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