The Sun.
London, England, 1840-01-16 00:00:00

EVENING EDITION.

1
of miles each Judge has to travel in the performance of 1
his duties, a great inequality appears in the amount of
i labour assigne to each Judge. The number of terms
I to be held in each of the Courts composing the ninth
circuit, the distance between the places at which they
sit, and from thence to the seat of the Government, are
i represented to be such as to render it impossible for
1, the Judge of that circuit to perform, in a manner cor-
responding with the public exigencies, his term and cir-
cuit duties. A revision, therefore, of the present ar-
rangement of the circuit seems to be called for, and is
recommended to your notice.
I think it proper to call your attention to the power
assumed by Territorial Legislatures to authorise the
' issue of bonds by corporate companies on the guaran-
tee of the territory. Congress passed a law in 1836,
?
providing that no Act of a Territorial Legislature incor-
porating banks should have the force of law until ap-
proved by Congress, but Acts of a very exceptionable
character previously passed by the Legislature of Flo-
rida were suffered to remain in force, by virtue of which
bonds may be issued to a very large amount by those
institutions upon the faith of the territory. A resolu-
tion, intending to be a just one, passed the Senate at
ihe same session, expressing the sense of Congress that
the laws in question ought not to be permitted to re-
mein in force unless amended in many material re-
spects, but it failed in the House of Representatives
for want of time, and the desired amendments have
not been made. The interests involved are of great
importance, and the subject d serves your early and
careful attention.
The continued agitation of the question relative to
the best mode of keeping and disbursing the public
money still injuriously affects the business of the coun•
ry. . 'l' ne suspension of specie payments in 1837 ren-
dered the use of dcposite banks, as prescribed by the
Act (if 1-43ri, a source rather of embarrassment than aid,
;eel of nrcess:ty placed the custody of most of the public
trioney efierwards collected in charge of public officers.
The new securities for its safety, which this required,
were a principal cause of my convening an extra Ses-
io,l of Congress ; but in consequence of a disagreement
hensveen the two Houses, neither then, nor at any sub-
snquent period, has there been any legislation on the
subject. 'fire effort made at the last session to obtain
the Authority of Congress to punish the use of the public
tmoney for private purposes as a crime, a measure e-
Reeled under other Governments with signal advantage,
was also unsuccessful, from diversities of opinion in that
lie,!.. notwithstanding tic anxiety doubtless felt by it
to afford every practical security. The result of this
, is still to leave the custody of the public money without
1 these safeguards which have been for several years ear-
nestly desired by the Executive ; and as the remedy is
only to be found in the action of the Legislature, it im-
poses on we the duty of again submitting toyou the pro-
priety of p .sing a law, providing for the safe keeping of
the public moneys, and especially to ask that its use for
I private purposes by any officers entrusted with it may
be declared to be a felony, punishable with penalties
Iproportioned to the magnitude of the offence.
1 These circumstances, added to known defects in i.he
f e'iistiog laws, and the unusual derangement in the gene-
, ral operations of trade, have, during the last three
sears, much increased the difficulties attendant on the
collection, keeping, and disbursement of the revenue,
mid coiled forth corresponding exertions from those hay-
! leg them in charge. Happily these have been success-
i ful beyond expectation. Vast sums have been collected
' end ilisburs,ed by the several departments with unex-
pecte.i cheapness and ease ; transfers have been readily
in trio to every part of the Union, however distant ; and
' rideleations have been far less than might have been
anticipated, from the absence of adequate legal restraints.
Since the officers of the Treasury and Post-office De-
partments were charged with the custody of most of the
public moneys received by them, there have been col-
, lected sixty-six millions of dollars, and, excluding the
case of tne late collector at New York, the aggregate
amount of losses sustained in the collection cannot, it is
I believed, exceed sixty thousand dollars. The defalcation
• of the late collector of that city, of the extent and cir-
cumstances of which Congress has been fully informed, ran
through all the modes of keeping the public money that
have been hitherto in use, and was distinguished by an
aggravated disregard of duty, that broke through the
i restraints of every s' stem, and cannot, therefore, be
use fully referred to as a test of the comparative safety
of either. Additional information will be furnishcd by
I the Report of the Secretary of the Treasury, in reply
to a call made upon that officer by the House of Re-
presentives at the last session, requiring detailed in-
formation on the subject of defaults by public officers
i or agents under each Administration, from 1786 to
i 18t7. This document will be submitted to you in a
few (Lys. Ti e genesal results (independent of the
resat-eflice, which is kept separately, and will be stated
i,yr itself), so far as they bear upon this subject, are that
toe losses which have been, and are likely to be, sus-
seined. by any class of agents have been—the greatest
by banks, including, as required in the resolution, their
deprecia.ed paper received for public dues; that the
next la-gest have been by disbursing officers, and the
least by collectors and receivers. If the losses on duty
bands are included, they alone will be threefold
those by both collectors and receivers. Our whole ex-
periences, therefore, furnishes the strongest evidence
that the desired legislation of Congress is alone wanting
to insure in those operations the highest degree of secu-
rity- and facility. Such also appears to have been the
eaporience of other nations. From the results of inqui-
s ies made by the Secretary of the Treasury in regard to
the practice among them, I am enabled to state that in
Pit out of 37 foreign governments, from which undoubted
information has been obtained, the public n oneys are
kept it' charge of public officers. This concurrence of
opinion in favour of that system is perhaps as great as
exists on any question of internal administration.
In the modes of business and official restraints on
distal,,ing officers no legal change was produced by the
sespeesis nof specie payments. The report last referred
to will be found to contain also much useful information
in relation to this subject.
I have heretofore assigned to Congress my reasons for
believing that the establishment of an independent na-
. Lionel treasury, as contemplated by the Constitution, is
cnecessary to the safe action of the Federal Government
The suspension of specie payments in 1837, by the
banks having the custody of the public money, showed
in so alarming a degree our dependence on those insti-
tutions for the performance of duties required by law,
that I then recommended the entire dissolution o'.`" that
elonneetien. This recommendation has been subjected,
s
I desired it should be, to severe scrutiny and ani-
st -
„„,4.,,' discussion ; and I allow myself to believe that,
notw,liss,anding the natural diversities of opinion which
Tll ;IV be anticipated on all subjects involving such imper-
t,oit. congh!?rations, it has secured in its favour as gene-
ra, cone
us,-enc.e of public sentiment as could be ex-
,
r ~ted on one ea! such magnitude.
Recent events have also continued to develnpe new
objections to'such a connection. Seldom is any bank,
ntii:er the existing system and practice, able to meet, on
demand, all its liabilities for deposits and notes in cir-
i eulasion. It maintains specie payments, and transacts
a profitable'husiness, only by the confidence of the people
.;11 its solvency ; and whenever this is destroyed, the
nsmtvds •rof its depositors and noteholders—pressed
more mnidly than it can make collections from its
debtors-Leforce it to stop payment. This loss of pay-
-1 ment, with its consequences, occurred in 1837, and
afforded the apology of the banks for their suspension.
The public then acquiesced in the validity of the ex-
cuse ; and, while the State Legislatures did not exact
from them their forfeited charters, Congress, in accord-
, It Pe with the recommendation of the Executive, al-
! 14e' ',, d them time to pay over . the public money they
t ii.,,ai
,nlthough compelled to issue Treasury notes to
i suppl /r . le deficiency thus created.
•
i It ,i„,,ir
~appears that there are other motives than a
want of
pels.lic confidence under which the banks seek '
to justifytheme-elves in a refusal to meet their oblige-
' tions. Sca:celY were the country and Government re-
't lived, in a degsee, from the difficulties occasioned by
1 the general suppression of 1837, when a partial one,
occurring within thirty nteseths of the former, produced
new and serious embarrassmeists, though it had no pal-
., hation in such circumstances as were alleged in justi-
i fi eteion of that which bad previously taken place. There
wits nothing in the condition of the country to endanger
lir vita managed banking institution ; commerce was de-
-1 re aged by no foreign war ; every branch of rnanufac-
tura lg industry was crowned with rich rewards ; and
( the et, ore than usual abundance of our harvests, after
! supplyiL•g our domestic wants, had left our granaries
and store tottses filled with a surplus for exportation.
1,.. is in the' ,midst of this that an irredeemable and
depreciated ,itper currency is entailed upon the people
) by a large porTion
,of the banks. They are not driven
to it by the exhiheittot: of a loss of public confidence, or
of a sudden press ure ham their depositors or of note-
-1 holders, hut they .excuse themselves by alleging that
i the current of business, and exchange with foreign
cluntrii s, which draws the precious metals from their
vaults, would require, in order to meet it, a larger cur-
teilenent of their loans to a comparatively small portion
l of the community, than it will be convenient for theta
.1
to bear, or perhaps cafe for the backs to exact. The
1 pea bias • 1. ceased to be one of necessity.. Convenience
t and policy are now deemed sufficient to warrant these
I 'its, itueions is degrading their solemn obligations.
Such conduct is not merely an injury to indivialual ere-
(Mors, but it is a wrong to the whole community, fro,m
whose liberality they hold most valuable privileges—
,hose rights they violate, whose business they derange,
and the value of whose property they render unseahla
and insecure. It must be evident that this new ground
far bank suspensions, in reference to which their action
is not only disconnected with, but wholly independent
0- 't." 4:
:v. , that of there
alarming blict,hgainveasnay character to
they
yo
ethxehirb.stusdpen-
'.....,--1747' or; sun greatly increases the impropriety of relying
•!-71'; .: vibe banks in the transactions of Government.
a . .7°7..a. large and highly-respectable portion of our
ff.; .1
es .*.t. 47. ' log institutions are, it affords me unfeigned plea-
i ,' ,
to state, exempted from all blame on account of
4:
-,, i eaond delinquency. They have, to their great
kat'ttessusllA- , t, not only continued to meet their demands, but
---2eN7.4 save even repudiated the grounds of suspension now re-
rted to.
It is only by such a course that the con&
, pa
(leave and good will of the community can be pre-

served, and, in the sequel, the best interests of the in
stitutions themselves promoted.
New dangers to the banks are also daily disclosed
from the extension of that system of extravagant cre-
dit of which they are the pillars. Formerly our fo-
reign commerce was principaliy founded on an ex-
change of commodities, including the precious metals,
and leaving in its transactions but little foreign debt.
Such is not now the case. Aided by the facilities af-
forded by the banks, mere credit has become too com-
monly the basis of trade. Many of the banks
themselves, not content with largely stimulating this
system among others, have usurped the business,
whsle they impair the stability of the mercantile
community ; they have become borrowers in-
stead of lenders ; they establish their agencies
abroad ; they deal largely in stocks and merchan-
dise ; they encourage the issue of State securities until
the foreign market is glutted with them ; and unsatis-
fied with the legitimate use of their own capital, and
the exercise of their lawful privileges, they raise by
large' loans additional means for every variety of
speculation. The disasters attendant on this deviation
from the former course of business in the country, are
now shared alike by banks and individuals, to an extent
of which there is perhaps no previous example in the
annals of our country. So long as a willingness of the
foreign lender, and a sufficient export of our produc-
tions to meet any necessary partial payments, leave the
flow of credit undisturbed, all appears to be prosper-
ous ; but as soon as it is checked by any hesitation
abroad, or by an inability to make payment there in our
productions, the evils of the system are disclosed. The
paper currency, which might serve for domestic
purposes, is useless to pay the debt due in Europe.
Gold and silver are therefore drawn, in ex-
change for their own notes, which are as un-
available to them as they are to the merchants to meet
the foreign demand. The calls of the banks, therefore,
in such emergencies of necessity exceed their demand,and
produce a corresponding curtailment of their accommo-
dations and of the currency, at the very moment when
the state of trade renders it most inconvenient to be
borne. The intensity of this pressure on the commu-
nity is in proportion to the previous liberality of credit
and consequent expansion of the currency ; forced sales
of property are made at the time when the means of
purchasing are most reduced, and the worst calamities
to individuals are only at lust arrested, by an open vio-
lation of their obligations by the banks, a refusal to pay
specie for their notes, and an imposition upon the com-
munity of a fluctuating and depreciated currency.
These consequences are inherent in the present sys-
tem. They are not influenced by the banks being large
or small, created by National or State Governments.
They are the results of the irresistible laws of trade and
credit. in the recent events which have so strikingly
illustrated the certain effects of these laws, we have
seen the bank of the largest capital in the Union, esta-
blished under a national charter, and lately strengthened,
as we were authoritatively informed, by exchanging that
for a State charter, with new and unusual privileges—
in a condition too, as it was said, of entire soundness
and great prosperity—not merely unable to resist these
effects, but the first to yield to them.
Nor is it to be overlooked that there exists a chain
of necessary dependence among these institutions,
which obliges them, to a great extent, to follow the
course of others, notwithstanding its injustice to their
own immediate creditors, or injury to the particular
community in which they are placed. This dependence
of a bank, which is in proportion to the extent of its
debts for circulation and deposits, is not merely on
others in its own vicinity, but on all those which connect
it with the centre of trade. Distant banks may fail,
without seriously affecting those in our principal com-
mercial cities ; but the failure of the latter is felt at
the extremities of the Union. The suspension at New
York in 1837, was everywhere, with very few excep-
tions, followed, as soon as it was known ; that recently
at Philadelphia immediately affected the banks of the
South and West in a similar manner. The dependence
of our whole banking system on the institutions in a few
large cities, is not found in the laws of their organization,
but in those of trade and exchange. The banks at that
centre to which currency flows, and where it is required
in payments for merchandise, hold the power of con-
trolling these in regions whence it come., while the lat-
ter possess no means of restraining them ; so that the
value of individual property, and the prosperity of trade,
thtough the whole interior of the country, are made to
depend on the good or bad management of the bank-
ing institutions in the great seats of trade on the sea-
board.

But this chain of dependence does not stop here. It
does not terminate in Philadelphia or New York. It
reaches across the ocean, and ends in London, the
centre of the credit system. The same laws of trade
which gave to the banks in our principal cities power
over the whole banking system of the United States,
subject the former, in their turn, to the money power in
Great Britain. It is not denied that the suspension
of the New York banks in 1837, which was followed in
quick succession throughout the Union, was produced
by an application of that power ; and it is now alleged,
in extenuation of the present condition of so ',age a
portion of our banks, that their embarrassments have
arisen from the same cause.

From this influence they cannot now entirely escape,
for it has its origin in the credit currencies of the two
countries ;it is strengthened by the current of trade
and exchange, which centres in London, and is rendered
almost irresistible by the large debts contracted there
by our merchants, our banks, and our states. It is
thus that an introduction of a new bank into the most
distant of our villages, places the business of that village
within the influence of the money power in England. It
is thus that every new debt which we contract in that
country seriously affects our own currency, and extends
over the pursuits of our citizens its powerful influence.
We cannot escape from this by making new banks,
great or small, state or national. The same chain
which binds those now existing to the centre of this
system of paper credit, must equally letter every
similarinstitution we create. It is only by the ex-
tent to which this system has been pushed of
late that we hare been made fully aware of
its irresistible tendency to subject our own banks and
currency to a vast controlling power in a foreign land ;
and it adds a new argument to those which illustrate
their precarious situation. Endangered in the first
place by their own mismanagement, and again by the
conduct of every institution which connects them with
the centre of trade in our own country, they are yet
subject, beyond all this, to the effect of whatever mea-
sures, policy, necessity, or caprice, may induce those
who control the credit of England to resort to. I
mean not to comment upon these measures, present or
past, and much less to discourage the prosecution of
fair commercial dealiag between the countries, based
on reciprocal benefits ; but it having now been made
manifest that the power of inflicting th:zse and similar
injuries, is, by the resistless law of a credit currency and
credit trade, equally capable of extending their conse-
quences through all the ramifications of our banking
sy,tem, and by that means indirectly obtaining, particu-
la-lv when our banks are used as depositories of the
public moneys, a dangerous political influence in the
United States, I have deemed it my duty to bring the
subject to your notica, and ask for it your serious con-
sideration.

Is an argument required beyond the exposition of
these facts, toshow the impropriety of using our banking
institutions as depositories of the public money ? Can
we venture not only to encounter the risk of their indi-
vidual and mutual mismanagement, but at the same
time, to place our foreign and domestic policy entirely
under the control of a foreign moneyed interest ? To
do so is to impair the independence of our Government,
as the present credit system has already im paired the
independence of our banks. It is to submit all its im-
portant operations, whether of peace or war, to be con-
trolled or thwarted at first by our own banks, acd then
by a power abroad greater than themselves. I cannot
bring myself to depict the humiliation to which this Go-
vernment and people might be sooner or later reduced,
if the means for defending their rights are to be made
dependent upon those who may have the most powerful
of motives to impair them.
Nor is it only in reference to the effect of this state
of things on the independence of our Government or of
our banks that the subject presents itself for considera-
tion : it is to be viewed also in its relations to the ge-
neral trade of our country. The time is not long past
when a deficiency of foreign crops was thought to
afford a profitable market for the surplus of our in-
dustry ; but now we await with feverish anxiety the
news of the English harvest, not so much from motives
of commendable sympathy, but fearful lest its antici-
pated failure should narrow the field of credit there.
Does not this speak volumes to the patriot ? Can a
system be beneficent, wise, or just, which creates greater
anxiety for interests dependent on foreign credit, than
for the. general prosperity of our own country, and the
profitable exportation of the surplus produce of our la-
bour?

The circumstances to which I have thus adverted
Appear to me to afford weighty reasons, developed by
taw events, to be added to those which 1 have on former
oceasiena offered when submitting to your better know-
ledge and discernment the propriety of separating the
gostody of the p4blie money from banking institu-
tut4s7 nor has any ;thing occurred to lessen in my
opinion tae force of what has been heretofore urged.
Tile only grour.3 on which that tustody can be desired
by the. banks, is the profitable use whicit They may make
of the mot,ley. Such use would be regarded ip indivi-
duals as a breach of trust, or a crime of great magni-
tude, and yet it aciay be reasonably doubted whether,
first and last, it is not attended with more mischievous
eousequences when permitted to the former than to the
latter, The practice of permitting the public money
to be used by its keepers as here, is believed to be pe-
culiar to this country, and to exist scarcely anywhere
else. To procure it here, improper influences are ap-
pealed to ; unwise connections are established between
the Government and vast numbers of powerful State
institutions ; other motives than the public good are
brought to bear both on the executive and legislative
departments, and selfish combinations, leading to spe-
cial legislation, are formed. It is made the interest of
banking institutions and their stockholders throughout

the Union to use their exertions for the increase of taxa-
tion and the accumulation of a surplus revenue ; and
while an excuse is afforded, the means are furnished for
those excessive issues which lead to extravagant trading
and speculation, and are the forerunners of vast debt
abroad, and a suspension of the banks at home.

Impressed, therefore, as I am, with the propriety of
the funds of the Government being withdrawn from the
private use of either banks or individuals, and the public
money kept by duly appointed public agents ; and be-
lieving, as I do, that such also is the judgment which
discussion, reflection, and experience have produced on
the public mind, I leave the subject with you. It is,
at all events, essential to the interests of the community
and the business of the Government that a decision
should be made.

Most of the arguments that dissuade us from employ-
ing banks in the custody and disbursement of the public
money, apply with equal force to the receipt of their
notes for public dues. The difference is only in form.
In one instance the Government is a creditor for its
deposits, and in the other for the notes it holds. They
afford the same opportunity for using the public moneys,
and equally lead to all the evils dependent upon it, since
a bank can as safely extend its discount on a deposit
of its notes in the hands of an officer, as on one made
in its own vaults. On the other hand, it would give to
the Government no greater security, for, in case of
'Awe, the claim of the note-holder would be no better
than that of a depositor.
I am aware that the danger of inconvenience to the
public, and unreasonable pressure upon sound banks,
have been urged as objections to requiring the payment
of the revenue in gold and silver. These objections
have been greatly exaggerated. From the best esti-
mates, we may safely fix the amount of specie in the
country at eighty-five millions of dollars, and the por-
tion of that which would be employed at any one time
in the receipts and disbursements of the Government,
even if the proposed change were made at once, would
not, it is now, after fuller investigation, believed, exceed
four or five millions. If the change were gradual,
several years would elapse before that sum would be re-
quired, with annual opportunities in the mean time to
alter the law, should experience prove it. to be oppres-
sive or inconvenient. The portions of the community
on whose business the change t‘ ould immediately operate,
are comparatively small, nor is it believed that its effect
would be in the least unjust or injurious to them.
In the payment of duties, which constitute by far
the greater portion of the revenue, a very large pro-
portion is derived ft om foreign commission houses and
agents of foreign manufacturers, who sell the goods
consigned to them, generally, at auction ; and after
paying the
_duties out of the avails, remit the rest
abroad in specie or its equivalent. That the amount of
duties should, in such cases, be also retained in specie,
can hardly be made a matter of complaint. Our ois n
importing merchants, by whom the residue of the duties
is paid, are not only peculiarly interested in maintaining
a sound currency, which the measure in question will
especially promote, but are, from the nature of their
dealings, best able to know when specie will be needed,
and to procure it with the least difficulty or sacrifice.
Residing, too, almost universally, in places where the re-
venue is received, and where the drafts used by the
Government for its disbursement must concentrate, they
have every opportunity to obtain and use them in place
of specie, should it be for their interest or convenience.
Of the number of these drafts and the facilities they
may afford, as well as of the rapidity with which the
public funds are drawn and disbursed, an idea may be
formed from the fact that, of nearly twenty millions of
dollars paid to collectors and receivers during the pre-
sent year, tha average amount in their hands at any one
time has not exceeded a million and a half ; and of the
fifteen millions received by the collector of New York
alone during the present year, the average amount held
by him, suhject to draft during each week, has been less
than half a million.

The ease and safety of the operations of the Trea-
sury in keeping the public money, are promoted by the
application of its own drafts to the public dues. The
objection arising from having them too long outstand-
ing, might be obviated, and they yet made to afford to
merchantS and banks holding them as an equivalent for
specie, and in that way greatly lessen the amount ac-
tually required. Still less inconvenience will attend the
requirement of specie in purchases of public lands. Such
purchases, except when made on speculations, are, in
general, but single transactions, rarely repeated by the
same person ; and it is a fact that for the last year and
a half during which the notes of sound banks have been
received, more than a moiety of these payments has been
voluntarily made in specie, being a larger proportion
than would have been required in three years under
the graduation proposed.
It is moreover a principle, than which none is
better settled by experience; that the supply of the
precious metals will always be found adequate to
the uses for which they are required. They abound
in countries where no other currency is allowed.
In our States, where small notes are excluded,
gold and silver supply their place. When driven to
their hiding places by bank suspensions, a little firm-
ness in the community soon restores them in a sufficient
quantity for ordinary purposes. Postages and other
public dues have been collected in coin, without serious
inconvenience, even in States where a depreciated paper
currency has existed for years, and this, with the aid of
Treasury notes for a part of the time, was done without
interruption during the suspension of 1837. At the
present moment the receipts and disbursements of the
Government are made in legal currency in the largest
portion of the union—no one suggests a departure from
this rule, and if it can now be successfully carried out,
it will be surely attended with even less difficulty when
bank notes are again redeemed in specie.
Indeed, I cannot think that a serious objection
would any where be raised to the receipt and pay-
ment of gold and silver in all public transactions,
were it not from an apprehension that a surplus in
the Treasury might withdraw a large portion of it from
circulation, and lock it up unprofitably in the public
vaults. It would not, in my opinion, be difficult to
prevent such an inconvenience from occurring ; but
the authentic statements which I have already
submitted to you in regard to the actual amount in
the public Treasury at any one time during the period
embraced in them, and the little probability of a diffe-
rent state of the Treasury for at least some years to
come, seem to render it unnecessary to dwell upon it.
Congress. moreover, as I have before observed, will in
every year have an opportunity to guard against it,
should the occurrence of any circumstances lead us to
apprehend injury from this source. Viewing the sub-
' ject in all its aspects, I cannot believe that any period
will be more auspicious than the present for the adop-
tion of all measures necessary to maintain the sanctity of
our own engagements, and to aid in securing to the
community that abundant supply of the precious metals
which adds so much to their prosperity, and gives such
increased stability in all their dealings.
In a country so commercial as ours, banks in some
form will probably always exist ; but. this serves only to
make it the more incumbent on U 3, notwithstanding
the discouragements of the past, to strive in our respec-
tive stations to mitigate the evils they produce ;
to take from them as rapidly as the obliga-
tions of public faith, and a careful conside-
ration of the immediate interests of the community
will permit, the unjust character of monopolies ; to
check, so far as may he practicable, by prudent Legisla-
tion, those temptations of interest, and those'opportu-
nities for their dangerous indulgence, which beset them
on every side, and to confine them strictly to the per-
formance of their paramount duty, that of aiding the
operations of commerce, rather than consulting their
own exclusive advantage. These and other salutary re-
forms may, it is believed, he accomplished without the
violation of any of the great principles of the social
compact, the observance of which is indispensable to
its existence, or interfering in any way with the useful
and profitable employment of real capital.

Institutions so framed have existed and still exist
elsewhere, giving to commercial intercourse all neces-
sary
legitimate
stimulatingen d s,
r theire n cytisipeeychuslavteiogiaLinud Thusth e accomplishing
facilities, without inflating or depreciating the
surestcur-
guaran-
tee for their protection and encouragement in the good-
will of the community. Among a people so just
as ours, the same results could net fail to attend
a similar course. The direct supervision of the banks
belongs, from the nature of our Government, to
the States wha authorise them. It is to their Legis-
latures that the people must mainly look for actios on that
subject. But as the conduct of the Federal Government
in the management of its revenue has also a powerful
though less immediate influence upon them, it becomes
our duty to see that a proper direction is given to it.
While the keeping of the public revenue in a separute and
independent treasury, and of collecting it in gold and
silver, will have a salutary influence on the system of paper
credit, with which all banks are connected, and thus aid
those that are sound and well managed, it will at the same
time sensibly check such as are otherwise, by at once with-
holding the means of extravagance afforded by the public
funds, and restraining them from excessive issues of notes,
which they would be constantly called upon to redeem.
lam aware it has been urged that this control may
be best attained and exerted by means of a national bank.
The constititational objections, which I am well known
to entertain, would prevent me in any event from pro-
posing or assenting to that remedy : but in addition to this
I cannot, after past experience, bring myself to think that
it can any longer be extensively regarded as effective for
such a purpose. The history of the late National Bank
through all its mutations shows that it was not so.
On the contrary, it may, after a careful consideration
of the subject, be, I think, stated, that at every
period of banking excess it took the leads that in 1817 and
181t1, in 1823, in 1831, and in 1834, it vast exanspions,
followed by distressing contractions, led to those of the
State institutions. ft swelled and maddened the tides of
the banking system, but seldom allayed or safely directed
them. At a few periods only was a salutary control exer,
cised, but an eager desire, on the contrary, exhibited for
profit in the first place ; and if afterwards its measures were
severe towards other institutions, it was because its own
safety compelled it to adopt them, It did not differ from
them in principle or in forms its measures emanated from
the same spirit of gain ; it felt the same temptation to
over issues; it suffered from, and was totally unable to
avert, those inevitable laws of trade by which it was itself
affected equally with them ; and, at least on one occasion,
at an early day, it was saved only by extraordinary ezer- I