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26Th Cong.... 1ST SESS.
Independent Treasury-Mr. Cooper.
HO. OF REPS.
For the years 1838, 1839, and 1840, the net cir- issued was disparaged; the order of things was as domestic, lords and ladies, dukes and earls, culation only is given, as taken from the Treas- reversed; the banks first interposed to advance and plebeians and patricians, widows and orphans, urer's report of 1840.
prop individual credit; now individual credit is and capitalists, great and small, operating iwenty Anterior to 1820 the deposits are not given. the sole support of bank credit. Why is this? years, with an average annual Governinent deAt that date they were $35,000,000, the circula- I answer, it is because the banks have issued and posit of nine or ten millions, free of interest, you Lion was $44,000,000, and the specie $19,000,000. | putin circulation as money that which, not being have seen pressure after pressure, expansion and
In 1830 the circulation had increased near a money, is based upon and governed by some- contraction repeated, lill at the wind up it ends third, and the deposits over a third, while the spe- thing that does noi belong to them, and which in discredit and bankruptcy, to the confusion of cie did not increase more than one ninth.
they were bound to surrender at a moment's its friends and mortification of its administraIn 1835 the circulation rose to $103,000,000, | warning.
tors. Sir, we have seen its evils. Where are its and the deposits $83,000,000; specie to$43,000,000. 3. The individuals upon whom rested the re- benefits?
The next year, and the year after, circulation deemable power of the $55,000,000 of bank issue, But, sir, gentlemen say our accumulated evils rose to $140,000,000 and $149,000,000, deposits rose up as one community and petitioned the that elicit such loud complaints are the effects of to $127,000,000; while the specie was reduced banks to suspend. Why? Because it was their the measure on your table. How can it be? It from $13,000,000 to $37,000,000. This brought
An extension to the banks was an has not yet begun to operate. If it does go into about the suspension and all our distress, press
extension to themselves. It was their case in a operation it can only take from the banks that ure, hard times, &c. The reasons why, I shall tenfold degree. It was virtually a case between which does not belong to them. If they have not soon explain, if they are not already made man- these bank debtors and the community, who used them as a basis of issue, their removal canifest.
hold bank bills as money-a case in which the not prejudice the circulation. If they have, the Here you perceive that the circulation rose to bank debtor had this advantage: if the banks responsibility is on them, and the country will a ruinous height, being carried up by the de- should suspend he might gain, but could not lose. call them to answer for all the mischief. posits at the same time that the specie was dimin- The community were certain to lose, and could What, sir! has it already come to this, that at ished. We expect to show hereafter, that of never gain. He might buy at discount bank this early period of our history the people dare the $149,000,000 of circulation then out, from notes with which, at par, he could pay his own. not attempt to use their own money, deposited in $30,000,000 to $40,000,000 was issued on a false Community lost the discount, but never shared bank for safe-keeping, without receiving through basis, or, in other words, on the fund of the de- the premium. It is more than equivalent to a vol- their agents insult and indignity at the hands of positors.
untary act of bankruptcy, for it enabled a man to these corporate powers? Is it not enough that From 1837 to 1839 $43,000,000 of the deposits stop payment, keep his property, and pay his they have had the use of $10,000,000 for twenty were used. This produced the contraction and debts at twenty-five cents in the dollar. 'li was years free of interest? Or must the people, in pressure now felt; for it reduced the circulation a copartnership in which one of the firm was demanding their money, be told they shall suffer in one year $58,000,000. This was not produced bound to share the loss, having no portion of the and be pressed until they not only withdraw the by a reduction of the specie basis, since it was di- || profits.
demand but grant this corporation all it asks? Sir, minished that year only $2,500,000.
4. Another effect was that in the excitement of || I trust there is patriotism and fortitude in the In 1839 lhe banks made a powerful effort to this expansion you created an artificial demand people to endure awhile until they shall be rid reinstate the circulation to what it was in 1837. for money, which tempted out of its proper chan- of this system of Hamilton and all its evils and Toetiect this they added $10,000,000 to their spe- nels that capital which, being needed, was habit- abuses. cie in one year, and carried it to $45,000,000, far ually used in the regular course of trade, and con- This system, Mr. Chairman, is thus shown to beyond what it ever had been. They were una- sequently kept on deposit with the banks. The be unlawful and injurious, both in theory and ble, however, to expand beyond $107,000,000, abstraction of this and its diversion to unwise, I practice. Its unconstitutionality is so well estabfor the deposits did not rise above $90,000,000 | uncertain, hopeless, helpless, and useless specu. lished by my colleagnes, who spoke in support and a small fraction.
lations, tended, like the removal of the depos- | of this bíll, that any argument of mine is superThis effort resulted in a further contraction in its," primarily to embarrass the banks, to test seded. the circulation of $21,000,000 from 1839 to 1840; the soundness of their issues, and to make mani- Who, then, is at a loss to assign the true causes hence the deposits fell from $9,000,000 to $75,- || fest (what existed before, but was unknown) the of the hard times and the derangement in the cur000,000. durangement of the currency.
rency? If there be one so willfully blind, so perHence you perceive, sir, that what was true 5. One more effect I will speak of. In a crisis | severing in his purpose not to see, as to affect of the United States Bank as a manager of your like this, in which the bank debtor had the de- unbeliet with these bank statements before him, funds, proved to be true of all the banks, partic- || cided advantage of community, and community let me call that one's attention to one more fact ularly after the removal of your money from the has sustained loss without a gain, the banks had drawn from the two bank statements now before former to the latter.
the advantage of both. If their bills depreciated, || me, and already referred to. In 1833, when the deOne fact let me call your attention to here. It | they would send into the market and buy them posits were removed from the United States Bank, is this: from 1834, the time the transfer of public | up; if they were forced to redeem, they too could ihey amounted to $12,752,543, which left of that money commenced from the United States Bank force their debtors by a contest with them. By bank's circulation $12,000,000 in round numbers to the pet banks, to 1837, the time when the trans- the power they possessed over the money and the resting on the deposits for support. fer was fully made, the aggregate expansion was credit of the country they had the whole prop- The funds were transferred to the pet banks $55,000,000. The amount of deposits transferred erty interests at their mercy,
in 1834, 1835, and 1836, during which iime their in this time was $52,000,000.
