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SPEECHES AND REPORTS 
 
 IN THE 
 
 ASSEMBLY OF NEW-YORK. 
 
 AT THE 
 
 ANNUAL SESSION OF 1838 
 
 By DANIEL D. BARNARD. 
 
 ALBANY : 
 
 PUBLISHED BY OLIVER STEELE, 
 405 SOUTH MARKET-STREET. 
 
 1838, 
 
£ 
 
 [Entered according to Act of Congress, in the year one thousand 
 eight hundred and thirty-eight, hy Oliver Steele, m the Clerks 
 Office of the Northern District Court of New-York.] 
 
 Of*? & 
 
 •ackardj Van Beiithnysen &. Co., Printer.* 
 
CONTENTS. 
 
 Fag?. 
 
 Speech on the Bill to repeal the Law prohibiting the cir- 
 culation of small bank-notes — Jan. 9, 1838, 1 
 
 Report on the subject of Religious Exercises, and the use 
 
 of the Bible, in Schools— Jan. 23, 1838, 49 
 
 Speech on Corporations, and the Proposition to make Cor- 
 porators personally liable — Jan. 30, 1838, 65 
 
 Speech on the Resolutions of Mr. Holley, respecting the 
 
 Sub-Treasury Scheme— Feb. 14, 1838, 81 
 
 Report on the Subject and System of Public Instruction — 
 
 March 7, 1838, 109 
 
 Remarks on the Economical Policy of Internal Improve- 
 ments—March 13, 1838, 137 
 
 Speech on Banking, Currency, and Credit, delivered upon 
 the passage of the General Banking Law — March 29, 
 1838, 343 
 
 APPENDIX— General Banking Law, 215 
 
INTRODUCTION. 
 
 The Legislature of the State of New- York, elected 
 in the fall of 1837, convened at Albany, in January, 
 1838, under circumstances of no common interest. 
 The opinion of the people, as expressed through the 
 ballot box, was shown to be in decided disapproval of 
 the course and policy avowed by the Administration of 
 the National Government. This was evinced by the 
 election of a large majority of members of the Assem- 
 bly, and three-fourths of the candidates for the Senate, 
 from the party opposed to the declared policy of the go- 
 vernment. As the executive officers of the State were 
 intimately linked in, and connected, as partizan appro- 
 vers, with the opinions of the national cabinet, the po- 
 pular election referred to, may, with equal fairness, be 
 deemed a rebuke of them, in common with their coad- 
 jutors at Washington city. In this state of things, the 
 assemblage of a Legislature composed of a majority in 
 
VI INTRODUCTION. 
 
 opposition, on joint ballot, to the State and General Go- 
 vernments, commanded the public attention in no or- 
 dinary degree. The more particularly, as the topics 
 which would naturally be presented for their delibera- 
 tion were of unusual weight and importance. 
 
 The suspension of specie payments by the banks of 
 this State — no matter by whom caused, or by whom 
 sanctioned — inflicted an almost intolerable inconve- 
 nience upon the people, from the consequent scarcity of 
 silver coin. As the laws prohibited the emission of 
 small notes by our State banks, the people were of neces- 
 sity subjected to an influx of depreciated paper money 
 from foreign States, which circulated from hand to hand 
 by common consent, in despite of the ineffectual laws 
 which had been enacted to restrain them. This state 
 of things forced the general conviction upon the public 
 mind, that it was the wisest policy to return to our an- 
 cient system, and allow our banks to furnish a better 
 small-note currency, than that which then filled the 
 lower channels of business. Upon this conviction the 
 Legislature acted, and their measures were followed by 
 the general relief, from a depreciated currency of which 
 the people, in the main, knew nothing, and the neces- 
 sity of practically proclaiming the law which prohibited 
 it, to be a dead letter. 
 
 At an early period of the session a memorial of a 
 most unexpected and extraordinary character was pre- 
 
INTRODUCTION. Vll 
 
 rented to the Assembly. It prayed neither more nor 
 less, than that the Legislature would enact a law to pro- 
 hibit the practice of praying, singing, reading the Bible, 
 and other religious exercises in such schools, academies, 
 and seminaries of education, as receive aid from the 
 public treasury. This subject, of so much importance to 
 the substantial welfare of the youth of the State, and the 
 perpetuity of its institutions, was referred to the Commit- 
 tee on Colleges, Academies and Common Schools. The 
 report of that Committee, confining its views, with great 
 strictness, to the question in a solely political light, de- 
 monstrated with much delicacy and forbearance, and 
 yet with sufficient strength, the fallacy of that theory 
 which forebodes an infringement of republican liberty 
 as inseparable from a general reading of the Holy Scrip- 
 tures. The action of the Assembly, subsequent to the 
 production of this Report, was all but unanimous, in 
 adopting the recommendation of the Committee, viz: 
 •'that the prayer of the memorialists be not granted." 
 It is sufficient for the merit of this Report, to say that it 
 has not only been received with commendation in this 
 State, but it has commanded for itself an extensive cir- 
 culation and reprint in other States. 
 
 The introduction to the Assembly of a Bill to incor- 
 porate the Cold Spring Whaling Company, though in 
 itself of limited public interest, became of importance in 
 consequence of the discussion which it drew out bear- 
 
Vlll INTRODUCTION. 
 
 ing upon great abstract questions. Among them was 
 one as to the propriety of subjecting Corporators to per- 
 sonal responsibility for the debts of corporations. The 
 negative ground is strongly taken in a speech contained 
 in the present volume, which, as an exposition of an 
 important principle, it has been deemed expedient to re- 
 tain in a more enduring shape than the columns of a 
 newspaper. 
 
 When the Executive of the United States summoned 
 Congress to an extra session, in September, 1837, he 
 promulgated to them, in his special message, an entire 
 new theory as to the future management of the public 
 money, and the reciprocal duties between the govern- 
 ment and the people. He proposed an entire abandon- 
 ment of what, up to his time, had been considered an 
 essential power and duty of the government, enjoined 
 by the constitution, and suggested instead, a system of 
 individual receivers and custodians of the public mo- 
 neys, subject generally to the supervision and control of 
 the President. This, which soon became known as 
 " The Sub-Treasury Scheme" was received with sig- 
 nal disfavor by the people at large, of both parties. So 
 unconstitutional was its character and fallacious its logic 
 considered in this State, that resolutions were introduced 
 into the House of Assembly, condemnatory of its princi- 
 ples and policy. The introduction of these resolutions 
 called out the able and searching examination of this 
 
INTRODUCTION. IX 
 
 leading executive measure, which will be found in the 
 succeeding pages. 
 
 In addition to the report on the memorial against the 
 use of Bibles, the Committee on Colleges, &c. made a re- 
 port to the House on that part of the Governor's mes- 
 sage which relates to Public Instruction. This report 
 enforced upon the Legislature, with much clearness of 
 logic and strength of eloquence, the duty, eminent and 
 obligatory, of providing for the education of the poor — 
 of enlarging the field of intellectual action — and of se- 
 curing to the young the means of cultivating the nobler 
 powers and the purer virtues. It was received with the 
 due appreciation to which it was entitled, both in and 
 out of the House. 
 
 Upon the important subject of Internal Improvements 
 the House had the good fortune to be highly gratified, 
 and it may be added instructed, by a most luminous 
 and comprehensive Report, from the pen of Mr. Ruggles 
 of New- York, chairman of the Committee on that subject. 
 Of the superior ability, thought, and forecast of this Re- 
 port it is not necessary here to speak. The people have 
 pronounced upon it in a language not to be misunderstood. 
 Some remarks connected with the subject are contained 
 in the succeeding volume, which present some important 
 principles, worthy of the consideration of the reader. 
 
 The glowing distrust, throughout the country, of the 
 existing system of bank charters, attributable, in the 
 
X INTRODUCTION. 
 
 main, to the destructive efforts directed against one in- 
 stitution by a late public functionary, was increased to 
 a high degree by the general derangement affecting all 
 classes of industry, consequent upon the suspension of 
 specie payments. There was obviously a determination 
 in the public mind to interpose some remedial legisla- 
 tion, between the action of bank corporations, and the 
 people at large. It was contended, that as these insti- 
 tutions were only willing to lend freely when money 
 was plenty and people did not want it, and were obdu- 
 rate in refusing when it was scarce, and their refusal 
 produced an added pressure, that their real utility was 
 much lessened, and that their privileges were in fact mo- 
 nopolies, the benefits of which, at seasons of calamity, 
 enured only to the few. The mode of relief proposed 
 was by a repeal of the restraining law, and enacting a 
 General Banking Law, allowing the privilege of bank- 
 ing to ally under certain restrictions. This discussion 
 called up the whole subject of banking, and the true 
 principles involved therein. The speech at the close of 
 the volume discusses and examines these in detail, and 
 enforces upon the attention of the reader some cardinal 
 principles, which are not always reverted to, even by re- 
 puted statesmen of experience, when legislating upon 
 this intricate and important subject. 
 
 The speeches and reports of this volume are from the 
 pen of D. D. Barnard, now member of the Assembly 
 
INTRODUCTION. XI 
 
 from the eity of Albany. It but remains for the Editor 
 to say, that they were collected by him, and put forth by 
 him, at the instance of friends, who, in common with 
 himself, appreciated the sentiments advanced, and the 
 principles maintained by Mr. Barnard during the win- 
 ter of 1838. They esteemed these sentiments and 
 principles as possessing too much of permanent interest 
 to be lost, (in some sense,) in the ephemeral columns of 
 the daily press. It was resolved, with the author's con- 
 sent, to combine them in their present more enduring 
 shape, and the newspapers in which they had appeared 
 were accordingly gathered, and placed in the hands of 
 the book compositor. The result is before the public ; 
 and if passages of the volume do not often charm the 
 desultory reader by their eloquence, or instruct by their 
 inculcation of sound principles, the book will still be 
 valuable as a book of reference for the important topics 
 discussed in the New-York Legislature of 1838. 
 
 J. B. V. S. 
 
 Albany, June. 1838. 
 
SPEECH 
 
 ON THE BILL TO REPEAL THE LAW PROHIBITING THE 
 CIRCULATION OF SMALL BANK NOTES; DELIVERED IN 
 THE ASSEMBLY OF NEW-YORK, JAN. 9, 1838. 
 
 Mr. Chairman — The bill before us involves some 
 principles which I regard as of considerable importance, 
 and in relation to which I desire personally to be under- 
 stood. I shall, therefore, with the indulgence of the 
 committee, undertake to present my views of the real 
 merits of the measure under debate. 
 
 And if the true merits of the bill only had been brought 
 under review and discussion, my remarks would be con- 
 fined strictly to those merits; but the debate has taken 
 a wider range under the lead of gentlemen who have 
 thought it to be their duty to oppose the bill; and I may 
 deem it necessary, before I close, as other gentlemen 
 have done, to notice, I hope not at much length, the po- 
 sition in which the opponents of this measure have 
 chosen to place themselves before the committee, and be- 
 fore the public. 
 
 Before proceeding, however, with the discussion, ac- 
 cording to the views now indicated, I beg leave to offer 
 a general remark or two, not inappropriate I hope, at 
 this early stage of the session. 
 
 1 
 
On this, and on all subjects of any considerable im- 
 portance, coming before us for action, I am in favor of 
 discussion. The truth was never injured any where by 
 full and free discussion. It is the way, and the only 
 way, in which truth is shown to be mighty, and in 
 which it comes eventually always to prevail. This is the 
 only way in which error can be successfully assailed and 
 beaten down. Falsehood is generally as good as fact — 
 naked theory as good as a philosophical induction — and 
 a mere sophism as forcible as a sound argument — until 
 the right is presented and the wrong exposed. But I 
 am in favor of legislative discussion, sir, above discus- 
 sion in almost every other mode. I think its value is 
 not generally understood. Even favorite and popular 
 measures, concerning which there is apt to be so much 
 impatient demand for action, are none the worse for being 
 thoroughly discussed. If this course were taken more 
 generally than it is, I am satisfied that legislation in re- 
 publican governments would be less liable than it now 
 is to the charge of capriciousness, and want of steadiness 
 and consistency. It is in the nature of things, that 
 large communities of men should act, more or less, from 
 impulse ; but it is the duty of legislative bodies to act as 
 little from impulse, and as much from principle and rea- 
 son, as possible. One way of securing this advantage 
 is, to deliberate, and to discuss. 
 
 The very measure before us, in its history, is, to some 
 extent, an apt illustration of the manner in which a 
 community may at different periods, be swayed, first 
 forward, and then backward, on the same subject. It is 
 useless to deny, that no longer than three years ago, 
 there was a current of popular sentiment in this state, 
 
setting in favor of the suppression of small bank bills, 
 though, because as I think that sentiment was wrong, it 
 was by no means as strong as it was made to appear to 
 be, and not half as strong as that which now demands the 
 repeal of the law. As a legislative measure, that law 
 was not carried by the votes of any paity. Men of all 
 parties, not all men of all parties, but men of all parties 
 aided in its passage — many of whom, in common with 
 those whom they represented, have now become satis- 
 fied that the measure was erroneous, and desire to see it 
 changed. 
 
 I mention this fact only to show the tendency of 
 things with us, and to derive from it, as I think by a 
 just inference, the importance of ample deliberation and 
 discussion on all questions coming up for legislative ac- 
 tion, in regard to the policy of which doubts may rea- 
 sonably be entertained. 
 
 I profess to entertain great confidence in the opinions 
 of the people as quite likely to be right, provided only a 
 fair opportunity be afforded them to form and mature 
 their judgments. And at the same time, I recognize the 
 possibility of their being quite wrong, even though quite 
 unanimous, when led by demagogues, and acting only 
 from impulse, or from passion. I hold it to be the im- 
 perious duty of every member on this floor, who feels 
 himself capable of doing so, to aid, to the extent of his 
 powers, in the development and elucidation of all sub- 
 jects of general importance presented before us. In this 
 way we may acid energy to our own powers of thought 
 and comprehension ; we may enlighten each other, and 
 we may aid most materially, through the public audi 
 ences with which we are favored, and through the re- 
 
ports that are made of us, in giving a just direction to 
 public sentiment. In this way, if fortunate and faithful; 
 we may be continually opening new fountains of light 
 on subjects of public interest, and digging deeper and 
 deeper the wells of clear and unadulterated truth. 
 
 It is evident, however, that to secure the best benefits 
 of discussion, it should be thorough and full. We shall 
 do little towards fathoming the deep waters that may 
 chance to lie beneath us, if we are content with sporting 
 ourselves on the frozen surface of subjects only. We 
 must take care to examine each others positions here, 
 each others opinions, doctrines and arguments, and we 
 must be faithful to expose them where we believe them 
 to be wrong, and where they tend, as we think, to mis- 
 chief. This, I give gentlemen fair notice, shall be my 
 course, pursuing it I trust with perfect courtesy, and 
 the kindest regard for the persons and feelings of those, 
 of whatever political faith, with whom I have the 
 gRulncation 10 be associated on this floor, and never in- 
 dulging in crimination or severity, but when the case 
 shall seem imperatively to demand it; and while I thus 
 avow my own course towards others, I invite others to 
 do by me in this regard, as I declare it to be my pur- 
 pose to do by them. 
 
 We have before us, Mr. Chairman, a bill, the object of 
 which to restore to this community a bank-note curren- 
 cy, to be furnished by our own banks, of convenient de- 
 nominations for the common and smaller business trans- 
 actions of life. A brief history of past legislative action 
 on this subject will not be out of place. In 1830 a law 
 was passed, prohibiting the circulation in this state of 
 the notes of banks out of the state, of a denomination 
 
less than five dollars. This law was wholly ineffectual. 
 It was scarcely noticed, much less obeyed. The object 
 was, I suppose, two fold; it was to get rid of a circula- 
 tion which was too far from the place of redemption to 
 be entirely sound, which was often spurious and gene- 
 rally suspected ; and to clear the channels which that cir- 
 culation occupied, in order that they might be filled with 
 the better-known and healthier issues of our ovrn banks. 
 The law was, however, as I have said, without effect. 
 
 In 1835, a policy, entirely new I think in this state, 
 was proposed. It was an experiment on the currency, 
 though one which certainly found more favor with the 
 public generally than some other experiments on the 
 same subject. A law was passed designed to enforce 
 obedience to the provisions of the a-ct of 1830 in regard 
 to foreign bank notes, and at the same time forbidding 
 the issue and circulation of domestic notes of a similar 
 description. This law was effective , and we ceased to 
 have a general bank-note currency in this state, except 
 of denominations of five dollars and upwards. This oc- 
 curred, by the provisions of the act, in the fall of 1836. 
 The operation of the law. according to my observation, 
 was never, from the first, deemed to be either convenient 
 or beneficial by any class in the community. Undoubt- 
 edly, there were individuals in every class with whom 
 the measure was a favorite one. 
 
 The law of 1835 had been in effective operation per- 
 haps a little more than six months, when the unhappy 
 suspension of specie payments by the banks took place. 
 This event, of course, changed the aspect of things en- 
 tirely, and what might have been a good currency mea- 
 sure before that occurrence, was not unlikely to prove a 
 
 1* 
 
6 
 
 disastrous one after it. The legislature of this state was 
 in session when that event happened; and while it re- 
 cognized by law, with great unanimity, the necessities 
 which had driven the banks to suspension, it refused, in 
 its wisdom, to entertain a proposition for the restoration 
 of a small bank-note currency to be issued by the banks 
 of this state. The consequence of this refusal was just 
 what should have been, and was expected. The state 
 has been flooded with the small paper issues of banks in 
 other states, forming, in fact, the only currency of that 
 description in use amongst us; a currency of a conside- 
 rable part of which even the genuineness is justly doubt- 
 ed, much of which is discredited for soundness, and all 
 of which is, at this time, greatly depreciated as compared 
 with our own bank paper. 
 
 It is now proposed, by the bill before us, to return 
 again in this state, unconditionally, to the use of a small- 
 note currency to be furnished by our own banks; and 
 from the brief recital now made, it will be seen that 
 this measure presents itself to us in two aspects. In one, 
 we may regard it as a measure of temporary relief, de- 
 signed to afford a remedy for a temporary and pressing 
 evil; in the other aspect, it involves the serious and im- 
 portant question, whether it be the true policy of this 
 state, as a settled and permanent measure, to supply to 
 the community a bank-note currency, rather than an 
 exclusive specie currency, for business requiring money 
 of a denomination over one and under five dollars? I 
 am in favor of the bill on both grounds ; as a measure 
 of temporay relief, and also as a measure of sound poli- 
 cy for all time to come. 
 
 Considered as a measure of immediate relief, I hold 
 
it to be the imperative duty of the legislature to pass the 
 bill, and to pass it as promptly as is at all consistent with 
 due deliberation. Sir, what was the condition of things 
 in this state in regard to the currency, when the banks 
 had suspended specie payments ? And what was the 
 duty of the legislature, then in session, on the subject ? 
 Why, sir, this community presented the extraordinary 
 spectacle of a people actually without a legal currency, 
 of any description, for all its business requiring money 
 under five dollars. The instant the suspension occurred, 
 the metals ceased to circulate. They ceased to be the 
 practical measure of value, and by necessity they ceased 
 to be capable of use as the common medium of exchange. 
 They bore at once a heavy premium, as compared with 
 that which alone filled the channels of circulation as 
 money ; and they became an article of trade. When 
 the banks suspended payments in specie, the necessary 
 effect was, as it always has been and always will be in 
 like cases, that the whole community followed the ex- 
 ample, and suspended payments in specie likewise. In 
 such cases, foreign commercial balances may still be paid 
 in specie ; but domestic commercial balances generally, 
 and nearly all the ordinary payments and exchanges 
 are made not only without specie, but without any more 
 regard to it than if it had been still in the mines. With 
 the suspension in May last, specie ceased to be money, 
 because it ceased to possess the peculiar attributes which 
 alone fit it for the uses of money. It was still nominally 
 the legal currency of the whole country, but the common 
 use of it as such, either in making present exchanges, 
 or in the performance of contracts, was at once suspend- 
 ed by universal consent, except only in cases where legal 
 
8 
 
 coercion was resorted to ; and to this the banks were liable 
 as well as individuals. 
 
 Now with specie withdrawn from circulation, what 
 was the community to do, without legislative aid ? By 
 the laws of trade, metal had ceased to be money, and 
 by our own statute law, applicable to small bills, the use 
 of a paper substitute was so far forbidden. Our own 
 banks could not furnish it under pain of a forfeiture of 
 their charters, and to offer in payment a small note of 
 a foreign bank subjected the offender to a heavy fine. 
 And that, at such a time, with such a condition of things 
 and such a state of the law, a legislature should have 
 actually been in session, a legislature claiming to repre- 
 sent an intelligent community, nay, claiming itself to be 
 both intelligent and honest, and yet that that legislature, 
 with the whole subject before it and pressed on its atten- 
 tion, should have utterly refused any action whatever 
 upon it — all this I confess almost passes belief. Sir, con- 
 ceive of a people numbering two millions — an industri- 
 ous people — an enterprising people—a trading people — 
 literally without an authorized currency for the daily and 
 common transactions of life ! And such was this peo- 
 ple — specie withdrawn, and paper refused, and nothing 
 remaining but to come down to a condition of barter, in 
 obedience to law, or to defy the government, and seize a 
 currency of some sort, or of any sort, wherever it was 
 to be found. 
 
 Sir, as money is a primary want of a civilized com- 
 munity, so i hold it to be the first duty of government 
 to see that that want is supplied. Since the period 
 of the first introduction of the precious metals for gene- 
 ral use as money, it does not occur to me, that any gc- 
 
vernment, in any part of the civilized and trading world, 
 has thought it could safely leave the subject of its cur- 
 rency to take care of itself; much less has any such go- 
 vernment ever ventured so to decree or legislate, as that 
 a whole people should be effectually denied the use of a 
 currency, whether for larger or smaller transactions, un- 
 less in defiance of a highly penal enactment. It is, in 
 this enlightened age, and in this enlightened and happy 
 country, that the first example of the sort has been set. 
 And I charge it on the last legislature of this state, 
 and on that party in the state, whose will it came 
 here to perform ; that 1 can recall to mind no parallel 
 for that gross neglect of the performance of legislative 
 obligation of which that body was guilty, when it re- 
 fused, after the suspension of specie payments, and its 
 own sanction of that measure as unavoidable, to pro- 
 vide for the people of this state a currency of small bank 
 bills. I charge it on the administration then in full 
 power, that it was guilty of a gross dereliction of duty 
 in this matter, equally without precedent and without 
 excuse. That administration deliberately refused to sup- 
 ply to this community a currency of denominations be- 
 low five dollars, and at the same lime forbid the free 
 citizens of this state, under severe penalties, to supply 
 themselves with such a currency, exhibiting at once a 
 mingled folly and recklessness which it is difficult to con- 
 template without indignation. 
 
 Sir, such was not the conduct of that sagacious states- 
 man, Mr. Pitt, on a like occasion, notwithstanding the 
 prophetic warning given him by Mr. Burke, to which 
 allusion has been made in the course of this debate. 
 Mr. Burke, then, I think, at Bath, and laboring under 
 
10 
 
 his last illness, and evidently looking at the subject, as 
 certainly was not his manner when he was in the vigor 
 of his age, in a single point of view, desired his corres- 
 pondent to tell the minister from him, that if he allowed 
 the Bank of England to issue one pound notes he would 
 never see a guinea again. The law of currency, to 
 which that remarkable man referred, was as certain in 
 its operation as the fact was then unimportant; and the 
 advice was disregarded by Mr. Pitt, as it should have 
 been. For thirty years previous to this time the bank 
 had been permitted to issue no notes of a denomination 
 less than five pounds. But the condition of things was 
 now changed. After a struggle, which had lasted for 
 several years, the government determined that the bank 
 ought to yield, and it was directed to refuse payments in 
 specie. This was in 1797 ; but the government did not, 
 by an arbitrary decree, leave the country without a cur- 
 rency of small money. The bank was authorized to 
 issue small notes, and although it resumed in 1821, yet 
 it was not, I believe, till 1829, that all notes under £5 
 ceased to circulate. 
 
 And now, Mr. Chairman, if it was the duty of the 
 legislature in session when the suspension in this coun- 
 try occurred last spring, to have promptly provided for a 
 due supply of small notes for circulation from our own 
 banks, is it any the less the duty of the legislature to 
 do, at this time, what ought by all means to have been 
 then done ? It is true, the remedy comes late, but its 
 necessity is scarcely less imperative than it was at the 
 moment of suspension. That suspension still continues, 
 and is legalized yet for four months to come. So long 
 as the suspension shall continue, so long will specie bear 
 
li 
 
 a premium. And though that premium is greatly les- 
 sened, yet it is still enough, and will continue to be 
 enough, effectually to forbid its use as a common medi- 
 um of exchange. In the mean time, the law prohibit- 
 ing the issue of small notes by our own banks, and the 
 circulation of such notes from any banks, keeps its place 
 in the statute book ; and it is just as true now as it was 
 when the suspension began, that this great community 
 is wholly without a currency of small money provided 
 by law ; and not only so, that it is utterly forbidden, by 
 positive and penal enactment, to supply itself with the 
 only currency of the sort possible to be brought into use. 
 
 The occasion for the interposition of the legislature 
 still remains, and in my judgment, we shall be wanting 
 in the discharge of our public duty, if we fail to grant to 
 the community the proper relief. This duty on our 
 part, is made the more indispensable from the unhappy 
 position which the people have been compelled to occupy 
 towards the law, and the public authorities of the state. 
 They stand in an attitude of open and avowed resis- 
 tance to authority; a state of things at war with both 
 law and morals, and tending to the destruction of all 
 that is stable, and all that is valuable in civil society. 
 
 The policy to which I have referred, and which re- 
 fused to unlock our own banks for the needed supply of 
 small bills, led of course to the immediate introduction of 
 foreign notes. This borrowed currency was brought in 
 at a premium, and if it ever goes out, it must go out at 
 a discount. We have paid for importing it, we pay, as 
 we should, for the use of it, and we must finally pay for 
 sending it home. It is believed that there may be at 
 this time not less than three millions of this paper afloat 
 
12 
 
 in this state. It is here for use at a great and constants 
 increasing expense, and what is worse, it is here in defi- 
 ance of all legal authority. Much of it is without doubt 
 spurious ; some of it the issues of banks of doubtful cre- 
 dit ; and all of it at a heavy discount, not merely as com- 
 pared with specie, but as compared with our own bank 
 paper. I regard it as an indispensable obligation resting 
 on us, to do what lies in our power, at least to put the 
 community in possession of something which can be le- 
 gally used as a currency ; and thus by frankly confess- 
 ing the enormous errors of past legislation, under which 
 the citizen was driven into hostility to the law, open 
 the way for restoring to him his rights, and at the same 
 time bringing him back to a condition of obedience to 
 public authority. It was one of the worst acts of ty- 
 ranny, to force the community into the use of this fo- 
 reign paper, and it is only an act of sheer justice, with 
 our earliest oppportunity, to relieve the public of the ne- 
 cessity of continuing to employ it. 
 
 It is mainly on the ground which I have now ex- 
 plained, that I choose to rest my opinion of the impor- 
 tance of passing this bill, as a measure of temporary re- 
 lief. There are, however, some other very important 
 considerations which ought to have great weight with 
 us. One of these, and the only one to which I can now 
 refer, is the valuable aid which the issuing of small bills 
 will give the banks, towards bringing about a speedy 
 and safe resumption of specie payments. It is easy 
 enough to see the operation of the measure in this re- 
 spect, and hardly needs, or would justify, any elaborate 
 explanation. That such would be its effect, seems to be 
 undisputed in every quarter, and an argument, there- 
 
13 
 
 fore, to justify such an expectation from it, might well 
 be regarded as out of place at the present time. 
 
 It will be observed, that the bill makes no attempt to 
 limit the amount of issues, which the banks may make 
 of small notes. The sum of their issues is already re- 
 strained by law, and beyond that limit they will of 
 course be unable to go. Whether they shall take the 
 occasion of the permissive authority of this bill to come 
 up to that limit, or in any the least degree to increase 
 the present sum of their issues, so long as the suspension 
 lasts, must depend upon themselves. I am disposed to 
 trust them, and leave them to act upon their own respon- 
 sibilities. I do not believe that, in the present condition 
 of things, they will increase their issues materially by 
 reason of this bill. Their policy has been, and is, a set- 
 tled one. They have been, and are, steadily strength- 
 ening themselves for the period of resumption. This 
 they do by curtailment ; and severe as the operation 
 is on the community, I think their safety consists in a 
 a firm adherence to this line of policy — especially if they 
 are to be left, as present appearances seem to indicate, 
 and as I think will be their duty, if that course is forced 
 upon them, to return to specie payments without the 
 consent or co-operation of their neighbors. I hope, and 
 I believe, that our banks will resume within the period 
 of indulgence now allowed by law. Every thing so far 
 has shown a settled determination on their part not to 
 protract the time -the disposition is not wanting — I be- 
 lieve they will have the ability — and in addition to all 
 this, there is a force pressing on them from the commu- 
 nity, and of which there is evidence enough in all quar- 
 ters of this representative body, which they cannot but 
 
 2 
 
14 
 
 know it would be mere madness in them to encounter 
 or resist, even if they had the disposition to do so. On 
 the whole, therefore, I agree with the gentleman who 
 has introduced this bill, that the simplest form in which 
 the authority to issue small bills, can be restored to the 
 banks, is the best form. As a general practice, while 
 the suspension lasts, they will put out small bills only 
 when they can make them take the place of their own 
 bills of larger denominations now in circulation ; and if 
 this prudent course be at all departed from, we may, I 
 think, safely calculate, that it will be only on the part of 
 those banks which, from the secure footing on which 
 they have already placed themselves, look forward to 
 the conflict which the act of resumption is nearly cer- 
 tain to bring upon them, with calmness and with confi- 
 dence. 
 
 But, sir, this bill would by no means satisfy me if it 
 did not look to a return to the former policj^ of this state ? 
 in regard to a small bank-note currency as a perma- 
 nent and established measure. For one, I was never 
 satisfied with the change, and I have never from the first 
 moment of its introduction, seen any evidence to con- 
 vince me that the community at large was satisfied with 
 it. Quite the contrary. It has at all times been pro- 
 ductive of great inconvenience ; it has greatly impeded 
 instead of facilitating business ; and it has unhappily 
 obstructed the circulation of cheap knowledge in a po- 
 pular form by cutting off the usual means of making 
 small remittances, and enhancing the cost of collections. 
 This of itself is a great evil, and is only to be compen- 
 sated for by some capital advantage, such as I have yet 
 to learn ever has been, or ever can be realized from the 
 
15 
 
 policy of excluding small bills. Although men of all 
 parties, and many men for whose opinions I entertain 
 the highest respect, have, at times, favored this policy, 
 still I hope it may not be deemed arrogance in me to say, 
 that I am impressed with the conviction that it was ad- 
 vocated and adopted, so far as it was adopted at all, with- 
 out all that thorough examination which was demanded 
 from its importance and its various bearings. 
 
 My own ideas of this policy, and which will of course 
 be taken for just what they may be worth, may be ea- 
 sily explained. I suppose it to be entirely settled that 
 the currency of this country is to consist principally of 
 paper, and not of specie. No man of any reputation at 
 this day openly advocates the expulsion of bank paper. 
 The "constitutional currency" has been talked about, 
 and there have been those, high in place too, who have 
 thought fit to intimate that the time was at hand, when 
 this nation would, as it ought, adopt the use of the pre- 
 cious metals as the only medium of exchanges. These 
 persons have met with a rebuke, however, which has 
 driven them to abandon their ground, or at least to co- 
 ver their offensive position behind all sorts of explana- 
 tions and excuses. It may, I suppose, be set down as 
 certain, that no community, at all advanced in civiliza- 
 tion and refinement, especially if it be a free community, 
 is about to resort at this day to an exclusive metallic 
 currency. 
 
 Now why is it, let me ask, that paper is resorted to at 
 all, for use as money, instead of metal 7 On what prin- 
 ciple is it adopted ? Paper is not, it must be remember- 
 ed, an entirely independent substitute for metal. A con- 
 vertible bank note is merely the paper title to so much 
 
16 
 
 coin or bullion as is expressed on its face. It is worse 
 than worthless as money, if it be not this, and merely 
 this. It does not take the place of coin, or dispense ab- 
 solutely with the use of it, any more than the deed 
 which a man has of his farm takes the place of the farm 
 of which it is the evidence of title. The instrument is 
 portable, while the acres are not, and by its means, the 
 acres themselves may be transferred from one owner to 
 another, not only with facility, but with perfect security, 
 and that at the distance of a thousand miles from their 
 location, as well as if the parties were actually standing 
 on the soil itself. 
 
 Metal is an expensive article. It could not be used 
 as money if it were not ; nor w^ould it be fit for use as 
 money, if there was not a natural and ascertainable 
 limit beyond which it cannot be profitably produced. 
 But while, on the one hand, a material of value is indis- 
 pensable to constitute a common measure of values, and 
 a basis for a common medium of exchange, yet it is al- 
 ways true, on the other hand, that such a material is 
 used, if at all, only at a dead loss of so much productive 
 capital. Gold and silver, in use as money, are in them- 
 selves utterly unproductive. 
 
 They are employed in making exchanges of property ; 
 they create no values ; they add nothing directly to 
 wealth when thus used ; they are so much dead capital 
 in the hands of those who are obliged to employ them 
 in active business ; and to keep them in actual service 
 for making exchanges, when a paper representative 
 would answer the purpose equally well, would be just as 
 wise as it would be if a merchant should use a gold or 
 silver yard-stick instead of one of wood or brass, when 
 
17 
 
 this last would perform the service of a yard-stick quite 
 as well. 
 
 By the use of paper, the expense of keeping a large 
 amount of coin is saved. There must still be enough 
 to constitute the proper basis of the paper circulation, 
 and enough to answer all the demands which the hold 
 ers of the paper are likely to make upon it. But this 
 amount is comparatively small, and all the residue is set 
 free to be employed as active and productive capital. 
 The commercial world is settled in the conclusion, am: 
 it is a matter about which there is no difference of opin- 
 ion, except as that difference of opinion has manifested 
 itself in this country within the last eight years, that in 
 commercial transactions, paper is absolutely indispen- 
 sable. 
 
 You must return to a state of comparative indigence, 
 you must cease to give employment to the industry of 
 the country as you now do, business and enterprise to a 
 great extent must be suspended, or you must adhere in- 
 flexibly to your settled system of a convertible paper cur- 
 rency. Bills of exchange and bank notes can never be 
 dispensed with in the transactions of an extended com- 
 merce. Gold and silver could never perform the office 
 and service which they perform. 
 
 Valuable even as gold is, the bulk and weight of it, 
 und the time and labor necessarily consumed in weigh- 
 ing, or counting, and transporting it, when employed in 
 heavy business, render it wholly unfit for the uses of 
 money. And if metal, or some material of intrinsic va- 
 lue must be used, we must find something better than 
 gold and silver. In Russia, it is understood, that platina 
 lias been coined for money, and in regard to its superior 
 
 2* 
 
18 
 
 value, has one advantage over gold, for heavy transac- 
 tions. 
 
 But there are objections to it, and, besides, even this 
 material is not dear enough to make it a competent me- 
 dium in very large exchanges. Diamonds have been 
 resorted to ; but are utterly unfit for common use as mo- 
 ney for a variety of reasons. 
 
 Now convertible paper is just that instrument, which, 
 by its constant and steady reference to specie, at the 
 same time that it dispenses with the actual use of it in 
 exchanges, enables the trading public to perform its ex- 
 tended operations in business in spite of a want, which 
 otherwise would be most severely felt — which otherwise 
 would certainly impede and arrest these operations. 
 
 A money of intrinsic value to answer the large de- 
 mands of commerce, w T ould need to be some material 
 which, without being more ponderous or bulky than gold, 
 must, quantity for quantity, be vastly more costly — so 
 that one eagle of such material, would suffice for ex- 
 changes which would require a hundred or a thousand 
 eagles of gold. And then if such a material could be 
 found, it is easy to see that it would be utterly useless in 
 all smaller transactions, in consequence of the minute- 
 ness of the pieces to be employed. Indeed it is, in my 
 judgment, impossible to conceive of any material for mo- 
 ney which, in actual circulation could answer the valua- 
 ble and indispensable uses, for which convertible paper 
 is now employed. 
 
 But I do not regard paper as useful only in large tran- 
 sactions ; it is equally useful in smaller. We are apt, 
 I think, to commit a great error in the estimate we put 
 on the ordinary and every day business of life. We 
 
19 
 
 greatly underrate its aggregate importance. We look 
 at drops of water, and we forget that the ocean is made 
 up of such. Our attention is arrested by the proportion 
 and magnitude of some individual operations, and we 
 forget the superior aggregate value of vast numbers of 
 others, because each is of itself so humble and unpre- 
 tending. We look at an individual trading on a capital 
 of a million, and forget that the trade of ten of his neigh- 
 bors who operate on a capital of one hundred thousand 
 dollars each, is equally important ; and what is more, 
 we forget that the trade of fifty others who operate on 
 capitals of fifty thousand dollars, and of yet thousands 
 of others who use still smaller capitals, down even to 
 very humble amounts, is vastly more important. Let 
 gentlemen consider the importance of money for the 
 common business of life. Consider our two millions of 
 inhabitants, our three hundred and fifty thousand voters, 
 with an equal number of females ; seven hundred thou- 
 sand persons making payments almost daily in sums 
 under five dollars. It is impossible to say, sir ; I have 
 not the data on which to make the calculation ; but I 
 am inclined to believe that the total of payments made 
 in this state, in a given period of time, in sums under five 
 dollars, is greater than the total of cash payments in 
 sums above that denomination. And if this be so ; or 
 even if this conjecture approaches the truth, does it not 
 give great importance to a subject like that now under 
 consideration ? And if it be admitted that convertible 
 paper is not to be dispensed with as an agent of ex- 
 changes, where sums above five dollars are required, be- 
 cause of its superior convenience and fitness, with what 
 propriety can it be contended, that it is not equally fit 
 
20 
 
 and convenient for that vast aggregate business, requir- 
 ing money below that denomination ? Undoubtedly, 
 there is a limit of denomination below which the issue 
 of paper ought not to be allowed. That limit is ascer- 
 tained in this, as in every country, by experience ; and 
 experience, I think, has shown that paper should be 
 used for all sums except the fractions of a dollar. 
 
 Sir, closely connected with the view now presented, 
 is another, which has great influence with me, and which 
 leads me to regard the restraint on the issue of small 
 bills with abhorrence. I think that any policy which 
 unnecessarily separates between the poor and the rich. 
 is, and must be, in the mind of every fair man, odious. 
 If convertible paper is a better currency than metal, 
 cheaper and more convenient, then it is monstrous, to 
 furnish the rich with paper, and turn off the poor with 
 metal ; and neither the propriety, nor the morality of the 
 measure, is at all improved by successfully deluding the 
 latter class into the notion, contrary to the truth, that 
 they have the better currency of the two. But if, on the 
 other hand, metal is a safer and better currency than 
 convertible paper, then I insist, if you provide a currency 
 of metal for one class, you are bound to provide it for 
 all. It cannot have escaped observation — we have had 
 some evidence of it in the course of this debate — that 
 metal is insisted on as money when small money is re- 
 quired, because that is the money of the poor. Sir, for 
 myself, I repudiate all such notions ; the principle is a 
 vicious one, and as the basis of legislation, I declare that 
 I know of nothing more odious, or more mischievous. 
 Give to the community, and the whole community, a 
 safe and sound currency for all classes, and for all tran- 
 
21 
 
 taction?, and then you will have done your duty to the 
 poor as well as to the rich. 
 
 But, Mr. Chairman, gentlemen have offered several 
 reasons why, in their judgment, this bill ought not to pass ; 
 and I propose to examine the strength of those reasons. 
 Among these grounds of opposition it is urged that a 
 currency of small bills is unsafe — especially for the poor. 
 Now, in the first place, I remark, that it is as safe for 
 the poor as it is for the rich. There is as much of it, 
 when it circulates, in the hands of the rich as in the 
 hands of the poor — probably a great deal more. And if 
 there be any good reason why any one class in the com- 
 munity ought not to be trusted with it, then it ought to 
 be withheld from the whole. 
 
 Two suggestions have been made as shewing why this 
 sort of currency is unsafe. The first is, that it is liable to 
 be counterfeited. And so, sir, is that of a higher denomi- 
 nation, and much more liable than the small bills, be- 
 cause just as easy and vastly more profitable to the coun- 
 terfeiter. I apprehend, sir, that this notion that notes 
 under five dollars are more likely to be counterfeited 
 than those above, has been drawn from the fact that 
 that happened to be the case with the five pound notes 
 of the bank of England, and which was undoubtedly 
 one of the resons why that circulation was withdrawn. 
 This was not, however, the only reason. England had 
 a system of free banking— nearly so every where — en- 
 tirely so sixty miles out of London. Under this system, 
 it was found that country banks, being unrestrained in 
 the character of their issues, and unable to establish 
 themselves sufficiently in the confidence of the public to 
 keep out notes of the larger denominations, resorted to 
 
22 
 
 issues of small notes, which they had credit enough to 
 circulate, though too often they had neither capital nor 
 honesty enough to redeem. This was one evil which 
 led to the exclusion of small notes in England. But 
 the other evil suggested — that of the facility with which, 
 counterfeiting was committed — undoubtedly aided in in- 
 ducing the government to interfere. Neither the coun- 
 try banks, nor the bank of England had taken any 
 pains to have their notes properly engraved — especially 
 those under five pounds. Nor was it of any benefit to 
 the bank of England to issue small notes, particularly if 
 obliged to procure expensive engravings, as it never re- 
 issues its notes — not even though drawn at one end of 
 the counter, and immediately presented for redemption 
 at the other. They are received and instantly cancel- 
 led. It was, therefore, in England, rather the interest 
 of the bank than of the community, that small notes 
 should be withdrawn from circulation. We know very 
 well that our system is widely different. Our banks re- 
 issue their notes at pleasure, and as often and as long as 
 they continue fit for circulation ; and the character of the 
 engraving is much the same in the bills of all denomi- 
 nations issuing from the same bank. It is as difficult 
 a matter to make a successful counterfeit of a one dollar 
 bill as of a five or ten — a difficulty, in regard to the 
 whole subject, which is greatly increased with the ad- 
 vance, if not perfection to which the art of engraving 
 has now attained. 
 
