26TH CONG....1ST SESS.

acquisition of wealth. He might as well undertake to stop the emotions and passions of the human heart. The only way to make men prudent and sagacious in business-and it is very desirable they should be so-is to make them see far enough into the future to avoid ruinous hazards; but the rash, who often have a passion for wealth, will indulge illusive hopes and make ruinous bargains, unless the Senator can enlarge their understandings and increase their sagacity.

The Independent Treasury-Mr. Davis.

sell to whomsoever will buy them; and his anxious desire is to obtain the most liberal remuneration. The Senator says the value of it is regulated by bank paper. Not so, Mr. President, not so; but chiefly by the amount in market, and the demand which exists for it; currency may, however, at times, have its influence. If the supply is great and the demand small, then wages are necessarily low; but if the supply be small and the demand great, they are high. When business is flourIshing the demand is urgent, and wages rise; when it is depressed the demand diminishes, and wages fall. Hence, too, in countries densely populated the supply is necessarily greater, in proportion to the business, than in countries thinly peopled. Thus we see why wages in a great country, new and full of resources, like ours, are in quick demand; while in China, where there is a vast surplus of population, the market is overstocked, and they are low. Hence, too, it is, that in such conditions of society we always find the greatest poverty, suffering, and degradation. Bank paper is obviously not the sole or chief cause which fixes the value of wages.

There is but one process by which credit and speculation can be suppressed, and that is, by denying the means and facilities of business, not to speculators alone, but to all; and that is exactly what the argument of the Senator tends to. He proposes to diminish the circulation, declaring that there is an inflation, when we are crippled down by the scarcity of money. He would diminish to a vast extent the resources and ability of lenders, when the public is in despair for want of circulation. He assumes that diminishing the currency will diminish wages and the value of property, and so it may be; but the first great and abiding result will be a diminution of business. His theory abolishes credit, and leaves nothing but a reduced currency to do business with, and no one can deny that a reduction of business must follow. Is the country prepared for this? Do we grow too fast? Is our enterprise too great? Do we labor too much? Have we too much to eat, drink, or wear? Are our comforts and enjoy-are engaged in transporting and exchanging the ments so multiplied that a sound policy requires they should be curtailed? What response will the people give to these inquiries? Let him who is willing to be pared down first stand forth and proclaim it. Wages are to be diminished by curtailing the demand for them; for that is the effect of reducing business.

The Senator, in his argument, seemed to forget that the evils of a contracting and contracted currency bear as oppressively upon the public, and more so, than those of expansion. The difference is this: in expansion, the weight of loss falls on the creditor portion-in contraction, upon the debtor portion; but in either case it is a grievous calamity. He cannot reduce the currency below what is necessary, without even more suffering than arises from too much.

But, sir, let us pursue this subject a little further, as it is capable of further illustration.

There are three great classes of laborers: those who produce from the earth are agriculturists; those who convert the products of the earth into useful forms are manufacturers; and those who

products of the other classes are commercial. These great divisions of mankind are founded on no law but that of civilized, social existence. In our country at least, each and every person may pursue any or all kinds of business. But experience teaches us the necessity of those divisions, for wool, cotton, and flax are of little value till turned into cloth; but the farmer would find it difficult to run a mill to make cloths, or to build and sail a ship to take his produce to market. From this division, too, come our markets. We must have food and clothing, and we must obtain them by an exchange of the products of labor; but we cannot exchange a horse or a watch for a joint of meat or for a pair of shoes; such property must first be broken into parts, and this is the peculiar office and almost the only use of money. The Senator from Mississippi [Mr. WALKER] It measures the value of property, and brings it goes for the abolition of paper. The quantity into a form suited to our convenience. This is of specie in the country is not supposed to ex- the relation which it bears to business, and no ceed about $80,000,000; the President put it at other; and while I admit its great importance, I $85,000,000. This he argues would insure a deny that it lies at the foundation, and is the great great reduction of wages and of the value of prop-regulator of the affairs of men, as seems here to erty, which he insists will be beneficial. The Senator from Missouri [Mr. BENTON] is also for metal alone; and these gentlemen have bestowed the highest encomiums upon the policy of the hard-money countries. The latter is enchanted with the fact that the Hollanders have grown rich and become great lenders of money, while we are borrowers; and I will solve for him this enigma upon his own principles. He imputes it to gold, and infers that we should be lenders if we had a metallic currency only. Who, Mr. President, are the lenders of Holland? Those individuals who have amassed millions who at one time owned most of this city, and who ean buy up empires with their boundless wealth, having profited by a state of things which made the privileged few rich, while the many are left poor-while the laborer, as I can prove, gets but. his 3d. and 4d. a day. This is the last policy we desire; the last that would be in harmony with the genius of our people or in unison with their true interests. It is diffusive wealth that we desire; a general prosperity among all; property scattered everywhere, attainable by all who deserve it; and thus invigorating a successful business, in which all may participate, instead of amassing it in the pockets of a few. We are borrowers; be it so. It is better, infinitely better, to borrow, and thus diffuse capital to excite industry and enterprise, than to amass it in heaps and become lenders to nations, with a nation of paupers at home.

But, sir, I fear I have dwelt too long on these matters, and will hasten to notice that for which i I chiefly rose. Much has been said of labor, and what is it? I may say, without offense, it is a commodity bought and sold like merchandise in the market. A man has his skill and service to

be supposed. The friends of this bill, I know, assume that we have an inflation, and that money rules, guides, and regulates business; when, in truth, the inquiries ought to be, first, how much is necessary as a circulating medium, that we may know whether there is an excess; and, second, does paper necessarily create an expansion, or unnecessary enlargement of the currency, that we may judge whether it ought to be abandoned. These matters, which are assumed, are precisely what ought to be proved. The Senators assume as evident truth what is not apparent. They affirm that paper becomes redundant, excessive, inflated. But they do not atterept to establish the fact by any proof. Since the first of January, 1838, our circulation has not much exceeded one hundred millions; it may, at some periods, have reached one hundred and twenty, inclusive of metal and paper. Is this excessive? Has it reached a point above the urgent necessities of business for two years past? If it has, how much is enough? Some days ago I put this inquiry distinctly to the Senate, and it remains, and will remain, unanswered. If it can be proved that we have too much, it is not difficult to ascertain, with sufficient exactness, what amount is necessary. I desire Senators to make known the process by which they arrive at their conclusions in so vitally an important matter. They seem to take it for granted that there is no evil but expansion to fear, while nothing is more certain than that too small a circulating medium works out as great, if not greater, injuries than one too large.

We have heard much declamation about bloated credit, gambling and speculation, but if the exist

ence of all these were established at this moment

by unquestionable proof, it would have little tendency to establish the fact of excessive circulation,

SENATE.

for they have no necessary connection, but each may exist independent of the other.

Will the Senator maintain the proposition that paper cannot and has not circulated without inflation or excessive credits in trade generally? I go further and ask him, if excess is anything more than an occasional occurrence, growing out of markets quickened into activity by events rather casual than permanent? Is there any excess of paper in the usual course of business from sound banks who redeem and are able to redeem their paper at sight, dollar for dollar, in metal? It is not easy to see how excess ever exists under such circumstances. I can go to-day into any bank in Boston or New York, and draw out a dollar with the same amount of paper, and that dollar is as good, and will buy as much, in France or Germany, as any dollar there. The paper, then, is clearly worth as much as the silver, for it buys it. If the paper of banks is maintained at this value, and so redeemed at all times, it is not easy to comprehend how it is inflated, or that more is in circulation than is needed for use. The idea of inflation presupposes some unsoundness. All money, metallic as well as paper, does and will fluctuate in value, and if this be inflation, then gold and silver is no more exempt from it than paper. It is by no means easy to determine which fluctuates oftentimes, money or property. Cotton is forty dollars a bale to-day; to-morrow it is thirty-five, and next day forty-five; it does not follow that the cotton alone has fluctuated, or that it has fluctuated at all; for gold and silver may be so abundant as to depress the value of property, or so scarce as to raise it. It is every day's occurrence to find gold and silver fluctuating in value, commanding at one time a premium, and then none; nay, under some circumstances, falling below good paper. No matter what we have for currency, there will be fluctuations in its value greatly affecting trade, as a circulating medium of uniform amount cannot be maintained any, more than you can limit business to an exact

amount.

26TH CONG.... 1ST SESS.

of the United States, and of all property created here. Upon this state of facts, as things are, the laborer would have, at the expiration of twenty days' labor, twenty dollars to provide supplies for himself and family. As they will be, he will have ten dollars. Now, sir, be it remembered that we buy and sell in foreign markets by their standard of currency, and that lowering wages and property here is to have no effect there, according to the reasoning of the Senator, as their currency must regulate the price of their wages and products; but cotton is to sell, and goods are to be bought, as if no change had taken place. Goods, therefore, will come into this country no cheaper. If, then, the laborer goes into the market with his money, as his wages are, he will have twenty dollars to expend in tea, coffee, sugar, and the thousand necessaries which come from foreign countries; but if he goes into it as they will be-ten dollars, under the operation of the new theory-it is plain, therefore, that with the same amount of labor, he can purchase but half as much foreign merchandise; in other words, it will in effect be doubled in price, while it is apparently the same.

But the Senator did not stop here, for he alleged that, while the laborer would be in a better condition, the exporter of produce—that is, cotton, &c.-would derive a greater profit, the measure of which would be the amount of reduction of wages and of property, as he would thus be able to produce so much cheaper. To make myself understood, I will proceed with the same supposition that wages and property are to be reduced one half. Then his theory is, that the cotton-planter, for example, would produce his crop at half the present cost, by the saving in labor and the support of it, and consequently derive double profit. That he would produce cheaper is undeniably true; and if he should sell for the same price he now does, and bring home specie, he would realize double profits, provided his laborers are supported wholly on the products of the United States. This, however, is not the course of trade, or of business. But from whence would the profits come? Not from foreign countries, for no change is to occur there; but from the pockets of every consumer of foreign goods in this country, for the change is wholly in the wages and produce of our own country. The idea is, that, if wages and property sink together one half, the relative positions of the laborer and the owner of property are the same, for the laborer can purchase as much with one half the money, and the same amount of property will purchase as much labor as before. But the laborer will, at the end of any given period, have but half as much money, and the same amount of property will be worth but half as much; consequently all the surplus gains of the farmer, mechanic, manufacturer, and laborer, will be but half what they now are, in nominal amount. If property in foreign countries should descend in the same ratio, the most that could be said of our condition is, that it is no worse, for it is obviously no better. But if we descend while they remain stationary, and a profit is thence gained to the exporter, nothing is plainer than that such profit is drawn from the consumer of foreign merchandise, as it will take twice as much of our labor or products to buy it as is now required. If the theory establishes the fact that the exporter is to reap double profits for cotton, it establishes, beyond controversy, the fact also that that profit will be a tax upon every man that consumes a foreign article, and that it will be wholly drawn from their pockets. The Senator has led himself into an error by supposing that foreign productions are to come to us cheaper, while our exports are to keep up where they are. He thinks the importer sells in a market inflated by paper, and realizes an extraordinary profit. But he must perceive that the low and depressed state of the working classes in Europe is proof enough that no excessive profit is obtained here upon goods-none that can bear essential reduction, and that whilst raw cotton maintains its price, foreign goods must maintain theirs. In the great competition of trade, this idea of excessive profit to the importer is fallacious; and as the notion of a reduction is founded on it, that is also fallacious.

is to

If the friends of the bill have given to it a true construction, it is a bill of privilege to the rich, but a scourge to all others.

What is the debtor portion of the public? Is it so insignificant as to be disregarded? Sir, I will venture to assert that the amount of existing indebtedness in any commercial country is nearly, if not quite, equal to the value of all property in that country, whether it be rich or poor, prosperous or unprosperous, and you cannot change, to the extent gentlemen have supposed, the relation of debtor and creditor, or thus diminish the resources of the debtors without a crash, a waste, and desolation, such as has never been experi-|| enced. Suppose a man has purchased $10,000 worth of property at present prices, and given his bond for it; you reduce its value one half, and it is worth $5,000. How is it possible that, with resources thus reduced, most debtors can ever pay?

But, sir, you cannot maintain a state of things such as has been supposed. You may embarrass and distress us as you have done, but this bill will, in the end, work out no such advantages as are anticipated for the planters. The theory contains in itself a principle that will defeat the end in view. Go on, sir, if you please, and so legislate as to bring to the cotton planters the extraordinary profits anticipated, at the expense of the other branches of industry; how long will it be before that pursuit will be overloaded with competitors, till the market will be inundated with cotton, and its price fall just in the ratio you have stimulated its productions. Down it will, down it must, by the laws of trade, come to a level with the fall of other productions. And what will be gained by the whole process? Nothing; absolutely nothing, except that it will take more of our labor and more of our productions to buy foreign merchandise; our gain wili turn literally into a loss. This is capable, I think, of demonstration, if it does not already sufficiently appear; but I have no time to enlarge, interesting and all important as the subject is.

What motive can we have, sir, to reduce wages and the value of property? When did the sun ever shine upon a laboring people so blessed as those of our country have been? Where have they ever been able by industry to feed, clothe,

SENATE.

and educate themselves so well? The history of the world proves nothing more certainly-nothing with clearer demonstration, than that where wages are lowest there is the greatest poverty and suffering; there the condition of the laborer is most forlorn and wretched; there is the least moral and intellectual culture; and there our race is sunk into the depths of political degradation, incapable of raising itself to that lofty elevation attained by a free, enlightened people, capable of governing their own affairs. It tends to the opposite of everything dearest to us, for the descent will carry with it not only wages, but all the high qualities which fit us to be what we are-free and independent. This is a sufficient answer to all that can be said upon the subject.

Such is the remedy for the disease which afflicts our country; and while its advocates shadow forth its evils far beyond any conception of mine, if the bill be carried into effect, as has been proposed here, I must confess that I see in it nothing to soothe or relieve the public-n thing to restore confidence, which is the great and desirable endnothing to avert future panics-nothing to stop this scramble after the gold and silver going on between us and other countries-nothing that has healing power enough to revive and maintain prosperity.

But, sir, much as remains to be said, I must draw to a close, as my object was merely to notice some loading remarks of Senators, which have developed the new and extraordinary doctrines of this Administration. I was anxious to vindicate the rights of the great mass of the people, who acquire their support by labor, and whose interests, as laying at the basis of all prosperity, I have at all times and on all fitting occasions espoused and maintained with whatever of ability I possess. In this, sir, I have taken great and sincere satisfaction, believing it to be the great end of our free Government, and the only sure means of sustaining it. In the name and in behalf of that great, powerful, and enlightened class of my fellow-citizens of Massachusetts, whom I have the honor to represent, I enter my solemn protest against the doctrines here advanced; and if my voice could reach them in their dwellings, their shops, and on the decks of their vessels, I would exhort them not to be deluded by false theories leading them on to ruin, but to rouse up their energies, and, at the bailot-box, manifest their indignation at all attempts to oppress them by diminishing their business and taxing their labor to enrich others. I would entreat them not to sit still and be made such as they see the distressed and impoverished laborers of Europe and Asia.

NOTES.

The statistics referred to in the remarks of Mr. DAVIS are contained in Porter's Progress of Nations, and Wade's History of the Middle and Working Classes, two recent and respectable authorities, relying for the correctness of the facts contained in the following extracts chiefly upon the statistics collected by the British Government.

These developments show the farmer and all other working men the condition of the working classes in Europe, and uport what limited means they subsist. It is this class of mien with whom they are to run the race of cheap production. and consequently of coarse and wretched existence; for the same causes which reduce them to hopeless penury will produce like results here. If a few pence a day will not support men there, it will fail to do it here. The intelligent working-man of the United States will pause before he precipitates himself into such irretrievable wretchedness to cheapen the products of labor. He will inquire whether it tends to elevate or depress his race; whether the privileges and hopes of a freeman are utterly delusive, and end in retracing his steps to the degraded condition from which we all believed we had escaped. In his descent from his present commanding position, he may well carry with him these reflections, sit down in despair, and spurn all the dazzling theories of self-government as illusory, if they leave him to subsist on the humble diet, and to grapple with the sufferings of the most desolate portion of mankind.

Wages in France.-Calais common laborers 74d. per day, with board, and without dwelling; Boulogne, 5d. per day, do. do.; Nantes, 8d. per day, without board, and without dwelling; Marsailles, 4d. to 7d. per day, with board and. without dwelling. The food in some districts "consists in rye bread, soup made of millet, cakes made of Indian corn, now and then some salt provisions and vegetables, rarely, if ever, butcher's meat." In others, "wheaten bread, C soup made with vegetables, and a little grease or lard twice a day, potatoes, or other vegetables, but seldom butcher's

'meat."

Sweden. The daily wages of a skilled agriculturist are 7d. or 8d.; while the unskilled obtain no more than 3d. or 44. and board themselves. Agriculturists in the southern provinces live upon salt fish and potatoes; in the northern provinces, porridge and rye bread form their food.

26TH CONG....1ST SESS.

Bavaria.-Laborers are paid at the rate of 8d. per day in the country, without board.

Belgium.-A skilled artisan may earn in summer 1s. 2d. to Is. 5.; in winter, from 10d. to Is. 2d.; unskilled half as much, without board, live upon rye bread, potatoes, and milk. Agricultural laborers have less.

Germany. Dantzig laborers, 4%d. to 7d. per day, without board; Mulhburg, 72. per day without board; Holstein, 7d. per day, without board.

Netherlands.-South Holland laborers, 3d. to 4d. per day, with board; North Holland, 20d. per day, without board; Antwerp, 5d. per day, do; West Flanders, 96s. to 104s. per year, with board.

Italy.-Trieste laborers, 12d. per day, without board; do. 6d. per day, with board; Istria, 8d. to 10d. per day, without board; do. 4d. to 5d. per day, with board; Lombardy, 4d. to 8d. per day, do; Genoa, 5d. to 8d. per day do; and without lodgings; Tuscany, 6d. per day without either.

Sarony. In 1837 a man employed in his own loom, working very diligently from Monday inorning to Saturday night, from 5 o'clock in the morning until dusk, and even at times with a lamp, his wife assisting him in finishing and taking him the work, could not possibly earn more than 20 groschen (about 60 cents) per week. Nor could one who had three children aged 12 years and upwards, all working the loom as well as himself, with his wife employed doing up the work, earn in the whole more than $1 weekly.

Navigation.-Between us and England this is placed upon a footing of equality; all advantage to our navigators being abrogated. If any interest can bear direct competition, this is the one. But let us see the result as set down by Mr. Porter. "In 1821," says this writer, "the proportion of Bri'tish vessels which entered the ports of the United States was 7 1-5 per cent. compared with the American tonnage employed in the foreign trade of the United States; while, in 1835, that proportion was increased to 39 per cent. The 'actual numbers in each of the years from 1821 to 1835 have 'been as follows:

British. American. Tons.

American. Tons. 872,949 967,227 1831...215,887 922,952 850,033 1832...288.841 949,622 880,754 1833...383,487 1,111,441 1834...453,495 1,074,670 1835...529,922 1,352,653

Year. Tons.

British. Year. Tons.

1821.....55,188

765,088

1829....86,337

1822... 70,669

787,961

1830....87.231

1823.....89,553

775.271

1824.....67,351

1825.....63,036

.1826.....69.295

942,206

918,361

868,381

1827.....99.114

1828....104,107

The British increase is 860 per cent.; the American 77 per cent." This is the result of treaties and conventions called reciprocal.

PENSION BILL AND PENSION AGENTS.

DEBATE IN THE HOUSE,
FRIDAY, February 7, 1840.

The House being in the Committee of the Whole on the state of the Union, (Mr. LINCOLN, of Massachusetts, in the chair,) took up the bill making appropriations for the payment of certain Revolutionary and other Pensioners of the United States.

Mr. R. GARLAND rose to reply to what Mr. SMITH, of Maine, had said, [see Congressional Globe, page 172,] and proceeded to read the names of several of the pension agents, together with the amounts of money in their hands, as stated in a printed official return from the Department; among them were General John P. Van Ness, of Washington; Isaac Hill, of New Hamp-|| shire; Mr. Brockenbrough, of Richmond, Virginia; and George W. Jones, of Wisconsin. He repeated the question he had put, in the House, to the chairman of the Committee of Ways and Means, namely, whether the pension agents had not the money appropriated by this bill already, in fact, in their hands, and whether such was not the practice of the Government.

Mr. JONES said that he thought he had already fully explained on that subject. He was not prepared to state positively or exactly what the practice of the Government in this respect had been, because he was not in possession of the requisite information, but he presumed that when provision was made to meet the payment of pensions, it was done in time to have the funds required at the several points where they were to be disbursed. He then went into the details of the estimates on which the present bill was founded.

Mr. MARVIN, of New York, addressed the House at some length on the evils of the existing rode of compensating pension agents, by an advance to them of public money before it was needed, that the use of it might be a remuneration for their services. Mr. M. referred to a debate on this same subject at a former session, and to the positions he had at that time assumed, and the returns which had been called for from the Department. The total amount of pensions annually paid being four millions, not less than two millions of it came into the hands of dis

Mr. M. went on to show that the practice of the agents as soon as the money in their hands under one head of pension was expended, though they might be full-handed under other heads, was immediately to write to the Department for more funds. By this means an agent had been known to keep $200,000 in his hands nearly the whole year round. The money was worth six per cent.; so that such an agent was in the receipt of little less than $12,000 a year-nearly one half the salary of the President of the United States! Was this right? A draft could go from Washington to Albany, where this man resided, in ten days at furthest; why must the money be sent him four, five, or six months beforehand?

Mr. REED, of Massachusetts, agreed with gentlemen who had preceded him, in the opinion that the present mode of compensating pension agents was a bad one, and ought to be reformed. In practice, however, he supposed it would, just now, make little difference, for he presumed the Administration would soon come to the House and complain that they had no money. But still this was a proper occasion to explain the conduct of the Administration. Under the pretext of giving these agents no compensation, they paid them ten times as much as any salary they could receive by law. Very large sums of the public money were purposely left in their hands, and it was not to be expected that they would not use it. He was for paying these officers directly; then the people would know what it was they were paying; but now it was all secret. He hoped an amendment would be proposed, restraining the Government from making these premature advances of public money under the pretense of getting ready to pay pensions. He never would put it in the power of the Secretary of the Treasury to allow one man a salary of $10,000, and another of five, and another of two, just at his sovereign pleasure. Everybody knew that if these men put their money in any bank, with a certainty that it would not be called for for four or five months to come, they could get four or five per cent. interest on it.

Mr. CRAIG made some remarks, at the conclusion of which he proposed an amendment, (handed to him for that purpose by Mr. R. GARLAND,) providing that no money appropriated should be placed in the hands of pension agents more than one month before the time for the payment of the said pensions.

To this amendment Mr. UNDERWOOD pro

Ho. OF REPS.

posed an amendment, providing for an allowance to the pension agents of a certain percentage on the money disbursed by them, but limiting the total amount to be received for such services by each of said agents in one year to $1,500; and prohibiting any agent from using or loaning the public money intrusted to his hands, under penalty of imprisonment for not less than one nor more than five years.

Mr. CRAIG after some remarks, submitted (in behalf of Mr. R. GARLAND) the following amendment:

"Be it further enacted, That no money appropriated by this act shall be placed in the hands cf pension agents more than one month before the day for the semi-annual payment of pensions."

Mr. SERGEANT addressed the House at some length, though heard at times by the Reporter very indistinctly. He said that what he considered the great evil in the present state (system he could not call it) of the management of this part of the momentary concerns of the United States was the fault in the general management. The fault is not so much in the payment of pensions or of any other particular fund, as in the utter want of system and of accountability according to law. And here he would take occasion to ask the attention of the committee to this business, according to his recollection. If he should be in error as to any particular, he would be glad that any gentleman should set him right. There was a time when the whole moneys of the United States were under the immediate protection and custody of the law of the United States. There was a period, from the year 1816 to the year 1833 or 1834, when the whole moneys of the United States were kept where Congress directed them to be kept. Congress made the laws, and Congress, in certain cases, unmade those laws; but whilst the public money remained as it was then, it was kept under the authority of law, and subject at all times to the authority of both Houses of Congress. This had ceased to be the case in relation to the moneys of the United States. They were no longer so. They were placed under the management of the Executive, and this great change in our money system had been accomplished by means to which he would not advert, because they were now a part, a very memorable part, of the history of the country.

It had been said in the course of the debate that the giving to pension agents the advantage of having the money of the United States in their hands was only conferring upon them the advantages which the Bank of the United States formerly had. This was a mistake. The Bank of the United States had never received any advantage at all from the payment of the pensioners; and, if gentlemen would look into the history of the matter, they would find such to be the fact. The whole service of paying the pensions of the United States, with all the risk and labor which accompanied it, was performed by that institution without compensation, directly or indirectly. When Congress chartered the Bank of the United States, certain stipulations were agreed upon between the bank and the United States. On the part of the United States it was stipulated that their treasure should be deposited in the bank and its branches until there should be some reason to suppose that it was not safe. This was a fact familiar to all. Congress reserved to itself the power (if it should think proper to exercise it) of imposing an additional burden upon the bank-that was, of executing the duty of commissioner of loans in any or all the States, transferring public moneys, &c., without commission. By the charter, the bank was not bound to execute that duty; nevertheless it did execute it, and without charge. Now, what did the United States Bank get? Not a dollar, directly or indirectly. [Mr. S.'s voice was here lost for a sentence or two.]

He would call the attention of the committee to another fact, which, in his judgment, would throw light upon this question, and would give it a bearing worthy the consideration of Congress. Before the removal of the deposits, according to his recollection, some one had felt a desire to be appointed pension agent in a State where there was a branch of the United States Bank; and the Secretary of War, supposing he had the power to

26TH CONG....1ST SESS.

order military pensions to be paid by any agent he might think proper, gave the United States Bank an order (in New Hampshire) to pass over the funds and books into the hands of an agent there. Upon looking at the act of Congress, it appeared conclusively that the Secretary of War had no such authority, and the thing was abandoned. There were individuals and institutions desirous to have those pension agencies. Why did they desire them if there was no advantage to be derived? An examination into the history of the matter would show presently what the advantage was. The United States Bank declared itself unable to comply with the order of the War Department above alluded to, because it was contrary to law; and, as he had said before, the thing was relinquished. Well, the United States Bank ceased to be the commissioner of loans, it ceased to be the payer of pensions, and it ceased to be the depository of the public moneys of the United States. What was the consequence? That, for all these purposes, the Executive had the selection of the agents; whereas, before that, they were selected by law, under the authority of both Houses of Congress-the Representatives of the people to whom the care of the public purse had been assigned.

What was the next consequence? That what had before been given by law was distributed by favor. Did people ask for these pension agencies without a prospect of emolument? No: and from the period when the management of the public treasure ceased to be thus controlled, up to this day there had been no system proposed that bore the least evidence of a desire ever again to put the Treasury of the United States, as it was, under the care of the Congress of the United States. All these powers were now in the hands of the Executive. This was a fatal change in the money affairs of the nation, and, in his judgment, the people of the United States would never do themselves justice until they should restore the Treasury of the United States to the custody of their Representatives in Congress, where it once was.

Look at the consequences. No man would say that there was no advantage derived from being a payer of pensions. What was it? It was the possession at all times of a sum of money belonging to the United States; so that if a man were a pension agent for a length of time, he would know what sum he might, depend upon always having in his hands. It had been avowed by a gentleman on the other side, that this was the compensation for the services; and thus the pension agents were placed in the same relative condition to the community as banks. What was the advantage of a bank? Its capital. It could lend out its money as an individual could; and, generally speaking, it could do no more. A bank also had its deposits. These varied from day to day; but, nevertheless, it could tell nearly on what it could calculate as its permanent deposits, and upon those deposits it would trade. And if money was placed in this manner in the hands of a pension agent, would he not have sufficient instinct of trade not to keep it unemployed? Could any man fail to see that if such a system were to prevail throughout the money affairs of the United States, the whole Treasury of the United States would be placed in the same situation, and there would be transferred to these depositaries of the public money all the advantages which the United States Bank is supposed to have had, and that, too, without the equivalent which the Bank gave, either in bonus, or its facilities for the distribution of funds? What, then, had been gained by taking it from one set of men or institutions, in order to give it to another?

Mr. S. proceeded to remark on the mode in which these matters were in fact managed at the present time, and to show that, under it, no man could tell how much pension agents might receive. That they received something, was agreed on all sides. Did they get it according to the amount they distributed? No; but according to the amount they had in their hands. There was great objection to the payment of compensation by unknown measures, or to unknown amounts.

Mr. S. alluded to the selection of State banks, or persons immediately connected with State banks, for the performance of these duties; by

reason of which, particular banks had the advantage of the public funds to any amount to which they might be awarded to them. He spoke generally-not particularly as to the pension fund, though that was a part. The conse quence was, that inducements were offered to trade upon the money of the United States. Were we not told, and had it not been proved, that from the years 1833 and 1834 down to this time too much of this sort of stimulus had been employed? That we had gone from a state of sound and substantial health into a plethora, from which we were now shrinking away in a manner so rapid as to awaken the most serious apprehensions for the result? Had not our affairs changed so fearfully as to bring us (as was once said in the British House of Commons) within a few hours of the state of barter? How had this happened? By the State bank system. By overtrading with banks-by overtrading in the community, by means of the facilities of the banks. To some this might appear a small affair. In human affairs the greatest concerns of men, considered alone, were small. It was the combination of all these small causes that produced at last the great result.

There was a radical vice in the system which never would be removed until Congress should again take into its own hands the selection of the depositaries of the public money, and the direction and control of the public money, without the intervention of the executive or any branch of the executive. He felt it to be his duty on this and on all occasions to declare what appeared to him to be a great fundamental truth-that, as regarded the Treasury of the country, we were living without law, and that thence evils of the most frightful magnitude followed; and what evils were yet to come from the same cause, it would require more than human wisdom to foretell. One solemn truth was known to all-that, at this very moment, the country was in deep distress, and was covered with the gloom of deep apprehension. He declared that there was one great cure-a remedy which had never failedand he appealed to the history of the country in proof of his assertion-and that was for the Government of the United States to take into its own hands, under custody of the law-not of the executive, but of both Houses of Congress as it formerly did-its Treasury, and thus have the regulation of the public funds. Things went well (concluded Mr. S.) when you had a system of that sort; and when you parted from it, things went ill, and have gone worse and worse from that day to this; until at last, upon this matter of pensions, no man can tell how much any pension agent receives-whether one thousand or ten thousand dollars-nor in what way he receives it. I will vote for a remedy for this particular evil. It falls far short of my idea of a remedy; still, so far as it goes, it is good.

Mr. UNDERWOOD had seen the operation of this pension agency system, and had seen its consequences. In the State of Kentucky there was only one pension agency, and that was located in Lexington, some two or three hundred miles from the lower end of the State. He lived (the reporter understood Mr. U. to say) some miles further west, beyond Lexington.

Some years since, in pursuance of a statute which they had, he applied to the Secretary of War for the establishment of a pension agency in his section of country, and stated to the Secretary that, through the instrumentality of the banks in Kentucky, the money of the Government could be disbursed to the pensioners in that State without costing one cent. No agency was established, even on these favorable terms; and, from that day to this, the pensioners in that section of country were put to a semi-annual expense of two or three dollars to obtain the pittance dealt out to them by the Government. Why was this? Let gentlemen look at some sections of country, and they would see that there were some States which had four, five, and even six pension agencies, while others had but

one.

Look at the history of this pension fund. Reports from committees had been made here, year after year, calling upon the Secretary of War to establish agencies; he having, by the law as it

Ho. OF REPS.

now stands, power to establish an agency any-
where in the United States when the public service
required it. Why was all this? The reason was
plain. By the use of the large sums of
money
furnished to pension agents for some years, such
a profit was attendant on its custody as to make
the agencies desirable, and applications had been
made for them until some States had six, whilst
others had but one. What was the source of the
evil? There was a system (if system it could be
called) by which the appointments of these agents
were left to the discretion of the Executive De-
partment of Government, with power to appoint
as many as might be deemed requisite. Mr. U.
here entered into some calculations as to the pro-
fits derivable from the use of the public moneys
thus left in the hands of the pension agents.

The President of the United States had de-
nounced the use of the public money without
authority as that which ought to be made a felony,
and punished as such by law. Now, was it
either a good or a safe policy to tolerate the use
of the public money for the purpose of giving
profits to individuals? Was it not the best plan
that could be adopted to induce men to become
defaulters? The principle was one which ought
to be abandoned, and the sooner it could be done
the better. He was opposed, however, to the
amendment of the gentleman from Louisiana,
[Mr. R. GARLAND.] These pensions were paid
on the 4th March and the 4th September. What
would be the consequence if the amendment pre-
vailed, which provided that no moneys should be
placed in the hands of the agents until within a
month of the time of disbursement? The direct,
and immediate consequence would be, that they
could no longer use the money so as to make a
profit, and that they would not accept an office,
requiring time and labor, but yielding no emolu-
ments. They would resign, and the pensioners
might be thus left unpaid. We must, therefore,
either allow the principle which all gentlemen
seemed to discountenance, of permitting the agents
to use the moneys for the purpose of profit, or
we must provide by law some percentage on the
amount disbursed by way of compensation for the
labor. One of the two modes must be adopted.
It might be said that there were three plans: the
first was, to let the agents work for nothing; that
would never do. The second was, to allow them
to compensate themselves for the use of the
public money. The evils of that plan were
numerous and manifest; so much so as to render
it unnecessary for him to dwell upon them. The
third plan was the one he was about to propose;
that was, to allow a percentage on the amount
of the disbursements.

Mr. U. was anxious also to avail himself of a
principle which had been recommended by the
President of the United States, and wished to test
the sense of the committee upon it. He desired
to know how far the prohibitory principle in rela-
tion to the use of the public money by Govern-
ment agents would meet with the sanction of the
Representatives of the people.

Mr. U. then moved the following as an amend

ment to the amendment:

"Each pension agent shall be allowed as compensation for his services per cent. on the amount of money disbursed by him: Provided, That no pension agent shall receive as compensation more than $1,500 per annum.

"Be it further enacted, That it shall be unlawful for any
pension agent to use or apply to his own purposes, or 10
lend to any person or persons, or to suffer any person or
persons to use, any part of the public moneys placed in his
hands or subject to his control; and, if any pension agent
shall violate the foregoing provisions of this section, he
shall, upon conviction thereof before any court of compe-
tent jurisdiction, undergo and suffer imprisonment for a
period of time not less than one nor more than five years, at
the discretion of the jury convicting the offender."

The blank in the first part of his amendment,
Mr. U. said, might be filled up in the House.

This, he thought, was the best plan that could be hit upon for the moment to supply the loss of that great system which had been so justly characterized by the gentleman from Pennsylvania, [Mr. SERGEANT,] which was the only safe system, and that to which we must return before the financial affairs of this country could be brought back to their former sound and healthy condition.

Mr. WADDY THOMPSON rose and said that in the estimation formed of those who were at there was one great error pervading the country: