The Sun.
London, England, 1837-01-02 00:00:00

THE SUN, LONDON, MONDAY, JANUARY 2, 1837.

classes cannot supply their wants out of their wages, that the
wages rise, and gradually reach a just proportioned rate to
that of the products of their labour. When thus, by the de-
preciation in consequence of the quantity of paper in circula-
tion, wages as well as prices become exorbitant, is soon found
that the whole effect of the adulteration is a tariff on our own
home industry for the benefit of the countries where gold and
silver circulate, and maintain uniformity and moderation in
prices. It is then perceived that the enhancement of the price
of land and labour produces a corresponding increase in the
price of products, until these products do not sustain a compe-
tition with similar ones in other countries; and thus both ma-
nufactured and agricultural productions cease to bear exporta-
tion from the country of the spurious currency, because they
cannot be sold for cost. This is the process by which specie is
banished by the paper of the banks. Their vaults are soon ex-
hausted to pay for foreign commodities ; the next step is a
stoppage of specie payment ; a total degradation of paper as a
currency ; unusual depression of prices, the ruin of debtors,
and the accumulation of property in the hands of creditors and
cautious capitalists.
It was in view of these evils, together with the dangerous
power wielded by the Bauk of the United States, and its re-
pugnance to our Constitution, that I was induced to exert
the power conferred upon me by the American people to
prevent the continuance of that institution. But, although
various dangers to our Republican institutions have been ob-
viated by the failure of that Bank to extort from the Go-
vernment a renewal of its charter, it is obvious that little has
been accomplished except a salutary change of public opi-
nion towards restoring 'to the country the sound currency
provided for in the Constitution. In the acts of several of
the States prohibiting the circulation of small notes, and
the auxiliary enactments of Congress at the last session,
forbidding their reception or payment on public account,
the true policy of the country has been advanced, and a
large portion of the precious metals infused into our circu-
lating medium. These measures will probably be followed
up in due time by the enactment of State laws banishing
from circulation bank notes of still higher denominations ;
and the object may be materially promoted by further Actk
of Congress, forbidding the employment, as fiscal agents,
of such banks as continue to issue notes of low denomina-
tions, and throw impediments in the way of the circulation
of gold and silver.
The effects of an extension of bank credits and over issues
of bank paper have been strikingly illustrated in the sales of
the public lands. From the returns made by the various re-
gisters and receivers in the early part of last summer it was
perceived that the receipts arising from the sales of the public
lands were increasing to an unprecedented amount. In
effect, however, those receipts amounted to nothing more
than credit in banks. The banks let out their notes to spe-
culators ; they were paid to the receivers, and immediate!),
returned to the banks, to be lent out again and again, being
mere instruments to transfer to speculators the most valuable
public land, and pay the Government by a credit on the books of
the banks. Those credits on the books of some of the western
banks, usually called deposits, were already greatly beyond
their immediate means of payment, and were rapidly increas-
ing. Indeed each speculation furnished means for another ;
for no sooner had one individual or company paid in their notes
than they were immediately lent to another for a like purpose,
and the banks were extending their business and their issues so
largely as to alarm considerate men, and render it doubtful
whether these bank credits, if permitted to accumulate, would
ultimately be of the least value to the Government.
The spirit of expansion and speculation was not con-
fined to the deposit banks, but pervaded the whole
multitude of banks throughout the Union, and was giving rise
to new institutious to aggravate the evil.
The safety of the public funds, and the interests of the peo-
ple generally, require that these operations should be checked;
and it became the duty of every branch of the General and
State Governments to adopt all legitimate and proper means
to produce that salutary effect. Under this view of my duty I
directed the issuing of the order which will be laid before you
by the secretary of the Treasury, requiring payment for the
public lands to be made in specie, with an exception until the
15th of the present month in favour of actual settlers. The
measure has produced many salutary consequences. It checked
the career of the western banks, and gave them additional
strength in anticipation of the pressure which has since per-
vaded our eastern as well as the European commercial cities.
By preventing the extension of the credit system it measurably
cut off the means of speculation, and retarded its progress in
monopolising the most valuable of the public lands. It has
tended to save the new States from a non-resident proprietor-
ship, one of the greatest obstacles to the advancement of a
new country and the prosperity of an old one. It has tended
to keep open the public lands for entry by emigrants at Go-
vernment prices, instead of their being compelled to purchase
of speculators at double or treble prices. And it is conveying
into the interior large sums in silver and gold, there to enter
permanently into the currency of the country, and place it on
a firmer foundation. It is confidently believed that the coun-
try will find in the motives which induced that order, and the
happy consequences which will have ensued, much to commend
and nothing to condemn.
It remains for the Congress, if they approve the policy
which dictated this order, to follow it up in its various bear-
ings. Much good, in my judgment, would be produced by
prohibiting sales of the public lands, except to actual settlers
at a reasonable reduction of price, and to limit the quantity
which shall be sold to them. Although it is believed the
General Government never ought to receive anything but the
constitutional currency in exchange for the public lands, that
point would be of less importance if the lands were sold for
immediate settlement and cultivation. Indeed, there is
scarcely a mischief arising out of our present system, includ-
ing the accumulating surplus of revenue, which would not be
remedied at once by a restriction on land sales to actual sales,
and it promises other advantages to the country in general,
and to the new States in particular, which cannot fail to re-
ceive the most profound consideration of Congress.
Experience continues to realise the expectations entertained
as to the capacity of the State banks to perform the duties of
the fiscal agents for the Government, at the time of the re-
moval of the deposits. It was alleged by the advocates of the
Bank of the United States, that the State banks, whatever
might be the regulations of the Treasury department, could
not make the transfers required by the Government, or nego-
tiate the domestic exchanges of the country. It is now well
ascertained that the real domestic exchanges performed
through discounts by the United States Bank and its twenty-
five branches were at least one-third less than those of the
deposit bank for an equal period of time;_ and if a compa-
rison be instituted between the amounts of service rendered
by these institutions, on the broader basis which has been
used by the advocates of the United States Bank, in estimat-
ing what they consider the domestic exchanges transacted by
it, the result will be still more favourable to the deposit
bank. _ _ _