Other and more remote effects of this unlawful circulation was increased to $55,000,000 without Again, from 1837 to 1840 the whole of the de- and destructive use of public money I will point a corresponding increase of capital. This, added posits were taken away, distributed, and used up, out hereafter, because my constituents are more to that of the United States Bank, makes the sum so that this year we have an empty Treasury. || interested, if possible, in them, and being more of $67,000,000 of circulation in 1837, most of The aggregate amount so used and taken away hidden, they are not so easily detected. For the which rested on the $12,000,000 of Government is $52,000,000 in this period, (precisely the same present I will here set down to this account all funds. But the Government, in the next two that was put there from 1834 to 1837,) and the the evils, moral, physical, commercial, and polit- || years, used this fund and left (as appears this contraction was $63,000,000, a little more than ical, of a vitiated and debased paper currency: year by the undenied statement of the gentlemen the expansion, as might have been expected. I say, sir, this system of issuing upon and be- from Maine and Pennsylvania, both on the Ways
Here, sir, is a vibration in the circulation in || ing governed by the public funds, is unlawful. and Means Committee) an empty Treasury-a six years from $94,000,000 to $149,000,000, a cor- You gave the stockholders a charter for a capital condition enviable to freemen. responding one in the deposits, while specie did of commanding amount, $35,000,000. For what Where is the power to redeem this fifty or sixty not go to greater extremes than from $37,000,000 | purpose? Was it not that it might be able, by millions of irredeemable paper? It lies in the and $45,000,000 in five of those years.
ihe extent of that capital, to furnish a circulation sweat of the brow, or under the sheriff's hamDo not all these facts conclusively establish the large enough to spread over your Union? mer. What will be the cost of redemption? Much proposition I have laid down? They do. What, For seventeen years they overlooked the con- toil, large amount of interest, or great sacrifice ihen, has been the effect of this policy of the sideration that their capital was large, and gov- of property. Who must endure the toil? The banks?
erned their circulation by the amount of money || laboring man. Who pays the interest? The 1. An expansion and contraction of $55,000,000 l you let them keep; and your experience proves community pays it; whether debtor to the banks from 1834 to 1840. The expansion put forth that if, by this bank you would furnish a circu- or not, they pay the tribute. Who will say what $55,000,000 of bank credits bearing no interest, | lation, you must not only give a charter with con- shall be sacrificed on property? I answer, the issued on the faith of the deposits, to be substi- trolling capital, but you must habitually keep on banks, and they alone. tuted for the like amount of individual credits deposit your money to the amount of bank cir- It is not in the power of this bill to affect either. bearing interest and made payable to the banks, culation to be supplied. Did you not expect that || What if the banks had not used the Government but resting, in seven cases out of ten, on the un- in its bills you would at all times find a uniform funds to loan its credits on, how could the taking certain results of a speculation on any subject and sale medium of exchange, North, South, East, or using of it affect the bank debtors or commuthat might promise a speculation.
and West? What do you see? Its capital loaned nity otherwise than beneficially? So long as you 2. 'The contraction sent the bank notes home out or invested; its amount of specie inadequate; || pay in gold and silver you cannot affect the measfor redemption, which, being deprived of the pub- | its circulation unsound, being based o:1 and
ure of value between me and my customer, nor lic funds on which they were issued, were thrown erned by your own money; irredeemable and de- can you, by that, increase or lessen my power to for support on the notes of individuals received based; its affairs in a condition that (to use the accumulate by the sweat of my brow or by the in exchange. These individuals having failed to words of its president, spoken in regard to the exertion of my talents. realize the speculations, for the sake of which country at large)“ all the banks in the Union can- It is the maladministration of the banks, then, they bartered bank notes substituted for their not save it from bankruptcy.
that has induced hard times; a maladministration, own, failed to pay. A suspension was the con- With a charter the most liberal; a capital the too, in that particular wherein this bill alone, by sequence. The $85,000,000 of bank paper thus most commanding; stockholders, foreign as well ll effecting a total divorce, can effect even the in
dncement to a remedy. Then let us hare it; by On that occasion Mr. Gilmer made the follow- try” to enter into such a controversy. Sir, un. all that is good and wise and charitable and patri- ing remarks, among others.
willing as I am to deal a single blow at them, sull olic and merciful, let us have it.
Speaking of the safety of the public funds, I strike for the cause of truth and of my counYou now see, Mr. Cliairman, that, under the which is one of the leading objects of this bill, try. operation of this great Federal measure of Alex- Mr. Gilmer said:
Mr. Gilmer further said: ander Hamilton, your public money has been “Ifratety had been the sole reason for placing the public “ After the President had put his veto to the bill for a rehabitually used by the bank for its own purposes;
money in the bank, it inight have been permitted to remain charter, did the bauk commence the gradual reduction of and when you would demand it, or offer to change
in the hands of the collectors or receivers, or placed in the business, with the view of closing its concerns? Assuredly Treasury, where money had never yet been placed.”
By enlarging its accommodations from $15.000,000 your policy to one more safe and certain, all your public agents are denounced by the bank and its
Speaking of the Secretary's reasons for remov
to $70,000,000, it proved its determination to buy up pop
ular favor for its candidate for the Presideney ; that its lite adherents as disorganizers. ing the deposits, he said:
might, at the end of four years, be renewed for twenty I now propose to show what has been the cost "lle differed with him as to the sufficiency of all the more. This attempt to bribe the people had proved as great of this bank system to the people in a pecuniary
reasons which he bad assigned, except that which charged a failure as the effort to deter the Presideni from vetoing
the bank with producing commercial embarrassment by the bill for a recharter.” point of view. The average deposit on which the withholding the accommodations from the people which people received no interest for twenty years was the possession of the public deposits enabled it to give."
Are not the party, which then and now advo$10,000,000; interest on this at six per cent per He here charges that the bank held and used
cate a bank, that thus attempted to “bribe" the
people and "deter"the President, the same which annum is $600,000. This is annually sunk by the public money as a means of power to effect the lying idle of that amount on deposit. But as
I oppose now? Is not the candidate which was its object. He said:
then in the field the candidate who has now my a substitute for it, and to render it active, they " He was resolved not to be drawn aside from the course say, the bank issued its notes and loaned them to of his remarks by the extraordinary arts which had
opposition? And do not my colleagues support
him? the people, for which it made the people pay six
used by the advocates of the bank and those who were
zealously engaged in the struggle for party, to persuade the “If the positions which he had assumed were true, (and per cent. more, which is $600,000. In these two
people that the restoration of the deposits had no connec- they seemed to him to be self-evident,) the distress could items of expense the loss in one year is $1,200,000. tion with the recharter of the bank. lle should not degrade only have been brought about by the Bank of the United Add to this the wcar and tear, and loss by fire and the cause of truth and of his country by entering into ruch States. It might not be possible to trace out with exactwater on bank notes, and the like by forgery, and a controversy. To be convinced that the recharter of the
ness all the means which had been used by the bank for bank was connected with the restoration of the public that purpose; the curtailment of its issues from $70,000,000 you have some idea of the actual and unavoidable
deposits, it is only necessary to trace out the conduct of to $52,000,000, with the great and increasing effort which annual expense of keeping up this system. It will the bank, and what inusi obviously be its future course. the friends of the bank bad made to produce alarm and not fall short of $1,500,000 per annum, or $30,
The end of a bank was to make profit. The charter of the general distrust of credit, (uuparalleled in the history of 000,000 in the twenty years. This is whai the
bank was near expiring. To obiain a recharter was greatly banking,) was, he believed, the true canse of most of the
more important to the bank ihan any profil which could be commerciul einbarrassment which had been felt in the free people of this country have paid to the banks. derived from its ordinary business. All its operations of country." For what have they paid it? For no other pur- late had been and would continue to be directed to the pose than to receive it and pay it out to them. accomplistinent of that purpose.”
Here Mr. Gilmer, in 1834, assigning the true What benefit has the bank derived ? First, $600,
causes of the embarrassment of the country, Sir, it has become my duty to “trace out the
charges it to the United States Bank, and never 000 yearly in interest; secondly, the profil by de- conduct of the bank," and I have now shown struction of its bills, &c.; and lastly, the profils that his every charge is true. He, in 1834, pre
intimates a charge against the Government, or on exchange, in which it was enabled, by inc de- ferred the indictment. In 1840 1, bearing the
the President, who removed the deposits. The posits, to deal to the best advantage, the sum of
causes that produced it then, continued to opersame relation to the grand inquest, have adduced which I am unable to state here; but on any esti- | the proof.
ale till 1840, and are now the causes. Speaking male they must be great.
To 1834 " the advocates of the bank, zealously
of the consequences of rechartering the banks,
Mr. Gilmer said: Other expenses incident and contingent to this engaged in the struggle for party, used extraor
" Sach an institution would necessarily have the power system, corresponding to such as have been dinary arts to persuade the people that the resto
of rendering the Government, in some degree, subsidiary charged to the sub-Treasury bill, might be men- ration of the deposits had no connection with the to it in time of war, and of changing, at its will, the tioned. recharter of the bank.”
price of all property by its command of the currency. In this estimate, made by me before the gentle- Mr. Gilmer, in sovereign contempt for those
There were other objections to which he desired to call man from Pennsylvania (Mr. SERGEANT) spoke, "acts,” said " he would not disgrace the cause
the special attention of the friends of constitutional lib
erty and the rights of the States. He urged the friends of I have the high gratification to say, on his author- || of truth and of his country by entering into such the rights of the States to resist every attempt to contirmi ity, that every item named is properly included in a controversy.
.". To be convinced of it, it was to the United States its usurped power over the money of the account. For, he on similar data has en- only necessary “to trace out the conduct of the the people by the recharier of the bank. The effort must
be made now or never. Unite the bank and the Governdeavored to exhibit the expense of the sub-Treas. | bank," and see that “all its operations of late had
ment for twenty years longer, and the advocation of the ury scheme, and I congratulate myself when I been directed to the accomplishment of that end." rights of the States would become folly. Upon this quesfind that after being so fortunate as to adopt his Sir, at this very day the same party, represented
tion was formed the first marked distinction between the mode of investigating and his plan of argument, by some of the same men, are "advocates of the
Federal and anti-Federal parties; tretween the advocates
of the individual freedom of the citizen and the advocates the balance, on the score of economy alone, after | bank,”zealously engaged in the struggle for party.
for controlling power in the Government.” including all his incidental and contingent items, They use the most * extraordinary arts" to perand excluding mine, is at least $500,000 annually suade the people that this bill has nothing to do
Here, sir, are plain truths, strongly told in Mr. in favor of the plan I advocate. "Now, add to this with "a recharter of the United States Bank."
Gilmer's proper style. Is it not strange that Stutethe contingent and unavoidable items incident to I will not “ degrade the cause of truth and of my
righis men are unwilling to resist the attempt
now making at a United States Bank, and are the bank system, to wit, the depreciation or loss country" by entering into such a controversy; on paper money from time to time by which arise but to convince all concerned I have “ traced the
willing to abandon the "advocation of the rights the fluctuations in value and prices, and you will
of the States," or lie down under this charge of conduct" of that bank, and have proved that it
“ folly,” by resisting the only policy that can suhave at least a loss of ten per cent. on the amount used the public money and directed all its late of deposits, or $1,000,000. operations to the accomplislıment of its purpose.
persede a bank, and opposing the only party that
will vote against it? To what end, sir, is all this to be suffered and In 1840 I find myself at the same point where submitted to, but to perpetuate the Federal plan of Mr. Gilmer made batile in 1834. I have the same
" It was with regret that he found many of those who
professed the same general political opinions with himself Hainilton; to establish a bank with its arrogant party on this floor to fight against, and the same
separated from hin upon the subject of the proper dispoand domineering power over you to rule your Gov- men of that party; I fight with the same weapons, sition of the public deposits and the recharter of the Uniernment, dictate its revenue, direct its cxpendi- | under the same banner, with the same purpose;
ted States Bank." ture, appoint your President, use your money, and, furthermore, I have the same allies, (saving If permitted, I will join in this expression of change your Constitution, mold your policy, con- and excepting always a certain very distinguished regret. The proper disposition of the public detrol your trade and commerce, and finally to de- Senator,) and what do I perceive? Why, sir, posits is still the question, and so is the bank. clare war and make peace?
within sixty days past I perceive those who in In 1834, there were three plans: first, the United Mr. Chairman, if it was right to remove the 1834 scorned the "arts" used by the advocates States bank; second, the pet banks; third, the sub-, deposits, it is more abundantly proper to keep of the bank "to persuade the people to believe a Treasury. them out of the banks.
lie," who refused to “degrade the cause of truth The Federalists took the first, and still adhere Here, sir, I plant myself triumphantly on the and of their country" by discussing these at- to it. The Conservatives, with General Jackground once occupied by a distinguished Repre- tempts to deceive the people, now that I have son's party, tried the second, and have given it sentative of Georgia, (George R. Gilmer,) at a the conduct of the bank," and proved all “ traced up as the worst of all. And the State-rights men time when, being about to measure arms with the Mr. Gilmer then said to be true, marching in al- of the South took the third, or sub-Treasury, bank, your late President, Andrew Jackson, the lignment with thai party which he then fought. but, strange to tell, very many of them give it up only man who could " take the responsibility,” Yes, I behold among them my colleagues, in- | just as we are able to try it, mainly to preserve seized the only measure to succeed, and dared to terposing in behalf of that party to arrest my that consistency of position in reference to men, remove the deposits.
arm, to foil my attack, weaken my defense, or and unite with that party who adopted the first Governor Gilmer then made an argument turn the edge of my weapons. Sir, they invite plan; who, being placed in power, will unite the which, in many features, is extremely pertinent me to enlist with them and fight with other weap
bank with the Government, and then, as Mr. now. Some of those arguments, if applied here, ons, under another banner. “ Being zealously
Gilmer said, “all advocation of the rights of the enforced by the energy and sincerity of Mr. Gil- engaged in the struggle for party,” they use very
States will become folly.” mer, would be to my colleagues who oppose me "extraordinary arts to persuade the people" that
Mr. Gilmer said: here as burning firebrands, the scorching effect the sub-Treasury has no connection with the “ He but discharged the obligation he owed to those he of which could only be avoided, as they now seek restoration of the deposits or charter of a bank.
represented, when he urged them not to be carried off from
the maintenance of the righis of the States and the people to avoid this, the true issue, by getting out of its / They now strive to convince me that it will not
by the contes for power among the abilious aspirants way.
“ degrade the cause of truth and of their coun- for the first office of the country."
Statement from the Pennsylvania Bank of the United States for 1836 and 1837.
So we all " urged," so I still urge. Neverthe- sequel of the late United States Bank. It is found and other securities,” for that peculiar item does less, it is true that very many of our State-rights in Senate Document No. 128, second session not figure in the previous statements of the United men have changed their policy in this regard, and Twenty-Fifth Congress, page 214:
States Bank, while the deposits tlourished. In are willing to enter into “the contest" for the
July, 1837, it is first set down, and at the outset it is first office in the country, and elect that man and
$26,000,000; in November, 1838, it is $24,000,000; put in power that party who were in 1834, and
February 1, 1840, it is $21,000,000. This is for still are, the “ advocates of the bank,”and who,
three years. What is the average? Twentybeing in power, will charter a bank" and theres
three million dollars. Now, what did I show the by render the "advocation of the rights of the
expansion in 1831 and 1832 by the United States Siales folly.'
Bank in loans and discounts? It was $23,000,000. Is not this being “carried off from the main
Here is a coincidence, at least, from which I draw tenance of the rights of the States, by the con
the just inference that stocks were resorted to as test of aspirants for the first office in the coun
a basis of issue. How was it done? Why just as
our southern banks issue on colton, which my Once more, sir:
colleague from Glynn says is the proper basis. “The bank was now curtailing its business, either with
The stocks are shipped to Europe, put in market the view of its approaching end, or for the purpose of dis
for sale or an advance, and the proceeds become tressing the people. If for the purpose of closing its concerns, the deposits could be of no advantage to it; if with
the basis of exchange, which the bank sells for a the design of distressing the people, in order to procure a
profit. With the proceeds of its exchange the recharter, could Congress aid such a purpose by placing
bank redeems its notes, or more frequently makes the public money in iis hands? He should not only oppose
a second issue. the restoration of the deposits to the Bank of the United States, but every other measure which had for its object
The result of this operation tempted corpothe recharter of the bank."
rations and States to go in debt more than they I know, sir, that the grand measure of those
could pay; their stocks have consequently sunk who oppose the bill on your table is that which
below the advance price, and the bank not only “has for its object” the charter of a United States
suspends, having no redeeming funds, but fails to Bank, and thai without this bill a bank will be
pay both here and in Europe, as Mr. Biddle's adopted. No gentleman of intelligence and can
bank did. dor now doubts or will deny it. This bill merely
After “stocks” failed, the next, and really a proposes to put the money. "in the Treasury
more, reliable pretext for a basis of circulation, where it never yet has been,"as Mr. Gilmer said,
was that which my colleague thinks the true oneand where, as he also said, it will be more safe.
"produce." If this were of uniform value, as gold After concluding this speech, the ablest he ever
and silver, it might in a degree answer, but it is delivered, Mr. Gilmer offered a series of resolu
not. Hence the result was the same as that on tions, strong and emphatic; among others, this:
the operation on stocks. The bank, like all spec“ Resolved, That the creation of a national bank, or the
ulators, was liable to break. recharter of the present Bank of the United States, is not
As regards the produce and the owner of it, they only an exercise of power not authorized by the Constitu
by the operation, placed in the predicament tion, but dangerous to the individual independence of the people, 10 the power of the Suates to resist the usurpation
of the people and the public deposits. The banks of their rights and to the continuance of our preseent free
use it and them to make interest and discount acinstitutions."
The bank returns for 1838 and 1840 show these count rise, and to realize exchange on. But the Sir, Mr. Gilmer is well known as a fearless de- several items to be what I here exhibit them to planter or merchant dare not withdraw it or confender of truth, and I hope these sentiments will be. (See Reports to the Treasurer and Hazard's irol it, lest he should bring about a suspension be appreciated. Statistics, volume two, page 170.)
and a pressure. In the South the planter begins On the same occasion, another son of Georgia, In the estimates I make, I use, in some instances, to understand this, and I doubt not the western *(Colonel Seaborn Jones,) then a Senator, distin- round numbers, as the object is merely to arrive wheat-grower or stock-drover has had a taste of guished himself by one of his ablest efforts; lo at a principle of action.
it. The United States Bank fairly tried cotton which, owing to the shortness of my time, I am I said, sir, that, after the deposits were re- as a basis. The fate of that experiment was, no only permitted to make a general reference. He moved, the bank resorted to stocks or produce as doubt, an addition to the “ other liabilities" of the and Mr. Gilmer sustained General Jackson in re- a basis. You will observe by the column of loans bank, and a loss to the planter. fusing to restore the deposits. These two Repre- and discounts,” in the tabular statement first re- Either of these expedients to support bank issentatives of Georgia were of the State-rights party. ferred to, that in 1831 the sum was $44,000,000, sues results in this: ihat these corporations issue In doing what they then did, they did and said as and by July, 1832, it rose to $67,000,000. The notes, not on their money or capital, but on the much to conflict their party prejudices and party | expansion was $23,000,000. Mark this sum. On || public money, that of others, or the products of principles as we do now in supporting this bill; and what kind of securities was it, personal securities labor, and on these issues make profit out of the yet that party, with all their opposition to what or on stocks? We shall see presently. From this very men who furnish the capital; and what do was esteemed a high-handed move in the Presi- time till 1836, (the expiration of the charter,) this these men receive for it? Paper, sir, at twenty dent, sustained them, while now we are de- item fluctuated from $45,000,000 to $60,000,000. cents in the dollar, exchange at ten per cent. prenounced. How does it happen?
I now call your attention to the table just be- mium, after a suspension and pressure. They Sir, I beg pardon for the question; it is for the fore us, that of the Pennsylvania Bank of the entail on posterity the inheritance, not of freepeople of Georgia to answer, not for you. That United States.
men, but of slaves. people will furnish the answer when ihey reflect 1. Observe that it starts off with a circulation Mr. Biddle, too, tried this basis of produce, and and know that the issue is now what it then was, at once nearly equal to that of the United States went into the cotton region, and that and his stock what it has continued to be, bank or no bank. Bank-$18,000,000. Deposits nearly correspond- operations burst the bubble; not, however withThat then the party, without controversy, was ing to ihose of the United States Bank. The out a third attempt at a blow, which is always the anti-bank; but that now, in action, a bold, tal- specie, if any, divided, I presume. But as the last, to wit: his drafts on the future unknownented, and intolerant influence for the bank shows | deposits and specie together could not support a I mean post notes. its front, which then was forced to lie behind a circulation of $18,000,000, it had to look out for In 1837, 1838, 1839, and 1840, they are enuscreen. That is the solution. And no man of the ways and means. Hence, first, it makes the merated by proper names- post notes. common candor and ordinary perception who has United States Bank owe it $29,000,000, and, in In 1840, also, you find another item, called spent one season in New York, Philadelphia, and turn, admits itself debtor to the United States "other liabilities,” after naming every sort you Boston, with privilege of a seat here and an in- Bank $29,000,000.
could conceive. The sum of these is that unforsight into the principles and action of the State- Now, sir, are you not ready to ask how it could tunate amount of $26,000,000, put forth originally rights party in Georgia, can for one moment deny so suddenly put $18,000,000 in circulation? I in 1832, no doubt, for the twofold object of supthe assertion that the great issue now is, what understand both these concerns were kept in one plying the deposits and stimulating the people Governor Troup declares it to be,“ bank or no building. How else could it be done, except by lo oppose Jackson, who removed them, and Mr. bank.”
paying that amount of its notes to the United Gilmer, who would not restore them. Mr. Chairman, having, as I think, demon- States Bank for such an amount of its notes? Now, Mr. Chairman, you talk about " experstrated the truth of my first proposition in regard How else could the United States Bank become iments upon the currency,
This bank has exto practical banking in this country, pointing at so suddenly indebted to this new concern just | perimented in all ways. The last is the worst, some of its actual and comparative evils when I going into operation? What was this for? It but the first led to it. The banks have the curcontrasted with the measure on your table, I now was done, sir, to put the notes in circulation, in- rency in their own hands. Jackson, with all his proceed to a second. It is this:
stead of the United States Bank, whose charter | strength, was powerless in any attempt to injure When the money deposits are abstracted, had expired. And why this large mutual indebt- the currency. The only necessary effect of all he thereby removing the basis of issue, resort is had edness $29,000,000? Merely that each might did was to prove its unsoundness, develop the to public stocks or corporation stocks or produce have the notes of the other to pay with. Accord- causes, and suggest a remedy, so far as the affairs going to market to furnish a basis.
ingly, we saw the new bank selling the notes of of the people were concerned. That remedy is This, too, may be proved by the bank reports the old in Georgia at five and six per cent. pre- on your table. That, too, is powerless, except or statements already referred to, and that of the mium. This, sir, was but an egg-shell con- to prevent mischief that might result from an imUnited States Bank of Pennsylvania, which I cern.
proper use of the public money by those who now exhibit. I consider it as little more than the Now, notice the column of"discounts on stocks li habitually control the currency, and through the 26ru Cong....1st SESS.
Independent Treasury-Mr. Cooper.
Ho. OF REPS.
power of it are striving now, as in 1834, to con- $47,000,000, and no resumption, notwithstanding expense. In this proportion will be the appro trol the people.
the circulation is reduced to what it was in 1834. priations and the revenue, whether needful io the The gentleman from New York (Mr. BARNARD) Now, sir, with from a third to double the spe- people or not. The banks being used, the more bas told us emphatically that this power over the cie they had in 1834, and a circulation reduced to expense the better, and if you must borrow money currency 18 “that ofa despot."
below what it then was by near ten million dol- to pay, it is still better for them and worse for Thus much for the circulation of the country, lars, why cannot they resume? Sir, I will tell the people. This proposition, in all its bearings and the true causes of its derangements.
you. If it was not for those nameless matters, and applications, has so repeatedly been illusI now proceed to establish a third proposition | called by the bank“other liabilities,”there would trated, and so fully established by others who by the testimony of these bank tables. It is this: be a resumption in ten days. Those "other lia- have discussed this subject, and may be so easily the average annual loan by the banks, the Uni- bilities" have resulted from the improper and elaborated by any one who has attended to or ted States Bank or the local banks, does not ex- illegitimate use of banking privileges.
