SPEECH 
 
 MR. RIVES, OF VIRGINIA 
 
 ■ 
 
 CURRENCY OF THE UNITED STATES, 
 
 AND THE 
 
 COLLECTION OF THE PUBLIC REVENUE. , 
 
 Delivered in the Senate U. S. January 10, 1837. 
 
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 WASHINGTON : 
 
 fe&INfRD AT THR GLOBE OPPICJB. 
 
 1837. 
 

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 SPEECH. 
 
 The following resolution was submitted by Mr. RIVES, as a substitute for the resolution 
 
 of Mr. Ewing, of Ohio, proposing to rescind the Treasury order of July 11, 1836 : 
 
 • 
 
 Resolved , That hereafter all sums of money accruing or becoming payable to the United 
 States, whether from customs, public lands, taxes, debts, or otherwise, shall be collected and 
 paid only in the legal currency of the United States, or in the notes of banks which are paya¬ 
 ble and paid on demand in the said legal currency, under the following restrictions and condi¬ 
 tions in regard to such notes: that is, from and after the passage of this resolution, the notes 
 of no bank which shall issue bills or notes of a less denomination than five dollars, shall be 
 received in payment of the public dues; from and after the first day of July, 1839, the notes 
 of no bank which shall issue bills or notes of a less denomination than ten dollars, shall be 
 receivable; and from and after the first of July, 1841, the like prohibition shall be extended to 
 the notes of all banks issuing bills or notes of a less denomination than twenty dollars: Pro¬ 
 vided, however, That no notes shall be taken, in payment by the collectors or receivers, which 
 the banks in which they are to be deposited shall not, under the supervision and control of the 
 Secretary of the Treasury, agree to pass'lo the credit of the United States as cash. 
 
 The question being on the adoption of his substitute— 
 
 Mr. RIVES said, that in asking the indulgence of the Senate, it was not 
 his design to abuse their patience by rearguing the questions which had 
 already been so fully and so ably discussed, in relation to the legality or 
 the policy of the Treasury Circular. It was his wish only to state, some¬ 
 what more at large than he had yet had an opportunity of doing, the views 
 under the influence of which he had offered the proposition which is now 
 pending before the Senate as an amendment to the resolution of the Sena¬ 
 tor from Ohio, (Mr. Ewing.) In reference to the most important objects of 
 the Treasury Circular, he regarded that measure as having done its office; 
 and the interests of the country are now much more concerned in the pro¬ 
 vision we shall make for the future, than in any decision we may pronounce 
 upomthe past. When I had the honor, some days ago, said Mr. R., of ad¬ 
 dressing a-few remarks to the Senate on this subject, I said what I take 
 great pleasure now in repeating, that - in whatever different lights the opera¬ 
 tion of the Treasury Circular may have been viewed, of one thing I was 
 thoroughly persuaded—that the motives which had induced the liigh func¬ 
 tionary at the head of the Government to direct the issuing-of it, were in 
 perfect consonance with that elevated and patriotic spirit which had so con¬ 
 spicuously marked the whole course of his public life; and that no defect 
 of legality, in my .estimation, had been shown in the authority under winch 
 it was issued. I added, also, that the measure was 'properly to be viewed 
 as a temporary one, tq.continue in operation until the action of Congress 
 on tile whole subject could be obtained ; and that the President himself as 
 shown by the evidence of his message at the commencement of the session, 
 attached no importance to its adoption as a permanent, ride of policy. 
 
 One of the leading objects of the Treasury Circular, at the time it was 
 issued, was to check that tendency to extravagant bank issues and bank 
 credits, which has so signally marked the history of the last twelve or 
 eighteen months. But, so far as that object is concerned, the same effect 
 will now be produced in a manner not less certain, though by a process 
 more gradual, and therefore easier and safer to the community, by the 
 operation of the depositc act. No one can doubt, Mr. President, that one 
 of the chief causes of the recent over-action of the banking system in this 
 
4 
 
 country”, is to be found in the immense sums of public moneys left in the 
 deposite banks, and which have been used and traded upon by them, as an 
 addition of so much to their banking capitals. This is a state of things 
 which has been eminently pernicious in all its bearings. The correction 
 of so great an evil formed in my mind one of the strongest considerations 
 for giving the cordial support I did to the deposite act of the last session ; 
 a measure which, however much misconceived or misrepresented in regard 
 to its true character, has, in my opinion, conferred upon the country a 
 double benefaction of the highest value: first, in putting out of the way of 
 the Government the temptation, whose powerful influence we were already 
 beginning to feel, to useless, extravagant, and anti-republican expenditure; 
 and, secondly, in taking from the deposite banks that gratuitous and arti¬ 
 ficial increment of their capitals, which has been a main cause of the 
 unnatural distension of our paper currency, and of that inordinate spirit of 
 speculation, which has prevailed through the country. In gradually with* 
 drawing, as we are now doing by the act of the last session, these large 
 amounts of the public treasure from the possession of the deposite banks, 
 and in avoiding,.as, I trust, by a wise and provident legislation, we shall 
 do, the accumulation of any idle surplus in future, the Government will take 
 away the stimulus which itself has given to the excessive issues and credits 
 of the banks; and we may then hope that, under, the salutary control of 
 the laws of trade, they will return within those safe, proper, and natural 
 limits, which the business of the community requires. 
 
 While on this branch of the subject, Mr. President, I will make one 
 other observation. However necessary or desirable the contraction of our 
 paper circulation may be, (if it be, indeed, in the large excess which is sup¬ 
 posed by many,) it must be borne in mind that there is no operation more- 
 delicate than the reduction of the currency of a country. A decreasing 
 circulating medium, it is agreed alike by theoretical writers and by en¬ 
 lightened practical men, is precisely that condition in the moneyed affairs 
 of a community which is the most critical and distressing. It is a transi¬ 
 tion from high to low prices, from a certain and liberal reward of labor to 
 diminished wages and precarious employment, from active and prospering 
 industry to general langour and depression in all the operations of business. 
 It is a change to which society always adjusts itself slowly and painfully; 
 and, under the most favorable circumstances, must be attended with dis¬ 
 tress—often with extensive ruin. Great caution, therefore, is necessary, 
 lest it bel unduly precipitated in its progress, or harshly aggravated in its 
 effects. We have, in the history of our own country, at a period not too 
 remote for the recollection of most of us, a memorable example of the 
 distressing effects of a rapid reduction of the circulating medium. It is 
 strikingly exhibited in all its details in the able report of Mr. Crawford, 
 then Secretary of the Treasury, on the currency, in 1820. It is there 
 shown that the circulation of the country, in the three years from 1816 to 
 1819, had been brought down from 110 millions in the former, to 45 mil¬ 
 lions in the latter; making the enormous reduction of 65 millions within 
 that short period! The scene of wide-spread ruin and distress, which 
 ensued, is fresh in the memories of all who witnessed it. It inculcates, at 
 least, the necessity of caution in the action of the Government, on this sub¬ 
 ject. It is our duty to withdraw from the banking operations of the coun¬ 
 try that artificial stimulant which the Government itself has administered; 
 but that being done, a just policy, in general, requires that the concerns of 
 
5 
 
 trade should be left to regulate themselves by their own natural and reme¬ 
 dial laws. 
 
