TVtcra licenses, Retailers licenses, " Tux on loan companies, Useheats, Bank charters Hawkers and podlars licenses, Miscellaneous.- 40,027 77 08,203 07 ' 15,240 00 3,020 24 100,000 10 3,015 15 18,017 35 81.021,110 81 Ahiltail of the ordinary expenditures of the mate in 183U. Expenses of Govornrae.it, $1,12,751 03 Repairs canals & railways, 370,330 79 Militia expenses, 25,081 17 Guaranity of interest, 24.5G2 22 Pensions and gratuities. 53,588 74 Common schools, colleges, &o. 385,253 14 House of Refuge, 5,000 00 Penilentiaries;castern fcwcstern, 30,820 54 Interest on loans, 1,200,010 24 Pay of collectors, lock keepers, &c. 70,000 00 Miscellaneous, 28,552 40 $2,708,803 47 PUDLIC PROPERTY Bank slock, S2,108,700 00 Tnrnpiko and bridge stock, 2,821,215 88 Canal and navigation stock, 002,570 01 Kail road stock, 327,368 03 Public work8,canals,&railway8, . &c. 20,309,220 50 Monoy due on land,cstimat- clJ, 1,000,000 00 S33.259.085 28 Tho public improvements are estimated at their original cost, and the bank and rail ... . . roau siock owncu uy me state, at its par value,, It will be obvious that tins estimate has relation to the ultimate value, of all (ex cept the bank stock) and not the p.esent a vailable value which this public property may bear. On a recapitulation of the foregoing state ments, it appears from them that the public debt amounts to the sum of $31,141,003 33,259,085 80 The public property to Balance, 28 8882,578 52' Tho ordinary expenditures of the commonwealth for all purposes for the last year, are $2,708,803 47 Tho ordinary revenue from all sources for the same - year, amounts to 1,021,119 81 Leaving a gross balance a gainst the stale of SI, 087,813, 03 The afiairs of the commonwealth have been for several vears Gradually verging" on towards deeper and deeper embarrassments until wij have at length reached this unex pected deficiency of funds in the treasury, t meet the demands upon it. The people have been told, again and agaiiij that our fiscal condition was flourishing and pros perous, while m fact, our prosperity was all fcased on paper calculations and loans, which loans, we are just now beginning to pcrceivo bear interest, and arp some day to be paid. We are now compelled to fore go all temporary expedients, and to look the true state of things in the face. We must resort to taxes, tho sale of the public improvements, or to further loans. The public improvements cannot be sold but at a most ruinou3 sacrifice ; and as to loans, it 1 t . . ia aouunui wneiner -wo can procure them. at all, unless at -an unwarranted rate of in terest. Notwithstanding all these difficul ties, this sum due by the state must bo paid. To obtain tho means wo have at the best a choice of evils ; and wc ought to se lect tliatwhicu will impose on the people -oi me commonwealth least inconvenience and detriment. I shall recur to this sub jeet again, in a subsequent part of this mes sage. In this state of things tho recent conduct fthe banks in this commonwealth, has added, m no slight degiee, toourombarass jnents. On tho 10th day of October last, tne uanKs ot the city of Philadelphia sus pended, wholly, or in a great measure, tho payment of their notes, ind othor liabilities in specie. Most of tho banks in the interi or speedily followed their example, as did also the banks in nearly all the other states of tho Union, But (he banks of the state of New York, and a few others favored by peculiar circumstances, or influenced by other causes, have been able to withstand the cutrcnt of demand, and have continued to pay specie until the present time. This ausnonsion was an event unlookifd for bv tuo public, and productive of the most un happy results It has pnralized business, shaken both state and individual credit. crippled all our monetary operations, and struck a death blow at the means of sub sistence possessed liv that portion ot our fellow.cjtizcna, whose labor and industry form their only capital. From all classes of the community, save those alone who are interested m tne 'janks, was heard a load and deep condemnation of this meas ure- Innumerable remedies have been uggestod, tome looking to the regulation el tnese institutions, others to their pun jatiracnt and extirpation. I was besought lo:onvone the legislature at an earlier day than that fixed hy the eonstitution, and very numerous confliuiipg suggestions 'have been .flcrcd, as to th measures of lolief that should be rccomrcejubd. On a subject so vitally interesting 'to the people at large, as that of the currency. I was persuaded that hasty legiilation was neither prudent nor Ciirbo ; and I accordingly declined to convene you before tlu day designated in i3)p xtitmioii. Imo lot reflection time for further experience, and time to as certain the general wants and wishes of tho pcophj has thus been afforded, and I con fidently' trust, that nothing will be lost by the delay. ( One of tho great evils of a suspension of pecio payments by tho banks, is tho Vast amount ot small notes issued without au thority of law, by individuals and corpora tions, that is immediately forced into circu lation, to supply tho placo of tho specie, for purposes of small change. This debase ment of the cutrency aggravated tho con sequences of the suspension in 1837. It ended in great losses to tho public, and in multiplied frauds. Satisfied that the same evils would again be experienced, I imme diately caused tho attornoy gcnoial to adopt proper measures to bring to justico all offen ders against tho law prohibiting the issue and circulation of notes below tho denomi nation of five dollars ; and I am happy to state to you that this measure was entirely adequate to tho suppression of tho issue of any notes of that description in the com monwealth. Ample arrangements had been made, as I rm informed, to throw into cir culation a large amount of this impurious currency, but they were instantly arrested by tho prompt und energetic action of the attorney general ; and public opinion, with an unexampled unanimity, sanctioned the" measure, and crowned it with success. It is true, in the counties of tho commonwealth bordering on states that allow the issue of small notes, if it has been impracticable to restrain altogether their circulation, still ve ry few of them have found their way into tho central part of the state. I shall call your attention to this subject again in anoth er part of this message. The active currency of Pennsylvania, and of tho wholo Union is composed mainly of bank notes. These notes arc made pay- ablo on demand m specie ; and while they continue to be so paid, no great danger of loss to tho community cananse. 1 he history of all bank operations shows, that while their notes are redeemable, and ac tually paid in spcoio when presented at the counter, an over-issue to any considerable extent, cannot casilyftakc plaac. It is only when notes are issued to such an amount, or when oilier obligations are incurred by tho banks so great as to prevent them from meeting these demands with specie, that they may bo considered in an unsound state and the public in danger of suffering loss from tho circulation of their notes. It is manifest, therefore, that the suspension of specie payments by the banks, is the pre cise act above all others, that renders them unsafe and dangerous to tho public and the other which in future, ought to be most strictly guarded against by law. It is true it does not always tollow that banks are unsound and unable to pay all demands a- gainst them, because they do not pay spe cie for their notes; yet unless explained to have been caused by some other means than the unsoundness of tho institutions, it must operaW much to the prejudice of their credit and standing. In Pennsylvania there are fifty-two banks, with an aggregate capital with some thing more than sixty millions of dollars; but such has been the disregard of law bv some of them, that they have not made any return, and the returns made by -several of them aie so very imperfect, that it is im possible to arrive at any thing like accuracy as to the amount of their circulation,' specie or debts due to them. But from the best date within my reach, the amount of their notes in circulation may be computed at not less than thirty-three millions'of dollars and the amount dud and owing tp them, principally by corporations and citizens of this commonwealth, is perhaps auout seven ty millions of dollars. This amount is due to these banks from individuals residing in all sections of the state, and engaged in all kinds of businoss. Slocks in our railroads, canals, turnpikes, file, are Held uy some of these banks, and in the shapo of sub scriptions bonuses, or dividends, they con tribute largely to the general tund in tho state treasury, and to tho support of the common school system. Their charters oxpiro at various periods between tho pre sent time and 1870, and the stock in them is owned by a great number of persons of all ages, classes, conditions, and pecuniary means. 1 lie capitalists of tho country as well as those of moderate means, widows, orphans, and guardians, all own stock in our sovcral banking institutions. From this cursory glance at tho subject, it is evi dent that the business, interests, and bank ing institutions of the country are intimately connected together, and mutually exert a powerful influence on each olhcr. A moro general and comprehensive vicv of this subject will sliow, that the banking system lias been greatly oxtended through out the whole union within the last twenty years, certainly to a greater degree, than the vastly increased business of all kinds would have seemed to warrant. Tho fol lowing tabular statement of the number of banks in tho United btates, with their capi tals, loans, discounts; circulation and spe vie, at three different periods, will ilrustrato with great forco, tho progress ot tho sys tern. It is manifest that the number of banks, with a corresponding increase of capital and circulation, has been fcarfuliy augmented within a fow years. Pennsyl vania has contributed her full share, since 1830, to tins increase. Years. No. Capital. Loan's SiDiscounts. 1820, 308 $137,110,011 $180,252,422 1830, 330 1.I5.J92,263 200,451,2r4 1837. 03i 290,772,001 525,115,70s Years. Ifd. Circulation Spcclei 1820. 308 944,803,344 $10,820,240 1830. 330 01,323,800 22,144,917 1837. 034 140,185,890 07,015.340 It is sometimes said that tho whole bank ing systom is but mi experiment, and that as such, it has failed to answer tho ex pectations of its projectors ; that it is time it was totally abrogated, and "that Pennsyl vania ought to take the lead in this great work of reform. It is certainly true, that the banking system of tho United States is so far a mere experiment, as to bo found in a stato of constant change and fluctua tion. No great elementary principles have yet been s'truck out to oxperienco, to form a sound and stable basis to uphold mid con trol it., liikc tho banking systom of all o thcr parts of the world, imperfection char acterize, nearly all its do'tails, and abuses of tho most flagrant sort, have been coeval with its first establishment. In legislating on this subject, however, wc cannot close our eyes to tho peculiar condition of tho country, Wo must take things as we find them. Wo arc not con sidering what would bo tho proper course it wc wcro now about to introduce, lor the (list time, a system of banking in Pennsyl vania. The quoslion was settled long ago, and by a constant rapid progression it has been entwining itself with every inteiest, and every measure of policy in this com, monwcalth. It has, fur good or tor evil, stamped its influenco on every commercial manufacturing and agricultural interest a inong our citizens. Under the operation of this system, and on the faith of its con tinuance in some form, all our business has been undertaken, our contracts between in dividuals entered into, and their debts con traded, our internal improvements commen ced, and our vast state debt fastened on tho poopfe. Abrogate the entire system.nnd wo . . ' - I i 1'. ! & Ml ..I Know noi inio wnaiconuiiioii n win piuugu us. Real estate and all commodities of commerce, agriculture and manufactures, now bearing the highest paper price, must fall greatly in value, and by that tall in price, thousands oi the enterprising and in dustrious of our fclldw-chizens' will bo ir retrievably ruined. The ten years immedi ately following the last war with Gtsat untain, lurnish us some instructive lessons on this subject thohgli very inadequate to portray the consequences that would lollow causes in our present situat on. And what heightens the evils anticipated, is the reflec tion, that the poor, and those immoderate circumstances, would be obliged to endure the brunt of the hardships. The rich be ing the creditors, have little to fear from such change in our system of currency ; it is tho debtor part ol the community on whom the chief burden is cast. In adopt ing coercive measures against tho banks, it should not be forgotten, that tho penal con sequences do not fall on them alone. 1 he vast number ot individuals, lrom whom so manv millions are duo to those institu tions, would feel most oppiessively the blow. Nor would it be right or uist to cast the great mass of innocent stockhol ders beyond the pale of legislative protec tion. The officers and directors, who are in fact chargeable with most, if not the en tire blame, would readily screen themselves from it, elude the laws, take caro of them selves, profit by tho sufferings nivl losses of the innocent, and leavo those to perish, who had little, if any, active agency in pro ducing tho present stato of tilings. 1 ins is a matter worthy ol your most serious and deliberate consideration. On relerence to the history ol all com mercial nations, it will be bound that every considerable liuctuation m the currency, operates directly and with greatest severity on tho laboring part f tho community. While currency is in a stato ot transition from a cheaper to a dearer medium, tho prices of wages aro first affected, without an immediate corresponding change in the price of tho necessaries of life. Those who carry on extensive businoss operations of all kinds, aro soon compelled to curtail or stop, and numerous industrious operatives aro thrown out of employment, or compel led to resort to other occupations that they do not understand, for the means of support ing their families, liesides, though Perm sylvania nngst abrogate her banking sys tern altogether, yet wo have no assurance that other states would follow her example It would be difficult, if not impossible, to prohibit their bank notes from circulation among us, and wo should suffer tho worst evils of the banking system, without its benefits; for the banks of oihci states would be situated beyond tho reach of our legisla tion and control. I know of no other modo of securing uniform aniLcotcmporaneous action, on this subject, among all tho states of the Union, except through the agency of the general government; which, il not nl ready possessed ol llio power necessary lor that purpose, should be clothed with it, by an amendment ot tho constiluton. 'f hero is an essential difference botween the position of tho citizens of our common wealth, in a pecuniary point ot view now, and that which characterized it in the years 1810, 1817, 1818, &c. It is true that then, as now, tho country was flooded with for cign goods, which low duties and credit up on those duties, enabled foreigners to intro duce, and thu3 cruato a largo debt abroad, It is also-true that then, as now tho banking facilities, and bank issues were increased beyond what tho necessities of tho country for the healthful transaction of its business required. But tlion tho spirit of spocula tion had infected tho agricultural, as well ns all other portions of the community. Now, kowvcr, tur farmers uro generally out of debt, and in flourishing circurasinrtocs; and it is the mercantile ami manufacturing das st!s that liavo been principally suffering by tile undue expansion ot the credit System. Hilt there IS now an evil existing, ol which Wc then kllcw nothing, and which does more than counterbalance the partial exemp tion from suffering of our agricultural in terest. Tho contraction of enormous for eign dobts by tho states for the purpose of internal improvements, and lor the estab lishment of banki, etc., is of comparative ly recent origin. This system of pledging tlfo property and industry ot posterity, loi the payment ol money obtained by the pres ent generation, in each stale, has chiefly grown up since llio year 1820, and as the following statement, which I believe to bo essentially correct, will show, has been sui prizingly on tho advance during tho last four or five years. Tho amount of stock author ized to bo created by eighteen stnles in each period of five years from 1820 to 1838, was as follows, viz : From 1820 to 1825 912,790,728 00 1825 to 1830 13,070.039 00 1830 to 1835 40,002,700 00 1835 to 1838 say 3. years, 108,223,808 00 S174.G9tJ.90l 00 This statement embraces all the stocks authorized to be issucd'np to, and including all but the last session of each stato legisla ture. A correct statement of the stocks au thorized to be issued, by all tho slates ex cept our own, at tho last session of their le gislatures. I have been unable to proeuro. Of tho foregoing stocks, it appeals from the best inquiry 1 can make, that the follow ing amounts havo been obtained fui the sev eral objects stated, viz : For banking, 852.010,000. 00 Foi canals, 00,201,551 00 For rail roads, 42,871,081 00 For lurnpil.es and Mcadam- rzed roads, 0,018.958 00 For miscellaneous objects, 8,474,084 00 8170,800,277 00 If wo add to the above enormous amount of stato stocks, owned almost entirely si broad, the post notes and bonds issued by banks, cities, rail road, canal and trust com panies, and other corporations, to holders residing in Europe, wo shall probably have i grand total ol at least two hundred and twenty millions of dollars, bearing an an nual interest of about twelve millions of dollars.' This latter sum must be paid to the European Iroldcrs in specie or its equiv alent, and may be justly regarded as one of the principal causes ot our present monota rv derangements. Little immediate relief can bo expected from our exports. During the last few years, they have been louud to tally inadequate to cover tho heavy impor tations into this country, rrom 1820 to 1830, tho imports into the United States exceed the exports therefrom annually a bout the average sum of three and a half millions of dollars. Since Jlio year 1830, our imports, including gold and saver com, havo exceeded our exports about twenty- four millions of dollars, per year. It is per fectly clear that this system of operations must speedily end in tho effectual prostra tion of our credit, busbies and resources. - No nation, whatever may be its industry, vigor and naluial advantages, can maintain its prosperity and independence against such opnicsive drawbacks as this is. n is irttc the public debt ol Great Hritain is a mani fold' gteater one than this, comparing the population and resources of the two nations; but the debt ot Ureat untain is ehtelly due to its own subjects; the interest paid is re tained at home, and continues to form a part of the capital of the country. Tho interest we pay, on tho contrary, is paid to foreigners. It is withdrawn from among us, never to return unless in the shape ol new loans to augment the drains on our cap ital. Much has been said and written on the subject of our "credit systom," within a lew years past. It is one ol unqualitiud eulogy bv some, and of as unqualified con demnation by others. By many, the banks liavo been regarded as tho authors ot that system, and ol course ol all mischiels; and by others, as of course, tho authors of all good. It is somewhat astonishing that (his novel system ol constructing canals and rail roads, and of building towns and cities, and establishing hanks by the instrumentality of stato credit, as if done by magic, has not been accredited ns one of the most potent agents in producing many ot tliu recent phases and phenomena of the credit sys tem. Had i( not been for the suppoit of credit, allorded to our haul; speculators and merchants, uy the sale ol stale stocks a broad, feeble and vain would have been the efforts of tho banks to have created and sustained such an extent of paper ciimila- tion as wo now find in the country equal ly focblo and vain would ha-e been the ef forts of speculators to havo procured suci heavy amounts ol lornign capital, to em ploy for purposes of wild speculation, and of our merchants to procure such unprece dented credits as have tilled every store house in thu country, with goods and wares not paid lor, while lying upon mterost uu sold. Did tho amount to bo loaned to our banks by foreign capitalists, and to be irus ted to our merchants by foreign nianufao turers, depend on the mure credit of tho banks, or tho merchants themselves, it could rarely exceed one year's excess of hnpor tation or about twenty millions of dullurs Hut when tho sovereign slates volunteer as endorsers for tho backs and corporations 'and in effact, draw their bill tf exotungf by futliiehlng certificate of loans In faw ol tub merchants, tills credit sysfem be comes immeasurably extended until It has at length reached to the astounding turn of mote than twd hundred millions o? iIaL nra. Tho banks havo acted as tho brokers. a largo scale, through whoso ngency tit stale loans hav been negotiated with for. cign capitalists. But let the legislatures of tiic several stales treating. loans to then selves the honor and responsibility of fur nishing the chief aliment to sustain our cum brous credit, sydora. It is no doubt truo, that the inordinate increase of banks of lata years, has been partly produced by tho ifc menso accumulation of stalo credits, and ' tins, in soruo do6.;". stimulated tho action of tho legislatures of tho several 6tales in authorizing the same, by affording agent to ncgociato and customers to' consume tktf avails of the stocks, when negotiated. Until within the lust year, we have been able', lint only, to borrow inoneyi without difficulty, oh sltalo stock in Europe, btil l pay the interest arising on former loans, by new ones. Wo feltlittlo of iho inconveni ence of this bloated system of credits, ani seldom reflected that a day of rccfioninf would come, when we could thus pay our ilebt3 no lonrcr. Slates, banks, corpora tions and indivuals, all moved forward in harmonious.unison, borrowing all they could, without reference to their future ability and means of repayment. The delusion is at last over. Stato stocks are now an unsala-1 ble drug in foreign markets, and We are cal led upon for tho interest on our permanent loans, and havo no means of paying it, un--less wc export specie, rely on the rematf avail of our agricultural productions, or dis pose of more stato stock at a ruinous sac rifice, if indent we can dispose of it at all.' Tho tiiuo for sober reflection has arrived, and tho different slates must now determino whether they will, or not, persist in a course of policy which has thus far been produc tive of such serions. evils. Shall the states of this Union plunge deeper into debt and embarrassment, or shall they make econo-' my and prudenco their motto resolvo o ex tricate themselves as soon as possible, and be free f This is the question, and I trust Pennsylvania is ready to take her stand with those who follow the distatcs of prudenco' and ecpno.ny. A system of credit, acted on with cap tion, and sound judgement, is not only wist and judicious, but indispnnsable to an en lightened business community. Tho hon esty, industry, and capacity ol a poor man is his only capital, and unless it gives hint credit where he is known, thero is littlo practical difference between tho condition, of the honest and dishonest, the capable and the ignorant man. The station of men in society, on the pposito principle, would be fixed by their birth, and merit would bo regarded as a bootless qualification. This is not the doctrine of nature, or of our Dec laration of Independcnce,and American sys tem of government. Tho credit system will bo seldom abused in the case of individuals; but not so in that of corporations and governments. Wnen men judge in'their individual relations, they weigh tilings' well, when a3 members of coiporations and governments, their cautitn corresponds with their share of the respon sibility. Our present condition illustrates the truth of this position, and calls aloud on tho representatives of. the people to pauso and reflect. Let no more mate debts, not ndisncnsihly necessary to prcsetvo tho faith and honor of the stales, bo contracted ; let no cerfWicatcs of loans be issued, and no commercial commodities bo imported for u few years. We will thus overcome our present difficulties, and re-establish our redit at home and abroau. i ins is io only course dictated by prudence and hi n I have thus at some length, brougnuo vour view several considerations, essenuai to a just and full knowledge of the lmpor lant subjuot of our finances. I have shown I trust, that the leading causes ot our pre sent derangements, lie at the very founda tion of our system of legislation for the last twenty ycaist I lie original delects anu infirmities of our banking system havo been aggravated by our system of public credits, and must continne to o so, as ieug as the same course is pursued. It must ba rvidcut from what has been already said, that our banking system however objec tionable in its oiigin, is now fastened uptn us. and connected with all our business op erations, no that it would be productivo of moro mischief to cut it up by flic roots, than to let it stand reformed an J regulatci in such manner as your experience and wis dom may enable you to devise. I proceed to mako such suggestions anu recommendations on tho subject, as appear to .me to promise the most salutary influ-i euro nud restrictions. Premising at tho same.limc, that I do not flatter myself that llio adoption of my recommendations wtuld render tho system perfect, or givp universal satisfaction on this subject, upon which thCroare so many adverse opinions. It will lie homo in mind I trust, that it is no diffi cult tack In sit down in the closet and con struct iheo'rios on the subject, beautiful and plausiblo in the abstract, without a full and comprehensive knowledge of their practi cal operation ; or to cavjl at whatever i suggested, and to coudemn what it is nei ther understood or disproved. This is a feet that the weakest can. and the mali cious will, perforin. I havo too much on fidonre in thu preient legitdsiiure, to sop po'bo that their assaults will shake vkt into-po-ictt-'e or arj Oie judtaattt, af ft I
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