is appatent, from the whole context of the Constitution, as well as the history of the
times that gave birth to it, that it was the purpose of the convention to establish a curren­
cy consisting of the vrecious metals. These, from their peculiar properties, which render­
ed them the standard of value in all other countries, were adopted in this, as well to esta­
blish its commercial standard, in reference to foreign countries, by a permanent rule, as to
exclude the use of a mutable medium of exchange, such as of certain agricultural com­
modities, recognised by the statutes of some States, as a tender for debts, or the still more
pernicious expedient of a paper currency/'
" Variableness must ever be tbe characteristic of a currency of which the precious me­
tals are not the chief ingredient, or which can be expanded or contracted without regard
to the principles that regulate the value of those metals as a standard in the general trade
of the world. With us, bank issues constitute such a currency, and must ever do so, un­
til they are made dependent on those just proportions of gold and silver, as a circulating

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J»*ftm», which eatpmwe has proved to be hecessarj, not only in this, bat in tU other
commercial countries. Where those proportions are not infused into the circulation, and
So not control it, it is manifest that prices must vary according to the tide of bank issues,
and the value and stability of property must stand exposed to all the uncertainty which
attends the administration of institutions that are constantly liable to4hc temptation of an
interest distinct from that of the commuiyty in which they are established."
11
But although various dangers to our Republican institutions have been obviated by
the failure of that bank to extort from the uovcrnment a renewal of its charter, it is ob­
vious that little has been accomplished, except a salutary change of public opinion towards
ffeetoring to the country the sound currency provided for in the Cor-stitmicn. In the acts
of several of the States prohibiting the circulation of small notes, and the auxiliary enact­
ments of Congress at the last session, forbidding their receinion or payment on public ac­
count, the true policy of the country has been advanced, anu a larger portion of the precious
metals infused into our circulating medium. These measures will probably be followed
up in due time by the enactment of State laws, banishing from circulation bank notes of
•till higher denominations; and the object may be materially promoted by further acts of
Congress, forbidding the employment, as fiscal agents, of such banks as issue notes of low
deootm nations, and throw impediments in the way of thecirculation of gold and silver.
" T h e effects of an extension of bank credits and overissues of bank paper h|ve been
strifcinpty illustrated in the sales of the public lands. From the returns made by the va­
rious registers and receivers in the early part of last summer, it was perceived that the
receipt* arising from the sales of public lands were increasing to an unprecedented amount.
In effect, however, these receipts amount to nothing more than credit* in banks. The
banks lent out their notes to speculators ; they were paid to the receivers, and immediately
returned to the banks, to be lent out again and again, being mere instruments to transfer
lo speculators the most valuable public land, and pay the Government by a credit on the
books of the banks. Those credits on the books of some of the Western banks, usually
called deposites, were already greatly beyond their immediate means of payment, and
were rapidly increasing. Indeed, each speculation furnished means for another ; for no
sooner had one individual or company paid in the notes, than tbey were immediately lent
to another for a like purpose; and the banks were extending their business and their
issues BO largely as to alarm considerate men, and render it doubtful whether these bank
credits, if permitted to accumulate, would ultimately be of the least value to the Government. The spirit of expansion and speculation was not confined to the deposite banks,
bat pervaded the whole multitude of banks throughout the Union, and was giving rise to
new institutions to aggravate the evil.
"The safety of the public funds, and the interest of the People generally, required that
these operations should be checked ; and it became the duty or every branch of the Gene­
ra! and State Governments to adopt all legitimate and proper means to produce that salu­
tary effect. Under this view of my duty, I directed the issuing of the order, which will be
lard before you by the Secretary of the Treasury, requiring payment of the public lands
sold to be made in specie, with an exception untd the 15th of the present month in favor
of actual settlers. This measure has produced many salutary consequences. It checked
the career of the Western banks, and gave them additional strength in anticipation of the
rasure which has since pervaded our Eastern, as well as the European commercial cities*
y preventing the expansion of the credit system, it measurably cut off the means of spe­
culation, and retarded its progress in monopolizing the most valuable of the public lands.
ITbas tended to save the new Slates from a non-resident proprietorship—one of the greatest
obstacles to the advancement of a new country, and the prosperity of an old one. It has
tended to keep open the public lands for entry by emigrants at Government prices, instead
of their being compelled to putchase of speculators at double or treble prices. And it is
conveying into the interior large sums in silver and gold, there to enter permanently into
the currency of the country, and place it on afirmerfoundation. It is confidently believ­
ed that the country will find, in the motives which induced that order, and the happy con­
sequences which have ensued, much to commend, and nothing to condemn."

E

It is seen that he again calls the attention of Congress to the currency of
the country, alleges that it was apparent from the whole context of the con*
stitution, as well as the history of the times that gave birth to it, that it was
the purpose of the convention to establish a currency consisting of the pr«cioustutah;
imputes variableness and a liability to inordinate contraction
and expansion to the existing paper system, and denounces bank issues, as
being an uncertain standard. He felicitates himself upon the dangers which
haw been obviated by the overthrow of the Bank of the United States, but
declares that little lias been yet done, except to produce a salutary change of
public opinion towards restoring to the country the sound currency provided
for in ike constitution. I will here say, in passing, that all thb outcry about,

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the precious metals, gold, and the constitutional currency, has been put forth
to delude the people, and to use the precious metals as an instrument to break
down the banking institutions of the States, and to thus pave the way for the
ultimate establishment of a great Government bank. In the present ad­
vanced state of civilization, in the present condition of the commerce of the
world, and in the actual relations of trade and intercourse between the
different nations of the world, it is perfectly chimerical to suppose that the
currency of the United States should consist exclusively, or principally, of
the precious metals.
In the quotations which I have made from the last annual message of
General Jackson, he speaks of the extension of bank credits, and the over­
issues of bank paper, in the operations upon the sales of public lands. In his
message of only the preceding year, the vast amount of those sales had been
dwelt upon with peculiar complaisance, as illustrating the general prosperity
of the country, and as proof of the wisdom of his administration. But now
that which had been announced as a blessing is deprecated as a calamity.
Now, his object being to assail the banking: institutions of the States, and to
justify that fatal Treasury order, which I shall hereafter have occasion to
notice, he expresses his apprehension of the danger to which we are exposed
of losing the public domain, and getting nothing for it but bank credits. He
describes, minutely, the circular process by which the notes of the banks
passed out of those institutions to be employed in the purchase of the public
lands, and returned again to them in the form of credits to the Government.
He forgets that Mr. Secretary Taney, to reconcile the people of the United
States to the daring measure of removing the public deposites, had stimulated
the banks to the exercise of great liberality in the grant of loans. He informs
us, in that message, that the safety of the public funds, and the interests of
the people generally, required that these copious issues of the banks should
be checked, and that the conversion of the public lands into mere bank cred­
its should be arrested. And his measure to accomplish these objects was
that famous Treasury order, already adverted to. Let us pause here for a
moment, and contemplate the circumstances under which it was issued. The
principle of the order had been proposed and discussed in Congress. But
one Senator, as far as I know, in this branch of the Legislature, and not a
solitary member, within my knowledge, in the House of Representatives, was
in favor of it. And yet, in about a week after the adjournment of Congress,
the principle, which met with no countenance from the legislative authority,
was imbodied in the form of a Treasury edict, and promulgated under the
executive authority, to tho astonishment of the people of the United States!
If we possessed no other evidence whatever of the hostility of President
Jackson to the State banks of the United States, that order would supply
conclusive proof. Bank notes, bank issues, bank credits, were distrusted and
denounced by him. It was proclaimed to the people that they were un­
worthy of confidence. The Government could no longer trust in their secu­
rity. And at a moment when the banking operations were extended, and
stretched to their utmost tension; when they were almost all tottering and
ready to fall, for the want of that metallic basis on which they all rested, the
Executive announces its distrust, issues the Treasury order, and enters the
market for specie, by a demand of an extraordinary amount to supply the
means of purchasing the public lands. If the sales had continued in the same
ratio they had been made during the previous year, that is, at about the rate
of twenty-four millions per annumy this unprecedented demand created by
Government for specie must have exhausted the vaults of most of the banks,
and produced much sooner the catastrophe which occurred in May last.
And, what is most extraordinary, this wanton demand for specie upon all the

