26TH CONG....1ST SESS. and popular liberty, or a national bank and a moneyed despotism. In Europe, capital, whether it be in money or in lands, is leagued with political power against the people. Here the people are united with the Government, instituted and upheld by themselves, against capital. The great contest in which we are engaged is a struggle on the part of the combined and allied moneyed interests of the country to reverse the present order of things, and establish the supremacy of wealth over popular institutions and popular liberty. This, sir, is the issue. The appeal is to the people. I await their verdict without fear of the result. PREEMPTION RIGHTS. REMARKS OF HON. D. HUBBARD, IN THE HOUSE OF REPRESENTATIVES, On the bill granting preëmption rights to settlers on the public lands. Mr. HUBBARD said: Mr. SPEAKER: Having obtained the floor to speake upon this bill, it becomes my duty, as a member of the Committee on the Public Lands, to explain its principles. It is intended to aid the frontier settlers who have gone upon the public lands, cleared them up, and put them into cultivation-to enable them to secure homes for their families, and to get the benefit of the labor they have done upon the land. The object of the bill is a good and just one, and will be supported by the House if not prejudiced by the objections raised against it on the part of the gentleman from Massachusetts, [Mr. LINCOLN,] and the gentleman from Kentucky, [Mr. WHITE,] who have occupied the whole of this day in making objections, which I trust I shall remove from the mind of every member not opposed to granting preëmptions to first settlers. Nothing can quiet the opposition of the gentlemen who are opposed. I shall begin with the gentleman from Massachusetts, (who has occupied the House some four or five hours,) and when I shall have disposed of such of his remarks as have any appearance of force, I shall turn to the gentleman from Kentucky, and upon meeting his objections shall call the previous question, with the view of having the vote to-night; and I now notify the House that I will not yield the floor to a motion for adjournment, the House having already been too long engaged in the consideration of the question before it. The gentleman from Massachusetts objects to the first section of the bill, which he supposes " contains a new principle. This section only provides that whenever a man has built his house upon one quarter section, and made his field upon another, he shall have the right to take either, whichsoever he may choose, or he may take eighty acres to include his house and eighty acres to include his field, so as not to exceed one quarter section in all. The section appears to me so just and reasonable in itself that I do not know how to offer argument in its support. It is intended for this purpose, sir: where a man has done most labor upon his house, he can take it; when he has done most on his field, he can enter that; and when, by taking legal subdivisions, he can save both, and get the benefit of all his labor, why not let him have it? It is no new principle; it is only applying an old principle to meet cases not provided for in other bills; but if it were a new principle, it is a just and good one, and such that no one who did not oppose the preemption principle, or who did not desire to get part of the man's labor, could object to. I know that it is pretended here by the gentleman from Massachusetts that this would enable the settler to take the best halves of each quarter section, and thereby render the other part unsaleable. If the land he takes is valuable, he would soon desire the other for timber and room, and if worth anything, would be compelled to purchase to keep others away. But how does this alter the case from the way things now stand? Suppose, sir, that the land had never been settled, or no preemption had been given, could not any other sale, where any man would settle upon them with- The whole objection is shown to be groundless to the most common understanding. I now turn to the second section, and his objection to that. The second section is intended to provide for the man who actually cleared the land and built the house, and who put another man into possession of the land or house. It will provide for cases like this: a man goes with his family and makes an improvement on a piece of public land; his wife may die; he takes his children, if he has any, to her or his relations or friends, as the case may be; he will not, nay, he cannot, live alone in the woods. He therefore rents out his place to some one who wants a place. Now, ought he to lose his labor, or will you give the preemption to the man who did not undergo the hardship of the first settlement, or who did not clear it up and improve it? The bill gives it to the man who went into the wilderness, found the place, and cleared it up; to the actual owner of the place and the labor upon it, and not to the person to whom he has rented; and it is right. And, sir, the gentleman from Massachusetts would have had much stronger reason to object if it had been otherwise, and I should have sustained his objection. I will now proceed to the third section of the bill. This provides that where a man settled upon the public lands before they were surveyed, and his improvement, upon the surveying of the country, was found to be upon section sixteen, then he may take another quarter section not occupied by another person, in the same land district, at the Government price. Now, in this case, the township gets the benefit of his labor, and he could not be placed on a footing with his neighbors without such provision. It is nothing but just and right; and no one who will vote for any part of the bill ought to object to this section. I now follow the gentleman through the fourth section of the bill, which gives a preemption to any one who cleared up and settled a tract of public land, which was taken from him afterward by a grant from Congress to a State, for any purpose whatever, and the objection stands in precisely the same situation, on principle, with the objection to the sixteenth section case, which, I trust, I have disposed of to the full and entire satisfaction of the House, and to the gentleman himself, if he was disposed to favor these claims of the settlers on public lands. The fifth and last section has been opposed by the gentleman for two reasons. The first, that by reviving the bill of 1838, "those settlers who did not take preemptions under that act will get still two years' longer credit to take their preemptions. Secondly, "that it enables men to have preemptions on land subject to sale at private entry," which the gentleman thinks is not right, and that it will keep back patents for lands in this situation. The first objection is strange to me from gentlemen who can give to banks two or three years' credit for millions of public money, which, by reason of the change in times, the banks allege they were unable to pay. They can vote away hundreds of thousands to the importing merchants for reputed losses by fire. They can credit them for years upon bonds due, for what they owe the Government; but a poor needy settler upon the public lands, who has worked hard to clear it up, who has lived hard while about it, and who, for the same reasons, (the