 The other suggestion, as shewing that small bills are 
 unsafe, is that the solvency of the banks may be doubt- 
 ful. But if the solvency of the banks is really doubted, 
 that doubt should go for the benefit of all who have any 
 
23 
 
 thing- to do with any of their issues. For one, sir, I 
 have no idea of any such duty as that of legislating ex- 
 clusively for the poor. That may be a doctrine of mo- 
 dern democracy, and it may suit the notions of some 
 gentlemen on this floor, but it will never satisfy me. And 
 I deny the constitutional right of any member to be 
 here, as some seem to be, for the purpose of conducting 
 legislation, as far as may be, on any such narrow, par- 
 tial and exclusive principle. But touching this subject 
 of security to the bill-holder, I think the tone of the gen- 
 tlemen in the opposition must be allowed to be some- 
 what changed. It certainly has been the fashion in 
 this state, especially among those who have claimed to 
 be of the democracy, to sing praises to the Safety Fund, 
 as making the banks the securest in the world. Is not 
 that so? And is it possible that gentlemen are now pre- 
 pared to say that their boasted Safety Fund offers no se- 
 curity to the holders of our bank-note currency? For it 
 must be admitted certainly, if it be worth any thing as 
 security, it is worth as much for notes below, as for notes 
 above five dollars. For myself, I never had, and have 
 not now, a very high opinion of your safety-fund sys- 
 tem. I have always been impressed with the sentiment, 
 that it was introduced and sustained, by those who best 
 understood what they were about, for the purpose of 
 cheating the people into a confidence in banks altogether 
 beyond the real merits of that part of the system. As 
 far as the fund itself goes, every body of course ac- 
 knowledges that it is a substantial security ; but I think 
 a better might be devised, and I think the banks all 
 along have rested, and that they now rest, on a basis of 
 security better than this, and to which this feature in 
 
24 
 
 the system really contributes very little. Yet, whether 
 this be so or not, it is certainly a little strange that gen- 
 tlemen who have been the friends and sworn advocates 
 of this system, early and late, who have supported it 
 and been supported by it, should now profess to enter- 
 tain doubts about the solvency of the banks, the Safety 
 Fund to the contrary notwithstanding; that they should 
 seriously object to restoring to the banks the right to issue 
 small notes, on the ground of an avowed apprehension 
 that they would never be able to redeem them ! Let not 
 gentlemen attribute their loss of confidence in the banks 
 to the suspension of specie payments. The suspension 
 is bad enough without aggravating, or adding to, the 
 evils which properly belong to it. It is undoubtedly true 
 that, in a commercial sense, a bank fails when it can no 
 longer pay its notes in specie if demanded. But if an in- 
 dividual may, and often does, suspend payments entirely, 
 and yet be perfectly solvent, the suspension of payments 
 in specie by a bank, where it still goes on to meet all 
 its engagements in the only currency that is left to the 
 country, is not even evidence prima facie that it is in- 
 solvent. It is true, that a suspension necessarily throws 
 every thing into confusion. Currency becomes de- 
 ranged, and prices are unsteady, and property is of un- 
 certain value. But in the circumstances of the country 
 at the time it took place, suspension was not the greatest 
 evil which could happen. If it had then been univer- 
 sally insisted on that nothing should be received in pay- 
 ment of debts, in any quarter, but gold and silver, uni- 
 versal bankruptcy of course must have succeeded. The 
 banks would have been insolvent, because all their 
 debtors would have been insolvent, a scene of unpa 
 
25 
 
 ralleled suffering, perhaps of anarchy, would have en- 
 sued. 
 
 But my final answer to this objection of the probable 
 want of soundness in the banks, is a broad one. It is 
 an objection, which goes to their present issues, and to 
 any they may make, in bills of five dollars and up- 
 wards, as well as to the issues for which this bill pro- 
 vides. And if gentlemen are sincere, they are bound to 
 see that banks, which have not the ability to redeem 
 their small notes, if they should put them out, shall not 
 be allow r ed to issue or keep afloat their lage ones. 
 
 But, Mr. Chairman, I come now to consider another 
 reason, which has been urged, why small bills ought 
 not to be issued. Gentlemen begin with the position, 
 that there can be no such thing as a safe bank-note cir- 
 culation, which is not based on specie — and in this po- 
 sition I cordially concur. I suppose, if there be any one 
 proposition in political economy, or in regard to currency, 
 wdiich is entirely settled, it is this. At any rate, I agree, 
 as a general principle, that if you use paper for currency, 
 it must be a paper, convertible into specie, at the will o 1 
 the holder. In other words, I agree, that an issue o' 
 paper, on a property basis only, and with no other limit, 
 or restraint, than what is imposed by the limited amount 
 of such property, is utterly unsafe, and sooner or later, 
 will always be depreciated. But I regard it as a very 
 great error, though a very common one, into which gen- 
 tlemen here have fallen, when they insist on having 
 nothing but metal money in circulation, under the de- 
 nomination of five dollars, or any other particular sum, 
 under the idea that it serves as a basis for the paper cir- 
 culation above that sum. The two things it seems to 
 
 3 
 
26 
 
 me, have no sort of connexion with each other. It is un- 
 true in fact that you create a specie basis for paper in 
 circulation, by establishing a distinct circulation of specie 
 along side of it. The truth simply is, that you thus 
 have two disconnected currencies instead of one. The 
 streams come together indeed at the point of confluence, 
 and flow on together in the same broad channel, but they 
 never do, and they never can be made to, commingle 
 and unite. 
 
 Sir, what is the object of a specie basis for a paper cir- 
 culation? There are two ends to be answered by it. 
 One is to have the means of payment, in that material, 
 to meet any demands which may be made for it. For 
 this purpose alone, the basis ordinarily need not be large; 
 for experience shews that probably not one person in five, 
 holding bills will demand the specie ; frequently, in times 
 of security and confidence, not one in twenty, or even 
 one in a hundred. For this reason it is that banks may 
 be safely conducted with paper out, greatly exceeding 
 the actual amount of specie on hand. In this particu- 
 lar, the business of a bank is very much what the busi- 
 ness of any fair trader is. Specie is the only legal ten- 
 der ; every creditor may demand it of every debtor ; 
 but it is not demanded except in comparatively rare in- 
 stances ; and in conducting a business, great or small, 
 the principle of safety only requires, that full provisions 
 should be made for the demand, whatever in practice it 
 is likely to be. This then is one object of a bank specie 
 basis. And now, in regard to this object, what is gain- 
 ed to the community by having a specie circulation esta- 
 blished by the side of a paper circulation? It is the bank 
 that is to redeem its paper, not the community. If you 
 
27 
 
 present a five dollar bill at the counter of a bank for 
 coin, you do little to facilitate the transaction by having 
 five dollars of silver already in your pocket; and I con- 
 clude the only proper place for a specie basis, to meet 
 the current demands of a paper circulation, is the vaults 
 of the banks. 
 
 But it is said, that a mixed currency, consisting partly 
 of paper and partly of specie, affords the best security 
 against over issues ; and this brings me to consider the 
 other, and the more important, use of an ample specie 
 basis. I desire it to be remembered all the while, that 
 what is thus called a mixed currency, is in truth no such 
 thing. It is always the case of two distinct, and, in 
 some respects, opposing currencies, and in the nature of 
 things they can not mingle and become one. The one is 
 not a basis for the other ; one may be above the other, 
 but does not rest upon it ; and the notion that any con- 
 siderable check is thus given to expansions and the evils 
 of redundancy to which paper always tends, is, in my 
 judgment, entirely unsound. This check can only 
 be given by a sufficient specie basis in vanity kept in 
 some fixed and adequate ratio to the whole amount of 
 paper in circulation. It is this office of a specie basis, 
 on which I am prepared at all times to insist ; and J 
 avow my solemn conviction and belief, that as nothing 
 else ever has been found, so nothing else ever will be 
 found, which will operate effectually to repress undue and 
 destructive expansions, in a currency consisting chiefly 
 of paper, and keep it in a sound and healthy state. 
 
 Let us see now if any principle can be found in a so- 
 called, mixed currency, to check expansions. We will 
 suppose that this whole country may require, for its 
 
28 
 
 actual exchanges and the employment of its caplal and 
 industry, a currency of a hundred millions of dollars. 
 Let us then be supplied with eighty- five millions of pa- 
 per and fifteen millions of specie, the line of demarca- 
 tion between the two currencies being drawn at the five 
 dollar point, the specie of course moving in the lower 
 plane, and the paper in the upper. Now comes a time 
 of great activity in business. Men are stimulated, and 
 they stimulate each other, to extraordinary action. Pro- 
 perty advances in value. Speculation begins to make 
 large promises, and excite high hopes. Money is in de- 
 mand ; the banks begin to be importuned ; and as eve- 
 ry thing looks prosperous and bright, they catch sympa- 
 thetically the tone of feeling without, and they become 
 liberal and generous even beyond their wont. Debtors 
 are treated w T ith great lenity, because securities seem 
 abundant, and new issues of paper are freely made. In 
 this way the sum of the circulation is greatly increased, 
 while, it must be remembered, your specie remains sta- 
 tionary. But it will not remain stationary long. Let 
 your circulation go up to one hundred and fifty millions 
 — a hundred being still all that the actual business of 
 the country requires — and before you get to this point 
 your specie in circulation will begin to disappear. You 
 have now a redundant currency, and of course a depre- 
 ciated currency, always manifest in a general rise in 
 prices, and the specie is depreciated in the same propor- 
 tion as the paper. It is now worth more abroad than it 
 is at home ; a demand for it begins to be felt, and hoard- 
 ing becomes the order of the day. So much of it as was 
 in circulation, or a great part of it, disappears. The 
 farmer, and the tradesman, and the thrifty laborer all 
 
29 
 
 put it by. The banks can not get perhaps a dollar of 
 it ; and no considerable part of it goes out of the coun- 
 try to meet and check the foreign demand. That de- 
 mand, in nearly all its strength, whatever that may be, 
 must be met by the banks; a pressure ensues, and to 
 encounter the crisis, and save themselves, there is one 
 only way — and that is to withdraw their paper as rapid- 
 ly as possible. And this is the ordinary operation of an 
 expansion and contraction of the currency ; and I invite 
 gentlemen to consider well if they can find any thing 
 in their favorite plan of a double and antagonist circu- 
 lation, to prevent or to check it. Certainly I can not. 
 
 But again, sir, on the point of expansions, and whether 
 the tendency that way is checked, by the presence of 
 specie in the lower channels of circulation — how are the 
 facts? I shall not go into this subject, except so far as to 
 refer gentlemen to the actual workings of this system. 
 In England, small notes are not now issued ; once they 
 were. Let it be shewn that expansions were greater 
 and more frequent in the one period of their bank histo- 
 ry than in the other. In Scotland on the contrary, 
 small notes circulate and always have, I think, circulated ; 
 and no banking system perhaps was ever as free from 
 the vice of expansion as this. From the beginning of 
 banking in that kingdom, it is understood there has 
 been but a single bank failure ; and I do not know that 
 that occurred as the consequence of any over issue. 
 How has it been in Pennsylvania, in Maryland, and 
 other states, where the policy of suppressing small notes 
 has been long and thoroughly tried? And what has been 
 the experience of these states, compared with the opera- 
 tion of a different svstem in New-England, in regard to 
 
 3* 
 
30 
 
 expansions? In Maryland, it is now proposed by the go- 
 vernor in his recent message, to return t© the use of 
 small notes. And finally what has been the experi- 
 ence of our own state in this matter? Has our paper cir- 
 culation been less since the prohibition of small bills than 
 before? I have not looked at it lately, but I have no 
 doubt an examination would shew, that the aggregate 
 issues of our banks since the prohibition have not been 
 materially diminished — increased rather ; and recent 
 events are enough to satisfy every one that expansions, 
 and the worst consequences of expansions, are in no de- 
 gree prevented by the substitution of specie for any part 
 of the paper circulation from one dollar upwards. And, 
 sir, the more I reflect on this matter the more I am sa- 
 tisfied, that this hard money policy, even to the extent 
 of excluding small bills, if it should go no further, is not 
 the policy for this country. It is a good enough policy, 
 possibly, for England ; a better one perhaps for France ; 
 better still for Austria, and better than all for Russia ; 
 but it will never do, I am sure it will not, for a country 
 where the people are already advanced in wealth, in cul- 
 tivation and general intelligence, or where it is intended 
 they ever shall be. 
 
 And now, Mr. Chairman, I have gone through with 
 all the observations, which I have thought it my duty 
 to make, on the merits of the bill on your table. But, 
 sir, as I remarked in the outset, this debate has taken a 
 wider range, and I hold myself bound to proceed a step 
 further, and notice the positions and arguments of gen- 
 tlemen on several points connected, though it may be 
 somewhat remotely, with the main subject. So far as I 
 now recollect, nothing has been offered to the committee in 
 
31 
 
 opposition to this bill, beyond what I have already com- 
 mented on, which requires me to regard it as having 
 been advanced in any other than a spirit of hostility to 
 banks, to bank paper, and banking business in general. 
 In this way I do, and must, regard it; with what rea- 
 son, must be left to appear in the course of my observa- 
 tions. 
 
 It has been said, sir, that those who support this bill 
 are the friends of banks. Well, I believe that is so. For 
 one — for I speak for myself in this matter — I am in fa- 
 vor of a convertible paper currency, to the extent already 
 indicated in my remarks ; and I am the friend of banks, 
 as the constituted public agencies by which that cur- 
 rency is to be furnished. I am the friend of banks, just 
 as I am the friend of the steam-engine, which may be 
 used to propel a boat in which I may choose to become 
 a passenger, because it carries me forward to my desti- 
 nation. I am the friend of banks, as valuable, and, at 
 present, indispensable institutions of great public impor- 
 tance. In any other sense I am not the friend of banks. 
 
 In regard to the mode in which banking business 
 shall be done, I have certainly some settled notions on 
 that subject. I am opposed to unrestrained banking; 
 but by no means to a general banking law. I insist on 
 the necessity of some legal and effectual check on bank 
 issues ; but the proper restraint can always be imposed, 
 whether it be our policy to furnish ourselves with a cur- 
 rency by means of corporations, or joint-stock companies, 
 or individuals. In either way, it would be easy to pro- 
 vide for the perfect security of the bill-holder, and for the 
 protection of the community against the monstrous evils 
 of unlimited issues. As to our existing system of bank- 
 
32 
 
 iog in this state, I do not think it free from faults. 1 
 think it may be improved, greatly improved ; and yet, I 
 am not only the friend of banks, but I am the friend of 
 the present subsisting banks of this state. I desire to 
 see them preserved, and not destroyed ; I desire to see 
 the public faith strictly kept with them, to see them pos- 
 sessing, as they may deserve, the unshaken confidence 
 of the community, and fulfilling the great purpose of 
 public benefit for which they were created. 
 
 Now I ask gentlemen who have addressed the com- 
 mittee in opposition to this bill, with a single exception, 
 whether they think they can say as much ? They 
 charge, in the way of reproach, on the political majority 
 of this house, that we are the friends of the banks. 
 Well, what do gentlemen mean by this? Will they, af- 
 ter this, deny that they entertain a feeling of hostility to 
 banks? I take it for granted, that gentlemen who have 
 any respect for themselves, or any just regard for decen- 
 cy, do not mean to charge it on the majority that we 
 are the friends of the banks in any odious sense? They 
 do not mean to be understood that the majority come 
 here purchased, or corrupted, by the hanks, or under 
 any improper influence whatever in their favor or be- 
 half. Not one of them will say that. And the infe- 
 rence seems to be irresistible, when they make it matter 
 of complaint and reproach, that we are friendly to bank- 
 ing institutions, and to a currency of convertible paper, 
 that as for themselves, they are oppposed to them all. 
 
 One gentleman who addressed the committee, inform- 
 ed us that banks were wrong in their origin, and he 
 justified the favor with which, in former times, he may 
 have regarded them, solely on the ground of what he 
 
33 
 
 then supposed to have been the stern necessities of the 
 case. Another gentleman argues that as banks were 
 wrong in their origin, he could find no apology for their 
 having ever been created in any idea of necessity. 
 Why, gentlemen, I pray you, shew us what you aim 
 at? If we are to have no banks, how are we to have 
 bank paper? And if your objections go to the banks only, 
 and not to the currency, will you inform us how that 
 currency is to be supplied? Do you propose any other 
 mode? And if not. then I ask, if all this does not look 
 as if there was, in that quarter, a settled and deter- 
 mined aversion to all banks, and to all bank paper? I 
 confess that I have not been able to resist this convic- 
 tion, after considering attentively the whole course of this 
 debate, and the character of the opposition which has 
 been offered to this bill. 
 
 One objection made to the passing of this bill, is that the 
 banks do not pay specie for their bills, and this is offer- 
 ed as a reason why the community shall not be allow- 
 ed to have a small bank-note currency. If the people 
 will employ such a currency at all, they shall get it 
 where they can, at their own hazard, and in the face of 
 a highly penal statute forbidding its use. Sir, is it not 
 manifest, that this is not so much an objection to the 
 present bill, as it is an objection to banks? It strikes at 
 the foundation stone of every banking institution in the 
 state. In the absence of specie for circulation, the utter 
 impossibility of enjoying any such use of it at present, 
 it is demanded by the people, that they may be furnish- 
 ed with something to supply its place — and what is the 
 answer? No; you can have nothing but bank notes, 
 and we will not allow you to have bank notes, because 
 
34 
 
 the banks have suspended payments in specie — and this 
 is broad ground, and goes, of course, as much against 
 the use of large notes as of small. 
 
 But gentlemen go a step farther. They are not con- 
 tent with refusing the relief asked for, but they have a 
 remedy of their own to propose. They would repeal the 
 law of May last, which released the banks, for one year, 
 from the penalty of forfeiture for refusing payments in 
 specie! This is their remedy. They are for a specie 
 currency to as large an extent as may be, and they 
 would say to the banks, at once, give us specie in forty 
 days from this time, or take the consequences. But are 
 gentlemen quite sure that the banks can resume on such 
 brief notice? They profess to think so; and upon what 
 evidence? The gentleman from Jefferson, (Mr. Ward- 
 well,) finds this evidence as I understand him, in the re- 
 port made by several members of the late bank conven- 
 tion in New- York. Sir, I read that report differently. 
 I think it winds up with the opinion, strongly expressed, 
 that it will be found extremely difficult, at any time ; 
 against the will and without the co-operation of their 
 neighbors, for the banks in this state to return to specie 
 payments. 
 
 [Mr. Wardwell explained. He had referred to the 
 published journal of the proceedings of the bank conven- 
 tion, by which it appeared that the delegates from New- 
 York voted for a resolution fixing the time for resump- 
 tion by the banks generally on the 4th of March next.] 
 But that proposition was not adopted, and we have 
 now the opinions of the very persons who voted for that 
 resolution, stating the difficulties in the way of partial 
 resumption — the very difficulties sought to be avoided 
 
35 
 
 by the proposition to which the gentleman alludes. 
 And yet, on no better evidence than this, of the ability 
 of the banks to resume, without further delay, gentle- 
 men insist on repealing the suspension law. Sir, would 
 this be wise legislation? Would it be rational? Would it 
 be safe? For one, sir, I can not consent to try so hazard- 
 ous an experiment. I would not disturb the suspension 
 law. I would give the banks their full time, in the con- 
 fidence that, though at great sacrifices, they will resume 
 within the period indicated by that act. 1 believe they 
 are in as good a condition to resume, as any banks in 
 the Union ; perhaps better than any ; but this matter of 
 resumption is not so easy and safe a thing as some seem 
 to imagine ; especially if the banks of New- York must 
 rise up alone and unsupported to meet the shock. I re- 
 peat that I believe the banks can and will resume be- 
 fore the 16th day of May next; I believe they will do 
 this with the more ease if they would themselves fix the 
 day ; but, at any rate, 1 would give them all the time, 
 now allowed them, to strengthen and prepare themselves 
 for the event ; and I declare that I can discover nothing 
 in the attitude which gentlemen have here assumed to- 
 wards the banks in regard to this matter, but new evi- 
 dence of hostile feeling towards all our banking institu- 
 tutions. 
 
 [Mr. Mann, here asked permission to state a fact on 
 which he founded his belief that the banks could re- 
 sume in forty days — in forty minutes he might say. He 
 referred to the fact, that during the past year six millions 
 of specie had been imported against ten millions export- 
 ed — the difference four millions only.] 
 
 For myself, from the best information I have on the 
 
36 
 
 subject, I am inclined to think that the balance of ex 
 ports is not as large as the gentleman supposes. But 
 what of it, either way? If the commercial debt of this 
 country abroad has been paid, it is of little consequence 
 to our present inquiry whether it has been paid in pro- 
 duce or in specie. The fact, I presume, on which the 
 member from Herkimer would rely is, that, whether our 
 foreign debt be paid, or not paid, or if paid, whether paid 
 in one way or another, it is at least quieted, and the fo- 
 reign exchanges, from having been greatly against us, 
 are now in our favor. And then I must be allowed to 
 say, that if he takes this fact alone as entirely decisive 
 of the question of the ability of the banks in New- York, 
 at once, and without concert, to resume, and would com- 
 pel them accordingly, I must deem him an unsafe coun- 
 sellor, and legislator, either in regard to the interests of 
 the banks, or the interests of the community. 
 
 Sir, we must not forget, on such a subject as this, that 
 there are some pecularities in our condition in this coun- 
 try. It must not be supposed, because the bank of 
 England may be relieved from all apprehension of a de- 
 mand for specie the moment foreign exchange is in favor 
 of London, that therefore the banks of New-York must be 
 relieved also from any such apprehension whenever fo- 
 reign exchange ceases to be against that city. We pos- 
 sess a widely extended country, composed of twenty-six 
 local sovereignties, of all which New- York is the money 
 centre, as London is the money centre of half the world. 
 What we call domestic exchange as applied to New- 
 York, is precisely what foreign exchange is as applied to 
 London ; and it is just as important, for the security of 
 banks in New- York, with reference to resumption, that 
 
37 
 
 they should be free from ruinous demands for specie 
 from Philadelphia, Charleston or New-Orleans, as it is, 
 that there should be no ground for such demands from 
 Paris or London. What the precise state of the domes- 
 tic exchanges may be at the present time, I shall not un- 
 dertake to say ; it is enough to know, that they are not 
 equalized, and that it is, to say the least of it, utterly 
 unsound and untrue, that the ability of our banks to re- 
 sume depends simply on the naked fact, whether foreign 
 exchange is, or is not, against us. And I repeat, sir, 
 that when I see gentlemen of intellegence, instead of 
 opposing the bill before us on its merits, resorting to such 
 a measure of opposition as that now proposed — a mea- 
 sure of extreme hazard, if not of certain destruction — 
 and with no better grounds than those now offered to 
 justify the professed belief that that measure would be 
 innocent if not salutary — when I see this, I think I am 
 free to conclude, that all this proceeds from a determined 
 spirit of hostility to banks and bank currency. 
 
 Sir, there was another and a distinct reason, though 
 nearly related to the last, offered why this bill ought not to 
 pass. The objection I have already considered was, that 
 small bank notes, if allowed to be issued, would not be 
 immediately convertible ; the position I now refer to was, 
 that the banks ought not to have the privilege of issuing 
 small notes because of the offence committed by them, 
 in suspending specie payments. And this is the an- 
 swer gentlemen would give to a demand, made by the 
 community with singular unanimity, for a currency of 
 small bills. The people say — give us a currency — al- 
 low us to have money for the transaction of our necessa- 
 ry business ; and the answer is, the currency you seek 
 
 4 
 
38 
 
 k to be furnished, if at all, by the banks, and the banks 
 shall make no such issues, no matter what may be your 
 necessities, because possibly it might result in some pe- 
 cuniary advantage to those offending institutions. 
 
 It would be something, if there was any justice in the 
 imputation cast on the banks. For myself, I have seen 
 no evidence that the suspension was exclusively the 
 fault of the banks. My own opinion clearly is, that the 
 suspension never would have occurred, but for the gross 
 mal-administration of the general government in regard 
 to banking, the currency, and other kindred subjects. 
 And yet, if it were admitted that the banks suspended 
 without necessity, and only to accommodate themselves 
 — a supposition both idle and absurd — still I should 
 think that fact, when offerd to oppose the measure now 
 under consideration, to be an argument much more like- 
 ly to prove the hostile temper and disposition of those 
 who advance it, towards all banks and bank currencies, 
 dhan to convince any body that this community ought 
 not be supplied with small bills. 
 
 But, Mr. Chairman, this measure is opposed on 
 another ground ; or rather I should say that this occa- 
 sion has been seized to charge amongst other things, 
 that the banks have been exempted by law from the 
 payment of their debts in specie, as every citizen of the 
 state is obliged to do. As the charge was first made, it 
 was untrue in fact. The banks enjoy no such exemp- 
 tion. They are just as liable to pay specie, and to be 
 prosecuted for refusing to pay specie, now, as before the 
 suspension act was passed. It is true that when that 
 act was passed, a provision was inserted in the law the 
 whole object of which was, to save the banks from the 
 
39 
 
 petty malice of the restless enemies of all banks, by taking; 
 away from them the right to recover costs on suits mere- 
 ly vexatious in their character and design. And I am, 
 in no degree, surprised to find gentlemen here making 
 loud and bitter complaints of this salutary and indispen- 
 sable provision. 
 
 Next to this, sir, we have had another charge agains?. 
 the banks ; that charge is, that the people of this coun- 
 try lost twenty millions of dollars at the time of the sus- 
 pension, by the depreciation of the bills of the bank>; 
 then in circulation. 
 
 Sir, if this were true, it would be difficult I think to 
 shew what necessary connexion it has with the proposi 
 tion now before us. But it is not true ; and before gen- 
 tlemen arm themselves with weapons of this sort, if they 
 mean to use them to any good effect, they would do 
 well to assure themselves that the steel is of temper to 
 cut. What do gentlemen mean w r hen they talk of a 
 depreciation of bank paper, and a loss upon it by reason 
 of that depreciation? That it has been depreciated as 
 compared with specie, is undoubtedly true ; and that 
 the whole community, with one voice, consented to 
 adopt it as the temporary currency of the country, in 
 the place of specie, is also true. But where is the evi- 
 dence of this loss of twenty millions? Bank paper wag 
 in circulation, and used as currency, up to the moment 
 of suspension, and it continued to be so used afterwards; 
 and I know of no facts to shew that, as currency, and 
 as compared with property generally, it was not worth 
 about as much after, as before that event. 
 
 But, sir, the most serious charge brought against the 
 banks in the course of this debate, is the old and fa- 
 
40 
 
 vorite one, in certain quarters, that they are monopolies. 
 What is a bank? solemnly demanded the member from 
 Herkimer, (Mr. Mann,) and the solemn answer was — 
 it is a monopoly. Now, sir, I take issue on the fact. 
 I deny that banks are monopolies, according to any de- 
 finition with which I am acquainted, or even according 
 to the gentlemen's own definition. I understand a mo- 
 nopoly to be a privilege granted to a company or an 
 individual to conduct some business or trade from 
 which all others are excluded. Such a monopoly was 
 granted to the East India Company. I know of but 
 one instance of a strict monopoly existing by law in 
 this country, and that is one to which nobody objects. 
 I mean the exclusive right which is secured to an in- 
 ventor. Copy-right is not strictly of this character, be- 
 cause that is no more than the security of a natural right 
 which every man has to the produce of his own indus- 
 try. The other is a monopoly, because, though, as often 
 happens, the same identical invention may be repro- 
 duced, yet the right is secured exclusively to the first in- 
 ventor. Now so far as I remember, this is the only true 
 monopoly known, at this day, to the laws of this coun- 
 try. There may be others ; but if there are, banks are 
 not of the number. The settled policy of this country 
 has been to supply the local currency in the several 
 states, by means of banks created under state authority ; 
 but these banks have had no exclusive privileges — cer- 
 tainly not with us. It has undoubtedly been the prac- 
 tice of the American governments, as it has of almost 
 all others, at times, to contract with corporations for cer- 
 tain indispensable services to be rendered to the public, 
 on the best terms in their power to make, and occa- 
 
4i 
 
 sionally the governments have not scrupled to pay for 
 such services by a giant of privileges. In all this I see 
 no violation of principle and no unjust interference with 
 individual rights. It is necessary for the community 
 that certain things should be done : and if the state., 
 
 whose business it is, can not well do them under its own 
 officers and with its own money, it may cause them to 
 be done under contracts with individuals or companies. 
 This is the policy under which our turnpikes, many of 
 our bridges and railroads, and some of our canals, have 
 been constructed ; and in every such case, the tolls are 
 the means of compensation and indemnity, and exclu- 
 sive privilege to a certain extent, is implied in every 
 such contract. But bank charters, at least in this state, 
 carry with them no such privilege, implied or expressed ; 
 and it is no matter how many banks exist already, the 
 state has always felt itself at liberty to grant as many 
 new charters, as the business wants of the community 
 might seem to require: and more than this, it is at per- 
 fect liberty, if it chooses, to throw open the business of 
 banking to all who desire to enter into it — the only ques- 
 tion in such case to be considered, being purely one con 
 cerning the common safety. All that can be said of it is, 
 that the business of banking heretofore hi this state, has 
 been conducted only under license and authority from go- 
 vernment. It has been supposed to be a business, which 
 considerations of public security required to be controlled 
 and regulated by law, and that it would not do to allow 
 any body and every body, who might be so disposed, 
 freely to do their part in supplying the country with so 
 important and delicate an instrument and agent as that 
 of currency. Whether there be or be not error in such 
 
 4* 
 
42 
 
 a position, is nothing to the present purpose. Such has 
 been the policy of the state, and the creation of banks 
 on such a basis is not the creation of monopolies, but 
 only the establishment of public agencies, by means of 
 which the government has undertaken to discharge the 
 duty of furnishing and regulating the currency. And, 
 at least, I hold it to be incumbent on gentlemen who pro- 
 pose to uproot these public agencies, by their cry of mo- 
 nopoly, first to satisfy the community that it can get on 
 quite as well without these establishments as with them, 
 and quite as well without as with any control whatever 
 over the currency. 
 
 But the last charge against the banks which I shall 
 deem it worth my while to notice, was one that fell 
 also from the gentleman from Herkimer. It was that 
 banks rob the poor — banks rob the poor! And the 
 gentleman favors us with the explanation of this charge. 
 Banks it is said, exchange their promissory notes for the 
 promissory notes of individuals, charging interest on the 
 loan of their own notes, and allowing none on such as 
 they receive. That is the explanation, sir ; and this is 
 robbing the poor. It is not objected that the rich are 
 obliged to pay for the money they borrow ; but the poor 
 — the poor are robbed, when they are compelled to pay 
 interest for borrowed money — and the remedy for this 
 oppression of course is, that the poor are to be supplied with 
 bank notes, if at all, gratuitously ! Sir, what is a con- 
 vertible bank note? I have said, that it is a paper title 
 to so much coin as is expressed on its face ; and having 
 that character it is money. The holder uses it as mo- 
 ney, in making his exchanges of property, and in facili- 
 tating the profitable employment of his productive capi- 
 
43 
 
 tal. It is money, and if he borrow it of a bank, it is 
 borrowed money, and such as no honest man, unless 
 he be poor, would borrow and use without paying for 
 the use of it ! Carry out the principle, and no man, if 
 poor, is to be expected to pay, or give his promise to 
 pay, for any description of property whatever. Or if, 
 on the purchase of property — as a farm- — and going 
 into the occupation and enjoyment of it, it be thought 
 decent, at least, that he should give his notes for the 
 contract price, still that is quite as far as any body 
 should think of going with a poor man, and it would 
 be shameful to think of his being asked to pay any 
 thing in the mean while for the use and profits of the 
 property. Any other course than this would be robbing 
 the poor ! 
 
 [Mr. Mann interposed : I must correct the gentleman 
 in the language he imputes to me. He puts into my 
 mouth the words " robbing the poor." I used no such 
 language. I said, what I have said often, and what I 
 now repeat. I feel it ; I know it. We live under a sys- 
 tem admirably calculated, by a silent, unseen opera- 
 tion — unseen I mean by the mass of men — to transfer 
 the products of the labor of those who submit to the 
 curse of Heaven pronounced in Paradise, to the pockets 
 of those who do not labor. I say that it is the operation 
 of the system under which we live; and the gentleman 
 from Albany has convinced me of another thing — that 
 we live under a bank government.] 
 
 I thought it would come at last to that ; and if any 
 body doubted before the gentleman's unqualified hostility 
 to banks, it would seem that all must be satisfied now. 
 Sir, what if the gentleman did not use the phrase 'rob- 
 
44 
 
 hmg the poor' — as 1 certainly understood him to do. He 
 complained bitterly of the banks for the offence of loan- 
 ing then money to the poor at an interest, and he char- 
 acterized it as a silent, unseen operation, by which the 
 products of their labor are iniquitously transferred to the 
 banks. Sir, if this be so, then if the gentleman does 
 not employ the phrase, I will — they do rob the poor. 
 
 But the sympathies of the gentleman are again roused, 
 when he thinks of the silent, unseen operation of the 
 banking system, in behalf of those who, according to 
 his interpretation, are the submissive victims of the 
 primeval curse. Sir, there are some differences of opin- 
 ion I think about the true reading of that Scripture to 
 Which the gentleman is so fond of alluding. For my- 
 self, I confess that what he seems to regard as a curse 
 — namely, the necessity of labor — always looks to me 
 like a very choice blessing. Jn his present position on 
 the earth, I know not how man could escape the very 
 depths of degradation and misery, if it were not for 
 labor — labor, imposed upon him by a law of neces- 
 sity, and always resulting, when cheerfully resorted to, 
 and wisely employed, in a harvest of rich enjoyment. 
 And then, Sir, whether labor be a blessing or a curse, 
 I do not understand how it falls so exclusively to the lot 
 of the poor. In my poor judgment the decree finds its 
 execution as fully in the person of the gentleman from 
 Herkimer, toiling in his appointed place here, as ever it 
 did in the moistened brow of the operator in the field 
 or the workshop. 
 
 Sir, if there is one thing which I loathe and abhor 
 more than another, it is the disposition to create unhap- 
 py differences between the rich and the poor. And I 
 
45 
 
 am sorry to be compelled to say that this has been the 
 evident leaning of this debate, so far as it has proceed- 
 ed from that quarter of the house, from the commence- 
 ment down to the present time. Let gentlemen beware 
 of sowing the wind, lest they also reap the whirlwind. 
 Let them be honest on this deeply interesting and deli- 
 cate subject, and be careful to represent the case truly 
 as it is. Let them remember, that all things considered, 
 there is great reason to believe that the poor are quite as 
 happy as the rich. Let them teach the rich to emulate 
 the poor in their humility and their virtue, and teach 
 the poor to emulate the rich in their habits of economy 
 and their comforts. Let them teach them all that they 
 are brethren of one family, with a common origin, a 
 common fortune, and a common destiny — children of a 
 common Father, to whom they owe a common accoun- 
 tability. Let them cherish within themselves thoughts 
 and feelings such as these, and sure I am, that we shall, 
 in future, hear much less about the peculiar necessities 
 and oppressions of the poor. 
 
 Mr. Chairman, in my examination of the various po- 
 sitions assumed by gentlemen who have opposed this bill 
 I think I have discovered all along a spirit hostile to 
 banks, and the whole banking system. I would give 
 them all the benefit of their disclaimers ; but these are 
 times when men know not what manner of spirit they 
 are of. They have asked to be judged by their acts ; 
 and so I have endeavored to judge them. 
 
 Sir, I take it that gentlemen would think it unkind, 
 if I were to insinuate that they were not the fast friends 
 of the present administration of the general government: 
 and particularly if I should hint a doubt of their being 
 
46 
 
 firm and unflinching, in support of (he schemes of that 
 administration in regard to banks and the currency. 
 What then, sir, is the policy of the administration on 
 these important subjects? For myself, I believe it to 
 be one of resolute hostility to the state institutions and 
 the currency which they are employed to furnish. The 
 preceding administration had been signalized by an ex- 
 terminating and successful war on the Bank of the Uni- 
 ted States. President Van Buren came in with a pro- 
 mise to follow in the footsteps of his illustrious predeces- 
 sor, and there were the state banks, and who could tell 
 what glory might not be gained in a war on them? — 
 My own belief is, that he had discovered, or thought he 
 had discovered, some short time previous to the late pre- 
 sidential election, that there was in this country a de- 
 cided and growing popular prejudice against banks, and 
 I suppose it to be in entire accordance with his princi- 
 ples, and only in harmony with the whole action of his 
 political life, never to hesitate about the duty and pro- 
 priety of following the manifest indications of popular 
 feeling and opinion, tend what way soever they may. 
 His doctrine, I think, always has been, that the popu- 
 lar will is to be obeyed, not, indeed, whether right or 
 wrong; but yet it is always to be obeyed, because it is 
 of course always right — it is quite impossible that it 
 ever should be wrong. 
 
 When the banks suspended specie payments, then 
 certainly, if ever, was the time to begin the war — and 
 then the war was begun. As had been done in the case 
 of the Bank of the United States, he broke ground a 
 good way off. In the present deranged state of the cur- 
 rency, he thought it a good time to establish the policy of 
 
47 
 
 collecting all the revenues of the government in gold and 
 silver only ; a measure as well calculated as could have 
 been conveniently devised to prevent the banks from ever 
 resuming specie payments. He thought it a proper time 
 also, to recommend to Congress what he once regarded 
 as an unconstitutional bankrupt law, applicable to cor- 
 porations and other bankers only, under which, if for- 
 tunate, his own commissioners might soon have been in 
 possession of the assets of every banking institution in 
 the Union. He proposed his sub-treasury scheme, for 
 the safe keeping and disbursement of the revenue, and 
 declared his conviction that it had become indispensable 
 to divorce the government from every possible connec- 
 tion with the banks, or with the currency which they 
 emitted, and to make that divorce eternal. And, final- 
 ly, in his late message, renewing his sub-treasury pro- 
 position, a little modified but made none the less offen- 
 sive, he has taken occasion to state his opinion, in the 
 face of the nation, that the recent local elections had 
 manifested little else than the corrupt and corrupting 
 power of the banks over the sentiments and suffrages of 
 the people. Now, Mr. Chairman, it is such an admi- 
 nistration, recommending such measures, pursuing such 
 a course of conduct and policy, so palpably tending to 
 the utter destruction of the banks by destroying their 
 public usefulness, and whatever confidence the commu- 
 nity has ever reposed in them — it is this administration, 
 with its entire policy and measures, which commands 
 the unqualified admiration and support of those gentle- 
 men who have been found arrayed here in opposition to 
 the bill now on your table ; — a position, I dare affirm, 
 utterly inconsistent with any disposition of favor or for- 
 
48 
 
 bearance towards banks or any of the valuable uses or 
 purposes which banks are intended to subserve. 
 
 Sir, as nearly as I can understand the times, there 
 are in this State, at the present time two, and only two, 
 political parties — and they seem to be represented on this 
 floor. The one, supported by an immense majority of 
 the people, is the party professing those sound and well 
 understood republican doctrines which have prevailed in 
 the country, almost without interruption, since their 
 origin in 1798 ; doctrines which look to the people as 
 the source of all political power, and which profess to 
 guard against all encroachments and assumptions of 
 authority with a sleepless and untiring vigilance ; doc- 
 trines which have never, since the day they were first 
 promulgated, been openly denied without a signal re- 
 buke from the people, and which only one man has ever 
 been permitted to violate in practice with impunity. 
 This is one of the parties. And the other is that small, 
 but determined band of men, professing the sentiments 
 of a strong and destructive radicalism ; sentiments which 
 look to the prostration of some of the most useful and 
 essential institutions of the country, and to the arrest of 
 all enterprise and prosperity, because all are not equal 
 sharers in the immediate returns ; which look to the 
 supposed natural hatred of the poor towards the rich, as 
 the means of levelling distinctions and differences among 
 men which exist by the appointment of God himself, in 
 the very diversity of faculties bestowed upon them, and 
 without which it is impossible to conceive that human 
 society could be held together. This is the other party. 
 The issue between the two is fairly made up, and I pray 
 God to favor the right. 
 
REPORT 
 
 On the subject of religious exercises, and the 
 use of the bible, in schools: made in the as- 
 sembly of new-york, jan. 23, 1838. 
 
 Mr. Barnard, from the committee on colleges, acade- 
 mies and common schools, to whom was referred the 
 memorial of William G. Griffin and others, asking the 
 legislature to enact a law to prohibit the practice of pray- 
 ing, singing, reading the Bible, and other religious ex- 
 ercises, in such schools, academies and seminaries of 
 education, as receive aid from the public treasury, 
 
 REPORTS: 
 
 That the committee have given to this memorial the 
 most serious and deliberate consideration. They have 
 been deeply impressed with the importance of some at 
 least of the questions raised by the petitioners, and in- 
 volved, directly or by implication, in the object they are 
 pursuing, and the indispensable necessity, if possible, 
 of having those questions settled, and settled right, in 
 the public mind. In recommending that the prayer of 
 the memorialists be not granted, the committee would 
 not deem their duty faithfully done, without an effort to 
 shew that their conclusions in the matter aie sound and 
 just; it is believed that this can be shewn to the satis- 
 faction of the house, and, it is hoped, to the satisfaction 
 of the petitioners and of the country. 
 
 5 
 
50 
 
 The substance of the complaint in this memorial is, 
 that religious exercises are tolerated in those public schools 
 which participate in the public bounty ; and this practice 
 they regard as a violation of the law of equality and the 
 rights of conscience, as aiding to propagate and enforce 
 peculiar religious opinions at the public expense, and 
 leading to, if not actually forming, a union of church 
 and state. 
 
 In order to understand the force and effect of this com- 
 plaint, it will be necessary to look, for a moment, at our 
 system of public instruction, to consider what our schools 
 are, how constituted and supported, and why they are 
 sustained and regulated as they are. 
 
 It happens, unfortunately, that experience does not 
 shew that the mass of any people are disposed to keep 
 up and support a sufficient and effective system of in- 
 struction for themselves by voluntary contributions, and 
 it becomes necessary, therefore, for the sake of self-preser- 
 vation, that the community should make provision for 
 the support of education by law. This necessity was 
 early felt in this state, and it has long been, and is now, 
 and always must be, the settled and steady policy of the 
 state, to furnish aid in support of public instruction. 
 
 To speak of our common-school system only. A large 
 sum is distributed aunually from the treasury in payment 
 of the wages of teachers, and a sum equal to that which 
 is thus furnished, and which is the income of a large 
 fund devoted to this purpose, is raised by the compulsory 
 process of taxation, and applied to the same object. 
 Each district, complying with certain prescribed condi- 
 tions, receives a share of these public moneys. The dis- 
 trict taxes itself, if the majority in it so please, to provide 
 
61 
 
 the proper house and accommodations for the school. It 
 contracts, through its trustees, with a qualified instructor, 
 and provides for the payment of any deficiency in the 
 amount of public moneys to pay the wages of the mas- 
 ter, by a rate-bill against those who furnish children to 
 be instructed. 
 
 In this plan, it will be seen, that while no person, lia- 
 ble to taxation, is allowed to escape the duty of contribu- 
 tion to the support of popular education, no individual 
 is compelled by any law to educate his children at all, 
 much less to send them to the public schools. If he 
 choose to violate the solemn obligation which his position 
 as a citizen, a contractor with the community, imposes 
 on him, to fit his offspring, by a proper course of educa- 
 tional discipline, for the part they are to act in the busi- 
 ness of the common government, he is at liberty to do 
 so. Especially is he left at perfect liberty, if he will have 
 them educated at all, to do so in any manner he thinks 
 fit, and under any masters whom he may see proper to 
 employ. In regard to the support of the public schools, 
 he stands precisely in the condition of any tax-paying 
 citizen, who may have no children to send to those 
 schools. He has the same interest in the school fund, 
 and, like them, he contributes to the amount raised by 
 taxation, according to his ability. Further than this the 
 law does not oblige him to go. He is taxed for the sup- 
 port of an indispensable public institution, and, if he 
 have children to be educated, this institution is open to 
 him as to all others, and he is free to avail himself of its 
 direct advantages or not, according to his pleasure. 
 
 Now it is to these schools, as we are to suppose, that 
 the children of the petitioners are accustomed to resort, 
 
52 
 
 and in some cases, it is fair to presume, that it is found 
 exceedingly inconvenient, perhaps impossible, for these 
 parents to furnish their children with the means of in- 
 struction any where else. They are, therefore, obliged 
 to resort to these schools, or take the alternative of keep- 
 ing their children in utter ignorance ; and it is, under 
 these circumstances, that they come before the legisla- 
 ture with the complaint, that, on resorting to these 
 schools, they find there a practice introduced — that of in- 
 dulging in devotional exercises — which they deem highly 
 offensive and objectionable. The grounds of objection 
 to this practice, as far as we can gather them from the 
 memorial, are two : 
 
 1. That the christian religion is thus supported, or 
 aided, at the public expense. 
 
 2. That the rights of equality and the rights of con- 
 science are thereby invaded, inasmuch as the unguarded 
 minds of their children are thus exposed to be contami- 
 nated. 
 
 In regard to the first of these positions, the committee 
 would only say, that it is a mere error in fact. It is sim- 
 ply untrue. These teachers are paid for teaching, and 
 not for praying. No part of their wages is for this ser- 
 vice, or any other religious exercise. And this must be 
 evident enough from the fact, that the wages of teach- 
 ers are not in the least affected by the consideration 
 whether they pray or do not pray. 
 
 In regard to the other ground of objection presented 
 by the petitioners, we remark : Whenever a number of 
 persons associate together in public assemblage for any 
 specific object, it is usual and perfectly competent for 
 them to agree on the forms of proceeding, and the terms 
 
53 
 
 on which the common object shall be prosecuted. This 
 determination of course belongs to the majority ; and it 
 belongs essentially to the power of the majority to insist 
 on any conventional forms of proceeding while the body 
 is together, not inconsistent with the common object. 
 As for example, if it be a company of Friends, or they 
 are in the majority, they may agree to sit with their hats 
 on ; if not, they may agree to sit with them off. If the 
 majority are Shakers, they may dance; if Jews, 01 
 Christians, they may pray. And in all these cases, it is 
 the duty of the minority to submit. * The only question fo? 
 them is, whether the form or ceremony insisted on is in 
 itself decent and becoming, and not in hostility to the 
 main purpose of the association. 
 
 Now it is on this principle that your committee sup 
 pose the practice objected to by the petitioners is adopted. 
 The practice is not prescribed by any state authority. 
 It is a matter wholly referred to the decision of the towns 
 and districts. /A majority of the parents sending chil 
 dren to a public school, acting for their children, as they 
 have a right to do, may rightfully agree, and direct, that 
 the proper business of the school shall be opened or clos 
 ed, or both, daily with religious exercises. Each parent 
 has a right to pray himself and to teach his child to pray ; 
 and if one has this right, so have all, or as many as are 
 of that way of thinking; and as each may practise acts 
 of devotion individually, whenever they associate they 
 may practise the like acts of devotion in a social way ; 
 and they may require the same thing of their children, 
 whether individually or in a social assemblage. The 
 practice is innocent and decent, and we know of no prin- 
 ciple on which a minority, voluntarily associating with 
 
 5* 
 
54 
 
 them in pursuit of an object in which they are all agreed, 
 can properly dictate to the majority the conventional 
 terms on which the body shall proceed. 
 
 But the petitioners ask for the passage of a law to 
 prohibit the practice complained of. They ask for a law 
 to prevent the majority in a school district from ruling 
 in a matter which is in itself innocent, and is of neces- 
 sity purely conventional. They ask for a law to prevent , 
 a majority, associated and meeting for the purpose of in- 
 struction, from indulging in social prayer and reading 
 the bible as a devotional exercise. The argument for 
 this application is, that the children of the minority are 
 exposed to have their minds tainted and corrupted by 
 these religious acts. 
 
 It is undoubtedly true that no person, and no associa- 
 tion of persons, is at liberty to indulge in an}' acts or 
 practice, in the face of the community, which, by their 
 necessary operation, are calculated to corrupt and debauch 
 the youthful or the unwary : to incite to licentiousness 
 or to crime. It is on this principle that the law will not 
 tolerate the publication of obscene books and prints. As 
 no man has himself a right to rob or steal, so no man 
 has a right to incite another person to rob or steal; and 
 as no man has himself a right to trample on the com- 
 mon law of public decency, so no man has a right to 
 stimulate the passions of others to the commission of the 
 like offence. 
 
 If then it were true that the devotional pratice com- 
 plained of by the petitioners tended of necessity to the 
 contamination of the minds and morals of their children, 
 it ought undoubtedly to be arrested by legal interposition. 
 Such is not, however, the opinion of your committee. 
 
55 
 
 It is not enough to make out the case, that the petition- 
 ers differ in opinion with those who resort to thi3 prac- 
 tice, in regard to the character and pretensions of the re- 
 ligion which the latter profess. The petitioners have an 
 undoubted right to pronounce that religion to be a mere 
 superstition, and its whole story a collection of legends 
 and absurdilies, as they seem to do in this petition; but 
 this we "apprehend is not enough to make out a case de- 
 manding its suppression by legal authority. They must 
 go farther, and show that this religion, by its necessary 
 operation, 13 pernicious in its effect on mind and mo- 
 rals, tending to set men free from all moral restraint, 
 and turn them loose, with excited and unbridled passion, 
 on each other and on society. When this is proved, then 
 undoubtedly ought the practice of " praying, singing, 
 and reading the Bible," to be prohibited in schools. And 
 of course the prohibition must not stop there. If these 
 Christian practices are interdicted by law in schools, be- 
 cause they contaminate and corrupt the youth who there 
 witness them, they must be interdicted elsewhere, and 
 every where, within the state, for the same reason. If 
 the public reading of the Bible, whether in schools or 
 elsewhere, has a necessary tendency to vitiate public 
 sentiment, to incite to universal lasciviousness, or in any 
 way to weaken and finally destroy all sense of moral 
 obligation, then the public reading of the Bible should 
 be prohibited by law, not in one place, but in all places; 
 and not only so, but it would be the duty of the com- 
 munity to put an utter end also to the printing and cir- 
 culation of such a bcok. 
 
 The committee cannot suppose that these petitioner* 
 themselves are ready to carry out the work of prohibit- 
 
56 
 
 lion and exclusion to the extent here indicated ; and for 
 ourselves, we should be quite unwilling to begin such an 
 experiment in any quarter — at least upon any evidence 
 we yet have of the pernicious and dangerous character 
 of the book, or the religion, of which the petitioners 
 complain. 
 
 But the prayer of these memorialists presents for con- 
 sideration another subject of no little moment. They 
 ask, that the reading of the Bible in schools should be 
 prohibited ; and this goes of course to its utter exclu- 
 sion — if it may not be read, it cannot be introduced and 
 used there for any valuable purpose. Now, your com- 
 mittee think that there are very weighty reasons why 
 the use of this book should be retained in our public 
 schools, and why it may be, without the least danger 
 of offending any one's conscience, or injuring any one's 
 rights. We have seen on what ground it is that the 
 majority in a public school have a right to read the Bible 
 as an act of devotion. We now mean to insist that its 
 use as a text or class-book, is, in our judgment, indis- 
 pensable to a good system of popular instruction. 
 
 Popular education is a thing very closely connected 
 with the healthy existence of civil society, especially in 
 the form which such society has assumed with us. — 
 Having been at liberty to choose a government for our- 
 selves, we have resorted to the republican mode, the first 
 principle of which is, that the people are the source of 
 all political power. We have all assented to this form 
 of government, each individual for himself, and each is 
 therefore under contract with all for its preservation. 
 The obligations which the adoption of any form of go- 
 vernment imposes on the citizens, do not rest alone in 
 
57 
 
 constitution and laws. Some of the most essential are 
 implied in the very nature of the government adopted. 
 Such are those which have regard to personal character 
 and conduct, and their influence, for good or evil, on 
 the stability and permanence of the political forms in 
 use. It is universally conceded that popular intelligence 
 and popular virtue are indispensable to the existence and 
 continuance of such a government as ours ; and if so, 
 then as the character of the public will be what the mass 
 of individual character is, it is the duty of every indi- 
 vidual to be virtuous, and to possess a competent degree 
 of intelligence. Every man who has any voice or in- 
 fluence in public affairs, is bound to inform himself, and 
 to act honestly; for if any one is not, no one is — all are 
 at liberty to be both ignorant and dishonest, and when- 
 ever that happens, the government, being in the hands 
 of the people, and swayed by a majority of voices, must 
 become the most oppressive and odious of all tyrannies, 
 and hasten to a violent conclusion. The whole power 
 of the community rests with the majority, and no mat- 
 ter how well defined and strictly guarded, the limits of 
 that power may be by the written terms of the compact, 
 there are constant and strong temptations to exceed 
 those limits ; and the grand security rests, and must al- 
 ways rest, after all, in the intelligence of the majority 
 to discover the proper boundaries of their power, and 
 their sense of moral obligation to keep within them. 
 In other words, the question of the existence and con- 
 tinuance of a popular government, is always a question 
 of the existence and continuance of popular intelligence 
 and popular virtue ; and hence the necessity and the 
 
58 
 
 ligation of every member of such a community to be 
 educated and to be virtuous. 
 
 But popular education can not be left to take care of 
 itself. It is found absolutely necessary to place it under 
 the care and patronage of government. fSuch is the 
 settled policy of our own state. And with what pur- 
 pose is it, that the government undertakes to exert its 
 political and parental authority over this subject? Not, 
 certainly, for the personal benefit merely of the indivi- 
 duals who partake of its bounty ; but it is for the sake 
 of self-preservation ; it is because these individuals to- 
 gether constitute the people, and because the people rule, 
 and because without education they are unfit to be rulers. 
 The object then simply is, to make these persons intel- 
 ligent and virtuous men, that they may be intelligent 
 and virtuous citizens ; to fit them, in other words, for 
 the faithful and competent discharge of their political, 
 social and public duties. 
 
 It is not, therefore, enough that the government shall 
 provide, in part or in whole, for the support of education ; 
 it is bound, as far as it can, to see that its bounty is so 
 applied as to produce the result at which it aims. It is 
 quite as important to take care that the proper course of 
 studies be prescribed for the public schools, that they 
 should be subjected to the proper discipline and the pro- 
 per police, as it is that they should be cherished and sus- 
 tained at all. And who is to take care of this impor- 
 tant matter, if the state does not? The limit of its au- 
 thority over the subject is very clear. It is found in the 
 object to be accomplished. Keeping that object steadily 
 in view, and being careful to prescribe nothing inconsis 
 lent with it, its power is indisputable. 
 
59 
 
 At present with us this important power of prescrib- 
 ing the course of studies in our common schools is lodg- 
 ed in hands very near the people. The inhabitants of 
 each town elect six officers who are by law the inspec- 
 tors and visiters of the schools, determining the qualifi- 
 cations of teachers, and directing the course of instruc- 
 tion. These officers, of course, represent the majority 
 of qualified voters ; that is to say, the majority, through 
 their elected officers, do, or may, prescribe the course of 
 studies. 
 
 Now your committee do not undertake to say what 
 subjects of study should be prescribed. That would be 
 foreign to our present duty. But when it is asked that 
 a particular book should be excluded from the course by 
 law, it is deemed proper to shew, at least, why that 
 particular book should be retained, if already in use, or 
 brought into use if it is not. 
 
 The great reason may be thus stated. Moral instruc- 
 tion is quite as important to the object had in view in 
 popular education, as intellectual instruction: it is in- 
 dispensable to that object. But to make such instruc- 
 tion effective, it should be given according to the best 
 code of morals known to the country and the age ; and 
 that code, it is universally conceded, is contained in the 
 Bible. Hence the Bible, as containing that code, and 
 for the sake of teaching and illustrating that code, so 
 far from being arbitrarily excluded from our schools, 
 ought to be in common use in them. 
 
 Keeping all the while in view the object of popular 
 education ; the necessity of fitting the people, by moral 
 as well as intellectual discipline, for self-government, no 
 one can doubt that any system of instruction which 
 
60 
 
 overlooks the training and informing of the moral fa 
 eulties must be wretchedly and fatally defective. Crime 
 and intellectual cultivation merely, so far from being 
 dissociated in history and statistics, are unhappily old 
 acquaintances and tried friends. To neglect tjie moral 
 powers in education, is to educate not quite half the 
 man. To cultivate the intellect only, is to unhinge 
 the mind, and destroy the essential balance of the men- 
 tal powers ; it is to light up a recess only the better to 
 shew how dark it is. And if this is all that is done in 
 popular education, then nothing, literally nothing is 
 done towards creating and establishing public virtue, and 
 forming a moral people. 
 
 The moral powers then must be informed and culti- 
 vated in our schools. Children must be instructed in 
 moral truth, and be taught to feel habitually the force 
 of moral obligation ; and to do this according to the best 
 standard, the use of the Bible for that purpose can not 
 be dispensed with. So it is believed the great majority 
 of our people think, and wherever they think so in the 
 towns, they will, of right, by their proper officers, or- 
 der and direct the course of instruction accordingly. 
 
 Nor is it discovered what good right the petitioners, or 
 any minority of persons, have to object to the use of 
 this book for the purpose indicated, as an approved and 
 standard work for instruction in morals, because their 
 opinion of its merits in this respect may differ from that 
 of the majority. If the minority may rule in regard to 
 the use ol this book, and forbid the teaching of its code. 
 they may do the same thing in regard to any other book, 
 or any other subject. They may insist that the Chris- 
 tian code of morals shall be exchanged for that of the 
 
61 
 
 Brahmins, or turn the schools over to Plato, or Aristotle, 
 or Seneca, or Mahomet. They may prescribe the entire 
 course of studies, instead of leaving it to be done by 
 those to whom the law, and the voice of the majority, 
 have confided the power. 
 
 Nor again, is it discovered that the practice of teach- 
 ing morals according to the christian code, and using 
 the Bible for that purpose, the majority adopting it, is 
 any infringement whatever on the religious rights and 
 liberty of any individual. To teach christian morals, 
 referring to the Bible both for the principles and for their 
 illustration, is a widely different thing from teaching 
 what is understood to be the christian religion. Reli- 
 gion is a matter between a man and his God. It has 
 reference to the worship of the Supreme Being, and the 
 mode of such worship, and has relation to a future state 
 of existence, and the retributions of that future state ; 
 and it is concerned with creeds and articles of faith. 
 Now, religious freedom consists in a man's professing 
 and enjoying what religious faith he pleases, or in the 
 right of rejecting all religions ; and this freedom is in 
 no degree invaded when the morals of the Bible are 
 taught in public schools. 
 
 And if the christian religion, as a system of faith, 
 whether according to one creed or another creed, according 
 to the notions of one sect or of another sect, is not taught 
 in these schools, then of course there can be no pretence 
 that this religion is, in this way, supported by the state. 
 Your committee, in common, they believe, with nearly 
 the whole body of their fellow citizens, would regard it 
 as the deepest of calamities, if religion — the christian re- 
 ligion — should fall under the protection and patronage 
 
 6 
 
62 
 
 of political power, That religion is, in its nature, free ; 
 it cannot take support from law, without losing its lus- 
 tre and its purity ; it is in its very essence and spirit, to 
 demand none but a voluntary worship, and allow none 
 but a voluntary support. But we can not discern that 
 it is in the least danger of injury from any public sup- 
 port in the schools, on account of the use which may be 
 made there of the Bible as a text or a class-book. 
 
 Your committee have now given the reason why they 
 think the Christian code of morals should be taught in 
 our schools, as an indispensable part of our system of 
 popular instruction ; and why the Bible should be em- 
 ployed for that purpose. There are other reasons why 
 it is exceedingly desirable and important that this book 
 should be generally used in our schools and seminaries, 
 instead of being arbitrarily excluded, as these petitioners 
 require. But we do not deem it necessary to detail those 
 reasons. If the Bible should be studied for its moral 
 principles, it should be studied also as a history, and as 
 a classic. As an authentic narrative of events, the most 
 extraordinary and the most interesting any where re- 
 corded of our race, it is invaluable ; and there is nothing, 
 and can be nothing, to supply its place. And such is 
 the nature and antiquity of its story, that no education 
 in this department of knowledge, not the most elemen- 
 tary, can be had without some acquaintance with its 
 contents. And then as a classic, if generally employed 
 as such, it would certainly supply a want which no 
 other book can. The faithful and critical study of the 
 English language, in its purity, by the youth of our 
 country, is immensely important ; and it is confidently 
 believed, that no where can there be found, in the same 
 
63 
 
 compass, half as many specimens of beautiful and pure 
 Anglo-Saxon language, as in the Bible. And we think 
 it may be safely said that, since the publication of the 
 present English Bible, as translated under the orders of 
 king James, no writer or speaker in that language, can 
 be named, who has acquired any just celebrity for the 
 simplicity, strength and beauty of his diction, who hat- 
 not been mainly indebted to that book for his excellence 
 in that particular. Mr. Fox declared, that if he was 
 ever eloquent, it was because he had faithfully studied 
 the book of Job. 
 
 In conclusion, your committee would only say tha:, 
 while after the most attentive examination, they have 
 not been able to find, in the memorial before them, 
 one fair ground of complaint, they have been and are, 
 deeply impressed with the many and weighty conside- 
 rations which urge on all who value the interests of 
 education, the interests of morals, and the interests of 
 the country and of mankind, the indispensable neces- 
 sity of preserving to the people the right to employ the 
 Bible as a means of invaluable secular instruction, in 
 all the public schools and seminaries, to which the]/ 
 may have occasion to resort. 
 
 Complaints of whatever is valuable in civil society will 
 always be made. Some who make them are honest, 
 but mistaken ; more act under the merest delusion ; a 
 few are speculative and reckless. Men of this latter 
 class are apt to be ingenious, because restless and dis- 
 satisfied. Their work is to destroy, but never build. 
 The moral restraints of society sit gallingly upon them. 
 They take the name of liberty on their lips, but they 
 mean license and confusion. With them nothing is 
 
v 64 
 
 sacred, nothing is venerable, and nothing is safe. And 
 of late, their boldness and strength seem to have in- 
 creased. Their spirit is seen every where. It is busy 
 with political institutions, with religious obligations, with 
 social forms and domestic ties ; busy to weaken, to inva- 
 lidate, and to undermine. They are not supposed to be 
 numerous even yet ; but they have followers, who are 
 followers because they do not know who they are who 
 lead them, or whither they are led. This state of things 
 demands undoubtedly great firmness on the part of those 
 who would sustain and preserve what is valuable in our 
 social and political forms. And it demands as much 
 moderation as firmness. We would always hear ; we 
 would always consider; and we would always reply 
 only by argument, and by appeals to reason and to truth. 
 It is in this way that the committee have intended to 
 meet the complaints of these memorialists; and with 
 what success they may have done so, must now be left 
 to the judgment of the house and of the country. 
 
 The committee recommend to the house the adoption 
 of the following resolution : 
 
 Resolved, Thai the prayer of the memorialists be not 
 granted. 
 
SPEECH 
 
 On corporations, and the proposition to make cor 
 porators personally liable; delivered in thf 
 assembly of new-york, jan. 30, 1838. 
 
 [The house in committee of the whole, had under 
 consideration an act to incorporate the Cold Spring; 
 Whaling- Company.] 
 
 Mr. Chairman — This is a bill to incorporate a 
 whaling company, after precedents now for some time 
 established in this state. In regard to the policy of in- 
 corporating companies for this particular object, I do not, 
 for one, feel bound to enter into any special explanation of 
 that subject. No sufficient objection to the object hav- 
 ing occurred to my mind, and none having been sug- 
 gested by others, I am, of course, in favor of the bill. 
 
 But, sir, when we were in committee on this bill some 
 days ago, an amendment was offered, the object of which 
 was to subject the corporators to personal responsibility 
 for the debts of the corporation. On that occasion, I 
 made some remarks explaining my objections to such a 
 feature, whether in this bill, or any other of a similar 
 character ; and I took the opportunity, at the same time, 
 to throw out some general reasons why I thought cor- 
 porations were entitled to the favorable consideration of 
 fche house and of the country. 
 
 It is not desirable, sir, to be drawn into the discussion 
 
 6* 
 
66 
 
 of great principles on a bill of so little public interest as 
 this, if it could well be avoided ; yet I own that my ob- 
 servation and limited experience have led me to think 
 it best, as a general thing, to meet and resist error on its 
 first appearance, and at the earliest opportunity. The 
 propriety of doing so on this occasion is more apparent 
 now, from the avowal which was made yesterday, that 
 this is a favorite principle in certain quarters, and that 
 it is to be insisted on, on every suitable opportunity 
 throughout the session. It must then be met, and may 
 as well, perhaps, be met and settled now as ever. 
 
 The remarks which I made the other day, very brief 
 as they were, have been subjected to some scrutiny, and 
 my positions denied. I deem it necessary to support and 
 defend the ground I then took, if I can. 
 
 In the first place, I was then of opinion, and I remain 
 of opinion now, that the principle of this amendment is 
 inconsistent with the very nature of a private corpora- 
 tion, and that it proceeds upon a mistaken notion of 
 what a corporation is. I stated then, and though it has 
 been denied, I repeat it, that a corporation is a person, 
 with the rights and the liabilities of a person. Created 
 by law, it is a legal person. It may be the owner of 
 property, real and personal, and possess a capital as any 
 other person. It has an occupation, and conducts some 
 lawful business. It enters into pecuniary and other en- 
 gagements, and contracts obligations. The courts are 
 open to it ; it summons its adversary before the tribu- 
 nals of justice to answer to it, and is itself summoned 
 to respond in turn to others. It is amenable to courts, 
 having jurisdiction, for the violation of penal enactments, 
 and is liable to punishment for its legal offences ; and it 
 
67 
 
 as only not answerable for crimes, because in its nature 
 it is incapable of committing them. It can not steal, or 
 commit forgery, arson, or treason. Individuals may do 
 so, and they may or may not be corporators, but corpo- 
 rations can not perpetrate such offences. A corporation 
 then is a person, a legal being, and as such, and in that 
 capacity, it ought to stand, as far as its nature will per- 
 mit, on a footing of equality with all other persons be 
 fore the law. 
 
 Now this principle of equal justice is violated, when it 
 is proposed to compel a corporation by law, to give secu- 
 rities for the performance of all its pecuniary obligations, 
 instead of leaving it, as in the case of all other persons, 
 to those who may choose to contract with it, to take its 
 individual responsibility, or demand farther security as 
 they shall see fit. A corporation has, or should have, a 
 fixed and ascertained capital on which it conducts its 
 business ; and that is the fund, and the only fund, to 
 which those who deal with it are used to look. And 
 with proper guaBds and checks, of which I am at all 
 times in favor, there can be no doubt, that the commu- 
 nity is quite as safe in its dealings with corporations, 
 without this principle of suretyship, as it is in its dealings 
 with natural persons. Beyond this point of equal safe- 
 ty, we ought not to attempt to go. 
 
 But this principle of personal responsibility imposed on 
 the corporators, considered as it always is, in the light of 
 a mere legal compulsion, securing the performance of a 
 natural and equitable obligation, is at war with the very 
 nature of the subject — as will, I think, be evident enough, 
 by considering for a moment the inherent and uncon- 
 querable difficulty there is, and always must be, in the 
 
68 
 
 way of fixing the limit of this personal liability, on any 
 just and equitable basis. 
 
 The notion is, that the individuals comprising the 
 company, ought in justice and good faith, to be com- 
 pelled to perform all their engagements made by or for 
 them, since those engagements are supposed to be made 
 for the common benefit of all, and therefore for the per- 
 sonal benefit of each. Taking this for the principle on 
 which the personal liability should be imposed, then it 
 becomes necessary to ascertain on whom that liability 
 ought to rest ; for if it be imposed on any person who 
 has not shared, and could not share, in any benefit or 
 advantage, if there was any arising from the supposed 
 engagement, great injustice would of course be done. 
 
 The object of such a rule of personal liability as is 
 contemplated in the amendment before us, would be to 
 hold those corporators responsible who should be such at 
 the time of commencing a suit, and this is the usual 
 course I believe in such cases. But in the first place, 
 we know that the members of corporations aggregate, 
 are constantly changing. Every sale of stock is a 
 change of corporators. One individual goes out and 
 another comes in ; and it might well happen, and I 
 dare say some times does, that a few months or days 
 even, may be enough in which to complete a change so 
 entire that not one person shall be a corporator at the 
 end, who was so at the beginning of the period. And 
 then it is the practice of corporations to make periodical 
 dividends, always, if at all, out of profits, and in such a 
 manner as to prevent accumulations. Now what pro- 
 bability, I might almost say what chance is there, that 
 in a prosecution against corporators, on a contract or en- 
 
gagement entered into by the corporation, they will be 
 found to be such as were corporators when the contract 
 was made, or when it was broken, or such as partici- 
 pated in any degree, or could have participated, in the 
 benefits, if any, arising out of the contract 1 It is evi- 
 dent that the persons held responsible, may have become 
 members perhaps only one hour before the suit is brought, 
 while their predecessors have taken by way of dividend, 
 with others, all the profits and advantage which had 
 accrued to the corporation out of the engagement. And 
 here, of course, would be a gross injustice, and a total 
 failure to fix the liability where it ought to rest, on the 
 principle of personal benefit. The same difficulty lies 
 in the way of any other rule so far as I know, which 
 ever has been, or can be, adopted — as to fix the liability 
 on the original corporators only, or on such as should 
 be so when the contract or engagement may be made ; 
 or those who should be members when the breach should 
 occur. 
 
 All these difficulties I think have been felt in Massa- 
 chusetts, where, for some twenty years, commencing I 
 believe in 1809., the principle of personal liability for 
 corporate debts in the case of the manufacturing corpo- 
 rations, was maintained, though with various and re- 
 peated changes in the rule. No rule, however, was ever 
 found which could make the principle just or equitable 
 m its application • and after persevering until it had dri- 
 ven millions of manufacturing capital out of the state, 
 the principle itself was finally abandoned, as I under- 
 stand, except in cases where there should be a failure to 
 pay in the capital. In this state there is, in the general 
 Jaw regulating and controlling corporations, a similar 
 
70 
 
 provision, subjecting members of corporations lo personal 
 liability when the capital has not been paid in ; and an- 
 other provision by which, in case of insolvency, fraud 
 is presumed, and personal liability imposed unless that 
 presumption is rebutted by proof. Here, I think, is se- 
 curity and liability enough, and farther than this I hold 
 it is neither reasonable nor right to go. 
 
 But, Mr. Chairman, from the moment when the 
 amendment now before the House was offered, I have 
 been impressed with the belief that it originated, not so 
 much in any apprehension that the community needed 
 this sort of supposed protection, as in the fact that, out 
 of this House, if not in it, there existed an unworthy 
 prejudice against corporations, and every thing bearing 
 the name, and a fixed design in some quarters, right or 
 wrong, to cripple, and if possible destroy them. Much 
 of this feeling in the community is doubtless honest, but 
 it is not the less mischievous for that reason, and when- 
 ever it is honest, it prevails only because wrong and un- 
 just notions are entertained of the true character and 
 value of corporations. Believing this, I ventured in a 
 few words the other day, to speak of these institutions as 
 having been intimately connected in their history with 
 the progress of the arts, and with the advance which 
 our race had made in civilization, in learning, in refine- 
 ment, and in civil liberty. I was aware that such a de- 
 claration must have grated harshly on some ears, and, 
 as I expected, an attempt has since been made on this 
 floor, to deny the position I had assumed. It was sug- 
 gested that, while the remark I had made presented a 
 remarkable coincidence with one to be found in the 
 learned opinion of some learned judge (but which I had 
 
n 
 
 been so unfortunate as never to have read or seen) I had 
 not, like the same learned judge, been careful to dis- 
 tinguish between corporations public or political, and cor- 
 porations private ; and that while it was admitted that 
 the former were entitled to some favorable consideration 
 in the point of view presented by me, that commenda- 
 tion was, to say the least of it, wholly undeserved by 
 the latter. 
 
 Sir, I think 1 understood what I meant to say the 
 other day ; I think I said just what I intended to say ; 
 and I now take upon me to re-affirm the proposition I 
 then made, as broadly as it was then uttered, and as it 
 was then understood. And so far from admitting, ac- 
 cording to the distinction attempted to be drawn, that 
 private corporations have had no connexion with, or 
 have not in any way aided, the progress of civilization, 
 learning and liberty, while political corporations have, I 
 affirm that the latter, thus acknowledged to have had 
 so favorable an influence, probably originated and took 
 their rise in private corporations. I speak of this subject 
 principally from a general impression, in which, how- 
 ever, though my reading on the subject is by no means 
 fresh, I think I cannot be mistaken. And I shall 
 trouble the committee with a few observations to illus- 
 trate my position. 
 
 Under the Roman government, private corporations 
 seem to have been first known, though traceable per- 
 haps to the Greeks. To authorize associations with 
 corporate powers and privileges, the express consent of 
 the government was necessary. They were generally 
 companies of tradesmen, called in the civil law, colleges 
 and universities. Now it is remarkable, that no sooner 
 
72 
 
 was the commonwealth at an end, and the empire esta 
 Wished, than it was discovered by the emperors that 
 these associations had been nurseries of faction and dis- 
 order — in better language, because truer, they had be- 
 come nurseries of liberty, and great numbers of them, of 
 such especially as could not protect themselves under 
 the prompt exhibition of an express charter, were early 
 dissolved. An instance of this jealously is given at a 
 late period, when the emperor Trajan refused to incor- 
 porate a fire company for Nicomedia, of one hundred 
 and fifty men, though recommended by Pliny, after a 
 destructive conflagration in that city ; placing his re- 
 fusal expressly on the ground that these societies had 
 become mischievous to the public peace — in other words r 
 they were accustomed more than others, to exhibit symp- 
 toms of restlessness under despotic power. These cor- 
 porations, especially where there was a number of them 
 in the same town or city, it is easy to see, would exer- 
 cise a controlling power. Engaged in mechanical or 
 commercial employments, and brought into close union 
 and sympathy with each other, they were more likely 
 to possess property, skill, and mental cultivation than 
 most other classes, and to resist oppression or unjust ex- 
 actions, they had the constant advantage of a combina- 
 tion already formed. To a considerable extent they 
 governed themselves under their own by-laws, and by 
 means of corporate officers elected by themselves, and 
 who stood to them in many things in the place of ma- 
 gistrates. 
 
 The first that we know of political corporations as 
 such, probably originated in this way. These private 
 associations became wealthy and influential — at least 
 
73 
 
 they were substantial and strong ; and they were ena 
 bled, in the progress of events, to command a charter, 
 adding to the corporate privileges which each society se- 
 parately possessed, new privileges of a political and mu- 
 nicipal character for the benefit of the whole. In 
 pursuing her conquests of arms, Rome encountered 
 many nations quite in advance of herself in the arts ; 
 and her custom was to adopt and found towns, granting 
 them political privileges of considerable value : and there 
 can be no doubt, that it was in these municipalities that 
 the forms of popular election and privilege were pre- 
 served, after the empire under which they were esta- 
 blished was ended, and that they finally contributed to 
 the foundation of liberty in modern Europe, through the 
 establishment of towns having similar and more ex- 
 tended corporate privileges and exemptions. 
 
 When the feudal system of Europe had become, in 
 its political effect, not only burdensome but oppressive^ 
 beyond any former example of tyranny, the relief came 
 by means of the exercise of corporate rights in cities and 
 towns. The inhabitants of these cities and towns were 
 for the most part engaged in various trades, sometimes, 
 as in Venice and Genoa, in commerce. They had al- 
 ready gained comparative wealth and importance. They 
 existed in associations or societies, each exercising corpo- 
 rate rights and privileges, sometimes with, and some- 
 times without express authority. It was natural that 
 they should gradually slide into the exercise of political 
 powers within the narrow sphere of their business ope 
 rations. Happily, the condition of Europe at the time 
 favored the assumption of such powers. The crusade- 
 drew oft' the sovereigns, or at least occupied their alten- 
 
 7 
 
74 
 
 don ; and while they were impoverishing themselves m 
 these enterprises, their subjects, many of them, were 
 growing rich and powerful The commercial cities of 
 Italy were among the earliest to avail themselves of this 
 state of things, and soon found themselves, partly by 
 concession or grant, and partly by actual purchase, in 
 possession of independence for all the purposes of local 
 government. The example was followed elsewhere ; 
 in the Low Countries very early, in France, in England, 
 and to some extent in Germany. These towns and 
 cities at first, as I have said, apparently occupied only 
 with trades people and gilds, grouped into private cor- 
 porations, thus steadily acquiring personal importance 
 and political power, taking something by grant or favor, 
 assuming other rights, and buying of their needy sove- 
 reigns still larger privileges, grew at length into repub- 
 lics, the more important and interesting as they were 
 long the only depositories and nurseries of those liberal 
 principles which lie at the foundation of modern liberty. 
 It was here that men first gained exemption from some 
 of the most odious exactions of feudal tyranny. The 
 freeman of the town could dispose of his property by 
 deed or will, which no vassal could do ; dying, he might 
 choose his own guardian for his children ; he could give 
 his daughter in marriage without purchasing the pri- 
 vilege; he could prosecute his lawsuit without being 
 obliged to resort to the lord's court. The elective and 
 representative principles were in vigorous and success- 
 ful operation, and the people were trained to an inde 
 pendence and freedom which existed nowhere else. 
 Finally, they gained or assumed the right of bearing 
 arms, and having surrounded their towns with walls, 
 
75 
 
 uhey prepared themselves , to offer warlike resistance to 
 oppression and injustice, come from whatever quarter 
 they might. They went farther in some instances, — as 
 in Holland — and actually confederated for mutual pro- 
 tection and defence, constituting a federal compact, a 
 government, for this single purpose, and placing them- 
 selves under federal officers of their own choice. 
 
 The jealousy existing between the sovereigns and the 
 great barons, was favorable to the encouragement and 
 growth of freedom in the towns. The former were glad 
 to interpose these towns between themselves and their 
 turbulent and haughty lords; and it was principally the 
 same consideration which induced (hem to favor the 
 claims of the agricultural portion of their subjects to en- 
 franchisement — claims which, serfs and slaves as they 
 were, attached to, and passing with the soil, might have 
 slumbered long but for the example of exemption and 
 freedom set them by the towns. It was, I think, in the 
 fourteenth century that the enfranchisement of this 
 whole class was accomplished, or at least attempted, in 
 France, by a general order from the sovereign. 
 
 I have taken this slight historical view for the purpose 
 of showing the rise and progress of liberty — democratic 
 liberty — in modern times, and for the sake of inferring, 
 as I do, that corporations — private corporations, had ori- 
 ginally much to do with it. It has been said, and I be- 
 lieve with truth, that the first express charters to politi- 
 cal or municipal corporations, were given in imitation of 
 the licenses to private and commercial companies, and 
 as a consequence of the existence of these latter corpo- 
 rations. And if entitled to any part of the credit of hav- 
 ing given birth to the great principle of local adminis 
 
76 
 
 tration under special charters, then we cannot know 
 how much more credit they really deserve, until we have 
 evidence how wide-spread and how invaluable to freedom 
 that principle has become. Look at that principle in its 
 application and practice in our own country. We have 
 a general government which is a corporation with an 
 express written charter from the people. Each state go- 
 vernment is also a corporation with a similar charter, 
 and the whole local administration — the great school 
 where democracy is studied, learned and practised — is 
 conducted by means of corporations. Every county, 
 every town, every city and every village, and every 
 school district is a corporation. Our supervisors, our 
 overseers of the poor, and our school commissioners, are 
 all corporations. 
 
 But it is not merely the service rendered to liberty by 
 their influence in bringing about the establishment of 
 political corporations, on which I wish to rest the claims 
 of private corporations to general consideration and fa- 
 vor. I think their own individual and direct opera- 
 tion is to advance mankind in wealth, in morals, in 
 refinement, and in freedom — and that on strictly demo- 
 cratic principles. This would seem to be inferrible from 
 the fact that these instititutions have always prevailed 
 most, where we find these principles to have been most 
 fully developed, and most strictly acted upon. They are 
 not I believe in much use, or held in much estimation 
 in Russia, or in Austria. France is only beginning to un- 
 derstand their value, while in England they have been 
 adopted and used extensively, and with great effect and 
 advantage. 
 
 It is however in this country alone, that their full im- 
 
77 
 
 portance has been seen and felt. With us, the great 
 point is to elevate the mass of men — the people as a bo- 
 dy. One important step towards this object, is to secure 
 to every man sacredly, the fruits of his own industry and 
 enterprise. But this is only a beginning. Property tends 
 to accumulation in a few hands; and the policy of oth- 
 er governments has been to preserve and perpetuate it in 
 a few hands. Our policy is a different one; we think 
 it important to distribute and equalize it, as far as may 
 be without interfering with individual right, and the due 
 encouragement of individual exertion. Now for one, I 
 confess I know of no instrumentality more efficient for 
 both objects, than that of our private corporations for bu- 
 siness enterprises. In this way the smallest surplus re- 
 turns of individual industry may be securely and profi- 
 tably employed. An interest is awakened in subjects 
 and modes of human exertion, of which the mass of 
 men would otherwise have no knowledge; and they 
 come not only to concern themselves with new forms of 
 business, but to participate in the profits which arise from 
 them. They enjoy not only the fruits of their own per- 
 sonal labor, but they share in the returns and advanta- 
 ges which flow from the employment of capital and skill. 
 No one, indeed, can look at the subject — at least it seems 
 so to me — and not perceive how powerful and how fa- 
 vorable must be the influence of these associations on the 
 habits and character of the people. The number and 
 variety of our corporations engaged in the prosecution of 
 private business — for they are still private, however pub- 
 lic may be the use of them — are very great. Money 
 and currency are furnished by them; insurance is effect- 
 ed by them; manufacturing and commercial business 19 
 
 7* 
 
conducted by them ; they construct turnpikes and bridges, 
 and rail- roads and canals. If we look at the great works 
 of internal improvement only, in this country, carried 
 forward by means of corporations — works which in oth- 
 er countries less free and democratic, if prosecuted at all, 
 must be either in the hands of wealthy individuals, or- 
 become the corrupt and corrupting jobs of the govern- 
 ment — we cannot fail to be struck with their immense 
 value, as the means by which the most magnificent pro- 
 jects and the most splendid enterprises may be conducted 
 and realized, not only without danger, but with positive 
 advantage to republican habits and republican institu- 
 tions. 
 
 But this is not all. We have other private corpora- 
 tions in almost every department of social life. In this 
 mode it is that Charity and Benevolence make to society 
 and humanity their most costly offerings — establishing 
 and endowing hospitals, asylums and retreats. In this 
 mode it is that Education and Learning are cherished and 
 encouraged — with incorporated colleges and academies, 
 institutes, historical, scientific and literary societies, mu- 
 seums, galleries and libraries, all devoted to this great 
 service. And finally, it is in this mode almost exclusive- 
 ly, that the public ceremonies of religious worship are 
 supported and sustained— a mode by which the nume- 
 rous sects into which the religious public is divided, are 
 enabled, each for itself, without question or molestation, 
 to conduct their own worship according to their own con- 
 sciences, and all with entire freedom from any corrupting 
 association with government protection or government 
 patronage. Let gentlemen look at all these things, and 
 then say if they deem it possible that civil society could 
 
79 
 
 be what it now is, in this age, and in this country, if 
 corporations had not existed and did not now exist — so 
 moral, so intellectual, so cultivated, so free! 
 
 But, Mr. Chairman, I shall not pursue the subject 
 The position which I formerly advanced, and which I 
 have now endeavored briefly to illustrate and sustain, is 
 not matter of opinion merely; it is rather matter of fact, 
 matter of history, of record and of evidence — and if I 
 am wrong, gentlemen to whom these views may be un- 
 acceptable, will find no difficulty in showing the error 
 and setting me right. 
 
 Sir, I have not presented this subject to the commitee 
 without an object. I am in favor of well regulated and 
 carefully guarded corporations, and I wish to defend them 
 against what I am afraid is a growing prejudice — a pre-, 
 judice which many well-disposed persons, and more that 
 are ill-disposed, are careful to feed and inflame. It must 
 be well understood by this time, that some of us on this 
 floor are of opinion, that there is a destructive spirit abroad 
 in this land, which requires to be strictly watched and 
 promptly and resolutely opposed, whenever and wherev- 
 er it may appear. It is a spirit — bold enough sometimes 
 — claiming to understand democracy in its essence and 
 purity, better than any body else, and claiming to have 
 the courage which others have not, to act always on its 
 theoretic doctrines, and carry them out to their conclu- 
 sions, lead where they may. It is a spirit which profes- 
 ses to watch for the security of the poor and the abject, 
 and looks with jealousy and distrust on the thrifty and 
 the opulent — a spirit which would be better satisfied with 
 nature, if the surface of the earth presented one unbro- 
 ken level; if there were no lofty eminences to cast their 
 
80 
 
 shadows over the humble valleys ; no broad-armed oaks 
 rising up to protect, or to shame, the stinted shrubs be- 
 side them ; no spots greener than any other spots, none 
 richer, none more beautiful ; if all men rose to the same 
 height, attained the same weight and dimensions, mov- 
 ed in the same sphere, spoke with the same voice, bloom- 
 ed with same complexion, and thought or drivelled, as 
 the case might be, with the same intellect. It is a spirit 
 which wars — I hope for the most part ignorantly — with 
 nearly all the valuable institutions of society, in the un- 
 founded and ignorant belief, or pretence, that they advance 
 individual interests at the expense of the mass, widening 
 the essential differences already existing in society, and 
 tending to aristocratic distinctions, to the oppression of 
 the humble, and to the destruction of equality and liber- 
 ty — ignorant and unfounded pretences all. Now, sir, I 
 shall not undertake to say that the evident presence of 
 that same spirit can be detected here, but so much I will 
 say, that I do implore gentlemen, in behalf of our com- 
 mon and beloved country, to examine well their own po- 
 sitions, and take care that they do not, whether uncon- 
 sciously or by design, so act their parts here as to mi- 
 nister to that spirit elsewhere. 
 