 Regarding, then, the Treasury Circular as having mainly done its office, 
 we are now called upon to establish some permanent and equal rule for the 
 collection of the public revenues. It is a duty which we cannot evade, if 
 we would. In the joint power which the constitution invests in Congress, 
 to “lay and collect 5 ’ taxes, our duty is read to us in terms too significant to 
 be mistaken. It is as much a part of the legislative authority to say in 
 what manner and by what rule the collection of the public revenue shall 
 be effected, as to say to what amount and from what sources it shall be 
 raised. Important as such a regulation is at all times, it derives, at the 
 present moment, a particular interest, from its close connexion with the 
 subject of the currency. It is in that connexion, that all who have partici¬ 
 pated in this debate have discussed the question before the Senate; and it is, 
 doubtless, in that connexion that the public attention is turned with most 
 anxiety to our decision upon it. I feel, Mr. President, all the magnitude 
 and all the difficulty of this great question of the currency. There is 
 none that rises higher in importance, or descends more deeply into the inter¬ 
 ests of society. It “ comes home to the business and the bosoms of men.” 
 It affects alike the humblest laborer and the wealthiest capitalist; on it 
 depend the security of property, the stability of contracts, the comfort and 
 support of families, and, I will add, in a great degree, the public morals; 
 for nothing, in my opinion, is more calculated to unsettle the moral sense 
 and habits of a community than the dispositions and pursuits fostered by the 
 lottery of a fluctuating currency. In approaching such a subject, I feel all 
 the diffidence which a just sense of its difficulty and importance properly 
 inspires. But having submitted to the Senate a proposition which, if adopt¬ 
 ed; would, I flatter myself, exert no small influence on this great interest ; 
 and as the friends of the administration (myself among the number) have 
 been accused of entertaining visionary, impracticable, and pernicious 
 notions, in regard to a reform of the currency, t must beg the indulgence 
 of the Senate while I state, with as much precision as 1 may, the views 
 of that reform, which I entertain, and which have determined the shape 
 of. the proposition now under their consideration. 
 
 In discussing the question of a reform of the currency, it is necessary 
 to settle our ideas clearly as to two things : first, the nature and extent of 
 the end to be aimed at; secondly, the means by which it is to be attained. 
 If I am asked, what is the'end I propose—whether I am in favor of a spe¬ 
 cie circulation exclusively, and the .total suppression of bank paper, I an¬ 
 swer, no. Even if such an object were desirable, it is plainly impracticable. 
 In the present state of commercial progress and refinement throughout the 
 world, it would, probably, be impracticable any where ; but in this coun¬ 
 try, and under our system of' government especially, it is obviously 
 . wholly unattainable. Whether right or wrong, we find twenty-six inde¬ 
 pendent State Legislatures possessed of the power to create banking corpo¬ 
 rations. Whatever speculative doubts may exist in the minds of some as 
 to the constitutional validity of this power, the States now actually possess 
 and exercise it, as they have invariably done from the foundation of the 
 Government, and there is not the slightest probability that they will ever 
 be divested of it. In every sober and practical scheme of policy, we must 
 proceed upon the assumption that this independent State power will rema n. 
 How, then, can the banking system be suppressed by this Government/ 
 
6 
 
 Such a notion, if entertained any where, would indeed be Utopian and 
 visionary. 
 
 My object, then, would be, not the destruction of the banking system 
 and the total suppression of bank paper, but an efficient regulation of it, 
 and its restriction to safe and proper limits ; not the exclusive use of specie 
 as a circulating medium, but such a substantial enlargement and general 
 diffusion of it, in actual circulation, as would make it the practical currency 
 of common life, the universal medium of ordinary transactions—in short, 
 the money of the farmer, the mechanic, the laborer, and the tradesman ; 
 while the merchant should be left in the enjoyment of the facilities of a 
 sound and restricted paper currency for his larger operations. Such a re¬ 
 formation in the currency as this, would, in my opinion, be productive of 
 the most beneficial results. It would give security to the industrious classes 
 of society for the products of their labor, against the casualties incident to 
 the paper system. The laborer, in returning to the bosom of his family 
 from his weekly toil, would no logger find his slumbers broken by the ap¬ 
 prehension that the hard earnings of the week, perhaps the accumulation 
 of long years of honest industry, might be dissipated, in a moment, by the 
 explosion of a bank, or the bursting of some paper bubble. It would give 
 security, to a great extent, to the whole body of the community, against 
 those disastrous fluctuations in the value of property and contracts, which 
 arise from the ebbs and flows of an unrestricted paper currency. It would 
 give security to the banks themselves, by providing them, in the daily in¬ 
 ternal circulation of the country, an abundant and accessible fund for re¬ 
 cruiting their resources, whenever they should be exposed to an extraor¬ 
 dinary pressure. 
 
 This, sir, is the happy state of things we might promise ourselves from 
 replacing (as it is the aim of the proposition which I have had the honor to 
 submit, to do) all bank bills under the denominationof twenty dollars with a 
 solid circulation of gold and silver. Is there any thing wild, any thing 
 visionary, any thing pernicious, in such a system of currency as this ? It 
 has the sanction, Mr. President, of the profoundest writers on questions of 
 political economy, and has received the practical assent of the wisest na¬ 
 tions. I am well aware that it would ill become me to present for the con¬ 
 sideration of the Senate any scheme which was not thus tested and ap¬ 
 proved. Of all the writers who have treated and examined questions of 
 this character, none possess so high an authority as the author of the 
 “Wealth of Nations.” It has been well and justly Said, that Adam Smith 
 had done for the science of political economy what Bacon and Newton had 
 done for physical science, and Sydney and Locke for the science of gov¬ 
 ernment, and the fundamental principles of civil and political liberty. His 
 work, appearing contemporaneously with the American revolution, was 
 deeply imbued with the free spirit, and the large and vigorous thought,. 
 which so remarkably distinguished that great era. He came forth as the 
 zealous and powerful champion of free trade, the inflexible opponent of 
 monopoly and restriction in all their multiplied forms, the ardent advocate 
 of every thing that is liberal, generous, and popular, in the institutions of 
 society and the intercourse of nations. No work has ever exercised so 
 large an influence for good on the policy and destiny of nations, and none, 
 
 I am sure, considering the stamp of liberty as well as wisdom impressed 
 upon it, is better entitled to the respect of an assembly of American legis¬ 
 lators. Adam Smith, by a strange mistake, lias been held up. rather op. 
 
7 
 
 probriously, as the advocate of a paper system—as the founder, in fact, ot 
 the paper school ! Sir, there can be no greater mistake than this. While 
 he recognised the utility of a judicious system of banking, in liberating and 
 putting into productive employment capital which would otherwise remain 
 dead and inactive, and the facilities it is calculated to afford to commerce, 
 he yet insists that the general circulation of the country should be of gold 
 and silver. 
 
 As the general principles he has laid down on the subjects of banking 
 and currency continue still to be appealed to by the enlightened writers who 
 have followed him, as affording the soundest exposition of those subjects, 
 whatever modifications of subordinate points may have been made by sub¬ 
 sequent inquirers, I will give to the Senate, and principally in the words of 
 Adam Smith himself, an outline of his system of currency. After speaking 
 of the advantages to be expected from a judicious and properly conducted 
 system of banking, he says expressly, that “the commerce and industry of 
 a country are not so secure when suspended, as it were, on the Daedalian 
 wings of paper money, as when they travel about on the solid ground of 
 gold and silver .” He says, therefore, it is the policy of wise Governments 
 “ to guard, not only against that excessive multiplication of paper money 
 which ruins the very banks which issue it, but even against that multipli¬ 
 cation of it which enables them to fill the greater part of the circulation 
 of the country with it." He then proceeds to show that “the circulation 
 of every country may be considered as divided into two different branches : 
 the circulation of the dealers with one another, and the circulation be¬ 
 tween the dealers and consumers.’’ His next position is, “ that paper money 
 may be so regulated as either to confine itself very much to the circulation 
 between the different dealers, or to extend itself likewise to a great part ot 
 that between fhe dealers and consumers.” This regulation is effected by 
 fixing the denomination of the notes permitted to be issued. “ It were 
 better,” he adds, “ that no bank notes were issued in any part of the king¬ 
 dom for a smaller sum than five pounds.' Paper money would then con¬ 
 fine itself to the circulation between the different dealersand where this 
 is the case, he says, “ there is always plenty of gold and silver." “ But 
 where it extends itself to a considerable part of the circulation between 
 dealers and consumers, it banishes gold and silver almost entirely from the 
 country.” The system of Adam Smith, then, resolves itself into this: that 
 the circulation between dealer and dealer may be of paper, but that the 
 circulation between dealer and consumer should be of the precious metals ; 
 that this result ought to be secured by prohibiting the issue of bank notes 
 for a less sum than five pounds, and that if such a restriction be adopted, 
 there “ will always be plenty of gold and silver” in circulation, performing 
 all the offices of exchange in the “ordinary transactions’’ of society, while 
 the use of paper would be confined to commercial operations of a larger 
 , scale. Instead of being the advocate, far less the founder, of an unre¬ 
 stricted paper system, he urges the necessity of confining it to commercial 
 accommodation in the larger transactions between dealer and dealer. He 
 is in favor of the suppression of all bank notes under five pounds; whereby 
 gold and silver will fill the ordinary channels of circulation, and become, 
 in fact, the common practical currency of the country. 
 
 But this system does not rest on the authority of Adam Smith alone. 
 Not to mention the illustrious names or the policy of other enlightened 
 nations in support of it. it has received the successive sanction of a long line 
 
8 
 
 of the ablest practical statesmen in England. It is a remarkable fact, that 
 the great work of Adam Smith having appeared in 1776, the Parliament of 
 Great Britain, in the very next year, passed a law prohibiting all bankers 
 from issuing notes under the denomination of five pounds. This continued 
 to be the legislative policy of that country till the memorable year of 1797, 
 when, in consequence of the exigencies and embarrassments of that tremend¬ 
 ous conflict, growing out of the French revolution, which desolated and 
 convulsed Europe for more than twenty years, the Bank of England, with 
 the sanction of the Government, suspended specie payments, and, at the 
 same time, resorted to an issue of one-pound and two-pound notes. As 
 soon, however, as the war was at an end, and the country was in a situation 
 to admit of the resumption of specie payments by the bank, the enlightened 
 statesmen of England recurred to the prohibition of all notes under the 
 denomination of five pounds. This return to a sound policy, however, 
 was not accomplished, nor has it been maintained, without encountering a 
 strenuous and persevering opposition. 
 
 There is something so instructive in the history of this reform of the 
 currency in England, that it deserves to be traced somewhat more in detail. 
 In 1819, a law was passed- directing a complete resumption of specie pay¬ 
 ments by the bank in three years, to wit, in 1822; and at the same time, it 
 was enacted that in two.years after, to wit. in 1824, all small notes under 
 the denomination of five pounds should be prohibited. The first provision 
 was carried fully into effect at the designated period; but, such was the 
 influence of the country bankers, and other associated interests, that, before 
 the appointed time for the suppression of the small notes arrived, the latter 
 prevision was repealed, and the final suppression of the small notes was ad¬ 
 journed to 1833, the year of the expiration of the charter of the Bank of 
 England. But the great commercial convulsion of 1825, which swept 
 banks, merchants, farmers, every thing before it, with the destructive fury 
 of a tornado, soon after occurred, and forcibly admonished British states¬ 
 men of the necessity of seeking a remedy—in part, at least—in a more solid 
 constitution of their currency. -Accordingly, in the beginning of 1826, Lord 
 Liverpool and Mr. Robinson, the one the. First Lord of the Treasury, the 
 other the Chancellor of the Exchequer, introduced and carried a bill provid¬ 
 ing for the prohibition, after April, 1829, of all small notes under the denomi¬ 
 nation of five pounds. This law was stoutly and zealously opposed at the time 
 of its enactment, and repeated attempts were subsequently made to procure its 
 repeal, before the period fixed for its operation. But these efforts were 
 happily unavailing; and the doctrine of Adam Smith, in regard to the pro¬ 
 hibition of all notes under the denomination of five pounds, re-established 
 in 1829, after experiencing the bitter fruits of a temporary departure from 
 it, may now be considered as the final and settled policy of the British 
 Government. It has received the sanction and support of her ablest states¬ 
 men—of Liverpool, of Peel, of Canning, of Huskisson, of Brougham, of 
 Wellington; all of whom,, upon the fullest experience and consideration, 
 have, from time to time, borne their testimony to the value and importance 
 of this essential restriction upon a paper circulation. 
 
 And what has been the result in practice ? Why, to give to the people of 
 England virtually a metallic currency; for gold and silver form there the 
 daily habitual medium of all ordinary transactions. A bank note, except 
 on special occasions, is a sort of phenomenon. On this point we have pre¬ 
 cise information. It appears, from statistical returns referred to by the 
 
9 
 
 Chancellor of the Exchequer in the House of Commons, a few years ago r 
 that the amount of gold then in circulation was £22,000,000, (twenty-two 
 millions of pounds sterling,) and of silver £8,000,000, (eight millions of 
 pounds sterling.) I do not speak of gold and silver locked up in the vaults 
 of banks; but of that which passes daily from hand to hand, in the ordinary 
 transactions of business. Mr. Gallatin, in his instructive pamphlet on the 
 currency, published in 1830, states the metallic circulation of England at 
 precisely the same amount. Allowing nothing for any augmentation since, 
 the people of England have, then, an actual circulating medium of gold 
 and silver to the amount of about one hundred and fifty millions of dollars. 
 The Secretary of the Treasury, (who, doubtless, has access to the most 
 authentic sources of information on the subject,) in his annual report at the 
 commencement of the session, states the whole paper circulation of Eng¬ 
 land, at this time, at one hundred and fifty-two millions of dollars. We 
 may, therefore, conclude that what Mr. Gallatin says, in the pamphlet just 
 referred to, is substantially correct—that, “by the suppression of all notes 
 of a less denomination than £5*sterling, the amount of the circulating me¬ 
 tallic currency in England has become equal to that of bank notes of every 
 description.” One-half of the entire circulation consists of gold and silver, 
 constantly passing from hand to hand, and performing all the offices of ex¬ 
 change in the ordinary business of life, and thus forming*, in fact, the prac¬ 
 tical currency of the country. It is-this large infusion of the precious 
 metals which has preserved the currency of England, in the main, in a 
 healthy condition, under a system of banking which her Prime Minister 
 himself (Lord Liverpool,) in 1826 pronounced to be, in other respects, “the 
 most insecure, the most rotten, the very worst, which it is possible to con¬ 
 ceive.” Much has been said recently, i know, Mr. President, of great com¬ 
 mercial embarrassments in England, which are attributed by many to a 
 deranged state of her currency. These embarrassments, in my opinion, are 
 viewed in much too serious a light; but, if they were not, it must be borne 
 in mind that all commercial countries, however solid the constitution of 
 their currency, will occasionally be visited by revulsions in trade. If, too, 
 they are to be considered as indicating a derangement in the currency of 
 England, the source of that derangement is to be found in those defects of 
 her system of banking which were referred to by Lord Liverpool as making 
 it so insecure and precarious, and not, surely, in that.salutary check, the 
 prohibition of small notes. On the contrary, the abundance of gold and 
 silver which that restriction secures in the common circulation of the coun¬ 
 try is the great preservative of the system, and the anchor which enables it 
 to ride in safety amid fluctuations and tempests that might otherwise over¬ 
 whelm or subvert it. 
 