examined the facts I have referred to, that I will ceed in any very considerable degree the sum of The gentleman from Philadelphia (Mr. Ser- not detain the committee. From its truth is ad. the capital of the banks, the deposits, and the GEANT) asks you in triumph, "Wherefore this duced this additional proposition, which is nearly specie basis, and yet at times it rises above and vast importation of useless specie?" Let him put equivalent in nature and magnitude: that under again sinks below.
the inquiry to the banks; they can tell him. 'In the bank system, you cannot long escape from the Take the United States Bank first. The total return I ask him
wherefore is ihat specie not paid funding system, or hesitate to assume those State average during its existence, of loans and dis. out and our public credit redeemed? I answer it debts which have been induced by the illegitimate counts, was $11,000,000. The average from 1817 for him. The banks are but the agents between use of the public deposits. This arises, in my to 1833, the period of the removal of the deposits, the foreign creditors and the domestic debtors. mind, from a conviction of the truth, that another was $39,000,000; and the average from 1833 to They profit both by the non-payment and the bank, limited and restricted as it may be, with 1836, the last three years, was $56,000,000. The pressure. Therefore they press that payment || power to issue paper money, will at once become average of the last three years of its life raised may not be made. For in that event they lose identified with the Government, control its operathe average of its first seventeen years $3,000,000 their occupation. Some of the banks, I admit, tions, and ultimately dictate to the people their annually, and exceeded the average of the seven- do not act on this rule.
laws and constitutions, and decide the amount teen by $18,000,000. The average of specie was By what has been said a seventh proposition and ratio of taxation; for, in the language of the $6,000,000; that of deposits, public and private, becomes manifest. It is this: nothing but the gentleman from New York, “The control of the was about $12,000,000; the capital, $35,000,000. multiplication of the products of labor, and a re- currency is the control of the country.” All together, the capital, specie, and deposits | trenchment in expenditures, can relieve the press- This measure, with its legitimate operation, remade $53,000,000. Up to 1833, then, the average ure we feel. I remember some weeks ago, when taining its specie clause, (which would be better Tell short; and the total average of its whole existe an attempt was made to gei up this bill, an hon- to operate all at once,) will avert these moral and ence, $11,000,000, fell short by over $10,000,000. orable gentleman (Mr. W1se) from Virginia, in political evils and do more to perpetuate our It is, therefore, not true that the country has re- great emphasis, demanded to know " what had Union than any one since the enactment of the ceived an accession to its active capital by this been done to relieve the country of its pressing | Constitution. It is desirable to Republicans and bank, unless you admit that what purports to be difficulties?". I then felt, and still feel, surprise State-rights men, because it tends to preserve capital in it is not so in fact. If you do that, you that one so distinguished should seriously think their rule of strict construction and limited deleconvict it ofa fraud upon the people. Away, then, it is in your power, with or without money in gated powers. The opposite system pulls it down with this argument against this bill, and for the your Treasury, to relieve those who are in debt. in a day. It limits the direct and indirect patronaga bank. What good, then, did you derive by this I was then struck and greatly delighted with the of the President. With it the measure of the papower to loan: None; but much evil. For the superior candor of the honorable gentleman (Gen- | tronage is "strict construction,"limited revenue, loans and discounts vibrated continually from eral CRABB] of Alabama, of the same party with certain and ascertained officers, without the use $30,000,000 to $65,000,000, producing distressing the other gentleman. He in his lofty tone, on the of the money. Without it the measure of patron effects wherever they occurred.
same occasion, succeeded the other, and said “he age is“ latitude of construing powers," unlimited The fourth proposition I shall attempt to illus- longed to quit this place and return to his planta- and surplus revenue, multiplicity of officials, trate is this: the abstraction of the deposits, by
tion, for he was assured that the only relief was known and unknown, with their ten thousand use or otherwise, is marked by a revulsion, be- to be found by close application to the ir.terests connections and ramifications and relationships, cause they were permitted to govern the circu- there." Sir, he was right, and I shall long re- natural and artificial, political and commercial, lation; and when stocks or produce are used as member him for the independence with which he with liberty to use not only the deposits, but three a basis, the fall in the price of either works the spoke truth.
and four times their sum, by and through the same effect according to the extent of the reduc- The question then arises, can this Goverı ment moral and political irresponsibility of a lawless, tion. How was it in 1818,1819, and 1820 ? Many | relieve the pressure of the country? Ifitcan, there | uncontrollable, and controlling corporation. will no doubt remember. Look at the tables. is but one way, and that is the last way to relief To illustrate, you have but to turn your attenDeposits fell from $24,000,000 to $2,000,000. which the gentleman from Virginia or I would || tion to another table I have prepared, exhibiting They were used up." How was it in 1824, 1825, elect, and still it is the only way, and is the way the action of the Government on a certain class and 1626? The cotton planters will remember. in which the advocates of ihe bank, if in power, of appropriations, from the chartering of the late Look at the state of the deposits. They fell from could and will effect it. That will be by an in- bank to ihe present time. I refer to that class $10,000,000 to $5,000,000. How was it in 1833, crease of revenue beyond the wants of the Gori entitled internal improvements. It has been prewhen the grand removal took place? The loans ernment, to be used by a United States Bank as a pared at the expense of much labor; and although were running up to $61,000,000, and ought to basis of issue, that may be loaned and discounted its perfect accuracy is not vouched for, have made you easy; and so you appeared to be when they choose. Without this result a United sert its accuracy to every material purpose. The then, for the deposits were greater than at any States Bunk is a useless thing, and would not be subjecis of these are the Cumberland road, roads other time. But in 1836 the deposits had been sought. This, too, would be but a cry of" peace, and canals, fortifications, surveys, harbors, lighttransferred. This bank and all the banks ex- peace,” where there was no peace. This mode houses, breakwaters, and navy-yards. It will be panded, and it appeared there was no end to pros- of relief, I say, is not in the power of this Gov- sufficient to give you the annualaggregate in round perity. Specie was coming in by millions. And ernment, for the reasons assigned by my col- numbers. it ought to have been permanent. But no; it was league and by Mr. Gilmer. It would be unjust, 1816..
.$1,900,000 as transient as the deposits, and with our laps because it would rob the many to pay the debts
9.279,000 full we were in one year compelled to suspend. of the few. The debtors would be the relieved
9,696.000 This was, however, very much because the banks party. The relief would be paid for by those
..... 2,596,000 1,700,000 1833.
3,155,000 would have it so, and the United States Bank who would not receive the benefit. It would, in
3,518,000 could not help itself. fact, be a general contribution for special distri
1,700,000 1835. A fifth proposition is that the number of banks bution; a general distribution of burdens to pur
3,100,000 1,700,000 18:37
3.800.000 and amount of banking capital do not contribute chase partial and limited benefits. To limit rev- 18:25.
2,00,000 to the relief of the country. If so, from 1837 to enue is the interest of the people who pay the
1,836,000 1840 ought to have been a time of great relief. taxes. It limits taxation. To enlarge the re
1,700,000 During those years two hundred and forty were ceipts and expenditures, is the interest of the bank
1,900,000 Aggregate.......$52,200,000 added to the number of banks, and $60,000,000 and its advocates; for by as much as you add to From 1816 to 1827 I have given you an annual to the aggregate banking capital. But we know them, by so much you add to the average de- average; from 1827 to 1839 the annualsum is given. we have experienced no relief. posits.
Now, if you will witness the truth of what I said, A sixth proposition is that a substitution of Whatever system, therefore, will produce the and test ihe influence of the Hamiltonian system stocks, as a basis, in lieu of deposits and their reverse effect is the one for a free people. The on this class of expenditures, and the subjection negotiation abroad, produced an importation of one on your table is that measure, if you retain of the latter to the will or power of the former, specie beyond the ucinal products of labor, which the specie clausc; since the average sum remain- look at the years from 1827 10 1839, and see how, was a loan to be paid back after a season with ing in the Treasury, be it large or small, must be with the increase of the deposits, these approinterest. Look at the United States Bank table, in specie, which, in the absence of Government || priations increased; how, as the bank expanded, and you find on the commencement of the stock money, must become the basis of issue by the ihese swelled; how, as the deposits were removed operations after the removal of deposits, specie banks. It then will become the interest of all or consumed, and the bank rendered powerless, came in for three years till it went up to over banks to unite with the friends of a simple eco- these were brought down by the will of the peo$18,000,000. Look, too, at the State banks. nomical Government to reduce and keep downple. Sir, in spite of himself, the bank interest From 1830 10 1837 the specie was increased from the revenue to its actual wants.
and policy controlled Jackyon and his party until $22,000,000 to $37,000,000; and still they suspend- I here offer another proposition, to wit, if you the deposits were removed. Ther, and not till edi. What is stranger still, during a suspen- do not adopt this bill you must use the banks. ll then, do you find any success in the priciples of sion, the specie is increased from $37,000,000 to The more avenues to expenditure, the greater the the Democratic pariy on these puljects. This
1831. 1,700,000 1832.
1817. 1818. 1819 1820 1821. 1892. 18.23.. 1824.
26TH CONG.... 1st Sess.
Independent Treasury-Mr. Cooper.
Ho. OF REPS.
Act June 7,
Act July 4,
occurred in the second and third years of the pres- try refused to take them the Bank of South Car- the field they look out for a shade or a place of ent Administration.
olina, Bank of Louisville, &c.; and many of those repose. Your soldiers love their barracks, and The people of the South, and Georgia in par- who did take them got sick of it, or broke and your officers are pleased with their dress parades, ticular, will do well to consider what interest they could not return them. This appears by Docu- and delight in the haunts of the capital; and the have in restraining this tendency in the Govern- ment No. 304 of the Senate, third session 'T'wenty- man of God seeks comfort and enjoyment in the ment. Here are $52,000,000 expended on these Filth Congress, which I hold in my hand. vain excitement of political life. Thus, it seems, objects in little more than twenty years. What But to return to the effect of this Hamiltonian this great Federal system that has been in operportion of it do they pay? At least half. What system on the revenue. What I have shown in ation, as has been said, from the days of Hamportion is spent with them? Not one fifth. What regard to particular classes of expenditure, lawful ilton, works badly, politically, financially, morportion is spent among those I represent? Not or unlawful, is true in regard to ihe expenditures | ally, physically, and religiously...“ Let us have one tenth.
in the general. This I illustrate by Document a change; we cannot be worsted." Mr. Chairman, I do not regret that which is No. 212 of the Senate, third session Twenty- Even a safe and prudent merchant or an honspent rightfully and properly for the good of the Fifth Congress, now before me, showing the an- est banker need not dread a change; neither can Union, though it be in the North. No, sir. nual receipts and expenditures of the Government be injured by it. The reckless speculator or the is the adoption of an unauthorized rule that lets from 1817 to 1838. Compare this with the state bankrupt has no motive to resist a change. The in all kinds of expense, through channels innu- of the deposits and you will find that whenever latter will no longer be credited by the banks, and merable, that grieves me-channels made broad there happened any considerable reduction in the will do well to set up for the individual credit and deep by the bank policy which my associates deposits or basis of issue there was an immedi- system so used up by the banks. The former, are contributing to promote by opposing this bill. ate call for increase of revenue, and of course new too, can no more expect facilities, for the banks
Take another class of expenses of particular in- pretexts of expenditure, whether the times were have speculated till they understand how far they dividual and local interest, to wit, pensions. Here good or bad. How was it in 1819? “ Hard should go or permit others to go; hence the specis a statement showing the whole number of pen
What were the deposits? Reduced by ulator may learn self-respect and rebel against sioners under the several laws, and the number the payment of public debt from $7,000,000 to this sort of guardianship. in the southern and northern States:
$2,000,000. What was the expenditure? In- This measure is the only alternative or escape
and 1833? “Flourishing times.” But Jackson turn to that currency in the Government transacNumber pen
and ihe bank were at war. It was important to tions which alone is constitutional. It brings | 1,2368,215 624 24,0862,512 1,301 44,694 increase the power. The local bank influence back the Government to what the framers intended southern States...... 1,206 1,528 154 7,237 264 386 10,775
began to coöperate, and expenses and deposits | it to be, and the administration of it to the repubboth increased.
lican standard. Difference.. • 3,0306,687 470|16, 846 2,2483, 91533,919 In 1836 the actual expenses still increased from The law provided at an early period that gold
similar causes. From that period, however, they and silver alone should be received and paid out. Out of twenty-nine States, Territories, and have diminished, making due allowances for ex- Mr. Hamilton first, by a mere Treasury order, districts, the fourteen southern States have but traordinary items. More especially do we find interfered with this law and encroached on its 10,775 pensioners, while the other fifteen have them reduced in the peculiarly obnoxious item of provisions. That law, I believe, remains unre33,919.
internal improvements, as well as the pensions. | pealed. And on what ground can any one, except The amount paid to pensioners is about in the Hence, sir, the history of your finances and those the genuine Federalist, object to its execution ? like proportion. By Senate Document No. 307, of the banks, prove that the United States Bank Having given satisfactory reasons for a change third session Twenty-Fifth Congress, you have has had important influence on the policy of the of the present system, and a correction of its an exhibit of the sums annually paid to pension- Government. And when the secret is told, it is abuses, as well as for the adoption of the measure ers and annuities and grants for revolutionary ser- true that its interests, direct and indirect, have had before the committee, I will now answer some of vices. From the commencement of the Govern- more to do in running the Government into ex- the prominent objections to the bill. ment to the charter of the late bank the annual travagance than any man's party. les party is The gentleman from Philadelphia (Mr. SERaverage did not exceed $100,000. From that time always that which goes for increase of revenue by GEANT] says, " A certain amount is to be supplied to 1838 the annualaverage was $1,500,000. And loans or otherwise. They never object. Hence for the use of the revenue-to lie idle." This it appears the further we remove from the Revo- you find it strongly supported by those who, not amount, under the operation of the bill, he aslution the greater the number of heroes demand- being dependent for office on a particular Presi- sumes will be, on an average, $5,000,000, and is ing pensions.
dent, have a permanent interest in high salaries. to be then for the use " of the revenue. In two years after the charter the sum ad- Alexander Hamilton said, concerning the bank, far there is no objection. But it is to “ lie idle." vanced from $300,000 to $2,200,00. About the while he was recommending a plan, among other | Very well; admit the argument, for sake of argutime of the contest with the Government and bank, things, that it is not a "mere matter of private | ment, and contrast the bill with the bank, or when the latter wanted large power, to wit, in property, but a political machine of the greatest Hamiltonian plan, and I have shown by the bank 1832 and 1833, the sum rose from $1,200,000 to importance to the State.” So it is esteemed by statement thai in twenty years' experiment they $4,400,000. After the effect of the removal was all who entertain the views of the powers, ends, have kept from nine to ten million dollars for the felt, to wit, 1836 and 1838, at the expiration of and nature of our Government, which he did. use of the bank, which the Treasurer could not the bank charter, it was reduced from $2,500,000 Again, Mr. Hamilton said on the same occasion, obtain for the "use of the revenue" when he to $800,000, coming back to what it was before "These deposits are of immense consequence to
wanted it; and if the people took it away, they the charter. Does not this prove what I said? the banks. In this he greatly differed with the were pressed until they put it back. He says, What portion of the $52,000,000 has gone South, gentleman from Philadelphia.
“ In the midst of our difficulties, we have been and what North, and what has each paid?
Having spoken of the political and pecuniary annually importing specie. How did we get it? I make the same remark here that I did be- evils under which we labor, and traced them in a By going in debt."
I have shown that the reason fore. My object is not to excite sectional jeal- most important degree to the fallacy, errors, and why specie was brought in the midst of our diffiousy, but to advise my constituents of their in- mischiefs of your banking system, permit me culiies, was that the bank issued on the deposits, terests, and awaken the sense of justice of the simply to refer you to the vasiness of the moral and was governed by them; their disturbance Norih. evil arising from it.
drove the bank to substitute stocks, which, being Georgia has only received about $320,000 of the First, it has made the obligation of "my prom- | negotiated abroad, brought specie here, and that $52,000,000. And this burden, just or unjust, has ise" hang loosely around me; it has destroyed it was a loan induced by the policy of the banks, been increased by the Hamiltonian system, to the sacredness of " my word," and made me I am happy to have my views thus corroborated. give a greater average deposit. I am here re- lightly esteem "my honor.
The gentleman has staied facts; I have explained minded that the gentleman from Philadelphia, (Mr. Hence has arisen a want of self-confidence and their causes. SERGEANT,] when discussing the pension bill, said self-respect which has opened a door to all kinds Again, in his estimate of the expense of this
these deposits were never worth one cent to the of vice and immorality, idleness, profligacy, and plan, he says, in the aggregate it will be $1,000,000, bank.” And yet he endeavored to show that they abandonment of honest, sober, patient industry, and asks if any one will contend we ought to were of vast importance to the pet banks. I know accompanied by a contempt for its temperate and pay it? I say not, if we can avoid it. But I have not how to think him sincere. They were more virtuous rewards. A false standard of worth has shown that by the bank system the expense in important and useful to the United States Bank led to errors of judgment in conduct and men, by one single item is $1,200,000; and if I estimate than to the pet banks. If not useful, why use which labor has become disreputable and indo- all the items as he has done, it will be nearer "extraordinary arts to persuade the people to re- lent ease applauded and cherished. These in | $3,000,000 annually; so the bank system is not store them?” Why such vast efforts to deteat turn had their effects on the results of political the plan to save the $1,000,000. this bill? It only “puts the money where it never economy, disparaging in the aggregate the prod- He gives an extraordinary statement of the exwas before, in the Treasury.
.” li gives the Pres- ucts of labor, thereby aggravating the causes of pense of "transferring funds in Wisconsin," a ident no power over the money that he did not distress as well as their effects. Physically the remote and wild country. The sun was small. have over it in the banks. The way to get at it same corresponding results have been witnessed. || Did he set down against this the vast sums is the same, The persons to call for it are the Your old men are worn out and enfeebled by annually lost on account of the fluctuations of same. Indeed, the power must be less, since the ceaseless watching. Your middle-aged are be- || exchanges, between South and North, on transsum will be diminished. Sir, you remember, coming miserly or indifferent to their love of coun- actions of millions and hundreds of millions, inwhen the banks were put on the distinci ternis of try, while your young men find themselves more duced by suspensions, the eflect of maladminisnot using the deposits, the best banks in the coun- at home in the drawing-room than in the field. In l tration of his favorite bunk-suspensions in which