hardness of the times,) needs a little time to enter his home, they cannot afford to credit him. They can indulge others for thousands or millions, but grudge to let a frontier man have even a little time to secure his labor, and a home for his family; and that, too, when they hold the land itself, together with the labor done upon it, for security. Is this the treatment these men have a right to expect from this House? No, sir; I cannot believe it; I || know better. The second objection is too small a matter for much consideration, but is as easily answered as the others. There are but few cases where lands have been offered and would not sell at public place an object for others to buy, and he would therefore be liable to lose his labor, and be moved off at trouble and expense. Therefore no man can be supposed to be upon lands subject to sale at private entry, at the passage of the act, who was able to buy, unless the place has been so poor that his labor and land together are not worth the minimum price. A few cases, then, of very poor men on very poor land may have preemption rights extended to them by this section of the bill, but the number must, for the reasons given, be very few, and the land too poor to make either an object of much consideration with this Congress; and the few titles which may be delayed on this account cannot work any injury to an upright man. If a buyer, in fraud of the law, was to go to the office and enter one of these improvements, to get the man's labor, and would falsely state that no person was upon it, and the occupant should afterward be able to raise the money and pay up for his improvement, and vacate the title, the fellow would deserve to lose it. One more objection made by the gentleman from Massachusetts and I shall quit him, being fully satisfied that I have disposed of his objections. He objects to this bill because "it will let every occupant now upon the land have a preemption, while the former bill of 1838 required four months' previous settlement and occupancy." Now the gentleman from Massachusetts, according to this argument, would have no objection to a preemption where a man had settled and cultivated the land some two, three, or four years, and had received some benefit from it; but a poor fellow who has gone upon it late this spring, and who plants, and cannot more than half break up and cultivate the land, and who has no possibility of making more than half a crop, without getting anything like half pay for his labor, must be rooted out and driven off. This is his argument; and it is answered in making a mere statement of its contents. I now, sir, turn to the objections raised by the gentleman from Kentucky, [Mr. WHITE;] and so far as they are of the same kind with those raised by his friend from Massachusetts, they are already, as I conceive, fully answered. His objections, growing out of political considerations, I shall not take time to answer; what he has said against Mr. Van Buren I shall pass over, with confidence that it will not seriously affect him. But he gives it as his opinion that if the present bill pass it will take millions from the Treasury, and has endeavored to support his opinion by referring to a report of the late Commissioner of the Public Lands, (Mr. Brown,) who supposed that the preemption laws of 1830 "took from the Treasury $3,000,000.” Now it so happens that the book containing that report, contains a few facts which, upon examination, will completely overturn this position. The book shows that the sales of all the lands in 1829, 1830, 1831, and 1832, did not go but a fraction over two million acres a year, and that the average price was nearly one dollar and twenty-seven cents per acre. The same book shows that in 1835 and 1836, when, according to the gentleman's own statement, no preemption laws were in existence, the sales amounted, together, to thirty-two million six hundred and thirty-nine thousand three hundred and forty-three acres, which sold for $41,167,637, being about one dollar and twenty-six cents and one tenth of a cent per acre-not one cent's difference in the average price per acre, between the sales when the preemption laws were in force, and afterwards, when not in force. It also happens that, during the time that Mr. Commissioner Brown thought that so much had been lost to the Government by preemption laws, money was scarce, and sales were small, as is shown; but in 1835 and 1836 paper money was abundant, speculations ran high, and everybody was buying lands that could get to the sales; and $40,000,000 worth were sold, which sales did not exceed $1 26 per acre; and this, too, when, according to the gentleman's own showing, no preemption laws were in force. Now if, when paper money was plenty and everything high, when sales took place to the 26TH CONG....1ST SESS. extent of forty millions' worth, and no preemption laws were in existence, the lands did not bring one and a half cent per acre above Government price, what ground has the gentleman from Ken- || tucky, or had the Commissioner, to conclude that in the sale of about three or four millions' worth, when money was scarce, the Government lost $3,000,000 on the small part that went to satisfy the preemption claims of that day? The idea is absurd. It was impossible, and could only have been entertained by prejudices created in the mind of that officer by persons dissatisfied with the execution of the preemption laws, from some particular cases, and who had no correct knowledge of the system, as the report shows was the case with Mr. Brown; and, sir, like every other objection to the bill, this also has been found to be only imaginary. What I have said, Mr. Speaker, is doing but small justice to these frontier people of the new States who settle upon the public lands and clear them up. They make roads to the country; they feed, lodge, and protect the wearied traveler. More than that, sir; when your country is invaded, they protect you; and now, when their improvements are selling out, will you not protect them? I think, sir, you will. I have, as I think, answered fully the objections of each of the gentlemen to this bill. As a member of the Committee on the Public Lands, and so frequently called upon and referred to by them, I could not have said less. One word more in explanation and reply, and I have done. Those frontier men are generally poor and needy, or, at best, men of but small property. When we speak of them, we must, if we speak truth, say "they are poor." And I regret, sir, a remark made by the gentleman from Kentucky, about those "who frequently harp about poor settlers, as demagogues and political hypocrites." I have only to say in reply to that remark, that if the gentleman had been at the Baltimore convention and had seen the log pens called "cabins" hauled through the streets, he would not again speak of demagogues or political hypocrites. Mr. H. was called to order by the Chair as not speaking to the bill. Mr. HUBBARD. I have, sir, said more than I intended when I commenced, but the full and critical examination of every section and sentence of the bill during the whole of this day, warns me that it is time to end this discussion, of which the House is already tired. I shall, therefore, as I promised, end it by a call for the previous question. The previous