 It is this abundant supply of the precious metals, filling and saturating 
 • the ordinary channels of circulation, which I desire to see brought about 
 in our own country. That is the end to be aimed at. What are the 
 4 means by which it is to be accomplished ? Wc have seen that in England 
 it has been accomplished by the prohibition of all bank notes of a less de¬ 
 nomination than £5. Similar means will, doubtless, accomplish the same 
 end here; and, 1 must add. nothing else will. It is in vain to expect to 
 bring gold and silver coins into circulation, without a previous suppression 
 of all notes of corresponding denominations. The reason is obvious. If 
 there exist in any country two distinct currencies, both of them answering 
 equally well the purposes of domestic circulation, but one of them possess- 
 
10 
 
 ing only a local value, confined to the country of its emission, while the other 
 has a universal and equal value throughout the world, the latter will ne¬ 
 cessarily go abroad into the commerce of the world, in quest of the riches 
 and productions of foreign nations, leaving the former at home to perform 
 an office which it does equally as well, though it would be wholly without 
 use or value abroad. The total incompatibility, therefore, of a paper and 
 metallic currency of the same denominations has grown into an axiom. 
 Edmund Burke, (whose sagacity in questions of this sort is well known,) at 
 the memorable period of the bill brought forward by Mr. Pitt for the sus¬ 
 pension of specie payments by the Bank of England, in 1797, in a letter, 
 written during his last illness, to Mr. Canning, which the latter gentleman 
 brought most touchingly to the notice of the House of Commons, in a de¬ 
 bate of great interest and instruction on this whole subject, at a much more 
 recent period, (1826,) used these memorable words : “ Tell Mr. Pitt that, if 
 tie consents to the issue of one-pound notes, he will never see a guinea 
 again.” The prophecy, sir, became history. No one saw a guinea in cir¬ 
 culation in England while the bank continued the issue of one-pound notes. 
 
 In 1828, when a great struggle again took place in the British Parlia¬ 
 ment, on the final consummation of the effort to restore a metallic cur¬ 
 rency, there was not a single distinguished man who did not bear his testi¬ 
 mony to the truth of Mr. Burke’s axiom. 'The Chancellor of the Exche¬ 
 quer said, on that occasion, “ there was a natural antipathy between the 
 one-pound note and the sovereign. They would not exist together, for the 
 note soon drove the sovereign out of circulation.” The Duke of Welling¬ 
 ton, who was eminently a practical man, and spoke from the teachings of 
 experience, said, “the experience of the last few years had proved the truth 
 •of the theory, that one pound notes and gold sovereigns would not circu¬ 
 late at the same time. If you are to have gold in circulation, you cannot 
 have one-pound notes.” Mr. Huskisson, whose familiarity with questions 
 of this sort was the result of profound studies, as well as matured experi¬ 
 ence, said, still more pointedly, “ when the paper is let in, the gold will dis¬ 
 appear. They might vote the money ; they might coin it; but how could 
 they retain it in the country?” This remark applies most forcibly to our 
 present situation. We have voted the metallic money ; we have corned it: 
 but it will not circulate. Since we corrected, bylaw, the undervaluation of 
 the gold coins, (but little more than two years ago,) the quantity of gold in 
 the country, according to the late annual report of the Secretary of the 
 'Treasury, has increased fifteen millions. We have coined at our own mint, 
 within that time, according to the same authority, ten millions of gold. But 
 where is it ? In the vaults of the banks, or hoarded by individuals i and 
 we shall never see it in circulation, until we have opened the way for it by 
 a previous suppression of the small notes. If we mean to do any thing prac¬ 
 tical and effectual for introducing a more general circulation of specie, we 
 must begin at the right end, by first putting down the small note circula¬ 
 tion. ' '■ 
 
 This is the true policy of the Government, and is that practical refoim 
 of the currency which has been steadily held in view by the present ad¬ 
 ministration and its friends. The honorable Senator from Massachusetts 
 (Mr. Webster) discovered great solicitude to know what is to be the system 
 of policy of the new administration upon this subject. 1 have no means of 
 knowing, Mr. President, which that gentleman does not equally possess. 
 It is generally supposed, however, that the coming administration will, in 
 
II 
 
 the main, conform its policy to the exemplar of the present. The inquiry 
 of the honorable gentleman, then, may be satisfied, by showing him what 
 has been the policy of the present administration ; and that cannot be better 
 stated than in the words of our venerable and patriotic Chief Magistrate 
 himself. I beg the indulgence of the Senate while I read a very unequivo¬ 
 cal and explicit passage on this subject in the President’s message of the 
 last year. In that document, he says: 
 
 “ It has been seen that, without the agency of a great moneyed monopoly, the revenue can 
 be collected, and conveniently and safely applied to all the purposes of the public expenditure. 
 It is also ascertained that, instead of being necessarily made to promote the evils of an un¬ 
 checked paper system, the management of the revenue can be made auxiliary to the reform 
 which the Legislatures of several of the States have already commenced in regard to the sup¬ 
 pression of small bills, and which has only to be fostered by proper regulations on the part of Con¬ 
 gress to secure a practical return , to the extent required for the security of the currency fo the con¬ 
 stitutional medium. Severed from the Government as political engines. and not susceptible of 
 dangerous extension and combination, the Slate banks will not be tempted, nor will they have 
 the power which we have seen exercised, to divert the public funds from the legitimate pur¬ 
 poses of the Government. The collection and custody of the revenue being, on the contrary, 
 a source of credit to them, will increase the security which the States provide for a faithful 
 execution of their trusts, by multiplying the scrutinies to which their operations and accounts 
 will be subjected. Thus disposed, as well from interest as the obligations of their charters, it 
 cannot be doubted that such conditions as Congress may see fit to adopt respecting the deposites 
 in these institutions, with a view to the gradual disuse of the small bills , will be cheerfully com¬ 
 plied with; and that we shall soon gain, in place of the Bank of the United States, a practical 
 reform hi the wliola paper system of the country. If, by this policy, we can ultimately witness 
 the suppression of all bank bills below twenty dollars , it is apparent that gold and silver will take 
 their placej and become the principal circulating medium in the common business of the far¬ 
 mers and mechanics of the country. The attainment of such a result will form an era in the 
 history of our country, which will be dwelt upon with delight by every true friend of its liberty 
 and independence. It will lighten the great tax which our paper system has so long collected 
 from the earnings of labor, and do more to revive and perpetuate those habits of economy and 
 simplicity which are so congenial to the character of republicans, than all the legislation which 
 has yet been attempted.’’ 
 
