MR. NILES, OF CONNECTICUT, ON TBS $ < . • . * \ 1 /' S * ^ RESOLUTION OF M R. E W I N G •/ pan RESCINDING THE TREASURY ORDER. ,1 Delivered in the Senate, December, ^835. WASHINGTON: DLAITl AND RIVES, PRINTERS. 1857 . 1- . r - ; * 1 f ; 1 fc.. - ’ jf, V v v * . 4 • •• - f ^ •y* •', • • t , / jit ; ' ^ 5 . # / > 1 < ,. • * > 1 I $ * A ■ ' 4w v ♦ ‘ r/ N / SPEECH. In betiate, December 22, 1836—On the resolution of Mr. Ewing of Ohio, for rescinding 1 the Trea¬ sury order of the 11th July, 1836 Mr. President: 1 had intended to submit some remarks on the resolution before the Sena'e, and may as well do it at this time as any other. In the course of the debate, there has been several topics drawn into consideration, not necessarily embraced in the question to be decided, yet somewhat con- nected with tne general subject. Some of these I shall have occasion to allude to as ! proceed; but wi.l here notice one preliminary observation of the Senator from Massachusetts, (Mr. Webster.,) That S T ° k °. C f a ? on to sa y that the vote on this resolution would form a test question; that those who vote against the resolution will be under siooc, as being favorably to the ultra, and as he re garded them.’ extreme opinions of the Senator cy TndThe r n, ( M- ™ \ P r b ,C revenue » and observed that it might be fortunate the public is, to be thus early apprized of what is to be the policy of t he imnort y V and K- f thC Comin &administration,on tho*e important subjects. He had heard the remark " 0t thinkin K k «"«> «*■ or justified by the occasion. Without stonnin^ to .nqu.re what are the opinions of,he Senator frrm Missouri, or what they at e considered to be bv t^ W’ o™y n that n i 0 M r S K ChuSe 1 ' ,Sl he muslbe -rL a „ ‘■ne que.ition before the Senate which would 7,r,T’ c e ,,,0 "K h ‘ wc * h *y feasons wmcti would justify Senators in voting atrainst any sense'or^'n " “"V" 1 queslions’of currency 0 S’ ' egi,rd <0,b " creat Senator h ,d referred $1 T'V to which th< p ; ,b,ic ~: u h e e rr V /£ ter ? be;n? "»"*• iVhr^br n ' iSrt ^J sS “ n ^ -east,re ^ felt TltnceT'cn ex,raor ‘ ,in » r v circum- tTs LS h w,,h tl,r s >'« "f the public and he was not sure that this was not the true light in which it ought to be consider* ed. It was the duty of the Executive to watch over the public revenue, and see that it was secure. Was there no hazard from the extrns : ve and gambling speculations in ths public lands paid for only in bank bills, which were handed over by the Receivers to the depo ite banks, and placed to the credit of the United States’ A larg- portion of the purchases, were paid for in bids of the dbposite banks, which* afier going into the hands of the R< ceivers, were returned and loaned out again, to go through the same operation. This was virtually reviving the old credit system, as the United States received nothing but credit for the lands. If there was no hazard to the revenue from these practices, and from the magnitude and extent of the sales, made upon this kind of credit, then gentlemen over the way had altered their opinions very much within the last six months. During the 1 .st session of Con- g-es*, we were repeatedly, and almost daily told by those who now oppose the Treasury order, that the funds of the Government m the western deposits banks were insecure, and that nothing but credit was received for the public lands Can gentlemen have forgo ten their often-repeated de¬ clarations on this subject? If so, they must be blessed with short memories. Again and again did Senators refer to the small amount of specie in those banks, and an impress on was attempted to be made, that their specie funds were the only solid security for the large sums due the United States. The order was calculated, and, »o a considera- j ble extent, no doubt, has corrected d is evi] jr insured something valuable for the lands, ani that something valuable was transferred to the depo- site banks, and formed a more solid basis for the Government credits. The order was also calculated to check sanita¬ tion in the public lands, which, in itself, Va- an evil of no small magnitude, transferring the best part of the national domain into the hands of heartless specula‘ors, to the great injury of actual settlers, and the detriment of the whole country. Public opinion was risirg up against h, an l re¬ quired that something should be done to arrest an evil of so extensive and serious a nature. VVhnt other or better measure could have been adrp*cd, until Congress should convene, which might adopt such further legislation in regard to the . <*ab-s of the lands, as the public interests m .v re- i quire > i Sir, (said Mr. N.) there is another re. aon wh,' l 4 taivnot vote for the resolution before the Senate. 1 ««»• rule has been adopted in regard to the tale of die public land*, that has been in operation «w a time, and which has a tendency t@ check speculation. 1 w ni l r o’ repeal that mle, and open Sgain tt e floi dgates of speculation—certainly not until l know whether Congress wilt pass any act regulating the sale < f the public lands. It is, 1 think, the duty of Congress to do this; the interest of the country requires it; public sentiment de¬ mands it; and it '8 strongly recommended by the 3*resident. If Congress suffer the session to pass off, without att< mpting to regulate the sale of the public land?, so as to check speculation, they will neglect their duty to the country.' Believing that there will be additional legislation on the subject, which may supersede the Treasury order, he was not, at this tin e, prepared to disturb it. Changes in any extensive business arc always attended with swre incorvc nience. and should be avoided as much as possible. When it shall be settled that Congress will not alter the system, it may be¬ come necessa’y to decide whether the rule pre¬ scribed in the order shall be maintained, or the old prach.ee restored; and if we do any thing on this subject, our action should be more compre hens;re; it should embrace the whole subject, and be settled by law, what currency shall be received for the payment of the revenues; not rr.lv from the lands, but from customs and all other dues. The •ioubt and uncertainty which hangs over this sub¬ ject ought t bo removed. g*For th ese reasons, therefore, ho should vote against reri.ulipg ?ho Treasury order, ev n if he was satisfied that the rule it prescribes was not on.:* which it would be expedient and just to t s- J tfcbl»sh as a settled policy. In this ■» iew of the suhiect, he had thrown out of the case the taral objection which has been rar-ed arreinst the Treasury order. Mr. President, there are two general ground^ of objection that have b ’en urged against the order, which the resolution on vour table pro- fxwen to rr scinri, which 1 w ill proceed to con- aider. The first objection is, that it is illegal; the second, that its operation is partial, unjurf, and injurious to the country, and h *s been the princi¬ pal cause* of the embarrassments and pressure rt** money, which have been so extensively ex¬ perienced . It h?ts also been claimed by the Senator from Ohio, (Mr. Ewing,) that the order is unconstitu¬ tional, ’hat if conflicts with that provision of the encatitution, which declares that ** the citizens of each Sla’e shill he entiled to all the rights and Immunities of the citizens of the several States.” This, however, is a very small point, so small that foe Senator seemed to find it difficult to stand upon it; it wan quite too small for him to vraite the time of the Senate about, and he should there¬ fore pass it over- 3 s the Treasury order contrary to law? If it is, it c«ght to be rescinded without regard to other considerations ? Congress is empowered to lay taxes, and to «u- th( rize and regulate the sale of the public lands; and in doing this, it can no doubt direct the kind of money or currency which shall be received in | payment. But if it neglect do this, it becomes i the duty of the Executive, who is charged with I executing • Iv* taw, to receive payment fi enable them to pay their debt: in a m re conve¬ nient and easy manner. But ’does this appear on the face of the resolution? is it inferable fori its till ? And if we look to the stnte^oi" the Treasury, and the condition of :he rev nue at the ways specified? On a suit by tlie cred tor, could lie avail himself of such instructions t-» vary the nature of his liability ? 'I'he construction .here contended for, bad al¬ ways ecu .g.vt u to d-e resold’ion of 1316; and the Senator !r im Massachusetts hud, on former occasions, regarded it m the same light, had been show u by the extracts read from his speech and report by the Senator from Missouri, (Y ‘r. Be.iton.) It was a very extraordinary position attempted tr* lie mnintai.red, that for twenty y*" rs there bad b/en a public law in force in 1 1 United States, confer¬ ring on paper money, y bank bjlls, the leg*! cha¬ racter or gold and silver, so far as regards the payment of the r*. venue rid all do s d ie the Unibed States; and tliat the cour.irv bias been in apprized ofih existence of such law. Air act to legalize p iper mom y, and nr ke it a lawful tender for all debts to the' United S’atcs, is one of great importance, and w: itU have been likely to have excited general interest a id att.n- lion. time the resolution was adopted, we cannot fail to discover the evils which this resolution was intend¬ ed to lernedy. Instead of its object being to en¬ large the rights of the debtors of the Govern¬ ment, it w: s designed to 1 ’restrict them, .and did restrict them. YV1 at was the condition < f your Treasury at that pt.rio , and how wjus the reve¬ nue collected? There was then in the Treasury more than one million of dollars in the bills o'' broken banks; and the public revenue bad been collected in the notes* of banks which did not re¬ deem tb m in >pe i‘ ; a large pot t on of the banks in the Union, which had suspended specie pay¬ ments during the war, had not resumed them. This resolution expressly limited the Secretary so far as not to permit him to receive, any bills of banks which did not redeem them with specie. He is expressly prohibited from receiving the notes of non-specie paying bfcnks; and il was left optio a! with him to collect the public revenue, either in t- e lawful currency of the United State*, or in Treasury notes, or in the notes of sp cie- paying banks. So far, a discr ti >n w-.ts still left with the: Secretary; but die discretion liehalex- ercis u of taking ini ?. of banks winch did not p .v their n tos in specie, was taken from him. These bids were ttceivod by th bank of the United Spates on';, as speci 1 d> posit, s, and the loss w s thrown i pon the Treasury. Th:* resolution was only an instruction to the Secret:, y of the Treasury; it bus neither the. f rm nor the language of a public i'Ct '1 he title f h '.vs clc.M-ly that the object rf Congress was soiciv to secure the Treasury, and gu-ml it against a loss from bad money. It. is entitled, “ A resolution re'ative to the more ejj'tctual collection ol toe pub¬ lic icvenuc” Cana mere i;-.struct ion to the Se¬ cretary of (lie Treasury, as the fiscal agtnt of they Government, change the r gh's or obligations of the debtors of the United States? Suppose a cr: -, diver shouhl instruct bis agent to receive payment for a debt in some other than the Irgil currency, or to take less than the sum due, or to receive! payment in some kind ol property—would this confer on the debtor the- bgul right to pi»v Ids debt, and di'.charge Ids liability in either of the T he sixteenth section of the act. chartcrirg the I Bank of the United S ate*, provides that the d<- j positcs of the money's of the Ui.i'ed Sta’e* shall fce him he in that bank and its branches. I5.it the bank had refused to rcceieve the bills of certain banks, notwithstanding they were rede med in speed •, and had been justified by Congress ih so doing, in a report to that elite 1 , urawn up by the Senator himself But if the reslTion of I 1316 gave to the bills of State banks ah the clv»- | racter of gold and silver, so far as r -gir s dues te the Government, then such bills wer j the “money of the United States,” and the b nk was bound by its charter to receive them on.deposite. Tlie Senator from MassacluivUs referred to the fact, that the Pres dent l ist ses-ion s u.t « mes¬ sage to Congress, recommending th*' repeal of the fuurtcf ntV, section of the charter of the li nk of the United Stales, which required that the iu*e» of that bank should be received in all payments'® the United States. He could not. perce ve what h.f r nee could b • drawn from t is f c*, tr-tv; r bl* to t: e gentleman’s purpose; but it appeared to liira that the necessa y inference was dirtctly tlie contrary. The bil’s of the Bank ol t:.c United States were made receivable In the Gorerwn tit, by a dutwict provision in its charter; and ihe President vci-hed tint section repealed, which, would pbee them on the same footing -■« other bank b Is. I’u< if the Senator is c rrect in bin argument, it would have heeo of no u e t<> repe.il the fourteenth section of the ank charter, as the United .Vates w>.uld sti‘1 have been > bi g-d io re¬ ceive the bi s of that b: nk, under the r* solution, j of 1816. Moreover, the fourteenth sec’ion wan never of an/importance to the B i k of the Uni¬ ted States, if. as is contended, the r:solution of 1^15 gave to the bills of fill specie payi: g banks tile ch iracJer cf receivabilitv for deb s p ,y a'>!e to the United States. The bills of th Stat« b.tnkK so far as regarded the Governmen*, stoo.t on the same footing as tboseof the n.mk of th.e Un t^A States; a’though it has always been claimed that the privilege conferred by ihe fourteenth section* formed a part of the consideration, for which Ibo / 6 corporation had paid a bonus of a million and a half of dollars. Mr. P’esident: if there is any doubt in regard to t?. e legal import and e (Feet of the resolution of 1816, stiU there can be no question as to the kind o. currency which is receivable for the sales of the public lands. The fourth section of the act of 18c0, which superseded the cred't system, and required that sales sbo. Id be made for cak the affirmative of the isme, lie miglr, perhaps, with more propriety, cab on tlv m to point out the evil consequences of the order. This they have attempted to do, hut he thong! t with no very great success. It has been boffiy asserted, that the Treasury order h-al deranged the currency^ and occasioned the existing d fficulties and pressure in regard to mo oey, which he admitted to be very severe. This, sir, (said Mr. N ) is no new complaint against the present administration. It is the old story which has been so often repeated within the last few years, that its authors on the present occasion can 1 ay no claims to originality. On his way to this ci v, during a short detention in New York, he had a conversation with a merchant, who com¬ plained not only of the times, but of the Govern¬ ment. It vr.'s, however, only a ^petition of the old story, of tampering with, the currency! — war upon the currency! When will the Government ccope tampering with the currency? These cotn- plahyts come with an ill grace from bankers, bro¬ kers, an * merchants, who'are strenuous support¬ er? of that inflated m stem of paptr money and credit, whose inherent defects aie the source of the ve»-y evils which they denounce. Mr. N. said, that when he heard complaints 4 ike these, he was forcibly y minded of an anecdote < f Dr. Franklin,, who, when in Europe, was a member of a learned sock ty, which had a regulation, that on certain .occasions each member was to suggest some pro¬ blem in physical ^science, and each one present was to g : ve an explanation impromp’u. The Doc¬ tor, who was fon$l of starting game for philoso¬ phers, as he called it, proposed this question? “ How it was to be accounted for, that a barrel of fish would contain mor salt that the barrel with¬ out the figli?” The explanations given by the learned savam, although extremely ingenious, did not appear to be entirely satisfactory. At last nil eyes were turned towards the Doctor, who, it was suppos d, c uld give a satisfactory solution of a problem he had suggest* d. “Gentlemen,” said he, “m the. first place the foci is net so?' So in regard to the compla’nts of merchants and poli- icians.so often repeated, of tampering with the currency, it is a sufficient answer to say, the fact is not so. These charges are without foundation, evert if we con¬ sider currency in the very comprehensive sense in which it appears to be regarded by the Senator from Massachusetts, (Mr. Webster,) who, if he correctly understood him, appears to consider currency as comprehending not only bsnk bill?, but bills of exchange, and every desfi ipticn of paper which was used to facilitate the transactions of commerce. This appeared to him to be al¬ together too comprehensive a view of me subject of currency, even in a commercial sen e. It ap¬ peared to be confourding currency and credit, which lie bad supposed, were essentially distinct. In the Small book which every Senator lias on his Uble, (containing the constitution of the United States,) is a. much better definition: he there found, that ‘*Gongre s shad have power to coin money, regulate tl e value thereof, and of foreign co il.” H^re we find what is th-; legal and con¬ stitutional currency of the Unit'd Stales, Gold and silver, either the coi isgeof the United States, or foreign coin, the value < f which lias been fixed and-rt gulated by a law of CVngress, constitute the only currency known to the constitution. But in a commercial sense, or in the common acceptation, whatever circulates as money, and is received ns such, in the ordinary transactions of society, may be considered as a part of the cur¬ rency of the country; and in this view of the sub¬ ject, bank bills form a part of our currency. But if we admit th<3 bibs of our banks to be a com¬ ponent part of the currency of the country, still 7 the complaints, of which we have heard so much for some years past, are without any just founda¬ tion. What are the acts of this administration, which have been denounced as tampering; with the currency, and making war on the currency? The first of them is the veto of the President, of the bill for rechartering the Bank of the United State?. This may have been a bold measure,-but great evils require powerful remedies; and it was confirmed and fully sustained by the people, and afterwards by Congress, which refused to give the hank another charter. If this measure had suc¬ ceeded in •destroying the Bank of the United States, it might be considered, in so’me measure, as interfering with the currency of the country, if it can be made out that the bills of that bank pos¬ sessed any essential qualities as money, or curren- . cy, which do not appertain to tire bills of the State banks. But lie did not consider that the bills of that bank possessed any material advantages, as money, over those of the State banks; fqr such were its regulations, that the different branches, so far as respects the redemption of their bills, were so many independent banks. It was not necessa¬ ry, however, to consider this question, because the bank had not ceased to exist. No, unfortunately for the country', the “monster” still lives; and, ac¬ cording to the declarations of its president, at the very time of its resuscitation, under a charter obtain¬ ed from one of the States, it inherits a circulation of twenty-two millions, and a credit throughout 'the world. We have the word of its presid nt that the bank still possesses its essential ability to do good, and, in the opinion of many, it has lost none of its powers of mischief. Whether for good or for evil, then, the bade still exists, and the country h±s the benefit, if such it is, of that paper currency which it can supply. I’he next act which has been condemned as an act of wap upon the currency, is the Treasury or¬ der for removing the public deposites in 1833. This, as is well known, occasioned great excite¬ ment; the measure was denounced in this Hall and elsewhere, as illegal,unconstitutional, and analarm- ing usurpation, calculated to derange the currency, destroy public and private credit, and prostrate the entire business of the country. Now the excite¬ ment has gone by, and the angry waves subsided, an 1 the measure already become, in some sense* a matter of history, we can look back upon it' dis¬ passionately and calmly. And what wait this alarm¬ ing act of usurpation, this war upon the currency and credit of the country, which was to paralyze all the great interests of the nation? He did not ^ speak with any reference to its legality or consti¬ tution? lity, but solely with regard to its effect bn the currency and credit. Why* sir, said Mr. N. this measure consisted simply of an order from the Secret .t-y of the Treasury changing the place of deposite of the public revenue, at a time when the money in the Treasury amounted to but about nine millions of dollars. The measure related only to the money of the United States; it had no applica¬ tion whatever to the currency of the country, whether metallic or paper; it had no operation upon commerce, or duties, or importations. This act, which w as said to derange the currency and destroy credit, was nothing more than the control and management of the funds belonging to the people of the United State?, in no way interfering with the transactions of comm -rce, or currency, or credit. Cannot the Government take c»re of their own funds, ar.d manage them as they t .ink best, without being charged w.th making war on the currency? without an outcry from bankers, brokers, and mere h nts, that their business is in¬ jured, arid the whole country exposed to r in? Must the Secretary of the Treasury c irr.It the bankers befcye lie can deck!. on any measure in relation to the public funds? If an act, having no bearing on commerce, in no way directly affecting any of the interests of the country, and which rely changed 'he plkces of deposits < the pub¬ lic revenues, could have/ occasioned the serious consequences which were charged upon it—the derangement of the currency, p.ostration of cre¬ dit, tire wide spread*embarfassments anil distress which prevailed—the case would afford the strongest, th'e most irresistible argument u.ainst the whole paper credit system. If these conse¬ quences did follow from so small a cause, it pi oves the miserable, wretched condition of your paper currency, which the Senator from Massachusetts seems to consider as preferable to gold an 1 silver. Unstable and bad as he considered the paper currency of the country, he would m ike no such charge against it; he did not believe it could be deranged, and the whole country involved in diffi¬ culty and distress by so trifling a cause. No, sir, there was at that period a war upon the currency $ but it did not come from the Executive, or this Go¬ vernment but from the Bank of the United States, and other banks which from fear or favor co-ope¬ rated with it in its measures int nded to dis¬ tress the country, and create a panic. That war on the currency and on the country came from the great mammoth of the paper system, which possessed more power over tie currency than tbits Government—which could make paper money plenty or scarce, at its pleasure. At this clay, lie believed r.o one could be found who would main¬ tain that the embarrassments and distress which prevailed during almost the entire year of 1334, were occasioned by the ch nge which was made iu the management of the public, r; venue. Mr. N- said he now came to consider the last measure, which had been condemned as a umpir¬ ing with the currency—the 'Treasury order of the 11th July—requiring cash payments for the public lands It is ct imed that the money pressure which has prevailed for months past, and which still continues, lias been occasioned by this new re¬ gulation as to the sales of the public lands. Tiie Senator from Massachusetts (Mr. Webster) Jid not seem to advance this opinion with confidence; he said there was a complication of.causes; that this order, with other causes, 1 had occasioned the exist¬ ing difficulties; but when lie came to point out the other causes, they did not appear to ne very nu¬ merous or complicated, and all of them ceWered in the Executive Department of thb Government. The complication of causes appeared to consist of but two; the Treasury order, and the execution of the depositeact, or the apprehension of the man¬ ner in which that act was to be execute !. That the deposite act had contributed to increase the 8 money pressure, Mr. N. did not doubt; but what ] the cause, he would like to know what it was. properly belonged to the act, ought not to be j Has li tre not been an alarming increase of bank charg 'd to the execution, or the apprehended ex- j capital, and of course of bank circulation, the last edition. He reluctantly gave his support to that j few years? The bank capital of the State banks act, although sensible at the time that, it would in- ; was estimated by Mr. Gallatin, in 1830, at ninety- crease, iv tiier than relieve, the pressure for money, j five millions of dollars, and the bank circulation at which prevailed. Rut it had rot been shown thatI thirty n ne millions. The annual report of the any censure was justly chargeable upon the Secre- Secretary of the Treasury, a year ago, contained tary for the execution of the law. It was impossi- returns from nearly all the State banks; according ble but that the act should occasion some tempura ry inconvenience in the monetary concerns of the country. It disposes of a large sum of money, to which, the capital of the State banks, on the 1st of January, 1835, amounted to about ninety-six millions, and their circulation to about e'ghty-six nearly forty miliipn?, upon principles altogether millions. Since that period, the increase of bank foreign to the commercial principles which coil -1 capital has been astonishingly rapid. It is thought' troi and re gulate the moneyed capital of the coun- i to have 'exceeded one hundred millions, and the try. Population is not the principle uptrn which,}circulation to have been increased fifty millions. commerce distributes money. Mr. N. raid that in relation to the Treasury 'order, he would not deny that in some small degree it may have increased the difficulties which exist. It But ia addition to this, the Hank of the United States has been rechartered the year past, w ith a capital of thirty-five millions, and has the posses- had increased the demand for specie, and that was c: the principal object of the measure, to obtain semeihirg of real value for the public lands. Its operation iias been to replenish the deposite banks in the west with specie funds, and to draw them from the banks at the esrt, which has, to some extent, diminished the ability of the latter to 1 ion of seven millions belonging to the United States* making a capital of forty-two millions. During the past year,there has also been a sum of from thirty to forty millions of dollars of the pub¬ lic revenue in the deposite baiyks, which has been used for banking* purposes, and constituted a part f f their capital. , The whole addition to.the bar.lc- ijig capital of the country, since January, 1835, make leans. Out a contraction of the paper cur- roust considerably exceed one hundred and fifty rency had long before commenced; and that con- traction must necessarily produce a curtailment in the loans arid discounts of banks. The Treasury order only co-operated with other causes in pro¬ ducing results, which were inevitable. To regard the 1 rearm v order as the c fficient cause of the pre¬ sent crisis, would be like an attempt to find one’s wa> In a taper, ar.d close his eyes to the sun, which was enlightening the world. The real cause of the existing pressure is much broader ard deepen than the Treasury order; it is a cause which is inherent in the banking system, ar.d in that paper currency which wc have just heard commended as preferable to gold aftd silver. There are laws which act upon and control the paper system of currency, supplied by banks, which are as immu¬ table as those that govern the physical universe. One of these lavs is, that a sudden expansion of. the currency, even to an inconsiderable amount, g v s an U'K.ue : timnius to enterprise, that o ca- sions overtrading and speculation, which will con¬ tinue to increase, until they are checked by a re¬ action in the money market, when a contraction of the currency ensues, by the banks being oblig¬ ed to curtail their discounts. This occasions a scarcity of money. Kut it seems to be denied that there has been any dangerous or essential enlargement of the paper currency. The Senator from Massachu- t>rtit. arum's that there has been a great augmenta¬ tion of hanking capital within the last two or three year.*, but attributes it to the rapid and un¬ paralleled advance in the value of real estate and other property*. It appeared to him this was faking the effect for the cause. What has occasioned the rapid rise in the price of re l estate and other r>ro- pei tv? la it not the flood of paper money wit!', which the country has been inundated for the last few years, and the wide spread and extravagant specu- miilions of dollars, and the addition to the circula¬ tion fifty millions. In his report, the present session, the Secretary' estimates tiie circulation of bank paper, on the first of the present month, at one hundred and twenty millions; but thinks that in July it consi¬ derably exceeded that sum. Mr. N. thought this estimate below the truth., because it was found that the issues of banks, would bear a certain propor¬ tion to their capitals. If it was true, as was sup¬ posed by Adam Smith, who w rote at a time when the subject o ; banking was very imperfectly un¬ derstood, that no more paper money could be cir¬ culated than would supply the specie which it forc¬ ed out of circulation, the creation of banking capi¬ tal would not add to the paper currency, hut that principle is incorrect; the paper issues of banks re found to depend mainly on the capital which shall be employed in banking operations. What proportion the circulation will bear to the bank¬ ing capital was not clearly established, - but it t would not vary far from thirty per cent. If gen¬ tlemen will look into the report of the Secretary of the Treasury, jus laid on our tables, they will find that the deposite banks, with a capital of se¬ venty-seven millions, have a circulation of forty- one millions, or more than fifty percent. These banks, it is true, possess large sums in deposite, so that their circulation is, no doubt, considerably larger, in proportion to their capital, than the general average. Sir, (said Mr. N.) are we to he-told in the face of 'hese strong facts, that there has been no undue enlargement of the paper currency and the credit system the last two years? Are we to believe that rhis increase has been occasioned by the general • tise in the value oft property? Has property ad- l> vanced nearly fifty per cent, in two years? And if such was the fact, what reason can be assigned lations to which it has given rise? If thatb not ^ orsuc ^ 1 fcn unprecedented advance in the value 0 of jropertv' in so short i period, except the su¬ perabundance of the paper currency? That the flood of p iper money, and. the great extension of bank credits, were ttie original and efficient 'cause of the 'embarrassments and diffi¬ culties which had prevailed for nearly one yer, was cle.ir beyond any reasonable doubt. Evert a very small a (lit on to the currency excites to over tra ing and speculation, and an advance of prices. This his been found to be invariably the case in England and in this country since the establish¬ ment < f the Hank of the United States. Ah pe¬ riods of excitfement and speculation,*in both coun¬ tries, have been preceded by an increase oi mo¬ ney or credit, or both The year 1835 and the fii-it hal of the year 1836, have been distinguish¬ ed for spcculai on in stocks, real estate and eve¬ ry kind of property, and for the unprecedented TTiultip icutiou of joint stock companies, for almost every conceivable object. • A reaction has en¬ sued, and there is now great distress in that coun¬ try for money, as well as in this. This spirit of speculation and gambling is there attributed to an expansion ef the paper currency, although tke in- ► cre:u»e of paper appears to be trifling, compared to uh.it has taken place in this country. In 1833, ^'there were hut thirty-four joint stock bar ks in England, and in July, 1836, they had increased to seventy-seven. Their issues in 1834 were £ 1,783,- 600, and in 1836, £3,094,025, being an increase of less then a million and a half. In the meantime, tiie priv: te b inks had not increased, but to a small amount had Contracted their issues. So small an addition to the paper currency as tins is consider¬ ed as the cause of the rage of speculation and gambling which has prevailed, and of the distress that has followed. Mr. N. said that in support and corroboration of these views, he would ask the Secretary to read some short extracts from two pc cent writers in that country', which lie had copied: Extract from Musket. “ In 1819, the flank of England and the coun¬ try' banks curtailed their issues about 15 ptr cent, and consols fell about 14 per cent ; in 1820, the count y banks curtailed 32 per cent* in 18-21, 28 per cent. A fab of prices, and scarcity of money f ol lowed; and 1819, *20, and *21, wore years of great distress in England. One of the gi'eat eviU from the gre it fluctuation in the amount of the currency, is the spirit of gambling which it engenders. It is the sudden abundance of money, which is the ma n spring of alt gamhl ng transac¬ tions in our funds, and in articles of general con¬ sumption; and the ri-e in prices is forced by speculative buying and selling, considerably be¬ yond the actual increase of the currency'. it is to this cause alone, and under e very circumstance, which, a. a nation, we can lie placed, that i attri¬ bute the w hole ol the speculations, now and here¬ tofore, that have appeared to begin in pfasperity, and to till in (lie distress and rui > of thousands. 1'be speculative rise probably exceeds the addition to the squares aided. if 2 per cent, is prices will rise 8; if 8, thirty-two per cent. If, on tiie other hand, there is a contraction of 8 per cent, it will be attended with a fall of public credit and confidence in buying and selling. These are lh.: evils, and they are evils of grcatnugni- tude, that atti nd jhe use of tiie paper currency. There is a range of contraction arid expansion in the use of paper, that does not belong to a metallic currency', and which pe haps do s more than counterbalance all the advantages to a nation from \ the use of paper.” Extract, from the Edinburg It view, l'>l. 4, Xo. 2. In a country so opulent as this, and so rapid¬ ly increasing in wealth and popul il on, the two 1 great ardor 61’ speculation, and t:ie mi,calculation of producers, must necessarily sometitnes occa¬ sion overtrading, and consequently gluts and de¬ presses of the market. But were the currency in a perfectly sound, state, the e' citi inent arising from such causes would a'mnst necessarily be confined to one or a very few businesses, and wou'd be very f.r indeed from be¬ ing either general or Universal. In point of fact, all periods eriods marked by a general len iency to speculation, and by u general rise of prices, have both, in this and other countries, been uniformly distinguished by some extraordinary Jhciliies in obtaining supplies of money or of credit, or of both »Ve are bold to to say, that no single instance to the contrary can be pointed out in the history of industry in modern limes.” Mr*. N. said, that the opinions of these two en¬ lightened writers in pointing out the eviisof a paper currency, contained a satisfaetpry explanation of the true or gin of the pecuni vy difficult es which now exist in this country. There was u«> Treasury order in England, no tampering with the currency, so fm as tiie Government was concerned, yet the same evils had been experienced there- A paper currency was, from the very nature of it, unstable, and subject to Constant fluctua¬ tions. Such had been' its character in England, and in this country particularly. Since the estab¬ lishment of the late Bank of the Unite I States, it hand been still more unstable. Those wl o sup¬ pose that reactions and p- rials of distress were only occasional, and the result of extraordinary causes, were entirely mistaken. They are evils inherent in the system, and inseparable from it. Whoever will look back to the period of the es¬ tablishment of the Bank ot the United Stales, will find that such lias been the cae in t iis country, the severe and universal distress which prevailed throughout the Union in 1819 .mil *20, will long be remembered. In 1822, mon y again became scare' , and in 1825 there was great cl s ress in the United States, as well as in England, where the pressure was universal and desolating hi its conse¬ quences. So great was the calamity, that it was found necessary to take away, in part, thi monopo¬ ly of the Bank of England, and authorize the es¬ tablishment of joint stock hanks, as a me ms of relief. In 1826. money wasscirce in New York; and in the winter of 1827, ’8, in the mi die and eastern States. In 1829, many banks f iled, and there was great distress among the manufacturer* in the eastern States. In the latter part of 1832, money again became scare'; nnl nearly the entire year of 1834 was distinguished, not only fora plea¬ sure, but for a panic, unexamph d in this country. The evils of this period are too fresh in the memo- 10 ry of every one, to