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banks of the commercial capitals, and in the busy and thickly peopled por­
tions of the country, was that it might be transported into the wilderness, and,
after having been used in the purchase of public lands, deposited to the credit
of the Government in the books of western banks, in some of which, according
to the message, there were already credits to the Government" greatly beyond
their immediate means of payment.'^ Government, therefore, did not itself
receive, or rather, did not retain, the very specie which it professed to Re­
mand as the only medium worthy of the public lands. The specie, which
was so uselessly exacted, was transferred from one set of banks, to the de­
rangement of the commerce and business of the country, and placed in the
vaults of another set of banks in the interior, forming only those bank cred­
its to the Government upon which President Jackson placed so slight a
value.
Finally, when General Jackson was about to retire from the cares of gove?rtM«nt,VtQ favored his cocmtrymen with a farewell address. The solemnity of
the occasion gives to any opinions which he has expressed in that document a '
claim to peculiar attention. It will be seen on perusing it, that he denounces,
Biore emphatically than in any of his previous addresses, the bank paper of
the country, corporations, and what he chooses to denominate the spirit of
monopoly. The Senate will indulge me in calling its attention to certain
parts of that address, in the following extracts:
u
The Constitution of the United States unquestionably intended to secure to the people
a circulating medium of gold and silver. But the establishment of a national bank by
Congress, with the privilege of issuing paper money receivable in payment of the public
dues, and the untortonate cause of legislation in the several States upon the same subject,
drove from general circulation the constitutional currency, and substituted one of paper
in its place."
" The mischief springs from the power which the moneyed interest derives from a paper
currency, which they are able to control; from tlie multitude of corporations, with exelusive privileges, which they have succeeded in obtaining in the different States, and
which are employed altogether for their benefit; and unless you become more watchful in
your Slates, and check this spirit of monopoly and thirst for exclusive privileges, you will,
in the end, find that the most important powers of Government have been given or barter­
ed away, and the control over your dearest interests has passed into the hands of these
corporations."
" But it will require steady and persevering exertions on your part to rid yourselves of
the iniquities and mischiefs of the paper system, and to check tne spirit of monopoly and
other abases which have sprung up with it, and of which it is the main support. So many
interests are united to resist all reform on this subject, that you must not hope that the
conflict wilf be a short one, nor success easy. My humble efforts have not been spared.
during a y administration of the Government, to restore the constitutional currency of gold
and suver: and something, I trust, has been done towards the accomplishment of this most
desirable object. But enough yet remains to require all your energy and perseverance.
The power, however, is in your hands, and the remedy must and will be applied, if you
determine upon it."

The mask is now thrown off, and he boldly says that the constitution of
the United States unquestionably intended to secure to the people a circula­
ting medium of gold and silver. They have not enjoyed, he says, that benefit,
because of the establishment of a n itional bank, and the unfortunate course
of legislation in the several States. He does not limit his condemnation of
the past policy of his country to the Federal Government, of which he had just
ceased to be the chief, but he extends it to the States also, as if they were
incompetent to judge of the interests of their respective citizens. He tells us
that the mischief springs from the power which the moneyed interest derives
from a paper currency, which they are able to control, and the multitude of
corporations ; and he stimulates the people to become more watchful in their
several States, to check this spirit of monopoly. To invigorate their for­
titude, be tells the people that it will require steady and persevering exertions

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Q r their part, to rid themselves of the iniquities and mischiefs of the paper
B
system, and to check the spirit of monopoly. They must not hope that the
conflict will be a short one, nor success easy* His humble efforts have not
been spared during his administration, to restore the constitutional currency
of geld and silver; and although he has been able to do something towards
the accomplishment of that object, enough yet remain* to require all the
energy and perseverance of the people.
Such,. Mr. President, are the proofs and the argument on which I rely to
establish the second and third propositions which I have been considering.
Are they not successfully maintained \ Is it possible that any thing could be
more conclusive on such a subject ?
I pass to the consideration of the fourth proposition.
4. Thai the present administration, by acknowledgments emanating iron*
the highest and most authentic sourco, has succeeded to the principles, plans,
and policy, of the preceding administration, and stands solemnly pledged to
complete and perfect them.
The proofs on this subject are brief; but they are clear, direct, and plenary.
It is impossible for any unbiased mind to doubt for a moment about there.
You, sir, will be surprised, when I shall array them before you, at their irresist­
ible force. The first that I shall offer is an extract from Mr. Van Buren's
letter of acceptance of the nomination of the Baltimore convention, dated
May 23d, 1835. In that letter he says: " I content myself, on this occasion,
with saying that I consider myself the honored instrument, selected by the
friends of the present administration, to carry out its principles and policy ;
and that, as well from inclination as from duty, 1 shall, if honored with the
choice of the American people, endeavor generally to follow in the footsteps
of President Jackson—happy if I shall be able to perfect the work which be
has so gloriously begun."
Mr. Van Buren announces that he was the honored instrument selected
by the friends of the present administration, to carry out its principles and
policy. The honored instrument! That word, according to the most ap­
proved definition, means tool. He was, then, the honored tool—to do what %
to promote the honor, and advance the welfare, of the people of the United
States, and to add to the glory of his country % No, no; his country was not
m his thoughts. Party, party, filled the place in his bosom which country
should have occupied. He was the honored tool to carry out the principles
and policy of General Jackson's administration; and, if elected, he should, as
well from inclination as from duty, endeavor, generally, to tread in the foot­
steps of General Jackson—happy if he should be able to perfect the work which
he bad so gloriously begun. Duty to whom 1 to the country, to the whole
people of the United Stalest No such thing; but duty to the friends of the
then administration; and that duty required him to tread in the footsteps of his
illustrious predecessor, and to perfect the work which he had begun I Now*
the Senate will bear in mind that the most distinguishing features of General
Jackson's administration related to the currency ; that he had denounced the
banking institutions of the country ; that he bad overthrown the Bank of the
United States; that he had declared, when that object was accomplish, only
one half the work, was completed; that he then commenced war against the
State banks, in oidei to finish the other half; that he constantly persevered
in, and never abandoned, his favorite project of a great Government Treasury
bank; and that be retired from the office of Chief Magistrate, pouring ou*,
in his farewell address, anathemas against paper money, corporations, and the
spirit of monopoly. When all these things are recollected, it is impossible
not tn comprehend clearly what Mr. V#m Buren means, by carrying out the

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principles and policy of the kite administration. No one can mistake that
those principle* and that policy require him to break down the local hwtitti*
bem af the States, and to discredit and destroy the paper mediant which
(fee? issue. No one can he at a los* to understand that, in following in the footstep* of President Jackson, and in perfecting the work which he begun, Mr.
Vaa Boren meant to continue attacking, systematically, the banks of the
States, and to erect on their rains that great Government bank, begun by bis
predecessor, and which he is the honored instrument selected to complete.
The nfcit proof which I shall offer is supplied by Mr. Van Buren's inaugural
address, from which I request permission of the Senate to read the following
extract: " In receiving from the people the sacred trust twice confided to my
httostrious predecessor, and which he has discharged so faithfully and so well,
I know that I cannot expect to perform the arduous task with equal ability
and success. But, united as t have been in his counsels, a daily witness of
hi* exclusive and aomrpas&od devotion to his country's welfare, agreeing with
him in sentiments which his countrymen have warmly supported, and permit­
ted) to partake largely of his confidence, I may hope that somewhat of the
some cheering approbation will be found to attend upon my path.**
Here we find Mr. Van Buren distinctly avowing, what the American
people' well knew before, that he had been united in the counsels of General
Jackson; that he had agreed with him in sentiments, and that he had par­
taken largely of his confidence. This intimacy and confidential intercourse
could not have existed without the concurrence of Mr. Van Buren in all
these leading and prominent measures of his friend, which related to the
establishment of a Government bank, the overthrow of the Bank of the
United States, the attack upon the State institutions, and the denunciation
of the- paper currency, the spirit of monopoly, and corporations. Is it credi­
ble to believe that General Jackson should have aimed at the accomplish­
ment of all those objects, and entertained all these sentiments, without Mr.
Vsm Buren's participation %
I proceed to- another point of powerful evidence, in the conduct of Mr.
Vaa Boren, in respect to the famous Treasury order. That order had been
promulgated, originally, in defiance of the opinion of Congress, had been
continued in operation in defiance of the wishes and will of the people, and
had been repealed by a bill passed at the last ordinary session of Congress,
by over whelming majorities. The late of that bill is well known. Instead
of being returned to the House in which it originated, according to the re­
quirement of the constitution, it was sent to one of the: pjgebn-holes of the
Department of State, to be fifed away with an opinion of a convenient Attor­
ney General, always ready to prepare one in support of execetive encroachaseot. On the 5th of March last, not a doubt was entertained, as far as my
knowledge or belief extends, that Mr. Van Buren would rescind the obnoxious
order. I appeal to the Senator from Missouri, who sits near me, [Mr. LINN,]
to the Senator fronr Mississippi who sits farthest from me, [Mr. WALKER,] to
the Senator from Alabama', [Mr. KINO,] and to the whole of the administra­
tion Senators, if such was not the expectation of all of them. Was there
ever an occasion in which a new administration hod so fine an opportunity
to signalize its commencement by an act of grace and wisdom, demanded by
the best interests and most anxious wishes of the people? But Mr. Van
Buren did not think proper to embrace it. He had shaved too largely in the
confidence of his predecessor, agreed too felly with him in sentiments, had
been too much united with htm in his counsels, to rescind an order which
constituted so essential a part of the system which had been deliberately
adopted to overthrow the Stato banks.