 Here we have a complete delineation of the policy of the administration 
 on this great question of the currency. Neither the President, nor the 
 body of his friends, have proposed a total suppression of bank paper, or an 
 exclusive metallic currency ; but, to use his own words, they have desired 
 to see “a practical reform in the banking system, by the ultimate suppres¬ 
 sion of all bank bills below tiventy dollars ; so that gold and silver might 
 take their place, and become the principal circulating medium in the com¬ 
 mon business of the farmers and mechanics of the country.” This, he ex¬ 
 pressly declares, would be “ a practical return, to the extent required for the 
 security of the currency , to the constitutional medium and the attain¬ 
 ment of which, he adds, “will form an era in the history of our country, 
 which will be dwelt upon with delight by every true friend of its liberty and 
 independence.” There is nothing in the Treasury Circular inconsistent 
 with this interpretation of the policy of the administration. That mea¬ 
 sure, as I have already said, was an occasional and temporary act, resorted 
 to'undera peculiar emergency, till the power of Congress could be inter¬ 
 posed to apply a more systematic remedy, and cannot be considered as a 
 departure from a settled and general line of policy. On the contrary, the 
 President, in his message at the commencement of the present session, ex¬ 
 pressly recurs to the suppression of the lower denominations of bank notes, 
 by the concurrent legislation of the General and State Governments, as 
 forming “the true policy of the country,” by which only “a larger portion 
 of the precious metals can be infused into our circulating medium.” No 
 other plan can be effectual for the accomplishment of such a result; and, 
 
12 
 
 until it shall be adopted, all that may be said, however glowing and fasci¬ 
 nating, of the advantages of a metallic circulation, will prove but barren 
 theory, and delusive and unprofitable generality. You may bring gold and 
 silver into the country, and pile them mountains high in your banks; but, 
 without the suppression of the small notes, they will never circulate in the 
 business of society, and will always be exposed to be drawn off by the ab¬ 
 sorbing currents of foreign trade. The object of a rational policy is, to 
 bring them into daily and active use, invigorating and sustaining the pur¬ 
 suits of industry, and not to have them, like the ancient household relics 
 described by the poet, “ wisely kept for show. 5 ’ 
 
 The question, then, is, by what means in our power this great object of 
 the suppression of the small notes may be promoted or accomplished. It 
 is through the collection and management of the public revenue only, 
 that the agency of this Government can, at present, be usefully interposed. 
 By refusing to receive, in payment of the public dues, the notes of all 
 banks which shall issue bills of the lower denominations, as is proposed by 
 the resolution I have had the honor to submit, a strong inducement of in¬ 
 terest will be held out to the leading State banks to discontinue their smaller 
 issues. The consideration of the credit and more general currency 
 given to their paper, by a receivability in payment of the revenue, would, 
 doubtless, induce more or less of them to conform to the standard which 
 shall be established in this respect by the legislation of Congress. But my 
 reliance is not so much upon the operation of this measure per se , as upon 
 the moral influence it is calculated to exert upon the policy of the States. 
 They have the complete power to prohibit, by law, the emission and cir¬ 
 culation of the smaller notes ; and I cannot doubt, if this Government shall 
 hold up to them a standard deemed indispensable to the purification and 
 reform of the currency, that that power will, in process of time, be exerted 
 so as to second and render effectual the policy of our legislation here. 
 Have we not every encouragement, in what has. already taken place, to 
 hope for such a result ? It is only a few years ago that blit three of the 
 States, according to Mr. Gallatin, (Pennsylvania, Maryland, and Virginia,) 
 had prohibited the issue of notes under five dollars. But, since that time, it 
 has been the policy of the General Government, in the collection and man¬ 
 agement of the public revenues, to discountenance bank notes under that 
 denomination. And what has been the result? We have seen the States, 
 one by one, successively conforming to the example, till now a majority of 
 them have prohibited all bank notes under the denomination of five dollars. 
 The confidence I feel in the enlightened patriotism of the State Govern¬ 
 ments, £nd in the popular intelligence and virtue which control them, 
 gives me every assurance that an appeal to their co-operation in so great 
 and noble a work will not be in vain, especially when they shall have 
 before them a sober and practical exhibition of the probable results of the 
 policy in which their concurrence is invited. 
 
 Let us then inquire what is likely to be the extent of the effect which 
 will be produced on the currency by the successive prohibition of all notes \ 
 under five, ten, and twenty dollars, respectively. Mr. Gallatin, whose skill 
 in questions of this sort is universally admitted, in his able pamphlet on 
 the currency, written in 1830, estimated the reduction in the amount of 
 the paper circulation which would arise, at that time from the suppression 
 of all notes under five dollars, at six millions; and that likely to be pro¬ 
 duced by a suppression of the notes under ten dollars, at about seven mil- 
 
13 
 
 lions; making an aggregate of thirteen millions of dollars, and eqtial to one- 
 tifth of the whole paper circulation of the country. Another highly re¬ 
 spectable authority on American banking, (Gouge,) estimates, in 1831, the 
 amount of notes under five dollars then in circulation at seven millions ; 
 and of notes under ten dollars, at ten millions ; making an aggregate of 
 seventeen millions. But let us take Mr. Gallatin’s estimate, and suppose 
 that the suppression of the notes under five and ten dollars would, together, 
 operate a reduction of one-fifth in the whole amount of bank paper in cir¬ 
 culation. Let us then suppose, (which, I presume, would not be extrava¬ 
 gant,) that the suppression of all notes under twenty dollars, and above ten, 
 would produce, in amount, a diminution of one-fifth more of the paper cir¬ 
 culation. By the ultimate suppression of all notes under twenty dollars, 
 we should then gain an aggregate reduction of two-fifths in the whole paper 
 circulation of the country. According to the recent report of the Secretary 
 of the Treasury, the whole paper circulation of the country amounts at 
 this time to 120 millions, two-fifths of which would be 48 millions of dol¬ 
 lars. But, in order to be within sure limits, we will suppose that the 
 amount of bank paper which would be withdrawn from circulation by the 
 suppression of all notes under twenty dollars, would be only 40 millions. 
 That, of course, would be replaced by an equal amount of gold and silver. 
 How, then, would stand the account in the final result ? Forty millions, 
 taken from the 120 millions of paper circulation, would leave 80 millions 
 of paper; and added to the 28 millions of gold and silver already in circu¬ 
 lation, according to the estimate of the Secretary of the Treasury, would 
 give ns 68 millions; or, (for the sake of round numbers, and to compensate 
 liberal deductions made above,) 70 millions of gold and silver in active 
 circulation —not dammed up and stagnating in the coffers of the banks, but 
 spread over the land, irrigating, refreshing, and fertilizing the whole 
 country. 
 
