or the principal part of it, will be wanted for that purpose, it appears most proper that the deposits should be withheld. Until the amount can be collected from the banks, treasury notes may be temporarily issued, to be gradually redeemed as it is received."

CHAPTER IX.

ATTACKS ON THE MESSAGE: TREASURY NOTES.

UNDER the first two of our Presidents, Washington, and the first Mr. Adams, the course of the British Parliament was followed

in answering the address of the President, as the course of the sovereign was followed in delivering it. The Sovereign delivered his address in person to the two assembled Houses, and each

Six millions of treasury notes only were required, and from this small amount required, it is casy to see how readily an adequate amount could have been secured from the deposit banks, if the administration had foreseen a month or two beforehand that the suspension was to take place. An issue of treasury notes, being an imitation of the exchequer bill issues answered it: our two first Presidents did the of the British government, which had been the same, and the Houses answered. The purport facile and noiseless way of swamping that gov-of the answer was always to express a concurernment in bottomless debt, was repugnant to the policy of this writer, and opposed by him:rence, or non-concurrence with the general policy of the government as thus authentically but of this hereafter. The third instalment of exposed; and the privilege of answering the the deposit, as it was called, had been received address laid open the policy of the government by the States-received in depreciated paper, to the fullest discussion. The effect of the and the fourth demanded in the same. A depractice was to lay open the state of the posit demanded! and claimed as a debt!-that country, and the public policy, to the fullest disis to say the word "deposit" used in the act cussion; and, in the character of the answer, admitted to be both by Congress and the States to decide the question of accord or disaccord— a fraud and a trick, and distribution the of support or opposition-between the reprething intended and done. Seldom has it hap-sentative and the executive branches of the pened that so gross a fraud, and one, too, intended to cheat the constitution, has been so promptly acknowledged by the high parties perpetrating it. But of this also hereafter.

The decorum and reserve of a State paper would not allow the President to expatiate upon the enormity of the suspension which had been contrived, nor to discriminate between the honest and solvent banks which had been taken by surprise and swept off in a current which they could not resist, and the insolvent or criminal class, which contrived the catastrophe and exulted in its success. He could only hint at the discrimination, and, while recommending the bankrupt process for one class, to express his belief that with all the honest and solvent institutions the suspension would be temporary, and that they would seize the earliest moment which the conduct of others would permit, to vindicate their integrity and ability by returning to specie payments.

government.

The change from the address delivered in person, with its answer, to the message sent by the private secretary, and no answer, was introduced by Mr. Jefferson, and considered a reform; but it was questioned at the time, whether any good would come of it, and whether that would not be done irregularly, in the course of the debates, which otherwise would have been done regularly in the discussion of the address. The administration policy would be sure to be attacked, and irregularly, in the course of business, if the spirit of opposition should not be allowed full indulgence in a general and regular discussion. The attacks would come, and many of Mr. Jefferson's friends thought it better they should come at once, and occupy the first week or two of the session, than to be scattered through the whole session and mixed up with all its business. But the change was made, and has stood, and now any bill or motion is laid hold of, to hang a speech upon, against the measures or policy of an administration. This was signally the case at this extra session, in relation to Mr. Van Buren's policy. He had staked himself too

ford Brown, of North Carolina, William Allen, of Ohio, John P. King, of Georgia, Walker, of Mississippi :-in the House of Representatives, Cambreleng, of New York, Hamer, of Ohio, Howard and Francis Thomas, of Maryland, McKay, of North Carolina, John M. Patton, Francis Pickens.