question was called; and the bill passed, by a vote of 126 to 64. INDEPENDENT TREASURY. Independent Treasury-Mr. Atherton. great variety of topics enlarged upon by him, has introduced only those which legitimately appertain to the discussion of the measure before us. Though he did once allude to a certain Dr. Harrison, were it not that he is too well disciplined to suffer his feelings to betray him into any improper degree of enthusiasm, perhaps even that slight aberration might be attributed to that sort of admiration, or, as it has been somewhere termed, Boswellism," which a biographer may be pardoned for feeling toward his hero. HO. OF REPS. country to that of paper is by far too small. Is there a gentleman here who will rise in his place and deny this proposition? Then, though it may justly be regretted that the effect of the bill will be so limited, that effect, so far as it goes to increase the proportion of specie in circulation, must be so far beneficial. But even were there serious objections in point of convenience to the scheme as a mere fiscal measure, as I humbly believe there are none, there are other considerations which call for its It is the system most consonant to the prin- . ciples of free institutions. In confining my remarks to those subjects prop- || adoption-considerations of controlling and paraerly connected with the bill it will be my endeav-mount importance. or to imitate his commendable example. Without further preface I will therefore proceed to state, as briefly as I may, the principles which I conceive to be involved in the measure, and some of the considerations which suggest themselves as favorable to its adoption. It will occur to those who have examined the bill, that the main principles of the scheme therein proposed, for the collection and safe-keeping of the public revenue, are 1. That the money of the people shall be safely kept by the people's own officers, responsible to them, and shall not be used by corporations or privileged individuals. 2. The bill makes provisions for reaching, by successive steps, a period when all the revenues shall be collected in the legal currency of the United States, or, in other words, in gold and silver only. The different sections of the bill contain the details necessary for carrying out these principles. The system, as I understand it, commends itself by combining economy, convenience, and security. The expense of putting it in operation will be trifling, as also the yearly cost of maintaining it. The general suspension of payment by the banks in 1837; their more recent very extensive suspension; the great expenses of the extra session of Congress, caused by the refusal of the deposit banks to pay over the public funds committed to their charge; the embarrassment and inconvenience resulting to the Government and to the people from the same cause; the great losses proved by authentic official documents to have been sustained by using banks as depositaries, and by depreciated bank paper; all these, it would seem, must carry conviction to the mind of every one that the inconsiderable cost of carrying the system into effect can bear no comparison with the advantages it must afford. And while it is one of the peculiar merits of the system that it gives neither to the officers of the Government nor to any corporation nor individual power to control the revenue for any other than constitutional and legal objects, it will enable the Government of the people to control, for legal and constitutional purposes, the revenue of the people. The simultaneous refusal of the deposit banks to pay over the funds of the Government in their possession, SPEECH OF HON. C. G. ATHERTON, and the disastrous consequences of that refusal, OF NEW HAMPSHIRE, IN THE HOUSE OF REPRESENTATIVES, In Committee of the Whole on the state of the Union, on afford an ample commentary on the propriety, or, I should rather say, the indispensable necessity, of the provisions necessary to accomplish this object. The system also insures the security of the public funds, by requiring ample bonds from depositaries, by establishing various and salutary checks and guards, by providing for regular periodical inspections and returns, and for sudden and unforeseen inspections of the accounts of the agents of Government, and the moneys in their hands. And further still, it guards against that most formidable temptation to embezzlement of the public funds, the liberty to use them, and subjects such use or embezzlement to the punishment of fine and imprisonment. Mr. CHAIRMAN: It was not my intention to have troubled the committee with any remarks on this bill which has been the subject of so much discussion heretofore in both Houses of Congress and throughout the country. But having been instrumental in bringing the bill before the committee for consideration, it may be supposed incumbent upon me to reply to the gentleman from But it is alleged that the measure will have an Massachusetts, [Mr. CUSHING,] who has moved effect on the currency of the country, and it is to strike out the enacting clause, and supported contended by our opponents that this effect will his motion by an elaborate argument. And I can be injurious. It is not denied that it will have only regret that on account of the illness of my an incidental effect on the currency, but its operfriend, the chairman of the Committee of Waysation in this respect, so far from deserving to be and Means, [Mr. JONES,] who, I rejoice to see, is deprecated, cannot fail to be beneficial. so far recovered as to be present in his seat, this duty is not to be performed by one who would discharge it in a manner so much more able and acceptable. It affords a good omen for the character of the debate on which we have entered, that the gentleman from Massachusetts, notwithstanding the The only reason for regret I conceive to be that its operation will be so limited. That the question of an entire specie currency, or any near approach to such a currency, is really involved in this bill I cannot conceive that any one will be wild enough to contend. All must acknowledge that the proportion of specie in circulation in the It may be safely laid down as a proposition that cannot be denied 1. That the taking possession of the public revenue, and asing it for the purposes of private gain necessarily implies, in those thus possessing and using it, control of the reveuuc. Were any one disposed to controvert this, a recollection of the bank suspension of 1837, which has heretofore been adverted to, must establish its truth. The banks then controlled the revenue. The people could not control their own money for their own purposes. Another position is: 2. That such control of the public revenue necessarily implies a high degree of political power. This appears equally undeniable. How can a Government be carried on without revenue? Money constitutes the sinews of all its operations. So evident is the truth of the position as to justify the remark of a great statesman that "the revenue is the State." If, then, the two foregoing propositions are uncontroverted and incontrovertible, another follows, equally incontrovertible, as it seems to me. It being assumed as a fact, which no one will deny, that the people are the true source of political power, it follows 3. That banking