 Such, Mr. President, would be the solid and practical result of the ulti¬ 
 mate suppression of all bank bills under the denomination of twenty dol¬ 
 lars. It would give to the country nearly one half of its whole circulation 
 in the precious metals, forming a solid and unfailing fund for the payment 
 of labor, for the buying and selling of the necessaries of life, for the great 
 mass of daily transactions, including the wants and interests of the farmer, 
 the mechanic, and the tradesman ; while the other half would consist of an 
 improved paper currency for the use and accommodation of the merchant, 
 and for the larger operations of trade and business. I would ask gentle¬ 
 men if such a result is not “ a consummation devoutly to be wished?” 
 Would it not, in the glowing and patriotic language of the President, form 
 11 an era in the history of the country which would be dwelt upon with delight 
 by every true friend of its liberty and independence?” And can we sup¬ 
 pose that the enlightened Legislatures of the States, in the view of such a 
 result, pregnant with consequences so important to the safety, the prosperi¬ 
 ty, and the morals of the whole community, and especially to the interests 
 of those numerous and industrious classes which form the basis and sup¬ 
 port of our republican system, could be so deaf to the united call of patri¬ 
 otism and wisdom, as not to lend their co-operation in so great and salutary 
 a reform? For myself, Mr. President, I feel a cheering confidence that 
 they will give a helping and efficient hand to this great work. The Legis¬ 
 lature of my own State is now engaged in revising her banking system, 
 and I console myself in the belief that she will be among the foremost to 
 
14 
 
 vindicate the wisdom and patriotism of the State councils from distrust, by 
 heartily seconding, in her legislation on the subject, our efforts here to estab¬ 
 lish a sound currency for the country. 
 
 But, sir, till by the suppression ©f the small notes the circulation of the 
 country has become better filled with the precious metals, I do not think 
 it would consist with a just, wise, and paternal policy on the part of the 
 Government to exact payment of its dues in specie exclusively. It could 
 not be done, without great hardship to the public debtor, and extensive dis¬ 
 tress and embarrassment to the whole community. To demonstrate this, 
 nothing more is necessary than to compare the amount of specie in circu¬ 
 lation with the amount of the revenue; for it is conceded now, that if pay¬ 
 ment of one branch of the revenue be required by any permanent regula¬ 
 tion to be made in specie, all ought to be paid in specie. According to the 
 estimate of the Secretary of the Treasury, (which appears to me a very 
 liberal one,) the whole amount of specie in circulation does not exceed 
 twenty-eight millions of dollars. The revenue during the last year amount¬ 
 ed to forty-seven millions : and perhaps, with all our efforts to reduce it, it 
 may still not fall short of thirty millions. There would then be thirty 
 millions of dollars to be paid to the Government, out of a circulation of 
 twenty-eight millions ! To confront the two sums is to show the temerity, 
 if not the impossibility, of the attempt. If the public debtors should be 
 thrown upon the banks for large amounts of specie, not to be had from the 
 circulation of the country, no one can be at a loss to perceive to what a 
 disastrous extent the business relations and pecuniary concerns of the whole 
 community would be embarrassed and deranged. And how much of specie, 
 permit me to ask, would remain for that immense mass of payments in pri¬ 
 vate transactions, which., according to a practical estimate made by Mr. 
 Gallatin, in reference to the revenue collected, and the business done, in the 
 city of New York, exceeds more than fifty times the payments to the Gov¬ 
 ernment? Nothing, therefore, can be clearer than that an attempt, with our 
 present limited metallic circulation, to collect the public revenue in specie 
 alone, would.be distressing to the last clcgjqe.and could not abide the test of 
 that public judgment, without whose approbation no system of policy can 
 or ought to stand. . " .. . 
 
 The honorable Senator from Missouri, (Mr. Benton,) in the able speecli 
 made by him in the opening of this discussion—a speecli which does him 
 great credit, not only for the extent and variety of the research-displayed 
 by him, but for the force and ability with which he illustrated his own 
 views, (in some of which it is my misfortune to differ from him)-—brought 
 to the notice of the Senate, from the evidence taken before thc Committee of 
 Secrecy of the House of Commons on the Bank of England charter in 1S32, 
 the case of a banker at Manchester, who paid out, in the course of the year, 
 about six millions of dollars in specie to the operatives of that pi ace. ^ But 
 this was done in a country which, as I have already shown, possesses an* ac¬ 
 tual circulating metallic currency of one hundred and fifty millions of dollars, 
 whereas our metallic circulation is but twenty-eight millions ! The exam¬ 
 ination of Mr. Samuel Jones Lloyd (the banker referred to) on this point, is 
 so instructive in itself, and so strikingly illustrative of Ihe arguments. I have 
 advanced, that I beg leave to read the whole of that portion of it to the 
 Senate, in the form of question and answer in which it is reported :• 
 
 i 
 
 i 
 
 “ Question. You are aware that a great amount of specie is required every week for the 
 jfiaymerit of wages at Manchester? 
 
15 
 
 Answer. A very large amount. 
 
 Question. Can you give the committee any idea of the amount ] 
 
 Answer. No, I cannot; but so far as regards the issue of our own house, I should say that- 
 upon the average we pay about *25,000 sovereigns a week. 
 
 Question. Is that a fresh supply of sovereigns in each week, or do you obtain it from the 
 circulation of the place? 
 
 Answer. We require a continual fresh supply, but not to that extent. 1 think the fresh 
 supply requisite will average something less than 10,000 a week. 
 
 Question. Before the abolition of the £1 notes, were those payments generally made in £1 
 notes ] 
 
 Answer. Entirely. 
 
 Question. Was the amount then about the same 'l 
 
 Answer. Quite as large. 
 
 Question. You say that about 25,000 a week is what you are called upon altogether to pay, 
 and that about 15,000 come back into your hands ? What do you apprehend becomes of the re¬ 
 maining 10,000 sovereigns! 
 
 Answer. When the £1 notes were in circulation, we could trace it pretty accurately, and J 
 believe the course to be the same with the sovereigns; they are paid principally in wages. 
 The work people lay them out in clothing and provisions, and those sovereigns pass to the pro¬ 
 vision dealers; and thence into the districts from which the provisions are supplied; the sover¬ 
 eigns then pass into the hands of the country bankers in tho>e districts, v:ho either send up to 
 London , or return them to Manchester , as may be most convenient to them. 
 
 Question. It does not follow, then, because you are obliged to have 10,050 sovereigns from 
 the branch bank, (that is, branch of the Bank of England) that the amount of the circulation 
 in Manchester is continually increasing at the rate of 10,000 a week ] 
 
 Answer. No, I do not apprehend it is increasing at all.” 
 
 Now, sir, let us see how these large payments in specie, in Manchester, are 
 made. Mr. Lloyd says expressly, that, of the 25,000 sovereigns a week paid 
 out by him, 15,000 of them are obtained from the circulation of the j)lace r 
 as, through that channel, they regularly come back into, his hands ; that 
 lie requires a fresh supply of about 10,000 sovereigns a week, from the 
 bank; but these ten thousand sovereigns are also constantly returning 
 to the bank from the circulation of the country. They are first paid by the 
 work people 1 to the provision dealers; then, by the provision dealers to the 
 farmers, of whom they procure their supplies; from the farmers they pass 
 into the hands of the country'bankers, who either return them to the 
 branch bank at Manchester, or, what is the same thing in effect, send them 
 up to the parent bank at London. Thus, the whole amount of these specie 
 payments is supplied by the actual circulating medium of the country—a 
 thing easy and convenient enough, and perfectly natural, where the amount 
 of gold and silver in daily and active circulation is 150,000,000 of dollars. 
 To make large payments in specie, under such circumstances, is attended 
 with no difficulty, because specie is the common and habitual currency of 
 the country. The metallic circulation of England is a perpetual fountain, 
 fed by the streams which flow from, and are constantly returning into, it. 
 But to make payments in specie, to the Government alone , of thirty or 
 twenty millions of dollars,’or .the half or the fourth of those sums, in a 
 country whose circulation consists of 120,0(10,000 of paper, and of but 
 & ,000,000 of-gold and silver, is a far different operation. 
 