The treasury note bill was one of the first measures on which the struggle took place. It was not a favorite with the whole body of the democracy, but the majority preferred a small issue of that paper, intended to operate, not as a currency, but as a ready means of borrowing money, and especially from small capitalists; and, therefore, preferable to a direct loan. It was opposed as a paper money bill in disguise, as germinating a new national debt, and as the easy mode of raising money, so ready to run into abuse from its very facility of use. The President had recommended the issue in general terms: the Secretary of the Treasury had descended into detail, and proposed notes as low as twenty dollars, and without interest. The Senate's committee rejected that proposition, and reported a bill only for large notesnone less than 100 dollars, and bearing interest; so as to be used for investment, not circulation. Mr. Webster assailed the Secretary's plan, saying

decisively against too large a combination of interests to expect moderation or justice from his opponents; and he received none. Seldom has any President been visited with more violent and general assaults than he received, almost every opposition speaker assailing some part of the message. One of the number, Mr. Caleb Cushing, of Massachusetts, made it a business to reply to the whole document, formally and elaborately, under two and thirty distinct heads-the number of points in the mariner's compass: each head bearing a caption to indicate its point: and in that speech any one that chooses, can find in a condensed form, and convenient for reading, all the points of accusation against the democratic policy from the beginning of the government down to that day. Mr. Clay and Mr. Webster assailed it for what it contained, and for what it did not-for its specific recommendations, and for its omission to recommend measures which they deemed necessary. The specie payments-the disconnection with banks-the retention of the fourth instalment—the bankrupt act against banksthe brief issue of treasury notes; all were condemned as measures improper in themselves and inadequate to the relief of the country: while, on the other hand, a national bank appeared to them to be the proper and adequate remedy for the public evils. With them acted "He proposes, sir, to issue treasury notes of many able men:-in the Senate, Bayard, of Del- small denominations, down even as low as aware, Crittenden, of Kentucky, John Davis, twenty dollars, not bearing interest, and reof Massachusetts, Preston, of South Carolina, deemable at no fixed period; they are to be received in debts due to government, but are not Southard, of New Jersey, Rives, of Virginia: otherwise to be paid until at some indefinite in the House of Representatives, Mr. John time there shall be a certain surplus in the Quincy Adams, Bell, of Tennessee, Richard treasury beyond what the Secretary may think Biddle, of Pennsylvania, Cushing, of Massachu- its wants require. Now, sir, this is plain, ausetts, Fillmore, of New York, Henry Johnson, thentic, statutable paper money; it is exactly a new emission of old continental. If the genius of Louisiana, Hunter and Mercer, of Virginia, of the old confederation were now to rise up in John Pope, of Kentucky, John Sargeant, Un- the midst of us, he could not furnish us, from derwood of Kentucky, Lewis Williams, Wise. the abundant stores of his recollection, with a All these were speaking members, and in their more perfect model of paper money. It carries no interest; it has no fixed time of payment; diversity of talent displayed all the varieties of it is to circulate as currency, and it is to circueffective speaking-close reasoning, sharp invec- late on the credit of government alone, with no tive, impassioned declamation, rhetoric, logic. fixed period of redemption! If this be not On the other hand was an equal array, both paper money, pray, sir, what is it? And, sir, in number and speaking talent, on the other fifth year of the experiment for reforming the who expected this? Who expected that in the side, defending and supporting the recommenda- currency, and bringing it to an absolute gold tions of the President:-in the Senate, Silas and silver circulation, the Treasury Department Wright, Grundy, John M. Niles, King, of would be found recommending to us a regular Alabama, Strange, of North Carolina, Buchan- new in the history of this government; it beemission of paper money? This, sir, is quite an, Calhoun, Linn, of Missouri, Benton, Bed-longs to that of the confederation which has VOL. II.-3

Mr. Benton, though opposed to the policy of issuing these notes, and preferring himself a direct loan in this case, yet defended the partic-paid at a day certain to wit, within one year; ular bill which had been brought in from the character and effects ascribed to it, and said:

6

Macon. Randolph, and all the fathers of the $25, received a large support-some ninety republican church, concurred with him. These votes. The motion to reduce to $50 was carried sagacious statesmen were shy of this facile and by a majority of forty. Returning to the Senate seductive resource, so liable to abuse, and so certain of being abused.' They held it inadmis- with this amendment, Mr. Benton moved to sible to recur to it in time of peace, and that it restore the $100 limit, and intimated his intencould only be thought of amidst the exigencies tion, if it was not done, of withholding his supand perils of war, and that after exhausting the direct and responsible alternative of loans and port from the bill-declaring that nothing but taxes. Bred in the school of these great men, the immediate wants of the Treasury, and the I came here at this session to oppose, at all lack of time to raise the money by a direct loan risks, an issue of treasury notes. I preferred a as declared by the Secretary of the Treasury, direct loan, and that for many and cogent rea- could have brought him to vote for treasury sons. There is clear authority to borrow in the constitution; but, to find authority to issue notes in any shape. Mr. Clay opposed the whole these notes, we must enter the field of con- scheme as a government bank in disguise, but structive powers. To borrow, is to do a re- supported Mr. Benton's motion as being adverse sponsible act; it is to incur certain accounta- to that design. He said: bility to the constituent, and heavy censure if it cannot be justified; to issue these notes, is to do an act which few consider of, which takes but little hold of the public mind, which few condemn and some encourage, because it increases the quantum of what is vainly called money. Loans are limited by the capacity, at least, of one side to borrow, and of the other to lend: the issue of these notes has no limit but the will of the makers, and the supply of lampblack and rags. The continental bills of the Revolution, and the assignats of France, should furnish some instructive lessons on this head. Direct loans are always voluntary on the part of the lender; treasury note loans may be a forced borrowing from the government creditor -as much so as if the bayonet were put to his breast; for necessity has no law, and the necessitous claimant must take what is tendered, whether with or without interest-whether ten or fifty per cent. below par. I distrust, dislike, and would fain eschew, this treasury note reSource. I prefer the direct loans of 1820-21. I could only bring myself to acquiesce in this measure when it was urged that there was not time to carry a loan through its forms; nor even then could I consent to it. until every feature of a currency character had been eradicated from the face of the bill."

The bill passed the Senate by a general vote, only Messrs. Clay, Crittenden, Preston, Southard, and Spence of Maryland, voting against it. In the House of Representatives it encountered a more strenuous resistance, and was subjected to some trials which showed the dangerous proclivity of these notes to slide from the foundation of investment into the slippery path of currency. Several motions were made to reduce their size to make them as low as $25; and that failing, to reduce them to $50; which succeeded. The interest was struck at in a motion to reduce it to a nominal amount; and this motion, like that for reducing the minimum size to

"He had been all along opposed to this measure, and he saw nothing now to change that opinion. Mr. C. would have been glad to aid the wants of the Treasury, but thought it might have been done better by suspending the action of many appropriations not so indispensably necessary, rather than by resorting to a loan. Reduction, economy, retrenchment, had been recommended by the President, and why not then pursued? Mr. C.'s chief objection, however, was, that these notes were mere post notes, only differing from bank notes of that kind in giving the Secretary a power of fixing the interest as he pleases.

It is, said Mr. C., a government bank, issuing government bank notes; an experiment to set up a government bank. It is, in point of fact, an incipient bank. Now, if government has the power to issue bank notes, and so to form indirectly and covertly a bank, how is it that it has not the power to establish a national bank? What difference is there between a great government bank, with Mr. Woodbury as the great cashier, and a bank composed of a corporation of private citizens? What difference is there, except that the latter is better and safer, and more stable, and more free from political influences, and more rational and more republican? An attack is made at Washington upon all the banks of the country, when we have at least one hundred millions of bank paper in circulation. At such a time, a time too of peace, instead of aid, we denounce them, decry them, seek to ruin them, and begin to issue paper in opposition to them! You resort to paper, which you profess to put down; you resort to a bank, which you pretend to decry and to denounce; you resort exclaimed against every currency except that of to a government paper currency, after having gold and silver! Mr. C. said he should vote for Mr. Benton's amendment, as far as it went to prevent the creation of a government bank and a government currency."

Mr. Webster also supported the motion of Mr. Benton, saying:

"He would not be unwilling to give his sup-event showed the delusion and the cheat of the port to the bill, as a loan, and that only a tem- bill under which a distribution had been made porary loan. He was, however, utterly opposed in the name of a deposit. The idea of restituto every modification of the measure which went

to stamp upon it the character of a government tion entered no one's head! neither of the currency. All past experience showed that such government to demand it, nor of the States to a currency would depreciate; that it will and render back. What had been delivered, was must depreciate. He should vote for the amendment, inasmuch as $100 bills were less likely to gone! that was a clear case; and reclamation, get into common circulation than $50 bills. His or rendition, even of the smallest part, or at the objection was against the old continental money most remote period, was not dreamed of. But in any shape or in any disguise, and he would there was a portion behind-another instalment therefore vote for the amendment." of ten millions-deliverable out of the "sur

The motion was lost by a vote of 16 to 25, plus" on the first day of October: but there the yeas and nays being:

was no surplus: on the contrary a deficit: and the retention of this sum would seem to be a YEAS-Messrs. Allen, Benton, Clay, of Ken-matter of course with the government, only retucky, Clayton, Kent, King, of Georgia, KcKean, Pierce, Rives, Robbins, Smith, of Connecticut, quiring the form of an act to release the obligaSouthard, Spence, Tipton, Webster, White-16. tion for the delivery. It was recommended by NAYS-Messrs. Buchanan, Clay, of Alabama, the President, counted upon in the treasury Crittenden, Fulton, Grundy, Hubbard, King, of estimates, and its retention the condition on Alabama, Knight, Linn, Lyon, Morris, Nicholas, Niles, Norvell, Roane, Robinson, Smith, of Indi- which the amount of treasury notes was limited ana, Strange, Swift, Talmadge, Walker, Wil- to ten millions of dollars. A bill was reported for liams, Wall, Wright, Young-25. the purpose, in the mildest form, not to repeal but to postpone the clause; and the reception which it met, though finally successful, should be an eternal admonition to the federal government never to have any money transaction with its members-a transaction in which the members become the masters, and the devourers of the head. The finance committee of the Senate had brought in a bill to repeal the obligation to deposit this fourth instalment; and from the beginning it encountered a serious resistance. Mr. Webster led the way, saying:

CHAPTER X.

RETENTION OF THE FOURTH DEPOSIT INSTAL-
MENT.

THE deposit with the States had only reached its second instalment when the deposit banks, unable to stand a continued quarterly drain of near ten millions to the quarter, gave np the "We are to consider that this money, accordeffort and closed their doors. The first instal-ing to the provisions of the existing law, is to ment had been delivered the first of January, in specie, or its equivalent; the second in April, also in valid money; the third one demandable on the first of June, was accepted by the States in depreciated paper: and they were very willing to receive the fourth instalment in the same way. It had cost the States nothing, was not likely to be called back by the federal government, and was all clear gains to those who took it as a deposit and held it as a donation. But *the Federal Treasury needed it also; and like

wise needed ten millions more of that amount which had already been "deposited" with the States; and which "deposit" was made and accepted under a statute which required it to be paid back whenever the wants of the Treasury required it. That want had now come, and the

go equally among all the States, and among all the people; and the wants of the Treasury must be supplied, if supplies be necessary, equally by all the people. It is not a question, therefore, whether some shall have money, and others shall make good the deficiency. All partake in the distribution, and all will contribute to the supply. So that it is a mere question of convenience, and, in my opinion, it is decidedly most convenient, on all accounts, that this instalment should follow its present destination, and the necessities of the Treasury be provided for by other means."

Mr. Preston opposed the repealing bill, principally on the ground that many of the States had already appropriated this money; that is to say, had undertaken public works on the strength of it; and would suffer more injury from not receiving it than the Federal Treasury