The whole amount of public money transferred by the Bank
of the United States in 1832 was 16,000,000 dollars. The
amount transferred and actually paid by the deposit banks in
the year ending the Ist of October last was 39,319,899 dol-
lars ; the amount transferred and paid between that period and
the 6th of November, 5,399,090 dollars ; and the amount of
transfer warrants outstanding on that day, was 14,450,000 dol-
lars ; making an aggregate of 59,168,895 dollars. These enor-
mous sums of money first mentioned have been transferred
with the greatest promptitude and regularity, and the rates at
which the exchange have been negotated previously to the
passage of the Deposit Act were generally below those
charged by the Bank of the United States. Independent of
these services, which are far greater than those rendered by
the United States Bank, and its twenty-five branches, a num-
ber of the deposit banks have, with a commendable zeal to aid
in the improvement of the currency, imported from abroad, at
their own expense, large sums of the precious metals for coin-
age and circulation.
In the same maneer have nearly all the predictions turned
out in respect to the effect of the removal of the deposits ; a
step unquestionably necessary, to prevent the evils which it
was foreseen the Bank itself would endeavour to create, in a
final struggle to procure a renewal of its charter. It may be
thus, too, in some degree, with the further steps which may be
taken to prevent the excessive issue of other Bank paper ;
but it is to be hoped that nothing will now deter the Federal
and State authorities from the firm and vigorous performance
of their duties to themselves and to the people in this respect.
In reducing the revenue to the wants of the Government,
your particular attention is invited to those articles which con-
stitute the necessaries of life. The duty on salt was laid as a
war tax, and was no doubt continued to assist in providing for
the payment of the war debt. There is no article the release
of which from taxation would be felt so generally and so bene-
ficially. To this may be added all kinds of fuel and provisions.
Justice and benevolence unite in favour of releasing the poor
of our cities from burdens which arc not necessary to the sup-
port of our Government, and tend only to increase the wants
of the destitute.
It will be seen by the report of the Secretary of the Trea-
sury, and the accompanying documents, that the Bank of the
United States has made no payment on account of the stock
held by the Governmeut in that institution, although urged to
pay any portion which might suit its convenience, and that it
has given no information when payment may be expected.
Nor, although repeatedly requested, has it furnished the in-
formation in relation to its condition which Congress autho-
rised the secretary to collect at their last session. Such mea-
sures as are within the power of the Executive have been
taken to ascertain the value of the stock, and procure the pay-
ment as early as possible.
The conduct and present condition of that bank, and the
great amount of capital vested in it by the United States, re-
quire your careful attention. Its charter expired on the 3d
day of March last, and it has now no power but that given
in the 2lst section, "to use the corporate name, style, and
capacity, for the purpose of suits fur the final settlement and
liquidation of the affairs and accounts of the Corporation, and
for the sale and disposition of the estate, real, personal, and
mixed, but not for any other purpose, or in any other manner
whatsoever, nor for a period exceeding two years after the
expiration of the said term of incorporation." Before the
expiration of the charter, the stockholders of the bank ob-
tained an act of incorporation from the Legislature of Pennsyl-
vania, excluding only the United Status. Instead of pro-
ceeding to wind up their concerns, and pay over to the United
States the amount due on account of the stock held by them,
the president and directors of the old bank appeared to have
transferred the books, papers, notes, and obligations, and most
all of its property to this new Corporation, which entered upon
business as a continuation of the old concern. Among other acts
of questionable validity the notes of the expired Corporation are
known to have been used as its own, and again put in circulation.
That the old bank had no right to issue or re-issue its notes after
the expiration of its charter cannot be denied, and that it
could not confer any such right on its substitute, any more
than exercise it itself, is equally plain. In law and honesty,
the notes of the beak in circulation at the expiration of the
charter, should have bee ,z.al" ' advertisement,
paid up anj presented, and, • on hand, can-