SPEECH 
 
 !N THE ASSEMBLY OF NEW YORK, DELIVERED FEB. 14» 
 1838, ON THE RESOLUTIONS INTRODUCED BY MR. HOL- 
 LEY RESPECTING THE SUB-TREASURY SCHEME. 
 
 [Mr. Holley, as chairman of a select committee had pre- 
 sented Resolutions, condemning, and protesting against, the 
 Sub-Treasury Scheme, and the course of the administration 
 at Washington, and that at Albany, in regard to it, which 
 were now under consideration in the house. The Resolu- 
 tions were designed to be forwarded to the Senators and Re- 
 presentatives of the state in Congress, as expressing the sense 
 of the Assembly touching the matters embraced in them. 
 
 Mr. Speaker — In considering the present attitude of 
 the national government towards the country and the 
 people, my mind has been agitated with conflicting 
 emotions. I have been alternately filled with indigna- 
 tion, and subdued and depressed under a feeling of hu- 
 miliation and sorrow. At one time, I have thought that 
 I could pour out on the authors of our ruin, prepared 
 and preparing, denunciations and curses, the wrath, the 
 scorn, the defiance, which becomes the free citizen of a free 
 republic, subjected in his person, in his principles, and in 
 his country, to insult and oppression. And again, when 
 another and a different train of thought and reflection 
 has passed through my mind — when I have considered 
 who they are who are engaged in this war upon us ; 
 how bold, how presuming, how confident they are ; how 
 
82 
 
 steadily they pursue their object ; the means of corrupt- 
 ing influence they possess; their unscrupulous use of 
 those means ; their unblushing appeals to whatever can 
 inflame the worst passions, or move the meanest pro- 
 pensities of mankind ; and when I have thought what 
 they have already accomplished in this way, and been 
 forced to compute the probabilities of their future suc- 
 cess, in some degree, by their actual successes already 
 achieved — when I have thought of all these things, I 
 confess my heart has sunk within me, "and I have found 
 it difficult to preserve and maintain that manliness of 
 spirit, that enduring hope, that unfailing confidence in 
 the republic, which ought never to desert the bosom of 
 the patriotic citizen. 
 
 Sir, it is with feelings such as those I have faintly 
 sketched, that I approach the discussion of the subject 
 now occupying the attention of the house, and the tone 
 and temper of my remarks will of course be influenced, 
 more or less, by those feelings. And I have referred to 
 this personal matter only for the purpose of affording to 
 to those who hear me, if of any consequence either to 
 myself or others, a way of accounting for any apparent 
 want of zeal or spirit in presenting my views. I shall 
 not certainly undertake to give security, or assurance, 
 before hand, how I may be affected in the progress of 
 my remarks. I can only say, that, at present, I am 
 calm. And one thing is settled with me : and that is, 
 that passion — I mean honest, virtuous passion, such as 
 may come and go and leave no stain — though by no 
 means out of place on this subject, can be be attended 
 with no advantage, while it might unfit the mind for 
 that free and unembarrassed action of all its powers and 
 
83 
 
 faculties which the occasion so urgently demands. I 
 shall endeavor to keep myself collected, and judging 
 from the feelings which now oppress me, I think I am 
 in little danger of losing my self-possession — perhaps I 
 may find it difficult to warm myself up even to a be- 
 coming degree of animation and earnestness. 
 
 Sir, the leading measure of the government at this 
 time, is embodied in what is called the Sub-Treasury 
 Scheme. This is that distinguishing measure which, if 
 adopted, will mark the difference between this and all 
 preceding administrations. This is that measure on 
 which the administration must stand or fall, before the 
 country and the world. This is that measure on which 
 the country must divide — those who are for it standing 
 on the left hand, and those who are against it on the 
 right. Those who favor this measure will support the 
 administration, and those who are opposed to it will op- 
 pose the administration. If the administration is right 
 in this, it may well enough be trusted as being likely to 
 be right in every thing ; and if wrong in this, then, in 
 my judgment, it is so very wrong, that little injustice 
 will be done it by supposing that it can hardly be right in 
 any thing. If the administration shall succeed in this 
 measure as proposed, and if the people can be brought to 
 sustain it, then it seems to me that it matters very little 
 what else it may see fit to do, or not to do. The constitu- 
 tion is changed. The government is changed ; and in- 
 stead of a republican country and a popular government, 
 we shall have an empire, and a despotism. How long our 
 republican forms may survive the event, I am not pro- 
 phet enough to tell ; but I feel certain that little of the 
 essence of republican freedom will be left after it. 
 
84 
 
 Mr. Speaker, the first reflection which forces itself ora 
 my mind as connected with this subject is, that, in order 
 to prepare the way for the introduction of this Scheme,, 
 it was deemed necessary, on the part of the administra- 
 tion, to decline and refuse to perform, or attempt to per- 
 form, one of the plainest and most indispensable of the 
 duties of the government under the constitution. I 
 mean that duty, without which the country cannot be 
 supplied with a sound and uniform national currency. 
 
 And when I speak of a national currency, I mean 
 something different from a local or state currency. I 
 mean a currency of general credit and uniform value all 
 over the country. I mean a currency which shall be 
 worth on the Penobscot, just what it is worth on the 
 Mississippi. I mean a currency which, as a medium of 
 exchange or payment, shall have the same value at the 
 extremes of the Union ; a medium such that a pay- 
 ment in Boston in that medium, and another in New- 
 Orleans in the same medium of the same nominal 
 amount, shall be payments of equal values; a me- 
 dium in which funds may be transmitted and debts 
 paid, without material loss, between the remotest quar- 
 ters of this extended republic. 
 
 Such would be a national currency, and such are the 
 uses of a national currency. And such a currency no 
 state can furnish, or any number of states, any more 
 than individual states can regulate trade between all the 
 states, or establish and maintain a post-office for all the 
 states. Such a currency can only be furnished by the 
 general government ; or if furnished by state banks, can 
 only be regulated and have given to it a national cha- 
 racter, by some authoritative control and direction of the 
 
85 
 
 general government. And it is the duty of the govern- 
 ment to see that the nation is furnished with such a 
 currency. 
 
 It is, of course, no part of my present business to 
 show how, by what mode or instrument, the govern- 
 ment should perform that duty. The mode in which it 
 has furnished a national currency for forty out of the 
 forty-nine years of its existence, has been by a national 
 bank. A mode in which it has attempted, at times, to 
 furnish such a currency, has been by the adoption and 
 regulation of state banks. The one has been a success- 
 ful mode, the other has been unsuccessful. We know 
 it may be done by a national bank ; perhaps it may be 
 done by the adoption and use of the state banks. At 
 some rate, this duty should be performed, and if it can- 
 not be done otherwise than by a national bank, then I 
 think such a bank should be created, which I believe 
 to be a constitutional instrument, for the purpose. But 
 if this duty can be performed without the agency of such 
 a bank, then for one I would dispense with such an in- 
 stitution : inasmuch as serious doubts and difficulties are 
 entertained, to a limited extent indeed, in regard to the 
 right of the government to create such a corporation — 
 and inasmuch, too, as such an institution always has 
 been, and probably always would be, a standing theme 
 for declamation and clamor from demagogues and dis- 
 honest politicians. 
 
 A proposition is now before the Senate of the United 
 States, introduced by a distinguished Senator from Vir- 
 ginia, for the adoption, once more, of a limited number 
 of state banks for the uses of the general government, 
 and as the instruments by which that government shall 
 
 8 
 
86 
 
 undertake to render that constitutional service to the 
 country which is due to it, in regard to the currency. It 
 is among the objects of the bill introduced by the Sena- 
 tor referred to, to provide, if possible, for such a corres- 
 pondence between the adopted banks, situated of course 
 in different and distant parts of the country, as may 
 give to their respective issues a mutual and extended 
 credit, and thus to fit those issues for use as a national 
 currency. In regard to this part of the Senator's plan, 
 I will say, that if it can be made successful, if it can be 
 made to answer the purpose, and meet the wants of the 
 nation, I shall be rejoiced at it ; and as between that 
 plan and this Sub-Treasury Scheme, although it embra- 
 ces provisions to which I am and believe I always shall 
 be strongly opposed, yet as between the two projects, for 
 one I say, in the present condition of things, let the 
 Virginia plan be tried. 
 
 But, sir, the administration is opposed to this mode, 
 and it is opposed to any mode of furnishing or main- 
 taining a national currency. And this, as I have said,. 
 Is an abandonment of an essential power and duty of 
 the government and the constitution. I shall not go 
 into the argument of the constitutional power. That 
 argument has been presented elsewhere, and with a de- 
 monstration, which I might repeat, but which I could 
 not strengthen. 
 
 I may say, however, in general terms, that perhaps 
 until the last six months, the power has always been ex- 
 ercised, and never doubted. The constitution provides 
 expressly for a money of account for the United States. 
 The government has the power of coinage, and the 
 regulation of the value of coins. Gold and silver coins 
 
87 
 
 were to be the standard money of the country, and no- 
 thing else was to be made a tender. The legal stand- 
 ard of value, the legal medium for the payment of 
 debts, was prascribed in the constitution, and exclusive 
 charge over it was given to the general government. It 
 was no part of the business of such an instrument, and 
 it did not undertake so far to descend to particulars, as 
 to prescribe what should be the actual and practical me- 
 dium of exchange in circulation — in what the actual 
 and practical currency of the country should consist. 
 
 But the constitution was not wholly silent on this 
 subject of the currency. That instrument prohibited 
 the issue of bills of credit by the states, and it seems to 
 me, by a plain inference, it prohibited the issue of such- 
 bills under the authority of the states. And what are 
 bills of credit? Why, sir, according to my understand- 
 ing of them, they are notes, designed to fulfil the uses 
 of money, and circulating on the credit of the state, or 
 the issuers, be they who they may. They are some- 
 thing very different from convertible bank paper — paper 
 representing coin — paper the express title to coin — and 
 such paper was left free to circulate, and I think it may 
 be said that it was contemplated that it should circulate^ 
 and become, as inevitably it must, and legally might 
 become, the actual currency of the country. At the 
 date of the constitution, there were existing and in ac- 
 tual operation in the country, three state banks — three 
 banks issuing convertible paper to circulate as money, 
 and actually, to the extent of the issues, taking the 
 place of coin in the channels of circulation ; and no- 
 thing seems to have been further from the thoughts of 
 the fratners of the constitution, than to interfere injuri 
 
88 
 
 ously with these banks, or with their issues. The use 
 and necessity of convertible bank paper for currency in- 
 stead of coin was as well understood at that time, as it 
 is now. And it seems to me, that to suppose, as some 
 do, that, in the face of facts like these referred to, power 
 was given to the general government to create a stand- 
 ard money for the country in the shape of coins, and 
 that it was designed at the same time to withhold from 
 that government the power to regulate and control that 
 which might legally, and would of necessity, take its 
 place in circulation as its representative, is to charge on 
 the framers of the constitution a want of common in- 
 telligence and sagacity in no degree merited. 
 
 Sir, it was expressly made the duty of the general go- 
 vernment to regulate trade between the states. Now it 
 was very well understood, I suppose, at that day, and has 
 always since been well understood — at least until within 
 a very recent period — that internal trade could not be car- 
 ried on without a currency. Barter may be; but com- 
 mercial trade cannot, any more than transportation can 
 be carried on without highways by land or water; with- 
 out an ocean, without rivers, canals, roads or railways, 
 or without ships, boats, wagons or cars. A currency is 
 not merely convenient to trade, or even essential to it as 
 an incident to a principal; it is, as has been elsewhere 
 said, a part of it, as much a part of it as a steam en- 
 gine is part of a steam-boat; and we might as well ex- 
 pect such a boat fitted for propulsion in that and no 
 other way, to move off at command without her engine, 
 as to expect the internal trade of a country to move for- 
 ward without a currency; and to suppose that at the 
 date of the constitution, it was expected that the inter- 
 
89 
 
 rial trade of such a country as this was to be carried on 
 and conducted with coin, with gold and silver only ; i?, 
 I think, to suppose an absurdity. 
 
 I think it was understood and anticipated that com- 
 mercial business did and would require a commercial 
 currency, to consist of convertible paper , and that the 
 new government would have a duty to perforn in regard 
 to that currency, without which it could not discharge 
 its express constitutional obligations of regulating the 
 commerce. It was one of the principal objects, leading 
 to the formation of the government, to give to the com 
 merce of the country a national character, and that it 
 could never have, without a currency having the like 
 character. 
 
 The domestic trade of this country, in amount and 
 value, is very great. It is vastly moie important and 
 extensive than the foreign trade. The commerce of the 
 coast and navigable rivers alone, is greater than the fo 
 reign commerce. The tonnage employed in the coast- 
 ing trade and fisheries, exceeds that employed in the fo- 
 reign trade, and the vessels thus employed make from 
 three to twenty voyages in a year. And then we have 
 to add to this, all that amount of trade, not easily calcu 
 lated, between the terminating points of sloop and steam- 
 boat navigation on the coast and rivers, and the vast 
 and wide-spread interior. Now the interests of this im- 
 mense trade are placed by the constitution under the care 
 and regulation of the general government, and, with it, 
 is imposed on that government the duty of providing or 
 maintaining a fit and proper currency for the conducting 
 and carrying on of that trade, and without which the 
 trade cannot be said to be regulated and taken care of 
 
 8* 
 
90 
 
 A slate currency, a local currency, however perfect in 
 itself, is utterly insufficient and incompetent for this pur- 
 pose. 
 
 The states do furnish currencies ; not one but many; 
 not. one but twenty-six currencies. And without the di- 
 rect and authoritative interference of the general govern- 
 ment, no such thing as a national currency ever has 
 existed, or ever can exist. If the states separate!}' can 
 eo far regulate domestic trade as to provide for it a gene- 
 ral and uniform currency, they can do various other 
 things for all the states just as well. They can about 
 as well regulate foreign commerce, as internal commerce. 
 They may coin money and regulate the value of coins. 
 They may establish post-offices and post-roads ; they 
 may declare war; raise and support armies; provide 
 and maintain a navy ; lay and collect taxes. If the 
 idea is that the states can mutually agree in regard to 
 commerce and the currency, they can mutually agree 
 also in regard to other objects confided to the general go- 
 vernment — a notion at war with abundant ante-consti- 
 tutional experience, and having no other foundation 
 than that, as far as the interests of the country are con- 
 cerned, we can do very well without a general govern- 
 ment, and that the only good reason why it should be 
 preserved is, that the interest and benefit of the govern- 
 ment itself, or of the government officials, require it. 
 And this notion seems to accord with the opinions of the 
 president. He thinks that the people expect too much 
 from government. The whole spirit and burthen of his 
 message to congress at the special session was, that it is 
 enough for the government, if it takes care of itself. 
 
 Now it is that most important constitutional duty in 
 
91 
 
 regard to the commerce and currency of the country, 
 which I have referred to, which the administration has 
 seen fit to repudiate and renounce. The administra- 
 tion denies that any such duty belongs to it, and it re- 
 fuses, in the most decided terms, to perform any such 
 duty. In his special message to congress, Mr. Van 
 Buren expressed himself on this subject, not indeed very 
 plainly, but yet, when examined, unequivocally. 
 
 " If therefore," said he, "I refrain from suggesting to 
 congress any specific plan for regulating the exchanges 
 of the country : relieving mercantile embarrassments ; 
 or interfering with the ordinary operations of foreign or 
 domestic commerce; it is from a conviction that such 
 measures are not within the constitutional province of 
 the general government." 
 
 And such is the beginning of this extraordinary 
 movement on the part of the administration. It begins 
 with a distinct and explicit disavowal of any obligation 
 to perform what has always been admitted to be an essen- 
 tial constitutional duty. It abandons a principal power 
 of the government: and that power one which, if ex- 
 ercised at all, must be exercised for the benefit of the 
 whole country ; and this it does for the sake of using 
 another power for its own especial benefit. It is the be- 
 ginning of a system by which, if followed out, the plain 
 and necessary powers of the general government, grant- 
 ed as all its powers were, with a scrupulous reference to 
 the interests of the country, may be given up and dis- 
 carded — giving place to other powers so construed, and 
 so used, as to make their exercise result in almost ex- 
 clusive advantage to the government. 
 
 But, Mr. Speaker, 1 turn now to consider what this 
 
92 
 
 Sub-Treasury Scheme is which the administration pro- 
 poses to adopt, and to which it has thought it necessary 
 to sacrifice preliminarily an essential constitutional power 
 of the government. 
 
 In practice, from the earliest time, except from the 
 necessity of the case, the government, and no officer of 
 the government, has been allowed to haye the actual 
 possession and keeping of large sums of public money. 
 We have had a treasury ; and in common language we 
 are often said to have money in the treasury — sometimes 
 very large amounts. But strictly, there has been more 
 fiction about this than fact. Congress, or the proper 
 functionaries acting for congress, have managed the 
 public money just as all considerable private dealers 
 have managed their money. It has been deposited ; 
 that is to sav, it has been changed from cash in hand 
 into mere credits — cash credits which may be com- 
 manded for use at pleasure— but still credits, and not 
 money. Even when, under the far famed Specie Circu- 
 lar, the government was in the receipt of millions of gold 
 and silver, I suppose it was generally without a dollar 
 of specie on hand in the treasury, or elsewhere. The 
 money was deposited in banks as fast as received, and 
 thus became the property of the banks, and the govern- 
 ment had, in exchange, credits, but not cash. And the 
 same thing was true when there was said to have been 
 a large surplus in the treasury. 
 
 The government went into operation in 1789, and in 
 February, 1791, the first bank of the United States was 
 established, and became the depository of the duty bonds 
 and public money of the country. When the charter of 
 that bank expired in 1811, twenty-one state and district 
 
93 
 
 banks were adopted as depositories. In 1816, the late 
 bank of (he United States was chartered, and became, 
 and continued to be, the depository of public moneys 
 until 1833; when the state banks were again adopted 
 and used for this purpose, and continued to be so used 
 until May last, when they-suspended payments in specie. 
 
 On the happening of this latter event, the mode of 
 keeping the public money was changed ; the Sub-Trea- 
 sury Scheme was begun. The revenue was directed to 
 be collected, kept, and disbursed in gold and silver. Of 
 this practice and policy, as attempted to be justified by 
 the circumstances of the case, I have only to say, that 
 it was not according to precedent. In the fall of 1814, 
 there was a suspension of specie payments by the banks 
 south of New-England ; and from that time till the bank 
 of the United States was charteied in 1816, the revenues 
 of the Union, south of New-England, consisted wholly 
 of treasury notes, and deposites in non-specie paying 
 banks. The government at that time submitted to the 
 same law of necessity in business which was the law of 
 the whole country. And that was a republican govern- 
 ment, and a republican administration — but the times 
 are changed. 
 
 It is now proposed, by the administration, to establish 
 the Sub-Treasury plan on a permanent footing, and as a 
 permanent policy. The former, long tried and well un- 
 derstood method of making deposites — exchanging cash 
 for cash credits — is to be abandoned ; and instead of 
 that we are to have that other system — the favorite sys- 
 tem of two classes, and of two classes only, I believe, in 
 any business and commercial community — I mean mi- 
 sers and despots. The government is now to set up for 
 
94 
 
 a grand proprietor, a wealthy dealer in money — in gold 
 and silver— trusting nobody but its own dependents and 
 creatures ; having a train of treasuries, with their vaults, 
 safes, bolts, and massive keys — the centre being at Wash- 
 ington, and ten thousand dependencies linked to it, and 
 scattered throughout, the length and breadth of the land. 
 Now if not only the framing of the law for the esta- 
 blishment of this scheme, but the ultimate control over 
 the whole operation and execution of it, was in the hands 
 of congress ; if no other hands than such as congress 
 might designate and control, such as should be responsi- 
 ble to congress alone and not to the president, could have 
 the handling of the money; still I should think it a 
 scheme fraught with danger to the constitution and the 
 country. I should think that government, under its 
 necessary operation, could not fail to become corrupt and 
 despotic. I should think that the people instead of be- 
 ing- masters would have masters; money masters, and 
 those the worst of masters and tyrants, such as the pos- 
 session and handling of money are apt to make. I 
 should be of opinion that the treasures of the nation 
 would be unsafe, for I should have no confidence in 
 bonds and sureties — in this lock-up and turnkey system. 
 I should expect to see public defaulters multiplied. I 
 should expect to see embezzlements, robbery, arson, mur- 
 der, become the order of the day, and of the night. 1 
 should expect to see our penitentiaries crowded with more 
 numerous inmates, the gallows trod by a more nume- 
 rous tenantry, and the whole land filled with violence 
 and outrage. 
 
 Looking at this scheme in the most favorable light, 
 I see in it nothing better than a cold-hearted, selfish po» 
 
95 
 
 licy, productive of no good to any body, but the govern- 
 ment or its retainers, and in the present state of things 
 likely to end in universal distress and ruin. 
 
 I see in it a hostile spirit towards the state institutions 
 in their present perilous condition, towards those im- 
 portant agencies established and employed in all the 
 states in aid of commerce and the currency ; or rather 
 I see in it a war of extermination on commerce and the 
 currency, and therefore a war on the interest and the 
 business of every man, rich or poor, in this widely ex- 
 tended country. 
 
 I see in it the means of now bringing in that hard- 
 money policy, not for the government only, but for the 
 whole country, which we know to have been heretofore 
 the favorite policy of some who were high in power ; a 
 policy which they aimed to establish, first of all, through 
 the agency and support of a party in this country which 
 was low in knowledge and lower still in principle — a 
 policy now, however, which, if it can once be fastened 
 on the people for a time, is then to be thrown off, at 
 least, for the government itself and its favorites, and for 
 which abundant provision is made in the details of the 
 plan, looking to paper issues by the government, and 
 the free use of drafts, checks and certificates of depo- 
 sites circulating between the various branches and strong- 
 holds of the treasury. 
 
 I see in it a settled purpose to separate the government 
 from the people; to erect the government into something 
 apart from and independent of the people; something 
 which shall have a separate and independent existence, 
 and become a property for the use and enjoyment of 
 those who may be in possession of power and the offices; 
 
96 
 
 and something moreover, which may be perpetuated and 
 transmitted, under the influence and patronage which 
 their new position will give, in just such a line of de- 
 scent and inheritance as the interest or affection of the 
 proprietors for the time being, may prompt them to ap- 
 point. 
 
 But, Mr. Speaker, there is another, and to my mind 
 a more serious and alarming view of this subject; and 
 if we would understand the full import of this Scheme; 
 we must go back a little, and inquire into certain consti- 
 tutional doctrines of the administration, having a most 
 important and ominous relation to it. And I do not he- 
 sitate to affirm that, taken in connection with the doc- 
 trines referred to, this Scheme, if adopted, must complete- 
 ly change the relation in which the government stands 
 to the people and the country. We shall have a new 
 government, such as the constitution never contemplat- 
 ed, and such as cannot consist with liberty. 
 
 Sir, that government of ours, which was created and 
 put in operation in 1789, was an agency adopted by the 
 people of the United States for their own purposes; — a 
 corporation, to which form, body and faculties were giv- 
 en, by written charter, to enable it, and for the sole pur- 
 pose of enabling it, to render certain services to the coun- 
 try, with a view to the common good. Such is an Ame- 
 rican constitutioual government; and thus is an Ameri- 
 can constitutional government distinguished from all 
 preceding governments, and from all cotemporaneous 
 governments in other parts of the world. It has been 
 the principal achievement of our time and country, that 
 we have demonstrated the practicability of framing a 
 government with all adequate powers ; and yet so con- 
 
97 
 
 stituted, by means of a skilful partition and limitation 
 of those powers, that the government cannot use its pow- 
 ers to separate itself in interest from the people, and 
 erect itself into a condition of independence. The great 
 vice of governments before us, had been that, whatever 
 form they might assume, they had in effect a separate 
 and independent existence, above the people rather than 
 of the people; having interests and possessing objects 
 other than those of the people, different from and anta- 
 gonist to them. 
 
 This vice was supposed to have been excluded, and 
 effectually guarded against, in our system. The point 
 of greatest difficulty undoubtedly was to manage the exe- 
 cutive department of the government. It was necessary 
 to create a head, or chief, of this department ; and it 
 was necessary to clothe this functionary w 7 ith large au- 
 thority, and even with considerable discretionary power. 
 And universal experience had shown that where much 
 power is given, more is usually coveted ; that executive 
 power especially is full of charms ; that the executive 
 office is prone to set up for independence, and draw away 
 after it other powers and other functionaries, and finally 
 to separate itself from the constituency, and become a 
 power and a property apart from the people and above 
 the people. The great problem, of course, was how to 
 make the executive effective, and yet escape this danger; 
 and that problem was supposed to have been solved, and 
 for the first time, in our American constitutions ; and it 
 was supposed to have been solved also, and for the first 
 time, in the case of a great and widely extended nation, 
 when the constitution of the United States was framed. 
 
 The constitution gave to the president the power of 
 
 9 
 
nomination to the principal offices. It gave him, not 
 indeed any part of the power of legislation, but the right 
 to arrest legislation by a voice equal to that of two-thirds 
 in number of those comprising the legislative depart- 
 ment. It made it his business to take care that the laws 
 be executed ; and it gave him the command of the 
 army and the navy — only making him subject to an- 
 swer, by impeachment, for any abuse of his authority. 
 Of course it did not entrust him with any portion of the 
 legislative or judicial power, and it was at great pains to 
 limit and define very exactly, the extent of his execu- 
 tive authority. There was one power, in particular, 
 and above all others, with which I think it is manifest, 
 it was intended the president should never intermeddle, 
 neither in whole nor in part — a power with which he 
 should have no concern, and over which he should have 
 no control. I shall be understood of course to refer to 
 the money power — the most delicate, the most dangerous 
 of all political power confided to human hands. 
 
 In regard to the revenues of the country, there are 
 several trusts which must be confided to somebody. In 
 the first place, the revenue must be raised, then it must 
 be received, kept and managed till wanted for use ; and 
 finally it must be disbursed. Now I hold it to be of the 
 very essence of our system, that neither of these trusts, 
 nor any part of either of them, should be confided to 
 the president. The first trust — that of raising the reve- 
 nue — belongs to the legislature. This is conceded by 
 every body; and so does the last trust — that of disburse- 
 ment — so far as the purposes and objects to which the 
 money is to be applied, are concerned. But that inter- 
 mediate trust — the duty of receiving, keeping and ma- 
 
99 
 
 naging the revenue, together with that of paying it out 
 according to legislative direction — how are these duties 
 to be executed ? They are, in their nature, executive 
 duties. There is something to be done and performed 
 in obedience to order and authority. Have these duties 
 been confided to the head of the executive departments 
 — to the president? Par from it. This would have 
 been to go back to former systems, and place the power 
 where it would be sure to be abused. This would have 
 been to adopt a distinguishing and marked feature of a 
 monarchy, or an autocracy. No: This power was 
 placed in far other hands. 
 
 If we look into the constitution, and turn to the enu- 
 merated powers of the president, we find not the slight- 
 est intimation that any portion of this power was to be 
 confided to him. On the contrary, we shall find, on 
 examination, that it was entrusted wholly to Congress. 
 The very first enumerated power of Congress is the 
 power, not only to lay taxes, but to collect taxes, and 
 to pay debts. And congress also has power to borrow 
 money, to support as well as raise armies, and (o main- 
 tain as well as provide a navy. And to congress is given 
 in express terms, the power of disposition over " the ter- 
 ritory or other property belonging to the United States." 
 
 When the government came to be organized under 
 the constitution, a treasury department was created, and 
 that department was arranged in strict conformity with 
 the frame of the constitution — an independant depart- 
 ment, independant I mean of the president, and insti- 
 tuted for the express purpose of receiving and manag- 
 ing the revenue : and made, in the act, responsible di- 
 rectly, not to the president, but to congress to whom it 
 
100 
 
 was to report. I conclude (hat congress, and congress 
 alone, according to the constitution and the law, has 
 the ultimate superintending and directing power over 
 the treasures of the nation, and those who may have 
 the immediate charge of them. 
 
 Sir, it would be extraordinary if it had been other- 
 wise. When the constitution of the United States was 
 framed, the American people had had some experience in 
 government on their own peculiar plan. And surely, 
 they had known no other principle and no other prac- 
 tice in regard to this important money power, than such 
 as I suppose to have been adopted in the frame of the 
 general government. Never, I believe, in a single in- 
 stance, had the people in any state confided this power 
 to the executive. I have looked into the constitutions 
 of the old thirteen, and it is evident enough from the 
 care with which, in all these states, the appointment of 
 the treasurers has been reserved either to the people, or 
 to the immediate representatives of the people, that the 
 danger of entrusting any part of this power to the exe- 
 cutive was well understood. It is believed to be the in- 
 variable and universal, practice in the states, that the le- 
 gislature is the body to which all the fiscal agents and 
 officers respond, and which has the undisputed control 
 of the public purse, or at least of those who are appoint- 
 ed to take charge of it. 
 
 Sir, this seems to me to be one of the most prominent 
 among those peculiar features of our system which have 
 made it what it is, a free and republican system — a con- 
 stitutional and American system. In that country which 
 had made the greatest advance in freedom before our 
 time, the people had early learned the importance of re- 
 
101 
 
 serving to themselves, or iheir represent atives, the mo- 
 ney power. But they regarded the subject chiefly in a 
 single point of view. Their doctrine was that if reve- 
 nue was to be raised, the people must tax themselves 
 by their representatives in parliament : for otherwise no 
 man's property was his own. It was the king's; for if 
 the king could take a part without consent, he could 
 take the whole. And a people who had nothing they 
 could call their own were slaves. Hence it was settled 
 that the king could have no revenue, except from per- 
 sonal or royal possessions, unless by grant from (he 
 commons. The commons, therefore, were accustomed 
 to give and grant a revenue to the king. And, un- 
 doubtedly, this right of withholding revenue from the 
 king was a most important and indispensable check on 
 (he sovereign. But ail this was very far from establish- 
 ing what we call constitutional liberty, or reducing go- 
 vernment to what we understand to be a free constitu- 
 tional government. For still government was a thing 
 apart from and above the people ; a thing in which the 
 sovereign had a personal and paramount interest and 
 property. It. was his government — his freehold — to be 
 held and enjoyed by him as such ; with a conceded ob- 
 ligation, indeed, so to conduct and manage its affairs as 
 to give protection and security to the subject, and pro- 
 mote the common good, provided only these objects 
 could be attained without any serious interruption to the 
 enjoyment of his own rights, privileges and immuni- 
 ties, as the undisputed property of government. This 
 was and is the English system ; and how much better 
 than most other European systems I need not stop to 
 say. 
 
 9* 
 
102 
 
 But this is not our system. We give and grant mo- 
 ney to nobody ; neither to the president, nor to the se- 
 cretary of the treasury, nor to any body else. We, by 
 our representatives, raise money for our own purposes : 
 we direct the application of it to such objects as we 
 please, and keep the management of it under our own 
 control, or the control of our representatives, until we 
 cause it to be paid out where it is due. This is our 
 system ; and unless that system be preserved, in every 
 feature of it, we have no longer such a government as 
 that with which we set out. 
 
 Now while such is our system ; while such is the 
 doctrine of the law and the constitution on this subject, 
 let us see what are the doctrines of the administration 
 on the same subject. 
 
 In April, 1834, the late president of the United States 
 sent to the senate his Protest, in which he took occasion 
 to set forth, very fully his notions in regard to the powers 
 and duties of the presidential office. It will be remem- 
 bered, that shortly before this time, the public moneys 
 were held in deposite by the bank of the United States, 
 where they had been placed by law. The president 
 had intimated a desire for their removal to the state 
 banks. The subject was considered in the house of 
 representatives, on an intimation that the money was 
 unsafe in the hands of the bank, and that house came 
 to the resolution that the money was entirely safe, and 
 no cause existed for the removal. Shortly after the ad- 
 journment of congress, the president came to the deci- 
 sion that the bank of the United States should no longer 
 have the keeping of the deposites, and he required the 
 secretary of the treasury, under whose control the law 
 
103 
 
 had placed them, to remove them. Mr. Duane, then 
 secretary, refused to comply with this order. The pre- 
 sident removed him from his office for this sole cause ; 
 and appointed another individual to that office, who 
 came in with the understanding that he would obey the 
 will of the executive. The new secretary then prompt- 
 ly removed the deposites, and placed them where he was 
 directed to place them — in certain selected state banks. 
 When congress came together the next session, the se- 
 nate passed a resolution condemnatory of the conduct of 
 the president, and it was on the occasion of that resolution 
 that he sent his Protest. And now let us look at some 
 of the positions of that extraordinary document. 
 
 [Mr. Barnard here read several paragraphs from the 
 Protest, and then proceeded.] 
 
 Mr. Speaker, I had occasion, when this celebrated 
 state paper was received, to draw up, which I did with 
 considerable care, an abstract of the constitutional doc- 
 trines contained in it ; and as the house will now be 
 well able to judge of the accuracy of the abstract. I will 
 take the liberty of reading such portions of it, as may 
 be applicable to the business in hand. 
 
 DOCTRINES CONTAINED IN THE PROTEST. 
 
 " That the whole executive power of the government, 
 and every part and fraction of it, is vested in the presi- 
 dent, and that he alone is responsible for its exercise, 
 whether the power be exercised by himself in person, or 
 by any other functionary." 
 
 " That all the duties imposed by law on any execu- 
 tive officer, from ' the highest officer of state' down * to 
 the lowest subordinate,' are duties imposed on the pre- 
 
104 
 
 sident, and therefore he has a right to the absolute 
 'control' of every such officer." 
 
 "That every officer in the government, deriving his 
 appointment through the president, or any officer under 
 him, (except judges only) holds his office by the tenure 
 of his will, and is removable by him according' to his 
 pleasure" 
 
 "That all the officers of the government, in every 
 department of it, having any executive duty to perform, 
 are merely the president's 'agents' and 'instruments,' 
 chosen to aid him in the performance of his duties, and 
 as such they are responsible to him." 
 
 " That the sole and exclusive custody of the public 
 money belongs to the president, not so much that it is 
 given to him by the constitution : but because it is ' an 
 appropriate function,' or prerogative, of his office; and 
 that congress can pass no law which would take the 
 treasures of the country out of his hands." 
 
 Such are the positions and doctrines of the Protest; 
 and as they were the doctrines of the last, so of course 
 they are doctrines of the present administration. Mr. 
 Van Buren came into office not only as the approved 
 successor of Gen. Jackson, but he came in with a so- 
 lemn promise to follow in the footsteps of his predecessor. 
 Such then are the doctrines of the president, and the 
 settled and approved doctrines of those who support and 
 sustain him. 
 
 Let it be remembered, then, that, when the consent 
 of congress shall once be obtained to the Sub-Treasury 
 Scheme — to the plan of having the public money kept 
 in hand, instead of being deposited as heretofore — from 
 that hour, the president of the United States will have 
 
105 
 
 the custody of it. With more heads and hands than 
 Briareus, and with this singular advantage over that 
 monster, that his heads and hands occupy various and 
 distant quarters at the same time, he will be present eve- 
 ry where, to clutch, and count, and hoard every dollar 
 of collection wherever received through the vast territo- 
 ries of this Union. Every officer, and every depository, 
 from the secretary of the treasury to the humblest post- 
 master, is his agent and instrument, dependent on his 
 will, responsible to him and to him only, and existing 
 merely to aid him in the performance of his duty. 
 
 Congress may declare who shall keep the public mo- 
 ney, and where it shall be kept ; but still, congress can- 
 not take it out of his hands. He will still be the keeper, 
 and the appointed place of keeping will be his place of 
 keeping. Congress may create a principal treasury at 
 Washington : the president will be there. It may con- 
 vert the mint at Philadelphia and its branches elsewhere 
 into treasuries, and the president will be there. It may 
 make treasuries of the custom-houses at New- York and 
 Boston, and the president will be there. It may esta- 
 blish treasuries at Charleston or St. Louis, and the pre- 
 sident will be there. It may erect a treasury in every 
 city, town, village and hamlet in the land, and wherever 
 the treasures of the country are, there will the president 
 be also. 
 
 If there be an individual on this floor, or in this com- 
 munity, who can contemplate this state of things, with- 
 out feeling that the condition of the country is changed, 
 and that the cause of the Constitution is in danger, then 
 I can only say that, that man's republican sensibilities 
 are strangely blunted. To seethe president about to be 
 
106 
 
 exalted to be a potentate of almost unrivalled power — to 
 see him sit as a great money king over the nation — to 
 see him invested with legal ubiquity, confined to no place, 
 but present every where — commanding an army of 
 retainers and slaves, created to do his will and perform 
 his pleasure — attaching them to his person, and to his 
 blazing car, by chains of gold and silver, never dimmed 
 or fretted with rust, and so ductile that they may be 
 drawn out to any required length, to extend to and em- 
 brace any possible increase in the numbers of those who 
 may be called in to widen and swell the mighty and 
 ominous circle — to see all this, and yet see nothing 
 wrong, to feel no alarm, to find every thing republican, 
 every thing democratic, every thing safe — to see all this 
 and remain unmoved and unconcerned — others may if 
 they will and can — I cannot. 
 
 Sir, the forms of government, the lifeless body of go* 
 vernment, is nothing when the spirit is gone. The sub- 
 stance of the Roman constitution did not survive the 
 battle of Pharsalia, but the forms of the Roman consti- 
 tution were not yet overthrown. And Caesar, in full 
 possession of the public treasures, and in the enjoyment 
 of actual and undisputed sovereignty, " bestriding the 
 narrow world like a Colossus," still contented himself 
 with the consulship; and to the last he refused to as- 
 sume the diadem or the title of king — but the Roman 
 republic was not the less at an end for that reason. 
 
 Mr. Speaker — After what has fallen from me already, 
 I need hardly add that I am in favor of the resolutions 
 on your table. I desire to see them passed, as promptly 
 as may be, and sent to the Senate of the United States, 
 where, it is possible, that the principal actor, engaged in 
 
107 
 
 prepaiing to bring out this tragic plot before the people, 
 may feel bound, for the sake of consistency, if not of 
 principle, to forbear any longer to give this nefarious 
 project his support. At all events, we shall do our duty 
 by adopting the resolutions. 
 
 And if, after all, when we and others, here, and else- 
 where, have done all in our power to do, to arrest the 
 administration in its mad, preposterous, and destructive 
 career — if still it shall persist in its course ; and then, if 
 the people shall sustain the administration, as its friends 
 confidently predict they will ; if the American people, as 
 I am not prepared to believe, shall consent to put on the 
 fetters forged and forging for them, because wrought of 
 gold and silver ; if that great Luminary, the source of 
 light and warmth to us, and of hope to the political 
 world, must now be darkened in the heavens ; if we 
 must have, not indeed a brazen, but yet a metallic sky 
 over our heads, from which no dews can descend to re- 
 fresh, and no showers to fertilize ; if we must inhabit a 
 parched earth, and grope in settled gloom, and stumble 
 on each other, without affection, without charity, with- 
 out kindness, without confidence ; if anarchy, if chaos, 
 if confusion must come again ; if we must meet disas- 
 ter, and ruin, and conflict, and blood — why let the evil 
 day come ; and let it be our consolation that we labored 
 to avert and avoid it, in office and out of office, in sea- 
 son and out of season, knowing no rest and no plea- 
 sures, so if by any possibility we might contribute to 
 save and redeem our beloved country. 
 
REPORT 
 
 On the subject and system of public instruction, 
 in the state of new-york, made in assembly, 
 
 MARCH 7, 1838. 
 
 Mr. Barnard, from the committee on colleges, acade- 
 mies and common schools, to whom were referred so 
 much of the Message of his Excellency the Governor, 
 as relates to Public Instruction ; the report of the Super- 
 intendent of common schools ; and sundry Petitions from 
 colleges and academies, for aid ; and from inhabitants 
 of various parts of this state, in regard to common 
 schools, and the diffusion of Knowledge among the peo- 
 ple, 
 
 REPORTS : 
 
 The committee feel the full weight of the high duty 
 imposed upon them. The most valuable interests of a 
 great people, personal and political, for the present time> 
 and for the future, are undoubtedly, in some degree, in 
 their hands. At all times, the educational system of the 
 state is a matter of deep and paramount importance ; 
 and on those who have charge of it, and on those who 
 have any authoritative influence over it, must always 
 rest a deep and lasting responsibility. But, at this time, 
 the whole subject comes to us invested with new interest. 
 The state is now possessed, and to be possessed, of new 
 and ample means, in the income of a large fund, depo- 
 
 10 
 
110 
 
 sited with it by the government of the United States ; 
 and, it seems to be generally conceded, that these means 
 shall be devoted exclusively to the purposes of educa- 
 tion. The available fund, already deposited, amounts 
 to nearly four millions of dollars ; and to this, will short- 
 ly be added a million and a third more, if the law of 
 congress, as it now stands, shall be executed. With the 
 income, arising from so liberal a fund, thrown on the 
 hands of the state, and which is regarded, by common 
 consent, as a new and perpetual endowment for our sys- 
 tem of public instruction, a new and most responsible 
 duty arises. An additional sum, already equal to twice 
 the amount of that now commanded by the state, for 
 the same purpose, is to be annually applied to the ad- 
 vancement of education, the spread of knowledge among 
 the people, the forming of the popular character, and the 
 preparing and perfecting of that broad basis of intelli- 
 gence and virtue, on which alone can rest our republi- 
 can forms, and the security and happiness of a great 
 and growing community. 
 
 Your committee feel that, under these circumstances, 
 it would be inexcusable in them, and in this legislature, 
 not to review, and, perhaps, revise the whole plan of pub- 
 lic instruction in this stale. From this time, the state 
 must be regarded as starting from a new point, as set- 
 ting out in a new career, in regard to a matter of the 
 first consequence ; and it cannot fail to depend very 
 much on the manner in which this important trust shall 
 be performed, whether we are to be a peaceful, prosper- 
 ous, free and happy people, or a people, sunk, at no dis- 
 tant day, in misery— splendid misery it may be — broken 
 into furious and contending factions, and passing through 
 
Ill 
 
 every form of vice, and every form of violence, first into 
 anarchy, and then under the iron hand of an oppressive, 
 and, perhaps, bloody despotism. 
 