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Another course pursued by the administration, after the catastrophe of the
suspension of specie payments by the banks, demonstrates the hostile pur­
poses towards them of the present administration. When a similar eveot
had occurred during the administration of Mr. Madison, did he discredit and
discountenance the issues of the banks, by refusing to receive them in pay­
ment of the public dues ? Did the State Governments, upon the former or
the late occasion, refuse to receive them in payment of the dues to them,
respectively ? And if irredeemable bank notes are good enough for State
Governments and the people, are they not good enough for the Federal Gov­
ernment of the same people t By exacting specie, in all payments to the Gen­
eral Government, that Government presented irself in the market as a power­
ful and formidable competitor with the banks, demanding specie at a moment
when the banks were making unexampled struggles to strengthen themselves*
and prepare for the resumption of specie payments. The extent of this Gov­
ernment demand for specie does not admit of exact ascertainment; but when
we reflect that the annual expenditures of the Government were at the fate,
including the Post Office Department, of about thirty-three millions of dol­
lars, and that its income, made up either of taxes or loans, must be an equal
sum, making together an aggregate of sixty-six millions, it will be seen that
the amount of specie required for the use, of Government must be immensely
large. It cannot be precisely determined, but would not be less probably
than fifteen or twenty millions of dollars per annum. Now, how is it possi­
ble for the banks, coming into the specie market in competition with all
the vast power and influence of the Government, to provide themselves
with specie in a reasonable time to resume specie payments? That
competition would have been avoided, if, upon the stoppage of the banks,
the notes of lhose of whose solidity there was no doubt, had been con­
tinued to be received in payment of the public dues, as was done in Mr.
Madison's administration. And why, Mr. President, should they not have
been ? Why should not this Government receive the same description of
medium which is found to answer all the purposes of the several State Gov­
ernments ? Why should they have resorted to the expedient of issuing ao
inferior paper medium, in the form of Treasury notes, and refusing to receive
the better notes of safe and solid banks ? Do not misunderstand me, Mr.
President. No man is more averse than I am to a permanent inconvertible
paper medium. It would have been as a temporary measure only that I
should have thought it expedient to receive the notes of good local banks*
If, along with that measure, the Treasury order had been repealed, and other
measures adopted to encourage and coerce the resumption of specie, pay­
ments, we should have been much nigher that desirable event than, I fear,
we now are. Indeed, I do not see when it is possible for the banks to resume
specie payments, as long as the Government is in the field, making war upon
them, and in the market demanding specie.
Another conclusive evidence of the hostility to the State banks, on the
part of Mr. Van Buren, is to be found in that extraordinary recommendation
of a bankrupt law contained in his message at the extra session. According
to all the principles of any bankrupt system with which I am acquainted, the
banks, by the stoppage of specie payment, had rendered themselves liable to
its operation. If the recommended law had been passed, commissions of
bankruptcy could have been immediately sued out against all the suspended
banks, their assets seized, and jhe administration of them transferred from
the several corporations to which it is now intrusted to commissioners ap­
pointed by the President himself. Thus, by one blow, would the whole of
the State banks have been completely prostrated, and the way cleared for
the introduction of the favorite Treasury bank; and is it not in the same

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spirit of unfriendliness to those banks, and with the same view of removing
all obstacles to the establishment of a Government bank, that the bill was
presented to the Senate a few days ago by the Senator from Tennessee
[Mr. G R U N D Y ] against the circulation of the notes of the old Bank of the
United States? At a time when there is too much want of confidence, and
when every thing that can be done should be done to revive and strengthen
it, we are called upon to pass a law denouncing the heaviest penalty and
ignominious punishment against all who shall reissue the notes of the old
Bank of the United States, of which we are told that about seven millions
of dollars are in circulation ; and they constitute the best portion of the paper
medium of the country; the only portion of it which has a credit everywhere,
and which serves the purpose of a general circulation ; the only portion with
whkh a man can travel from one end of the continent to the other; and I do
eot doubt that the Senator who has fulminated these severe pains and penallie* against that best part of our paper medium provides himself with a sufficient amounfof it, whenever he leaves Nashville, to take him to Washington.
(Here Mr. G R U N D Y rose and remarked: No, sir; I always travel on specie.]
Ab S continued Mr. C L A Y , my old friend is always specieous. I am quite
sura that members from a distance in the interior generally find it indispensable to supply themselves, on commencing their journey, with an adequate
amount of these identical notes to defray its expenses. Why, sir, will any
man in his senses deny thai these notes are far better than those which have
been issued by that Government banker, Mr. Levi Woodbury, aided though
he be by the chancellor of the exchequer, (1 beg his pardon, I mean the exchancellor,) the Senator from New York, [Mr. W R I G H T ? ] 1 am not going
to Stop here to inquire into the strict legality of the reissue of these notes;
that question, together with the power of the Government to pass the proposed bill, will be taken up when it is considered. 1 am looking into the
motive of such a measure. Nobody doubts the perfect safety of the notes;
no one can believe that they will not be fairly and fully paid. What, then,
is the design of the hill? It is to assail the only sute general medium which
the people posses*. It is because it may come in competition with Treasury
notes or other Government paper. Sir, if the bill had not been proposed
by my eld friend from Tennessee, I would say its author better deserved a
penitentiary punishment than those against whom it is directed. I remember to have heard of an illustrious individual, now in retirement, having, on
aome occasion, hurst out into the most patriotic indignation, because of a
waggish trick played off upon him, by putting a note of the late Bank of the
United States into his silk purse with his gold.
But it is unnecessary to dwell longer on the innumerable proofs of the hostflity against the State banks, and the deliberate purpose of those in power
to overthrow them. W e hear and see daily, throughout the country, among
their partisans and presses, denunciations against banks, corporations, rag
harem, the spirit of monopoly, dtc.; and the howl for gold, hard money, and
the constitutional currency; and no one can listen to the speeches of
honorable members, friends of the administration, in this House and the
other, without beiog impressed with a perfect conviction that the destruction
of the State hanks is meditated.
I have fulfiMtd my promise, Mr. President, to sustain the first four proposition* with which 1 a«t out.
I now proceed to the fifth proposition :
5. That the bill under consideration is intended to execute Mr. Van Buren's
pledge, te complete and perfect the principles, plans, and policy, of the past
administration, by establishing, upon the rains of the late Bank of the United
9

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States and the State banks, a Government bank, to be managed and controlled
by the Treasury Department, acting under the commands -of the President
of the United States.
The first impression made by the perusal of the bill is the prodigal and
boundless discretion which it grants to the Secretary of the Treasury, irrec­
oncilable with the genius of our free institutions, and contrary to the former
cautious practice of the Government. A$ originally reported, he was au­
thorized by the bill to allow any number of clerks he thought proper to the
various receivers general, and to fix their salaries. It will be borne in mind
that this is the mere commencement of a system; and it cannot be doubted
that, if put into operation, the number of receivers general aad other depos­
itaries of the public money would be indefinitely multiplied. He is allowed
to appoint as many examiners of the public money, and to fix their salaries..
as he pleases; he is allowed to erect at pleasure costly buildings; there is
no estimate for anything; and all who are conversant with the operations
of the executive branch of the Government know tbe value aod importance
of previous estimates. There is no other check upon wasteful expenditure
but previous estimates; and that was a point always particularly insisted upon
by Mr. Jefferson. The Senate will recollect that, a few days ago, when the
salary of the receiver general at New York was fixed, the chairman of the
Committee of Finance rose in his place and stated that it was suggested by
the Secretary of the Treasury that it should be placed at $3,000; and the
blank was accordingly so filled. There was no statement of the nature or
extent of the duties to be performed, of the time that he would be occupied,.
of the extent of his responsibility, or the expense of living at the several
points where they were to be located; nothing but the suggestion of the
Secretary of the Treasury, and that was deemed all-sufficient by a majority*.
There is no limit upon the appropriation which is made to carry into effect
the bill, contrary to all former usage, which invariably prescribed a sum not
to be transcended.
A most remarkable feature in the bill is that to which I have already
called the attention of the Senate, and of which no satisfactory explanation
has been given. It is that which proceeds upon the idea that the Treasury
is a thing distinct from the treasure of the United States, and gives to the
Treasury a local habitation and a name, m the new building which is being
erected for the Treasury Department in the city of Washington. In the
Treasury, so constituted, is to be placed that pittance of the public revenue
which is gleaned from the District of Columbia. All else, that is to say,
nine hundred and ninety-nine hundredths of the public re venue of the United
States, is to be placed in the hands of the receivers general, and the other
depositaries beyond the District of Columbia. Now, the constitution of the
United States provides that no money shall be drawn from the public Treas­
ury but in virtue of a previous appropriation by law. That trifling, portion
of it, therefore, which is within the District of Columbia, will be under the
safeguard of the constitution, and all else will be at tbe arbitrary, disposal of
the Secretary of the Treasury.
It was deemed necessary, no doubt, to vest in the Secretary of the T*e&*<
sury this vast and alarming discretionary power. A new and immense-Gov­
ernment bank is about to be erected. How it would work in all its parts
could not be anticipated with certainty; and it was thought proper,.there­
fore, to bestow a discretion commensurate with its novelty and complexity^
and adapted to any exigencies which might arise* The 10th section of tbebill is that in which tbe power to create a bank is more particularly confer­
red. It is short, and I will read it to the Senate.

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" Sec. 10. And be it further enacted, That it shall be lawful for the Secretary of the
Treasury to transfer the moneys in the hands of any depositary hereby constituted, to the
Treasury of the United States; to the Mint at Philadelphia; to the Branch Mint at New
Orleans; or to the offices of either of the receivers general of public moneys, by this act
directed to be appointed j to be there safely kept, according to the provisions of this act;
and also to transfer money* in the hand* of any one depositary constituted by this act to any
otter depositary constituted by the same, AT HIS DISCRETION, and as the safety of the public
moneys, and the convenience of the public service, shall seem to him to require. And for
the purpose of payments on the publio account, it shall be lawful for the said Secretary to
draw upon any of the said depositaries, as he may think most conducive to the public interests, or to the convenience of the public creditors, or both."

It will be seen that it grants a power, perfectly undefined, to the Secretary
of the Treasury, to shift and transfer the public money, from depositary to*
depositary, as be pleases. He is expressly authorized to transfer moneys in
the hands of any one depositary, constituted by the act, to any other deposi­
tary constituted by it, at his discretion, and'as the safety of the public mon­
eys, AM the convenience of the public service, shall seem to him to require.
There is no specification of any contingency or contingencies on which he is
lo act. All is left to his discretion. He is to judge when the public service
(and more indefinite terms could not have been employed) shall seem to him
to require it. It has been said that this is nothing more than the customary
power of transfer, exercised by the Treasury Department from the origin of
the Government. I deny it; utterly deny it. It is a totally different power
from that which was exercised by the cautious Gallatin, and other Secreta­
ries of the Treasury*—a power, by the bye, which, on more than one occa­
sion! lias been controverted, and which is infinitely more questionable than
the power to establish a Bank of the United States. The transfer was made
by them rarely, in large suras* and were left to the banks to remit. When
payments were made, they were effected in the notes of banks with which
the public money was deposited, or to which it was transferred. The rates
of exchange were regulated by the stale of the market, and under the re­
sponsibility of the banks. But here is a power given to transfer the public
moneys without limit, as to sum, place, or time, leaving every thing to tbe
discretion of the Secretary of the Treasury, the receiver! general, and
otlper depositaries. What a scope is allowed in the fixation of the rates of
exchange, whether of premium or discount, to regulate the whole domestic
exchanges of the country, to exercise favoritism t These former transfers
were not made for disbursement, but as preparatory to disbursement'; an*
when disbursed, it was generally in. bank notes. The transfers of this bill
are immediate payments, and payment* made not in bask notes, but specie*
The last paragraph in the section provides that, for the purpose of pay­
ments on the public account, it shall be lawful for the Secretary to draw
ape* any of the said deposUories, as he may think most conducive to the
public interestt or to the convenience of the public creditors, or both. It
wW be seen that no limit whatever is imposed upon the amount or form of
&e draft, or as to the depositary upon which it is drawn. He is made the
exclusive judge of what is u most conducive to the public interests.*' Now,
lei us pause a moment, and trace the operation of the powers thus vested.
Tbe Government has a revenue of from twenty to thirty millions. The Sec­
retary may; draw it to any one or more points, as he pleases. More than a
moiety of the revenue arising from customs is receivable at the port of New
York, to which point the Secretary may draw all portions of it, if he think it
conducive to tbe- public interest. A man has to receive, unjler an appro­
priation law, $10,000, and applies to Mr. Secretary for payment. Where
will you receive it ? he is asked. On New York. How 1 In drafts from $5

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to $500. Mr. Secretary will give him these drafts accordingly, upon bank
note paper, impressed like and simulating bank notes, having all suitable em­
blazonry, signed by my friend the Treasurer, (whose excellent practical
sense, and solid and sound judgment, if he had been at the head of the Treas­
ury, instead of Mr. Levi Woodbury, when the suspension of specie payments
took1 place, would have relieved or mitigated the pecuniary embarrassments
of the Government and the people,) countersigned by the Comptroller, and
filled up in the usual way of bank notes. Here is one of them, said Mr.
CLAY. [He here held up, to the gaze of the Senate, a Treasury note, hav­
ing all the appearance of a bank note, colored, engraved, and executed like
any other bank note, for $50.] This, continued Mr. CLAY, is a Govern­
ment post note, put into circulation, paid out as money, and prepared and
sent forth, gradually to accustom the people of this country to Government
paper.
I have supposed $10,000 to be received in the mode stated by a person
entitled to receive it under an appropriation law. Now, let us suppose what
be will do with it. Anywhere to the South or West it will command a pre­
mium of from two to five per cent Nowhere in the United States will it
be under par. Do you suppose that the holder of these drafts would be fool
enough to convert them in to specie, to be carried and transported at his risk?
Do you think that he would not prefer that his money should be in the respon­
sible custody of the Government, rather then in his own insecure keeping t
Do you think he will deny to himself the opportunity of realizing the pre­
mium of which he may be perfectly sure ? The greatest want of the coun­
try is a medium of general circulation, and of uniform value everywhere.
That, especially, is our want in the western and interior States. Now, here is
exactly such a medium; and, supposing the Government bank to be hon­
estly and faithfully administered, it will, during such an administration, be the
best convertible paper money in the world, for two reasons: The first is,
that every dollar of paper out will be the representative of a dollar of specie
in the hands of the receivers general, or other depositaries ; and, secondly,
if the receivers general should embezzle the public money, the responsi­
bility of the Government to pay the drafts issued upon the basis of that
money would remain unimpaired. The paper, therefore, would be as far
superior to the paper of any private corporation as the ability and resources
of the Government of the United States are superior to those of such cor­
porations.
Tiie banking capacity may be divided into three faculties: deposites, dis­
count of bills of exchange, and promissory notes, or either, and circula­
tion. This Government bank would combine them all, except that it
.will not discount private notes, nor receive private deposites. In payments
for the public lands, indeed, individuals are allowed to make deposites, and
to receive certificates of their amount. To guard against their negotiability,
a clause has been introduced to render them unassignable. But how will it
be possible to maintain such an inconvenient restriction, in a country where
«very description of paper importing an obligation to pay money or deliver
property is assignable, at law or in equity, from the commercial nature and
trading character of our people ?
Of all the faculties which I have stated of a bank, that which creates a
circulation is the most important to the community at large. It is that in
which thousands may be interested, who never obtained a discount, or made
a depoaite with, a bank. Whatever a Government agrees to receive in
payment of the public dues is a medium of circulation, is money, current
•money, DO matter what its form may be, Treasury notes, drafts drawn at

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Washington, by the Treasurer, on the receiver general at New York, or, to
use the language employed in various parts of this bill, "such notes, bills, or
paper, issued under the authority of the United States." These various
provisions were probably inserted not only to cover the case of Treasury
notes, but that of these drafts id due season. But if there were no express
provision of law, that these drafts should be receivable in payment of public
dues, they would, necessarily, be so employed, from their own intrinsic value.
The want of the community of a general circulation of uniform value
everywhere in the United States would occasion vast amounts of the spe­
cies of draft which I have described to remain in circulation. The appro­
priations this year will probably fall not much short of thirty millions.
Thirty millions of Treasury drafts on receivers general, of every denomi­
nation, and to any amount, may be issued by the Secretary of the Treasury*
What amount would remain in circulation cannot be determined a priori, I
suppose not less than ten or fifteen millions; at the end of another year,
some ten or fifteen millions moro; they would fill all the channels of circula­
tion. The war between the Government and State banks continuing, and
this mammoth Government bank being in the market, constantly demand­
ing specie for its varied and ramified operations, confidence would be lost in
the notes of the local banks, their paper would gradually cease to circulate,.
and the banks themselves would be crippled and broken. The paper of the
Government bank would ultimately fill the vacuum, as it would instantly
occupy the place of the notes of the late Bank of the United States.
I am aware, Mr. President, that by the 25th section of the bill, in Order to
disguise the purpose of the vast machinery which we are about constructing,
it is provided that it shall be the duty of the Secretary of the Treasury to
issue and publish regulations to enforce the speedy presentation of all Gov­
ernment drafts for payments at the place where payable, &c. Now, what a
tremendous power is here vested in the Secretary ! He is to prescribe rules
and regulations to enforce the speedy presentation of all Government drafts
for payment at the place where payable. The speedy presentation! In
the case 1 have supposed, a man has his $10,000 in drafts on the receiver
general at New York. The Secretary is empowered to enact regulations
requiring him speedily to present them, and if he do not, the Secretary may
order them to be paid at St. Louis. At New York they may be worth a
premium of five per cent.; on St. Louis they may be liable to a discount of
five per cent. Now, in a free Government, who would ever think of sub­
jecting the property or money of a citizen to the exercise of such a power
by any Secretary of the Treasury? What opportunity does it not afford to
reward a partisan, or punish an opponent ? It will be impossible to main­
tain such an odious and useless restriction for any length of time. Why
should the debtor (as the Government would be in the case of such drafts as
I have supposed) require his creditor (as the holder of the draft would be) to
apply within a prescribed time for his payment ? No, sir; the system would
control you ; you could not so control the system. But if such a ridiculous
restriction could be continued, the drafts would, nevertheless, whilst they
were oof,wbe the time long or short, perform the office of circulation and
money.
Let as trace a Ihtle further the operation of this Government bank, and
follow H out to its final explosion. I have supposed the appropriation of
some thirty millions of dollars annually by the Government, to be disbursed
in the form of drafts, issued at Washington by the Treasury Department,
ope* the depositaries. Of that amount, some ten or fifteen mill ionsJwouId
remain, the first yefer, in circulation; at the end of another year, a similar

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amount would continue in circulation; and so on, from year to year, until, at
the end of a series of some five or six years, there would be in circulation,
to supply the indispensable wants of commerce and of a general medium of
uniform value, not less than some sixty or eighty millions of drafts issued by
the Government. These drafts would be generally upon the receiver gen­
era) at New York, because, on that point, they would be preferred over all
others, as they would command a premium, or be at par, throughout the
whole extent of the United States; and we have seen that the Secretary of
the Treasury is invested with ample authority to concentrate at that point
the whole revenue of the United States.
All experience has demonstrated that in banking operations a much larger
amount of paper can be kept out in circulation than the specie which h is
necessary to retain in the vaults to meet it when presented for payment. The
proportions which the same experience has ascertained to be entirely safe are
one of specie to three of paper.- If, therefore, the Executive Government
had sixty millions of dollars accumulated at the port of New York, in the
hands of the receiver general, represented by sixty millions of Government
drafts in circulation, it would be known that twenty of that sixty millions
would be sufficient to retain to meet any amount of drafts which, in ordinary
times, would be presented for payment There would then remain forty
millions in the vaults, idle and unproductive, and of which no practical use
could be made. Well: a great election is at band in the State of New York,
the result of which will seal the fate of an existing administration. If the ap­
plication of ten millions of that dormant capital could save, at some future
day, a corrupt Executive from overthrow, can it be doubted ibat the ten mil­
lions would be applied to preserve it in power? Again:, let us suppose
. some great exigency to arise, a season of war, creating severe financial pres­
sure and embarrassment. Would not an issue of paper, founded upon and
exceeeding the specie in the vaults, in some such proportions as experience
had demonstrated might be safely emitted, be authorized ? Finally, the whole
amount of specie might be exhausted, and then, as it is easier to engrave and
issue bank notes than to perform the unpopular office of imposing taxes and
burdens, the discovery would be made that the credit of the Government
was a sufficient basis whereupon to make emissions of paper money, to be
redeemed when peace and prosperity returned. Then we should have the
days of continental money, and of assignats, restored 1 Then we should have
that Government paper medium which the Senator from South Carolina
[Mr. CALHOUN] considers the most perfect of all currency!
Meantime, and during the progress of this vast Government machine, the
State banks would be all prostrated. Working well, as it may, if honestly
administered, in the first period of its existence, it will be utterly impossible
for them to maintain the unequal competition. They could not maintain it,
even if the Government were actuated by no unfriendly feelings towards
them. But when we know the spirit which animates the present Executive
towards them, who can doubt that they must fall in the unequal contest T
Their issues will be discredited and discountenanced, and that system of
bankruptcy which the President would even now put into operation against
them, will, in the sequel, be passed and enforced without difficulty.
Assuming the downfall of the local banks, the inevitable consequence of the
operations of this great Government bank; assuming, as I have shown would
be the case, that the Government would monopolise the paper issues of the
country, and obtain the possession of a great portion of the specie of the
country, we should then behold a combined and concentrated moneyed power
equal to that of all the existing banks of the United States, with that of the late

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6ankof the United States superadded. This tremendous power would be wield­
ed by the Secretary of the Treasur/, acting under the immediate commands of
the President of the United States. Here would be a perfect union of the sword
and the purse; here would be no* imaginary, but an actual, visible, tangible,
•consolidationof the moneyed power. Who or what could withstand it ? The
'States themselves would become suppliants at the feet of the Executive for a
portion of those paper emissions, of the power to issue which they had been
stripped, aod which he now exclusively possessed.
Mr. President, my observation and experience have satisfied me that the
safety of liberty and prosperity consists in the division of power, whether
political or pecuniary. la our federative system, our security is to be found
in that happy distribution of power which exists between the Federal Goventtnept and jbe State Governments. In our monetary system, as it lately
«xiated,its excellence resulted from that beautiful arrangement, by which the
States had their institutions for local purposes, and the General Government
its institution for the more general purposes of the whole Union. There ex­
isted the greatest congeniality between, all the parts of this admirable system.
All was homogeneous. There was no separation of the Federal Government
from the States or from the people. There was no attempt to execute prac­
tically that absurdity of sustaining, among the same people, two different
currencies of unequal value. And how admirably did the whole system, during
the forty years of its existence, move and work! And on the two unfortunate
•occasions of its ceasing to exist, how quickly did the business and transac­
tions of the country run into wild disorder and utter confusion!
Hitherto, I have considered this new project as it is, according to its true
nature and character, and what it must inevitably become. I have not examined it as it is, not, but as its friends would represent it to be. They hold
out the idea that it is a simple contrivance to collect, to keep, and to dis­
burse, the public revenue. In that view of it, every consideration of safety
and security recommends the agency of responsible corporations, rather than
the employment of particular individuals. It has been shown, during the
coarse of this debate, that the amount which has been lost by the defalca­
tion -of individuals has exceeded three or four times the amount of all that
has been lost by the local banks, although the sums confided to the care of in* dividuals have not been probably one-tenth part of the amount that has
been in- the custody of the local banks. And we all know that, during the
forty years of existence of the two Banks of the United States, not one cent
was lost of the public revenue.
I have been curious, Mr President, to know whence this idea of \receivers general was derived. It has been supposed to have been bor­
rowed from France. It required all the power of that most extraordinary
man that ever lived, Napoleon Bonaparte, when he was in his meridian
* greatness, to displace the farmers general, and to substitute in their
place the receivers general. The new. system requires, I think I have
heard it stated, something like 100,000 employees to have it executed.
And, notwithstanding the modesty of the infant promises of this new pro­
ject; I have no doubt that ultimately we sliall have to employ a number of
persons approximating to that which is retained in France. That will un­
doubtedly be the case whenever we shall revive the system of internal
taxation. In France, what reconciled them to the system was, that Napoleon
*first,and the Bourbons afterwards, were pleased with the immense patronage
which it gave them. They liked to have 100,000 dependants to add
strength to the throne, which had been recently constructed or reascended
I thought, however, that the learned chairman of the Committee of

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Finance must bave had some other. besides the French model for his re­
ceivers general; and, accordingly, upon looking into Smith's history of his
own State, I found that, when it was yet a colony, some century and a half
ago, and when its present noble capital still retained the name of New Am­
sterdam, the historian says: " Among the principal laws enacted at this
session, we may mention that for establishing the revenue, which was drawn
into precedent. The sums raised by it were made payable into the bands
of receivers general, and issued by the Governor's warrant. By this
means the Governor became, for a season, independent of the people, and
hence wc find frequent instances of the Assemblies contending with him for
the discharge of debts to private persons, contracted on the faith of the Gov­
ernment." The then Governor of the colony was a man of great violence
of temper, and arbitrary in his conduct. How the sub-Treasury system of
that day operated the same historian, informs us in a subsequent part of bis •
work. *• The revenue," he says, •• established the last year, was at this ses­
sion continued five years longer than was originally intended. This was ren­
dering the Governor independent of the people. Format that day, the Assem­
bly had no treasure, but the amount of all taxes went, of course, into the hands
of the receiver general, who was appointed by the Crown. Out of this fund,
moneys were only issuable by the Governor's warrant, so that every officer
in the Government, from Mr. Blaithwait, who drew annually five per cent, out
of the revenue, as auditor general, down to the meanest servant of the public,
became dependent, solely, of the Governor. And hence we find the 'House,
at the close of every session, humbly addressing his Excellency, for the
trifling wages of their own clerk.11 And, Mr. President, if this measure
should unhappily pass, the day may come when the Senate of the United
States will have humbly to implore some future President of the United
States to grant it money to pay the wages of its own sergeant-at-arms and
doorkeeper.
" Who, Mr. President, are the most conspicuous of those, who perseveringly
pressed this bill upon Congress and the American people? Its drawer is the
distinguished gentleman in the white house not far off; its endorser is the
distinguished Senator from South Carolina, here present. What the drawer
thinks of the endorser, his cautious reserve, and stifled enmity, prevent us from
knowing. But the frankness of the endorser has not left us in the same
ignorance with respect to his opinion of the drawer. He has often expressed
it upon the floor of the Senate. On an occasion not very distant, denying to
him any of the nobler qualities of the royal beast of the forest, he attributed la
him those which belong to the most crafty, most skulking, and one of the mean­
est of the quadruped tribe. Mr. President, it is due to myself to say that I do
not altogether-share with the Senator from South Carolina in this opinion of
the President of the United States. I have always found him, in his manners
and deportment, civil, courteous, and gentlemanly ; and he dispenses, in the
noble mansion which he now occupies, one worthy the residence of the Chief
Magistrate of a great people, a generous and liberal hospitality. An ac­
quaintance with him of more than twenty years duration has inspired me with
a respect for the man, although, I regret to be compelled to say, I detest the
Magistrate.
The eloquent Senator from South Carelina has intimated that the course
of my friends and myself, in opposing this bill, was unpatriotic, and that we
ought to have followed in his lead ; and, m a lato letter of his, he has spoken
of his alliance with us, and of his motives for quitting it. I cannot admit the
justice of his reproach. We united, if, indeed, there were any alliance in the
case, to restrain the enormous expansion of executive power; to arrest the

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progress of corruption; to rebuke usurpation; and to drive the Goths and
Vandals from the capital; to expel Brennus and his horde from Rome, who,
when he threw his sword into, the scale, to augment the ransonTdemanded from
the mistress of the world, showed his preference for gold; that he was a hardmoney chieftain. It was by the much more valuable metal of iron that he was
driven from her gates. And how often have we witnessed the Senator from
South Carolina, with woful countenance, and in doleful strains, pouring forth
touching and mournful eloquence on the degeneracy of the times, and the
downward tendency of the republic? Day after day, in the Senate, have we
seen tbe displays of bis lofty and impassioned eloquence. Although I shared
largely with the Senator in his apprehension for the purity of our institutions,
and the permanency of civil liberty, disposed always to look at the brighter
side of human affairs, I was sometimes inclined to hope that the vivid imaginatiofeof the Senator had depicted the dangers by which we were encompassed
in somewhat stronger colors than they justified. The arduous contest in which
we were so long engaged was about to terminate in a glorious victory. The
very object for which the alliance was formed was about to be accomplished.
At this critical moment tbe Senator left us; he left us for the very purpose
of preventing the success of the common cause. He took up his musket,
knapsack, and shot-pouch, and joined the other party. He went, horse, foot,
and dragoon, and he himself composed the whole corps. He went, as his
present most distinguished ally commenced with his expunging resolution,
solitary and alone. The earliest instance recorded in history, within
my recollection, of an ally drawing off his forces from the combined army,
was that of Achilles at the siege of Troy. He withdrew with all his troops,
and remained in the neighborhood, in sullen and dignified inactivity. But
be did not join the Trojan forces, and when, during the progress of the siege,
his faithful friend fell in battle, he raised his avenging arm, drove the Trojans
back into the gates of Troy, and satiated his vengeance by slaying Priam's
noblest and dearest son, the finest hero in the immortal Iliad. But Achilles
had been wronged, or imagined himself wronged, in the person of the fair and
beautiful Briseis. We did no wrong to the distinguished Senator from South
Carolina. On the contrary, we respected him, confided in his great and
acknowledged ability, his uncommon genius, his extensive.experience, his
supposed patriotism ; above all, we confided in his stern and inflexible fidelity*
Nevertheless, he left us, and joined our common opponents, distrusting and dis­
trusted. He left us, as ho tells us in his Edgefield letter, because the victory
which our common arms were about to achieve, was not to enure to him and
his party, but exclusively to the benefit of his allies and their cause. I thought
that, actuated by patriotism, (that noblest of human virtues,) we had been
contending together for our common country, for her violated rights, her
threatened liberties, her prostrate constitution. Never did I suppose that
personal or party considerations entered into our views. Whether, if vic­
tory shall ever again be about to perch upon the standard of the spoils
party, (the denomination which the Senator from South Carolina has so often
given to his present allies,) he will not feel himself constrained, by the prin­
ciples on which he has acted, to leave them, because it may not enure to the
benefit of himself and his party, I leave to be adjusted between themselves.
The speech of the Senator from South Carolina was plausible, ingenious,
abstract, metaphysical, and generalizing. It did not appear to me to be
adapted to the bosoms and business of hitman life. It was aerial, and not
very high up in the air, Mr. President, either, not quite as high as Mr. Clay­
ton was Hi his last ascension in his balloon. The Senator announced that
there was a single alternative, and no escape from one or the other branch

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of it. He stated that we must take the bill under consideration, or the sub­
stitute proposed by the Senator from Virginia. I do not concur in that state­
ment of the case. There is another course embraced in neither branch of
the Senator's alternative ; and that course is to do nothing; always the wisest,
when you are not certain what you ought to do. Let us suppose that neither
branch of the alternative is accepted, and that nothing is done. What, then,
would be the consequence 1 There wonld be a restoration of the law of
1789, with all its cautious provisions and securities, provided by the wisdom
of our ancestors, which has been so trampled upon by the late and present ad­
ministrations. By that law, establishing the Treasury Department, the treas­
ure of the United States is to be received, kept, and disbursed, by the Treas­
urer, under a bond with ample security, under a large penalty fixed by law,
and not left, as this bill leaves it, to the uncertain discretion of a Secretary of
the Treasury. If, therefore, we were to do nothing, that law would be re­
vived ; the Treasurer would have the custody, as he ought to have, of the
public money, and doubtless he would make special deposites of it in all in­
stances with safe and sound State banks, as in some cases the Secretary of
the Treasury is now obliged to do. Thus, we should have in operation that
very special deposite system, so much desired by some gentlemen, by which
the public money would remain separate and unmixed with the money of
banks. There is yet another course, unembraced by either branch of the
alternative presented by the Senator from South Carolina ; and that is to es­
tablish a Bank of the United States, constituted according to the old and ap­
proved method of forming such an institution, tested and sanctioned by ex­
perience ; a Bank of the United States which should blend public and private
interests, and be subject to public and private control, united together in
such manner as to present safe and salutary checks against all abuses. The
Senator mistakes his own abandonment of that institution as ours. I know
that the party in power has barricaded itself against the establishment of
such a bank. It adopted, at the last extra session, the extraordinary and
unprecedented resolution, that the people of the United States should not
have such a bank, although it might be manifest that there was a clear ma­
jority of them demanding it. But the day may come, and I trust is not dis­
tant, when the will of the people must prevail in the councils of their own
Government; and when it does arrive a bank will be established.
The Senator from South Carolina reminds us that we denounced the pet
bank system; and so we did, and so we do. But does it therefore follow
that, bad as that system was, we must be driven 4nto the acceptance of a
system infinitely worse 1 He tells us that the J>HI under consideration takes
the public funds out of the hands of the Executive, and places them in the
hands of the law. It does no such thing. They are now without law, it is
true, in the custody of the Executive; and the bill proposes by law to con-■'firm them in that custody, and to convey new and enormous powers of con­
trol to the Executive over them. Every custodary of the public funds pro­
vided by the bill is a creature of the Executive, dependent upon his breath,
and subject to the same breath for removal, whenever the Executive, from
caprice, from tyranny, or from party motives, shall choose to order it.
What safety is there for the public money, if there were a hundred subordi­
nate executive officers charged with its care, whilst the doctrine of the abso­
lute unity of the whole executive power, promulgated by the last administra­
tion, and persisted in by this, remains unrevoked and unrebuked.
Whilst the Senator from South Carolina professes to be the friend of State
tanks, he has attacked the whole banking system of the United States. H e
is their friend; he only thinks they are all unconstitutional! Why t Because

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the coining power is possessed by the General Government, and that coin­
ing power, he argues, was intended to supply a currency of the precious
metals; but the State banks absorb the precious metals, and withdraw them
from circulation, and, therefore, are in conflict with the coining power. That
power, according to my view of it, is nothing but a naked authority to stamp
-certain pieces of the precious metals, in fixed proportions of alloy and pure
metal, prescribed by law, so that their exact value may be known. When
that office is performed, the power is functus officio; the money passes oqt
of the mint, and becomes the lawful-property of those who legally acquire it.
They may do with it as they please, throw it into the ocean, bury it in the
earth, or melt it in a crucible, without violating any law. When it has once
left the vaults of the mint, the law-maker has nothing to do with it, but to
protect it against those who attempt to debase or counterfeit, and, subsejqueotip, to pass it as lawful money. I* the sense in which the Senator sup­
poses banks to conflict with the coining oower, foreign commerce, and espe­
cially our commerce with China, conflict with it much more extensively.
That is the great absorbent of the precious metals, and is, therefore, much
more unconstitutional than the State banks. Foreign commerce sends them
out of the country; banks retain them within it. The distinguished Senator
• is no enemy to the banks; he merely thinks them injurious to the morals and
industry of the country. He likes them very well, but he nevertheless be­
lieves that they levy a tax of twenty-five millions anuiially on the industry of
the country! Let us examine, Mr. President, how this enormous and
iniquitous assessment is made, according to the argument of the Senator from
South Carolina. JJe states that there is a mass of debt due from the commu­
nity to the banks, amounting to $475,000,000, the interest upon which, con' stituting about that sum of $25,000,000, forms the exceptionable tax. Now,
this sum is not paid by the whole community, but only by those individuals
who obtain discounts from the banks. They borrow money at six per cent.
interest, and invest it in profitable adventures, or otherwise employ it. They
would not borrow it if they did not suppose they could make profit by it; and
the probability is that they do make profit by it. Instead, therefore, of there
being any loss in the operation, there is an actual gain to the community, by
the excess of profit made beyond six per cent, interest, which they pay.
What are banks ? They are mere organised agencies for the loan of money
and the transaction of monetary business; regulated agencies, acting under
the prescriptions of law, and subject to a responsibility, moral and legal, far
transccnUing that under which any private capitalist operates. A number of
persons, not choosing to lend out their money privately, associate together,
bring their respective capitals into a common stock, which is controlled and
managed by the corporate government of a bank. If no association whatever
had been formed, a large portion of this capital, a large portion, therefore,
of that very debt of $475,000,000, would still exist, in the shape of private
loans. The Senator from South Carolina might as well collect the aggregate
amount of all the mortgages, bonds, and notes, which have been executed in
the United States for loans, and assert that the interest paid upon the total
.sum constituted a tax levied upon the community.
In the liquidation of the debt due to the banks from the community, and
(ram the banks to the community, there would not be as much difficulty as
the Senator seems to apprehend. From the mass of debts due to the banks
are to be deducted, first, the amount of subscriptions which constitute their
-capitals; secondly, the amount of deposites to the credit of individuals in
their custody; and, thirdly, the amount of their notes in circulation. How
easily will these mutual debts neutralize each other! The same person, in

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numberless instances, will combine in himself the relations both of creditor
and debtor.
The only general operation of banks beyond their discounts and deposites,
whicli pervades the whole community, is that of furnishing a circulation in
redeemable paper, beyond the amount of specie to redeem it in their vaults.
And can it be doubted that this additional supply of money furnishes a pow­
erful stimulus to industry and production, fully compensating any casual in­
conveniences, which sometimes, though rarely, occur? Banks reduce the rate
of interest, and repress inordinate usury. The salutary influence of banking
operations is demonstrated in countries and sections of country where they
prevail, when contrasted with those in which they are not found. In the
former, all is bustle, activity, general prosperity. The country is beautified
and adorned by the noble works of internal improvement; the cities are
filled with splendid edifices, and tin wharves covered with the ri«h produc­
tions of our own or of foreign climates. In the latter, all is sluggishness,
slothfulness, and inactivity. England, in modern times, illustrates the great
advantages of banks, of credit, and of stimulated industry. Contrast her
with Spain, destitute of all those advantages. In ancient times, Athens
would present an image of full and active employment of all the energies of
man, carried to the highest point of civilization, whilst her neighbor, Sparta,
with her iron money, affords another of the boasted benefits of metallic cir­
culation.
The Senator from South Carolina would do the banks no harm; but
they are deemed by him highly injurious to the planting interest! Accord­
ing to him, they inflate prices, and the poor planter sells his productions for
hard money, and has to purchase his supplies at the swoln prices produced
by a paper medium. Now, I must dissent altogether from /he Senator's
statement of the case. England, the principal customer of the planter, is
quite as much, if not more, a paper country than ours. And the papermoney prices of the one country are neutralized by the paper-money prices
of the other country. If the argument were true, that a paper-money coun­
try trades disadvantageous^ with a hard-money country, we ought to con­
tinue to employ a paper medium, to counterbalance the paper medium of
England. And if we were to banish our paper, and substitute altogether a
metallic currency, we should be exposed to the very inequality which has been
insisted upon. But there is nothing in that view of the matter which is
presented by the Senator from South Carolina. If, as he asserts, prices
were always inflated in this country, beyond their standard in England, the
rate of exchange would be constantly against us. An* examination, however,
into the actual state of exchange between the two countries, for a long series
of years, evinces that it has generally been ill our favor. In the direct trade
between England and this country, I have no doubt, there is a large aunual
balance against u s ; but that balance is adjusted and liquidated by balances
in our favor in other branches of our foreign trade, which have finally con­
centrated in England, as the great centre of the commercial world.
Of all the interests and branches of industry in this country, none has profit­
ed more by the use and employment of credit and capital derived from banks
and other sources, than the planting interest. It habitually employs credit in all
countries where planting agriculture prevails. The States 6f Alabama, Missis­
sippi, Arkansas, and Louisiana, have almost sprung into existence, as it were,
by magic, or, at least, have been vastly improved and extended, under the
influence of the credit system. Lands, slaves, utensils, beasts of burden,
and other supplies, have been constantly bought, and still continue to be
purchased, upon credit; and bank agency is all essential to give the most

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beneficial operation to these credits. But the argument of the Senator from
Sooth Carolina, which I am combating, would not be correct, if it were true
that we have inflated prices on this side of the Atlantic, without a corresponding inflation of price on the other side; because the planter generally selling
at home, and buying at home, the proceeds of his sale, whatever they may
be, constitute the means by which he effects his purchases, and consequently
neutralize each other. I n what do we of the West receive payment for the
immense quantity of live stock and other produce of our industry, which we
annually sell to the South and Southwest, but that paper medium now so
much decried and denounced ? The Senator from South * Carolina is very
fond of the State banks; (put he thinks there is no legitimate currency except
that of the constitution. He contends that the power which the Government
possesses to impose taxes restricts it, in their payment, to the receipt of the
ptqsious metaU. Bui the constitution does not say so. The power is given
in broad and unrestricted terms; and the Government is left at liberty to
collect the taxes in whatever medium or commodity, from the exigencies of
the case, it can collect tbem. It is, doubtless, much the most convenient to
collect them in money, because that represents, or can command, every
thing, the want of which is implied by the power of taxation. But suppose
there was no money in the country, none whatever, to be extorted by the
tax-gatherer from an impoverished people? Is the power of Government to
cease, and the people to be thrown back into a state of nature ? The Senator asks if taxes could be levied and collected in tobacco, in cotton, and
other commodities ? Undoubtedly they could, if the necessity existed for
such, an inconvenient imposition. Such a case of necessity did exist in the
colony of Virginia, and other colonies, prior to the Revolution, and taxes
were accordingly levied in tobacco or other commodities, as wolf-scalps,
even at this day, compose a part of the revenue of more than one State.
The argument, then, of the Senator against the right of the Government
to receive bank notes in payment of public dues, a practice coeval with the
existence of the Government, does not seem to me to be sound. It is not
accurate, for another reason. Bank notes, when convertible at the will of the
holder into specie, are so much counted or told specie, like the specie which
is counted and put in marked kegs, denoting the quantity of their contents.
T h e Senator tells us that it has been only within a few days that he has discovered that it is illegal to receive bank notes in payment of public dues.
Does he think that the usage of the Government, under all its administrations,
and with every parly in power, which has prevailed for nigh fifty years, ought
to be set aside by a novel theory of his, just dreamed into existence, even if
it possess the merit of ingenuity ? The bill under consideration, which has been
eulogized by the^Senator as perfect in its structure and details, contains a provision that bank notes shall be received in diminished proportions, during a
term of six years. He himself introduced that identical principle. I t is the only
part of the bill that is emphatically bis. How, then, can he contend'that it
is unconstitutional to receive bank notes in payment of public dues ? I appeal from himself to himself. The Senator further contends, that general depesites cannot be made with banks, aid-be thus confounded with the generat moss of the funds on which they transact business. The argument suppesos that the money collected for taxes must be preserved in identity;
bat that is impossible, often, to do. May not a collector give the small
change which he has received from one tax-payer to another tax-payer,
to enable him to effect his payment? May he not change gold for silver, or
9Kf oerid, or both, if he be a distant collector, to obtain an undoubted remittance to the public Treasury ? What, Mr. President, is the process of ma»

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king deposites with brinks? The deposite is made, and a credit is entered for
its amount to the Government. That credit is supposed to be the exact
equivalent of the amount deposited, ready and forthcoming to the Govern­
ment whenever it is wanted for the purposes of disbursement. It is imma­
terial to the Government whether it receives back again the identical money
put in, or other money of equal value. All that it wants is what it put in the
bank, or its equivalent; and that, in ordinary times, with such* prudent
banks as alone ought to be selected, it is sure of getting. Again: the Treas­
ury has frequently to make remittances to foreign countries, to meet the ex­
penditure necessary there for our naval squadrons, and other purposes. They
are made to the bankers, to the Barings or the Rothschilds, in the form of
bills of exchange, purchased in the market by the agents of the Government
here, with money drawn out of the Treasury. Here is one conversion of the
money received from the tax-gatherer into the Treasury. The bitt« are trans­
mitted to the bankers, honored, paid, and the amount credited by them to
the United States. Are the bankers bound to retain the proceeds of the
bills in identity t Are they bound to do more than credit the Government
for an equal amount, for which they stand responsible whenever it is wanted!
If they should happen to use any portion of those very proceeds of bills re­
mitted to them in their banking operations, would it be drawing money from
the Treasury, contrary to the provisions of the constitution 1 The Senator
from South Carolina contends that there is no constitutional power to con­
tract with the twenty-five selected banks, as proposed in the substitute;
yet the deposite act of 1836, which obtained the hearty approbation of that
Senator, contained a similar provision ; and the very bill under considera­
tion, so warmly supported by him, provides, under certain contingencies, for
contracts to be made with State banks, td receive deposites of the public
money upon compensation. He objects to the substitute, that it converts
twenty-five State banks into a system of federal institutions; but the em­
ployment of State institutions by the federal authority no more makes them
federal, than the employment of federal institutions by the States converts
them into State institutions. This mutual aid, and this reciprocal employ^
ment of the several institutions of the general and particular Governments,
is one of the results and beauties of our admirable though complex system
of Government. The General Government has the use of the capital, court­
houses, prisons, and penitentiaries,in the several States. Do they, therefore,
cease to appertain to the States 1 It is to be borne in mind, that although
the State banks may occasionally be used by the federal authority, their lend
responsibility to the several States remains unimpaired. Thev continue to
be accountable to them, and their existence can only be terminated or pro­
longed by the State authority. And being governed, as they%re, by corpo­
rate authority emanating from and amenable to State jurisdiction, and not
under the control of the Executive of the United States, constitutes at once
a greater security for the public money, and more safety to the public liberty.
It has been argued that a separation of the Government from the banks will
diminish the executive power. It must be admitted that the custody of the
public money in various banks, subject to the control of State authority, fur­
nishes some check upon the possible abuses of the Executive Government.
But the argument maintains that the Executive has least power when it has
most complete possession of the public Treasury! The Senator from South
Carolina contends that the separation in question being once effected, the
relation of the Federal Government and the State banks will be antagonistical. I believe so, Mr. President. That is the very thing I wish to prevent.
I want them to live in peace, harmony, and friendship. If they are antago-

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nisls, how is it possible that the State banks can maintain their existence
against the tremendous influence of this Government 1 Especially, if this
Government should be backed by such a vast Treasury bank as I verily
believe this bill is intended to create? And what becomes of the argument
urged by the Senator from South Carolina, and the abolition resolutions offer­
ed by him at an early period of the session, asserting that the General Gov- »
ernraent is bound to protect the domestic institutions of the several States ?
The substitute is not, I think, what the welfare of the country requires. It
may serve the purpose of a good half-way house. Its accommodations ap­
pear fair, and, with the feelings of a wearied traveller, one may be tempted
to stop awhile and refresh himself there. I shall vote for it as an amend­
ment to the bill, because I believe it the least of two evils, if it should,
indeed, inflict any evil; or rather, because I feel myself in the position of
a patient to who** the physician presents in one hand a cup of arsenic,
and in the other a cup of ptisan : I reject Use first, because of the instant
death with which it is charged; I take the latter, as being, at the most,
harmless, and depend upon the vis medicatriz natura. It would have
been a great improvement, in my opinion, if the mode of bringing about the
resumption of specif payments, contained in the substitute, were reversed:
that is to say, if, -instead of fixing, on the 1st of July for resumption, it had
provided that the notes of a certain number of safe, sound, and unquestion­
able banks to be selected, should be forthwith received, by the General Gov­
ernment, in payment of all public dues; and that if the selected banks did
not resume, by a future designated day, their notes should cease to be taken*
Several immediate effects would follow : 1st. The Government would with­
draw from the market as a competitor with the banks for specie, and they
would be left undisturbed to strengthen themselves. And, 2dly, confi­
dence would be restored by taking off the discredit and discountenance thrown
upon all banks by the Government. And why should these notes not be
so received t They are as good as Treasury notes, if not better. They
answer all the 'purposes of the State Governments and the people. They
now would buy as much as specie could have commanded at the period of
suspension. They could be disbursed by the Government. And, finally,
the measure would be temporary.
But the true and only efficacious and permanent remedy, I solemnly be­
lieve, is to be found in a Bank of the United States, properly organized and
constituted. We are told that such a bank is fraught with indescribable
danger; and that the Government must, in tbe sequel, get possession of the
b M , or the bank of the Government, I oppose to these imaginary terrors
the practical experience of forty years. I oppose to them the issue of the
meojoffable contest, commenced by the late President of the United States,
against tbe late Bank of the United Slates. The administration of that bank
had been without serious fault. It had given no just offence to the Govern­
ment, towards which it had faithfully performed every financial duty. Under
its able and enlightened president, it had fulfilled every anticipation which
bad been formed by those who created it; President Jackson pronounced
tbe edict that it must fall, and it did fall, against the wishes of an immense
majority of the people of the United States; against the convictions of its
utility entertained by a large majority of the States; and to the prejudice
of tbe best interests of the whole country. If an innocent, unoffending, and
highly beneficial institution could be thus easily destroyed by the power of
one man, where would be the difficulty of crushing it, if it had given any
real cause for just animadversions -Finally, I oppose to these imaginary
tenors the example deducible from English history. There a bank has ex-

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isted sibce the year 1694, and neither has the bank got possession of the
Government, nor the Government of the bank. They have existed in har­
mony together, both conducing to the prosperity of that great country; and
they have so existed, and so contributed, because each has avoided cherish­
ing towards the other that wanton and unnecessary spirit of hostility which
was unfortunately engendered in the bosom of the late President of the United
States.
I am admonished, sir, by my exhausted strength, and by, I fear, your more
exhausted patience, to hasten to a close. Mr. President, a great, novel, and
untried measure, is perseveringly urged upon the acceptance of Congress.
That it is pregnant with tremendous consequences, for good or evil, is unde­
niable, and admitted by all. We firmly believe that it will be fatal to the
best interests of this country, and ultimately subversive of its liberties. You,
who have been greatly disappointed in other measures of equal promise, can
only hope, in the doubtful and uncertain future, that its operation may prove
salutary. Since it was first proposed at the extra session, the whole people
have not had an opportunity of passing in judgment upon it at their election*.
As far as they have, they have expressed their unqualified disapprobation.
From Maine to the State of Mississippi, its condemnation has been loudly
thundered forth. In every intervening election, the administration has been
defeated, or its former majorities neutralized. Maine has spoken; New York,
Pennsylvania, Maryland, Ohio, Rhode Island, Mississippi, and Michigan, all
these States, in tones and terms not to be misunderstood, have denounced the
measure. The key-stone State (God bless her) has twice proclaimed her
rejection of it; once at the polls, and once through her Legislature. Friends
and foes of the administration have united in condemning it. And, at the
very moment when I am addressing you, a large meeting of the late support­
ers of the administration, headed by the distinguished gentleman who presided
in the electoral college which gave the vote of that patriotic State to
President Van Buren, are assembling in Philadelphia, to prptest solemnly
against the passage of this bill. Is it right that, under such circumstances, it
should be forced upon a reluctant but free and intelligent people 1 Is it right
that this Senate, constituted as it now is, should give its sanction to the meas­
ure 1 1 say it in no disrespectful or taunting sense, but we are entitled, accord­
ing to the latest expressions of the popular will, and in virtue of manifestations
of opinion deliberately expressed by State Legislatures, to a vote of 35 against
the bill; and I am ready to enter, with any Senator friendly to the adminis­
tration, into details to prove the assertion. Will the Senate, then, bring upon
itself the odium of passing this bill ? I implore it to forbear, forbear, forbear v
I appeal to the instructed Senators. Is this Government made for us, or for
the people and the States whose agents we are % Are we not bound so to ad­
minister it as to advance their welfare, promote their prosperity, and give
general satisfaction? Will that sacred trust be fulfilled, if the known senti­
ments of large and respectable communities are despised and contemned by
those whom they have sent here ? I call upon the honorable Senater from
Alabama, [Mr. KING,] with whom I have so long stood in the public councils,
shoulder to shoulder, bearing up the honor and the glory of this great people,
to come now to their rescue. I call upon all the Senators; let us bury deep
and forever the character of the partisan, rise up patriots and statesmen,
break the vile chains of party, throw the fragments to the winds, and feel the
proud satisfaction that we have made but a small sacrifice to the paramount
obligations which we owe our common country.

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