 Another most important lesson is to be derived from the evidence of Mr. 
 Lloyd. How were these payments for wages made in Manchester previous 
 to the^prohibition of the small notes? I ri-stovefeigns / In gold or silver ? 
 Let us turn to the examination of Mr. Lloyd. 
 
 ‘ Question. Before the abolition of the £1 notes*, were those payment*** generally made in £1 
 notes I 
 
 Answer. Entirely 
 
 Question. Was the amonu then aho t ihe sam 1 ] 
 
 Answer. Quite as large,” 
 
16 
 
 Previous to the suppression of the small notes, then, the whole amount 
 of payments now made in gold, were made exclusively in one-pound notes ; 
 and, but for that suppression, would still be made in one-pound notes. 
 While the one-pound notes were in circulation, these payments could not 
 be made in gold, because gold was not in circulation. Gold was, doubt¬ 
 less, in the country, accumulated in the vaults of banks; but not being in 
 circulation, there was no common and accessible fund from which it could be 
 readily and conveniently obtained for the business of life. It never will be 
 in circulation until bank notes of the smaller denominations have been first 
 suppressed. It is in vain for the Government to attempt to bring it into 
 circulation by demanding it in payment of the public dues. By doing so. 
 the public debtor may be subjected to hardship, the banks may be exposed 
 to runs upon them for specie, and the business of the community may be 
 crippled and deranged. But gold and silver will never circulate while 
 bank notes of the same denomination are permitted to occupy the channels 
 of circulation. u You may call spirits from the vasty deep, but will they 
 come V 
 
 The requisition of specie in payments to the Government will notonly not 
 avail to bring gold and silver into circulation, but, if insisted on, while gold and 
 silver yet form, comparatively, but a small part of the actual currency of the 
 country, it will inevitably have the effect of diminishing their circulation. 
 While bank paper forms the great mass of the currency of the country, if 
 the Government refuse to receive it in payment of the public dues, and 
 demand specie exclusively, the necessary consequence will be to enhance, 
 to a greater or less extent, the value of gold and silver in relation to paper. 
 That being the case, gold and silver will no longer circulate freely. Those 
 who have specie will be unwilling to part with it, except at a premium; 
 and those who have notes will be anxious to convert them into specie. 
 Hoarding of the precious metals will then commence, and but little of them 
 be seen in circulation. No one, I presume, Mr. President, attaches much 
 importance to the collection of the public revenue in specie, as an ultimate 
 object, if it can be made equally safe by other means. It is only as an 
 instrument of purifying and correcting the currency, that it deserves the 
 consideration of a practical statesman. The great object is not to amass 
 specie in the public treasury, or in the vaults of banks, but to diffuse its 
 healthful currents through the business of society, and to bring it into 
 active circulation among the people. This can only be effected by the 
 previous suppression of the small notes; and any attempt by the Govern¬ 
 ment, before that is done , to collect its revenues in specie, instead of pro¬ 
 moting and extending the circulation of gold and silver, tends directly to 
 narrow and diminish their circulation. 
 
 The indiscriminate refusal of bank paper in payment of the public dues 
 might, in the present condition of the country, be attended with other seri¬ 
 ous hazards. We have heard a great deal recently, Mr. President, of the 
 pecuniary panic and distress prevailing in England and Ireland, and of the 
 extensive commercial embarrassments felt there. These embarrassments, 
 (in Ireland, especially,) seem to have arisen mainly from this very circum¬ 
 stance of a refusal to receive the paper of solvent banks in collections of the 
 public revenue. It appears that some of the collectors of the customs had 
 arbitrarily refused the bills of the Provincial Bank of Ireland. Thereupon, a 
 run upon the bank immediately commenced, which, nevertheless, weathered 
 the storm. The panic spread in regard to other institutions, which, though 
 .solvent, were compelled to stop payment; and a general scene of confusion* 
 
17 
 
 alarm, and embarrassment ensued. But I will give the details in an extract 
 from an English paper, which has been republished extensively in all of our 
 principal journals. Here it is: 
 
 “ The pressure was yet severe, not only throughout England, but in Ireland. In the latter 
 country, there had been a panic, attended by several severe commercial disasters. This panic 
 was commenced by the collectors of the customs at Newry, and some other places, refusing the 
 bills of the Provincial Bank of Ireland. A run upon the bank was the inevitable and immedi- 
 | ate consequence. The solvency of the bank, however , had never been questioned, and was finally 
 attested by the result. The panic spread in respect to other institutions, and the Dublin Agri¬ 
 cultural Bank stopped payment on the 15th. Strong efforts were made by its friends to sustain 
 it. One gentleman, Mr. Gresham, sent iri 23,000/. The liabilities of the bank are s:ate 1 at 
 210,000/; its assets at 680,000/. 
 
 “This bank was established in 1834, by 2,170 partners. It now has5,000partners, and twenty - 
 six branches scattered all over the country, all of which stop of course. Hut, notwithstanding the 
 solvency of the institution , its suspension will operate fearful injury .” 
 
 All this pecuniary suffering and distress, widely ramified as it afterwards 
 became, originated in the refusal, by officers of the Government, to receive 
 the notes of a solvent bank in payment of the public revenue. If. Mr. 
 President, we shall, by a sweeping law, refuse to receive the paper of all 
 banks, however sound, in discharge of the public dues, will there not be 
 danger of similar consequences? Might it not operate, to a certain extent, 
 as a discredit of all bank paper, exposing the institutions which issue it to 
 severe runs, and the community at large to consequential pressure and 
 embarrassment? At all events, there would be heavy demands upon the 
 banks for the specie requisite in payments to the Government, which the 
 limited metallic circulation of the country would be wholly inadequate to 
 supply. Would it be just or wise in the Government, in the present con¬ 
 dition of the currency, with a Shylock severity to demand its pound of 
 flesh? Would not such a course tend to produce, instead of averting, the 
 catastrophe which appears to he dreaded by some ? 
 
 I should he as little disposed, Mr. President, aS any member of this body, 
 to hazard the safety of the public revenue by any undue laxity in regard to 
 its collection. The proposition I have had the honor to submit provides 
 studiously for the security of the revenue. It not only does not allow the 
 notes of any hanks to he received, but such as are promptly redeemed in 
 specie—subject, too, to important restrictions in regard to their denomina¬ 
 tions—but it expressly declares that no notes whatever shall be received 
 which the banks in which they are to be deposited shall not agree to pass 
 at once to the credit of the United States as cash. This guaranty of the 
 deposite banks converts the whole,of the public collections, virtually, into 
 specie; and when it is recollected that the Secretary of the Treasury is im- 
 powered, whenever he thinks it necessary, to obtain from them a special 
 and supplementary security for the public deposites, the solidity of the 
 guaranty may be reposed upon with confidence. 
 