 The part which seems to be assigned to your commit- 
 tee in this work ; that of examining the plan of public 
 instruction, as it now exists, pointing out its defects, and 
 devising and preparing for the action of the assembly, 
 such material changes and alterations in the system, and 
 such new measures, as we may deem essential to the 
 proper progress and advancement of this great interest ; 
 this delicate and responsible service, has occupied much 
 painful thought with u*, much severe study and pa- 
 tient investigation. We submit the conclusions at which 
 we have arrived, to the house, certainly with a sincere 
 conviction that, in the main, they are right, and with an 
 earnest hope that, if they shall meet with the favorable 
 judgment of the legislature, they may be proved to be 
 just by the practical working, the salutary and happy 
 influence of the measures which may be adopted, as the 
 result of these conclusions. At the same time, we may 
 be allowed to say, that though we do not shrink from 
 the responsibility of taking decided, perhaps?, bold ground, 
 yet this confidence is not wholly our own; inasmuch, 
 as we know that nothing that we may recommend can 
 be adopted, until it shall have passed the patient scrutiny 
 of hot! i houses of the legislature, and met the sanction 
 of their deliberate and united wisdom. 
 
 It has seemed desirable to your committee, at a time 
 when the state is about to apply large additional means 
 to the uses of education, and to adopt, as we hope, a 
 permanent state system of public instruction on an ex- 
 tended and comprehensive plan, that the right and the 
 
112 
 
 duty of the government in regard to the subject of popu- 
 lar education, should, if possible, be clearly and accu- 
 rately defined. What constitutional right has the go- 
 vernment to impose the burthen of taxation on indivi- 
 dual property, or to employ the public funds, however 
 obtained, for the furtherance of any such object as that 
 of popular instruction ? Is not education a personal ad- 
 vantage, accruing to the individual instructed, as much 
 as the possession of property, or any other good — and 
 by what rigrjt does the government undertake to bestow 
 personal benefits at all, much more to compel one class 
 of men, because they are men of substance, to bear the 
 expense of benefits gratuitously bestowed on another 
 class ? 
 
 The right and duty in question, seem, to your com- 
 mittee, to rest, mainly on two grounds. 
 
 In the first place, the power over education is one of 
 the powers of public police, belonging essentially to 
 government. It is one of those powers, the exercise of 
 which, is indispensable to the preservation of society — 
 to its integrity, and its healthy action. It rests on the 
 same foundation as that which is employed in defining 
 and taking cognizance of crime, in erecting courts, both 
 of civil and of criminal jurisdiction, in establishing jails 
 and penitentiaries, and in compelling the performance 
 of contracts, and the reparation of injuries. In this 
 point of view, it is one among a number of means to 
 the same end, either of which, or all of which, mav be 
 freely used, according to the wisdom and discretion of the 
 public authorities. All are lawful, and equally lawful 
 and constitutional modes of action. In the present case, 
 however, the choice is not a question of expediency or 
 
113 
 
 economy only — though certainly important in the latter 
 point of view; but it becomes a question of humanity 
 also. For while it will always be necessary to provide 
 for the punishment of offences against society, when 
 committed, and for the compulsory observance of per- 
 sonal obligations, and redress of personal grievances, 
 yet it is vastly preferable, undoubtedly, that, if such a 
 thing were possible, there should be no grievances to be 
 redressed, no broken promises, and no committed crimes. 
 It is the aim, and the undoubted tendency of education, 
 properly understood and conducted, to accomplish this 
 object — an object of incalculable benefit to human soci- 
 ety. As a measure, designed to operate only as a law 
 of police, the public support of education goes behind 
 ail crime, and all injurious and disturbing action in 
 society, and seeks to occupy the intellect and the affec- 
 tions of men, and simply by informing the mind and 
 moulding the temper, by demonstrating that it is the 
 interest and the happiness of each to be just and ge- 
 nerous towards all, by letting a little light in on the 
 understanding, and touching the heart, either to take 
 from them the disposition to offend one another, or to 
 injure society, or to arm them with strength of purpose 
 to resist every temptation to do so. 
 
 But there is another and broader ground, still, on 
 which to rest the power and duty of the state, in regard 
 to educa:ion. That which we have already noticed, is 
 enough for the authority, if the state choose to exercise 
 it, and in the opinion of your committee, enough for 
 (the duty also. But the consideration which we now ap- 
 proach, is not only sufficient for the abundant justifica- 
 
 10* 
 
114 
 
 tion of authoritative action — it demands action, and 
 the state could not justify itself to the people without it. 
 The people of this state, having united themselves 
 together in a civil society, have agreed to secure to them- 
 selves, or to attempt to secure to themselves, the highest 
 advantages of the social compact, through the agency 
 of certain forms of government and administration. — 
 We have adopted the representative system ; and we 
 start from the position, that the whole political power of 
 the country, much of it for immediate exercise, and all 
 of it hy ultimate reference, is in the hands of the peo- 
 ple. And, on this grand position, as a basis, do all our 
 constitutional forms absolutely rest. But just as chil- 
 dren are unfit to govern themselves, so are uneducated 
 men, being still children, though of huge growth, un- 
 fit to govern themselves. In one mode or another, as- 
 sociations of such men always have had, and always 
 will have, protectors and masters; and we hardly need 
 add, that a people with masters of any sort, as the basis 
 of a free representative system, is a contradiction in terms. 
 It is evident, therefore, that popular cultivation, as dif- 
 fusive and general as the numbers composing the re- 
 public, is indispensable to the perservation of our re- 
 publican forms — and hence arises the great constitutional 
 duty of the government. It is the duty of self-pre- 
 servation, according to its actual mode of existence, 
 for the sake of the common good. The highest good 
 of the whole, as a body, is the object in view ; that 
 good is to be attained only, according to the very terms 
 of the original compact, through our adopted forms; 
 and the duty of preserving and maintaining those forms, 
 in their vigor and purity, becomes, at once, the very 
 
115 
 
 highest duty and obligation of (hose who are entrusted 
 with the administration. It is a duty, every instant, 
 and perpetually, in force. No change of administra- 
 tion can affect it; and the moment it is denied or ne- 
 glected, that, moment is the cause of the republic re- 
 pudiated and betrayed. 
 
 It is easy, we think, to know when this duty of main- 
 taining our constitutional forms, by the care which is 
 taken of the structure on which they rest, is in the 
 way of being faithfully performed. The duty is not 
 well provided for, unless some rational plan of public 
 instruction shall have been devised and adopted, the ob- 
 ject and the probable effect of which thall be, to lead to 
 the cultivation of every child in the community, at least 
 so far as to fit them all. without exception to the extent 
 of their capabilities, for an intelligent discharge of the 
 common and ordinary duties and responsibilities of social 
 and political life, to which all, or nearly all, are called 
 by the very conditions of our social and political forms. 
 The future mother must be educated in every female 
 child — a matter not to be neglected if we would have men 
 in the republic ; and in every male child, must be edu- 
 cated the future elector, juror, and local administrator. 
 
 The duty of being educated is, undoubtedly, one of 
 positive obligation, resting on every citizen, as part of 
 the original compact between every citizen and the whole 
 body of citizens ; and as far as instruction is attainable 
 in youth, the obligation rests on parents and guardians. 
 It is a duty which by no means concerns the individual 
 only ; it is one in which every other individual, and the 
 whole community have a deep interest. The verdict of 
 jurors, and the decision of a contested election, perhaps 
 
116 
 
 by the casting vote of a single person, are mailers of 
 vast concernment to others, besides those who render 
 the verdict, or turn the election. 
 
 But while there can he no doubt about this personal 
 duty, and the claims which the community has on eve- 
 ry member in regaid to it, it is clearly one which could 
 not, especially with us, be enforced by any direct and 
 arbitrary exercise of power. Happily, we think, nothing 
 of this sort is necessary, any more than it would be de- 
 sirable. 
 
 There are evidently two difficulties in the case to con- 
 tend with. One of them is, that so long as men differ 
 in endowment and in the allotment? of Providence, and 
 so long as the rights of property shall be respected, there 
 will always be a considerable portion of the community 
 unable, for want of the necessary means, to sustain the 
 expenses of education. Whenever this is the case, we 
 hold it to be the duty of the state to supply the necessa- 
 ry means ; and on this principle the state has long acted. 
 
 The other difficulty in the case is the more serious 
 one of the two. It is, that perhaps a large majority of 
 those who have the means of meeting the necessary 
 outlays for the proper education of their children, are not 
 disposed to use them for any such purpose. The bur- 
 then in many cases is undoubtedly a heavy one, and it 
 is difficult to convince parents of the unquestionable 
 truth, that they can make no provision for their off- 
 spring by pecuniary aids, which can in any degree 
 compensate for the want of adequate mental and moral 
 cultivation. 
 
 This is a difficulty to be met by the stale, with mea- 
 sures of a delicate character — measures calculated to in- 
 
117 
 
 duce and to persuade — measures aiming to bring in 
 public opinion to its aid, and appealing at once to the 
 good sense, the pride, and the interest of the parties 
 concerned. Whatever compulsory action is resorted to, 
 must be of a gentle and paternal character, and be sur- 
 rounded and accompanied with every circumstance of 
 kindness, and with whatever is best adapted to move 
 and to interest. Such, in a great measure, has been 
 and is the nature of the system of public instruction 
 long in operation in this state, so far as designed to meet 
 the difficulty here suggested ; and your committee pro- 
 pose some important measures, regarded by them as 
 worthy of great consideration, not certainly to change 
 materially the features of the system in this respect, but 
 to modify them, and if possible to give them efficiency. 
 
 There is one other test to which your committee 
 would refer, as one by which we may know whether 
 the state has performed, or is performing, its great con- 
 stitutional duty of self-preservation for the common good, 
 by taking due care of the subject of popular instruction. 
 That test is, whether or not the system be such as makes 
 education a thing of practicable and probable attainment 
 by the class of the comparatively indigent. For if it be 
 otherwise, there can be no security for the continuance 
 of our constitutional forms. In this age of the world, 
 the rich in any civilized community will be educated; 
 and if the poor cannot be, and are not, the necessary 
 consequence is, that, a separation takes place. Know- 
 ledge is power, and it will be exercised ; and a selfish 
 aristocracy, formed of those who are at the same time 
 rich and educated, will bear the class of the indigent, and 
 ignorant to the wall. The community being once di- 
 
118 
 
 vided into these two great classes, it matters little, to (he 
 present argument at least, whether the powerful bear 
 sway wisely and well, or oppressively : in either case 
 the balance is destroyed which makes our government 
 what it. is ; our constitutional forms are not preserved; 
 and so much of common good as depended upon them, 
 much or little, is sacrificed. 
 
 Nor is it enough, in our judgment, to satisfy the de- 
 mands of the test now referred to, that our common 
 schools are made accessible to all classes, the poorest as 
 well as the better conditioned. If the system stopped 
 here, it would aid in creating the very distinction and 
 separation which ought, to be avoided. In the first place 
 the condition of the common schools themselves must be 
 elevated ; and if it is not, the consequence will soon be, 
 that they will come to be regarded as the seminaries of 
 the poor, when the rich will desert them ; yielding them 
 neither countenance nor support any further than forced 
 to do so, or contributing to sustain them, like other in- 
 stitutions for the poor, as public charities. The condi- 
 tion of ihese schools then must be elevated. They must 
 be common places of resort for all classes as far as pos- 
 sible, where the youth of the same neighborhood, how- 
 ever otherwise separated, may meet, as youth now meet 
 in our academies and colleges, to sacrifice all distinctions 
 except, such as grow out of various success in the prose- 
 cution of the same studies. 
 
 But this is not. all; the way to the higher schools— 
 to the academies and colleges — must, be open, at least to 
 the young man of genius and enterprise among the 
 classes of the indigent, as well as to his more wealthy 
 rival. 
 
119 
 
 There is one way, and only one in which this can be 
 done; and that is, by such liberal endowment of the 
 better s hook, by private munificence and state patron- 
 age, as will bring down the wages of instruction to the 
 person taught, to a moderate sum. When this is ac- 
 complished, the balance between the wealthy and poorer 
 classes will be easily struck; for (hough their relative 
 numbers will still be unequal in these schools, the sum 
 of knowledge and intellectual power among the sturdy 
 and ambitious sons of poverty, will be, out and out, 
 equal to that acquired and displayed by the more nu- 
 merous class of those among whom must always be 
 many whom indulgence and luxury have enervated. 
 
 Your committee are happy in having it in their power 
 to state that the principle here suggested in relation to 
 the higher schools, is one which has long been recog- 
 nized and acted on in this state: and it needs only to 
 be carried out and properly applied to make it efficient 
 in producing the best and most auspicious results. 
 
 Your committee would now ask attention more pat- 
 ticularly to the system of public instruction in this state, 
 and to the measures proposed by us for its improvement 
 We speak of course only of those scholastic institutions 
 to which the public bounty flows, and which are under 
 the care and supervision of the public authorities. 
 
 These institutions are ; first, common schools ; second, 
 academies; third, colleges; and fourth, a State Univer- 
 sity ; this last, however, never having yet become a 
 school, but only existing as a board of inspection and 
 visitation. 
 
 To begin with the common schools. Your commit- 
 tee suppose that it must be conceded on all hands, that 
 
120 
 
 the children of this state who receive instruction in these 
 schools, are, in no degree, educated as they ought to be. 
 Apply to them the test of qualification already stated in 
 this report, and it is certain that the mass fall vastly be- 
 low the proper standard ; and we do not hesitate to af- 
 firm, that it is just as important as the continued ex- 
 istence of peace, security and republican freedom among 
 us, that a decided effort should at once be made to ele- 
 vate the standard of instruction in the common schools. 
 With every year, nay, with every month's delay, the 
 army of the uneducated is reinforced with frightful 
 numbers ; and we are of opinion that nothing but 
 prompt action can save us. 
 
 And why are the five hundred thousand children of 
 the state, though attending school, for the most part un- 
 educated ? We would repeat, and we would, if possible, 
 teach every parent in the state to repeat, after M. Cousin, 
 the pregnant maxim — "As is the master so is the 
 school." It is simply because the schools are not sup- 
 plied with good teachers that we have not good schools. 
 
 To this point then, the attention of your committee 
 has been earnestly directed ; and after entertaining a 
 variety of propositions on the subject, we have come to 
 the conclusion on the whole, that it is better to take the 
 plan already adopted by the regents of the university, 
 for the instruction of common school teachers, rather 
 than to attempt a new one, and to give it at once suffi- 
 cient extension to adapt it to the exigencies of the state. 
 We propose therefore, that there shall be a department 
 for the education of teachers in one academy in every 
 county of the state ; and we are satisfied, after mature 
 examination, that, while the presence of a normal school 
 
121 
 
 in each county cannot fail to be salutary in its influence 
 on many accounts, there will be no more than a com- 
 petent supply of teachers from these sources, whether 
 for the immediate or the permanent demand, provided 
 only we can succeed in creating and increasing that de- 
 mand as we think will be done, if the measures which 
 we contemplate for that end shall meet with the favor 
 and approbation of the legislature. 
 
 It is undoubtedly true that, in the present state of 
 popular education, and with the prevalent indifference 
 to the whole subject in the districts, no very great num- 
 ber of well qualified instructors would meet with em- 
 ployment, at competent wages, in the district schools. 
 It would not be enough, therefore, to furnish well-taught 
 teachers. They would still be forced to seek employ- 
 ment elsewhere, or in other and more profitable occupa- 
 tions. By doing only so much, therefore, we should do 
 nothing valuable. We must go further, and prepare 
 the way, if possible, for the prompt introduction of the 
 masters we may furnish, into the ready and well-paid 
 service of popular instruction. And it is the attempt to 
 solve this most difficult problem, which has cost your com- 
 mittee more anxiety and labor than every thing else 
 connected with the entiie subject. We will submit to 
 the house the result of our deliberations on this impor- 
 tant point. 
 
 And first, we propose to make the establishment of 
 district libraries, heretofore attempted in this state by a 
 law of 1835, imperative and certain, as prayed for by 
 various petitions before us. The law, as it now stands, 
 authorizes each district to tax itself for this object ; twen- 
 ty dollars the first year, and ten dollars every year after- 
 
 11 
 
122 
 
 wards. We propose that the same sums shall still be 
 realized for these objects ; but that the state shall fur- 
 nish half; while it shall be the duty of the districts, with- 
 out choice, to tax their own property for the remainder. 
 
 The law as it now stands has been nearly a nullity. 
 We can hear of but few, exceedingly few districts, who 
 have availed themselves of its provisions. Some solitary 
 libraries, however, have been established after great ef- 
 forts and sacrifices on the part of individuals ; and from 
 these we have the most satisfactory testimony that the 
 benefits flowing from them have exceeded the highest 
 expectations of the most sanguine advocates of the plan. 
 
 To secure the benefits of these libraries at all, we are 
 entirely satisfied that it is indipensable to make the levy- 
 ing of the tax on the districts compulsory ; but while 
 the state commands in this matter, as it ought to, we 
 think it should also show a becoming liberality; and 
 this it will do by appropriating more than one hundred 
 thousand dollars the first year to this single object. 
 
 The committee would not disguise that they regard 
 the establishment of these libraries as a thing of the 
 very last consequence ; and if refused by the legislature, 
 they are free to confess that they shall look to all sub- 
 stantial improvement in the common school system, as 
 something rather to be despaired of, than to be expected 
 or hoped for. With these libraries in possession, it is 
 calculated, on proper and sufficient data, that between 
 seven and eight millions of volumes of books will at 
 once be brought into use and perusal in this state, 
 where now scarcely a book is read ; and that seven or 
 eight hundred thousand persons, male and female, 
 young and old, will become attentive and instructed 
 
123 
 
 readers, of whom scarcely one is now entitled to the 
 name of reader. Who can undertake to compute the 
 sum of benefits arising from such a condition of things? 
 — the intellectual tastes and habits that may be formed 
 — the new sympathies springing up between parent and 
 child — the desertion of old haunts of dissipation and old 
 habits of vice — the new and swarming births of thought 
 and fancy that must occur — the occasional discoveries 
 which genius may make of itself and its wonderful 
 powers and impulses — the passions that shall be calmed 
 — the differences that shall be healed — the broils that 
 shall be quieted and allayed — the families, and neigh- 
 borhoods, and country that shall be blessed — who can 
 contemplate all this, and more that might be thought of, 
 and not tremble, as a man and a patriot, with the appre- 
 hension lest the country should lose, or fail, through any 
 cause, to realize benefits so immense and so indispensa- 
 ble? . 
 
 It will be seen that the committee place great reliance 
 on the establishment of district libraries, in their influ- 
 ence on both parents and children, as a principal means 
 of leading to the employment of competent teachers. 
 But there are other means also on which we greatly 
 rely. 
 
 One of these is the very direct one of increasing very 
 largely the fund appropriated by law for the payment of 
 teachers' wages. It is proposed to double the sum sup- 
 plied from the state treasury for this object ; to double 
 also the sum which the property in the several towns 
 now pays by compulsory taxation ; and finally, to au- 
 thorize the towns to double the sum which they are now 
 allowed to raise by voluntary taxation. 
 
124 
 
 In this way the whole sum which would go into the 
 hands of the commissioners of common schools as public 
 school moneys for distribution among the districts, would 
 be about equal to the whole sum, including rale-bills, 
 which was paid for teachers' wages, so late as 1833, 
 and would fall but little more than one hundred thou- 
 sand dollars short of the whole sum thus paid, accord- 
 ing to the last year's returns. 
 
 But the committee are unwilling to allow this large 
 increase of public moneys for annual distribution, with- 
 out making an effort to secure a correspondent exertion 
 and liberality on the part of those who furnish children 
 for the schools. If this be not secured, more harm will 
 be done than good. If higher wages are not to be paid 
 to teachers than before ; if the services of a better order 
 of instructors are not to be required ; if the standard is 
 not to be materially raised, then will this additional pub- 
 lic bounty be wasted, and the extraordinary burthen of 
 taxation which property will be made to bear, be only 
 oppressive and tyrannical ; because in no degree useful. 
 The poor who are unable to pay rate-bills will receive 
 no more benefit from the schools than they now do; 
 while those who are able but unwilling to pay will 
 wholly escape the payment of their just proportion of the 
 expenses of tuition for their own children, by casting the 
 whole burthen on the state and on property. 
 
 To avoid the evils here suggested, and to secure the 
 employment of qualified teachers at fair prices, as fast 
 as they can be found or furnished, the committee pro- 
 pose two or three changes of some importance in the de- 
 tails of the common school system. 
 
 It is proposed, in the first place, to establish a mimi- 
 
125 
 
 mum of prices as the wages of instruction in the schools 
 receiving any share of the public moneys — the monthly 
 wages of the male teachers to be not less than fifteen 
 dollars ; and those of female teachers not less than ten 
 — at the same time extending the term during which 
 the school must be kept in each year, from three months, 
 which is the present requisition of the law, to six months. 
 
 In connection with this new provision in regard to wa- 
 ges, the committee recommend a slight, but yet, as we 
 believe, an important change in the manner of ascer- 
 taining the qualification of teachers. The whole sub- 
 ject of local inspection undoubtedly demands revision. 
 At present, however, we only propose that candidates for 
 teachers of a certain description of schools to which we 
 shall presently refer, shall only be admitted to examina- 
 tion by the local inspectors on their presenting some pro- 
 per testimonial of their scholarship from some of the 
 higher schools, academies or colleges ; and that in all 
 cases the candidates for teachers of common schools shall 
 be examined by, or under the direction of, the inspec- 
 tors, in certain studies and subjects which shall be, from 
 time to time, named and prescribed by the superintend- 
 ent. 
 
 With the same object and result in view, it is next 
 proposed to make a most important change in the prin- 
 ciple on which the additional funds, whether derived 
 from the state treasury or from local taxation, shall be 
 distributed among the districts. On the plan now pro- 
 posed, the apportionment by the superintendent of the 
 whole of the school moneys will be made precisely as 
 heretofore, among the several counties, towns and cities; 
 and the new mode of distribution applies only to the 
 
 11* 
 
126 
 
 moneys in the hands of the commissioners of each town, 
 The proposition is, that in each town one equal half of 
 the public school moneys in the hands of the commis- 
 sioners, instead of being apportioned as the whole has 
 heretofore been, among the several districts in proportion 
 to the number of children residing in each between cer- 
 tain ages, shall hereafter be apportioned in a ratio ac- 
 cording to the average monthly rate of wages paid to 
 teachers, for six months, in each of the several districts. 
 
 It is supposed that the business of teaching, like all 
 other businesses requiring learning and skill, will, as a 
 general thing, command wages and be paid for, as be- 
 tween those who practise it, according to excellence and 
 superiority ; and the proposed mode of apportioning a 
 part of the public moneys among the districts is intend- 
 ed to operate directly as a bounty to those districts of any 
 town which shall most faithfully serve the great cause 
 of popular instruction, by employing the best teachers. 
 And this method of apportionment is recommended with 
 the more confidence, not only in its efficacy, but in its 
 justice, because it may be made to appear, by an easy 
 calculation, that while the bounty to one or two districts 
 in a town which might be induced to give the highest 
 rate of wages would be very considerable, yet the 
 amounts distributed to the remaining districts would be 
 only the merest trifle less than they would receive under 
 the old mode of distribution. In the mean time, an ex- 
 ample would be set in the town which could not fail to 
 be of the happiest influence on all the districts, demon- 
 strating to their observation the benefits of good instruc- 
 tion, and inciting to a mutual and healthy emulation. 
 
 But your committee propose still another way of reach- 
 
127 
 
 ing, if possible, the great object in view, that of securing 
 the employment of competent teachers, and elevating 
 the standard of education in the common schools. It is 
 evident that there is a strong tendency in the towns to 
 an unnecessary and injurious multiplication of districts — 
 thus vastly increasing the expenses of education without 
 any corresponding benefits. And the committee have 
 been disposed to put it in the power of two or more dis- 
 tricts to consolidate, and to offer some inducements to 
 them to do so, where it can be done judiciously. The 
 point, however, to which our attention has here been 
 chiefly directed, has been the importance, for the sake 
 both of efficiency in teaching and of economy, of form- 
 ing the younger, and the older and more advanced pu- 
 pils into separate departments, or schools. It is certainly 
 the most wretched economy to employ a male teacher 
 at eighteen or twenty-five dollars a month, to instruct 
 infants, when a well-qualified female could be employed 
 at ten dollars, and, ten to one, perform the service the 
 better of the two. Besides it is deemed a hopeless ex- 
 pectation to find men really qualified by their learning 
 and talents to instruct youth from ten years old and up- 
 ward as they ought to be, who will be employed, at any 
 wages, to teach children of five. 
 
 To meet the case suggested, it is proposed, by your 
 committee, to authorize several districts, not more than 
 four, without dissolving the primary districts, to unite 
 to form a high-school district and establish a district 
 high-school. It is supposed that, without much expense, 
 one of the district school-houses may be taken and fitted 
 for the central school. If the remaining school-houses 
 in the united districts will accommodate the primary 
 
128 
 
 schools for the younger children, then the central school- 
 house will need to have perhaps but a single apartment 
 for the high-school; and otherwise, a separate apart- 
 ment, so as to accommodate both schools under the same 
 roof, would be required. In any event, the extra ex- 
 pense under this head would be very inconsiderable to 
 the united districts. 
 
 It is proposed, as connected with this plan, to fix a mi- 
 nimum of monthly wages to be paid to the high-school 
 teacher, of twenty-five dollars. This is deemed desira- 
 ble, not only as likely to secure the services of proper 
 instructors, but as establishing an elevated grade in the 
 business of common-school instruction. And besides, it 
 is demonstrable, that with this higher rate of wages to 
 the high-school teacher, all the benefits of these supe- 
 rior schools may be secured to the towns and the chil- 
 dren of the state, with very little, if any, additional 
 expense, in the aggregate, for tuition. As take for ex- 
 ample a town having twelve districts, the average in the 
 state ; and such town could support three district high- 
 schools, with eight primary departments, all with quali- 
 fied instructors, for wages scarcely more, if any, in the 
 aggregate, than would be required to sustain the twelve 
 district schools on their present footing. 
 
 The committee would add on this important point, 
 that the plan here suggested is not wholly a new expe- 
 riment. We have information of its having been vo- 
 luntarily attempted in some towns in the interior of the 
 state, and wherever tried it has been attended with com- 
 plete success. We have no hesitation in commending 
 the plan, in the strongest manner, to the favor of the 
 house ; and with some encouraging aid which it propos- 
 
129 
 
 ed the state shall offer, towards furnishing these high 
 schools with necessary apparatus, we are prepared to ex- 
 pect from the plan, if the legislature shall sanction it, 
 the happiest and most satisfactory results. 
 
 We have now done with the common schools, after 
 commending them, as we beg leave to do, with all the 
 vast and inappreciable interests belonging to them, to the 
 continued care and favor of the state; only adding, how- 
 ever, that a chief interest belonging to the consideration 
 of the higher seminaries, to which we now for a moment 
 pass, arises from the intimate connection between them 
 and common schools, as part of the same system of pub- 
 lic and popular education. 
 
 In regard to colleges and academies, we have already 
 stated in this report a principal of vital importance, pro- 
 per to influence and govern the action of the state in its 
 patronage of these institutions. If there were no other 
 reason, they should be sustained with aid from the pub- 
 lic funds, as schools for the education of teachers ; not 
 merely where departments for that purpose are especially 
 established, but every where if necessary. There is, 
 however, another and equally cogent reason why such 
 aid should be furnished, and that reason is found in the 
 principle just referred to. We need not repeat it. Let 
 it be enough to say, that the state ought to see that the 
 doors of these institutions are open to the comparatively 
 indigent ; it will never do to permit education to become 
 a monopoly of the rich. There is nothing indeed in the 
 manner in which these higher schools are founded and 
 constituted, tending to so unhappy a result ; the proper- 
 ty of the wealthy and the munificent is freely bestowed 
 for their endowment, and thus their advantages are 
 
130 
 
 brought within the reach of nearly all. When the ne- 
 cessary buildings are erected for the accommodation of 
 faculty and students, and a proper library, museum, and 
 apparatus furnished, for all which the student pays no- 
 thing or very little ; and especially when to this is added 
 the endowment of professorships, or the possession of 
 productive funds, so that the wages of instruction also 
 are paid with but small contributions from the student 
 or none at all ; then are these schools placed on the 
 right foundation ; then will they become nurseries of 
 men trained for the cause and the service of the re- 
 public ; then ? and then only, will they operate to check 
 the growth of aristocratic pride and distinction, and pro- 
 mote that healthy equality without which we may per- 
 haps have the forms of republicanism, but none of its 
 essence or its benefits. It is easy enough, we think, to 
 see, if the system as we have it, should be left to change 
 itself into one in which the whole onerous expense of 
 instruction in the higher schools — tuition, rents, the use 
 of books, and apparatus, with all the necessary incidents 
 — must be borne by the individuals instructed, that edu- 
 cation could not be, and would not be, a thing in which 
 the poor, or those in moderate circumstances, would have 
 any part. And it is against every such tendency that 
 we think the public ought strictly to guard ; and the 
 state does, and may, materially aid in the matter, by a 
 judicious application of its public funds to the encou- 
 ragement and support of education in colleges and aca- 
 demies. 
 
 It will be seen by the bill prepared by the committee, 
 that they propose to increase moderately the annual sum 
 now distributed by law, among the academies of this 
 
131 
 
 state, subject to the visitation of the regents ; and also 
 that a further sum shall be annually distributed among 
 other academies, not yet perhaps so well endowed as 
 those just named, and, therefore, more necessitous ; 
 taking care, however, that they shall all have the cha- 
 racter of classical schools of the rank to which they claim 
 to belong. 
 
 A principle seems to have obtained in the state here- 
 tofore, in regard to aid furnished to academies, which 
 the committee are disposed to sustain. These institu- 
 tions are numerous, and it is desirable they should be ; 
 and it is quite improbable that the treasury of the state 
 could bear the drains upon it, if it was once adopted as 
 a practice to make grants to academies of considerable 
 sums, by way of endowment ; as for the erection of 
 buildings or to pay the debts incurred in the erection. It 
 is believed to be decidedly better to look, as heretofore, to 
 voluntary and united contributions and private munifi- 
 cence, to supply to every academy the necessary erec- 
 tions for the accommodation of students, and then for 
 the state to come in with its annual bounty, to aid in 
 sustaining current expenses. 
 
 Colleges, in this respect, appear to your committee to 
 stand on a footing somewhat different, and so they have 
 been heretofore considered. The state has, in some in- 
 stances, furnished very liberal pecuniary aid to the found- 
 ing and building up of colleges. When the state was 
 younger and individual wealth was less abundant than 
 it now is, it is probable those colleges could not have 
 existed, or been preserved, without such assistance. And 
 even now, since private fortunes and means have greatly 
 increased, the establishment and endowing of a college 
 
132 
 
 out of individual contributions, is a thing not easily ac- 
 complished. The necessary cost of college buildings, 
 and dwellings for the faculty, and of furniture, library, 
 apparatus and museum, is very great; and if those 
 who attempt such an enterprise are left to stand alone, 
 it is only after years of effort, and toil, and anxiety, and 
 sacrifice, that they can finally succeed. And it seems to 
 your committee, on the whole, that there is no good 
 reason why the past practice of the state in making di- 
 rect grants to colleges for endowment, should be wholly 
 pretermitted. The bounty of the state can never be call 
 ed for, for this object, to any such extent as it heretofore 
 has been. And no demand of the sort is at present 
 made from any of the colleges. 
 
 The committee recommend, on the same principles 
 on which current aid is afforded to academies, an annual 
 appropriation, for a limited time, of six thousand dollars 
 each, to Geneva college, and the University of the city 
 of New- York ; and four thousand dollars each, to Ha- 
 milton and Columbia colleges. All these institutions 
 are embarrassed for want of current support, and we 
 hope that at least the state will not see them sink under 
 such embarrassments. 
 
 There is one topic more which the committee feel 
 bound to touch before concluding their report. They pre- 
 sent the subject with a brief but frank expression of their 
 views and opinions, in order to place it in the possession 
 of the house for review, and for the exercise of its better 
 judgment. The subject is an important one, and it will 
 be wholly for the house to say, whether the suggestions 
 of the committee shall be acted upon at all, at the pre- 
 sent session, or whether the whole subject shall be laid 
 
133 
 
 over for such consideration as the community may see 
 fit to bestow upon it. 
 
 We have already said, that the State University, as 
 now constituted, is not a school. It is without locality, 
 without endowment, without literary or scientific pro- 
 perty. The regents form a board of inspection and visi- 
 tation, for all departments of public instruction above 
 the common schools. To the care of the latter a super- 
 intendent is appointed. 
 
 Now the changes which your committee would sug- 
 gest, are in a great degree, organic. We will state 
 them ; but we will not undertake to sustain our views 
 by argument or illustration. 
 
 We think in the first place, that there should be ap- 
 pointed in this state an officer who should be the head 
 of the system, and called, perhaps, the President of Pub- 
 lic Instruction. That his office should be wholly sepa- 
 rated from any political office whatever, and, as far as 
 may be, from every possible political connexion or inte- 
 terest. He should have especial charge of common 
 schools and academies, and of the funds appropriated to 
 them ; and should devote himself exclusively to the 
 work of improving and perfecting the system of which 
 he would be the head. It is work enough to occupy all 
 the time and the energies of any one man. The re- 
 gents should still have the power of visitation over the 
 colleges, properly supervisable by the State University ; 
 they reporting to the President, as the head of the sys- 
 tem ; and he reporting of course, in all things, to the 
 legislature. 
 
 Finally, we think that the time has come when the 
 State University should be something- better than a 
 
 12 
 
134 
 
 name. It is now a corporation ; give it, we say, a local 
 habitation, and invest it with some of the usual signs of 
 physical existence. A beginning might be made by 
 declaring by law that what is now known as the State 
 Library, always to be located at the Capital and occupy 
 apartments in the Capitol buildings, shall hereafter be 
 known as the Library of the State University ; and let 
 the funds for its increase, which should be more liberal 
 than heretofore, as well as the Library, be placed in the 
 hands of the regents. A moderate sum annually should 
 be added, for the gradual establishment of an anatomi- 
 cal or other museum, to be located also at the Capital. 
 In this way, it is supposed by your committee, that 
 while the cause of science and learning would be imme- 
 diately subserved, preparation might gradually be made 
 for the University to enter on its proper business, as a 
 school of instruction in the highest branches of learning, 
 under well endowed professorships ; and thus the state 
 and the country, in time, escape the reproach of being 
 obliged to send the sons of the republic to other countries, 
 and to kingdoms, with which we have little connexion 
 and no congeniality or sympathy, for the advantages 
 of education in its higher walks and attainments. 
 
 In the bill which we propose, will be found provisions 
 answering to the suggestions which we have now sub- 
 mitted in respect to the reorganization of the executive 
 department of public instruction. 
 
 In concluding this report, your committee would say, 
 that they cannot trust themselves to speak of the sub- 
 ject of Education, in so grave a document as this, as they 
 would like to speak — of its vast importance, its advan- 
 tages, its necessity. In another place, we should in- 
 
135 
 
 dulge in feelings and language which would not be be- 
 coming here. We should speak of the spectacle of an 
 educated people — educated to the top of their faculties, 
 as physical, organized, intellectual, moral and religious 
 beings — educated above want and above pride, above 
 fear and above reproach — educated to know what truth 
 is, what charity is, what justice is, what liberty is — edu- 
 cated to be generous, and peaceful, and free, and happy 
 — educated to understand, and feel, and respond to every 
 call of duty and of patriotism — educated out of vice and 
 meanness, and into lofty thoughts and noble sentiments 
 — educated for home, for pleasure, for business — educated 
 for themselves, for their families and kindred, for their 
 friends and for their country. But we forbear. Such 
 a country and such a people we believe ours ought to 
 be, and may be. 
 
 The committee ask leave to bring in a bill 
 
REMARKS 
 
 >n the assembly of new-york, touching the econo- 
 mical policy of an extended system of internal 
 improvements; march 13, 1838. 
 
 [Mr. Ruggles, Chairman of the Committee of Ways and 
 means, had presented his Report on the Finances and Re- 
 sources of the State : and a motion was pending - for the 
 printing of a large number of extra copies.] 
 
 Mr. Speaker — For one. I am in no degree surprised 
 at the course of remark in which the member from Her- 
 kimer (Mr. Mann) has now indulged. We have just 
 listened j a delighted auditory, to the reading of a docu- 
 ment, drawn up with most uncommon clearness, com- 
 prehensiveness and power, which is now to go out to the 
 community, with the undoubted effect of waking up 
 this great, and greatly abused people, from a long and 
 heavy slumber, into which they were thrown some ten 
 years ago, by the skilful manipulations of a distinguish- 
 ed citizen, then a member of the senate of this state. 
 It was due to this house, constituted as it is, that such a 
 Report as that we have now heard, should have been 
 made ; and we may look to that particular effect to be 
 produced by it, to which I have just alluded, with en- 
 tire confidence. Sir, it was clearly the design of the 
 financial paper, produced by the distinguished senator 
 referred to, in 1827, to aim a fatal blow at our great 
 works of internal improvement, while it should at the 
 
 12* 
 
138 
 
 same time, if possible, strike down the character and in- 
 fluence of that great man under the auspices of whose 
 name those works had been commenced and prosecuted, 
 The effect of that paper, able and deceptive as it was, 
 was unhappily too great ; and from that day to the pre- 
 sent, the policy of this state on the great subject affected 
 by it, has been uncertain and timid, without any com- 
 petent system, and without any such efficiency, or re- 
 sult, as the condition of the state, and the condition of 
 things about us demanded. Now, sir, I hail the report 
 just read as eminently fitted to expose the sophisms of 
 the former financial paper, to dissipate the mists which 
 have gathered over the state, and to wake us up at 
 once to a sense of our past injuries, and to the percep- 
 tion of our true interests. And it would have been 
 strange indeed, if such a document as this had been al- 
 lowed to pass without some commentary, designed, as 
 far as possible, to take off its edge, detract from its high 
 merits, and weaken its certain influence. Let, there- 
 fore, gentlemen be indulged in pouring out their ill-dis- 
 guised bitterness on the report, It can do no harm — 
 good rather. 
 
 But, sir, I have been called up by the extraordinary 
 doctrine which has been put forward by the member 
 from Herkimer, in the course of his remarks. The 
 alarm of taxation is sounded : and we have been told 
 that it seems to be wholly forgotten, that a great sys- 
 tem of internal improvements, such as is sketched in 
 this Report as being within the financial resources of 
 the state, can only be carried forward and sustained, by 
 taxation upon the people, direct or indirect. Now, sir, 
 the term taxation as here used is meant to convey an 
 
139 
 
 idea of injustice and oppression ; for, in the same con- 
 nexion, the member talks of the laboring poor, and those 
 who live by the sweat of the brow, as likely to be ground 
 down with taxes for the exclusive benefit of other classes ! 
 He means I take it, when he talks of taxation, to be un- 
 derstood as employing the word much in that sense in 
 which it is used to characterize the financial policy of 
 other countries and other governments ; where the peo- 
 ple are drained of their substance to support the govern- 
 ment for the benefit of the -government, and not, or 
 only in a secondary degree, for the benefit of the people. 
 It is in this odious sense, as a thing unjust and oppres- 
 sive, that taxation is spoken of as the necessary conse- 
 quence of any system of internal improvements prose- 
 cuted by the state — and this is done thus promptly as 
 an earnest, that the cry of taxation, in other words, of 
 injustice and oppression, is to be raised, as if the state 
 were inhabited by an ignorant instead of an intelligent 
 population, to frighten the community from the support 
 of a policy in which their very highest and best inte- 
 rests are involved. 
 
 Sir, for myself, for this legislative body, and I believe 
 I may say for this whole people, I repudiate the extraor- 
 dinary notions referred to. They are unworthy of this 
 place, and of this people. In our country let it be re- 
 membered, that governments are instituted for the bene- 
 fit of the people, and not at all for the benefit of the go- 
 vernments ; and when the people sustain these govern- 
 ments by their means and substance, as they always do 
 directly or indirectly, this is not taxation in any odious 
 sense whatever — it is simply paying for a benefit of their 
 own choosing, and in their own way. If government 
 
140 
 
 as answering the end of its institution — if its policy and 
 measures have that end in view, and if they result, as 
 they must if they are wise, in the common good, then 
 is the community paying for a common benefit, which 
 could not very well be dispensed with, and which is al- 
 ways worth more than it costs. Sir, I am in favor of 
 this sort of taxation ; and if government could not be 
 supported without direct taxation, why then I should 
 be in favor of direct taxation, and I hope and believe the 
 people of this country are intelligent enough to under- 
 stand, in that case, what would be their duty and their 
 interest. Shame on any republican community that 
 would not. 
 
 And then to carry the principle from the ordinary bu- 
 siness of government, to that important policy which 
 makes so vast a part of the business of enlightened go- 
 vernments at the present day, and especially in this 
 country: — The doctrine is as we have just heard it, that 
 the state must not project and carry on extended works 
 of internal improvements, because as government has 
 no means of its own, and can expend nothing for such 
 works but the means of the people, it is of course the 
 people who pay for these works ; and this is taxation- 
 odious and oppressive taxation. Sir, what sort of doc- 
 trine is this, for this age and country ? For whose be- 
 nefit and advantage are these works undertaken ? Not 
 certainly for the government. If the ground had been 
 taken, that the benefits to be derived to the community, 
 from any contemplated system of internal improvement, 
 would not be worth their cost to the people, that would 
 have been fair ground at least, whatever might be 
 thought of the soundness of the position. But that is 
 
ill 
 
 not the ground. It is, that, such system cannot be car- 
 ried forward without means ; that the means belong to 
 the people ; and that this is taxation, and taxation is 
 oppressive to the people. 
 
 Sir, if this is good doctrine at all, it is good for more 
 ^cases than the one to which it is applied. Taxation 
 under such a government as ours is precisely what pay- 
 ment for benefits and advantages, voluntarily purchased 
 by individuals, always is. And hence, if this doctrine 
 be sound, a man must not employ a physican, because 
 he would be taxed for it ; nor a schoolmaster, because 
 he would be taxed for it ; nor a tailor to cut and fit him 
 a coat, because he would be taxed for it. He must not 
 travel on a turnpike, because he will be taxed for it : 
 nor trust himself, or his property, on a rail-road, or a 
 canal, or in a steamboat, because he would be taxed 
 for it. The doctrine could not be satisfied, short of a 
 mighty backward revolution in human affairs. The 
 least that could be done in this state would be to fill up 
 the canals, break up the rail-roads, and above all things 
 to abandon the thousand uses to which the mighty 
 power of steam is applied. We must forego the best 
 blessings of civilization, and all the advantages arising 
 from the present advanced state of the arts and of know- 
 ledge, because these are not to be enjoyed without taxa- 
 tion ! 
 
 Sir, I hope not ; I believe not. For myself, and in 
 the name of the people of this state, I reject the mon- 
 strous doctrine and argument. The people of this state, 
 I answer for it, are ready and willing, not only to take 
 die untold benefits of a judicious system of internal im- 
 provements, but to pay for them — in other words, they 
 
142 
 
 are ready to make a reasonable outlay of their means 
 and their credit, for the purchase of profit and advan- 
 tage in return vastly beyond a mere equivalent, which is 
 the whole effect of this odious and oppressive system of 
 taxation, whenever and wherever it is wisely applied. 
 The people are not paupers, seeking to have their es- 
 sential wants supplied gratuitously, nor will they give 
 up for ever the great and glorious advantages of their 
 position, for an unmeaning cry of taxation that may be 
 raised to alarm and deter them. 
 
