ml" our servieo will permit. I recommend, I
therefore, tlmt commodious and permanent
Wracks hit constructed at Uio several posts
designated by the Secretary of Wat. Not
withstanding tho slato of their discipline
and excellent police, the evils resulting to
this service from the deficiency of company
nfliePM, vrero vcrv apparent, and 1 recom
mend that tho staff officers bo permanently
separated from the line.
Tho navy has been usefully and honora
bly employed in protecting the rights and
property of onr citizens, wherever the con
dition of affairs seemed to require iis pres
ence With the exception of one instance,
where an outrage, accompanied by minder,
was committed on a vessel of the United
States while engaged in a lawful commerce,
nothing is known to have occurred to im
pede or molest the enterprise of our citi
zens on that element where it is so signally
displajcd. On learning this daring act of
piracy, Commodore Reed proceeded imme
diately to the spot, and receiving no satis
faction, cither in the surrender of the mur
derers, or the restoration of tho . plundered
property, inflicted severe and merited chas
tisement on the bnrbatians.
It will be seen by tho report of the Sec
retary of the Navy, respecting the disposi
tion of our ships of war, that it bus been
d;eincd necessary to station a competent
f iree on the const of Africa, to prevent a
fraudulent use of nur Hag by foreigners.
Recent rxp'-ricuco has shown that the
firovisions in our existing laws which re
ate to the sale and transfer of American ves
sels, while abroad, are extremely defective,
Advantage has been taken of these defects,
to give to vessels wholly belonging to fo
reigners, and navigating the ocean an appa
rent American ownership. This charactei
lias been so well simulated as to afford them
apparent secuiity in prosecuting the slave
trade, a liailie emphatically denounced in
our statutes, regarded with abhorrence by
our citizens, and of which the effectual .sup
pression is no where more sincerely desired
than in the United States. These circum
stances make it proper to recommend to
your early attention a careful revision of
these laws so that, without impeding the
freedom and facilities of our navigation, or
impairing an important branch of our indus
try connected with it, the integrity and hon
Oi ofour flag may bo carefully preserved.
Information derived from our Consul at Ha
vana, showing the necessity of this, was
communicated to a Committee of the Sen
ate, near the close of last session, but too
late, as it appeared, to bo acted upon. It
will be brought to your notice by the prop
er department, with additional communica
tions from other sources'
The. latest accounts from the Exploring
Expedition represent it as proceeding suc
cessfully in the objects, and promising re
sults no less useful to trade and navigation
than to science.
The extent of post roads-covered by mail
service on the 1st of July last, was about
133,999 miles, and the rate of annual Hans-
portatiim upon them 3t,i0G,878 miles.
The uumberof post offices on ihaiday was
12,789, and on the Gth ultimo 13,028.
Tho revenue of tho post office depart
mont, fur tho year ending with tho 30th or
Juno last, wue four millions four hundred
and seventy-sis thousand six hundred and
thirty-eight dollars, exhibiting an increase
over the proceeding year of two hundred
and forty-onp thousand five hundred and
sixty dollars. Tho engagements and lia
bilities of the deparvnent for tho same pe
riod, are four miliums six hundred .md twenty-four
thousand one hundred and seventeen
Klullure.
Tho excess of liabiliiios over the revenue
for the last two years has been met out of
the surplus which had previously accumu
lated. Tho cash on hand, on the 30th tilt.,
was about S'J90,701 95. and the current in
come of tho department varies vcrv little
Jrom the rale of current expenditures.
fllostof the mail service suspended last year
lias been restored, and most of tho "new
routes established by the act of July, 18'J8,
have gone into operation at an annual cost
of not less than S 130,903. Notwithstand
ing the pecuniary difficulties of tho coun
try, the revenue of tho department appears
ta be increasing; and unless it shall be se
riously checked by the recent suspension of
payment by so many banks, it will b? able
liol only to maintain the present mail ser
vice, but in a short time to extend it. It
js gratifying to witness the promptitude and
fiuelity with which the agents of tho de
partment ill general perform their public duties.
Some difficulties have arisen in relation
to contracts .for ihe transportation of the
mails by rail-road nml steamboat companies.
It appears that the maximum of compon
eitioii provided by Congress for the tians.
portHtiouof mails upon rail-roads is not si f.
ficient to induce 6ome of the companies to
convey them a: such hours as are required
'for the accommodation of tho public. It
i one of tho most important duties of the
General Government to provide and main
tain for the use of the people of tho Stale
-the best practicable mail establishment. To
arrive al (hut end it ieindispensiblo that the
Pod Offleo Department shall be enabled to
'control tl c hours at which tho mails shall
be carried over rjil-roads as it now doos o
ver all other toads. Should serious Incon
veniencies qrise from tho -inadequacy of the
viripciuaiin now proved by law, or from
unreasonable demands by any of the rail
road companies, the subject is of such gen
eral imponanoo as to require .e prompt at
4tioii of Congress.
In relation to steamboat lines, llto most
efficient remedy is obvious, and has been
suggested by the Postmaster General. Tho
War and Navy Department already employ
steamboats in their service, and although it
is by no means desirable tiat the Govern
ment should undertake the transportation of
passengers or freight as a business there can
bo no more reasonable objection to running
boats, temporarily, whenever it may bo ne
cessary to put down attempts at extortion,
to be discontinued as soon as reasonable
contracts can bo obtained
The suggestions of tho Post Master Ge
neral relative to the inadequacy of the legal
allowance to witnesses in cases of prosecu
tions fur mail depredations, merit your scri
ous consideration. The safety of tho mails
requires that ouch prosecutions shall be ef
ficient, and justice to the citizen whose lime
is required to bo given to the public, de
mauds not only that his expenses shall be
paid, but that he shall receive u reasonable
compensation.
The reports from the War, Navy, and
Post-office departments will accompany this
communication, and one from the Treasury
department, will be presented to Congress
in a few days.
For various details itr respect to matters
in chaiue of these departments. I would re
fer you to those important documents, satis
lied that you will find in them many valua
ble suggestions, which will bo found well
deserving the attention of the legislature.
Prom a report made in December of last
yeai by the Secretary of State to the Sen
ate, showing tlie trial docket ol each ot the
circuit courts and the number of miles each
judge has to travel in the performance of
his duties, a great inequality appears in Hie
amount ol labor assigned to each judge
Tho number of terms to be held in each of
the courts composing the ninth circuit, the
distances bclvcceu the places which they
sit, and Irom tbencc to the seat ol govern
ment, arc represented to bo such as to ren
der it impossible lor the judge of that cir
cuit to perfoim, in a manner corresponding
with the public exigencies, his term anil cir
etiil duties A revision, therefoie, of the
present arrangement of tho circuits seems
to be called for and is recommended to your
notice.
I think it proper to recommend to your
notice the power assumed by 1 e-ritorial
Legislatures to authoiizc the issue of bonds
by corporate companies on the guarantee of
the Territory. Uongrcss passed a law in
183G, providing that no act of a Territorial
Legislature incorporating banks should have
Hie lorcc 01 law mini nppruvi-u uy v.iiiiiuas
but acts of vcrv exceptionable character pre
viously passed by the Legislature of Flori
da, wore suffered to remain in force by vir
tue of which bonds may be issued to a very
largo amount by those institutions, upon the
faidi of the Territory A resolution intend
inir to be a joint one passed the Senate at
the samo session, exprcssim: the bense of
Congress that the laws in question ought
not to be permitted to remain in force un
less amended in many material respects, but
it failed in the House of lteprc3entatives
for want of lime, and the desired amend
ments have not been made The interests
involved arc of great importance, and the
subject deserves your early and careful at
tention. The continued agitation of the qitPslionre
lativotothe best mode of keeping & disburs
ing tho public money .still injuriously afi'ecls
ilic business ol the country. I lie suspen
sion of specie payments in 1838,- rendered
the use of ilopositc banks, as prescribed by
the act ot 1830, a snutco rather of embar
rassment than aid, and of necessity placed
the custody of most of the public money af
terward collected in charge of tho public of
ficers. The new securities for its safety,
which this required, were a principal cause
of mv convening an axtra session of Con
gress; but in eonseqneire of a disagteemcnt
liHtwi'uii the two Houses, neither then nor
ni iiiiv tnibsenuent neriod. has there been
anv legislation on tho subject. The eH'url
made at the last session to obtain the au
thority of Coneress to punish the uso of
public money for private purposes as a
ciimo, a measure attended under other go
vernments with signal advantage, was also
unsuccessful, from diversities of opinion in
that body, notwithstanding tho anxiety
dutiinlcss felt by it to afford every practica
ble security. The result of this is still to
leave tho custody of the public money with
out those safeguards which havu been for
several years earnestly desired by the Ex
ecutive; and as the remedy ia only to be
found in tho action oi the Legislature, it
iiiinoses on me the duty of again submitting
to vou the propriety of passing a law, pro-
' r . ; .. c i.i:
viuing tor tuo saio peeping hib jhiuub
moneys, and especially to ask that its iiho
for private purposes by any officers entrust
ed with it, may be declared to be n felony,
punishable with penalties proportioned to
the magnitude of the offence.
The eircumstancss, added to known de
fects in tho existing laws and unusual de
rangement in the general operation of trade
have, dining 11jo last three years, much in
creased the difficulty attendant on tho collec
tion, keeping, and disbiirsmeut of the reve
nue, and called forth corresponding exer
tions from those having them in charge.
Happily these have been successful beyond
expectation. Vast sums have been collect
ed and disbursed by the several departments
with unexpected cheapness and case; trans
fers have been readily msdo to every part
of the Union, however distant; and defal
cations have been far less than might have
I Veen aaucipatcd, from the absence of ade
quate) legal restraints Sinco the officer's of
tho Treasury anil t'ost Uilico departments
were charged with the custody of most ol
tho public moneys received by them, there
hnvo been collected sixty six millions of
dollars, and excluding tho caso of tho late
collector at Now York, tho aggregato a-
mount of losses sustained in the collection
cannot, it is believed, exceed sixty thou
sand dollars, Tho defalcation of the lato
collector at 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 havo been
hitherto in use, and was distinguished hy
an aggravated disregard of duly that broke
through tho restraints of every system, and
cannot, therefore, be usefully referred to as
i test of the comparlivc duly of either.
Additional information will also bo fur
nished by tho report of the Secretary of the
Treasury, in reply to a call madu upon that
officer by the House of Representatives at
the last session, requiring detailed iniorma
tion on the subject of defaults by public of
ficers or agents under eacli administration,
from 1780 to 1837. This document will
be submitted to you in a few days. The
coueral results, (independent of the post of
fice, which is kcjit separately and will be
stated by itself,) so far as they bear upon
this subject, ari',,that the losses which have
been, and arc likely to be sustained, by n
ny class of agents, have been the greatest
by banks, including, as required in tho res
olution, their derircciatcd paper received for
public, dues; that tiio next largest have been
by disbursing officers, and the least by col
lectors and receivers. If the losses on du
ty bonds are included, they alone will be
tincefold thoso by collectors and receivers.
Our whole experience therefore, furnishes
the strongest evidence that the desired le
gislation of Congress is alone wanting to
insure, in those operations, the highest de
gree of security and facility. Such, also,
appears to have been the experience of oth
er nations. From the results of inquiries
madebv the Secretary of the I rensury in re
ganl to the practice among.lhcmlam enabled
to stale, that in twenty-two out of twenty
seven foreign governments, from which un
doubted information has been obtained, the
public moneys are kept in charge of public
officers. This concurrence of opinion in
favor of that system is perhaps as great as
exists on any question ol internal udminis
tration.
In the modes of business and official re
slraiuts on disbursing officers, on legal
change was produced by the suspension of
specie payments- 1 lie last relerrctl to w
be I on ml to contain, also, much usclul in
formation in relation to this subject.
1 have hcielolorc assigned to Congress
my reasons for believing that the establish
merit of an Independent National Treasury
as contemplated hy the Constitution, is ne
cessary to the safo noiiou of ihu federal gov
eminent. The suspension of specie pay
incuts in 1837, by the banks having the cus
todv of the public money, showed in so a
larming a degree our dependence of duties
required bv taw, that I then recommended
the entire dissolution of that connection.
This recommendation has been subjected
as I desired it should be, to severe scrutiny
and animated discussion; and I allow my
self to believe that, notwithstanding the na
tural diversities of opinion which mav be
anticipated on subjects involving such im
portant considerations, it litis secured in its
favor as general a concurrence ol public sen
limenis as uu!d bo expected on one of such
iiiai'iiitiidu.i
Uecent events have also continued to dc
velope now objections to such a connexion.
Seldom is iny bank, under the existing sys
tem and practice, able to meet, on demand,
all iis liabilities for deposites and notes in
circulation. L.i maintains specie payments,
and transacts a profitable business, only by
the confidence of the public in iis solvency,
and whenever this is destroyed, the de
mands of its depoMturs and noteholders
pressed inoro rapidly than it can make col
lections from its debtors, force it to stop pay
ment. " his loss ot eoiiluluiice, with its
consequence, occurred in 1837,nnd afforded
the apology ol lite hanks lor their suspen
sion. The public then acquierced in the
validity of the excuse; and, while the Stale
crisla'iures did not exact from them their
forfeited charters, Congress, in accordance
with the recommendation of the Executive,
allowed them time to pay over tho public
money thev had, although compelled to is
sue Treasury nolcs to supply the deficiency
thus created.
It now appears that there are other mo
lives than a want of public confidence un
der which the banks seek to justify them
selves in a refusal to meet their obligations
Scarcely were the country and government
relieved, in a degree, from tho difficulties
occasioned by the general suspension ol
1837, when a partial one, occurring within
thirty months of tho former, producing new
and 'serious embarrassments, though it had
no palliation in such circumstances as were
alleged in justification of that which had
previously taken place.
There was nothing in tho condition of
the country to endanger a well managed
bankine: institution, commerce was derail-
(red bv no foreisn war ; every branch of
manufacturing industry was crowned with
rich towards ; and tho moro than usual a
bnndance of our harvosts, after supplying
our domeatto wants, hud left our granaries
and store-houses filled with a surplus for
exportation. It is in the midst of this, that
an irredeemable and depreciated paper cur
rency is entailed upon tho pooplo by a largo
portion of the batiks. They arc put driven
to it by' Iho exhibition ot a loss of pnblie
cenfidonco, or of a sudden pressure from
their depositors or note holders, but they
excuse themselves by alleging that the cur
rent of business, and exchange with foreign
countries, which draws tho precious metals
from their vaults, would require in order to
meet it, a larger curtailment of their loans
to a comparatively small portion of the
community, than it will be convenient for
them to bear, or perhaps safe for the banks
to exact. The plea has ceased to bo one
of necessity. Convenience and policy arc
now deemed sulhcicnt to Warrant these in
stitutions in disregarding their solemn obli
gations, bitch conduct is not merely an
iniurv to individual creditors, but it is a
wtong to ihu whole community, from
whose liberality they hold most valusble
privileges whose rights thev violarc.whosu
business thev derange, mid the value of
whose properly they render unstable and
insecure. It must be evident that this new
ground for bank suspensions, in reference
to which their action is not only discon
neclod with, but wholly independent of
that of the public, gives a character to their
nspension more alarming than any which
they exhibited before, and greately increas
cs the impropriety of relying on the
hanks in the transactions of tho Govern
ment.
A large and highly respectable portion
of our banking institutions arc, it affords
me unfeigned pleasure to stale, exempted
Irom all claim on account of this second
delinquency. They have to their great
credit, not only continued to meet their en
gagements, but have even repudiated the
grounds of suspension now resorted to. It
is only by such a course that the confi-
Icnce and pooil will of the community can
In: preserved, and, in the sequel, the best
iiitctests of the institutions themselves pro
moted
New dangers to tho banks aro also daily
disclosed from the extension of that system
of extravagant credit, of which they arc
the pillars, Formerly, our foreign com
merce was principally louuded on an cxa
change of commodities, including the prc-
ious iiiclals, and leaving in its transactions
but little foreign debt. Such is not now
the case. Aided by these facilities afforded
by the banks, mere credit has become too
commonly the basis of trade. Many of the
banks themselves, not content with largely
stimulating ibis system among others, have
usurped the business, whilst they impair
the stability of tho mercantile community :
they have become borrowers instead ol
lenders ; they establish their agencies a
broad ; they deal largely in stock and mer
chandise; lliny encourage the issue of
Stale securities, unlit tho loreign market is
glutted with thorn; and, unsatisfied with
ihe legtliiiiative use of their own cripital,
and the exercise of their lawful privileges,
they raise, by large loans, additional means
for every variety of speculation. The dis
asters attendant on this deviation from ihe
course of business in ibis country, are now
shared alike by banks and individuals, to
an extent of which there is perhaps no pre
vious example in tho annals of our country
So long as a willingness of the foreign len
der, and a sufficient export of our produc
tions to meet any necessary partial pay
ments, leave the flow of credit undisturbed,
all appear to be prosperous ; but as soon as
it is checked by any hesitation abroad, or
by an inability to make payment there in
our productions, the evils oi' the system ate
disclosed. The paper cunency, which
might serve for domestic purposes, is use
less to nav the debt due in Europe. Gold
mil silver are ihorelorc drawn, in exchange
for their notes, from the banks. To keep
up their supply of coin, these institutions
are obliged to call upon their own debtors,
who pay them punctually in their own
notes, which are as unavailable to them as
they aro to the merchants to meet the for
. . . .... ,l f . I .... 1.
eii'ii demand, i ne cans oi uic iwni.e,
therefore, in such emergencies, ol necessity
exceed that demand and produce a eorres'
ponding curtailment of their accommoda
tions, and of the currency, at tho very mo
ment when the slato of tho trade renders it
most inconvenient to be borne. The inten
sitv of this pressure on the community
in proportion to the previous liberality of
credit and consequent expansion oi uie
currency : forced sales ot property are
made at tho timo when the means of pur-
cbasinrr arc most reduced, and the worst
calamities lo individuals, arc only at last ar
rested by an open violation of their obliga
lions by the banks, at a refusal to pay spc
eic for their notes, and an imposition upoi
iho community of a fluctuating and depreci
ated currency.
These r.onsenucnccs aro inherent in the
present system. J hey aro not inlluenced
by tho banks being large or small, created
by National or Slato Government. They
am iho results of the irrcstiblo laws of trad
and credit. In tho recent events which
have eo strikingly illustrated tho certain
effects of these laws, wc havo seen the
bank of the largest capital in the Union, es
tablished under a National charier, and late
ly strengthened, ub we were authoritatively
informed, by exchanging that for a Slate
charter, with now and unusual privileges
in a condition too, as it was said, of entire
soundness and gieat prosperity not merely
unable to resist these effects, but the first to
yield to them.
Nor is it lo be overlooked that thero ex
ists a chain of necessary deponduiico among
these iimiUiliouH which obliges them, to a
great extent, to follow tho course of other?,
notwithstanding i'a injustice to their own
immediate creditors or injury totUc parli
tilar community in which flioV art placet!'
m'i,;. ,Ln.,i n i. ...i.' t '
J Ilia UUioiimuiivu Ul UUMIt, WIMUlf IS If) pfQi
portion to the extent of its debts for circula
lion and deposites, is not merely on others
in its own vicinity, but on all those which
connect it with the center of trade. Distant
banks may fail, without seriously affecting
those in our principal commercial cities
but the failuro of the latter is felt at the ex'
Irotnittcs of tho Union. Tho suspension at
New York, in 1837, was every where
with very few exceptions, followed, as soon
as it was known that rccntly at Philadeji
phia immediately affected the banks of tho
South and West in a similar mannor. This
dependanco of our whole banking system,.,
on the institutions in a few large cities, is V
not found in the laws of their oiganizatiun,
but in those of trade and exchange. Thd
banks at that center to which currencv i
flows, and where it is required in payment
for merchandize, hold the power of control!
ing those in regions whence it comes, whilo
the latter possess no means of restraining
them ; so that the valuo of individual pro-
pcrily, and tho prosperity of trade, thro' tho
whole interior of the countiy, are made to
depend on the good or bad management of
tho bank institutions in the great seats of
trade on (he seaboard.
Hut this chain of dependenco does not
stop hero. It does not terminate at Phila
delphia or New York. It reaches across
the ocean, and ends in London, the center
of tho credit system. The same laws of
tr?de, which give to the banks in our prin
cipal cities power over the wholo banking
system of tho United Slates, subject tho for
mer, ir. their turn, to the money power in
Great Britain. It is not denied lhatlhs
suspension of the New York banks in 1837
which was followed in qu'ck succession
throughout the Union, was produced by an
application of that power; and it is now al
leged, in extenuation of tho present condi
tion of so large a portion of our banks, that
their embarrassments have arisen from tho
samo cause.
From this influence they cannot now en
tirely escape, for it has its origin in the
credit currencies of tho two countries ; it
is strengthened by the current trade and ex
change, which centres in London; and is
rendered almost irrcsistable by tho large
debts contracted there by out 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 bu
siness of that village within the influence
of ihe money power in England. It is
thus that every new debt which we con
tract in that country, seriously affecls our
own currency, and extends over the pur
suits of our citizens its powerful influence.
V c cannot escape from this by making
new hanks, great or small, State or Nation
al. The samo chain which bind those now
existing to tho centre of ibis system of pa
per credit, must equally fetter every simi
lar institution vu create. It is only by the-
extent lo which this system has been push-
is
cd of late, that we havo been made fully a
ware of his irresistible tendency to subject
our own banks and currency lo a vast con
trolling power in a foreign land ; and it adds
new argument to thoso which illustrate
their precarious situation. Endangered in
the first place by their own mismanage
ment, and again bv the conduct of every
institution which connects them with tho
centro of trade in our own country, they
aro yet subjected, beyond all this, lo tha
cited ol whatever measures policy, neces
fcitv, or caprice may induce those who con
trol the credits of England to resort lo. I
menu not to comment upon these measures,
present or past, nnd much less to discern-
ige ihe prosecution ol lair commercial ueai
ing between iho two countries, based on
reciprocal benefits ; but it having now been
made manliest that tho power ol mutciing
these and similar injuries, is; by the resist
less law ol a credit currency and cieuu
trade, equally capable of e'xtending tNeir
consequences through Ml the rainilications
of our banking system, and by that means
indirectly obtaining, particularly when
banks arc used as depositaries of the public
moneys, a dangerous political inllucoce in
tho United Slates, I havo deemed it my du
ty u bring tho subject to your notice, and
ask for it your serious consideration.
Is an argument required beyond tnc e
position of these facts, to show the impn
prielv ol using our banking 'nstituuoiis .
depositories of tho public money i taj1
we venture not only to encounter me run
of their individual and mutual mismanage
incut, but, at the same lime, to place our
foreign and domestic policy entirely under
the control of a foreign moneyed interest.
To do so is to impair tiro independence ol
our government, as the present credit sys
tem has already impaired the iituepcnui
of our banks. It Is to submit all its impor
tant operations, whether of peace or war,
lobe controlled or thwarted at first by
ilimi bv a power J
broad nraalcr limn themselves. I cannot
tirmii muci.tr in i.n oi lhn iiumuiaui
to which this Government and people iui&'j
be soonor or later reduced, if tho means M
,ir.,.li t...:.. :!.. . in hn made u'
nnnduni unnn tlmsn who may have t
most powerful of motives lo impair them.
Nor is it only in reference to tho e
of this state of things on the indcpetuWV
of our Government or of our banks that w
subject presents itself for considerate"
is to bu viewed also n its relations to
general trade of our country. '1 lie
not long past when a deficiency of lor
rrrf. wns thnnlit to alford a PtOW
market for tho Surplus of our industry;
now wo lwaii wmi iumu - .
V
if