 It is objected to this provision, by some gentlemen, that it puts it in the 
 i power of the deposite hanks to say what notes shall, and what shall not, be 
 received by the Government in payment of its revenues. The absolute 
 responsibility of the deposite hanks for the notes deposited with them oil 
 public account is deemed a fundamental principle in the fiscal codp of the 
 Government; without it, the practice of special deposites must be revived, 
 which formerly subjected the Government to'heavy losses, and is the origin 
 of the unavailable funds still borne on the books of the Treasury. But 
 if the deposite banks are to he absolutely responsible for the notes deposited 
 
18 
 
 with them, as so much cash , they ought certainly to have a reasonable dis¬ 
 cretion as to the notes they shall receive on deposite. This is no new 
 principle in the practice of the Government; it, has been a standing 
 instruction from the Treasury Department to the public receivers and 
 collectors, for more than twenty years, to receive no notes but such as 
 the deposite banks would credit to the United States as cash. To satisfy, 
 however, as far as possible, the jealousy which has been expressed on this 
 subject, and to guard against any arbitrary or wanton abuse of their discre¬ 
 tion by the deposite banks, I have, by a modification of my original resolu¬ 
 tion, placed them, in this regard, expressly under the supervision and 
 control of the Secretary of the Treasury. 
 
 While the proposition I have had the honor to submit provides, as I 
 believe, in the amplest manner, for the security of the public revenue, it 
 pays a due regard to the interests of the great body of the community. An 
 inflexible exaction of gold and silver in payments to the Government, in 
 the present condition of the circulating medium, it seemed to me, would 
 involve a necessary and serious derangement to the whole business and 
 commerce of the country. These interests I believe to be more or less 
 common to all. I am not one of those who see a natural enmity and inhe¬ 
 rent incompatibility between the interests of different classes of men ; I do 
 not belong to that school of philosophy which divides society horizontally,' 
 the upper portion pressing upon the lower with the weight of its incumbent 
 mass, while the latter is constantly striving to throw off the load by violent 
 arid vindictive struggles. This is the helium omnium in omnia which 
 forms no part either of my philosophy or my feelings. No, sir ; my theory 
 assigns a perpendicular stratification to society, placing all its component 
 parts side by side on the same platform of equality, with common rights, 
 common interests, and common duties, mutually giving and receiving support 
 by their juxtaposition. In this aspect, the interests of the merchant, the 
 farmer, the mechanic, the laborer, are the same ; what promotes the pros¬ 
 perity of one, redounds to the advantage of each. 
 
 In regard to the effect upon the currency, the proposition I have had the 
 honor to submit, if adopted, would prove in some degree instrumental, I 
 tiust, in promoting that great reform which has been so impressively 
 recommended by the patriotic Chief Magistrate of the nation, and which, 
 at the moment when he is about to close a long and glorious career of 
 public service, in a hallowed retirement, “ by all a nation’s wishes blest,” may 
 well form the object of his ardent vows for his country. That reform seeks, 
 by the substitution of gold and silver in place of the lower denominations 
 of bank paper, to make the precious metals the familiar currency of com¬ 
 mon life. But this object can be fully accomplished only by the ultimate 
 suppression of all notes under twenty dollars ; five-dollar notes and half 
 eagles will not circulate together'; the ten-dollar note must be put down, 
 before the eagle can take its place. ' • * 
 
 I am aware, Mr. President, that our position is not exempt from difficul¬ 
 ties and dangers. But I see in them nothing to create alarm, far less to ex¬ 
 cite despondency; but every thing to rouse the devotion and energy of the 
 patriot. With whatever embarrassments we may be beset, there is a redeem¬ 
 ing power in the virtue and intelligence of the American people, which 
 will conduct us in safety and triumph through them all. Some gentlemen, 
 I find, still fondly recur to their favorite prescription of a national bank as 
 the panacea for all our ills. I:i my humble judgment, sir, the remedy is 
 
19 
 
 far worse than the disease. The protection of a national bank would bo 
 “ such protection as vultures give to lambs.” No, sir; let us rather invoke 
 the protectiod of our guardian and victorious bird, the American eagle, the 
 emblem of our freedom and strength. An able and experienced member of 
 the House of Commons, speaking of the inherent tendencies of the banking 
 system, said, “ there is in it an inevitable tendency to over-issues of paper, 
 without a constant sentinel keeping watch upon it, and that sentinel ” (for 
 them) “ was the metallic sovereign in constant circulatipn.” The Ameri¬ 
 can metallic eagle, in active circulation, will perform the same tutelary of¬ 
 fice for us ; and with such other provisions as the practical and sagacious 
 spirit of American legislation shall devise, will finally, I firmly believe 
 place our currency on a footing which, for convenience and security united, 
 will rival any other under the sun. 
 
 Let the State Legislatures proceed firmly and vigorously in the suppres¬ 
 sion of the small notes. I believe they will. They have the highest mo¬ 
 tives which can address themselves to human action to accomplish this 
 great reform. Let them subject all banks, both old and new, to efficient re¬ 
 gulation ; let them regard with jealousy every proposition for an increase 
 of banks, and yield to none which is not founded on broad considerations of 
 public utility; let them impose strict, practical limitations both upon their 
 issues and their discounts ; let them provide for frequent periodical scru¬ 
 tinies into their condition; and, above .all, let them retain in their own 
 hands a constant power of correcting abuses, and of protecting, in every 
 emergency, the interests of the community. 
 
 It is this principle of legislative regulation and control over banking in¬ 
 stitutions, which constitutes the distinctive feature of American policy. It 
 is the result of the practical character of the American mind; and I am 
 happy to perceive that the people of older countries—of England especially— 
 are turning to us for lessons and examples in this branch of the public eco¬ 
 nomy. In that country, beyond the 65 miles from London, which define 
 the limits of the Bank of England monopoly, numerous broods of joint stock 
 ' companies and private bankers have sprung up, without regulation bylaw, 
 without limitation of number, without restriction as to their issues or dis¬ 
 counts, and without responsibility to the public authority. The consequence 
 has been, that this branch of their system has run into wild disorder and 
 confusion. They now see that the privilege of issuing money, of whatever 
 kind, is an essential branch of the public sovereignty^ and, like every other 
 delegated power of that sort, it must be subjected to regulation, to inspection, 
 to responsibility. Thlsis a lesson they have learned from ns; and it is gratifying 
 to see that, on another fundamental point, the most enlightened minds in that 
 country are coming to the same conclusion that we have attained. They be¬ 
 gin to see that the monopoly of the Bank of England, as that of the Bank of the 
 United States here, is a dangerous monopoly; that the dominion of such an 
 institution over the circulation is a power more of evil than good : and that it 
 must be brought down to the level of competition with other solid institutions. 
 The opinions of the two countries, on this great concern of the currency, are 
 mutually approximating, and settling down upon a common system. They 
 are learning from us tire necessary checks and controls of a paper currency; 
 we from them,.I trust, the value and importance of an enlarged metallic circu¬ 
 lation. I repeat, then, there is nothing in our present situation to excite 
 alarm or despondency, whatever occasion there may ! o for vigilance and 
 caution. Let us look onr dangers steadily in the face, but let us not be dismay- 
 
20 
 
 ed by them. Let us grapple with the difficulties which may oppose us, in a 
 spirit of strenuous and determined patriotism, and we shall triumph over 
 and subdue them, in conclusion, let me say to the political friends, with 
 whom I have had the honor to act in trying times, that, after having suc¬ 
 cessfully dissipated so many panics raised under other auspices, we shall 
 not, I trust, at last become the victims of a panic ot our own creation.