render it necessary to enlarge upon them. In confirmation of these facts and views,.lie would beg leave to read a letter which has been publish¬ ed; it is from no visionary theorist, or anti-bank man, but from a responsible officer, the cashier of the Branch of the United States Bank in Bal¬ timore, in 1830, and was addressed to the Secreta¬ ry of the Treasury. It bears date, February 15, 1830. “Looking back to the peace, a short period, fresh in the memory of every man, the wretched state of the currency for the two succeeding years can¬ not be overlooked. The disasters of* 1819, which seriously affected the circunns'ances, property and industry ofevery dht.ict in the United States, will long be recollected. A sudden and pressing scarci¬ ty of money prevail* d in 1822; numerous and vefy extensive failures tor>k place in New York, Savan¬ nah, Charles’on, and New Orleans, in 1825. There was a great convulsion among banks and other moneyed institutions, in 1826 The scrcity of mo- ney among traders in that State and eastward, in the winter of 1827-8, was distressing and alarm¬ ing. Failures of banks in North Carolina and Rhode Island, and amongst the manufacturers of New England and this State (Maryland,) charac¬ terized the last year, (1829); and intelligence is just received of the refusal of some of the prin¬ cipal banks of Georgia to redeem their notes with specie—a lamentable and rapid succession of evil and untoward events, prejudicial to the progress of productive industry, and causing a baleful ex¬ tension of embarrassment, insolvency, litigation and dishonesty , alike subversive of social happiness and morals. Every intelligent mind must express regret and astonishment, at the recurrence of these disasters in tranquil times and bountiful seasons, amongst an enlightened, industrious and enterpris¬ ing people, comparatively free from taxation, un¬ restrained in their pvt;suits, possessing abundance of fertile lands and valuable minerals, with capital and cap acity to improve, and an ardent disposition to avail ourselves of, th*se great bounties. “Calamities of an injurious and demoralizing na¬ ture, occurring with singular frequency amidst a profusion of the elem nts of wealth, are well cal¬ culated to inspire and enforce the conviction, that there is something radically erroneous in our monetary system, were it not that the judgment hesitates to yield assent, when grave, enlightened and patriotic Senators have deliberately announ¬ ced to the public, in a recent report, that our sys¬ tem of money is in the main excellent, and that in most of its great principles no innovation cfeui be made to advantage.” Mr. N. said that the letter which he hacljust read contained more truth and hones'y fhan all the c< mmunications which had ever appeared from the head of that banking institution, of which the writer of this letter was an officer. It pre¬ sented a faithful, but melancholy picture, of the operations of our banking and credit system. With such facts as these, and the experience of the 1 ast twenty years before us, he thought it was trifling with common sense to talk about the Trea¬ sury order being the cause of the existing difficul¬ ties. Sir, (said Mr. N.) the came of these evils lies deeper and broader; it exists in your paper currency and banking system. The order has, no doybt, in some small degree, contributed to in¬ crease the pressure; and this is also true of the deposite act. They have served to bring on the crisis a little sooner than it might otherwise have come, but the disease was upon us, and must have its course. If we were to look to any secondary causes, that of a wild spirit of speculation stands pre-eminent; \ ar.d particularly speculation in public lands. But speculation is stimulated by our system of cur¬ rency and credit. The immense purchases of the public lands during the last two years have filled your Treasury to overflowing; more than forty millions had been received from the sales of the public domain. Tills immense capital had been withdrawn from its accustomed employment. This, ofitself, was sufficient to derange the whole business of the country. The pe riod of distress to which he had particu¬ larly referred, was also distinguished by specula¬ tions in the public lands. They commenced in 1818; the sales that year exceeded seven millions of dollars; in 1819, they were more than seventeen millions, -and the first two quarters of 1820 amounted to the enormous sum of twenty-seven millions. In July the law went into operation, requiring cash payments; and so entirely did the sales depend on credit, that they were almost en’irely suspended, and the last half of that year amounted to only about four hundred thousand dollars; and for the four succeeding, did not ave¬ rage one million a year. Speculations in the pub¬ lic lands again commenced in 1834, when the sales amounted to about eight millions; in 1835, to fif¬ teen millions,’ and' the present year to more than twenty-four millions, including the sales of the Chickasaw lands, which do not go into the Trea¬ sury. That a reaction should follow this reckless spirit of speculation, was inevitable. Mr. N. said lie thought that the attempt to charge the embarrassments and pressure for mo¬ ney upon the Treasury order, had entirely failed. He believed the order to he legal, and was satisfied that it had had but little agency in causing tile existing crisis. Still it was, in his mind, a question whether the princip : e of that order ought to be maintained. He considered it as a temporary measure, well calculated to remedy existing evils of the most alarming magnitude. But he was not prepared to say that it would do as a permanent regulation. The strongest rea¬ son for its adoption was to guard against the flood of paper money which was flowing with a swellin/y tide into the deposite, banks from the sales of tire public lands. This evil he hoped would be cor¬ rected By legislation before Congress adjourned, which, so far as that object was concerned, would supersede the Treasury order. But still the ques¬ tion is before us, and may have to be^decidf d, in what currency shall the public revenue be collect¬ ed? This was a question of great delicacy and magnitude. Great as lie considered the evils of our paper s}'stem of money and credit, lie did not see how this Government could provide a remedy. It certainly could not do it by any direct legisla¬ tion; it had no power over the State banks, or 11 their issues. The only power it could'’exercise upon the paper currency of the State banks was indirectly in the collection and disbursement of the revenue, and this was no small power, especially at a time like the present, when the revenues amounted to more than forty millions. A large portion of the whole currency of the country pas¬ ses through your Treasury annually. if Mr. N. said he was not prepared to say to what extent this power could safely be exercised. He was satisfied, however, that it would not do at th s time to collect the revenue in specie^exciusively. Congress had no doubt a right to do this; but in the collection of so large an amount of revenue, V. e must have some regard to the business of the coun¬ try, and to the ordinary currency used in commer¬ cial and other transactions. It is evident that we might adopt a r ile which would occasion great inconvenience, and perhaps injustice, because the large sums of money received into the Treasury cannot well be collected in a currency not in gene¬ ral use. Whatever principle is adopted as a per- f manent regulation, ought to be uniform and appli¬ cable to the customs as well a3 the lands. That in * the -collection and disbursement of the public reve¬ nue, it will be proper to attempt to remedy some of the evils of the paper system, he had no doubt. We may by our regulations do something to in¬ crease the use and circulation of specie, and dis¬ countenance bills of small denominations. With regard to this important object, Congress had, per¬ haps, clone all that it could by direct legislation. It has superseded the act of 1819, and legalized for¬ eign coin? it has raised the standard of gold coin; it lias established additional mints and greatly in¬ creased the annual coinage, and particularly that of gold, which has already become a new and import¬ ant part of our metallic currency. The amount of specie in the country is greatly increased the last three years, for which this administration is entitled to great credit. Mr. N. said that he could not assent to the pro¬ position of the Senator from Massachusetts, who, if he understood him, contended that it was the right and the duty of Congress to regulate the wh le currency of the country. By this, he understoo 1 the Senator to mean, that Con¬ gress h d the power to regulate the paper issues of the State banks. If he did not refer to this description of currency, it was dif¬ ficult for him to conceive to what his remarks were intended to apply. But whilst we were so emphatic 1 y informed that this was the duty of Congress we were not told how it was,to be done. 1(11 wliat way can Congress rtgulate the paper cur¬ rency supplied by the State banks? The gentle¬ man did ni't inform us: be seemed to have -a stu¬ died caution and reserve on thin point, and thereby hangs a tale. Mr. N. thought, however, there - was no secret in the case. The views of the Sena¬ tor have been heretofore disclosed. Sir, said Mr. N. the Senator would regulate the paper currency of the Stales by a paper currency of the Federal Government; he woulcl regulate the banking in¬ stitutions of die States by the agency of a bank «>f the United State's. This was the secret A national bank is to be the regulating power. But the country thought the remedy worse than the dis¬ ease; they had twice tried it, and knew what sort of a regulation it was. He was speaking of a national bank in a mere financial point of view, without any reference to constitutional or political objections; and in this aspect of the question, he did not hesitate to say that the proposition of es¬ tablishing a national bank, as a means of restraining and regulating the State banks, was the most pre¬ posterous one ever submit' ed to a deliberative body and the boldest attempt ever yet ma le to practise on the gullability of-tlie people. That such an insti¬ tution possessed, and would necessarily ox rcise, great power ovtr the ktate banks, he was not dis¬ posed to deny; but the question v. ai, whether that power would be exercised for good or for evil. The question is not whether it is a regulator, but whether it is a safe regulator; whether it tends to keep the paper currency of the country more stable, or to render it more fluctuating. He ap- - pealed to the experience of the count y in the last twenty years to settle that question. When the great national bank throws out its money plenti¬ fully, the State hanks do the sime; tlmy are in¬ vited to this course, and it is their interest to pur¬ sue to it. When it curtails its discounts and its issues, the State banks are compelled to do the same; so that the result of this mode of regulating the paper currency of the country, through the agency of a national bank, is, to place in the hands of a few individuals the power to maize money plenty or scarce at their pleasure. The currency of the country is made to depend on the interest, the ca¬ price, or the passions, cf one or more individuals. This is a power greater than that possessed by your Executive; and its terrible effects were ex¬ perienced during the memorable year cf the panic. Mr. N. said that the present high prices of pro¬ visions and the necessaries of life, were supposed to be inconsistent \vi;h the existing scarcity of mo¬ ney. There was nothing, however, extraordinary in this state of things; it was the case in 1819. The reaction was felt first upon stocks, and those kinds of property which had a more intimate con¬ nection with the money market; whilst the pro¬ ducts of labor were less easily or immediately af¬ fected. When the prices of the necessaries of life are once raised, by an undue expansion of currency, and credit^ and consequent speculation, j it takes a long time, often years, to biing them down. Labor is the last thing that is raised in price; but when it is, all the products of labor will of course be advanced, and may rem do high for years; but the reaction which is going on must bring them down to their proper value. The Senator from Ohio (Mr. Ewing) has given a very novel explanation of the present high price of breadstuff. Me says that this country will no longer export wheat or flour, that ther