from expansions, contractions, and ruinous fluctuations of price. It has saved her, for near forty years, from a debate on currency. It has saved her even from the knowledge of our sweetscented phrases: "sound currency-unsound currency; plethoric, dropsical, inflated, bloated; the money market tight to-day-a little easier this morning;" and all such verbiage, which the haberdashers' boys repeat. It has saved France from even a discussion on currency; while in England, and with us, it is banks! banks! banks!-morning, noon, and night; breakfast, dinner, and supper; levant, and couchant; sitting, or standing; at home, or abroad; steamboat, or railroad car; in Congress, or out of Congress, it is all the same thing: banksbanks-banks; currency-currency-currency; meaning, all the while, paper money and shin-plasters; until our very brains seem as if they would be converted into lampblack and rags.

rence.

currency, one not liable to disease, to this fede ral government. They started the new government fair upon gold and silver. The first act of Congress attested this great fact; for it made the revenues payable in gold and silver coin only. Thus the States delivered a solid currency to this government, and they reserved the same currency for themselves; and they provided constitutional sanctions to guard both. The thing to be saved, and the power to save it, was given to this government by the States; and in the hands of this government it became deteriorated. The first great error was General Hamilton's construction of the act of 1789, by which he nullified that act, and overturned the statute and the constitution together. The next great error was the establishment of a na tional bank of circulation, with authority to pay all the public dues in its own paper. This confirmed the overthrow of the constitution, and of the statute of 1789; and it set the fatal example to the States to make banks, and to re

The bill before the Senate dispenses with the further use of banks as depositories of the pub-ceive their paper for public dues, as the United lic moneys. In that it has my hearty concur- States had done. This was the origin of the Four times heretofore, and on four dif- evil-this the origin of the overthrow of the ferent occasions, I have made propositions to solid currency which the States had delivered to accomplish a part of the same purpose. First, the federal government. It was the Hamilto in proposing an amendment to the deposit bill nian policy that did the mischief; and the state of 1836, by which the mint, and the branch of things in 1837, is the natural fruit of that mints, were to be included in the list of deposi-policy. It is time for us to quit it—to return tories; secondly, in proposing that the public to the constitution and the statute of 1789, and moneys here, at the seat of Government, should to confine the federal Treasury to the hard mobe kept and paid out by the Treasurer; thirdly, ney which was intended for it. by proposing that a preference, in receiving the deposits, should be given to such banks as should cease to be banks of circulation; fourthly, in opposing the establishment of a bank agency in Missouri, and proposing that the moneys there should be drawn direct from the hands of the receivers. Three of these propositions are now included in the bill before the Senate; and the whole object at which they partially aimed is fully embraced. I am for the measure-fully, cordially, earnestly for it.

Congress has a sacred duty to perform in reforming the finances, and the currency; for the ruin of both has resulted from federal legislation, and federal administration. The States at the formation of the constitution, delivered a solid currency-I will not say sound, for that word implies subject to unsoundness, to rottenness, and to death-but they delivered a solid

I repeat, this is a measure of reform, worthy to be called a reformation. It goes back to a fundamental abuse, nearly coeval with the foundation of the government. Two epochs have occurred for the reformation of this abuse; one was lost, the other is now in jeopardy. Mr. Madison's administration committed a great error at the expiration of the charter of the first Bank of the United States, in not reviving the currency of the constitution for the federal Treasury, and especially the gold currency. That error threw the Treasury back upon the local bank paper. This paper quickly failed, and out of that failure grew the second United States Bank. Those who put down the second United States Bank, warned by the calamity, determined to avoid the error of Mr. Madison's administration: they determined to increase the stock of specie, and to revive the gold cir

the conduct of that bank and its friends. Let us imitate their zeal, their unanimity, and their perseverance. The amendment and the bill, now before the Senate, embodies our policy. Let us carry them, and the republic is safe.

The extra session had been called to relieve the distress of the federal treasury, and had done so by authorizing an issue of treasury notes. That object being accomplished, and the great measures for the divorce of Bank and State, and for the sole use of gold and silver in federal payments, having been recommended, and commenced, the session adjourned.

CHAPTER XVI.

FIRST REGULAR SESSION UNDER MR. VAN BU-
REN'S ADMINISTRATION HIS MESSAGE.

culation, which had been dead for thirty years. The accumulation of eighty millions in the brief space of five years, fifteen millions of it in gold, attest the sincerity of their design, and the facility of its execution. The country was going on at the rate of an average increase of twelve millions of specie per annum, when the general stoppages of the banks in May last, the exportation of specie, and the imposition of irredeemable paper upon the government and the people, seemed to announce the total failure of the plan. But it was a seeming only. The impetus given to the specie policy still prevails, and five millions are added to the stock during the present fiscal year. So far, then, as the counteraction of the government policy, and the suppression of the constitutional currency, might have been expected to result from that stoppage, the calculation seems to be in a fair way to be disappointed. The spirit of the people, and our hundred millions of exportable produce, are giving the victory to the glorious policy of our late illustrious President. The other great A BRIEF interval of two months only interconsequences expected to result from that stop-vened between the adjournment of the called sespage, namely, the recharter of the Bank of the United States, the change of administration, the overthrow of the republican party, and the restoration of the federal dynasty, all seem to be in the same fair way to total miscarriage; but the objects are too dazzling to be abandoned by the party interested, and the destruction of the finances and the currency, is still the cher-eral Jackson's administration having left us ished road to success. The miscalled Bank of the United States, the soul of the federal dynasty, and the anchor of its hopes-believed by many to have been at the bottom of the stoppages in May, and known by all to be at the head of non-resumption-now displays her policy on this floor; it is to compel the repetition of the error of Mr. Madison's administration! Knowing that from the repetition of this error must come the repetition of the catastrophes of 1814, 1819, and 1837; and out of these catastrophes to extract a new clamor for the revivification of herself. This is her line of conduct; and to this line, the conduct of all her friends conforms. With one heart, one mind, one voice, they labor to cut off gold and silver from the federal government, and to impose paper upon it! they labor to deprive it of the keeping of its own revenues, and to place them again where they have been so often lost! This is VOL. II.-5

sion and the meeting of the regular one; and the general state of the public affairs, both at home and abroad, being essentially the same at both periods, left no new or extraordinary measures for the President to recommend. With foreign powers we were on good terms, the settlement of all our long-standing complaints under Gen

free from the foreign controversies which gave trouble; and on that head the message had little but what was agreeable to communicate. Its topics were principally confined to home affairs, and that part of these affairs which were connected with the banks. That of the United States, as it still called itself, gave a new species of disregard of moral and legal obligation, and presented a new mode of depraving the currency and endangering property and contracts, by continuing to issue and to use the notes of the expired institution. Its currency was still that of the defunct bank. It used the dead notes of that institution, for which, of course, neither bank was liable. They were called resurrection notes; and their use, besides the injury to the currency and danger to property, was a high contempt and defiance of the authority which had created it; and called for the attention of the federal government. The

President, therefore, thus formally brought the has a right to reissue these notes now, I can see procedure to the notice of Congress :

no reason why it may not continue to do so after the expiration of the two years. As no one "It was my hope that nothing would occur to could have anticipated a course so extraordinary, make necessary, on this occasion, any allusion the prohibitory clause of the charter above to the late national bank. There are circum-quoted was not accompanied by any penalty or stances, however, connected with the present other special provision for enforcing it; nor state of its affairs that bear so directly on the have we any general law for the prevention of character of the government and the welfare of similar acts in future. the citizen, that I should not feel myself excused in neglecting to notice them. The charter which terminated its banking privileges on the 4th of March, 1836, continued its corporate powers two years more, for the sole purpose of closing its affairs, with authority 'to use the corporate name, style, and capacity, for the purpose of suits for a final settlement and liquidation of the affairs and acts of the corporation, and for the sale and disposition of their estate, real, personal and mixed, but for no other purpose or in any other manner whatsoever.' Just before the banking privileges ceased, its effects were transferred by the bank to a new State institution then recently incorporated, in trust, for the discharge of its debts and the settlement of its affairs. With this trustee, by authority of Congress, an adjustment was subsequently made of the large interest which the government had in the stock of the institution. The manner in which a trust unexpectedly created upon the act granting the charter, and involving such great public interests, has been executed, would, under any circumstances, be a fit subject of inquiry; but much more does it deserve your attention, when it embraces the redemption of obligations to which the authority and credit of the United States have given value. The two years allowed are now nearly at an end. It is

well understood that the trustee has not re

deemed and cancelled the outstanding notes of the bank, but has reissued, and is actually reissuing, since the 3d of March, 1836, the notes which have been received by it to a vast amount. According to its own official statement, so late as the 1st of October last, nineteen months after the banking privileges given by the charter had expired, it had under its control uncancelled notes of the late Bank of the United States to the amount of twenty-seven millions five hundred and sixty-one thousand eight hundred and sixty-six dollars, of which six millions one hundred and seventy-five thousand eight hundred and sixty-one dollars were in actual circulation, one million four hundred and sixty-eight thousand six hundred and twenty-seven dollars at State bank agencies, and three millions two thousand three hundred and ninety dollars in transitu; thus showing that upwards of ten millions and a half of the notes of the old bank were then still kept outstanding. The impropriety of this procedure is obvious: it being the duty of the trustee to cancel and not to put forth the notes of an institution, whose concerns it had undertaken to wind up. If the trustee

"But it is not in this view of the subject alone that your interposition is required. The United States, in settling with the trustee for their stock, have withdrawn their funds from their former direct ability to the creditors of the old bank, yet notes of the institution continue to be sent forth in its name, and apparently upon the authority of the United States. The transactions connected with the employment of the bills of the old bank are of vast extent; and should they result unfortunately, the interests of individuals may be deeply compromised. Without undertaking to decide how far, or in what form, if any, the trustee could be made liable for notes which contain no obligation on its part; or the old bank, for such as are put in circulation after the expiration of its charter, and without its authority; or the government for indemnity, in case of loss, the question still presses itself upon your consideration, whether it is consistent with duty and good faith on the part of the government, to witness this proceeding without a single effort to arrest it."