 But I shall not pursue the subject. I am for the print- 
 ing of the largest number which has been named of this 
 remarkable document. Sir, let us give it wings — send 
 it forth on every wind — we cannot spend the little mo- 
 ney it will cost to better profit. It ought to, and will 
 find its way to every quarter of the state, and of the 
 country : Nay, it will be read with eagerness and ad- 
 miration in other and distant Sands, 
 
SPEECH 
 
 On banking, currency, and credit, delivered in 
 the assembly of new-york, march 29, 1838, up- 
 on the passage of the general banking law. 
 
 [The General Banking Law so called, authorized any 
 person, or Association, to issue notes for circulation as mo- 
 ney, on a pledge of State Stocks with the Comptroller, or 
 a pledge of land and Stocks, one half of the amount at least 
 being Stocks. 1 
 
 Mr. Barnard proposed to amend the bill in two par- 
 ticulars : 
 
 1st. Requiring the bankers under this law to keep 
 their notes at par in the city of New- York. 
 
 2d. Requiring them to limit their issues to five times 
 the average monthly amount of specie on hand. 
 
 The proportion of specie to circulation was first pro- 
 posed by Mr. Barnard to be fixed at twenty per cent; 
 afterwards at fifteen. The bill finally passed both 
 Houses with the proportion fixed at twelve and a half 
 per cent. 
 
 The bill and amendments being under consideration. 
 Mr. Barnard spoke as follows : 
 
 Mr. Chairman: I have now a most responsible and 
 a most embarrassing duty to perform. I occupy a po- 
 sition in regard to this bill, both before this house and 
 before the country, which is neither pleasant nor com- 
 
144 
 
 fortable. It is well known that I differ in opinion from 
 chose in this house, and out of it, with whom I am most 
 anxious to agree, on the policy of this bill as it now 
 stands, on what the true character of the bill is, and 
 what is to be its operation and effect upon those great 
 interests on which it is to act. This difference of opinion, 
 I am afraid, is a radical and wide one. My friends, 
 who are so ardent and so efficient in the support of this 
 bill, seem to regard its grand feature — the security which 
 it offers to the bill holder — as one of perfect soundness 
 and safety in all respects, and of inappreciable value. 
 I look on that same feature with distrust, and see in it 
 the seeds of mischief. With that feature in it, they be- 
 hold in this bill the means of reviving the drooping com- 
 merce, the business, and the general prosperity of the 
 country : while I am afraid that it is but too well calcu- 
 lated to be made a cover and shield for those whose busi- 
 ness it is to prey on society, and that while in one quar- 
 ter it may afford some immediate relief, elsewhere, and 
 finally everywhere over the state, it will open the way 
 to frauds and to intolerable evils. 
 
 On the other hand, I propose certain amendments, 
 one of which in particular I think indispensable to the 
 safe action of the bill, but which my friends regard as 
 something at least fanciful if not absurd, resting in mere 
 theory, of no practical utility anywhere and least of all 
 here, and only embarrassing the free action of a system 
 beautiful and altogether perfect in itself. They verily 
 think they have happily hit on a project for banking, 
 splendid and new, the wisest, the safest and the best 
 ever yet devised, while I am so unfortunate as to view 
 it, standing as it now does, rather in the light of another 
 
145 
 
 experiment on the currency, not untried, but never tried! 
 with success or without mischief: another effort at tinker- 
 ing the currency, and coming nigh to being a total de 
 parture from every sound and well established principle 
 of banking. 
 
 Among the strenuous supporters of this bill in its pre- 
 sent shape, I recognize many personal as well as political 
 friends: many of experience and tried judgment in legis- 
 lation and public affairs, and to whose opinions I should 
 defer with pleasure anywhere — except here — except here 
 — Mr. Chairman, in this Legislative Hall, where, though 
 esteeming myself to be the humblest individual on the 
 floor, I feel bound to maintain my position, even to- 
 wards the loftiest and proudest of the people's represen- 
 tatives here, as an equal among equals. At the same 
 time, it is not a little embarassing to be obliged to set up 
 opinions of mine, on so grave a subject as that now be- 
 fore us, against what seems at present to be the united 
 strength, almost without exception, of that portion of 
 the house with which I usually act. I cannot but be 
 aware that in so doing I am liable to become the sub- 
 ject of unworthy thoughts, and perhaps of injurious ex- 
 pressions and imputations, in quarters where it would 
 certainly be agreeable to stand well, and where I should 
 much prefer to avoid all collisions. But I cannot, frpm 
 any such considerations, shrink from the responsibilities 
 of my office and my position. And if I am told, as has 
 been more than once broadly intimated, that gentle- 
 men's minds are made up, and that they are not to be 
 moved, I answer that I do not admit it. As yet, though 
 this measure has been long before the house, we have 
 had little or no discussion of the principles involved in it. 
 
 13 
 
146 
 
 For one, sir, I shall not forget that this is a deliberative, 
 body, assembled for the very purpose of deliberation, of 
 discussion, and of debate. I shall not admit that such 
 weighty matters as currency and credit are fit to be set- 
 tled by any party movement or manoeuvre in the house 
 or out of it ; or that it is either creditable or safe to le- 
 gislate on such matters upon preconceived impressions, 
 however strong, which have not been tested by examina- 
 tion and analysis. I shall take it for granted that the 
 minds of gentlemen are still open to conviction, as my 
 own mind certainly is. On both sides we have un- 
 doubtedly our present opinions ; and my anxiety is, not, 
 I trust, merely that my own should prevail, but that the 
 best and soundest should prevail. I shall state my views 
 plainly, addressing myself to the sense and understand- 
 ing of those who hear me : and I invite gentlemen to 
 the debate. If I am right, I desire to convince others ; 
 if I am wrong, I desire to be convinced. Let the argu- 
 ment be met and refuted, and I shall be found ready 
 and prompt to yield my views and opinions, to the bet- 
 ter views and opinions of others. 
 
 There is another topic to which I must here take the 
 liberty to advert. The country is in a very disturbed 
 state. It may be said to be passing through the condi- 
 tion of almost universal bankruptcy. It is now nearly 
 a year since the banks suspended specie payments. In 
 the mean time a steady effort has been made, in this 
 state, to bring about again a sound and healthy state of 
 things. The banks have perseveringly looked to a 
 period of resumption within the year, and now just at 
 hand. In this operation the currency has been con- 
 tracted, prices have tended downwards, business ha# 
 
147 
 
 been paralyzed, and men are everywhere looking around 
 them for some means of relief, some way of escape from 
 the crushing pressure of the times. They are not con- 
 tent to wait for the operation of natural causes, or the 
 result of any prescriptions for political ills which do not 
 promise an instantaneous and miraculous cure. Nov/ 
 many persons see in a general banking law the certain 
 means of present relief. Their, plans of operation under 
 it are already formed. The bill before us authorizes as- 
 sociations for banking, with powers and facilities not 
 very unlike those enjoyed by corporations; and there 
 can be little doubt that, under it, an institution equally 
 valuable and safe may be built up in the city of New- 
 York, greatly to the relief and advantage of the com- 
 merce and business of the country. Undoubtedly, 
 where the true condition of things is understood, where 
 the true want of the community is felt and appreciated, 
 and the true way of return to soundness and prosperity 
 is discovered and known, the provisions of this bill may 
 be used with eminent advantage and with entire safety. 
 But this is a general law, and while at one point, and 
 in judicious and discreet hands, it may be found to an- 
 swer a valuable purpose, elsewhere and in other hands 
 it may be found to be fruitful only of evil and mischief. 
 This is my apprehension — I may say it is my convic- 
 tion ; and I do not therefore feel myself at liberty to 
 yield to those strong influences which we know are 
 brought to bear upon us all in favor of this measure, in 
 behalf of particular interests and particular places. I 
 should hope that my sympathies are not less strong, my 
 nature not less generous, my disposition to relieve and 
 to build up not less fixed and determined, than are these 
 
148 
 
 qualities in others ; but I cannot consent to aid in pro- 
 moting any partial interest, however considerable, at the 
 cost of the common safety ; I cannot consent to do even 
 a great good at an expense still greater. Others, 1 
 know, do not see the dangers which I think I discover, 
 They see very clearly certain advantages to flow from 
 the system ; and it is not to be wondered at that they 
 should be a little impatient with me for pretending to 
 discover mischief where they can find nothing but un- 
 mixed good. 
 
 There is still another influence operating on the house 
 from another quarter. The burthen of all songs just 
 now is the distresses of the times ; and these are times 
 when men become patriots at a very trifling cost. A 
 judicious exhibition of ready sympathy, a timely lamen- 
 tation over common calamities, with some ingenious 
 and plausible suggestions for present relief, will make a 
 man's reputation in a day. Unfortunately it happens 
 that our patriots have, too often, some personal good, to 
 be attained only through their schemes for the public 
 advantage. I suppose it will not be unjust or improper 
 to say that there is in the community a host of expec- 
 tants and speculators, who are anxiously looking to this 
 bill to help them out, or to help them on — a host which 
 is ; not unrepresented in the house beloio this. These 
 • \re persons of substance — at least they esteem themselves 
 so — with property in abundance in possession or within 
 reach, and which cannot be turned to profit or account, 
 only because they lack money. Now they look on this . 
 bill in a truer light, I think, than some others. They 
 see in it a license to men to create their own money, ait 
 least for temporary use, to any extent to which the«t 
 
149 
 
 ability or their credit and ingenuity can supply or com- 
 mand the means to make the necessary pledges. The 
 passage of such a bill would be a jubilee to the whole 
 class of the poor rich ; and hence their patriotic anxie- 
 ties are natural and urgent, and are felt of course first of 
 all for their beloved country ! They love their party ; 
 they love the state ; they love the people. The people, 
 moreover, have desired and expect a general banking 
 law, and this is a general banking law, and the very 
 thing for the people ! 
 
 Sir, I confess it looks a little obstinate in me not to 
 yield to the various suggestions and appeals coming from 
 so many quarters, out of the house and in it, in favor of 
 this bill. Certainly if I had consulted my ease I should 
 have yielded long ago. Certainly foo, if I could consent 
 to stifle my sense of public duty in order to give chase 
 to the bubble popularity — that popular favor I mean 
 which a breath can blow away as a breath creates — 
 I should not stand here to advocate doctrines and opi- 
 nions which I know to be distateful, unwelcome, and 
 to many I doubt not odious. But I shall do it. Yes, 
 sir, I shall do it — and with one only anxiety — and that 
 is, by the blessing of God, to bring conviction to the 
 honest minds who hear me of the indispensable neces- 
 sity of changing, at least in one essential particular, the 
 character of this measure, before it shall be given to the 
 community, in order to arrest a deep calamity to the 
 state, which otherwise, in my judgment, will certainly 
 be inflicted upon it. 
 
 Before proceeding with my principal purpose in this 
 discussion, I will take leave to submit, in a very brief 
 way, what I have to offer on my proposition requiring 
 
 13* 
 
150 
 
 the bankers under this law, whose offices may be situ- 
 ated elsewhere than in the city of New -York, to see that 
 their bills are kept at par in that city. This proposition 
 looks simply to uniformity in the currency. I hold it 
 to have been, and to be, the duty of the general govern- 
 ment to provide for the country a uniform national cur- 
 rency : such a currency, I mean, as shall be of equal 
 value in every part, and in the most distant parts of the 
 Union ; such as shall command the same sum in gold 
 and silver in the extreme north as in the extreme south, 
 in the extreme west as in the extreme east. This is a 
 duty which that government can perform, because it is 
 one which it has performed. But unhappily that duty 
 has been wholly abandoned. The existence of the 
 power even, to regulate the currency, is denied and dis- 
 claimed. In this state of things, I am of opinion that 
 the obligation on the several states, always strong, is 
 now doubly so, to make their local currencies uniform 
 within their respective limits. I know of nothing more 
 discreditable to a highly commercial community than 
 voluntarily to forego the advantages of a uniform me- 
 dium of payment and exchange. Neither the business 
 operations, nor the moral habits of a people can be steady 
 and sound without it. Whatever is used as money 
 should always, as far as possible, have a steady and 
 uniform value ; otherwise, prices will fluctuate, contracts 
 will be varied, and profits and property become unstable, 
 uncertain and precarious. The precious metals have 
 been selected as the universal standard, chiefly because 
 of this very quality of uniformity of value ; and there is 
 in truth no more difficulty, if government would do its 
 duty, in keeping bank paper, really representing the 
 
161 
 
 precious metals, at a uniform value, than there is in re 
 gulating the value of coins themselves. 
 
 It is a little singular that it is only within the last 
 year, and while we have been using, by necessity, an 
 inconvertible medium, that this state has ever been 
 blessed with a local currency of uniform value, This 
 was brought about by a provision of law, of doubtful 
 validity, compelling the banks to take each others bills 
 at par in payment of debts : that provision leading to 
 an arrangement by which the bills of all the country 
 banks became current in the city at the same value as 
 they bore at the counters where they were issued. Be- 
 fore this, a dollar of country paper was not a dollar of mo- 
 ney in the city, but something less : and to this extent 
 such paper had not that quality of money which all pa- 
 per ought to have. It is certainly to be desired, in my 
 estimation, that a return to this loose condition of things 
 should be prevented ; and as we are now about to devise 
 another and a new system of banking, I am anxious 
 that the new issues at least shall have the character of 
 uniformity. This is easily accomplished, and accom- 
 plished without any serious hardship or burthen any- 
 where. City paper is at par throughout the country, be- 
 cause it is in demand for remittance and payments. 
 Not so with country paper in the city, nor can it be, so 
 long as the course of trade remains what it is. The 
 case can only be reached by legislation, for the country 
 banks will not be at the trouble, or charge, of keeping 
 their bills at par and preserving their money character 
 in the metropolis, so long as the people can be made to 
 bear the loss of their depreciation and discount. But lei 
 the banks be compelled to employ a portion of their city 
 
152 
 
 funds, necessarily there in the course of trade, in the re- 
 demption of their paper afloat there, and the whole evil 
 is at once cured. The profits of banking in this state, 
 especially in the country, will be found to be large 
 enough, though diminished in this way by a trifle. 
 Nor do I deem it certain that any diminution of profits, 
 on the whole, would follow from this regulation. There 
 is and will be in the west, beyond the boundaries of our 
 own state, a constant demand for a cash medium for re- 
 mittance to the city of New- York, and if the bills of our 
 country banks can be made such a medium, those banks 
 may in some good degree supply that demand, and thus 
 enjoy the benefits of a more extended circulation. At 
 any rate, be the profits of banking a little greater or a 
 little less, that is not, I trust, our chief concern : and I 
 hold it to be the sacred duty of this legislature, when 
 providing for issues of paper to circulate as money, to 
 provide also that such issue shall be money and not 
 merchandize, wherever they may circulate within the 
 state. This can only be done by some such legislation 
 as I have suggested. 
 
 But I leave this topic, to go to the more important 
 and pressing business in hand. When statesmen and 
 legislators propose a new measure of general import and 
 application, it is to be presumed that they have in view 
 some well defined object of practical benefit to be ac- 
 complished by it. What is the object in the measure 
 now under consideration ? It is very plain and easily 
 understood. We mean to break down whatever there 
 there may seem to be of a monopoly character about 
 the business of banking in this state. We mean to put 
 an end to the disgraceful scramble, heretofore exhibited, 
 
163 
 
 for bank charters, and for bank stocks, with all the mo- 
 ral and political corruptions which have attended the 
 whole subject. But we do not mean, directly or indi- 
 rectly, to break down and destroy our present system of 
 banking", and build up another on its ruins — at least, if 
 there be any such design, I am not privy to it. I sup- 
 pose our object to be, plainly and simply, in passing a 
 general banking law, to establish an auxiliary system 
 to the one now existing, not an antagonist one, for the 
 supply of capital and currency to the people of this state. 
 In this object I most heartily concur. I see no difficulty 
 in reaching the object, on sound and safe principles, and 
 I see in its accomplishment the certain means of en- 
 couraging the industry and promoting the prosperity of 
 the state. 
 
 But it becomes an important inquiry whether, in the 
 pursuit of our object, we are about to employ a safe and 
 judicious plan of operations, or one utterly unworthy and 
 unsafe — whether, in short, we are in the right way, or the 
 wrong. And this is a point which it is impossible to un- 
 derstand, as it seems to me, unless w T e will be content to 
 pause a little, and recur to some very plain elementary 
 principles connected with the subject in hand. I do not 
 mean to inflict on the house a dissertation on political eco- 
 nomy ; but I desire to recall to the recollection of gentle- 
 men some few simple truths ; some few well-ascertain- 
 ed and settled laws, not the worse certainly for their 
 scientific character, but which are equally maxims of 
 common sense and common experience, though de- 
 veloped only after investigation and study, and which 
 are not unessential to be remembered when we would 
 legislate undestandingly and well, on such deep and de- 
 
licate matters as currency and credit Let me say, also, 
 that in recurring to the truths and laws alluded to, we 
 have nothing to do with mere theories, whether my own 
 or belonging to any body else. The doctrines belong to 
 no individual and no name, any more than do the laws 
 of nature herself. Like the doctrines of the Baconian 
 or Newtonian philosophy, they are universally acknow- 
 ledged wherever they are understood, and no writer or 
 speaker at the present day, in any country, of admitted 
 reputation, is found to deny or to doubt them. And I 
 should feel ashamed to dwell upon such undisputed topics 
 at all, if I had not discovered, as I think, in various respec- 
 table quarters in this house, either a total forgetfulness of 
 settled principles, or a disposition to scout and discard 
 them. 
 
 Keeping in mind then the great object we have in 
 view ; that we propose to promote the common prospe- 
 rity, by affording further facilities for necessary supplies 
 through the medium of banks ; let us inquire how we 
 must proceed, according to known laws, to effect our 
 purpose. When we understand clearly what capital is, 
 what credit is, and in what manner profits and wealth 
 are produced, we shall then be prepared to understand 
 how it is that banks are of such eminent utility, and 
 on what terms they ought to be established and encou- 
 raged. We shall then see, too, whether our present pro- 
 ceeding is altogether on the right foundation, and calcu- 
 lated to afford the best advantages to the community. 
 
 We hear so much of banking capital, and the neces- 
 sity of increasing it, that it is worth while to inquire what 
 capita! is, in order that we may understand, amongst 
 other things, whether there is really any thing uncom 
 
155 
 
 mon or magical about banking capital to distinguish tt 
 from all other capital, as many seem to suppose. Capi- 
 tal, as considered in connexion with industry, has been 
 found to consist, 1st, of the materials on which labor or 
 skill has conferred, or is about to confer, additional va- 
 lue : 2d, of the instruments and tools employed and used 
 in the application of labor and skill to materials ; and 
 3d, of the means of subsistence to the beings employed 
 in performing and conducting the operations of labor. 
 It is supposed that in that enumeration is comprised 
 every thing which can properly bear the name of capi- 
 tal — every thing which goes to make up individual pro- 
 perty, or national wealth. 
 
 Take a familiar example by way of illustration : 
 The manufacturer has for his materials, his cotton, his 
 wool, his wood, or his iron, as the case may be; for in- 
 struments, he has his factory or workshop and machi- 
 nery ; and for subsistence he has his food, clothing and 
 shelter for himself and his workmen. In the same way, 
 the capital employed by the mechanic, the merchant, 
 the farmer, the professional man, may be easily ascer- 
 tained. 
 
 Money in actual use as such, that is, in making ex- 
 changes of values, is capital, and falls within the class 
 of instruments employed in facilitating the productive 
 operations of industry upon materials ; and thus used, 
 it is, like other instruments and tools, indispensable, but 
 at the same time in itself utterly unproductive. But I 
 shall have more to say of money by and by. 
 
 In connection with this view of capital, it will be con- 
 venient to understand also what credit is — what the 
 credit system is, of which so much is now-a-days written 
 
156 
 
 and spoken, said and sung. Credit is the trust, or con- 
 fidence, which one individual reposes in another, upon 
 the transfer or assignment from the one to the other of 
 money or other property by way of loan. The lender 
 gives the credit : the borrower obtains it. 
 
 The manufacturer of cotton cloths, for example, may 
 have skill and industry for this particular calling, and 
 he may have some capital, yet not as much as he could 
 profitably employ. In the way of materials, he may 
 require more cotton ; or in the way of instruments he 
 may have occasion for more machinery ; or in the way 
 of subsistence, he may want food and clothing for more 
 laborers. Not owning these things, and not having the 
 means of purchasing, he must borrow, he must obtain 
 credit j and be trusted for a return, until he can realize 
 the fruits of his operations. So the agriculturist, having 
 his land, and skill to work it, may have no seed corn ; 
 or having this, he may want the necessary utensils and 
 animals ; or possessing every other requisite, he may 
 lack the means of living, in the mean time, while he is 
 tilling the soil and waiting for his crop ; and in either 
 event, if he has not the means of buying, he must re- 
 sort to his credit and obtain whatever he wants upon 
 that. In the same way, the merchant and the mecha- 
 nic become borrowers of capital, on which, or with which, 
 they employ their skill and their industry in the produc- 
 tion of profits. 
 
 An apt illustration of the advantages of borrowing 
 may be found in our state works of internal improve- 
 ment — a case, by the way, which illustrates also, most 
 forcibly, the difference between us and other nations in 
 the use which is ordinarily made by the governments of 
 
157 
 
 borrowed capital, as well as in the application which in- 
 dividual capitalists in these respective countries usually 
 make of their surplus means. It will be sufficient to 
 instance the public canals of this state to shew the pro- 
 fitable employment of our public credit : works in which 
 many millions of borrowed capital have been consumed, 
 and which, in so brief a time, have yielded profits not 
 only to pay the interest of the debt, but enough to can- 
 cel also the debt itself, and leave to the state a clear and 
 unincumbered property of almost inestimable value. 
 By borrowing abroad, the capital here, in individual 
 hands, was left for employment in personal business and 
 individual enterprise ; and by borrowing to expend in 
 the construction of public works of great utility and 
 profit, instead of borrowing, as other governments have 
 done and still do, to consume in wasteful extravagance, 
 in the support of armies, and in the conduct of war, the 
 advantage and gain to the country have been incalcula- 
 ble. 
 
 And this leads me to speak of the production of wealth, 
 which is only the aggregate of profits resulting from the 
 application of labor and skill to capital. The great use 
 of capital, in an economical point of view, is to supply 
 industry and skill with the means of profitable occupa- 
 tion ; and this is the great use of credit and the credit 
 system. Labor can afford to borrow capital and pay for 
 the use of it, because when the result is realized, the 
 capital borrowed may be returned to the lender with in- 
 terest on it, and the borrower still retain a valuable com- 
 pensation for his labor. In this country, we abound in 
 industry, skill and enterprise ; but these can accomplish 
 little without materials, without instruments, without 
 
 14 
 
158 
 
 subsistence — in short, without capital. Capital is what 
 we want, and it is what is not to be found in any abund- 
 ance among ourselves. Nobody has capital to lend un- 
 less he have a surplus — capital, already prepared for pro- 
 ductive employment, which the owner cannot use, or 
 consume, at least with advantage or economy. Some 
 surplus capital undoubtedly we have at home — indeed 
 we have much considering the age of the country — 
 but we have not enough ; and hence, as a people, we 
 are largely borrowers from other and older countries, and 
 if we are wise we shall long continue to be borrowers 
 from countries where surplus capital abounds, where it 
 is seeking investment, and where of course the rate of 
 interest is low. 
 
 Probably not another country that the sun shines up- 
 on, ever made so rapid an advance in wealth as this 
 has. And it is not difficult to account for it. We have 
 taken possession of a new country, where the elements 
 of wealth existed in unexampled profusion : we had only 
 to seize them, to take possession of them at little or no 
 cost, and realize the largest returns from the smallest 
 possible outlay of labor and capital. To allude only to 
 our interminable forests, our virgin soils, our swarming 
 fisheries, our noble water courses and our water power 
 — these alone, placed almost without expense in the 
 hands of a people who, by education and habit, make 
 a pastime and pleasure of diligence and toil, are enough 
 to account for much of what seems really wonderful in 
 the rapid advance we have made. An important item 
 in the amount is no doubt, to be found in the astonish- 
 ing enhancement of value, often of several hundred 
 per cent, in a few short years or months, in the native? 
 
159 
 
 and as yet perhaps unemployed capital of the country. 
 Such has been the case with our lands, cultivated and 
 uncultivated : with the sites of business or habitation in 
 our cities and villages, often springing up suddenly in 
 the very midst of the wilderness : and with innumerable 
 localities on our streams and rivers, coming into demand 
 for mechanical and manufacturing purposes. But, after 
 all, much, very much of our present prosperous condi- 
 tion is to be traced directly and distinctly to the effect of 
 the credit system — used, undoubtedly, with more libe- 
 rality, and more extensively, among us than among 
 any other people that ever existed. I have not a parti- 
 cle of doubt that, considering the limited amount of sur- 
 plus capital amongst us, less of it has been wasted, less 
 hoarded, and more loaned and productively employed, 
 than anywhere else on earth : and, moreover, what is 
 much to the purpose, and creditable alike to individual 
 character and the character of the country, a vast pro 
 portion of this business of lending has been done on the 
 faith and confidence alone of the skill, the industry, the 
 integrity and the intelligence of the borrowers. 
 
 The business of borrowing, moreover, is done at unu- 
 sual profit with us, because of the extraordinary inge- 
 nuity and invention displayed by our people in the dis- 
 covery of new elements and new combinations of power 
 in nature, and the art and energy exhibited by them in 
 putting all these into active requisition in the performance 
 of physical labor— increasing and multiplying motion 
 and force every where, and in all kinds of business, to 
 an incalculable degree, and yet at very small cost. 
 
 In these peculiarities of our condition, and in the free 
 ose of the credit system, lies in truth the secret of cur 
 
160 
 
 general prosperity — the secret of those almost magic 
 changes which this country has undergone and is un- 
 dergoing. These causes well considered, we need not 
 wonder at the unexampled increase of private fortunes 
 and of national wealth among us ; at the extent to which 
 our waste lands have been cultivated ; the number of 
 our roads and bridges, our canals and railways ; the 
 crowded and profitable occupation of all our rivers ; our 
 comfortable dwellings ; our flocks and herds ; the faci- 
 lity and rapidity with which our mighty forests have re- 
 ceded before the march of improvement and cultivation 
 from the Atlantic border to the almost limitless West, 
 and a vast country, but just now savage and wild, re- 
 claimed to the dominion of civilized man and converted 
 into beautiful fields and blooming gardens, dotted with 
 manufactories, where the elements, and agencies the 
 most powerful and sublime, are working with man and 
 for man, and studded with smiling villages and busy 
 cities, the peaceful yet thronged and wealthy marts of 
 trade and commerce. 
 
 But though much has been done, much remains to be 
 done. We must still be borrowers. Other rail-roads and 
 other canals must be made. We have a widely extend- 
 ed territory over which transportation is to be conducted. 
 The amount of property to be exchanged is accumulat- 
 ing every day. We must increase the number of our 
 manufactories and mechanical employments. There is 
 yet a vast amount of capital now idle, which is only 
 waiting for the hand of labor to make it productive and 
 profitable ; we have fertile lands waiting to be cultivated ; 
 water power waiting to be employed ; and mines of lead, 
 iron, copper and zinc, waiting to be opened and wrought. 
 
161 
 
 We must put new labor, new hands, new engines and 
 machinery into operation ; we want them at work on 
 the water and on the land, and in the bowels of the 
 earth ; and for this purpose more capital must be em- 
 ployed ; we must go on with our system of borrowing, 
 and a moie extended use of credit. 
 
 And now, Mr. Chairman, we may be prepared to 
 turn our thoughts to banks, to see what banks are and 
 how they operate, when they operate well, to supply in- 
 dustry with capital and to give extension to the credit 
 system. And here I beg leave to remark, that it is now 
 about sixty years since the secrets of banking were pe- 
 netrated, and whatever there was of mystery about it 
 completely exposed ; and nothing can be more silly, at 
 this time of day, than for persons to look wise and set 
 up pretensions in this matter, as if they had made dis- 
 coveries and were possessed of knowledge concerning 
 the business of banking of which the world has hitherto 
 been quite ignorant. There are those connected with 
 banks, who sometimes exhibit a great deal of small wis- 
 dom on the subject ; and verily believe that their skill 
 in the mechanical working of a bank, and their ac- 
 qaintance with its details, are enough to make oracles of 
 them, even when the question is one which concerns 
 the state, and the whole body politic, relating to currency 
 and finance, and the public prosperity as connected with 
 them ; and the wisdom of such persons is not the less 
 profound, in their own estimation, though they have 
 never given themselves the trouble to understand the 
 commonest principles belonging to the subject. There 
 are others who, from some restless desire to be foremost 
 in ail good works, or else from a love of speculation, or 
 
 14* 
 
162 
 
 from some other equally worthy impulse, turn reformers^ 
 and offer us various ingenious devices for improving the 
 currency. Sir, for one, I have no faith in experiments 
 on the currency, and no attempts in this way, of a re- 
 cent date, have given me any new confidence in them. 
 Nor, on the other hand, have the signal failures which 
 have attended all such attempts, nor the distresses into 
 which the country has been thrown in consequence of 
 them, weakened at all my trust in banking as an indis- 
 pensable agent of prosperity in all mercantile and busi- 
 ness communities, and in the superiority of a bank-note 
 circulation over any other that ever has been, or can be, 
 devised. But then, I think, of course, that banking 
 should be conducted on plain, simple, and well-under- 
 stood principles ; that thus conducted it is entirely safe, 
 and otherwise it is entirely unsafe, and generally to the 
 last degree mischievous. 
 
 The business of banking, at this day, is usually con- 
 ducted in two principal branches — loaning capital, and 
 issuing currency. Nearly all the banks in this country 
 are both banks of loan, and banks of issue. The ope- 
 ration of a bank of loan is exceedingly simple. Such a 
 bank, owned at home, of course adds nothing to the 
 actual capital of the country. It serves simply to collect 
 and distribute a portion of such capital, and this is a ser- 
 vice of immense importance. The capital of the bank 
 consists in a certain amount of surplus property belong- 
 ing to the respective owners. Whatever that surplus 
 may have been in the hands of the original proprietors — 
 materials, instruments, or food and clothing — cotton, 
 wool, grain, iron, leather, coal, wood, lands and build- 
 ings, implements and tools of trade, the products of the 
 
163 
 
 soil, the stall and the loom — every thing, having been 
 exchanged for cash, goes into the banks in the shape of 
 money, as the representative of so much value of capital, 
 and as the most convenient form for putting out on loan. 
 In this shape it is borrowed, and immediately again ex- 
 changed, by each borrower, into such property, or capital, 
 as is suited to his particular occupation and wants — ex- 
 cept, perhaps, some small portion of it which may be 
 preserved for necessary use as money. I speak of course 
 of the case of loans to the business part of the community, 
 and without reference to instances which may seem to 
 form exceptions to the general practice. It is, then, let it 
 be remembered, capital, according to the true meaning of 
 the word, which is really loaned by these banks ; it is 
 not money, in any other sense, than as money is the 
 representative of capital, and may always be readily ex- 
 changed for it. It is not money which the manufactu- 
 rer or mechanic wants ; it is cotton, or iron, or leather, 
 or wool. It is not money which the merchant-miller 
 wants ; it is wheat, and he could not grind up and bolt 
 the cash for the market with any great profit, if he were 
 to make that experiment. Money is the convenient agent 
 by which capital and labor are brought together — it is 
 the priest performing the marriage ceremony, but not 
 entitled to claim quite all the credit for the fruits of the 
 union — which are profits and wealth. 
 
 Banks of loan do not, as I have said, when owned 
 wholly at home, add any thing to the actual capital in 
 the country. They do add, undoubtedly, to the capital 
 actually loaned^ because they serve to gather in for that 
 purpose, much that would otherwise be idle, and finally 
 wasted by being unproductively consumed. But when 
 
the capital stock of such banks is owned abroad, there 
 is just so much actual and loanable capital added to the 
 amount already in the country ; and so long as the pro- 
 fits of labor bestowed on borrowed capital, shall exceed 
 the rate of interest and expenses paid for it, so long will 
 it be good policy for us thus to continue to borrow from 
 other countries. 
 
 It is of some importance to bear in mind also, what 
 one of the principal actors in bringing forward and sus- 
 taining this bill, and with whom I have conversed re 
 cently on the subject, seems to find it very hard to com- 
 prehend, that the amount of money loaned to and in 
 use by the community, is by no means increased in equal 
 proportion to the amount of capital collected in new banks 
 and put out on lean. The increase of real banking ca- 
 pital does not necessarily increase the quantity of circu- 
 lating medium actually employed, except only as the 
 greater number of exchanges which increased activity 
 in business requires, demands a proportionably greater 
 amount of the common medium by which such ex- 
 changes are made. When the banks in this state, on 
 the first of January last, had sixty millions on loan 
 in the hands of the community, the whole amount of 
 money in circulation, of every description, did not pro- 
 bably exceed fifteen millions of dollars ; and I suppose 
 it would be quite possible to add to the loans to any de- 
 sirable extent, without materially advancing the ratio of 
 circulation. 
 
 But, Mr. Chairman, let us now see what we can make 
 of banks of issue, and whether we fully understand 
 their operation and effect. Banks, as they are constitu- 
 ted in this country, not only loan capital, but they also 
 
165 
 
 create and loan currency. What then is currency, and 
 what relation does it bear to capital ? Is it true, that in 
 order to supply borrowers with capital, nothing more is 
 necessary than to set to work to create and put out cur- 
 rency ? If so, then it is indeed shameful that any coun- 
 try should ever feel the want of capital ; if so, then I 
 grant that this bill has been conceived in exactly the 
 right spirit, and proceeds on the right hypothesis. Bank- 
 notes being money, and money being capital, increase 
 bank-notes and you increase capital. This is short rea- 
 soning, and I have no doubt to many quite conclusive. 
 According to my simple apprehension, a bank-note 
 currency, when issued, is used, in the place of an equal 
 amount of coin, as money, and so long as it remains in 
 circulation is only money and that continually. As 
 the representative of coin, it performs the office of coin, 
 both as a measure of values, and as a medium or instru- 
 ment for the exchange of values. As an instrument of 
 exchange, it is like all other instruments — its importance 
 and utility are wholly relative — and whether you want 
 more or less of it will depend on the amount of work 
 you may have to be performed by its means. The 
 smith does not want two forges to work up a given quan- 
 tity of iron which can as well be done in one. If the 
 weaver have a given quantity of woollen yarn to be wo- 
 ven, and one loom will do it in a given time, he will not 
 set two looms in operation to do the same work, in the 
 same time. If one yard stick will measure one hundred 
 yards of cloth in ten minutes, it would be quite useless 
 to employ ten yard sticks in ten different hands, to oc- 
 cupy the same time, in performing the same work. And 
 ■so with exchanges of values by means of money. With 
 
166 
 
 a given sum, a certain number of exchanges may be 
 made ; and hence it is found that the sum of all the ex- 
 changes in a business community, according to the 
 amount and activity of its business, requires for that 
 purpose a certain amount of money. The ratio has 
 been differently computed : but unquestionably there is 
 a point beyond which the community cannot go in the 
 use of money in business, either with economy or with 
 safety. Circulation has been estimated, by reference to 
 the whole amount of capital in a country, and also by 
 reference to the amount of annual income. In Great 
 Britian the proportion of circulation to capital has been 
 computed by some as one to fifty, and by others as one 
 to one hundred and twenty-seven. The proportion to 
 annual income has been supposed to range from one to 
 ten, to one to twenty. But it is not so important to find 
 the true ratio in either case, if that were possible, as it is 
 to be made sure of the fact that an amount of money, 
 comparatively small when considered in relation to capi- 
 tal or income, not only suffices for the uses of business ; 
 but is really all that can be employed. 
 
 When the currency is full, that is to say, when there 
 is enough of this medium or instrument abroad, if kept 
 active, to perform all the exchanges required to be per- 
 formed in the prosecution of the business of an indus- 
 trious, skilful and enterprising population, then both 
 economy and safety require that no more should be 
 added. After that, every addition, if it benefits indivi- 
 duals, does so at the public cost, and can only be pro- 
 ductive of general mischief. If the currency in any 
 community is full with twenty millions in circulation, 
 the addition of ten millions can only have the genera?, 
 
167 
 
 effect to knock down the price of the whole currency, 
 as compared with other things, until the thirty millions 
 shall be worth no more than the twenty. It is a good 
 enough operation for lenders, for the time being, but 
 positively ruinous in the end to borrowers. 
 
 It is true, that the currency of a commercial country, 
 keeping up an active commercial intercourse with other 
 countries, cannot long continue in an inflated condition, 
 if such currency be either specie, or bills convertible into 
 specie. A foreign demand for specie will be created, 
 which will begin to flow off to places where it bears bet- 
 ter prices than at home ; the currency will begin to be 
 contracted, and through ruinous fluctuations in property 
 and universal distress — perhaps through suspension of 
 specie payments — the evil will at length be cured, and 
 the country return to sound and healthy habits. 
 
 We may now see Mr. Chairman, exactly the use of 
 Banks of issue, and just what they are worth. They 
 are valuable institutions, and no commercial community 
 can get on without some contrivance of the sort ; but 
 care must be taken that they do not attempt to take the 
 place and perform the functions, by way of substitute, 
 of banks having capital to loan, and loaning capital ac- 
 cordingly. They are useful and indeed indispensable, 
 so long as they confine their operations to the issuing of 
 currency, to the extent only to which money, or cir- 
 culation, is really required ; the instant they pass be- 
 yond this line, they do nothing but inflict on the com- 
 munity positive injury. 
 
 The use of bank-note money is to represent and take 
 the place of the precious metals in circulation, and it is, 
 beyond all question, the cheapest, the most convenient, 
 
168 
 
 and the best money which a commercial country cans 
 yse. The principal pecuniary advantage of paper ? 
 however, is easily calculated. Money, when in use as 
 such, is in itself utterly unproductive. If materials of 
 value be used like the precious metals, then it is so much 
 dead capital, necessary indeed, if a cheaper substitute 
 cannot be found, but still used at a dead loss — precisely 
 as if all our dry-goods dealers were to take a fancy to 
 use only gold and silver yard-sticks, instead of wooden 
 ones costing little or nothing. The substitution of pa- 
 per for metal as money, simply has the effect to release 
 from an employment in which they earn nothing, 
 and, at the same time, are rapidly losing value from 
 wear, articles of great intrinsic value, which may now 
 be made productive in the same manner as any other 
 capital. 
 
 To illustrate this position, let us suppose the case of 
 a silver-smith employing a certain amount of that metal 
 in the profitable business of manufacturing silver ware* 
 In the absence of paper, suppose he finds it necessary to 
 employ also, in his business, ten thousand dollars of 
 silver as cash, or money. Give him now the chance of 
 borrowing ten thousand dollars of paper, which will an- 
 swer his purpose as money equally well, and let him ap- 
 ply his silver dollars to increase his stock of ware for 
 market. It is clear that his personal advantage will be 
 equal to the difference between his profits on his work, 
 and the interest he may pay for his money ; while the 
 advantage to the community will be equal to the clear 
 profits, provided only that the bank, receiving the in- 
 terest on the paper, is owned at home and not abroad. 
 
 Here then is a direct pecuniary benefit to be derived 
 
169 
 
 from banks of issue. If owned by our own citizens, so 
 that the interest is saved to the community, the benefit 
 is equal to the profits which the community may make on 
 so much productive capital as is represented by the paper 
 in circulation. If the currency in this state, in ordinary 
 times, is twenty millions, and fifteen millions of that 
 amount is paper, and the annual profits of capital produc- 
 tively used are ten per cent, then are the people of this state 
 made richer every year, in this way alone, by the sum of 
 a million and a half, by the use of so much paper. So 
 much for this direct saving by the use of a paper cur- 
 rency, and for the proper functions of banks of issue ; 
 and if the view here presented could always be kept in 
 mind, by those who deal authoritatively on the subject, 
 the system might always be a safe and profitable one. 
 The danger arises from the temptation to push the sys- 
 tem beyond its sphere. Men will not remember the true 
 uses of money; that from its very nature, its constitu- 
 tion and office, it requires to be limited in quantity ; that 
 it can never be judiciously or profitable increased beyond 
 the natural demand for the legitimate purpose to which 
 alone it can be applied ; and that in every respect the 
 law of money is the same, whether it exist in the shape 
 of metal or in the shape of paper. 
 
 And now, Mr. Chairman, after having been so long 
 engaged, I hope not wholly without profit, in looking 
 into general principles, we are prepared perhaps, to see 
 what we want, in the way of banks, and also what we 
 do not want. 
 
 We have undoubtedly in this state at the present 
 time a contracted currency. But if present relief from 
 
 15 
 
the immediate pressure under which the country is la- 
 boring, be any part of our object, we shall not gain that 
 object, in my opinion, merely by providing new sources 
 for the issue of paper. The present banks can issue pa- 
 per as well certainly as any new banks that may be form- 
 ed ; but the present banks are steadily preparing for re- 
 sumption, and nobody, I believe, proposes that our new 
 banks shall begin with issues not purporting to be "re- 
 deemable in specie on demand. Looking to the period 
 of resuming, we may expect that for some time at least, 
 the circulation will continue to be contracted. The 
 banks will not put out bills in profusion in the face of ap- 
 prehended demands for specie. They will feel their 
 way gradually, and come up to their wonted limits only 
 after they shall find the accustomed confidence of the 
 community fully restored. No banks, however framed, 
 could do more than this. It is not in times of distrust 
 and general suspension that banks, however plausibly 
 contrived to secure bill-holders and win public confidence, 
 can safely venture to cast abroad a full supply of bank 
 paper, unless indeed the intention be themselves to fall 
 back on suspension with the earliest opportunity. I 
 conclude that the banks contemplated by this law, will 
 no more be able to furnish a fresh supply of currency, 
 in the present emergency, than the old banks are, or will 
 be, without them. 
 
 But in offering to the state a general banking law, 
 our purpose is to offer a system which will work benefi- 
 cially, not at one time merely, but at all times. And 
 considering the present scheme in this point of view, it 
 seems to me that quite too much effort is expended in 
 in preparing the way for new issues of paper. Indeed, 
 
171 
 
 to my mind it is quite apparent, not only from the gene- 
 ral frame of this bill, but from the manner in which it 
 has' more than once been stated on this floor that its sup- 
 posed benefits were expected to accrue, that the leading 
 and governing impression of its friends is, that what the 
 country mainly wants, to promote its steady growth and 
 prosperity, is a permanent increase of currency. We 
 want, say they, more banking capital, and this want 
 they suppose will be abundantly supplied, by authorizing 
 banks to issue currency at will, without having one dol- 
 lar of actual capital to loan to the community ! In no 
 part of it does this bill require, or even contemplate, that 
 the banks, created under it, shall possess a shilling of 
 loanable capital. On the contrary, the plan is, and every 
 thing is contrived with reference to it, that whatever capi- 
 tal a bank shall possess, instead of being loaned to any- 
 body, shall be locked up in pledge with the comptroller, 
 as the condition of its right to issue currency. The no- 
 tion entertained evidently is that currency is banking 
 capital, and that when you have provided for an inde- 
 finite supply of currency, the want of capital can no 
 longer be felt. I hope, before we have all done with 
 this subject, that gentlemen will consent to come back 
 to juster and safer sentiments than these. 
 
 In all my remarks on this subject, I trust I shall not 
 be so far misunderstood as to be thought, in any man- 
 ner, opposed to a general banking law, or to giving to 
 all persons the same authority, under proper regulations, 
 to issue paper. I.am decidedly in favor of such a law, 
 and I see no difficulty, and no danger, in such a course. 
 But then I do not think that currency is all we want. 
 
172 
 
 or that it is our chief want ; nor can 1 fall deeply in love 
 with any law framed on such a supposition. 
 
 On the supposition that our new banks are to be 
 merely banks of issue, it is easy enough to compute, 
 very exactly, how much the community, for I do not re- 
 gard the benefits to the bankers as the principal thing, 
 is to be benefitted by them. The banks now existing 
 in this state have authority, even under the restriction 
 of the suspension law of last May, to issue something 
 more than twenty-nine millions of dollars. How much 
 currency the people of this state can use, in the most 
 active and busy times, I shall not undertake to say ; but 
 we know about how much they have used, when they 
 had probably quite as much as their business would 
 bear, and as much as the banks dared to, or could put 
 out. The highest point to which their issues have ever 
 attained was some short time before the suspension last 
 spring, when they amounted to about twenty-four mil- 
 lions. The bank commissioners tell us, that, with the 
 present amount of capital, their issues, in ordinary times, 
 will probably be less than twenty millions. A calcula- 
 tion founded on the estimated ratio of circulation to capi- 
 tal, or to income, would give a result considerably be- 
 low this sum. Ten dollars of money in use to each per- 
 son, including women and children, has been thought 
 by many to be a large estimate, and this would make 
 twelve millions or a little more, a full currency for the 
 people of this state. Double the sum, and it would not 
 equal the present capacity of the banks to furnish the 
 full supply. 
 
 If then we cannot use as money, in this state by any 
 possibility, a currency of twenty-nine millions, without 
 
173 
 
 having a dangerous expansion, and a bubble, will any- 
 body tell me how we are to be benefitted as a people, 
 merely by establishing new banks of issue, without any 
 increase whatever of loanable capital ? Either the new 
 banks will supplant the old in this business, and furnish 
 all the currency, or they will come in for a share of the 
 public confidence and custom. In either event, what 
 does the community gain? And what becomes of all 
 those splendid visions, in which gentlemen have in- 
 dulged, of new impulse, new prosperity, and unwonted 
 glory to the state, from this new creation of banks, 
 which, after all, are expected to do nothing but issue 
 new currency ? I repeat again, that I am in favor of 
 throwing open this business of issuing currency, and the 
 reasons for it are strong and obvious enough ; but I am 
 unwilling to see anybody here cheat themselves, or 
 others, into rhapsodies about the advantages of accu- 
 mulated issues of paper. A grosser delusion never took 
 possession of any man's mind, and it shall be my labor 
 to dissipate it if I can. At least I will endeavor, as far 
 as in me lies, to prevent the mischief which might fol- 
 low, if such error were indulged without gainsaying or 
 exposure. 
 
 I suppose that what this state really wants is an in- 
 crease of loanable capital^ and an extension of the 
 credit system. And my difficulty is, that while I see 
 in this bill a provision — that which authorizes associa- 
 tions for banking — of which advantage may be taken 
 for forming associations with loanable capital, and which 
 probably w 7 ill be thus used in the city of New- York, if 
 oowhere else — a result which nobody can desire more 
 strongly than myself — yet I also see in this bill, as it 
 
 15* 
 
174 
 
 seems to me, a strong and ingenious effort made, to set 
 up generally throughout this state a system of paper is- 
 sues as a substitute for capital, and thus, if the scheme 
 should be successful, as it would be full likely to be, to 
 commit an alarming practical error, from the conse- 
 quences of which it might take us long years to recover, 
 By a brief analysis of that part of the bill which pro- 
 vides for issues on a pledge or mortgage of property, we 
 shall easily discover what must be the practical working 
 of the plan, and whether we are, or are not to be sup- 
 plied, under it, with additional capital, and favored with 
 new facilities for the use of credit. 
 
 In regard to stock banks, several cases may be sup- 
 posed, and I will content myself with simply and plainly 
 stating the result in each. 
 
 Suppose existing state stocks, now owned by capi- 
 talists at home, be pledged for issues : state stocks in 
 the hands of individuals are not only a marketable pro- 
 prerty, but they will readily command foreign capital ; 
 and if sold abroad instead of being pledged at home, 
 actual capital would be brought into the country, and 
 used, or put out on loan, instead of the currency which 
 is proposed to be issued upon it as a basis; while, if 
 more currency be needed either generally, or in particu- 
 lar places, it is easy to provide for it, with perfect safety, 
 without locking up capital. 
 
 But suppose existing state stocks, now owned abroad, 
 be brought in, and being still owned abroad, are pledged 
 for issues ; nothing of course would thus be gained in 
 the way of loanable capital, and to the extent of the 
 issues, the interest would be paid abroad instead of at 
 home. 
 
175 
 
 Again ; suppose such stocks, now owned abroad, 
 fee purchased by our own capitalists, and brought in to 
 be pledged by them for issues ; the whole capital thus 
 paid for stocks, held by foreigners, would be so much with- 
 drawn from the country, and from the industry of the 
 country, and we should thus provide for a new issue 
 of currency at the expense of an equal amount of capital. 
 
 But we will now take the case of a new creation 
 of state stocks, and suppose them to be purchased 
 abroad with foreign capital, and then pledged here, by 
 their owners, for issues of paper ; in this case, the state, 
 creating the stock, adds to its borrowed capital, which it 
 may consume in a productive and profitable manner, as 
 in the construction of canals and rail-roads, advancing 
 thus the common prosperity ; but individual industry, or 
 business, would not in that way acquire any additional 
 capital — it would acquire nothing but currency, which 
 it already has, or always may have, on terms equally 
 safe, and vastly more economical. 
 
 Or suppose, finally, that this new creation of state 
 stocks is purchased at home, and so pledged for issues ; 
 it is plain, that so much domestic capital which might 
 have been loaned to individuals, and thus have gone to 
 stimulate and sustain individual enterprise and labor, is 
 now loaned to the state, or states, creating the stock — 
 it may be our own state, and is quite as like to be some 
 other ; and if loaned to other states, then we are wise 
 enough to dig their canals and build their rail-roads with 
 our capital, and imagine that currency will answer our 
 own purpose equally well ! 
 
 The case here put seems to have been the one which 
 the honorable chairman of the committee on banks con- 
 
ire 
 
 templated, when his imagination, a few days ago, was 
 so strongly fired with the glories of this new discovery 
 in banking. He saw in this scheme, an immense sav- 
 ing to the whole country, as well as I could understand 
 him, in the item of interest. He spoke of a hundred 
 millions of state stock, all being owned at home instead 
 of abroad, and a consequent saving of five millions a 
 year to the country, which must otherwise be sent away 
 in the shape of interest. This saving is, of course, to be 
 made in only one way : if the commercial and business 
 community, instead of being borrowers, are ready to be- 
 come lenders; if they can and will supply the govern- 
 ments with all the capital which they would borrow ; 
 and then, if they can contrive to add to a full currency, 
 millions upon millions of more currency still, and make 
 that currency supply to them the place and the uses of 
 capital — why the whole thing is done ; a community of 
 needy borrowers may at once become a community of 
 rich lenders, though without one dollar of property, sur- 
 plus or otherwise, more than they had before — interest 
 will of course be saved, and capitalists may go hang ! 
 
 In regard to the mortgage feature in this bill : the 
 effect of pledging lands for issues may be seen at a 
 glance. If we could suppose that associations w T ould be 
 formed with a cash capital to begin with, which would 
 be loaned out on mortgage securities, we might expect 
 to realize some substantial advantage from the operations 
 of such banks. Though even in such a case, we should 
 not have banks making loans on commercial principles, 
 but putting out their capital on time, and upon those 
 very securities that have heretofore been used most ad- 
 vantageously as pledges for private loans- 
 
177 
 
 But I apprehend our land banksw'iW. not be got up in 
 any such way, nor is anysuch thing intended. The 
 share-holders of these banks, so far as land or mortga- 
 ges are used, will be the owners, at least they will be 
 the holders, either of existing mortgages on lands, or of 
 the lands themselves, which are proposed to be pledged 
 for issues. In other words, and very plainly, it is not 
 proposed or expected, that such banks are to possess any 
 loanable capital whatever, or to put out any capital on 
 loan, but if banks at all, they are to be banks of issue 
 only, loaning currency, and nothing but currency. 
 
 Sir, this is not the first time, by any means, that it 
 has entered into the imagination of men, that since pa- 
 per has become money, it is quite right that every body 
 should be allowed to make their own money, only tak- 
 ing care that security be given for its ultimate redemp- 
 tion. This is the leading idea in this bill. And under 
 it, unquestionably any person of substance, or without 
 substance, if he have credit enough to command a tem- 
 porary loan, may, at any time, supply his own necessi- 
 ties for ready money, simply by the dash of his own pen- 
 To many persons, even of substance, when pressed by 
 an urgent call, when a lucky hit might be made, or a 
 valuable property saved by it, the temptation to resort to 
 the plain suggestions of this bill for supplies, would be 
 too strong to be resisted. A man with a little scrip lying 
 by him, and some real estate unavailable in any other 
 way for raising money, would not be likely to see him- 
 self ruined, in a time of pressure or panic, for want of 
 a few thousands, when by turning this property over to 
 the comptroller, he could at once lend himself whatever 
 he needed, He might have no intention to turn banker; 
 
178 
 
 that might be the farthest thing from his thoughts, 
 but he would meet a present exigency ; he would throw 
 out his bank notes as cash ; he would effect a ready sale 
 of his stock without sacrifice ; and for his land, he would 
 gain time to redeem his mortgage on that, and in the 
 mean while make up abundantly any little losses in the 
 operation, by buying up his own issues at a discount, 
 That such would be the common order of proceeding 
 under this bill, I do not pretend to say ; but that undue 
 and improper advantages would be taken of its provi- 
 sions, and that to an extent injurious to the best interests 
 of the country, I have no doubt, provided the bill should 
 be suffered to pass in its present shape. 
 
 But, Mr. Chairman, I come now to consider this bill 
 in a different point of view. Besides that the bill, so far 
 from requiring, does not even contemplate, that the banks., 
 generally established under it, shall possess or offer to 
 the community any loanable capital whatever ; besides 
 that it professedly regards the great want of the com- 
 munity to be paper and only paper ; it provides for a 
 system in respect to issues, in some important particulars, 
 entirely new. We are now to leave old landmarks, and 
 venture forward where we, at least, have never ventur- 
 ed before. And it is not that we are about to throw 
 open the business of banking. That has been done by 
 former legislation, except in regard to issues only ; and 
 we may make this latter branch of the business free 
 also, with perfect safety, in my judgment, and without 
 resorting to any new and hazardous experiments. It is 
 this feature of the present bill, the attempt to put issues 
 on a new basis, a basis of property instead of specie, 
 which more than anything else makes it objectionable 
 
179 
 
 to my mind, and which, unless I can persuade the house 
 to admit my amendment, must determine my vote, 
 much as I shall regret it, against the final passage of the 
 bill. 
 
 When 1 look at the whole frame of this act, and when 
 especially, I consider it in connexion with the ominous 
 remarks which have, from time to time, fallen from its 
 friends and those who have it mainly in charge, I can- 
 not doubt, that it is expected that, in its practical work- 
 ing and result, the country is now to be supplied with 
 what is called money, to the full extent to which the 
 demand for it is at all times known to exist. This mo- 
 ney is of course to be paper, and to be dealt out to bor- 
 rowers without measure or stint, and regardless of all 
 the fatal mischiefs which always follow from an over- 
 charged currency, of whatever description it may be. 
 I say, sir, that it is expected that bank money shall now 
 be created in full profusion. This is precisely the pro- 
 mise which gentlemen make to themselves, in proposing 
 and sustaining this bill in its present form, and it is pre- 
 cisely the result to which they look with equal confi- 
 dence and pleasure. Now, sir, I agree with gentlemen, 
 in believing firmly that the plan of the bill is admirably 
 fitted to bring about the result to which they so eagerly 
 look, though I have by no means any sympathy with 
 the feelings of hope and pleasure with which they con- 
 template the prospect. 
 
 Mr. Chairman, it is my opinion, that this bill contem- 
 plates and proposes the establishment of banks of issue, 
 which will not be very far from being what are well un- 
 derstood by the term, property banks ; and that their 
 issues will not in the end, vary in character, very mate- 
 
rially, from what are known as bills of credit. I think 
 there is an effort here, quite likely to be successful, at 
 least for a time, to win the public confidence to these 
 issues, without regard to convertibility ; to induce the 
 community to look upon tnem, and that with satisfac- 
 tion and favor, as representing property and not coin, 
 and thus to give them a character and a currency tend- 
 ing to all the evils of undue expansion belonging to 
 mere paper-money. 
 
 These issues are to bear, on the very face of the bills, 
 two principal features, admirably calculated to gain for 
 them favor and confidence, wherever they may go. In 
 the first place, they will shew an established connexion 
 with the government, which, though in reality only ap- 
 parent, will seem to be very important. They are all 
 to bear the signature of a government officer, and to be 
 known as issuing directly from the authority of the head 
 of the financial department of the government. And in 
 the next place, they are to have, either in whole or in 
 part, the actual guaranty of a state government, for their 
 redemption. Where this guaranty does not go to the 
 full value, the remainder is secured by a mortgage on 
 real estate of double the value for which it is pledged, 
 perfected under the direction of the same financial offi- 
 cer of the government, and for whose faithfulness and 
 capacity the state is responsible. 
 
 Now that such paper is to circulate merely on the 
 credit of the issuers, and simply as the representative of 
 coin, is more than I expect or believe. Nobody, scarcely, 
 in a commercial community, wants specie, when paper 
 can be had in which all, for the time being, have confi- 
 dence. A very brief experiment will be enough to satisfy 
 
181 
 
 every bold operator in banking, that iittie or no specie 
 need be kept idle in vault. The demand will be for the 
 bills, and not for metal; and this is an appetite that 
 grows by what it feeds on. An expansion once begun, 
 is sure to go on. The mighty bubble, the great balloon 
 made of silk-paper, is constantly swelled out, more and 
 more, increasing in volume and losing substance in pro- 
 portion, until it is distended to bursting. I would I could 
 be satisfied that my apprehensions on this point are un- 
 reasonable and unfounded. 
 
 Until now we have had a legal limit to issues. At 
 the present moment, if every other restraint was removed, 
 bank paper could not be issued quite up to thirty millions. 
 It is now proposed to allow issues without limit ; at least 
 without any other limit than such as always belongs to 
 property banks, that is, the amount of property which 
 can be commanded, to place in pledge for eventual re- 
 demptions. The ordinary guards thrown around bank- 
 ing, even where there is a legal limit to issues, are now 
 wholly omitted, when the legal limit is removed. I can- 
 not think that this is proceeding wisely or safely. There 
 seems to me to be in this plan every possible facility for 
 putting out and keeping out paper, every possible in- 
 ducement to do so, and a careful abstaining from what- 
 ever might operate as a check to issues. Let us see if 
 this be not so. 
 
 We have already seen what provision is made for in- 
 spiring an unusual confidence in the paper. I think it 
 is also plain, that the bill holds out the inducement of 
 large profits to those who may engage in the business. 
 Persons owning state stock, and receiving upon it an 
 interest of five per cent, can have no possible objection 
 
 16 
 
182 
 
 to place it in a condition in which, with the aid of pa- 
 per issues, it shall produce them ten per cent, clear of all 
 expenses, and without trouble or risk. And the owners 
 of mortgages, and of farming and other productive lands, 
 will not think it a hardship to receive an income, from 
 these sources, of twelve per cent instead of seven. From 
 every calculation which I have been able to make, I do 
 not see why the ordinary profits of banking, under this 
 bill, may not be as great as I have indicated. In any 
 event, whatever the respective holders of property shall 
 be able to realize, above the ordinary rate of interest or 
 return upon such property, be it ten per cent or only 
 two, is so much nett gain, and to that extent a strong 
 inducement to undertake the business. An interest is 
 obtained above the legal rate, without any of the hazards 
 or imputations of usury. 
 
 In my study of this scheme of banking I have con- 
 sidered carefully the point, what there was, and whether 
 there was anything in it, or connected with it, which 
 would operate as a check upon issues. If there be any- 
 thing, I have not been fortunate enough to discover it. 
 Amongst other things, I have tried to satisfy myself that 
 there might be something in the character of our people, 
 which of itself might be enough to prevent the bankers 
 on the one hand, and the borrowing community on the 
 other, from running into any excesses in the use of pa- 
 per money. All wise men know that the end of excess 
 in this matter, is distress and ruin ; but then every man 
 is apt to think that, in the general wreck, he will escape. 
 I have adverted in my mind to the parallel often drawn 
 between the Scotch and Yankee character, in regard to 
 habitual caution and discretion ; but I do not find the 
 
183 
 
 parallel complete. As imputed to the Scotch, whether 
 true or false, "Yankees may indulge some habitual dis- 
 trust of each other ; but the Yankees have no distrust 
 of themselves. In themselves they have the most en- 
 tire confidence. They will take bond of all around 
 them, if they can ; but if no security can be had, it is 
 no matter, and each for himself, will play at any game 
 of chance or hazard, old or new, small or great, in which 
 others are willing to engage. To win or to lose, he will 
 take his chance in any attempt in which he can find 
 anybody bold enough to dare him on. Never was there 
 a people more enterprising or more daring. Tell me 
 what island there is, to which adventurous navigation 
 has ever penetrated in search of gain, which has not been 
 trodden by the foot of some son of New-England? 
 What ocean, which has not been whitened with his 
 sail ? Who travels faster, or travels farther than he ? 
 Who sails faster, or farther? Who encounters labor, 
 exposure, fasting, peril, death, with such deliberation 
 and coolness as he does, whether led by the spirit of dis- 
 covery, or the spirit of benevolence, or the spirit of ad- 
 venture and gain ? But it is better to let Burke describe 
 him. 
 
 "Look, 71 says he, "at the manner in which the peo- 
 ple of New-England have of late carried on the whale 
 fishery. Whilst we follow them among the tumbling 
 mountains of ice, and behold them penetrating into the 
 deepest frozen recesses of Hudson's bay and Davis's 
 straits, whilst we are looking for them beneath the 
 arclic circle, we hear that they have pierced into the op- 
 posite region of polar cold, that they are at the antipodes, 
 and engaged under the frozen serpent of the south. 
 
184 
 
 Falkland island, which seemed too remote and romantic 
 an object for the grasp of national ambition, is but a 
 stage and resting place in the progress of their victorious 
 industry. Nor is the equinoctial heat more discouraging 
 to them than the accumulated winter of both the poles. 
 We know that while some of them draw the line and 
 strike the harpoon on the coast of Africa, others run the 
 longitude, and pursue their gigantic game along the 
 coast of Brazil. No sea but what is vexed by their 
 fisheries. No climate that is not witness to their toils. 
 Neither the perseverance of Holland, nor the activity of 
 France, nor the dexterous and firm sagacity of English 
 enterprise, ever carried this most perilous mode of hard 
 industry to the extent to which it has been pushed by 
 this recent people ; a people who are still as it were but 
 in the gristle, and not yet hardened into the bone of 
 manhood." 
 
 For my part, sir, I can find nothing in the character 
 of our people, (for we are of the blood of the race just 
 now described,) calculated to give me any confidence 
 whatever that the provisions of this bill, with all the 
 temptations and invitations to abuse, contained in it, are 
 likely to be always prudently and safely used. 
 
 But, Mr. Chairman, I have not forgotten that all 
 bankers under this bill will be held to pay specie for their 
 notes, on demand, under penalty of being proceeded 
 against as bankrupts after ten days from refusal. Yet 
 as a check upon issues, I regard this provision as being 
 likely to prove delusive, and nearly useless. And I think 
 I cannot be mistaken in supposing that this opinion of 
 mine is not at variance with the opinions of the friends 
 of the bill. I put it to gentlemen plainly to say, who 
 
185 
 
 ther it be not one principal object on their part, to make 
 such a show of property security to the bill-holder as 
 will have the effect to take away from him all disposi- 
 tion ever to test the question of convertibility by demand- 
 ing the specie? Is it not a part of the design, thai 
 banks thus constituted will be able to maintain a circu- 
 lation which no other banks could ? But whether there 
 be any such intention or not, I cannot doubt that such 
 would be the effect. The issues would not be regarded 
 in any respect as representing coin, but as representing 
 property — property pledged for their redemption — proper- 
 ty of such a character that it may be thrown into mar- 
 ket, and the value realized, with little sacrifice and small 
 delay. 
 
 Mr. Chairman, I should be glad to know if I am re- 
 ally so much in error, in regarding the proposed banks 
 rather in the light of property banks than of ordinary 
 commercial banks, and in believing that their issues 
 will have more the character of bills of credit than 
 of convertible bank paper? I pray the committee to 
 indulge me in a little further examination of this mat- 
 ter. 
 
 What is it which constitutes the characteristic diffe- 
 rence between bills of credit— mere paper money — and 
 convertible bank-notes ? Nobody doubts that there is a 
 difference — in what does it consist ? A convertible note 
 must, of course, be payable on demand, and in coin ; 
 but are all notes, thus purporting to be payable, conver- 
 tible notes? I think not, and there are many instances 
 to prove they are not. Convertible notes are really and 
 truly the representatives of coin: and if they are no?., 
 they are not fit to be called money. If they represent 
 
 16* 
 
186 
 
 credit, or property ; if they circulate merely on the faith 
 of the ability of the issuers ultimately to redeem in va- 
 lue, then they are not strictly convertible paper, but are 
 properly bills of credit. Such was the old continental 
 money, payable on the face of it in specie on demand, 
 but circulating really on the credit of the country : and, 
 to give a fresher instance, such has been, and is, all our 
 bank money since the suspension of specie pa)^ments. 
 
 The theory in regard to bank paper is, that the coin 
 is supposed to be all in vault, and the bills are only 
 tickets, certifying that the holder has so much coin in 
 deposite, to be had of course for the asking. Every bo- 
 dy, indeed, who takes the trouble to think about it, knows 
 that the fact is not so, and yet, in every sound bank, 
 the principle is faithfully preserved. If ten depositors 
 put in bank each a thousand dollars in coin, taking back 
 paper for it, and of course with the right to draw upon 
 the specie fund from time to time, in the course of busi- 
 ness, it may very likely be found, after a little experi- 
 ence, that the average monthly demand for specie from 
 the whole number, will not exceed a tenth part of the 
 whole sum deposited ; and hence the bank will be safe 
 in loaning out the nine thousand of specie, only taking 
 care that it be so managed as to keep the remaining 
 thousand all the while good. Very much the same 
 course is followed, in all issues of paper by specie paying 
 banks ; and so long as the reserve of specie is at all 
 times abundant to meet the current demand — the issues, 
 at the same time, being limited by some safe proportion 
 to the specie in hand, so as not to become inflated and 
 depreciated — the paper may still truly be said to preserve 
 its characteristic of being the representative of coin in 
 
18? 
 
 xkposite, and every holder has his specie whenever he 
 pleases to receive it. 
 
 But the case is different when notes are put out to cir- 
 culate on the basis of property — on the supposed or as* 
 certained ability of the issuers to respond in value mere- 
 ly. Such issues have precisely the character of com mora 
 promissory notes, made by responsible individuals. Whe- 
 ther payable on demand, or at a day certain, they are 
 payable in legal money — in gold and silver if demand- 
 ed ; and such promissory notes may pass from hand to 
 hand, and form a convenient medium of payment be- 
 tween persons having confidence in the makers; but 
 they are in no sense the mere representatives of coin, 
 and are, therefore, wholly unfit to go into general circu- 
 lation, as money, and would be exceedingly dangerous 
 if they did. Suppose the case of an individual, and 
 such an one might be named, in whose promissory notes 
 payable on demand, even to. the amount of many mil- 
 lions, the whole public would have the most entire con- 
 fidence from his known wealth ; suppose in the absence 
 of any restraining law, he should issue his notes, in the 
 form of bank bills, making it known to the public at the 
 same time, that while of course he could not escape the 
 common legal obligation to pay in coin if demanded, 
 yet his purpose was, in the ordinary course of business, 
 to redeem only by drafts on specie paying banks, or by 
 the bills of such banks, because he would not have the 
 trouble and the loss of keeping specie on hand at his 
 own office of business ; can there be any doubt that his 
 notes would find ready borrowers, that they would cir- 
 culate, and, so long as his affairs were known to be pru- 
 dently managed, that they would remain in good credit? 
 
188 
 
 And yet would any body, in the least acquainted with 
 the subject, pretend that such notes were entitled to be 
 deemed convertible paper, and proper to fill the channels 
 of currency as the representatives of coin ? And if not, 
 why not? Can there be any other reason, than because 
 these notes would be strictly bills of credit — having a 
 known basis of property and representing property, and 
 circulating solely on the confidence of the community 
 in the ability of the maker to answer for his promises in 
 value, and not at all on the idea that they were eviden- 
 ces of title to so much coin on deposite, for the holder, 
 with the issuer ? 
 
 And here the question may well be asked — if the dif- 
 ference between mere promissory notes or bills of credit, 
 and convertible bank paper, be so little — if, in the one 
 case, the coin itself is at once forthcoming on demand 
 from the vaults of the issuer, and, in the other, cash 
 property is forthcoming on which the coin, if desired, 
 may be readily realized, such as cash drafts, bills of 
 specie-paying banks, state stocks in good credit, and the 
 like — w hy then may not bills of credit be as well and 
 as safely used for money, as any other kind of paper? 
 Why is it, that mere paper money is so much decried 
 and abused, and why was even the use of it by the 
 states expressly prohibited by the Federal Constitution? 
 1 suppose the reason to be plain and obvious. The men 
 of 1787 understood the reason well enough, for they had 
 been taught in a school of experience. In the one case, 
 you have, for money, a representative of coin ; in the 
 other, you attempt to set up an independent substitute. 
 The substitute does very well, as long as confidence 
 lasts, and the issues are not in excess. It was not till 
 
189 
 
 the issues of continental paper exceeded nine millions, 
 that the bills began to be depreciated ; by the time they 
 had reached three hundred and fifty millions, they were 
 worthless. And here is the precise evil of credit paper. 
 Being based on property, though payable on demand, 
 as was continental paper, the community soon under- 
 stand that is to be redeemed with value, but not in coin ; 
 it is received, and held, and circulated, with that un- 
 der-standing ; and, with seeming good faith, therefore, 
 and as long as the property of the issuer holds out, the 
 amount of issues may be increased. There is nothing 
 to be considered in the matter, but the interest of the 
 issuer, and the public demand ; and the effort to satisfy 
 these leads insensibly, but inevitable, to excess. There 
 is nothing to check issues, and there is no possible test 
 by which it can be ascertained, that the community has 
 as much as it can bear. The first warning is likely to 
 be an explosion. But with paper that is strictly con- 
 vertible, the case is otherwise. There is a limit to issues 
 in the very character of the paper — in the perpetual ob- 
 ligation of the issuer to regard himself, as he is regarded 
 by others, as the depository of coin for the use of the 
 holders of his paper ; an obligation which I think should 
 be legally enforced in the case of all banks of issue, by 
 requiring them to keep their issues within some fixed 
 proportion to the amount of specie on hand. 
 
 And now, Mr. Chairman, let us look once more at 
 the banks you will give us under this bill, and see what 
 would be the true character of their issues. The bills 
 are to bear on their face that they are payable on de- 
 mand ; they are to be paid in specie if required ; but 
 then there is this unusual provision in regard to all these 
 
190 
 
 issues, that they are to be accompained with a pledge, 
 or mortgage, of cash property to each holder, to the full 
 value of the bills in hand. This is the substance and 
 effect of the provision. If I give to an individual my 
 promissory note, or my bond, payable in cash on de- 
 mand, for a sum borrowed, and accompany it with a 
 pledge or mortgage of personal or real property, of am- 
 ple value, to secure the payment — what is the good 
 sense and meaning of the transaction? Is it not simply, 
 that if I do not answer his demand whenever he sees 
 fit to make it, by paying him cash, or its equivalent, 
 that he shall be at liberty to pay himself out of my pro- 
 perty? And do I not mean, by the security I offer, 
 and the facilities I give him to turn those securities into 
 money at will, to purchase his confidence in my ability 
 to redeem my obligation in value, and thus to secure 
 his forbearance, for as long a period as possible? Would 
 my note, or bond, be strictly convertible paper, though 
 the cash might be realized, perhaps, at any time, in 
 twenty-four hours after demand ? And how would the 
 issues of your banks under this bill differ, in this respect, 
 from the note or bond, referred to? Would not the is- 
 sues be made with the expectation, and in the confi- 
 dence, that, at least after a little time, the community 
 would forbear to ask for redemption in specie, and rest 
 wholly on the security ? Would not this be the natural 
 effect, and soon come to be regarded as the right under- 
 standing of the case between the banks and the public? 
 And when things had come to this pass, I should be 
 glad to know what is to prevent the accumulation of 
 this paper to any extent to which the cupidity of the 
 issuers, and the greedy and morbid appetite of the pub 
 
191 
 
 lie might lead. What would be the actual results under 
 this bill is not for me to say. That some valuable and 
 safe institutions might be established under it, I have 
 no doubt ; but it is enough for me to point to the fatal 
 mischiefs which might be practised in its name, and 
 which would, therefore, receive the sanction of our le- 
 gislation. 
 
 My great apprehension is of over issues, and expan- 
 sions ; and I see in the provisions of this bill a good 
 foundation laid for such a result. It has, to my mind, 
 too much the appearance of legalizing mere property 
 banks — stock and land banks — which are to issue bills 
 as long as they can furnish securities. This was pre- 
 cisely John Law's notion of what banks should be, 
 when he presented his scheme to the Scottish govern- 
 ment. He saw no reason why the paper money in cir- 
 culation might not be made to equal the whole value of 
 all the real estate in the kingdom. A.nd yet even John 
 Law had his notions of convertibility also. The notes 
 of the bank of France, got up in his name, and adopted 
 by the Regent, were payable in silver coin, at sight, and 
 were moreover guarantied to the holders by the pledge 
 of the king's name, and, therefore, by a pledge of the 
 whole property of the country. The issues became ex- 
 cessive, and finally of no value. The assignats of the 
 French revolution are not an inapt example of the secu- 
 rity and value of issues by property banks. This paper 
 was payable at sight, and the whole confiscated property 
 of the church was pledged by the government for its re- 
 demption. The holders might pay themselves, at any 
 moment, in church lands. When forty thousand mil- 
 lions of it had been issued, it ceased to be worth any- 
 
192 
 
 thing, and was never called in, or redeemed in any 
 manner. Now I do not say that our stock and land 
 banks will ever be allowed to run on to the same wicked 
 and ruinous issue ; but I do deem it quite too late a day 
 In the history of banking, for any country, having any 
 regard to reputation, to attempt to justify itself in a re- 
 sort to moneyed institutions having the least semblance 
 of property banks. 
 
 The nature of property banks consists perfectly well 
 with the common obligation to pay specie when de- 
 manded, and with the actual payment when demand- 
 ed. The advantage they have is in inspiring a credit 
 and confidence in the public mind, which enables them 
 to escape all demands on their vaults till a fatal mischief 
 is done. The issues swell, and still the flood rises, and 
 though there is depreciation, nobody believes it so long 
 as a paper dollar exchanges for a silver one ; and this 
 it will continue to do, the currency all the while puffing 
 up, and commodities rising as if leavened with it, till, 
 suddenly, a demand for specie comes from abroad, and 
 a panic ensues, and the first act closes with a general 
 suspension of payments. 
 
 Gentlemen have more than once let fall, since this 
 scheme has been in agitation, that in their judgment the 
 issues of these banks should be deemed convertible, he- 
 cause the property pledged, especially the stocks, may 
 always be converted. This shows plainly enough what 
 convertibility means, according to their conception of it. 
 And on their principle, any property which may be con- 
 verted into cash with facility, is just as good a basis for 
 issues as specie. Indeed one gentleman, an inhabitant 
 of the west, and a strong and impatient advocate of this 
 
193 
 
 bill, has declared on this floor that wheat was a better 
 basis for bank issues, in his part of the state, than specie 
 could be. Who can say he is wrong, if the principle of 
 this bill is right 1 
 
 But the glory of this project, in the estimation of gen- 
 tlemen, is the security which it offers to the bill-holder ; 
 and as long as this point is gained, they can see no pos- 
 sible danger in any quarter. And in regard to my pro- 
 position, that the banks shall be required to keep a cer- 
 tain ratio of specie on hand, though told, over and over 
 again, that this is designed chiefly as a means of limiting 
 the volume of issues, they still insist upon it that it is all 
 idle and useless — nay quite ridiculous — because the bill- 
 holder is already made abundantly secure! They do 
 not see, or they will not see, how deep a stake the com- 
 munity has in the question, whether we are to have a 
 regulated and uniform currency, at all times convertible, 
 and limited in volume to the true wants of business, or 
 an unsteady and fluctuating currency, tending to ruin- 
 ous expansions, and unsettling everything that is stable 
 and valuable in society, habits as well as property, mo- 
 rals as well as business. They see one only possible 
 evil growing out of bank issues — the losses of bill-holders 
 by occasional bank failures — and they do not or will 
 not remember that these losses, though sometimes se- 
 vere and distressing, (and they ought therefore to be 
 strictly guarded against,) are not to be compared with 
 those which communities suffer from depreciated paper, 
 consequent on expansions, from varying the terms of con- 
 tracts, causing prices to fluctuate, and giving to all pro- 
 perty as fickle and changeable a character as if it rested 
 on no solid foundation whatever, but was the mere sport 
 
 17 
 
194 
 
 of the wind or the tide. They seem to me to be smifc 
 with the love of property banks, and they can therefore 
 see nothing excellent or desirable, in a system of bank- 
 ing, except security to the bill-holder. Security to the 
 bill-holder — there is surely something, I know not what 7 
 about this security to the bill-holder, which has dazzled 
 the vision of gentlemen, and left them less of the power 
 of discrimination than they are used to exercise. Safety 
 to the bill-holder, exclaimed an honorable and learned 
 friend of mine the other day, has been the object of all 
 the various guards heretofore thrown around the busi- 
 ness of banking : and now that we have gained that 
 point, now that the bill-holder is safe, let us do nothing 
 which will go to regulate or control the discretion of the 
 banker in any other particular ! We shall have the best 
 paper currency in the world, because it will rest on the 
 basis of cash property, pledged for its redemption — a 
 basis for issues better than specie can be, because, while 
 the basis is specie, whenever the balance of trade is 
 against us, the precious metals will flow out of the coun- 
 try, and leave our paper with nothing to stand upon ! 
 
 Now I tell my honorable friend, and I tell all my 
 friends on this floor, that, in my poor judgment, security 
 to the bill-holder is a very good thing, but it is not every 
 thing in a system of banking ; and if this point only 
 be cared for, while we neglect to make the community 
 secure against the revulsions and losses consequent on a 
 bloated condition of the currency, nay, while we our- 
 selves are engaged in stimulating the creation of un- 
 limited paper issues, I think we shall perform but a part, 
 and a very small part too, of our duty to the people, and 
 even that what we do, would be much better left undone. 
 
195 
 
 Let gentlemen take the trouble to reflect a little on 
 what will really be gained by their proposed security to 
 the bill-holder. In the first place, the property pledge 
 can have no tendency whatever to prevent an inflation 
 of the currency, which is always a point of danger ; on 
 the contrary, in the absence of the specie check on 
 issues, the tendency will be directly, as I think I have 
 shewn, to produce such a result. Now, in this state of 
 things, it would be some consolation to know, that this 
 contrivance was likely at least to effect the particular 
 object in view — namely, the security of the bill-holder. 
 Will it do so? As much, certainly, as any such con- 
 trivance can — but can the actual bill-holder be made 
 wholly secure by any invention of the sort? Let us 
 look at this. 
 
 The property placed in pledge is to be the ultimate 
 resort for the redemption of the bills. A single bank, for 
 example, falls into difficulty, and comes to a sudden 
 stand, with a million in circulation, scattered in every 
 part of the state. Immediately the comptroller takes 
 order for the disposition of the property in pledge, and 
 the payment of the notes standing out ; and who mainly 
 will reap the benefit ? Why, clearly, according to all 
 experience, and from the necessity of the case, not the 
 original holders of the paper at the failure, but those who 
 have purchased it at a discount — not those who hold it 
 as money, but those who hold it as merchandize — 
 namely, the brokers. In case of a general suspension, 
 or a general crash among the banks, following an in- 
 flation of the paper system, the same thing must hap- 
 pen. That very class of persons particularly, the in- 
 digent, whom you are most anxious to protect, would 
 
196 
 
 be found to be just the least protected of all. They 
 have this paper in possession, as money, and for imme- 
 diate and necessary use. They are obliged to part with 
 it, because their daily subsistence depends upon it, and 
 they must let it go for what it is worth. And whatever 
 gentlemen may think, the paper would be immediately 
 and seriously depreciated, in any such event. The 
 banks having failed, no amount of securities, though 
 Ossa be piled on Pelion, would keep the bills at par, at 
 least at first, and for sometime after the explosion. In 
 remote parts of the state particularly, they would drop 
 down to prices far below their nominal value, and be 
 picked up by those who always have the means of 
 speculating out of the necessilies and misfortunes of the 
 poor. And on the whole, I have no doubt that in every 
 case of the redemption of these issues at the hand of the 
 comptroller, much the larger part of them would be re- 
 deemed for the benefit of brokers. Is it worth while, I ask 
 gentlemen, to pursue this object so strenuously, for the 
 sake of such a result, and to pursue it, too, as is it seems 
 to me to be pursued, regardless of evils of probable, if 
 not inevitable consequence, and at any rate to the ex- 
 clusion of considerations, connected with the subject, of 
 vastly more moment. Is it worth while, I ask, to fol- 
 low up this system of legislative quackery, for I cannot 
 call it by a better name, and be forever prescribing for 
 symptoms, when we might come at once to the disease? 
 The best security, in my judgment, which bill-holders 
 can possibly have, is in a system of banking, conducted, 
 under legal regulations, on sound, well-known and in- 
 disputable principles. Compel the observance of these 
 principles, which are few and easily understood, and 
 
197 
 
 nothing will be left to complain of on the part of the bill- 
 holder. He is safe, in the general safety of the system. 
 My plan for a general banking law would be exceed- 
 ingly simple, and I believe entirely safe. In the first 
 place, I would prefer to give proper corporate powers to 
 associations for banking, instead of the somewhat awk- 
 ward facilities afforded by this act ; and I see no consti- 
 tutional impediment in the way of conferring such cor- 
 porate powers by a general law. But if others do, so 
 that such a law could not be passed, then I would con- 
 sent to the formation of these joint-stock companies. 
 Provision being made for the voluntary formation of 
 Banking Associations, I would prescribe the terms on 
 which they might establish banks of issue. The prin- 
 cipal points of regulation would be, that there should be 
 a loanable capital actually paid in ; that the issues should 
 never exceed the amount of the capital ; that the month- 
 ly average of specie in vault should bear some fixed 
 proportion to the circulation — perhaps twenty per cent ; 
 and that ample returns should be made, with sufficient 
 particularity, under oath, at short intervals, with provi- 
 sion for thorough inspection in case the least doubt or 
 suspicion existed. I should depend on the specie basis 
 to prevent over issues, believing that nothing else can 
 check them effectually, andlhat this would do so, while 
 at the same time room enough would be afforded for 
 flexibility. In the very steadiness of the system which 
 would thus be induced, I should find a valuable safe- 
 guard for the bill-holder. His direct safety would be 
 found in the money securities of which the bank must 
 be in possession, of double the value of all the bills in 
 circulation, and in regard to which the holders of bills 
 
 17* 
 
198 
 
 would stand as preferred creditors. The securities ta- 
 ken for the capital loaned, and the securities taken for 
 circulation, must both of course be applied to the redemp- 
 tion of bills, before any thing could be divided among 
 the stockholders. The chances of loss to the holders of 
 Bank of England notes, if they depended wholly on the 
 securities taken for issues, have been calculated to be as 
 one to three hundred thousand ! 
 
 But, Mr. Chairman, in the present condition of things, 
 and especially considering the present temper and con- 
 stitution of the house, I shall propose no other radical 
 change in the General Banking Law now before us ? 
 than such as is suggested in my printed amendments. 
 I shall take it for granted that the main feature of this 
 bill is to be preserved ; the pledge of property for issues; 
 and I shall rest all my hopes of safety to the community 
 on the salutary check which the legal requisition of a 
 specie basis will impose on the banks. Here I take my 
 stand. The adoption of the proposition which I make 
 to this effect, changes in my view, the whole character 
 of the bill. It will place issues distinctly on another 
 basis than that proposed in the bill, and on the right ba- 
 sis. With this basis assumed, we are no longer engaged 
 in setting up property banks of issue, and providing 
 for a supply of bills of credit. We shall have free bank- 
 ing, with the first and main principle of sound banking 
 carefully preserved. On this principle I plant myself, 
 and I shall cheerfully abide the issue both here and else- 
 where, for the present time and for the future. With it, 
 I am for the bill ; without it, I shall record my vote 
 against it. I yet trust, somewhat confidently, that it 
 will be adopted ; and though the prospect has heretofore 
 
199 
 
 been dark and unpromising-, yet I do not think that I 
 deceive myself in taking courage from the gratifying 
 attention and favor with which my remarks, extended 
 to so unusual a length, have been received. I have 
 strong hope, and strong ground of hope, that my amend- 
 ment will prevail. 
 
 Some indication of the importance of my amendment 
 in my own estimation, may be found in the labor which 
 I have bestowed in endeavoring to satisfy this house of 
 the dangerous character of the bill without it. In no 
 degree can this bill receive a favorable consideration at 
 my hands in its original shape. I am quite serious and 
 sincere when I say that I regard it as an experiment on 
 the currency, which would be likely to end in greater 
 disaster to the good people of this state than any or all 
 the government experiments of the last eight years. If 
 it is to be tried as proposed, why be it so — personally I 
 desire no part of the credit belonging to the measure ; 
 and I desire no friend or friends of mine, personal or po- 
 litical, to have any part of the credit. My solemn con- 
 viction is, that no political man, and no political party, 
 could ever bear up under the burthen of such a measure. 
 It cannot stand the test of examination, the test of prin- 
 ciple, the test of time. It will fail, if attempted, as all 
 plausible but unsubstantial theories and experiments do; 
 it will fail, and the very success which it may have for 
 a brief season, will only mark its downfall with the more 
 notoriety, and the greater shame. 
 
 Let gentlemen remember, that it is one thing to be 
 ingenious and inventive, and another to be wise. Let 
 them remember the familiar story of Daedalus, an ar- 
 tist of surpassing skill and invention, and the most 
 
200 
 
 useful man of his period, while he contented himself 
 with employing his powers in the construction of the 
 wedge, the axe, the wimble, and the sails of ships. 
 He was at least innocent too, when he amused his coun- 
 trymen with his moving statues, which seemed instinct 
 with life. But when he attempted to set the laws of 
 Nature at defiance ; when he set himself at work to con- 
 trive his wings of feathers and wax, for himself and for 
 Icarus, his son, he committed a gross and fatal error. 
 The confiding and adventurous boy rose, as he should 
 have known he would do, too high — too near the sun 
 — and fell, never to rise again. Let gentlemen beware 
 how they attempt to imitate this bad example, by sup- 
 plying this young and adventurous people with their 
 wings of feathers and wax. Be sure, we shall put them 
 on if you furnish them to us, and we shall rise upon 
 them, no doubt, to a high flight : and then the first 
 fervid kiss of the risen sun, long before he shall have 
 reached his meridian, will melt away the support on 
 which we rest, and leave us to a precipitous fall, and a 
 melancholy and cruel fate. 
 
 [The General Banking Law, with Mr. Barnard's 
 amendments, being still under consideration in commit- 
 tee of the whole, and several gentlemen having spoken 
 — -some in answer to Mr. Barnard — he (Mr. B.) spoke 
 in reply to the following effect :] 
 
 Mr. Chairman : I shall not detain the committee with 
 any further extended discussion of the points at issue, 
 between myself and gentlemen who have been pleased 
 to notice, and to favor me with an attempt to answer, 
 my position and my former remarks. The positions ta- 
 
201 
 
 ken by me were too plain to be misunderstood, or mys- 
 tified. In general terms, they were these : 
 
 That what we want in this country is capital, and 
 an extension of the credit system; but that this bill 
 seems to contemplate only an extension of currency, 
 and that at the expense of capital and the credit system. 
 
 That we already have a banking system in this state 
 authorized to supply us with about thirty millions of pa- 
 per, and if we want more currency than this, we may 
 have it, by passing a general banking law, on a sys- 
 tem analagous and auxiliary to the present. 
 
 That the effect, if not the object of this bill, if it shall 
 pass without amendment, will be the establishment of 
 banks to issue paper for circulation, resting on property 
 as a basis, and not paper based on, or representing, coin. 
 
 That the only way in which you can have a safe and 
 sound paper currency, is to secure that currency on a 
 specie basis, and let it rest on convertibility, and not 
 merely on property or credit. 
 
 That it is the duty of the state to provide for the peo- 
 ple a local currency of uniform value. 
 
 Now I might appeal, I think, with safety, to any im- 
 partial auditor to say, whether I have been fairly met in 
 this argument, and fairly answered. I might ask, which 
 of my positions has been overturned, which of them wea- 
 kened ? There has been plenty of denunciation, some 
 loud and vehement, if not angry, declamation, and 
 other exhibitions, indicating real alarm for a favorite 
 measure, and yet shewing a determination to carry a 
 point by a display of boisterous courage, rather than of 
 manly strength. Gentlemen have talked, a little grandi- 
 loquently, of the principles of free trade, of the wonder- 
 
202 
 
 working power of credit, and of the absurdity of all 
 hard money schemes ; and we have had opened to us 
 some ravishing views of the golden glories to be realized 
 and enjoyed under this bill. But where have we been 
 favored with argument, with critical examination and 
 analysis, with sober views, with rational conclusions? 
 
 The house has been gravely told, amongst other 
 things, that I have been entertaining it with the theories, 
 the ever-varying theories, of political economy ; that I 
 have resorted to ancient and exploded systems, occa- 
 sionally recognized perhaps in other countries and other 
 times, but in no degree applicable to the altered state of 
 things, at this day, and in this country. Indeed ! And 
 if I had had occasion to speak of the Corpernican sys- 
 tem, or the law of gravitation, I should have been told, 
 I suppose, that these were very good theories in the days 
 of Galileo and Newton, and well enough even now pos- 
 sibly for Italy and England, but I must not attempt to 
 impose such absurdities on the American people, as hav- 
 ing any applicability to this climate and latitude, and 
 especially at so late a period as this year of our Lord, one 
 thousand eight hundred and thirty-eight ! Let gentle- 
 men name to me one doctrine or principle, one only, 
 maintained by me, as belonging to the subject in hand, 
 about which there have ever been two opinions, from re- 
 putable sources, on either side of the water — let them 
 specify — put a finger on one — I ask for one only — and 
 then they may talk of ever-varying theories, and ex- 
 ploded systems, with some shew of reason, and to some 
 good purpose perhaps — but not till then. 
 
 Gentlemen will not listen to any proposition in regard 
 to uniformity of value in the currency of the state, be- 
 
203 
 
 cause that would be interfering with the freedom of 
 trade. If the bills of country banks stand at a discount 
 in the city, what then, says the chairman of the bank 
 committee — are they not depreciated by a law of trade, 
 and shall we attempt to legislate them up to par? So, 
 then, currency is to be regulated solely by the laws of 
 trade, is it ? Government is no longer to have any con- 
 trol over it. Money is no longer to be money, but mer- 
 chandize ; and we, the legislature, are to authorize the 
 creation of unlimited quantities of paper, which it is ad- 
 mitted will be depreciated at certain points, the moment 
 it appears there, and give it up to the laws of free trade. 
 Well, the country is, at this moment, enjoying the blessed 
 benefits of this very freedom of trade in bank money. 
 The notes of Philadelphia banks are worth three per 
 cent less than the notes of New- York banks, and those 
 of Mississippi, some of them, twenty-five per cent less. 
 And this is free trade in banking and money ! Sir, I 
 had thought that the doctrine of the whigs was quite 
 different from this. I had thought it was rather a dis- 
 tinguishing doctrine of theirs, just now, that it was the 
 duty of the general government to provide for the people 
 a medium, or money, of uniform value, for the conve- 
 nience of payments in the discharge of contracts, and for 
 equalizing exchanges, and not leave this important mat- 
 ter, as it is now, to the laws of free trade. Such, at 
 least, is my doctrine ; and I believe it to be the doctrine 
 of the party of which I am a humble member. And 
 since the care of the currency has been abandoned by 
 the general government — abandoned to free trade — I 
 think it imperiously the duty of the local governments 
 
204 
 
 to legislate for uniformity in their local currencies — the 
 laws of free trade to the contrary notwithstanding. 
 
 Mr. Chairman, this doctrine of free trade has been 
 interposed as a sort of estoppel to all legislation, the object 
 of which shall be to secure a specie basis for issues, and 
 to limit and control their volume. From all sides we 
 hear it repeated, that security to the bill-holder for 
 eventual redemption, is the one thing, and the only 
 thing needful. With most of those who hold this opi- 
 nion, it rests simply on the false assumption, that society 
 has no other interest than this to protect, in the case of 
 a general license to issue currency — no other peril to en- 
 counter — no other possible danger to apprehehend ; as if 
 such a thing as expansion, and the existence of bank 
 paper practically inconvertible, and ruinously inflated, 
 was never heard of, or as if the losses and general wreck 
 which comes with such a condition of things, could be 
 prevented or cured by this single provision of securhy to 
 the bill-holder ; as if the eventual redemption, in value, 
 of a few millions in bills put forth as money, would 
 make good all the losses, arising from fluctuations in 
 prices, which would accrue on contracts, enterprises and 
 speculations, to ten, twenty or fifty times that amount, 
 and to which those very issues had stimulated ; or as if 
 such final payment of bill-holders, would repair the dis- 
 astrous breach which would be made in public morals 
 and public faith, in the universal sense of right and wrong T 
 in that delicate perception of the nature and beauty of 
 common honesty, and in that popular virtue, which no 
 republican country can lose, and be safe ! With most of 
 those, I say, who have delivered their sentiments on this 
 point, security to the bill-holder is the end of all things — 
 
205 
 
 it makes every thing safe. But with a few, and with 
 one honorable member in particular, whose position in 
 this house makes his opinions of consequence, the doc- 
 trine maintained is not quite so blind, nor quite so tame. 
 With them every thing is resolved into a question of free 
 trade. To compel bankers to secure the holders of their 
 paper is well enough. This violates no freedom of trade 
 because there is no freedom or equality between the con- 
 tracting parties. Men are obliged to take bank paper ! 
 But to allow bankers to issue paper, truly the represen- 
 tative of coin and truly convertible, and to restrain them 
 from pining' out any other kind of paper to circulate as 
 money — this is a gross violation of the laws of free 
 trade ! 
 
 Well, I would respectfully ask gentlemen, in the first 
 place, why do you insert or tolerate the insertion, in this 
 bill, of a section requiring all bankers to pay their notes 
 on demand in gold and silver ? Is it not enough if they 
 pay in value ? May you not safely leave the commu- 
 nity to take their paper, or not, on those terms? Why do 
 you thus violate the laws of free trade? And besides, 
 consider how useless it is. Do not the constitution and 
 laws already require the discharge of all such contracts, if 
 demanded, in gold and silver? And do you gain any 
 thing by re-enacting provisions which already exist in 
 the face of the laws of free trade? I aver, fearless of 
 contradiction, that for all that is done in this bill at pre- 
 sent towards securing convertibility, and a specie basis 
 for issues, you would be quite as wise, and pursue your 
 object much more directly, if you should strike out what- 
 ever there is in it relating in any way to gold and sil- 
 ver. It is only there t3 blind and mislead the public. 
 
 18 
 
206 
 
 Yon do not .add, in the least, by any thing inserted here ? 
 to the obligation, or the duty, of the banks to redeem their 
 dues in specie when it is required ; while you do lend 
 your sanction to a violation of those laws of free trade 
 which you seem to have taken under your special pro- 
 tection. 
 
 But, sir, it is as I have all along feared. There are 
 gentlemen here, in this house, here to legislate for a 
 great people, on this great interest — not many I hope — 
 who go for free trade — free, unlimited, and unrestricted 
 trade, in the matter of bank issues — on the single con- 
 dition of making the bill-holder secure against eventual 
 loss. This position has been distinctly avowed, and 
 boldly maintained. This doctrine abandons, at once, 
 all duty of government towards the currency, except as 
 to the single point indicated ; it does more, it denies that 
 government has any right to interfere. It declares dis- 
 tinctly that all such matters as these ; whether issues 
 shall have the character of convertible paper, represent- 
 ing coin, or of commercial paper based on property, 
 value, or general responsibility ; whether they shall be 
 limited or unlimited, with or without check ; whether 
 they shall be money or merchandize, at par value or 
 depreciated, uniform or otherwise — these are all mat- 
 ters quite out of the cognizance of government, and be- 
 longing exclusively to the province and jurisdiction of 
 the law r s of trade. The doctrine not only leaves gold 
 and silver to be dealt with as commodities, but it leaves 
 bank paper currency, to be dealt, with as a commodity. 
 Paper is hereafter to bear value according to supply, just 
 as any article of merchandize. It is to bear one price 
 at one point in the state, and a different price at another 
 
207 
 
 point; one price to-day, and another price to-morrow. 
 It is to go into the market on a footing with cotton and 
 corn, and be just as good a standard of value, and just 
 such a common medium of payment and exchange as 
 they — and no better. When the season is propitious 
 and the crop abundant, prices will be knocked down ; 
 that is, in second hands, for in original hands, with the 
 issuers, the price, namely the interest, will be the same; 
 and when, from any cause, there is a short crop, prices 
 will advance. And this is money on the free trade 
 plan ; and this is to be our money ! 
 
 And, moreover, Mr. Chairman, this free trade in pa- 
 per money, is the credit system, as gentlemen under- 
 stand if, and (he perfection of the credit system. The 
 grand point they aim at, is to facilitate an exchange of 
 credits, the credit of individuals for the credit of the banks 
 in the shape of bank money ; and it is this operation of 
 exchanging credits, without stint or limit, that is to en- 
 rich all parties, revive and support business generally, 
 and create a living soul of prosperity under the ribs of 
 dead commerce. They care not what capital is, or how 
 it may be defined — not they. Credit is capital enough 
 for them, and paper issues are credit, and therefore capi 
 tal. They do not want to borrow capital on the strength 
 of credit ; that would be a tame business ; but they 
 want to borrow credit — or rather they would make a 
 fair and independent transaction of it, and pay up as 
 they go along, by giving credit for credit, and adjusting 
 the difference of value, if there be any, on the spot 
 Credit is especially the poor man's capital, they ex- 
 claim ; not his own credit, but that which he borrows in 
 the form of bank issues. Give us a supply of these v 
 
208 
 
 and nobody can complain of the want of capital, nobody 
 can be poor. Pour out bank issues till the lap of earth 
 is full, and the land will overflow with riches. An ar- 
 ticle in itself utterly without value, contrived as an in- 
 strument to facilitate exchange of values, which is use- 
 less for any other earthly purpose, and wholly unpro- 
 ductive when thus employed — that article, increased 
 and multiplied indefinitely beyond any possible use for 
 it in its proper sphere, as a medium of exchange, fit for 
 no other u^e, and put to no other use — that article, thus 
 in excess, becomes capital, and profits, and wealth, ma- 
 king barrenness itself fruitful, and sterility rich, wherev- 
 er it flows, and in exact proportion to the copiousness 
 with which it is showered on the community. And this 
 is the credit system, according to the notions of gentle- 
 men, and the glorious effects of free trade in credit and 
 paper money ! 
 
 Sir, every thing which has fallen from gentlemen in- 
 dicates clearly to my mind, that they are indulging the 
 dangerous notion that paper can well enough take the 
 place of specie as an independent substitute for money. 
 They will do nothing towards securing a specie basis 
 for circulation by law, because gold and silver are com- 
 modities, and nothing but commodities, and must be 
 left free to go wherever there is a demand for them ; and 
 they will not have a paper circulation that is to expand 
 and contract as specie flows in or flows out. They 
 must have it based on property put in pledge, which 
 cannot flow out after it has once come in, and then the 
 currency will stand firm and full, no matter what be- 
 comes of the specie ! And then to reconcile us to the 
 adoption of this paper money system, we are informed 
 
209 
 
 that all our alarms about expansions and contractions are 
 quite useless, because the precious metals have been found 
 to be more fluctuating than any thing else ever used as 
 money. A remarkable fact certainly, and proved in a 
 most remarkable way — proved by the wonderful disco- 
 very of an extraordinary variation in the price of wheat 
 in a single year in England — probably in the time of 
 the Crusades. And besides, say they, we want expan- 
 sions of paper. Gentlemen tell us that we have never 
 had enough of it, and they seem to think we never can 
 have, till we shall sever all connexion and dependence 
 between specie and paper. And finally we are told 
 again, that the expansion of paper, is only the expan- 
 sion of the credit system, and, of course, so far from be- 
 ing dreaded and deprecated, should be greatly desired, 
 Mr. Chairman, w r ho can hear such sentiments coming 
 from respectable sources, who can contemplate the issue 
 ■of such doctrines if once they take root and prevail, 
 without amazement, without grief, without deep concern 
 and alarm? 
 
 A single point presented by the honorable chairman 
 of the bank committee, in regard to the character of the 
 proposed banks, under this bill, deserves attention. He 
 finds a parallel in the bank England, and so do I. It 
 is true, the whole capital of that bank is perpetually on 
 loan to the government, which, therefore, is the debtor 
 of the bank to that amount, and becomes in effect the 
 guarantor of the bills in circulation ; just as in our stock 
 banks, the holders of bills would have the pledge of go- 
 vernment securities. But I ask my friend if the capital 
 of the bank of England, thus loaned, or the securities 
 taken for it, are in any manner the basis of its issues? 
 
 18* 
 
210 
 
 Once it might have been so ; but a suspension of specie 
 payments for near a quarter of a century, by that bank, 
 was experience and lesson enough for her, and for the 
 people of England. Since the time of that suspension, 
 the government of that institution has given to it a law, 
 which is observed with great strictness, requiring that 
 the proportion of bullion in bank to its cash liabilities, 
 including deposites, shall not be less than one for three. 
 All that I ask is, that the principle of that rule shall be 
 adopted and enforced here ; and the utmost extent to 
 which I have proposed to go, has been to fix the propor- 
 tion of specie to circulation, not including other liabili- 
 ties, at one for five. But this, it seems, is wholly inad- 
 missible, as it would seriously interfere with free trade 
 in banking, and in the expansion and use of paper 
 issues, which gentlemen are pleased to denominate cre- 
 dit and the credit system ! 
 
 But, Mr. Chairman, I shall not pursue the discussion. 
 Let us come to the vote. My own opinions are before 
 the house and will be before the country. So are, and 
 will be, the opinions of gentlemen who insist upon the 
 bill, and nothing but the bill. Let us have the vote ; 
 and whatever may be the issue here, or the more au- 
 thoritative verdict elsewhere, 1 am ready for it, and shall 
 cheerfully abide by it. 
 
 Before I sit down, however, I have a word to say, in 
 all candor, to my friend from New- York, the honorable 
 chairman just referred to, for whom I entertain, and am 
 sure I always shall entertain a very high respect, and 
 none other than the kindest feelings. My worthy friend 
 commenced his brilliant speech in reply to me, in a strain 
 somewhat unusual, if not discourteous; not certainly 
 
211 
 
 either in as good taste, or in as good temper as we are ac- 
 customed to expect, and have a right always to expect 
 from him. But first let me make a confession of sins on 
 my part. Some few days ago, on the same subject, I treat- 
 ed the gentleman harshly. I was sorry for it, and I told 
 him so, as soon as it was over. I had felt deeply, and 
 I expressed myself strongly — too strongly perhaps. I 
 had listened to sentiments, which, coming as they did 
 from him, occupying a position at the head of the com- 
 mittee on banks, I thought were too likely to be mista- 
 ken for the sentiments of this house, if they should go 
 forth without remark. I thought them not only mista- 
 ken, but very mischievous, and I meant, for myself, to 
 disclaim them in very decided terms. In doing this, I 
 was wrong, if I allowed myself to be betrayed into using 
 the language of rebuke or reproach. I had no right to 
 do so. 
 
 Now, I could wish that this passage had been entirely 
 forgotten, and that my friend had approached his reply 
 to my speech with different feelings from those which 
 seemed to possess him at the moment. I could wish 
 he had thought he could afford to let me enjoy the inno- 
 cent vanity of believing that I had not made an utter 
 failure in my attempt ; that I had not been wholly un- 
 successful ; and, if he could have gone a little out of his 
 way, and bestowed a word of commendation on my 
 effort, in a very cautious manner, it would have been 
 gratefully received. But I was not so fortunate. On 
 the contrary, I was told of several things very disa- 
 greeable for a gentleman to hear of himself; as that I 
 had wasted the time of the house for two or three days, 
 without once having touched the merits of the subject 
 
212 
 
 in hand ; that I had stood up before the house to claim 
 the merit of superior wisdom — and the like. Now, sup- 
 posing all tins to be true, it was very hard to be obliged 
 to sit here, in such a presence, and be told of it. And 
 then to be compared to the mad astronomer in Rasselas, 
 who fancied that he had the responsible charge of the 
 weather on his hands — that was the unkindest cut! 
 And the worst of it is, I am afraid there is some parallel 
 between my case and that of the philosopher. He, I 
 think, had succeeded, as he supposed, in acquiring much 
 power over the weather and the seasons. The sun lis- 
 tened to him, and passed from tropic to tropic by his di- 
 rection ; the clouds poured their waters, and the Nile 
 overflowed, at his command ; he could restrain the rage 
 of the dog-star, and mitigate the fervors of the crab ; but, 
 unhappily, he could not control the winds — the winds 
 would not obey him. Well, sir, am I not much in the 
 same predicament? I think I could have stood up 
 against what there w r as of reason or argument in my 
 friend's speech ; if there had been nothing else in it, I 
 should even have hoped to save my poor amendment. 
 But who or what could stand the wind, the storm, the 
 tempest of passion and declamation, with which I was 
 assailed? Yes, sir, if I could have controlled and re- 
 strained the wind, I should deem myself safer and more 
 fortunate than I now do. 
 
 But let that pass. My honorable and talented friend 
 favored us, in the course of his speech, with a burst of 
 passionate and splendid eloquence, on the wonder-work- 
 ing power of credit, and the credit system. It was a 
 theme worthy of him, and he did himself excellent jus- 
 tice in the management of it. Only it is a pity he 
 
213 
 
 should so utterly mistake what credit is. On such a 
 theme, and inspired by his example, I could almost hope 
 to be eloquent myself. Contemplating the certain glo- 
 ries of our beloved state and country, under a proper use 
 of loanable capital, and an extension of the true credit 
 system ; the elements of prosperity all set in motion ; 
 human hands and human heads all busy; the winds 
 laboring for us; water laboring for us; machinery at 
 work ; and steam at work, on the earth, and in the 
 earth, and on the waters — with these things in contem- 
 plation I might almost venture myself to attempt to rise 
 to a lofty and fervid strain of observation and remark. 
 But, sir, I shall make no such attempt. It is not my 
 vocation, and I yield the palm herein, to my friend from 
 New-York. I trust it is not necessary for either of us 
 to make any such display, for the sake of proving how 
 ardently we love our country. Yet are such things 
 sometimes done ; and when one person attempts it, 
 others are apt to attempt it also. Does my friend re- 
 member the manner in which Hamlet accosted Laertes, 
 when he found him making a somewhat extravagant 
 exhibition of his love for the poor Ophelia, leaping in 
 her grave, and calling on the standers-by to 
 
 "pile their dust upon the quick and dead, 
 
 "'Till of that flat a mountain they had made, 
 " To o'ertop old Pelion ?" 
 
 Said Hamlet: 
 
 " Jlov'd Ophelia; forty thousand brothers 
 " Could not, with all their quantity of love, 
 
 ''• Make up my sum" 
 
 "Dost thou come here to whine? 
 
 "To outface me with leaping in her grave? 
 
 "Be buried quick with her. and so will I; 
 
214 
 
 " And, if thou prate of mountains, let them throw 
 '•' Millions of acres on us, 'till our ground, 
 " Singeing his pate against the burning zone, 
 "Make Ossa like a wart! Nay, and thou'lt mouth, 
 " I'll rani as well as thou." 
 
 Now, I shall not say, that my worthy friend, in the 
 passionate and eloquent display made by him of his 
 zeal for the prosperity of the state : attempted to play 
 Laertes in his speech ; but I will say, if he had done so, I 
 should not follow him by enacting Hamlet. I could have 
 no controversy of that sort with him — no, nor of any 
 sort, except it be in a generous contest which shall 
 serve the great interests of the people most faithfully, 
 wisely, and successfully, in our humble place here — 
 which shall most effectually contribute, by his labois 
 and his counsel, to advance their true and lasting hap- 
 piness, prosperity and glory. 
 
APPENDIX. 
 
 [The following is the General Banking Law, as it finally passed 
 both Houses of the Legislature.] 
 
 AN ACT 
 
 TO AUTHORIZE THE BUSINESS OF BANKING. 
 
 Passed April 18, 1838. 
 
 The People of the State of New- York, represented 
 in Senate and Assembly, do enact as follows : 
 
 § 1. The comptroller is hereby authorized and re- 
 quired to cause to be engraved and printed in the best 
 manner to guard against counterfeiting, such quantity 
 of circulating notes, in the similitude of bank notes in 
 blank, of the different denominations authorized to be 
 issued by the incorporated banks of this state, as he may 
 from time to time deem necessary to carry into effect 
 the provisions of this act, and of such form as he may 
 prescribe. Such blank circulating notes shall be coun- 
 tersigned, numbered and registered in proper books to 
 be provided and kept for that purpose in the office of 
 said comptroller, under his direction, by such person or 
 persons as the said comptroller shall appoint for that 
 
216 APPENDIX. 
 
 purpose, so that each denomination of such circulating 
 notes shall all be of the same similitude and bear the 
 uniform signature of such register, or one of such regis- 
 ters, 
 
 § 2. Whenever any person, or association of persons 
 formed for the purpose of banking, under the provisions 
 of this act, shall legally transfer to the comptroller any 
 portion of the public debt now created or hereafter to 
 be created by the United States or by this state, or such 
 other states of the United States as shall be approved 
 by the comptroller, such person or association of per- 
 sons shall be entitled to receive from the comptroller 
 an equal amount of such circulating notes, of different 
 denominations, registered and countersigned as afore- 
 said ; but such public debt shall in all cases be, or be 
 made to be, equal to a stock of the state producing five 
 per cent per annum ; and it shall not be lawful for the 
 comptroller to take any stock at a rate above its par 
 value. 
 
 § 3. Such person or association of persons are hereby 
 authorized, after having executed and signed such cir- 
 culating notes in the manner required by law to make 
 them obligatory and promissory notes payable on demand, 
 at the place of business within this state, of such person 
 or association, to loan and circulate the same as money, 
 according to the ordinary course of banking business as 
 regulated by the laws and usages of this state. 
 
 § 4. In case the maker or makers of any such circu- 
 lating note, countersigned and registered as aforesaid, 
 shall at any time hereafter on lawful demand during 
 the usual hours of business, between the hours of ten 
 and three o'clock, at the place where such note is paya- 
 
APPENDIX, 217 
 
 ble, fail or refuse to redeem such note in the lawful mo- 
 ney of the United States, the holder of such note making 
 such demand may cause the same to be protested for non- 
 payment by a notary public, under his seal of office in 
 the usual manner ; and the comptroller, on receiving 
 and filing in his office such protest, shall forthwith give 
 notice in writing to the maker or makers of such note 
 to pay the same ; and if he or they shall omit to do so 
 for ten days after such notice, the comptroller shall im- 
 mediately thereupon, (unless he shall be satisfied that 
 there is a good and legal defence against the payment 
 of such note or notes,) give notice in the state paper that 
 all the circulating notes issued by such person or asso- 
 ciation will be redeemed out of the trust funds in his 
 hands for that purpose ; and it shall be lawful for the 
 comptroller to apply the said trust funds belonging to 
 the maker or makers of such protested notes, to the pay- 
 ment and redemption of such notes, with costs of protest, 
 and to adopt such measures for the payment of all such 
 circulating notes put in circulation by the maker or ma- 
 kers of such protested notes, pursuant to the provisions 
 of this act, as will, in his opinion, most effectually pre- 
 vent loss to the holders thereof. 
 
 § 5. The comptroller may give to any person, or as- 
 sociation of persons, so transferring stock in pursuance 
 of the provisions of this act, powers of attorney to receive 
 interest or dividends thereon, which such person or asso- 
 ciation may receive and apply to their own use; but 
 such powers may be revoked upon such person or asso- 
 ciation failing to redeem the circulating notes so issued, 
 or whenever, in the opinion of the comptroller, the prin- 
 cipal of such stock shall become an insufficient security ; 
 
 19 
 
218 APPENDIX. 
 
 and the said comptroller, upon the application of the 
 owner or owners of such transferred stock in trust, may, 
 in his discretion, change or transfer the same for other 
 stocks of the kinds before specified in this act, or may 
 re-transfer the said stocks, or any part thereof, or the 
 the mortgages, or any of them, hereinafter mentioned 
 and provided for, upon receiving and cancelling an 
 equal amount of such circulating notes delivered by him 
 to such person or association, in such manner that the 
 circulating notes shall always be secured in full, either 
 by stocks, or by stocks and mortgages, as in this act pro- 
 vided. 
 
 $6. The bills or notes so to be countersigned, and 
 the payment of which shall be so secured by the trans- 
 fer of public stocks, shall be stamped on their face, " Se- 
 cured by the pledge of public stocks." 
 
 § 7. Instead of transferring public stocks as aforesaid 
 to secure the whole amount of such bills or notes, it 
 shall be lawful for such person or association of persons, 
 in case they shall so elect before receiving any of the 
 said bills or notes, to secure the payment of one half of 
 the whole amount so to be issued, by transferring to the 
 comptroller bonds and mortgages upon real estate, bear- 
 ing at least six per cent interest of this state, payable 
 annually or semi-annually ; in which case all such bills 
 or notes issued by the said person or association of per- 
 sons, shall be stamped on their face, " Secured by pledge 
 of public stocks and real estate." 
 
 g 8. Such mortgages shall be only upon improved, 
 productive, unincumbered lands within this state, worth 
 independently of any buildings thereon, at least double 
 the amount for which they shall be so mortgaged ; and 
 
APPENDIX, 
 
 219 
 
 the comptroller shall prescribe such regulations for as- 
 certaining the title and the value of such lands as he 
 may deem necessary ; and such mortgages shall be pay- 
 able within such time as the comptroller may direct. 
 
 § 9. The comptroller may, in his discretion, reassign 
 the said bonds and mortgages, or any of them, to the 
 person or association who transferred the same, on re- 
 ceiving other approved bonds and mortgages of equal 
 amount; and when any sum of the principal of the 
 bonds and mortgages transferred to the comptroller shall 
 be paid to him, he shall notify the person or association 
 that transferred the bonds and mortgages of such pay- 
 ment, and may pay the same to such person or associa- 
 tion on receiving other approved bonds and mortgages 
 of equal amount. 
 
 § 10. The person or association of persons assigning 
 such bonds and mortgages to the comptroller, may re- 
 ceive the annual interest to accrue thereon, unless de- 
 fault shall be made in paying the bills or notes to be 
 countersigned as aforesaid, or unless in the opinion of 
 the comptroller the bonds and mortgages or stocks so 
 pledged shall become an insufficient security for the pay- 
 ment of such bills or notes. 
 
 §11. In case such person or association of persons 
 shall fail or refuse to pay such bills or notes on demand, 
 in the manner specified in the fourth section of this act, 
 the comptroller, after the ten days' notice therein men- 
 tioned, may proceed to sell at public auction the public 
 stocks so pledged or the bonds and mortgages so assign- 
 ed, or any or either of them, and out of the proceeds of 
 such sale shall pay and cancel the said bills or notes, 
 default in paying which shall have been made as afore- 
 
220 APPENDIX. 
 
 said ; but nothing in this act contained shall be con- 
 sidered as implying any pledge on the part of the state 
 for the payment of said bills or notes beyond the proper 
 application of the securities pledged to the comptroller 
 for their redemption. 
 
 §12. The public debt and bonds and mortgages to 
 be deposited with the comptroller by any such person or 
 association, shall be held by him exclusively for the re- 
 demption of the bills or notes of such person or associa- 
 tion put in circulation as money, until the same are paid. 
 
 § 13. The plates, dies and materials to be procured 
 by the comptroller, for the printing and making of the 
 circulating notes provided for hereby, shall remain in his 
 custody and under his direction ; and the expenses ne- 
 cessarily incurred in executing the provisions of this act, 
 shall be audited and settled by the comptroller, and paid 
 out of any moneys in the treasury not otherwise appro- 
 priated ; and for the purpose of reimbursing the same, 
 the said comptroller is hereby authorized and required 
 to charge against and receive from such person or asso- 
 ciation applying for such circulating notes, such rate per 
 cent thereon as may be sufficient for that purpose, and 
 as may be just and reasonable. 
 
 § 14. It shall not be lawful for the comptroller, or 
 other officer, to countersign bills or notes for any person 
 or association of persons, to an amount in the aggregate 
 exceeding the public debt, or public debt and bonds and 
 mortgages at their value, as provided in the second sec- 
 tion of this act, deposited with the comptroller by such 
 person or association ; and any comptroller or other offi- 
 cer who shall violate the provisions of this section shall, 
 upon conviction, be adjudged guilty of a misdemeanor, 
 
PPENDJX. 
 
 221 
 
 and shall be punished by a fine not less than five thou- 
 sand dollars, or be imprisoned not less than five years, 
 or by both such fine and imprisonment 
 
 § 15. Any number of persons may associate to esta- 
 blish offices of discount, deposite and circulation, upon 
 the terms and conditions, and subject to the liabilities 
 prescribed in this act ; but the aggregate amount of the 
 capital stock of any such association shall not be less 
 than one hundred thousand dollars. 
 
 § 16. Such persons, under their hands and seals, shall 
 make a certificate which shall specify : 
 
 1. The name assumed to distinguish such association, 
 and to be used in its dealings : 
 
 2. The place where the operations of discount and 
 deposite of such association are to be carried on, desig- 
 nating the particular city, town or village : 
 
 3. The amount of the capital stock of such associa- 
 tion, and the number of shares into which the same 
 shall be divided : 
 
 4. The names and places of residence of the share- 
 holders, and the number of shares held by each of them 
 respectively : 
 
 5. The period at which such association shall com- 
 mence and terminate ; which certificate shall be proved 
 or acknowledged and recorded in the office of the clerk 
 of the county where any office of such association shall 
 be established, and a copy thereof filed in the office of 
 the secretary of state. 
 
 $ 17. The certificate iequired by the last preceding 
 section to be recorded and filed in the offices of the clerk 
 of the county and secretary of state as aforesaid, or co- 
 pies thereof, duly certified by either of those officers, may 
 
 19* 
 
222 APPENDIX. 
 
 be used as evidence in all courts and places for and 
 against any such association. 
 
 §18. Such association shall have power to carry on 
 the business of banking, by discounting bills, notes and 
 other evidences of debt; by receiving deposites ; by buying 
 and selling gold and silver bullion, foreign coins and bills 
 of exchange, in the manner specified in their articles of 
 association for the purposes authorized by this act ; by 
 loaning money on real and personal security ; and by 
 exercising such incidental powers as shall be necessary 
 to carry on such business ; to choose one of their num- 
 ber as president of such association, and to appoint a 
 cashier, and such other officers and agents as their busi- 
 ness may require, and to remove such president, cashier, 
 officers and agents at pleasure, and appoint others in 
 their place. 
 
 § 19. The shares of said association shall be deemed 
 personal property, and shall be transferable on the books 
 of the association in such manner as may be agreed 
 on in the articles of association ; and every person be- 
 coming a shareholder by such transfer, shall, in propor- 
 tion to his shares, succeed to all the rights and liabili- 
 ties of prior shareholders : and no change shall be made 
 in the articles of association by which the rights, reme- 
 dies or security of its existing creditors shall be weaken- 
 ed or impaired. Such association shall not be dissolved 
 by the death or insanity of any of the shareholders 
 therein. 
 
 (J 20. It shall be lawful for any association of persons 
 organized under this act, by their articles of association, 
 to provide for an increase of their capital and of the 
 
APPENDIX. 223 
 
 number of the associates, from time to time as they may 
 think proper. 
 
 $ 21. Contracts made by any such association, and 
 all notes and bills by them issued and put in circulation 
 as money, shall be signed by the president or vice-presi- 
 dent and cashier thereof; and all suits, actions and pro- 
 ceedings brought or prosecuted by or on behalf of such 
 association, may be brought or prosecuted in the name 
 of the president thereof; and no such suit, action or pro- 
 ceeding shall abate by reason of the death, resignation 
 or removal from office of such president, but may be 
 continued and prosecuted according to such rules as the 
 courts of law and equity may direct, in the name of his 
 successor in office, who shall exercise the powers, enjoy 
 the rights, and discharge the duties of his predecessor. 
 
 § 22. All persons having demands against any such 
 association, may maintain actions against the president 
 thereof; which suits or actions shall not abate by rea- 
 son of the death, resignation or removal from office of 
 such president, but may be continued and prosecuted to 
 judgment against his successor : and all judgments and 
 decrees obtained or rendered against such president for 
 any debt or liability of such association shall be enforced 
 only against the joint property of the association, and 
 which property shall be liable to be taken and sold by 
 execution under any such judgment or decree. 
 
 § 23. No shareholder of any such association shall be 
 liable in his individual capacity for any contract, debt or 
 engagement of such association, unless the articles of as- 
 sociation by him signed shall have declared that the 
 shareholder shall be so liable. 
 
 $ 24. It shall be lawful for such association to pur- 
 
224 
 
 APPENDIX. 
 
 chase, hold and convey real estate for the following pur- 
 poses : 
 
 i. Such as shall be necessary for its immediate ac- 
 commodation in the convenient transaction of its busi- 
 ness ; or, 
 
 2. Such as shall be mortgaged to it in good faith, by 
 way of security for loans made by, or moneys due to ? 
 such association ; or, 
 
 3. Such as shall be conveyed to it in satisfaction of 
 debts previously contracted in the course of its dealings ; 
 or, 
 
 4. Such as it shall purchase at sales under judgments, 
 decrees or mortgages held by such association. 
 
 The said association shall not purchase, hold or con- 
 vey real estate in any other case or for any other pur- 
 pose ; and all conveyances of such real estate shall be 
 made to the president, or such other officer as shall be 
 indicated for that purpose in the articles of association ; 
 and which president or officer, and his successors, from 
 time to time may sell, assign and convey the same, free 
 from any claim thereon, against any of the shareholders, 
 or any person claiming under them. 
 
 g 25. Upon the application of creditors or shareholders 
 of any such association, whose debts or shares shall 
 amount to one thousand dollars, and stating facts, veri- 
 fied by affidavit, the chancellor may, in his discretion, 
 order a strict examination to be made by one of the mas- 
 ters of his court, of all the affairs of such association, for 
 the purpose of ascertaining the safety of its investments, 
 and the prudence of its management ; and the result of 
 every such examination, together with the opinion of 
 the master and of the chancellor thereon, shall be pub- 
 
APPENDIX. 
 
 225 
 
 fished in such manner as the chancellor shall direct, 
 who shall make such order in respect to the expenses of 
 such examination and publication as he may deem pro- 
 per. 
 
 § 26. Such association shall, on the first Mondays 
 of January and July in every year after having com- 
 menced the business of banking as prescribed by this 
 act, make out and transmit to the comptroller, in the 
 form to be provided by him, a full statement of the af- 
 fairs of the association, verified by the oaths of the presi- 
 dent or cashier, which statement shall contain, 
 
 1 . The amount of the capital stock paid in according 
 to the provisions of this act, or secured to be paid : 
 
 2. The value of the real estate of the association ; 
 specifying what portion is occupied by the association as 
 necessary to the transaction of its business : 
 
 3. The shares of stock held by such association, 
 whether absolutely or as collateral security ; specifying 
 each kind and description of stock, and the number and 
 value of the shares of each : 
 
 4. The amount of debts due to the association ; spe- 
 cifying such as are due from moneyed or other corpora- 
 tions or associations; and also specifying the amount 
 secured by bond and mortgage or judgment ; and the 
 amount which ought to be included in the computation 
 of losses : 
 
 5. The amount of debts due by such association ; spe- 
 cifying such as are payable on demand, and such as are 
 due to moneyed or other corporations or associations : 
 
 6. The amount of claims against the association not 
 acknowledged by it as debts : 
 
226 APPENDIX. 
 
 7. The amount of notes, bills or other evidences of 
 debt issued by such association : 
 
 8,. The amount of the losses of the association ; spe- 
 cifying whether charged on its capital or profits, since its 
 last preceding statement, and of its dividends declared 
 and made during the same period : 
 
 9. The average amount in each month during the 
 preceding six months of the debts due to and from the 
 association ; the average amount of specie possessed by 
 the same during each month, and the amount of bills 
 and notes issued by such association and put in circula- 
 tion as money, and outstanding against the association, 
 on the first day of each of the preceding six months: 
 
 10. The average amount in each month during the 
 preceding six months due to the association, from all the 
 shareholders in the association, also the greatest amount 
 due to the association in each of the said preceding six 
 months, from all the shareholders in such association : 
 
 11. The amount which the capital of the said asso- 
 ciation has been increased during the preceding six 
 months, if there shall have been any increase of the 
 said capital ; and the names of any persons who may 
 have become parties to the said articles of association, or 
 may have withdrawn therefrom since their last report. 
 
 It shall be the duty of the comptroller to cause the 
 statement required to be made by this section, to be pub- 
 lished in a newspaper printed in the county where the 
 place of business of such association is situated, and in 
 the state paper ; the expense of which shall be paid by 
 such association. 
 
 § 27. If such association shall neglect to make out 
 and transmit the statement required in the last preceding 
 
APPENDIX. 227 
 
 section, for one month beyond the period when the same 
 is required to be made, or shall violate any of the provi- 
 sions of this act, such association may be proceeded 
 against and dissolved by the court of chancery, in the 
 same manner as any moneyed corporation may be pro- 
 ceeded against and dissolved. 
 
 § 28. If any portion of the original capital of any such 
 association shall be withdrawn for any purpose whatever 
 whilst any debts of the association remain unsatisfied, 
 no dividends or profits on the shares of the capital stock 
 of the association shall thereafter be made, until the deficit 
 of capital shall have been made good, either by subscrip- 
 tion of the shareholders, or out of the subsequently ac- 
 cruing profits of the association ; and if it shall appear 
 that any such dividends have been made, it shall be the 
 duty of the chancellor to make the necessary orders and 
 decrees for closing the affairs of the association, and dis- 
 tributing its property and effects among its creditors and 
 shareholders. 
 
 § 29. Such associations shall be liable to pay the 
 holder of every bill or note put in circulation as money, 
 the payment of which shall have been demanded and 
 refused, damages for non-payment thereof, in lieu of in- 
 terest, at and after the rate of fourteen per cent per an- 
 num, from the time of such refusal until the payment of 
 such evidence of debt, and the damages thereon. 
 
 $ 30. The president and cashier of every association 
 formed pursuant to the provisions of this act, shall at all 
 times keep a true and correct list of the names of all the 
 shareholders of such association, and shall file a copy of 
 such list in the office of the clerk of the county where 
 any office of such association may be located, and also 
 
228 
 
 APPENDIX, 
 
 in the office of the comptroller on the first Mondays of 
 January and July in every year. 
 
 § 31. It shall not be lawful for any association formed 
 under the provisions of this act, to make any of its bills 
 or notes of a denomination less than one thousand dol 
 lars, to be put in circulation as money, payable at any 
 other place than at the office where the business of the 
 association is carried on and conducted. 
 
 § 32. The legislature may at any time alter or repeal 
 this act. 
 
 $ 33. No association of persons authorized to carry 
 on the business of banking under this act, shall at any 
 time, for the space of twenty days, have on hand at 
 their place of business, less than twelve and a half per 
 cent in specie, on the amount of the bills or notes in cir- 
 culation as money. 
 
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