The national era. [volume] (Washington [D.C.]) 1847-1860, 1857-12-10
PRESIDENTS MESSAGE
FetIOao-cttizens Of tie Senate
and House of Representatives

" CongTees information of the state OF the
Union, ard recommend to their consideration
such measures as Judge to be necessary
and expedient."
But first, and above all, our thanks are due
TO Almighty God, for the numerous benefits
winch he has bestowed upon this people and
our united prayers ought to. ascend to Him, that
he would continue to bless our great Republic
IN Tune to come as He has blessed it in time
past. Since the adjougSmsnt of the last Con;
gress, our constituents have enjoyed an unusual
degree of health. The earth has yielded her
fruits abundantly, and has beautifully rewarded
the toll of the husbandman Our great staples
have commanded high prices, and, up till with
IN orlet period, our manufacturing, mineral,
and mechanical occupations have largely par
taken OF the general prosperity. We have pos
sesseo all the elements of material wealth in
rich abundance, and yet, Notwithstanding all
tnese advantages, our couatry, in its monetary
interests, ID at the present moment in deplo-
raoie condition. In the midst of unsurpassed
plenty IN all the productions of agriculture and
In all the elements of national wealth, we find
our manufactures suspended, our public works
retarded, our private enterprises of different
kinds abandoned, and thousands of useful Ia
borers thrown out of employment and reduced
to want. The revenue of the Government,
which is chiefly derived from duties on imports
from abroad, has been greatly reduced, whilst
the appropriations made by Congress at its last
session for the current fiscal year are very large
in amount
Under these circumstances, a loan may be
required before the close of your present SEES
sion; but this, although deeply to be regretted,
would prove to be only slight misfortune,
when compared with the suffering and distress
OrQUailipn he Al
Government cannot fail deeply to sympathize.
though it may be without the power to extend
relief.
1t is our duty to inquire what has produced
such unfortunate results, and whether their re.
currence can be prevented? In all former
revulsions, the blame might have been fairly
attributed to variety of cooperating causes :
but not so upon the present occasion. It is ap
parent that our existing misfortunes have pro.
ceeded solely from our extravagant and vicious
system of paper currency and bank credits, ex.
citing the people to wild speculations and
gambling in stocks. These revulsions must
continue to recur at successive intervals, 90 long
as the amount of the paper currency and bank
loans and discounts of the country shall be left
to the discretion of fourteen hundred rrespon.
slble banking institutions, which from the verv
law Of their nature will consult the interest of
their stockholders rather than the public well
fare.
The trainers of the Constitution, when they
gave 10 Congress the power "to coin money
and to regulate the value thereof" and pro
hibited the States from coming money, emit
ting bills of credit, or making anything but
gold and silver coin tender in payment OF
debts, supposed they had protected the people
against the evils of an excessive and irredeem.
ahla Tbo0 L
for the existing anomaly, that's Government en-.
dowed with the sovereign attribute of coming
money and regulating the value thereof should
have no power to prevent others from driving
this coin out of the country, and filling up the
channels of circulation with paper which does
not represent gold and silver
1t IS one Of the highest and most responsible
duties OF Government, to insure TO the people
sound circulating medium, the amount OF
which ought to be adapted with the utmost
possible wisdom and skill to the wants of in.
ternal trade and foreign exchanges. If this
be either greatly above or greatly below the
proper standard, the marketable value of every
mans property is increased or diminished in
the same proportion, and injustice to individu
ais as well as incalculable evils to the commu.
nifty are the consequence.
Unfortunately, under the construction Of the
Federal Constitution which has now prevailed
too long to be changed, this important and deli
cate duty has been discovered from the coming
power, and virtually transferred to more thar
fourteen hundred State banks, acting independ
emily of each other, and regulating their paper
issues almost exclusively by O regard to tie
present interest of their stockholders. Exer
cising the sovereign power of providing pa
per currency, instead of coin, for the country
the first duty which these banks owe to the pub
nc Is to keep IN their vaults q sufficient amount
OF gold and silver to insure the convertibility o.
their notes into coin at all times and under al
circumstances. No bank ought ever to be char
tered without such restrictions on its business
as to secure this result. All other restrictions
are comparatively vain. This is the only true
tombstone, the only efficient regulator of a pa
per currency-the only one which can guard
the public against over-issues and bank suspen
sions. As q collateral and eventual security
1t is doubtless wise, and in all cases ought to
be required, that banks shall hold an amount
of United States or State securities equal to
their notes in circulation, and pledged for their
redemption. This, however, furnishes no ade
quote security against over-issues. On the con
trary, it may be perverted to initiate the curren
ey. Indeed, it is impossible by this means tc
convert all the debts of the lited States and
State Governments into bank notes, without
reference to the specie required to redeem
them. However valuable these securities NAV
be in themselves, they cannot be converted into
gold and silver at the moment of pressure. ~
our experience teaches, in sufficient tine to
prevent bank suspensions and the depreciation
OF bank notes. la England, which is to a con
siderable extent paper money country, though
vastly behind our own in this respect it was
deemed advisable, anterior to the act of Parla
ment OF 1874, which wisely separated the issue
of notes from the banking department for the
Bank ct England always to keep on hand gold
and silver equal to one-third of its combined
circulation and depopites. If this proportion
was no more than sufficient to secure the con.
vertibility of its notes, with the whole of Great
Britain, and to some extent the continent Of
Europe, as a field fer its circulation. rendering
it almost impossible that sudden and immedi
ate run to dangerous amount should be made
upon 1t, the came proportion would certainly be
insufficient under our banking system. Each
of cur fourteen hundred banks has but a lin
tied circumference for its circulation, and in the
course Of very few days the depositors and
note-holders might demand from such bank a
sufficient amount in specie to compel it to sus.
pend, even although it had coin in its vaults
equal to one-third of it's immediate liabilities
And yet am not aware, with the exception of
the banks of Louisiana that any State bank
throughout the Union has been required by its
charter to keep this or any other proportion Of
gold and silver, compared with the amount Ct
its combined circulation and deposites. What
has been the consequence? The recent report
made by the Treasury Department on the condi
ton OF the banks throughout the different States
according to returns dated nearest to January
1887, the aggregate amount of actual specie In
their vaults is S58,349,838, of their circulation
S2l4,778,822, and of their deposites $3.50, 35l ;.
352. Thus it appears that these banks in the
aggregate have considerably less than one dollar
in seven of gold and silver, compared with their