corporations, not being politically responsible to the people, ought not to be intrusted with the exercise of political power, and thus ought not to be intrusted with the control of the revenue. The other consideration alluded to as of controlling and paramount importance, and of a similar nature with the former, is this: Unlike its antagonist scheme, the system is consistent with the Constitution 1. Because it does not recognize the necessity of agents not contemplated or provided for by the Constitution. Neither banking corporations nor any other cor porations are recognized in the Constitution. It is well known to all that the proposition to confer on the General Government power to create corporations was rejected in the Convention for the formation of the Constitution. Can it be possible that those wise men who framed that instru ment could have contemplated any necessity of employing banking corporations to carry on the fiscal affairs of the Government and yet have neg. lected to provide for such necessity? To suppose this is to suppose they formed a Government which could not be executed, unless the States should be kind enough to create corporations for its convenience-nay, for its very existence. No one will hazard his own reputation by saying of those great men that they were guilty of so vain a thing. The conclusion, then, is irresistible, that the necessity of the use of banking corporations to carry on the affairs of the Government was not contemplated by the framers of the Consti tution. stitutionThe system proposed is consistent with the Con 2. Because it provides, so far as the revenues. are concerned, for a return to the legal currency of the United States. Its effect will thus be to prevent the people from sustaining loss on account of their Gove ernment being obliged to receive depreciated paper. It will also protect the creditors of the Government from loss in a similar manner. The gives power to the Government to coin one oil, Constitution recognizes no paper currency. regulate the value thereof and of foreign col and prohibits the States from making anything 26TH CONG.... 1ST SESS. except gold and silver a tender in payment of debts. The system now proposed avoids the absurdity of receiving in payment and paying out that of which the Government has no right to regulate the value. I have thus hastily enumerated what occur to me as some of the merits of the measure now under discussion. However feebly they may have been stated, they are, some of them at least, of grave interest, and mark the system as one of vital importance. But the gentleman from Massachusetts has attacked this bill at the threshold. His object is not to amend, nor even to offer another system, but to destroy. In his extended and elaborate speech he has swept up as with a drag-net all that has ever been suggested on this once fertile but now almost exhausted subject, and has enforced his arguments with his accustomed ability. In replying to his objections, I shall frequently, therefore, have occasion to recur to the considerations which have been already thus briefly adverted to. The gentleman from Massachusetts has referred to the origin of this measure, which origin he says the Secretary of the Treasury has given in covert language, by stating the system to have been in practice as early as 1790. Mr. Hamilton was then Secretary of the Treasury. Thus, says the gentleman from Massachusetts, the Secretary refers the origin of this scheme to Hamilton, the Federalist and monarchist; but, he adds, the Secretary does not tell us that Hamilton's experiment failed. Again, he says Mr. Woodbury takes up the rejected instruments of Mr. Hamilton. There does not appear to be much consistency in denouncing this scheme as originating with Hamilton, the Federalist, and in the next breath denouncing the Secretary for taking up a scheme "rejected" by Hamilton. But what are the facts? The system of employing individuals for the safekeeping of the public moneys was the first system in practice under our Constitution. Banks were employed at the period in our history next after the adoption of the Constitution. Hamilton was the first Secretary of the Treasury. It is well known that he was not imbued with those principles of republicanism which prevailed in the formation of the Constitution. There can be no doubt that Hamilton was in favor of a Government resembling that of Great Britain. He says: "Purge the British Government of its corruption, and it would be an impracticable Government; as it stands at present, with all its supposed defects, it is the most perfect Government that ever existed." ernment. "" ter of the bank would not have contained such a moneys, so far that he, under the laws, draws for to these provisions of the Constitution. But it is otherwise with the system of deposits of public money into a bank and the bank loans it out to a speculator, is that money in the Treasury? Is the individual who uses the money as his own the Hamilton advocated the bank, Jefferson op- Treasury? No, sir; the money in that case is posed it. Hamilton, the Federalist, the mon- taken out of the Treasury without appropriation archist, got rid of the simple system of the Con- by law, or it never goes into the Treasury at all. stitution, which is the system proposed in this The public money is taken from the places of its bill, as soon as in his power. Such a system did deposit and used by individuals without any apnot suit the ulterior views formed by his daring propriation by law. Thus the objection which and sagacious mind. I agree that this scheme is the gentleman from Massachusetts urges, withthe one rejected by Hamilton, but not that it was out any foundation whatever, against this bill, is rejected because it had failed in its legitimate pur- an objection which applies with irresistible force poses. The gentleman from Massachusetts, so to the scheme of deposits in banking corporations. far as he can be understood to take up any scheme The gentleman from Massachusetts next dis-" at all, takes up the scheme adopted by the mon- cussed the safety of individual depositaries, comarchist Hamilton, rejected by the Democrat Jef-pared with that of bank agency, and he objects to ferson-the scheme rejected by a far higher authority than any single name, rejected by the people. The gentleman from Massachusetts next makes the startling announcement that the bill proposes to reform, by an express repeal of the Constitution, because the ninth section of the Constitution provides that " no money shall be drawn from the Treasury but in consequence of appropriations made by law;" and the first section of the bill declares certain rooms, and vaults, and safes, which are to be prepared in the building now going up in the western part of this city, to be the Treasury of the United States. He says the Treasury is not local, and cannot be, and entering upon that region "Where entity and quiddity, And ghosts of defunct bodies lie," he declares the Treasury to be "an abstract en- The eleventh section of the bill provides that Mr. CUSHING said that he also referred to another provision of the Constitution, which he had mentioned but did not particularly quote, and he would now give it. It was the provision which declares that the net produce of all duties and imposts laid by any State