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and all used, and carried to places where it was not needed, and could not be used.
The agricultural State of Indiana, for example, is full of specie; the highly commercial and manufacturing State of Massachusetts is severely drained. In the mean time, the money in Indiana cannot be used. It is waiting for the new year. The moment the Treasury grasp is let loose from it, it will tend again to the great marts of business; that is to say, the restoration of the natural state of things will begin to correct the evil of arbitrary and artificial financial arrangements. The money will go back to the places where it is wanted. It will seek its level, and its place of usefulness. In my opinion, the proper execution of the deposit law did not make it at all necessary for the Treasury to order these previous local changes. The law itself is not answerable for the inconvenience which has resulted. When the time came, the States, all of them, would have been very glad to receive the money where it was. They wanted but an order for it. They desired no carting. Can any thing be more preposterous than to transfer specie from New York to Nashville, when to a man in Nashville specie in New York is two per cent. more valuable than if he had it in his own house? There is always a tendency in specie, not actually in the pockets of the People, towards the great marts and places of exchange. Those who want it, want it there. There the great transactions of commerce are performed, and there the means of those transactions naturally exist, simply because there they are required. Now, what reason was there for disturbing the revenue, thus lying where it had been collected, and thus mingled with the commerce of the country? Why laboriously drag it off, far from its place of useful action, to places where it was not wanted, and could do no good, and there hold it, under the key of the Treasury.
This anticipation of the operation of the deposit law-this attempt at local distribution — this arbitrary system of transfer, which seems to forget at once the necessities of commerce, and the real uses of money, I regard as the direct and prime cause of the pressure felt by the community. But the Treasury order came powerfully in aid of this. This order checked the use of bank notes in the West, and made another loud call for specie. The specie, therefore, is transferred to the West to pay for lands; being received for lands, it becomes public revenue, is brought to the East for expenditure, and passes, on its way, other quantities going West, to buy lands also, and in the same way to return again to the East. Now, Sir, how does all this improve the currency? What fraud does it prevent, what speculation does it arrest, what monopoly does it suppress? I am very much mistaken if all this does not embarrass the small purchaser of land much more than the large one. He who has fifty or a hundred thousand dollars to lay out, may
collect his specie, not without some charge, it is true, but without a very heavy charge. But, if there be a man, with a hundred or two dollars, waiting to take up a small parcel for actual settlement, and his money be in bank notes, and the bank, perhaps, at a great distance, what has he to do? He must send far to exchange a little money; or else he must submit to any brokerage which he may find established in the neighborhood of the land-office. Upon the local operation of this order, however, I say the less, as on that point Western gentlemen are better informed and better judges.
I am willing to hope, Sir, and, indeed, I do hope and believe, that when the first payment or deposit under the act of last session shall have been made, and the States shall have found some use and employment for the money, and when this unnatural transfer system shall cease, money will seek its natural channels, and commercial business resume, in some measure, its accustomed habits. But this Treasury order will be a disturbing agent, every hour it is suffered to exist. Indeed, it cannot be allowed to exist long. It is not possible that the West can submit to a measure at once so injurious and so partial. Hard money at the land-office, and bank notes at the custom-house, must make men open their eyes after a while, whatever degree of political confidence weighs down their lids. I look upon it, therefore, as certain, that the order will not be permitted long to remain in force.
If I am now asked, Sir, whether, supposing this order to be rescinded, and the deposit law executed, and the transfers discontinued, affairs will return to their former state, I answer, with all candor, that though I look, in those events, for a great improvement, I do not expect to see the domestic exchanges and the currency return entirely to their former state. I do not believe there is any agency at work, at present, competent to bring about this desirable end. In other words, I do not believe that the deposit banks, however well administered, can fully supply the place of a national institution; and I am very much mistaken if intelligent men, connected with those institutions themselves, believe any such thing. I find, that in 1828, 1829, 1830, 1831, and 1832, exchange at New York, in the southern and south-western cities, averaged three fourths of one per cent. discount, or thereabouts. Now, I doubt whether the most sanguine of those connected with the deposit banks expect to be able, through their means, to bring back exchanges to that state, or any thing like it.
The deposit banks are separate and distinct institutions, many of them strangers to each other, without full confidence in each other, and all acting without uniformity of purpose. Their objects are distinct, their capitals distinct, their interests distinct. If one of them has connection with some others, it yet has no unbroken chain of connection. They have nothing which runs through the whole
circle of the exchanges, as that circle is drawn through the great commercial cities of the Union. They can only act in the business of exchange to the extent of funds, or not much beyond it, actually existing. A national institution, with branches or agencies at different points, may deal in exchanges between these points in amounts to meet the convenience of the Public, without reference to the fact of the existence of local funds. One institution, therefore, with branches, has facilities which never can be possessed by different institutions, however honorably or ably conducted.
For myself, I am of the same opinion as formerly, that for the administration of the finances of the country, for the facility of internal exchanges, and for the due control and regulation of the actual currency, a national institution, under proper guards and limits, is by far the best means within our reach. And I am, as I always have been, of opinion, that Congress, having the power of regulating commerce, and the power over the coinage, has power, also, which it is bound to exercise, by lawful means, over that currency in which the revenue is to be collected, and which is to carry on that commerce, external and internal, which is thus committed to its regulation and protection. All the duties of this Government are, in my judgment, not fulfilled, while it leaves these great interests, thus confided to its own care, to the discretion of others, or to the results of chance. But I will not go farther into these subjects at the present time.
Mr. President, I am indifferent to the form in which the Treasury order may be done away. Gentlemen may please themselves in the mode. I shall be satisfied with the substance. Believing it to be both illegal and injurious, I shall vote to rescind, to revoke, to abolish, to supersede, to do any thing which may have the effect of terminating its existence.
IN SENATE, JANUARY 30, 1837.
The bill to limit and designate the funds in which dues to the United States shall be receivable, having been read a third time, and the question being on its passage, Mr. MORRIS having concluded an argument against the constitutionality of the bill,
Mr. WEBSTER said, when the resolution moved by the Senator from Ohio, (Mr. EWING,) to rescind the Treasury order of July last, was under discussion, I expressed the sentiments which I then entertained, and which I hold now, in regard to that measure. My great object, as I then said, and now say, is to get rid of the order. I was not, and am not now, very solicitous as to the particular mode. When the subject was sent to the Committee on the Public Lands,
(though my own impression had been that it should have been referred rather to the Committee on Finance,) I assented, in the hope that they would confine what they should propose, to the single object of getting rid of the order. But for that order, I presume that few would have been willing to touch the subject at all. The majority of the Senate were content that matters should have remained as they were under the joint resolution of 1816. But as the order interfered with the provisions of that resolution, it was deemed necessary that something should be done. I regret that this bill is not such a one as was called for by the exigency, and confined to the exigency. It goes beyond what was needed, in important respects, and, though I most cordially wish for the abolition of the Treasury order, there are some things in this bill which do not accord at all with my own view of what the public interest requires. I feel, therefore, somewhat at a loss to know what is the true line of my duty on this occasion. I will state my difficulties. In the first place, I see nothing in the bill that is fixed and stable, defined and determinate; nothing peremptory and decisive, as matter of law. I asked the honorable chairman who reported the bill, whether he understood it to be peremptory in its character, and would be so in its practical effect, or not? And his answer was, that he did not doubt that its operation would be to produce a great reform in the state of the currency. Now, what I want to know is, whether this bill will furnish the country with a legal statute rule as to the payment of debts; or whether the whole matter will not be left very much in the discretion of the Secretary of the Treasury. I think it leaves too much in that discretion. It provides that he may issue orders as he may deem necessary, in order to secure the collection of the revenue in specie and bills of specie-paying banks. Now, supposing the Secretary should not think that any further order of any kind is necessary. Then matters will remain precisely as they are now. Suppose he should believe one kind of order necessary for one part of the country, and another for another part. The bill would allow all this. It secures no uniform or certain rule.
Again: the particular provisions of the bill appear to me (with great deference) to have been not well considered. If its enactments amount to a positive statute, (and not a mere permission or recommendation,) then neither land scrip nor revolutionary scrip can be received for the public lands; or, if they can be received for the public lands, they can equally be received for the customs. This, I presume, was not intended. The bill is imperfect; it imposes no duty on the Secretary, it enacts no law to supersede a Treasury order; the whole subject is left within the discretion of the Secretary.
While, on the one hand, it does not directly relieve the country from the existing illegal and unconstitutional Treasury order, on the
other, it does not provide a circulating medium which shall be uniform and legal in its character. Could we say, in so many words, that all the debts of this government shall be collected in such mode as the Secretary of the Treasury shall think best? Or that such funds shall be received as the Secretary shall think most expedient, with a view to increase a specie circulation? thus presenting a mere indication of the object he is to have in view, and leaving all the rest to him. Would that be law? would that be constitutional ? What sort of a tender might a debtor of the United States make, under this law, in discharge of his debt? Suppose he tenders Virginia land scrip, and the answer given him is, "The Secretary of the Treasury has not issued any order that land scrip shall be receivable at the custom-house," would that not be a good answer? As this bill repeals all other enactments in pari materie, does it not refer the whole to the Secretary? May he not issue one order to-day, and another to-morrow? one order in the North-west, and another in the South-west? It is surely most important that, on such a subject, there should be a plain, settled, statutory provision, declaring what is receivable in discharge of debts due the Government, so that men may know what are their rights. To me it appears that, by this bill, in its present form, the whole subject is left in greater doubt than before. If we do any thing with a view to rescinding the objectionable order, let us have a bill that shall apply to the exigency, to that single object, and give the country some uniform and stable rule. If we reject the Treasury order, let us reenact the resolution of 1816; that will get rid of any thing like rebuke or reproach in regard to the order, and will give us at least a law to guide us. As the bill stands, it leaves every thing in the will of the Secretary of the Treasury.