26TH CONG....1ST SESS.

gold and silver and the paper of the bank to the difference between the paper of the Bank of the United States and the Su te banks, and you have, as in the last column, the true discount of the paper of the State banks from gold and silver, in 1831, at the counter of the great regulator. This was the condition of things in the most prosperous existence of the bank, and before the public deposits were removed.

What was the price of produce during these bank operations? I refer to the following statement for an answer:

Prices of Wheat from 1890 to 1831, inclusive; and also from 1831 to the 21st of February, 1810, in the eastern part of Ohio.

Average price. 20 cts. 31

421

3

3

Independent Treasury—Mr. Parrish.

others is produced by the sudden stoppage of the circulation of money in consequence of the frauds committed in banks and the jealousy and fear which these institutions have of one another, powerfully assisted, too, by the apparent determination of the United States Bank to eat up all the State banks immediately."

Same volume, page 274, June 19, 1819. "BANKING.-We have prepared a pretty long article on the equalization of exchange,' as now practically felt by the operations of the Bank of the United States in refusing to issue its own notes, of which, a little while ago, enough could not be signed to fill up the currency, and about which Congress was petitioned, &c. But such things must not be expected! We have fallen on evil times. We think we shall be able to show that by a procedure like this the bank is really invested with a more dangerous and destructive power than many of its most inveterate enemies expected. May it not be a new speculation? United States Bank stock at Philadelphia, June 15, in the market at 911; 90 offered-no sales."

Same volume, page 417, August 21, 1819. "Never did an institution exist that more completely blasted the public expectation than this bank has done. Its policy, though founded upon opposite extremes, has been equally mischievous and malevolent. The original purpose of its framers was to get money; the object of its present managers is to acquire power. The former were a desperate set of speculators, the other is a conclave of tyrants. Gold was the god that the first worshiped; the second gives up all to ambition. Cæsar or nothing, is the device inscribed on the entrance of the council chamber."

"Certain facts have just reached me from a source in which I have as much confidence as if the confession were [Table referred to in preceding column.]

HO. OF REPS.

made by the Secretary of the Treasury to me in person, that the Treasury of the United States is already in a subservient condition to the bank. in April last the bank resolved that it would not receive of Government its own bills and credit them as cash, except when tendered at the places at which they were payable; that it would not pay the Treasury drafts at any place required,' except the publie moneys had accumulated there to a sufficient amount, unless upon a notice given to allow the bank time to do so on commercial principles, &c. To which the Secretary submitted."

Everybody knows and feels the grand deception of this institution as to its pretension to furnish a circulating medium of an equal and certain value in all parts of the United States; but things like the preceding, in regard to the Government, were hardly expected by any one so soon."

Report of the Bank Committee, 1832, pages 16 and 18.

"The committee feel it their duty now to give their views as to the cause of the present distress in the trading community, and which they fear may greatly increase. It is an acknowledged principle that like causes in all cases produce like effects; and, as in 1818, contraction followed the expansion of 1817 and 1818, so by the same rule must contraction follow the immense expansion of 1830 and 1831, and like effects and consequences succeed."

*

"The committee believe that the cause of operations by the bank, during the years 1830 and 1831, have been nearly of a similar character to those of the years 1817 and 1818."

Almost at the same time with the Bank of the United States commenced the internal improvement spirit, which, during Mr. Adams's administration, received a new impetus, that was only checked on the part of the Federal Government by General Jackson's veto on the Maysville road bill. This did not affect the States, and most of them continued to carry on the system by raising money on the credit of their stocks. To this I oppose no objection while kept within the means of the State. Put the system was persevered in until, for this and banking, most of the States now find themselves largely in debt, as appears

from the following table:

Statement showing the amount of Stocks issued, and authorized by law to be issued by the several

States named below, in each period of five years from 1820 to 1835, and from 1835 to 1838.

Table showing the Prices of different articles of Provisions and Produce in different sections of the Union, about the months of April, May, and June, of 1991; and of

Flour at the same places in 1839, and the last of May, 1840.

2,000,000

7,000,000

7,335,000

$174,906,994 5,340,000 23,735,000 3,000,000

cated, during the period of the above fluctuations, mostly passed under the control of the Bank of the United States, and to that extent enabled it, as a vacuum was created by the payment of the national debt, to fill it up by sending those stocks abroad, principally to England; until, with what have since been contracted, nearly the whole of the State debts are held by English bankers and brokers, and are supposed to amount to nearly two hundred million dollars. This operation has had a threefold effect: first, in stimulating to excessive importation, through the facility it afforded for payments and exchanges abroad, as is evident from examining the periods and amounts in the

1.08 60 50

This statement is furnished from two of the oldest milling establishments in Ohio-those of Kinsey and Patterson, in Belmont county-and taken in connection with the taxing system above shown, exhibits the situation of the farming interest while the Bank of the United States was carrying on its operations, even to the time the deposits were removed. Wheat being the great staple, the above table, with the following, shows pretty fairly the relative value of all other kinds of produce and provisions in different parts of the Union. From these the wages of labor may be fairly inferred, as they invariably go together. [See table in next column.]

These exhibits not only show the prices of produce from 1820 to 1840, but they fix the basis on which to ascertain the price of labor, which was during the first ten years of the period equally low. If proof beyond the recollection of those now living were necessary, the following extract from a speech of Hon. Henry Clay in 1824, is sufficient, at least with the Opposition, who now have so much care on this subject.

"In casting our eyes around us the most prominent circumstance which fixes our attention and challenges our deepest regret, is the general distress which pervades the whole country."

"The truth is that no class of society suffers more in the present stagnation of business than the laboring class. That is a necessary effect of the depression of agriculture, the principal business of the community. The wages of ablebodied men vary from five to eight dollars per month; and such has been the want of employment in some parts of the Union, that instances have not been unfrequent of men working merely for the means of present subsistence. If the wages for labor here and in England are compared, they will be found not to be essentially different."-Niles's Register, vol. 26, pages 378 and 387.

The following additional extracts from the same authority add to the testimony on this subject, and show also the depressed and miserable condition of commerce and manufactures:

From Niles's Register, June 19, 1819, vol. 16, page 273. "OUR MANUFACTORIES.-We hear of the shutting up of several large manufacturing establishments. It is probabie that during the present summer not less than fifteen thoueand persons, and it may be many more, who subsisted by employment in those establishments, in addition to the great numbers already discharged, will be thrown from the productive into the consuming classes of the people. The political economist will estimate the effect of this on the national wealth."

Same volume, pages 356 and 357, July 24, 1819. "WANT OF EMPLOYMENT.-The greatest evil to be deprecated in the present deranged state of things will be the dead loss incurred by casting many thousands of productive persons into the consuming classes of the people. Most of our manufactories have stopped or are about to stop, and every branch of mechanical industry is reduced from one third to one half of its recent amount; the first by the great sacrifice that is made of imported goods by bankrupt owners in England or bankrupt importers here to raise money to riot upon until their accounts with their creditors are settled according to law; the effect on the

No. 39.

pound.

Beef, per per Corn, barrel. bushel. barrel. bushel. per Flour, per Oats,

Cents.

10 50 $7.00

ོ

4.50

12 00

87

18

3

10

7

27

50

9 75

61

550

50

6 50

7 621

4.87 4.50

26TH CONG....1ST SESS.

subscribed; one or more branches to be established in each State now existing, or which may hereafter be admitted into the Union; the interest on loans by the bank not to exceed six per cent, for the first five years, and after the expiration of five years the said bank is not to take more than five per cent. ; no note is to be issued by the bank of a less denomination than five dollars; after five years the bank shail not issue any note of a less denomination than ten dollars, and after the expiration of ten years the bank not to issue any note of a less denomination than twenty dollars. No foreigner shall be a director or vote for a director in said bank. Each State in which a branch shall be located shai have the appointment of one director in such branch, besides its due participation in the general election of directors. The deposits of the public money to be made in the said bank, to be disbursed as may be required and provided for. The bank, on reasonable notice, to lend to the Government any sum not exceeding $10,000.000 without the consent of both parties. The bank never to suspend specle payments without the consent of Congress, and never to have notes in circulation exceeding twice the amount of specie in its vaults.

Resolved, That to aid the public credit and finances of the several States, and the better to enable them to take the proportion of bank stock allotted them in the first resolution, the proceeds of the public lands to be received after the 1st day of January next ought to be distributed among them according to the representation of each in Congress after the next apportionment of representation; one half of the land fund paid to each State to be vested and pledged for the support of common schools, and the other halt for internal improvements and such other purposes as the States resp: ctively may direct.

Mr. STANLY moved to lay it on the table. "Mr. EVERETT made the question of consideration, and under that motion the resolution, according to a rule of the House, lies over.”

The whole system is here developed; and the objects which are to be effected by it are those which I have shown neither tariff nor bank has ever yet been able to do. It assumes to relieve the people from embarrassment and taxation, but instead of these will increase both. A few brief reflections will prove this:

The State debts which are proposed to be assumed, are shown by the above table to be more in amount than any longer debt owed by this Government, and the interest on hem at five percent., which is rather below the average, would amount to....

This sum would be required in gold and silver to pay the interest, which has to be done every six months, and added to the appropriations made this year......

$10,000,000

22,750,000

This sum, equal to what is already received, must be raised, and as the public lands are gone it can only be raised from the people; this can only be done by levying a direct tax; or indirectly, by laying high duties under the tariff system. This is the only alternative, and the tariff will be the resort. To meet the demands of the Government it will of necessity be one hundred per cent. higher than at present. Here will be, then, a renewal of all that I have been describing. Instead of little or no national debt, as at present, the country would be loaded with upward of two hundred million; instead of reduced taxes through duties, higher taxes from tariffs than have ever been collected; instead of the sub-Treasury, a national bank with a capital composed of national debt; and instead of having the public money used for public purposes alone, it will be deposited with and used by bankers; and the whole system ends in completing what its principles tend to, taxing the many for the benefit of the few. Against this I oppose my vote in favor of the sub-Treasury.

INDEPENDENT TREASURY.

SPEECH OF HON. M. A. COOPER,
OF GEORGIA,

IN THE HOUSE OF REPRESENTATIVES,
June 26, 1840,

On the bill to establish an Independent Treasury. Mr. COOPER said: Ì rejoice, Mr. Chairman, that an opportunity is at length afforded me to assign the reasons why I support this measure Convinced of its propriety and rectitude before it

Independent Treasury-Mr. Cooper.

was recommended by the present Administration, I have watched its progress before the country, in the hands of the present rulers, with immense solicitude. I look on it as involving directly an issue between the people and the bank corporations of the couniry: whether the former shall keep their money, so as at all times to use it without danger of detriment to themselves, or whether the banks, by keeping and possessing it, shall dictate to the country the time as well as the mode and manner of using the public money.

This is an inquiry of vast moment. On its decision depend the future characteristics of our Government. By the adoption of this bill it may retain the form and substance of a republic; by the adverse policy it may for a time preserve the outward appearances, but in reality it will soon become an unlimited consolidation of powers.

The gentleman from Pennsylvania, who has just taken his seat, [Mr. BIDDLE,] always eloquent, promised us in the outset he would offer something for us, not for his constituents, and would address our understandings, not our prejudices. This promise from one so competent to fulfill it was a pledge that we should receive light and instruction. It therefore gave me pleasure. In the discharge of this obligation, however, he has been unmindful of his duty under it, or else has placed an estimate on the good sense of members by no means flattering to them. A very large proportion of his speech was devoted to eloquent declamation on points secondary to the questions at issue. The apology for this may be that his distinguished colleague from Philadelphia, [Mr. SERGEANT,] who preceded him, in an able and very elaborate manner, covered the whole ground of argument.

Two questions, however, were asked by the first-named gentleman, [Mr. BIDDLE,] very pertinent, pointing to the merits of this bill:

1. "When you have gotten the specie into the Treasury, how is it ever to come out, since the paper circulation will be less valuable?

2." When, by this operation, the paper medium shall be discredited, how are you to restore its credit?"

These I will, in the sequel, endeavor to answer. Besides these questions the main topics of this gentleman's remarks were the State banks, and a defense of the administration of the late United States Bank. These points, too, shall receive attention from me.

Before I proceed, sir, I must ask permission of the committee to digress for a moment or two, to touch a matter connected with this measure, but somewhat personal to myself and colleagues. I have postponed an expression of my opinions on this measure longer than I should have done, for the following reason: when the present delegation from Georgia took their seats in Congress, they were affiliated members of one political family. We then differed, as we still do, on this measure. By consent, our friends at home agreed it should not be cause of quarrel or mutual crimination, but that either should carry out his views in the most consistent and conscientious way. In the progress of a faithful discharge of these obligations to the country, and to those who sent us here, we have found it indispensable to differ in the choice of the men who shall be used to carry out our respective views. On us who advocate the sub-Treasury, the necessity of choosing a Democrat became as imperious as that which commanded my colleagues, who opposed that measure, to elect a Whig and a bank man. This I foresaw before I came here. It was known that every Whig was opposed to the Independent Treasury, and the party as a body were advocates of the bank system; that system which the distinguished gentleman from Philadelphia [Mr. SERGEANT] has truly and successfully traced to Alexander Hamilton, and which the same gentleman so triumphantly and so bodly announced as Hamilton's favorite scheme. Would you expect to fee the bank-note engraver to shoe my horse? To ask a blind man to distinguish between the fixed stars and the planets; to invite the moon to shine without the sun, or to apply at midnight for the light of noonday? If I should act thus would you not justly say, that man is either a fool or a knave?

Sir, so long as my colleagues desire to oppose

HO. OF REPS.

this measure and take a United States Bank in preference, equally foolish would they act to take a Democrat to do the work. Foreseeing all this, I told my constituents before they elected me what rule would govern me, and that this rule would make it my duty and their interest to elect "Van Buren in preference to Clay or Webster; and that as for Harrison, he could not be thought of under any circumstances." I appeal to my colleagues whether I have not stated truly. Having truly stated, I appeal, sir, to this committee in proof that in what I have done and said here, I have said and done neither more nor less than I proposed to do before my election. My colleagues and myself, at this very moment, have the same difference in reality which we brought with us here. If there be any difference now which did not then exist, it is as to men, not as to measures. From this remark I ought to except two of the six, who are opposed to this measure. Those two have now a difference from me in regard to it which did not then appear. But I have not changed.

In regard to our opinions of parties, also, the same two agreed with me once in that wherein we now disagree. We then thought it would not do to amalgamate with the Whigs. On this point we now differ. I have not changed. In regard to men, I thought and said it would be better to choose Van Buren rather than Harrison. All my colleagues thought, and so said the party, that they would vote neither for Harrison nor Van Buren. Six of my colleagues now think they will vote for Harrison. They have changed, not I. So that, whether in reference to measures or men, I have not changed, while six of my colleagues have changed, either as to men or meas

ures.

Here, then, is my apology for this digression. At a recent convention of those who claimed to represent the party whose nominees we all were, it was thought advisable to proscribe that portion of their delegation who are now advocating this measure. I have searched in vain for the political grounds on which, consistently with their former action it has been done. I grant their right to make this measure now a test, though not so made heretofore. But in doing it, they cannot escape from the conclusion that it will be because they oppose it, and desire a bank. I know there are some who do not desire a bank, and prefer even this measure to a bank; and yet, by force of party prejudice, join in the proscription. Against such, and such alone, with justice I complain.

Against those who desire a bank we have only this complaint, that they have subverted the ancient policy of the party, and are sending it adrift into the broad channel of Federalism, swiftly pursuing the great idol of Alexander Hamilton; and while they worship at this idol's shrine they are bringing up to the altar, as a sacrifice and peaceoffering, every vestige of State rights; but, before doing it, they will have rung the death-knell of the party, and to the grave have consigned its remains.

A difference, then, on this measure and its necessary incidents, has separated the present delegation from Georgia. Feeling it to be a mournful occasion, I have waited to the last hour, in hopes that those who differ from us would give me the benefit of their views, that I might make available that last hour as a day of repentance.

But notwithstanding two of us have given them our reasons for supporting this bill, and I have privately requested them to answer our arguments and give us their own, they decline to do so, and seem content to see us go forth in our way without an effort to convince us. Sir, my own opinions are my guide, but I hold no opinion too sacred to be yielded up to the force of

truth and reason.

Mr. ALFORD here interrupted Mr. COOPER, and asked him to yield the floor for a short time and he would briefly state for his benefit his reasons for opposing the bill.

Mr. COOPER, through courtesy to his colleague, consented.

Mr. ALFORD then occupied the floor for two hours. After he closed,

Mr. COOPER. Mr. Chairman, I would be greatly obliged to my colleague, who just spoke, for the use of his lungs.

26TH CONG....1ST SESS.

When I made the digression, I had referred to the speech of the gentleman from Pennsylvania [Mr. BIDDLE] and to the very able argument of the distinguished member from Philadelphia. To both I shall try to refer a few times more. I will now proceed, without further liberty to depart, and discuss the merits of the bill before the committee.

An honorable member has said he was at a loss to know whether he understood the subject and nature of this measure, because of the differing views of members as to its effect and operation. The objects I have in view, which commend the bill to my support, may be reduced to two:

1. A limitation of the revenue to the economical wants of this Government.

2. To keep the executive and legislative departments within their limits, as defined and prescribed by the Constitution, both in regard to the nature and purpose of its policy and powers.

I am not so sanguine as to expect this single measure will guaranty these results in defiance of a willful propensity to pervert, common to all parties. This would be, by the potent energies of a single proposition, to make this Government all that our forefathers desired and its enemies deprecated. No; I should be a perfect enthusiast, and overlook all the frailties of our nature. No measure you can adopt, however potent or conservative, possesses such sanative properties. The yearly perversions of our invaluable Constitution, so plainly written and fully expounded, warn me against the disappointment that might follow such anticipations of bliss.

My brightest hopes are that this measure, honestly and faithfully administered, and untrammeled by obstacles unnecessary and willfully interposed by those opposed to it, will by its legitimate operation tend at all times to secure these two great objects, while every antagonist policy will render their attainment less and less hopeful, and will be productive of evil, and that continually.

This policy is not only the most effectual to limit the revenue and avoid a surplus, but it will operate to diminish the indirect patronage of the Executive without increasing the direct. former is more to be dreaded than the latter, because it is more hidden and less understood.

The

The bill supersedes the agency of all banks, and keeps the Government funds at command of the people's Representatives, to be used when they order it, without danger of a spasmodic effect on the currency:

It will tend to make the paper money sounder by removing from the banks the pretext or most fruitful cause of irredeemable issues; consequently to that extent it will prevent convulsions in money matters, changes in the relations of property and its owners, and will produce more uniformity in prices, and soundness of pay to labor and its prod

ucts.

It cannot injure any of the State banks, because it can only take and withhold from them what is not theirs, and deny them the power of abusing what they ought never to use the public money. For the same reason it can never injure the prudent and honest merchant or trader of any description.

The benefits of this measure are not addressed peculiarly to any leading interest whatever. They are to be diffused more especially among the planters, the farmers, the day laborers, and mechanics; because the permanent circulation rests habitually in their pockets. Every loss on it is their loss, and the saving of a loss is their gain. Whatever, therefore, diminishes the use of the article on which they must lose, and substitutes that by which they cannot lose, is interesing to them. This measure does that.

It does not address itself to the interest of the shaver and broker as some, for effect, have declared. They fatten on a multiplication of credits and the derangement of currency. Hence, in such times, every bank has its broker. Reduce the former or make uniform the latter, you cut off their speculations, and make their business and profits as regular and uniform as those of the merchant, the banker, or the planter.

If I be asked, sir, how I arrive at these and other conclusions, which I shall presently state, I answer, by inquiring into the nature and objects of modern banking. First, I find the object to be

Independent Treasury-Mr. Cooper.

to make money without the use of money. How is this done?

1. It is done by using the corporation credits to the most unlimited degree consistent with the safety of the stockholders.

2. By getting possession of as much of another's money as possible, keeping it as long as possible, making the best use of it for the time, and finally paying for it in anything but money.

Hence, he who can get hold of the most money, keep it the longest, make the most of it, and invent the most ways to return it, without giving up the thing itself, maintaining all the while a reputation for fairness, prudence, and safety, is esteemed the best modern banker. The keeping, receiving, and paying out the public money (independent of banks) is the subject of this bill. The keeping and using of the public funds by the banks, or through their agency, is the policy of the Opposition, to wit, the Whigs.

The public deposits constitute the bone of contention. I beg the committee to fix their eyes on this single idea, and follow it in all its applications; for startling results will be exhibited to some at least when I shall have fully answered the following inquiry: why is it that the friends of the banks are so hot in pursuit of the deposits, raising a great hue and cry when they are removed, charging Government with all the evils resting on the land induced by superabundance of irredeemable currency? Do not the people believe that bank notes are based on, and their circulation governed by, the capital or money of the banks, a reasonable portion of which is supposed to be specie? They do. Hence the universal idea with the mass that a bank is a strong, a safe thing. Hence the planter or farmer who has no

HO. OF REPS.

borrowing to do, puts his money on deposit for safe-keeping. What will be the surprise of this confiding portion of community when I assert and prove that the entire circulation of the Union is based on or governed, not by the specie in the vaults, not by the amount of capital paid in, but by the average deposits held by the banks?

That this is not only true of the United States Bank, but that its aggregate annual circulation, during the twenty years of its existence, was governed by the aggregate amount of public money held by it. This, sir, is literally true. And the average deposits during the period of that bank's existence were as true an index to the circulation as the dial is to the sun's course when no cloud obstructs its shining; as just, sir, as the thermometer to indicate the heat-swelling as they increased, and contracting as they diminished. I will prove this by witnesses not to be distrustedthe bank's own confessions, which are to be taken always most strongly against itself. This will furnish a true development of the real cause of all our distress and suffering, and may serve to suggest the appropriate remedy.

Now for the proof. It is taken from the bank returns exhibited in the public documents. (Senate Document, second session Twenty-Fifth Congress, No. 128, page 208.) The proposition is, that the circulation of the United States Bank, from 1817 to 1836, was governed, not by its capital, not by its specie, but by the average amount of public money on deposit.

Here is a semi-annual statement of that bank for January and July of the several years, taken from that document, under the respective heads of capital, specie, deposits, circulation, loans, and discounts: