rived in the course of the day, when, on my motion, it was laid on the table; and I had the gratification of receiving the thanks of many for defeating the bill, who, a short time before, were almost ready to cut my throat for my persevering opposition to the measure. An offer was then made to me to come to my terms, which I refused, declaring that I would rise in my demand, and would agree to no bill which should not be formed expressly with the view to the speedy restoration of specie payments. It was afterward postponed, on the conviction that it could not be so modified as to make it acceptable to a majority. This was my first lessons on banks. It has made a durable impression on my mind.

My colleague, in the course of his remarks, said he regarded this measure as a secret war waged against the banks. I am sure he could not intend to attribute such motives to me. I wage no war, secret or open, against the existing institutions. They have been created by the legislation of the states, and are alone responsible to the states. I hold them not answerable for the present state of things, which has been brought about under the silent operation of time, without attracting notice or disclosing its danger. Whatever legal or constitutional rights they possess under their charters ought to be respected; and, if attacked, I would defend them as resolutely as I now oppose the system. Against that I wage, not secret, but open and uncompromising hostilities, originating not in opinions recently or hastily formed. I have long seen the true character of the system, its tendency and destiny, and have looked forward for many years, as many of my friends know, to the crisis in the midst of which we now are. My ardent wish has been to effect a gradual change in the banking system, by which the crisis might be passed without a shock, if possible; but I have been resolved for many years, that should it arrive in my time, I would discharge my duty, however great the difficulty and danger. I have thus far faithfully performed it, according to the best of my abilities, and, with the blessing of God, shall persist, regardless of every obstacle, with equal fidelity, to the end.

He who does not see that the credit system is on the eve of a great revolution, has formed a very imperfect conception of the past and anticipation of the future. What changes it is destined to undergo, and what new form it will ultimately assume, are concealed in the womb of time, and not given us to foresee. But we may perceive in the present many of the elements of the existing system which must be expelled, and others which must enter it in its renewed form. In looking at the elements at work, I hold it certain, that in the process there will be a total and final separation of the credit of government and that of individuals, which have been so long blended. The good of society, and the interests of both, imperiously demand it, and the growing intelligence of the age will enforce it. It is unfair, unjust, unequal, contrary to the spirit of free institutions, and corrupting in its consequences. How far the credit of government may be used in a separate form, with safety and convenience, remains to be seen. To the extent of its fiscal action, limited strictly to the function of the collection and disbursement of its revenue, and in the form I have suggested, I am of the impression it may be both safely and conveniently used, and with great incidental advantages to the whole community. Beyond that limit I see no safety, and much danger.

What form individual credit will assume after the separation, is still more uncertain, but I see clearly that the existing fetters that restrain it will be thrown off. The credit of an individual is his property, and belongs to him as much as his land and houses, to use it as he pleases, with the single restriction, which is imposed on all our rights, that it is not to be used so as to injure others. What limitations this restriction may prescribe, time and experience will show; but, whatever they may be, they ought to assume the character of general laws, obligatory on all alike, and open to all; and under the provisions.

of which all may be at liberty to use their credit, jointly or separately, as freely as they now use their land and houses, without any preference by special acts, in any form or shape, to one over another. Everything like monopoly must ultimately disappear before the process which has begun will finally terminate.

I see, not less clearly, that, in the process, a separation will take place between the use of capital and the use of credit. They are wholly different, and, under the growing intelligence of the times, cannot much longer remain confounded in their present state of combination. They are as distinct as a loan and an endorsement; in fact, the one is but giving to another the use of our capital, and the other the use of our credit; and yet, so dissimilar are they, that we daily see the most prudent individuals lending their credit for nothing, in the form of endorsement or security, who would not loan the most inconsiderable sum without interest. But as dissimilar as they are, they are completely confounded in banking operations, which is one of the main sources of the profit, and the consequent dangerous flow of capital in that direction. A bank discount, instead of a loan, is very little more, as I have shown, than a mere exchange of credit-an exchange of the joint credit of the drawer and endorser of the note discounted for the credit of the bank in the shape of its own note. In the exchange, the bank ensures the parties to the note discounted, and the community, which is the loser if the bank fails, virtually ensures the bank; and yet, by confounding this exchange of credit with the use of capital, the bank is permitted to charge an interest for this exchange, rather greater than an individual is permitted to charge for a loan, to the great gain of the bank and loss to the community. I say loss, for the community can never enjoy the great and full benefit of the credit system, till loans and credit are considered as entirely distinct in their nature, and the compensation for the use of each be adjusted to their respective nature and character. Nothing would give a greater impulse to all the business of society. The superior cheapness of credit would add incalculably to the productive powers of the community, when the immense gains which are now made by confounding them shall come in aid of production.

Whatever other changes the credit system is destined to undergo, these are certainly some which it must; but when, and how the revolution will endwhether it is destined to be sudden and convulsive, or gradual and free from shock, time alone can disclose. Much will depend on the decision of the present question, and the course which the advocates of the system will pursue. If the separation takes place, and is acquiesced in by those interested in the system, the prospect will be, that it will gradually and quietly run down, without shock or convulsions, which is my sincere prayer; but if not-if the reverse shall be insisted on, and, above all, if it should be effected through a great political struggle (it can only so be effected), the revolution would be violent and convulsive.

A great and thorough change must take place. It is wholly unavoidable. The public attention begins to be roused throughout the civilized world to this all-absorbing subject. There is nothing left to be controlled but the mode and manner, and it is better for all that it should be gradual and quiet than the reverse. All the rest is destiny.

I have now, Mr. President, said what I intended, without reserve or disguise. In taking the stand I have, I change no relation, personal or political, nor alter any opinion I have heretofore expressed or entertained. I desire nothing from the government or the people. My only ambition is to do my duty, and shall follow wherever that may lead, regardless alike of attachments or antipathies, personal or political. I know full well the responsibility I have assumed. I see clearly the magnitude and the hazard of the crisis, and the danger of confiding the execution of measures in which I take so deep a responsibility, to those in But all this deters me whom I have no reason to have any special confidence. not, when I believe that the permanent interest of the country is involved. My course is fixed. I go forward. If the administration recommend what I ap

prove on this great question, I will cheerfully give my support; if not, I shall oppose; but, in opposing, I shall feel bound to suggest what I believe to be the proper measure, and which I shall be ready to back, be the responsibility what it may, looking only to the country, and not stopping to estimate whether the benefit shall inure either to the administration or the opposition.

1

XX.

SPEECH ON THE SUB-TREASURY BILL, FEBRUARY 15, 1838.

I REGARD this measure, which has been so much denounced, as very little more than an attempt to carry out the provisions of the joint resolution of 1816, and the deposite act of 1836. The former provides that no notes but those of specie-paying banks shall be received in the dues of the government, and the latter that such banks only shall be the depositories of the public revenues and fiscal agents of the government; but it omitted to make provisions for the contingency of a general suspension of specie payments, such as is the present. It followed, accordingly, on the suspension in May last, which totally separated the government and the banks, that the revenue was thrown in the hands of the executive, where it has since remained under its exclusive control, without any legal provision for its safe-keeping. The object of this bill is to supply this omission; to take the public money out of the hands of the executive and place it under the custody of the laws, and to prevent the renewal of a connexion which has proved so unfortunate to both the government and the banks. But it is this measure, originating in an exigency caused by our own acts, and that seeks to make the most of a change effected by operation of law, instead of attempting to innovate, or to make another experiment, as has been erroneously represented, which has been denounced under the name of the sub-treasury with such unexampled bitterness.

In lieu of this bill, an amendment has been offered, as a substitute, by the senator from Virginia farthest from the chair (Mr. Rives), which, he informs us, is the first choice of himself and those who agree with him, and the second choice of those with whom he is allied on this question. If I may judge from appearances, which can hardly deceive, he might have said their first choice under existing circumstances; and have added, that, despairing of a National Bank, the object of their preference, they have adopted his substitute, as the only practical alternative at present. We have, then, the question thus narrowed down to this bill and the proposed substitute: it is agreed on all sides, that one or the other must be selected, and that to adopt or reject the one is to reject or adopt the other. The single question, then, is, Which shall we choose? A deeply momentous question, which we are now called on to decide in behalf of the states of this Union; and on our decision their future destiny must in a great degree depend, so long as their Union endures.

In comparing the relative merits of the two measures, preparatory to a decision, I shall touch very briefly on the principles and details of the bill. The former is well understood by the Senate and the country at large, and the latter has been so ably and lucidly explained by the chairman of the committee in his opening speech, as to supersede the necessity of farther remarks on them at this stage of the discussion. I propose, then, to limit myself to a mere general summary, accompanied by a few brief observations.

The object of the bill, as I have already stated, is to take the public funds out of the hands of the executive, where they have been thrown by operation of our acts, and to place them under the custody of law; and to provide for a gradual and slow, but a perpetual separation between the government and the banks.

It proposes to extend the process of separating to the year 1845, receiving during the first year of the series the notes of such banks as may pay specie, and reducing thereafter the amount receivable in notes one sixth annually, till the separation shall be finally consummated at the period mentioned.

The provisions of the bill are the most simple and effectual that an able committee could devise. Four principal receivers, a few clerks, and a sufficient number of agents to examine the state of the public funds, in order to see that all is right, at an annual charge not exceeding forty or fifty thousand dollars at most, constitute the additional officers and expenditures required to perform all the functions heretofore discharged by the banks, as depositories of the public money and fiscal agents of the treasury. This simple apparatus will place the public treasury on an independent footing, and give to the government, at all times, a certain command of its funds to meet its engagements, and preserve its honour and faith inviolate. If it be desirable to separate from the banks, the government must have some independent agency of its own to keep and disburse the public revenue; and if it must have such an agency, none, in my opinion, can be devised more simple, more economical, more effectual and safe than that provided by this bill. It is the necessary result of the separation, and to reject it, without proposing a better (if, indeed, a better can be), is to reject the separation itself.

I turn, now, to the substitute. Its object is directly the reverse of that of the bill. It proposes to revive the league of state banks, and to renew our connexion with them, and which all acknowledge has contributed so much to corrupt the community, and to create a spirit for speculation heretofore unexampled in our history.

The senator, in offering it, whether wisely or not, has at least acted consistently. He was its advocate at first in 1834, when the alternative was between it and the recharter of the late Bank of the United States. He then defended it zealously and manfully against the fierce assaults of his present allies, as he now defends it, when those who then sustained him have abandoned the measure. Whether wisely or not, there is something heroic in his adherence, and I commend him for it; but I fear I cannot say as much for his wisdom and discretion. He acknowledged, with all others, the disasters that have followed the first experiment, but attributes the failure to inauspicious circumstances, and insists that the measure has not had a fair trial. I grant that a second experiment may succeed after the first has failed; but the senator must concede, in return, that every failure must necessarily weaken confidence, both in the experiment and the experimenter. He cannot be more confident in making this second trial than he was in the first; and, if I doubted the success then, and preferred the sub-treasury to his league of banks, he must excuse me for still adhering to my opinion, and doubting the success of his second trial. Nor ought he to be surprised that those who joined him in the first should be rather shy of trying the experiment again, after having been blown into the air, and burned and scalded by the explosion. But, if the senator has been unfortunate in failing to secure the co-operation of those who aided him in the first trial, he has been compensated by securing the support of those who were then opposed to him. They are now his zealous supporters. In contrasting their course then and now, I intend nothing personal. I make no charge of inconsistency, nor do I intend to imply it. My object is truth, and not to wound the feelings of any one or any party. I know that to make out a charge of inconsistency, not only the question, but all the material circumstances must be the same. A change in either may make a change of vote necessary; and, with a material variation in circumstances, we are often compelled to vary our course, in order to preserve our principles. In this case, I conceive that circumstances, as far as the present allies of the senator are concerned, have materially changed. Then the option was between a recharter of the late Bank and a league of state banks

but now the former is out of the question, and the option is between such a league and a total separation from the banks. This being the alternative, they may well take that which they rejected in 1834, without subjecting themselves to the charge of inconsistency, or justly exposing themselves to the imputation of change of principle or opinion. I acquit them, then, of all such charges. They, doubtless, think now as they formerly did of the measure which they denounced and rejected, but which a change of circumstances now compels them to support. But in thus acquitting them of the charge of inconsistency, they must excuse me if I should avail myself of the fact, that their opinion remains unchanged, as an argument in favour of the bill, against the substitute. The choice is between them. They are in the opposite scales. To take from the one is, in effect, to add to the other; and any objection against the one is an argument equally strong in favour of the other. I, then, do avail myself of their many powerful objections in 1834 against the measure, which this substitute proposes now to revive. I call to my aid and press into my service every denunciation they then uttered, and every argument they then so successfully urged against it. They-no, we (for I was then, as now, irreconcilably opposed to the measure) charged against it, and proved what we charged, that it placed the purse and the sword in the same hands; that it would be the source of boundless patronage and corruption, and fatal, in its consequences, to the currency of the country; and I now avail myself of these, and all other objections then urged by us, in as full force against this substitute, as if you were again to rise in your places and repeat them now; and, of course, as so many arguments, in effect, in favour of the bill; and on their strength I claim your vote in its favour, unless, indeed, still stronger objections can be urged against it. I say stronger, because time has proved the truth of all that was then said against the measure now proposed to be revived by this substitute. What was then prediction is now fact. But whatever objections have been, or may be urged against the bill, however strong they may appear in argument, remain yet to be tested by the unerring test of time and experience. Whether they shall ever be realized, must be admitted, even by those who may have the greatest confidence in them, to be at least uncertain; and it is the part of wisdom and prudence, where objections are equally strong against two measures, to prefer that which is yet untried to that which has been tried and failed. Against this conclusion there is but one escape.

It may be said that we are sometimes compelled, in the midst of the many extraordinary circumstances in which we may be placed, to prefer that which is of itself the more objectionable to that which is less so; because the former may more probably lead, in the end, to some desired result than the latter. To apply the principle to this case. It may be said that the substitute, though of itself objectionable, is to be preferred, because it would more probably lead to the establishment of a National Bank than the bill, which you believe to be the only certain remedy for all the disorders that affect the currency. I admit the position to be sound in principle, but it is one exceedingly bold and full of danger in practice, and ought never to be acted on but in extreme cases, and where there is a rational prospect of accomplishing the object ultimately aimed

at.

The application in this case, I must think, would be rashness itself. It may be safely assumed, that the success of either, whichever may be adopted, the bill or the substitute, would be fatal to the establishment of a National Bank. It can never put down a successful measure to take its place; and, of course, that which is most likely to fail, and replunge the country into all the disasters of a disordered currency, is that which would most probably lead to the restora tion of a National Bank; and to prefer the substitute on that account is, in fact, to prefer it because it is the worst of the two. But are you certain that another explosion would be followed by a bank? We have already had two; and it is far more probable that the third would impress, universally and indelibly, on the