. 7' LMI" ' "n 'UL tf-...-SSt!.fli
JHML - "' "iMiaio sworn
upon the Altar of God, eternal hostility to cv'cry Turgor Tyranny over the Mind of Moh.Thoruas Jefferson.
HINTED Ml) PUBLISHED BY J01IN S. INGRAM;
mm r
ggggggyRi OOIiTOjglA COTOTY, PA. gATURBAY, SB3PTEMBBliT6j1837r
mhtty- FB0, the
.President of tt:c V. States,
To thplivo Houses of CoimrcsH. nt tlin rnimnriirr.
.mcnt,of the First Session of tlio Twcnly-filth
vonijrcss.
Fclipwfipitizens of the Semite
1 " ahd'Housc of Represent utlvti :
'('VFhtfact ofthc 23th of June. 1830. remi
llSff.positesof the puhlic money, St
uirecung me empioyincnt ul Stale, Utstrj
'territorial hanks for that purpos
mjdJt 'ho duty of the Secretary of tl
Treasury to discontinue the use of such
ri thenvtis should atanv time refuse
tlli.r--iLotes '.n,8Pocio a'l o substitute other
' ojnhsrproviueu a suflicicnt number coul
ugobtajncu to. receive hopublio dcposilcs
fipon tlio terms and conditions therein pre
Scribed.. Tlie general and almost siinulta-
iiuouh suspension oi specie payments hy the
banks in May last, rendord the performance
bf this fluty imperative, in respect to those
which had been selected under the act; and
made if, at the sanio-timq; impracticable to
cmpioy me requisite number ol others, up
on inoprcscrincd conditions. The specific
regulations esiannsiied ny Uongrcss lor the
ueposiic aim sate keeping ol the public mo
ncys.having thus iln'cxpcctiy become in
operative, I felt it to be my dutv to airord
jou-aii eariy opportunity lor the exercise
tof ydurslipervisory power over the subject
"I-lwalDnlsblcdtd apprehend that the sus
pcnsionoi specie payments, increasing th
viiiiKitiassuiciiis nciorc cxisnmr in tlm m
ciiniary.affnirs of the counlry, would so far
1tn In t.Ii ..1.1 . . . . i
un.iiumii uiu jiuuiiu revenue, mat the accru
nig receipts into mo Treasury would not
With the reserved five millions, be sufficient
10 uciray. the unavoidable expenses of the
government, until the usual period for the
muuung.oi congress; whilst the authority
tocail lipon the states, for a portion of the
Bums uoposiicu wan them, was too restric
ted to enable the department to realise a snf-
finlfn4vim-iiw r. .1... mi
uuimi Mom mat source, rnese
apprehensions have been justified by sub
euent results, which render it certain that
una ueiicicncy will occur, if additions
means hc.not provided bv Congress.
J tic Uiilicultiei experienced by the trier
cantilo interest, in mnntincr ilmir nn,.
incnts, induced them to appfy to mc, previ-
v ,v atmui siiHpeusion oi specie
payments, lor indulgent upon their bonds
Jor duties: and all the relief authorized by
,j.r .aa j,iuiiijuy ana cnecritilly granted.
The dependence of the Treasury upon the
avail of these bonds, to ensble it to mak'c
the depositee with the states required hy
law, led me in the outset to limit this indul
gence 10 me hrstol September, but it has
oincc peon-extended to the first of October,
inat .the matter might be submitted to your
fiMiiA. .1 r ...... i .
Questions were also expected to arise in
tho recess in rrspect to the October instal-
mem oi tuesc dcposites, icquiring tho inter
posiuonfof Congress.
a., provision ol another act, passed about
hib sdiuB,jnnc, and intended to secure a
.a.uHui compnance with the obligations of
mo untied, States, to satisfy all demands
upon, them in specie or its equivalent, pro-
nihil n'..- r ii 1
""si i any oanu note, noteonver
" . f.v??i!n. sPot into gold and silver at the
will of, hp holder; and the ability of the
, eoverihciit, with millions on deposite, to
meet its engagements in tho manner thus
' e?ul"f y law was rendered veiy doubt
Jul by the ecnt to which I have referred.
Sensibly thatadequato provisions for these
!PncPcct-cl exigencies could only be made
oy Congress convincbd that some of them
would bo indisnensablv
public seryice, before the regular period of
u wusuuiis aiMi 10 cnaoie
' y.u t0 exercise, at the earliest moment, vour
1 lull constitutional power for tho relief o'ftho
j 5:ountry, I co"l'i not, with propriety, avoid
, Buujecung you to the inconvenience of
' assembling at as early a day as the state of
miu popular representation would permit.
I am sure that I have done but justice to your
fee lntTS. in,'lini;ni,;l, ,i,. .f.: .- ' ...
bride will beelipnrr.ill
nope of rendering your meeting conclusive
to tho good 'of the country.
i( During,, the earlier stages of tho revolu
.ion throughwhich we have just passed,
1 rnucH acnnipnious discussion arose, and
"jvprs'lty of opinion existed, as to its
.. feal rausea This is not surprising Tho
, VLonof credit are so diversified, and
the influences which aflcct them so numer
ous, andfflfte.n stf subtle, that even impartial
ana welljijformej persons are seldom found
a vnagr??4M2Pect to them. To inherent
JUhcuItiqilRvMo also added other tenden--les,
whifiro by no means favorable to
r "l0 dlfcov",W troth. It was hardly to be
expected thatT those who disapprove the
policy of tho government, in relation to tho
it (urrency, would, in iho excited stato of
tho country,
nectcd with
1 heniBttut thus became con- poared that evils, similar to those sufTcrod
the passions and cnnflieis nf lv onrnK-iK. Imt-i. iu,n 1 :..
, . , .....v .rn LA lUUUIItUU III
party; opinions were mora or less nttectpd 0 real Britain, on the continent, and, indeed
by political consideration; and differences throughout the commercial world; and that
were prolonged which might otherwise in other countries, as well as in our own,
have been determined by. an appeal to facts, they have been uniformly proceded by an
by the oxernso of reason, or by mutual , undue enlargement of the boundaries of
...inn ssiuii 11 is, iiowcver, a encoring re-1 trade, promoted, as with
neciion
TVunilber 21.
11 i i i .
II 1. Ilfl ll-nt'ftf r n innmii,. 4Hn,n .1 . '.I t
i, that circumstances of this nature 1 dented expansions of the systems nf rmAU
cannot prevent a conununity so intelligent i A reference to the amount of banlsinjr cani-
ismus rom uuiinaieiy arriving at correct tal, and the issues of paner credits nut in
i nrnni-iirn. t... l... f. I : 1..,: ii ... . . . '
""-"'""s " uiu arm uc- uiti-uKuion m ii rent
conchifions
uei 01 mis truth, 1 proceed to stato my
views, so far as may ho necessary, to a clear
understanding of the remedies, I feel it my
duty, to propose, and of the reasons by which
1 have been led to recommend them.
The history of trade in the United States
for the last three or four years, affords the
most convincing evidence that our present
condition is chiefly to be attributed to over-
action mall tho departments of business; an
over-action deriving, perhaps, its first im
pulses from antecedent causes, but stimula
ted to its destructhe consequences by ex
cessive issues of bank paper, and by other
facilities for the acquisition and enlarge
ment ot credit. At the commencement of
the year 18J4, the banking capital of the
United States, including that of the national
hank then existing, amounted to about two
hundred million of dollars; the bank notes
then in circulation to about ninety-five mill
ions; and the loans and discounts of thi
banks to three hundred and twenty-four mill
ions, lietween that time and the first of
January, 183(1, being the latest period to
which accurate accounts have been received
our banking capital was increased to inoro
than two hundred and fifty-one millions:
our paper circulation to more than one hun
dred and lorty millions, and the lnnn un,l
discounts to more than four 1
fifiy-scvon millions. To this vast increase
arc to be added the many millions of credit,
acquired by means of foreign loans, con
tracted by the States and Slate iiintiiiitinns.
and, above all, by the lavish accommoda-
i" . lit. . .
uons cxienueu ny toreign dealers to
merchants.
our
The consequences of this rcdumlancv nf
credit, and of spirit of reckless speculation
engendered by it, were a foreign debt con
tracted by our citizens, estimated in March
last at more than thirty millions of dollars;
the extension to traders in the interior of
our country ol credits for supplies greatly
ueyonu me wants ol the people; thr invest
ment ol tlurtvnino and a half mill inns nf
lollars in unproductive public lands, in tin
years 18.15 and 1836. whilst in th nrnnp
ding year the sales amounted to only four
uiu h nan minions; me creation o ( ehts. to
an almost countless amount, for real estate
n existing or anticipated cities and villages.
equally unproductive, and at prices now
seen to have been greatly disproportionate
to the real value; the expenditure of immense
sums m improvements which, m nmnv
ascs, have been found to be ruinously im-
rovident; the diversion to other pursuits of
1 . ... .
mucii oi mo iaor thai should have been ap-
Iied to agriculture, thereby contributing in
le expenditure of largo sums in tho imnor-
lauou oi grain irom Europe an expenditure
mien, amounting in 1831 to about two
undred and fifty thousand dollars, was.
n the first two quarters of the present year,
ncrcaseu to more than two millions of do
ars; and finally, without enumerating olher
njurious results, the rapid growth amninr
ill classes, and especially in our groat com
mercial towns, ol luxurious habits, fiumil-
ed too often on merely fancied wealth, anil
elrimenial alike to tin; industry, ihe resour
ces, and the morals of our people.
It was so impossible that such a state of
things could long continue, that tho nrosncet
f revulsion was nresent to tho minds nf
considorato men before it actually came
None, however, had correctly anticipated
its severity. A concurrence of circumstan
ce? inadequate of themselves to prodnccsuch
wiiic-sprcau cj calamitous embarrassments,
tended so greatly to aggravate them, that
they cannot bo overlooked in considering
their history. Among theso may ho men
tioncd, as most prominent, tho great loss of
. II " . .
cujiuai susiamcu ny our commercial empo
rium in Ihe fire of December, 183fl a loss
the effects of which were underrated at the
time, because! postponed for a season by
tho great facilities of cicdit then existing;
the disturbing effects, in our commercial
cities, of tho transfers of the public moneys
required by the deposite law of Juno, 1839;
and the measures adopted by the foreign
creditors of our merchants fo' reduce their
debts, and fo withdraw from tlio United
States a largo portion of our specie.
However unwilling any of our citizens
may heretofore have been to assign to these
causes the chief instrumentality in produ
cing the present stato of things, the develop-
inenis siiDseqiicniiy maucas mo actual con
liritain. bv hanks?, .mil
in other ways, during il1D yCars qu,
,aiid 1830, will show an augmentation of
in v. mj.i.-i cuiiunuy mure, as mucii uispro
portioncd to the real wants of trade as in
the United Slates. With this redundancy
of the paper currency, there arose also a
spirit of adventurous speculation, cmLracing
the whole range of human enterprise. Aid
was profusely given to projected improve
ments; large investments were made in for
eign stocks and loans : credits for goods
were giantcd with unbounded liberality to
merchants in foreign countries; and all the
means of acquiring and employing credit
were put in active operation, and extended
in their effects to every department of bu
siness, and to every quarter of the globe.
The reaction was proportioned in its vio
lence to the extraordinary character of the
events which preceded it. The commer
cial community of Gre.it liritain wrn sun.
..i... .... - . . . . . .i;
jected to the greatest difficulties, and thi
debtors in this country were not only sud
denly deprived of accustomed and cxpec
ted ciedits, hut called upon for payments
which, in the actual posture of things here
ruuiu oniy oe maue through a general pres
sure, ami at tne most ruionous sacrifices
! ..!... 1 .1 r. ... .
in wuw in muse lacis, it would seem
impossible for sincere inquirers after trull
to resist the conviction, that the causes of
the revulsion in both countries have been
substantially the same. Two nations, the
iimai. uuiuuierciai in mc world, enjoying
inn ruceniiy me nigiiest drgree of appa
rent prosperity, and maintaining with each
uiner mc closest relations, are suddenly, in
o r r. i i ... J
. iuiiu in iiuidiinu peace, anu witnout any
great national disaster arrested in their ca
reer, and plungedjnto a state of embarrass
niuiu .uiu tnsiress. in uom countries we
have witnessed the same redundancy of pa
pei money, and oilier iacilities of credit
the same partial successes: the'same did
cullies and reverses; and, at length, nearly
the same overwhelming catastrophe. The
UHJ31 iii.uuii.ii uuiercnce ueiween the re
suits in the two countries has only been
umi mm us mere iihk aiso occurrcu an ex
tensive derangement in the fiscal affairs of
the l'cderal and State Governments, occa
sioned by the suspension of specie payments
oy me nanus.
The history of these causes and efTects,
in Great liritain and the United States, is
substantially the history of the revulsion in
ail other commercial countries
The present and visible effects of theso
circumstances on the operations of the Gov
ernment, and on the industry of the people,
jiiiim out mc oojccis wnicn can lor your
immediate attention.
1 hey arc, to regulate by law, the safe
keeping, transfer, and disbursement, of the
public moneys; to designate tho funds to be
received and paid by tho Government: to
enable the I reasury to meet promptly eve
ry demand upon it; to proscribe tho terms
of indulgence, and the mode of settlement
to be adopted, as well in collecting from in
dividuals mo revenue that has accrued, as
in withdrawing it from former depositories,
and to devise and adopt such further moa-
National
( juoiic.ieeiiiijr produced Uv tlm n..;n,. u;i.,., ,r,.ii inr iininmnHnhil niniiit!M. ...n
9 S'ttppnbuto to that policy any extensivo as it seems tome, dispel alK remaining
jmuarrasgment in the monetary affairs of J doubts upon tlio subject. It has siiiuo ap-
sures, within ihe constitutional competency
of Congress, as will bo best calculated to
revive tho enterprise and to promote the
prosperity of the country.
I'or the deposite, transfer, and disburse
ment, of tho revenue, National and State
hanks have always, with temporary nnd
limited exceptions, been heretofore employ
ed; but, although advocates of each system
are still to ho found, it is apparent that the
events of the last few months havo greatly
augmented the desire, long existing among
the pcoplo of the United States, to separ
ate tho fiscal operations of the Government
Irom those ol individuals of corporations.
Again to create a national bank, as a fis
cal agent, would be to disregard tho popu
lar will, twice solemnly and unequivocally
expressed. On no question of domestic
policy is thoro stronger evidence that the
sentiments of a large majority are deliber
ately fixed: and I cannot concur with those
who think they see, in recent events, a
proof that these sentiments are, or a reason
that they should be, changed.
ISvcnts, similar in their origin and char
acter, have heretofore frequently occurrod,
without producing any such change; and
the lessons of experience mnst bo forgotten.
if wo supposo that the present ovorthrow
of credit would havo br on prevented by the
existence of a national hank. I'roneuess tn
excessive issues has ever been iho vice of
the banking system a vice as prominent in
as in Stato instiiminno 'Pi.lo
propensity is as subservient to tho advance
ment of private interests In the one as in
the others; and those who direct them both,
being principally guided by the same views,
and influenced by the same motives, will
be equally ready to stimulate extravagance
of enterprise by improvidence of credit.
How strikingly is this conclusion sustained
by experience. Tho Hank of the United
States, with the vast powers conferred on
it by Congress, did not or could not pre
vent former and similar embarrassments;
nor has the still greater strength, it has
been said to possess, under its present char
ter, enabled it, in the existing emergency,
to check other institutions, or even to save
itself. In Great liritain, where, it has been
seen, the same causes have been attended
with the same effects, a national bank, pos
sessing powers far greater than are asked
Tor by the warmest advocates of such an
institution here, has also proved unable to
prevent an undue expansion of credit, and
the evils that flow from it. Nor can I find
any tenable ground for the re-establishment
of a national bank, in the. derangement al
leged at present to exist in the domestic
exchanges of the country, or in the facili
ties it may be apahlc of affording them.
Although advantages of this sort were an
ticipated when the first Bank of the United
States was created they were regarded as
on iiiuiuemai accommodation; not one
which the Federal Government was bound,
or could be called upon to furnish. This
accommodation is now, indeed, after the
lapse of not many years, demanded from it
as among its first duties, and an omission
to aid and regulate commercial exchange,
is treated as a ground of loud and serious
complaint. Such results only serve to ex
emplify the constant desire among some of
our citizens, to enlarge the powers of the
Government and extend its control to sub
jects wilh which it should not interfere,
They can never justify the creation of an
institution to promote such objects. On
the contrary, they jutly excite among the
community a more diligent inquiry into ihe
character of those operations of trade, to
wards which it is desired to extend such
peculiar favors.
The various transactions which hear the
name of domestic exchanges, differ essen
tially m their nature, operation and utility.
jue ciabs oi mem consists ol lulls of ex
change, drawn for the purpose of transfer
ring actual capital from one part of tho
country to another, or to anticipate the
proceeds of property actually transmitted.
uius oi mis description are lmr b v useful in
the movements of trade-, and well deserve
all the encouragement which can rightfully
be given to them: Another class is made
up ol bills ol exchange, not drawn to trans
for actual capital, nor on the credit of pro.
pcrty transmitted, but to create fictitious
capital, partaking at once of the character
ol notes discounted in bank, and of bank
notes in circulation, and swelling the mass
of paper credits to a vastcxtent in the most
objectionable manner. These bills have
formed, for the last few years, a large, pro
portion of what are termed the domestic ex
changes of the country, serving as the means
of usurious profit, and constituting the most
unsafe and precarious paper in circulation.
This species of traffic, instead of being up
held, ought to lie discountenanced bv the
government and the people.
in translcrnng Us funds from place to
place, the government is on tho same foot
ing with the private citizen, and many re
sort to'the same legal means. It may do
so through the medium of bills drawn by
itscll,
generally, without the assistance of banks
l et they extend throughout d
eigntics. and far exceed in amount the real
exenanges of the United States. There is
no reason why our own may not be con
ducted in the same manner, with, equal
cheapness and safety. Certainly this
might be accomplished, if it were favored
by those most deeply interested; and few
can doubt that their own interest, as well
as the general welfare of the country, would
be promoted by leaving such a subject in
the hands of those to whom it properly be
longs. A system founded on private in
terest, enterprise and competition, without
the aid of legislative grants or regulations
by law, would rapidly prosper; it would
be free from the influence of political agi
tation, and extend the same exemption to
trade itself; and it would put an end to
those complaints of neglect, partiality, in
justice and oppression, which are tho una
voidable results of interference by the gov
ernment in the proper concerns of individ
uals. All former attempts on the part of
the government to carry its legislation id
this respect, further than was designed by
the constitution, have in the end pioved in
jurious, and have served only to convince
the great body of the people; .more and
more, of tho certain dangers of blending
private interests with the operations of
public business, and there is no reason to
suppose that a repetition of thetti now would
be more successful.
It cannot be concealed that there exists
in our community, opinions and feelingt
on thin subject in direct opposition to each
other. 1 large portion of them, combi
ning great intelligence, activity and influ
ence, are no doubt sincere in their belief,
lhat the operations of trade ought lo be as
sisted by such a connection; they regard a
national bank as necessary for this pur
pose, and they arc disinclined to every
measure that docs not tend, sooner or later,
to the establishment of such an institution.
On the other hand, a majority of the peo
ple are believed to be irreconcilably oppo
sed to that measure; th'ey consider such a
concentration of power dangerous to their
liberties; and many of them regard it as a
riolalion of the Constitution. This colli
sion of opinion has, doubtless, caused much
ol the embarrassment to which the com
mercial transactions of the country have
lately been exposed. Banking has become
a political topic of the highest interest, and
trade has suffered in the conflict of parties.
A speedy termination of this state of things,
however desirable, is scarcely to be expect
ed. We have seen, for nearly half a cen
tury, that those who advocate a national
bank, by whatever motive they may be in
fluenced, constitute a portion of our com
munity too numerous to allow us to hone
for an early abandonment of their favorite
plan. On the other hand thev must in
deed form-an erroneous estimate of the in
telligence and temper of the American peo
ple, who suppose that they have continued,
on slight or insufficient grounds, their per
severing opposition lo such an institution,
or that they can bo induced, by pecuniary
pressure, or by any other combination of
circumstances, to surrender principles they
hare so long and so inflexibly maintained.
My own views of the subieet are unchanceil.
They have Icon repeatedly and unreservedly an
nounced to my felloTv citizens, who, with full kqowl
eAgc of them, conforred upon me the two highest
ofiiccs of tho Government. On Iho list of theso
occasions, I felt it due to tho pcoplo to apprize
them distinctly, that, in tho CTcnt of mv election. I
would not he able to co-operate in there-establishment
ofa national bank. To these sentiments, I
nao only to add tho expression of an
::.... .i
Ill I I I "... .If UUU UIU VAJIICMIU1J Ui Ull ll.l.a-K.U
or purchased Irom others; and in ronnction, thatthe rc.establishmentofsuch a bank,
mcso operations it may, in a manner un-
loubtedlv constitutional and legitimate, fa
cilitate and assist exchanges of individuals
founded on real transactions of trade. The
extent to which this may be done, and the
est means ol allecting it, are entitled to
ic fullest consideration. This has been
bestowed by tho Sccrotary of the Treasury,
and his views will be submitted to you m
his report.
Hut it was not designed by the constitu
tion that tho government should assume
tho management of domestic or foreign ex
change. It is indeed authorized to regu
lato by law the commerce between tho
States, and to provide a general standard
of value, or medium of exchange, in gold
and silver; but it is not its province to aid
individuals in tho transfer of their funds,
otherwise than through tho facilities afford
ed by the Post Office Department. As
justly might it ho called on to provide for
tlio transportation of their merchandize.
These arc operations of trade. They
ought to bo conducted by those who aro
interested in them, in tho same manner that
the incidental difficulties of other pursuits
aro encountered by other classes of citizens.
Such aid has not been doemod necessary in
lllUL'l WUUIIllll-'O.
in any form, whilst it would not accomplish tho
beneficial purposo promised by its advocates, would
impair mo ngiumi supremacy or tno popular will;
injure tho character and diminish iho influence of
our political sytfem; and bring once more into ex
istence a eoncentratcd moneyed power, hostile to
the spirit, and threatening the permanency of our
republican institutions.
Local banks havo been t mployod for the depos
ito and tho distribution of ths revenue, at all limes
partially, and, on three difl'orcnt occasions, exclu
sively: first anterior to tho establishment of thq first
Bank of tho United States; secondly, in tho inter
val between tho termination of that institution
and the charter of its successor; and, thirdly, during
the limited period which has now so nbnintlv clo
sed. Tho connection thus repcatodly utlempted,
proved unsatisfactory on each successive occasion.
notwithstanding tho various measures which wore
adopted to facilitato or ensure its taiccesa.' On tho
fast occasion, in tho year 183U, the employment of
Iho State Banks was guarded especially in every
w ay whicli experience and caution could suggtet.
1'orsonal Bocurity was required for tho safo kcop
ing and prompt payment of the moneys to bo re
ceived, and full returns of their condition were,
from dmo to time, to bo made by the depositories.
In tho first stages tha measure was eminently buc
asssful, notwithstanding tho violent opposition of
tho Bank of the United States, and the unceasing
efforts mado to overthrow iu Tho selected banks
performed with fidelity, and without any embar
rassment to themselves or to tho community, tbalr
in. , j-i . i viiu,eiuuuia uj uiu vuvuxiiUJUlil, tutu me SVBuQTn
1 lirOUgllOUt fcUrOPe, tlie nrnml,r,l in , rmnft,,ll nufi.1 !..! If
I ,. .. - . 1 1 ' t" "J w.-.. .... I .
uuinuauu as vuu us me loreign exenangea . became nooosury, under tha aetofJuoe, 1839. ,9
are oarrietl on by private holmes, if not 1 withdraw Hie publje rnoflffc ftt rn jww eft
to