The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1840-03-07
SPEECH OF MR.. SMITH,
OF INDIANA,
On The Report and Resolutions relatipe 10 The
assumption Of State Debts.
(coNcLuDED.)
IN sENATE-February ia. 1910.


from South Carolina, as we'll as from the Sc
nator from Pennsylvania, dissertation on
currency, and he was free TO admit that he
had read some authors on that highly impor-
tant subject himself He was aware that the
general principles were, that an increase Of
currency produced corresponding increase
oil prices. He had heard much of redun-
dant currency, and its effects upon the bust
ness OF the country. twas one OF the most
difficult questions ever examined. As to when
the currency was or when twas not redundant,
SO much depended upon the business, improve
menis, increase OF population, and thousand
other considerations, that it would be only
conjecture. He was aware that there was
much speculation and theorizing on the whole
subjoct; but he had thought single conside-
ration, to which no would advert. had not
been sufficiently attended to, either by authors
or Senators, and that was, that il was not so
much the quantity of money in circulation in
country as the rapidity Of its motion, that
created either q supposed redundancy or
scarcity in the transactions of society. He
held that velocity or motion might be so ac-
celebrated as 10 make one hundred dollars an
swer more Of the valuable purposes Of society
at one period of time than one thousand dol
lars, with less activity, would at another
Motion applied to currency would be accole-
rated either by suspicion on the part of the
holder Of the currency in his possession,
which would induce him to part with it as
soon as possible or, by that universal and
vital principle of all society, confidence be-
tween man and man, the first principle opera
ting upon currency, that IS, suspicion of its
permanent value, could only operate on bank
paper, and, when once attacked, must neces-
sariy drive it out of circulation The alb
sence of the other principle, confidence, must
inevitably arrest, in great degree, the active
principle Of currency, and, with much more
money in country, The velocity may be so
much less that il may be infinitely more scarce
than at other times, when there is less money
in the country, but when confidence is such
as 10 give it accelerated motion. There was
at the present time money enough in the coun-
try TO relieve greatly the embarrassments Of
the People. Why, then, was it SO scarce
The obvious answer is, that such has been
the war upon the banks, upon the credit and
currency OF the country, that confidence was
destroyed between man and man. and between
the People and the Institutions of the coun-
try, in consequence of which, the principles
to which he had adverted were brought in
full operation against the active principle Of
currency, motion; and, by that means, The
money had been driven TO its hiding places,
from which it would only be forced through
the fundamentally of the usurer, or of per-
sons desiring to speculate on the misforlunes
of their fellow-men, until it should be again
set in active motion by confidence, the pro-
pelling principle. That confidence could me-
yer be restored so long as the war on the par,
of the Administration continued; for, Mr.
S. said, he was bound to look upon the pro-
ceedings before the Senate as a part of the
same policy which had been ayowed by the
President, and Of which the Sub-treasury had
formed component part
Mr.. S. had said all he desired to say on
first branch of The subject. He would call
the attention OF the Senate to some other
views connected more closely with the reso-
}utions before the Senate 1t seemed TO be
resolved that the General Government should
set itself up as grand lecturer Of the States.
Much had been said in the debate by Sena-
tors, condemning the report of the committee
of which he was dissenting member, for
the manner in which it arrayed the debts of
the States before the world and, after the
debate Of day, that report has been sent
back to the committee to be so altered as to
omit the Objectionable statements. The re-
port had been SO altered, and reported back.
All this was well enough; but did not Sena-
tors see that neither the Senator from Nilsson
ri nor the committee had the honor of orgi-
nal inventors in that matter! The President
of the United States, it seems, was at the
bottom of the whole of it, Mr. S. then read
extracts from the last Message:
"The foreign debt Of States, corporations, and
Of business scarcely be less than hundred
millions of dollars" at is easy to see that the in
Of this foreign debt augment the foreign de-
mad on the exports to pay the interest," and to the
extent diminish the imports and in proportion the
enlargement Of the foreign debt, and tho consequent
increase of interest, be the decrease of the i'm
port trade In lieu OF the comforts il brings us,
we might have our gigantic banking institutions aud
splendid but IN many instances proess railroads and
canals absorbing TO great extent interest upon the
capital borrowed to construct them, the surplus fruits of
national industry for years to come and securing to
pos'ey adequate return for the comforts which the
labor Of their hands might otherswisc have secured
not by tho increase OF this debt that relief is to be
sought, but in its dlminuon"
Mr.. S. said the entire credit of this whole
matter was due to the President, and he was
not willing to see it shifted and placed on the
bead Of either the Senator from Missouri or the
committee. Ifthe States had been arragned
before the Federal Government, he had shown
who was the prosecutor Sir, (said Mr.. 81
this is only portion of the entire policy, the
ccntralizing policy Of the present Administra-
ton. State rights and State legislation are to
be subject to the animadversion Of the federal
head of this Government. He had pointed
Senators again and again TO the lnordinate,
If fhnfs lnXy
up in the tremendous vortex OF Executive
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