on imports or exports, shall be for the use of the Treasury of the United States." Though some have been weak or wicked enough to characterize the imputation of such opinions to Mr. Hamilton as a slander, no one will think such a course expedient since the publication of the Madison Papers. In the debates of the Convention, there reported, he freely avowed that "he did not think favorably of republican gov His aim in the administration of the Treasury Department undoubtedly was to infuse indirectly into the management of our system of Government those principles of hostility to popular rights, and denial of popular power, which he had in vain endeavored to infuse into the system itself. It is in accordance with all the motives which usually operate on human action that he should have attempted this. Thus, as soon as was safe or practicable, he departed from the system, the immediate result of the adoption of the Constitution, and ingrafted on our institutions the new principle of employing banking corporations as agents of the Government for keeping the Mr. ATHERTON. Well, sir, how does the public moneys. But it is a remarkable fact that first section of the bill conflict with either of these even this he did by indirection and by his own provisions? Does it authorize any money to be discretion, and not in consequence of provision paid out of the Treasury except in pursuance of by law. It is not true that "the first scheme appropriations made by law, or provide that the failed." The old Bank of the United States was net produce of duties and imposts shall not be for established in 1791. There is not one word in the use of the Treasury of the United States? The its charter about its being a fiscal machine of the Treasurer of the United States has, for his office, Government as a depositary of the public moneys. certain rooms, with proper safes and vaults conIf the system of employing individuals had failed, nected therewith, where he is to keep all the puband on account of its failure another had been re- lic money which is in his immediate custody. But sorted to, it is perfect folly to suppose the char-constructively he has the custody of all the public the bonds required by this bill as furnishing no adequate security on account of the large amount which may accumulate in the hands of depositaries. He alludes to the defalcation of Swartwout for upward of a million; and he also objects to the other checks provided by the bill as cumbrous machines for watching and guarding, and contends that it will be impossible to exercise inspections in all sections of the country. These objections may at first appear plausible; but when examined, they are discovered to be groundless. There are only a few depositaries under whose custody the amount of money can ever be large. The amount of their bonds will be proportionate, and the appointment by the President, with the concurrence of the Senate, should be a guarantee that none will be appointed who could not obtain sufficient sureties. The bonds of individual depositaries will surely be as secure as those given by bank officers. The suretics in the latter are usually those interested in the bank, who, when the bank goes down, are too frequently involved in common ruin: Besides, in the case of these few large depositaries, their transactions can be easily watched and inspected, and these checks and guards will be in addition to the security of their bonds. With regard to the small depositaries in all sections of the country, there is no difficulty in making their bonds a sufficient security. So, where the objection of the gentleman from Massachusetts has even an appearance of plausibility in regard to the difficulty of procuring proper bonds, his objection, drawn from the difficulty of exercising efficient inspections, fails altogether, and the reverse. Even in regard to the largest depositaries the amount on hand at any one time will never be very considerable, unless Congress should pass laws to tax the people to such an extent as to create a surplus revenue, which occurrence no one anticipates. It is also in the power of the Secretary of the Treasury, by the bill, and will be his duty, to guard against all such accumulations as could have any tendency to insecurity. Swartwout's defalcation ceases to have any application as an argument in favor of the views of the gentleman from Massachusetts, but has a directly opposite tendency, when we recollect that it was the result of the operations of years, and took place under the very system of using banks as depositaries, which the gentleman so highly commends. A considerable portion of that defalcation took place while the United States Bank was still employed as a fiscal agent of the Government. Had such a system of suretyship and checks and guards and inspections been in operation at that time as is contained in the provisions of this bill, that defalcation could never have happened. In pursuing his comparison of security of moneys deposited in banks with that of the system proposed in this bill, the gentleman from Massachusetts asks what is the security of depostis in a bank, and replies, first, the integrity of its officers, and next, the capital stock, as collateral security. 26TH CONG....1ST SESS. It seems to me to be a sufficient answer, on the first ground, to remark that the officers of banks are not appointed by the people, nor are they agents of the people. Is not an appointment by the President, by and with the advice and consent of the Senate, a higher guarantee of fidelity and integrity than the selection by a few members of a corporation? If not, why not permit the members of local corporations to select officers who are to exercise other important political trusts? There is also a further and conclusive answer. A larger number of persons have access to the funds in a bank, and the risk is thereby proportionably increased. As to the collateral security of the capital stock, every one that knows the manner in which banking is managed, is aware how little reliance is to be placed on this, and that, in many instances, the capital stock is not paid in. But suppose it really paid in; that security is far more than counterbalanced by the great risk incurred by involving the funds of Government in all the desperate hazards of the business of banking. In the hands of an individual depositary the public moneys to no risks. Independent Treasury-Mr. Atherton. employment a person of integrity equal to that HO. OF REPS. burser, but of the honesty of the bank officers, and of the solvency of the institution. The history of the Treasury, as drawn from public documents, has been referred to by the gentleman from Massachusetts. Extracts were produced from the report of the Secretary of the Treasury in 1834, in which it is said the Secretary condemned the idea of intrusting the public moneys to the keeping of individual agents. Permit me to read an an extract from that report, in which it is even then suggested that events might occur that would render the adoption of that very system expedient and proper. The Secretary remarks: "It will then become necessary to devolve these duties on some receiver or collector already in office, or on some safe agent not now in office, as has been the practice for years in this country in paying pensions at convenient places near which there was no State bank or branch of the United States Bank, and has long been the usage in some countries of Europe, by having the revenue in certain districts chiefly received, kept, and transmitted through private agents and brokers." There is also in the same report a suggestion that there is an additional fact. Swartwout may abscond, the American Bank, the Bank of Pennsylvania cannot; they are perpetually fixed by the local tenure of their existence, and are amenable to law. The history of these institutions for a few years past furnishes no very strong confirmation of these suggestions. How many instances have occurred of the absconding of bank officers, and how many melancholy proofs that they are no less liable than others to fall before temptation! A bank, to be sure, cannot abscond, but its officers may. Of what avail is it when the bank's treasures are dissipated, and its treasury not even "an abstract entity," but an abstract nonentity, that there is left an intangible, impalpable shadow of the law called a corporation? Amenable to law! I ask whether it be not to contradict all observation and all experience to say that corporations are more amenable to law than individuals are? They have, in numerous instances, procured laws for their especial benefit, and exempting them from their just liabilities. Not only so, but they have defied existing laws and set themselves above the Sovereign power that created them. The gentleman from Massachusetts also argues that banks are subject to similar inspections to those provided in this bill, and thus the security in this respect is equal. In the first place, I deny the fact. The Government of the United States has no power of such inspections over local institutions, and by no possibility can have. Again, sir; suppose the right of inspection equal in the two cases, what would its exercise be worth as applied to banking corporations? Absolutely nothing. The business of an individual depositary would be simple. It would be confined to the transactions on account of the Government alone. You have only to look at his account of moneys received, of moneys paid, and his funds on hand, and you ascertain the state of the affairs of his office. In the complicated, various, and infinitely diversified operations of a bank, inspections would always prove, as experience shows they always have proved, entirely useless and unavailing. time, the notes of various banks. There is also another very important consideration. Individuals make deposits in the bank in their immediate neighborhood, where they suppose they have an opportunity of knowing the standing of the bank and providing against emergencies. Would they think it safe to make their deposits in banks scattered over all sections of our extended country? No, sir; far from it. "Banks are not believed to be necessary for the fiscal purposes of any Government." The gentleman next refers to Executive Document No. 10, which, he says, on hasty inspection, is calculated to mislead the public. He speaks of the losses by disbursing officers. What argument can those losses furnish against the system proposed? Disbursing officers always have been, and always must be, employed under all systems, and the amount of losses through their defaults has nothing whatever to do with the question under consideration. Thus, in regard to all the particulars mentioned, the argument as to the comparative safety of deposits with individuals, as contemplated by this But the gentleman contends that the whole loss bill, and of deposits in banks, as decidedly in of the Treasury by deposit banks from the founfavor of the former and against the latter system. dation of the Government to 1837, is only about In the former the guarantee for the integrity of two thirds what has been lost by the former the officers having access to the money is of a collector of New York. Now, sir, I contend that higher nature than in the latter. But suppose it it appears from the document referred to, that equal; in the latter system the risk is greater on the loss to the Treasury from banks is greater account of the greater number of those officers of than all the losses from the commencement of the whose integrity you must be assured. The secu- Government by collectors, even including the rity to be derived from bonds is more likely to be defalcation of Swartwout. The loss from colcompetent in the case of individuals than of bank lectors is $2,038,549 81. Add the amount of the depositaries. The collateral security of the cap- defalcation by Swartwout (of which half is prob ital stock of banks is far more than compensated ably secured by Government, and which, be it by the risks incurred by involving the moneys of remembered, took place under the bank deposit the people in all the hazards of banking adven- system) and you have a little over three millions. ture. And the security to be derived from in- The losses by using banks as depositaries, and spections is, in the case of individual agents, avail-receiving their notes in payment of public dues, able and important; in the case of banks, utterly futile and worthless. • But there is another aspect in which this subject should be viewed, which of itself furnishes a complete refutation of all the arguments which have been urged, or which can be urged, against the security of the proposed system, and in favor of the system of deposits in banks. The revenues have always been mostly collected by individuals. The public moneys pass through the hands of individuals, and are disbursed, to a great extent, by individuals as disbursing officers, and this whether in the interim these moneys are deposited in banks or not. The operation of this bill is very little more than merely to prevent banks from taking the money out of the hands of the individuals who have collected it, and from using it for the purposes of speculation before it goes into the But the gentleman from Massachusetts says hands of the disbursing agents. Thus, if you that the conduct of mankind evinces their sense require the money to be deposited in banks, you of the superior security of banks, and that if in- expose the money to additional risks. There dividuals have money they deposit it in a bank, is, at any rate, and under all systems, the risk of and do not carry it in their pocket. They place the collecting officers and the disbursing officers. it with some one (I use his language) "whose You have the guarantee of their honesty and fidelbusiness it is to keep deposits." Ay, sir," whose ity. If you interpose between the collecting offibusiness it is to keep deposits." If, then, the cer and the disbursing officer the custody of the Government appoint officers "whose business it banks, you vary and increase the risk. You is to keep deposits," and that alone; who are not, have the integrity of your collecting officer. If like the officers of banks, exposed to all sorts of he be honest, and you are safe in permitting him temptation from the power of using the moneys to collect and keep your money until he can pay left with them, nor, like banking corporations, it over to the bank, his honesty will equally proexposed to the hazards of a fluctuating game of tect you if he be permitted to keep it a little longer, speculation and banking, why shall not the public until he be ordered to pay it over to a disbursmoneys be safe in their hands? Cannot a vaulting officer. Suffer a bank to interpose and take be constructed for deposits as secure as the vault of a bank? No one will deny this. Suppose an individual to possess vaults and safes of his own, equally secure with those of the bank in his immediate neighborhood, and also to have in his possession of and use the money, after it comes only of the honesty of your collector and dis amount, adopting the estimates made by the Treasury Department, to $6,474,722. Mr. CUSHING said he was considering, in that part of his argument, the question of deposit merely, and thought the subject ought to be thus viewed, and not connected with the receptibility of the paper of the banks. Mr. ATHERTON. Sir, why should these considerations be separated? This bill proposes a system, and that system includes both." What right has the gentleman from Massachusetts to separate one part of the system from another? The question is, what are the liabilities to loss incident to the system proposed in this bill? Is it not the system of general bank deposit for which gentlemen contend? Surely it is so, for most of their arguments are based on the impropriety of keeping idle the Government funds. This system of general deposit is, I conceive, necessarily connected with the reception of bank paper. Therefore, I repeat, the advocates of the bank deposit system have no right to separate these classes of losses; and an attempt to do it seems to me to indicate a consciousness of the weakness of their cause when placed on its true grounds. Besides, if they intimate the possibil ity of special deposits in banks, in that case the banks are mere bailees, and answerable only for gross negligence; and their security, so much relied on, of the capital stock, vanishes. Thus we see, sir, that, by authentic documents, the losses by banks have been nearly six millions and a half; double all those which have been sustained on account of collectors. Is this estimate too high? Will the friends of the Bank of the United States say this? When it suited the purpose of the advocates of the United States Bank to bring before the country the losses sustained by depreciated currency, how did they estimate 26TH CONG.... 1ST SESS. = those losses? In a report made by Mr. Duffie, on the 13th April, 1830, those losses are estimated at $34,000,000. Adopting this estimate, made by ar advocate of the United States Bank, the amount which has been lost by banks is $34,974,722nearly thirty-five million dollars, more than eleven times the amount lost by collecting officers. Thus the history of the Treasury, drawn from authentic public documents, thus facts and figures, and the lessons of experience, speak in a voice which cannot be misunderstood, in condemnation of the bank deposit system, and in favor of the measure now before us. Independent Treasury-Mr. Atherton. sir king fact that these nations are at the bottom of the scale of civilization which employ individual depositaries and make use of coin; that, in Great Britain and France, which stand highest in the scale, banks are used, and that the station of nations in the intermediate points of the scale is measured by the proportion in which they make use of banks and paper. Does he mean to contend that banks and paper money are the causes of civilization? He admits that some of those countries which he has placed low in the scale are paper-money Governments, flooded with depreciated paper of all sorts. Why may we not with equal justice maintain that this is the cause of their inferior position? Even in relation to Turkey, which country, in one portion of his remarks, he adduced as demonstrating the truth of his position, and as standing among the lowest sion (and I have taken down his words) that there" the Greek and Armenian bankers have as much to do in public affairs as ever the United States Bank had here." But, Mr. Chairman, why talk about the unfaithfulness of a few individuals who have refused to pay over the public money committed to their keeping? All the banks have done this simultaneously and as if by concert. There exists no power in the Government, nor can the Govern-in his scale of nations, he made the vital admisment have the power conferred on it, to punish abuse of trust by these corporations. Neither can the Government guard against their combinations, by which they may exert all their united power to sustain each other against the interests of the Government and of the people. We have recently had a bank convention in this country which held its sessions with closed doors. Shall the revenues of the people be intrusted to the secret exercise of a power thus irresponsible? The dependence of the operations of our banks on the foreign money power in England has been most vividly depicted in the message of the President at the opening of the session. And this is aside from the fact that the stock of banks may be in the hands of foreign stockholders, and the revenues of the people be thus far, in this manner, controlled by them. There is no possibility of a general failure of duty, or a general combination among individual depositaries, which shall deprive the people of their resources and stop the wheels of Government. In regard to banks, the most recent experience shows that there is not only a possibility, but a probability, of these occurrences. Why talk about the danger of intrusting money to individuals? The moneys placed in a bank are intrusted to individuals. And to say nothing of the suspensions, the insolvencies of the corporations, and the disgraceful disregard of all obligations of law and justice so frequently manifested by them, how frequent and how stupendous have been the frauds of late disclosed on the part of their officers and managers! The gentleman from Massachusetts says that the promptings of insolvency "are too powerful for the Government, and that the Government, when duty comes in conflict with these promptings, is always the loser." That is the very suggestion by which the provisions of this bill are strongly commended. The provision which prohibits the use of the public money, and punishes that use as a crime, that principle and that punishment will afford a security which alone far more than overbalances all the objections urged. The principle that it was permissible to use the public money, nay, commenable so todo, has been the cause of more defalcations than all other circumstances combined. Individuals have been induced to enter into speculations; they have plunged deeper and deeper in the use of the public funds which had first tempted them with the hope of extricating themselves by some fortunate issue. At length they have become inextricably involved, and lost their pride and character, and have boldly defied the Government they have plundered, because they have considered themselves only as unfortunate debtors instead of robbers of the public treasure. Thus the defaults are shown by returns to have been more numerous and of larger amount in the years following the mad speculations caused by the expansions of the paper system. This bill pronounces the first step in the use of the public funds a crime, punishable by fine and imprisonment. Who will assert that this is not a safeguard, worth more in itself alone than the whole of those which can be applied to banking corporations? The gentleman from Massachusetts, while he deprecates to a great extent the idea of drawing our examples from other nations, yet undertakes to fortify his objections to the bill by illustrations taken from foreign countries. He asserts it as a | It may be proper here to notice a remarkable fact in relation to the history of China, and it is this: paper money has been used by the Chinese at various periods from as carly a date as the tenth century. Like all such systems, it was productive of distress and ruin, till finally it exploded entirely; and after the year 1445, it is said their history makes no mention of any further paper issues. It is true that in France the notes of the Bank of France are taken in payment of public dues. But those notes are not of a denomination less than five hundred francs, and do not circulate much out of Paris. In a letter published in the National Intelligencer of May 6, 1840, which refers to a work on finance by Baron Gautier, formerly one of the governors of the Bank of France, and sub-minister of finance, the following head of one of his chapters is given: "From the experience of the Bank of France it is never desirable that banks should be employed in collections or disbursements of the public revenue." In addition to these considerations is the fact that in France specie now constitutes five sixths of the circulation, and in England only three sevenths. It is pertinent to inquire whether France was not civilized until her bank was brought into existence. John Law's scheme, which had as earnest and as able advocates as the present vicious banking system, and which was to carry forward the French nation on the swelling tide of wealth and prosperity with unexampled rapidity, exploded in 1720, spreading over the country such desolation and distress as can scarcely be imagined, much less portrayed. The bank was not established till the year 1803. Was not England civilized in the seventeenth century? Were our ancestors when they came here uncivilized? Were the countrymen of Milton and Shakspeare barbarians? The Bank of England was chartered under William III, in 1693; at first as a mere corporation to loan money to Government. Its title was "for granting duties on certain articles to those who will loan £1,500,000 to carry on the war with France, and for conferring certain other privileges. "The notes of the bank at first, and for many years, were on interest, and not properly a paper currency. And there are two facts which show the utter fallacy of reasoning from the use Ho. OF REPS. from Massachusetts has also, in eloquent terms, spoken of her vast dominion and her wealth. He has avowed that there is no Government he more respects, and, bringing her example forward as an argument against this measure, asserts that she has reached her present greatness, employing these very agents which we propose to reject. In his description of the extent of her power, he has repeated the remark that the beat of the morning drum in her garrisons follows the dawn of day circling round the globe. Some, perhaps, might assert that the sun, as it circles round the globe, ceases not to dawn on some monument of her rapacity or injustice. If her civilization and power are owing to the banking system, I would inquire if this system is the cause, also, of her morality, of which we have recently heard something from the gentleman's colleague, [Mr. ADAMS,] and which was alluded to recently by the gentleman himself, as signalized in her conduct toward China. And though, in addition to her European influence, she may be, as the gentleman says, the greatest Asiatic Power, was not that power acquired by treachery and rapacity and bloodshed, and is it not supported by cruelty and injustice? One of her own orators has characterized it as "an empire which God never gave, sustained by means which He can never sanction." In the gorgeous picture presented to us of her wealth, we gaze at the splendid mansion, within which are gathered, for its lordly inhabitant, the luxuries of a world, and overlook the hovel, whose desolate inmates "cower, shivering and hunger-stricken, into their lair of straw." She may be truly called a nation of princes and of paupers. What is the condition of the mass of the people? More than one sixth of the population paupers! What is the condition of the laboring classes? Look at the accounts especially from the manufacturing districts. The laborer, throughout his whole existence, wrestles in deadly strife with the grim demon of starvation. Parents, after struggling for years, through regard for their offspring, almost without hope, at last yield to despair. Children know not the season of childhood, but, crippled and deformed by incessant labor and watching, and wasted by famine, find only in a premature grave a resting-place from their toil and misery. Those who have so frequently enlarged here on the glory and riches and power of England, as proofs of the great advantages of their favorite system, hold up to our view the parks and paluces, the splendid equipages, the overgrown fortunes-ay, sir, the evidences of wealth accumulated, of wealth privileged, of a Government "founded on wealth;" but they say nothing of "the wide-spread wretchedness which is, so to speak, the rank manure which causes all these gaudy flowers to spring up and flourish." The gentleman says that when you press out bank paper Government paper comes up; that the sub-Treasury has been in operation three years, and simultaneously Treasury notes have appeared, and that Treasury notes were previously a war measure. I believe suspension has previously been a consequence of war. And as the gentleman asserts that men sometimes "mistake contiguity and contemporaneity for cause and effect," it appears to me that he has fallen himself into that error. Will any one deny that the issue of Treasury notes of 1837 was caused by the suspsnsion of the banks, and thus owing to the bank furnished the answer to his position; for he compares Treasury notes to English exchequer bills, or Government paper in Spain and Russia, and the similar issues of "all nations in debt." Then it is the being in debt which causes these issues, and not the circumstance of employing individuals as depositaries. of the Bank of England by the English Govern-deposit system? And the gentleman himself has Mr. Chairman, I have heard many glowing eulogiums on the wealth and power of England by the opponents of this bill. A gentleman from South Carolina, in the last Congress, in most vivid colors depicted her greatness, and attributed it to the banking and credit system, and called on us to follow her example. And the gentleman In relation to the argument on the expense of carrying on this system, it is only necessary to say that the objections are not so much drawn from any provisions of the bill, as from that spirit of prophecy which enables the gentleman to foresee "a new corps of clerks." It is not easy to conceive why more clerks than those provided in the bill should become necessary, though it is easy to assert that more will be needed. But Congress must authorize them if they are to be employed, and the Representatives of the people may, I hope, be safely trusted. I repeat what I |