On the subject of the public lands, and the most judicious mode of disposing of them-a question of so much interest to the new States the message took the view of those who looked to the domain less as a source of revenue than as a means of settling and improving the country. He recommended graduated prices according to the value of the different classes of lands in order to facilitate their sale; prospective permanent pre-emption act to give encouragement to settlers. On the first of these points he said:

แ

and a

Hitherto, after being offered at public sale, lands have been disposed of at one uniform price, whatever difference there might be in their intrinsic value. The leading considerations urged in favor of the measure referred to, are, that in almost all the land districts, and particularly in those in which the lands have been long surveyed and exposed to sale, there are still remaining numerous and large tracts of every gradation of value, from the government price downwards; that these lands will not be purchased at the government price, so long as better can be conveniently obtained for the same amount; that there are large tracts which even the improvements of the adjacent lands will

There is no reason to suppose that future sales will be more productive. The government, therefore, has no adequate pecuniary interest to induce it to drive these people from the lands they occupy, for the purpose of selling them to others."

never raise to that price; and that the present "A large portion of our citizens have seated uniform price, combined with their irregular themselves on the public lands, without authorivalue, operates to prevent a desirable compact- ty, since the passage of the last pre-emption law, ness of settlement in the new States, and to re- and now ask the enactment of another, to enatard the full development of that wise policy on ble them to retain the lands occupied, upon paywhich our land system is founded, to the injury ment of the minimum government price. They not only of the several States where the lands ask that which has been repeatedly granted belie, but of the United States as a whole. fore. If the future may be judged of by the past, "The remedy proposed has been a reduction of little harm can be done to the interests of the prices according to the length of time the lands Treasury by yielding to their request. Upon have been in market, without reference to any a critical examination, it is found that the lands other circumstances. The certainty that the sold at the public sales since the introduction efflux of time would not always in such cases, of cash payments in 1820, have produced, on an and perhaps not even generally, furnish a true average, the net revenue of only six cents an criterion of value; and the probability that per-acre more than the minimum government price. sons residing in the vicinity, as the period for the reduction of prices approached, would postpone purchases they would otherwise make, for the purpose of availing themselves of the lower price, with other considerations of a similar character, have hitherto been successfully urged to defeat the graduation upon time. May not all reasonable desires upon this subject be satisfied without encountering any of these objections? All will concede the abstract principle, that the price of the public lands should be proportioned to their relative value, so far as that can be accomplished without departing from the rule, heretofore observed, requiring fixed prices in cases of private entries. The difficulty of the subject seems to lie in the mode of ascertaining what that value is. Would not the safest plan be that which has been adopted by many of the States as the basis of taxation; an actual valuation of lands, and classification of them into different rates? Would it not be practicable and expedient to cause the relative value of the public lands in the old districts, which have been for a certain length of time in market, to be appraised, and classed into two or more rates below the present minimum price, by the officers now employed in this branch of the public service, or in any other mode deemed preferable, and to make those prices permanent, if upon the coming in of the report they shall prove satisfactory to Congress? Cannot all the objects of graduation be accomplished in this way, and the objections which have hitherto been urged against it avoided? It would seem to me that such a step, with a restriction of the sales to limited quantities, and for actual improvement, would be free from all just exception."

A permanent prospective pre-emption law was cogently recommended as a measure just in itself to the settlers, and not injurious to the public Treasury, as experience had shown that the auction system-that of selling to the highest bidder above the prescribed minimum pricehad produced in its aggregate but a few cents on the acre above the minimum price. On this point he said:

This wise recommendation has since been carried into effect, and pre-emptive rights are now admitted in all cases where settlements are made upon lands to which the Indian title shall have been extinguished; and the graduation of the price of the public lands, though a measure long delayed, yet prevailed in the end, and was made as originally proposed, by reductions according to the length of time the land had been offered at sale. Beginning at the minimum price of $1 25 per acre, the reduction of price went down through a descending scale, according to time, as low as 12 cents per acre. was long after.

CHAPTER XVII.

But this

PENNSYLVANIA BANK OF THE UNITED STATES.

ITS USE OF THE DEFUNCT NOTES OF THE EX-
PIRED INSTITUTION.

HISTORY gives many instances of armies refusing to be disbanded, and remaining in arms in defiance of the authority which created them; but the example of this bank presents, probably, the first instance in which a great moneyed corporation refused to be dissolved-refused to cease its operations after its legal existence had expired ;-and continued its corporate transactions as if in full life. It has already been shown that its proviso charter, at the end of a local railroad act, made no difference in its condition

that it went on exactly as before. Its use of the defunct notes of the expired institution was a further instance of this conduct, transcending any thing conceived of, and presenting a case of danger to the public, and defiance of government, which the President had deemed it his duty to bring to the attention of Congress, and ask a remedy for a proceeding so criminal. Congress acted on the recommendation, and a bill was brought in to make the repetition of the of fence a high misdemeanor, and the officers and managers of the institution personally and individually liable for its commission. In support of this bill, Mr. Buchanan gave the fullest and clearest account of this almost incredible misconduct. He said:

"Having assumed this responsibility, the duty of the new bank was so plain that it character to sustain. Under the charter from could not have been mistaken. It had a double Pennsylvania, it became a new banking corporation; whilst, under the assignment from the old bank, it became a trustee to wind up the concerns of that institution under the Act of Congress. These two characters were in their nature separate and distinct, and never ought to have been blended. For each of these purposes it ought to have kept a separate set of bank notes, and thus creating a paper currency, books. Above all, as the privilege of circulating is that function of a bank which most deeply and vitally affects the community, the new bank ought to have cancelled or destroyed all the notes of the old bank which it found in its possession on the 4th of March, 1836, and ought to have redeemed the remainder at its counter, as they were demanded by the holders, and then destroyed them. This obligation no senator has attempted to doubt, or to deny. Bat what was the course of the bank? It has grossly violated both the old and the new charand appropriated to itself all the notes of the ter. It at once declared independence of both, old bank,-not only those which were then still in circulation, but those which had been redeemed before it accepted the assignment, and were then lying dead in its vaults. I have now before me the first monthly statement which was ever made by the Bank to the Auditor-general of Pennsylvania. It is dated on the 2d of April, 1836, and signed J. Cowperthwaite, acting cashier. In this statement, the Bank charges itself with 'notes issued,' $36,620,420 16; whilst, in its cash account, along with its specie and the notes of State banks, it credits itself with 'notes of the Bank of the United States and offices,' on hand, $16,794,713 71. It thus seized these dead notes to the amount of $16,794,713 71, and transformed them into cash; whilst the differ

"The charter of the late Bank of the United States expired, by its own limitation, on the 3d of March, 1836. After that day, it could issue no notes, discount no new paper, and exercise none of the usual functions of a bank. For two years thereafter, until the 3d of March, 1838, it was merely permitted to use its corporate name and capacity for the purpose of suits for the final settlement and liquidation of the affairs and accounts of the corporation, and for the sale and disposition of their estate, real, personal, and mixed; but not for any other purpose, or in any other manner, whatsoever.' Congress had granted the bank no power to make a voluntary assignment of its property to any corporation or any individual. On the contrary, the plain meaning of the charter was, that all the affairs of the institution should be wound up by its own president and directors. It received no authority to delegate this important trust to others, and yet what has it done? On the second day of March, 1836, one day be fore the charter had expired, this very president and these directors assigned all the property and effects of the old corporation to the Penn-ence between those on hand and those issued, sylvania Bank of the United States. On the same day, this latter bank accepted the assignment, and agreed to pay, satisfy, and discharge all debts, contracts, and engagements, owing, entered into, or made by this [the old] bank, as the same shall become due and payable, and fulfil and execute all trusts and obligations whatsoever arising from its transactions, or from any of them, so that every creditor or rightful claimant shall be fully satisfied.' By its own agreement, it has thus expressly created itself a trustee of the old bank. But this was not necessary to confer upon it that character. By the bare act of accepting the assignment, it became responsible, under the laws of the land, for the performance of all the duties and trusts required by the old charter. Under the circumstances, it cannot make the slightest pretence of any want of notice.

equal to $19,825,706 45, was the circulation from the old. It thus, in an instant, appropriwhich the new bank boasted it had inherited ated to itself, and adopted as its own circulation, all the notes and all the illegal branch drafts of the old bank which were then in existregard of law. In this first return, it not only ence. Its boldness was equal to its utter disproclaimed to the Legislature and people of Pennsylvania that it had disregarded its trust as assignee of the old Bank, by seizing upon the whole of the old circulation and converting it to its own use, but that it had violated one of the fundamental provisions of its new char

ter."

Mr. Calhoun spoke chiefly to the question of the right of Congress to pass a bill of the tenor proposed. Several senators denied that right: