H. OF R.] Sub-Treasury Bill. constituents, as that now before it. He had been aware when he first took his seat in that body, that he would have to contend against great power and patronage. There had been a time in his political life when he thought the arm of this Government needed to be strong to regulate some of the consequences of the rapid increase, in extent and resources, of the country. The usurpations of the Executive, which he had witnessed for the last few years, had taught him a different lesson. He now found the Government too strong for the people; and that some of the memorable predictions of the gentleman from South Carolina [Mr. PICKENS] and his friends, in regard to the influence of Executive dictation and usurpation, were in a fair way to be realized. He had come to his seat prepared to combat that usurpation, and to contend for the lost rights of the States; and he thought he should find the bold, manly, and chivalrous arm of the Southron bared to aid him in that contest. What had been his surprise to find that very arm on which he had relied for such aid, raised in the van of the attack he had to resist! That gentleman [Mr. PICKENS] had said that he had renounced no opinions he had entertained before, and yet he is lending his aid in the advancement of a scheme which is to unite in one hand the purse and the sword of this Government, and to make, by his adhesion and support, the bill before the committee too strong for the opposition of those with whom he had been used to act in concert. Commenting on the argument of Mr. PICKENS as to the character and influence of a national bank, Mr. H. demanded of that gentleman what would be the influence of an Executive, in any action against the rights of the States, who could wield so formidable a weapon against those rights, as all the revenues of this Government? And upon this subject he enlarged extensively. As to what had fallen from that gentleman in his remarks of yesterday, in relation to the North and South, as relatively placed, in interest and in policy, with regard to each other, Mr. H. was very eloquent and forcible. That gentleman [Mr. PICKENS] had threatened a servile war as the consequence of a struggle between those interests, and had promised to preach insurrection to the laborers of the North, as an offset to similar alleged appeals to the South. That gentleman (said Mr. H.) is mistaken if he thinks that there is any parity of reasoning as to the laborers of the North, or the slaves of the South. They were not, as was so boldly argued, under the domination or control of the capitalists. They were freemen, conscious of their rights and privileges. By the laboring classes of the North the banner of the Revolution had been unfurled, and the fields of Lexington and Bunker Hill been won. By those classes there, even in the cities so much vilified and denounced, were the men who sit in that hall sent thither; and they were alive to all the rights of freemen, which they sent their representatives there to defend and advocate. Mr. H. regretted that this ball of discord had been set rolling there; that the Texas question, and the slavery question, had been started on that floor to frighten the House "from its propriety." He was not unfriendly to the South. Far from it. Many of his early and most friendly associates were connected with that section. He should be ever found by the side of the people of that section, in resisting any invasion of their rights. But still he had a paramount duty to perform—to vindicate from attack, and to shield from reproach, the people of his own part of the country. Mr. HOFFMAN paid a deserved compliment to the bold and frank manner in which Mr. PICKENS had come forward to the aid of the administration in the support of this bill. That gentleman had not crept into the ranks of his former enemies. He had, like Tullius Aufidius, in Roman history, boldly told his new allies of his former battles against them; he had, almost in bravado, indeed, spread [Oct. 11, 1837. before them the records of his consistency as their uncompromising opponent. They had taken him into their employ, and, being in the ranks of the enemy, he (Mr. H.) must defend his countrymen, though it be Coriolanus who heads the Volscians against Rome! The gentleman (continued Mr. H.) is proud of the name of locofoco, Sir, that is a matter of taste. [Mr. PICKENS explained. He had said, in allusion to a remark made on that floor some days since by an honorable member, that he was willing to be such a locofoco as John Milton was, if he were, indeed, one. He had not intended to be understood as declaring himself a locofoco, under the ordinary acceptation of that term.] He Mr. HOFFMAN said that he certainly did not mean to misrepresent the gentleman from South Carolina. hardly understood what the term in question signified. But he is not surprised to hear the gentleman declare that he is not one of the followers of him who had once sworn that his "mouth should be the Parliament of England," and that "his horse should graze in Cheapside."* But he had eulogized Milton as his exemplar. For that name, he, too, (Mr. H.,) had great reverence. He remembered well the noble defence of John Milton of the subject; and yet this very man was choleric, hasty, and often rash in his opinions. There was (said Mr. H.) a striking coincidence, which he could not but allude to, in the history of Milton, as applicable to our own times. The same intrepid patriot who, in his zeal for liberty, had aided in bringing his monarch to the block, afterwards threw himself into the arms of the Protector, and supported the throne which was reared on the downfall of Charles. Here Mr. H. drew a parallel between the succession of the present to the late Executive, and that of the Protector to the King, and between the conduct of the gentleman from South Carolina and that of the great statesman he had alluded to, under the parallel change of circunstances. Mr. H. was opposed to the sub-Treasury bill, because it violated the constitution of the country-if not its plain and palpable literal language, its spirit, which is its lifeblood, and which alone recommends it to the people of the nation. That spirit is the principle that the people shall govern themselves. The mode of choosing public officers, the appointment of those officers, duties, &c., are but the trappings of the constitution. But this principle, which is its spirit, enters into the labors of the artisan, and the researches of the scholar. It should be the atmosphere by which we should be sustained and strengthened, and from which we should receive buoyancy and vigor to perform the duties of good citizens and patriots. The connexion between the Government and the people of this Union, Mr. H. looked upon as a great partnership. There should be a common credit or discredit, a common honor or dishonor, a common interest in all things between them. The distress, if there be any, of the Government should be reflected upon the people. The arm of power should not be wielded over the governed, to be looked up to as paramount. The people should not, while struggling amidst discontent, embarrassment, and perplexity, be insulted by the spectacle of their Government walking free, unfettered, unembarrassed, and in prosperity. Mr. H. remarked that it had been said that this was no new proposition; that England and France had furnished examples of similar schemes; and not long since (though perhaps not parliamentary to allude particularly to it on that floor) the great Mormon of this golden bible (Mr. BENTON, of the Senate) had instanced Rome also as furnishing a similar example. In reply to these allusions, Mr. H. adverted to the difference between the institutions of England and France and those of our own country, and asked, why not model our whole Government upon those examples! Why not establish the "divine right of kings" *Jack Cade. See 2d part Henry VI, activ. Oct. 11, 1837.] 66 Sub-Treasury Bill. principle throughout; create a standing army, authorize a system of passports, and all the rest? And Rome, too; Rome had her quæstors, or public treasurers! Yes, (said Mr. H.,) she had; and they grew by what they fed on." They followed the Roman eagles to conquest, and, in every situation, were ever the links between the worn-down people and the overbearing Government. Mr. H. alluded to the provisions of the bill before the committee. The public money is to be given by the Executive to the different disbursing officers. Defalcation would ensue detalcation, as the consequence of this provision. Besides the direct pilfering and frauds of the officers who will have the charge of the public revenues, there would be the brawling sycophant, and the unscrupulous partisan, whose very bread would depend upon his subserviency to Executive dictation. He did not allude more to one administration than to another. This would ever be the case, were this bill to become a law. In case of an election depending in any State, or district, or town, there would be a call on the partisan officeholder's exertions. On one side would be his honesty, and on the other his office; and he would console himself, while making the sacrifice of the former to the latter, that the bread of his wife and children depended upon it. And who will call the defaulter in such a case to account? The Executive ? This would never be; and, as to the Congress? That, too, was powerless. The proceedings of the last Congress, under similar circumstances to those described, afforded a sufficient proof that this was so. Here Mr. H. alluded to the novel and monstrous doctrine which had been broached under the late administration, that every officer of the Government was accountable to the Executive alone; and he only to the impeaching power of Congress; and insisted that no people were ever strong enough to resist the union of the purse and sword of Government. If the bill passes, he contended the money of the people would not be safe; it would be less safe than in banks, where the stockholders' interests require the selection of careful directors and officers, and where there were many hands, and not a single hand, to guard those interests. And to this point Mr. H. read from the Congressional Debates of 1835 an opinion of one who he wished could take a part in that debate, and sustain the views he had once expressed, and which he would now quote-views which he was confident the high regard for his opinions, entertained by the members of that House, would lead them to regard with great respect; he alluded to Mr. Speaker POLK, who, in the course of a debate in 1835, had said that “ corporations were safer than any individual could be, as the depositary of public moneys,' " because corporations were bound together by the strongest ties of interest, with an immense aggregate of wealth, which furnished a safe security, &c. But, (said Mr. H.,) who can tell but that, if that gentleinan could descend from the chair, and address the House on this bill now, he would not also be found to have undergone some change of sentiment since the time alluded to? This would not be more surprising than that one of that gentleman's friends, also on that floor, should have changed his views on the subject within the same term of time. In a debate upon a resolution offered in 1835 to that body by Mr. GAMBLE, as to the best mode of keeping the public moneys, Mr.CAMBRELENG was reported in the Congressional Debates to have uttered the opinion that the sub-Treasury scheme would find no friends there, and that it was a proposition too odious and monstrous to be entertained. [Mr. CAMBRELENG read, in answer to this allusion, an extract from his own prepared report of the speech adverted to, to the effect that he had expressed the hope that the time would come when banks, as fiscal agents of the Government, could be dispensed with altogether.] VOL. XIV.-88 (H. OF R. Mr. H. remarked that the gentleman had voted against the scheme at the time, and was reported, in the book of debates, before he had had time to prepare carefully his own report of the speech he had made, to have said that such a proposition could find no friends in that body. But still (said Mr. H.) I know that opinions often change, like the gourd of Jonah, in a single night. Mr. H. here alluded to Mr. FOSTER's eulogy on the safety-fund system, which he admitted to be appropriate and deserved. And he eloquently detailed the consequences of that system to the prosperity of the State-the springing up of her western cities almost at the very sound of the woodman's axe-the stretching out of long lines of railroads, those avenues of communication and social intercourse with the different parts of the country. The North and East had made the West, and the West had poured back her gratitude in increasing contributions to the wealth and prosperity of the State:-and this was the working of the safety-fund system. It had worked well: and now, he would ask, what was the reverse in the country? The President now says that over-speculation is the cause of our present troubles. The philosopher whose theory it was that the earth rested on a tortoise, was puzzled to find a place for the tortoise. And what was the true cause of this distress and embarrassment? Mr. H. said that it was the war on the United States Bank by the late Executive. The first germ of all that Executive power which now oppresses us was the withdrawal of the deposites. That was the fountain whence all these bitter waters flowed. The hopes and wishes of the people were involved in that institution. The boat was proceeding on its way, in a swift but equable course, when there had suddenly ensued a crash, which was the prelude to a bubbling cry of agony and despair from the passengers and crew. The balance-wheel had been removed by the ignorance or the wantonness of the engineer. Mr. H. had never been the friend or the enemy of the United States Bank, nor of the local banks. He had not worshipped Pompey, in all his pride of power and place, when armies had sprung up at the stamp of his foot; nor had he ever bowed the knee to his great rival. Yet would he not withhold from the latter the justice which he should extend towards him; as -in his mantle muffling up his face, With none so poor to do him reverence!" After some discussion of the conduct pursued by the State deposite banks, which he contended had, in the majority of instances, been honorable and upright, he insisted that it was inconsistent for the friends of the administration to decry and destroy them. They had eaten of the fruit, and should not now cut down the tree. The United States Bank had been ruined to aggrandize the State banks: not in accordance, as had been asserted, with the people's will; the people would never have destroyed that institution; but as a sacrifice to the popularity of the late Executive. It was withered by the resplendent "glory" from the brow of the victor of New Orleans. It was destroyed, that the "weeds," as Mr. PICKENS had called the State banks, might grow and flourish. Mr. H. contended that there had been a time when those "weeds" were shallow rooted, and might have been easily eradicated. He then went on to show that Mr. Van Buren originated and rose into power by the aid of the safety fund system. That it still continued its influence, politically, and procured a Van Buren majority there of two-thirds and that Mr. Van Buren was now kicking away the ladder by which he had mounted, not even saying to those who had been wondering at his ascent with upturned eyes, "Stand from under!" This part of the speech was very minute in its details, and excited a deep interest. Mr. H. said the bill before the committee had been christened "a divorce bill." It was no such thing. It was a bill authorizing "a fatal marriage"-fatal to the constitution, and to the liberties and happiness of the people. It was not a divorce bill. The divorce" had already taken place, without cause or right, by the act of one of the parties, and it was the nuptial benediction or another alliance that the House were now called on to pronounce. History furnishes a parallel. He who was "but yesterday a King, And armed with Kings to strive," Napoleon Bonaparte, loved Josephine. The conqueror of Italy had laid his laurels at her feet, and whispered in her ear his aspirations of love as well as of ambition. By her were his troubles assuaged, and she was ever his good genius, pointing him the path to glory and renown, and with her, as his companion and adviser, he found himself upon the throne of Charlemange. But no sooner did the diadem glitter upon his brow, than she, who had been ever true to him, was cast off for the furtherance of schemes of policy. He was thus, but he would be safely and ever thus, and he procured from a weak Senate a divorce from her, and wedded Louise of Austria, who mounted his throne only to see his crown snatched from his brow! Sir, there may be a moral even in the lesson read to our own Government from the rock of St. Helena. Mr. H. closed his remarks by warning gentlemen of the consequences of passing a bill so fraught with danger as that under consideration. He said, "the bow is bent, make from the shaft!" unless by a bold effort you can wrest the bow from the hands of the archer! Rise from the mire of party! Sustain the administration in every thing in which it is just and right, but resist it when its measures are hostile to the best and most enduring interests of the people. Do not aid in that unholy alliance of the purse with the sword in the hand of power: and Let the great interests of the State depend After Mr. HoFFMAN concluded Mr. HUNTER, of Virginia, addressed the chair as follows: Mr. Speaker: I arise under the painful sense that I am asking almost too much of this committee, when I throw myself upon its indulgence whilst I express my views in relation to the subject before us. But our present position is highly responsible; the consequences of our action in the existing crisis may be lasting to the country, and I wish to be heard in vindication of the principles which will govern my course. We stand, sir, in the midst of a great commercial revolution; we have just witnessed an explosion in the credit system, through which the stream of capital circulates and dispenses its mighty agency to the country. Old channels have been abandoned, new ones are being formed; and now, sir, when every institution of the land is trembling under the shock, and our most important interests are sympathizing with the distress in the circulating system of the body politic, the eyes of the people are turned in anxious solicitude upon our course. They have suffered with exemplary patience under calamities which would have goaded almost any other people to tumult and bloodshed; and they have even forborne to speak forth their grievances, as if fearful that the clamor might disturb the presence of mind of those whose peculiar task it was to work the ship of state off the lee shore upon which it was driving-" Nec tumultus, nec quies;" but there is that state of deep and silent suspense which more forcibly than by words seems to say that, upon this occasion, our country expects every man to do his duty." I feel, sir, a most painful sense of the responsibility of my position. On the one hand, I know that he cannot be justified on the plea of ignorance who lightly tampers with the [Oct. 11, 1837. important interests now concerned in our action; and, on the other, if personal or party considerations were to deter me from doing whatever may be done for the relief of the country, I feel that my name would deserve to be pursued through all posterity with execrations. I might, perhaps, escape responsibility by declaring that, as I had nothing to do in producing the present distress, so I was bound to do nothing towards restoring things to a sounder condition. Sir, I scorn the excuse. I think I see something which may be done for the good of the country, and I am willing to share the responsibility with those who will attempt it. In taking my course I form no new connexions, I make no alliances; I act as I was sent here to act. I legislate not for party, but for the good of our common country. I tread all personal and party considerations into the dust, when they present themselves in competition with the most important interests of the people. Mr. Chairman, if I can free this Government from a corrupting connexion, if I can aid in so moulding its action as to remove the causes by which it has disturbed the natural level of our circulating capital, and advance one more step towards that perfect freedom which American trade ought to enjoy, I shall be content, be my own fate what it may; but if I should unfortunately work harm where I mean good, I shall only regret that others will suffer under the consequences of my mistake. But, sir, I turn from these considerations to the great question before us. How can we exercise the powers given us by the constitution, and remould the fiscal action of the Government, so as to relieve the country of its sufferings, and prevent their recurrence again? It has been well said that debt is the evil under which we are suffering. The real balance of trade has been against us; the foreign creditor demanded the adjustment of this balance in specie; and the currency system of the country, having been inflated beyond its just dimensions, was unable to meet the demand for a conversion so sudden. What, then, can be done, sir, to relieve the people from this pressure? There are but two modes of relief from debt; the one consists in its payment, and the other palliates the evil by obtaining time, so as to divide between several years the burden which is too heavy for It is obvious that, as a Government, we have neither the right nor the means of paying the debt. Governments may spend money, but they never make it; and their attempts at political alchemy have always resulted, like the vain search after the philosopher's stone, in more expense than profit. one. Has the Government the means of extending the credit upon the debt due abroad? If this could be done, we should undoubtedly find immediate relief. Instances have occurred in the history of English commerce, and in some of our own States, in which Government has effected this purpose by interposing its own credit between the domestic debtor and the foreign creditor. There are times when a people may be unable, without great suffering, to meet a sudden call for the balance of trade which exists against them. But it can scarcely happen that they should not be ultimately able to meet the call, if time were given. On these occasions, the foreign creditor presses, because he cannot well know the actual responsibility of individuals. In such situations, the English Government has exchanged its own credit, which was undoubted, for that of the domestic creditor, who was thus enabled to make his remittances abroad in undoubted securities. We have no power here to enter into any such trade; and although the exercise of this power might occasionally be useful, yet it is too liable to abuse to have been wisely entrusted to us. The direct fiscal action of Government might have been rendered conducive to this end, and eminently beneficial, If we had issued certificates of loan upon time for the money necessary for Government, I believe, sir, that the merchant, instead of exporting his specie, would have given it to us in exchange for this paper, which would have served a better purpose abroad. In this way we should have done much for the relief of the country; we should have avoided all danger of a depreciated paper currency issued by Government, and we should have been clearly within the limits of our constitutional power. But the occasion has passed away; we have passed a bill for Treasury notes; and when I connect the discretion, as to interest, confided to the Secretary, under the bill, with his known opinions on that subject, I am bound to conclude that they will be issued and designed as currency. But, Mr. Chairman, that subject is not now before us, and I will not detain the committee with its further consideration. I shall pause but a moment to consider the expedient of a United States bank, which has been suggested by some as affording the means of producing immediate relief. If this were so, the suggestion would be useless to those who, like myself, believe that it is demonstrable, and that it has often been demonstrated, that we have no power under the constitution to charter such a bank. But, for one, I do not believe that the expected effect would flow from such an institution. It would enter the field as a rival of the State institutions, and could only sustain the competition by either debasing its currency to the level of the State institutions, or by elevating their circulation to the seunder level which it might establish for itself. The first operation would prolong the present evils; and the other, if attempted by any but the most gradual means, would break the State banks, and aggravate the distress of the community. But I pass from the consideration of the means of immediate relief, real or imaginary, which are not within our reach, to those which may be. And here I beg leave to pause upon our fiscal policy, and its incidental effects upon currency and trade. If it has introduced causes which disturb the natural level of circulating capital, and furnished a false excitement to currency and credit, that policy ought to be changed. Public convenience may require that the change should be gradual, but important interests demand that it shall be ultimately made. After much consideration, I have come to the conclusion that the present and past commercial distresses have been mainly produced by the American banking system; a system, sir, which, by the law of its creation, hurries to its downfall as the necessary result of its own action; and this catastrophe is only hastened by the excitement of the connexion between it and the Government. It has been said, Mr. Chairman, by McCulloch, one of the ablest politial economists of the present day, that our system of banking is the worst in the world. I will not stop now to institute that comparison, or to examine his conclusion; but I shall demonstrate that its natural tendencies are to produce a state of things like the present, if I succeed in showing, first, that it causes a false distribution of capital, and, secondly, that it creates a diseased action in the credit and currency systems, by forming an improper connexion between them. According to our banking policy, these institutions have the exclusive right of making a paper currency; and their paper only is received in payment of public dues. To these exclusive privileges they unite the power of drawing interest from an amount greatly exceeding their capitals. Take, in connexion with this, the usury laws, which exist, I believe, in all of the States of the Union, and you have the result that capital, loaned through bank agency, will draw an interest greatly exceeding that which any other capitalist can derive from money lent. The loanable capital of the country will of course seek that investment, and fill those channels of circulation before it reaches any other; the consequences of the artificial direction thus given to capital, is its false distribution between the different sections of that country, and the different classes of society in that country, in which banks have those exclu [H. OF R. sive privileges. The loanable capital will seek the places in which these institutions exist, until it has exhausted the demand for it there, before it reaches those portions of the same country in which banks do not exist. It will do so, because, through bank agency, it can derive more than the legal interest within the sphere of its operations, whilst beyond that sphere its profits are confined to that interest. The system establishes, in effect, a bounty upon capital lent to the mercantile, and those classes whose labor brings a speedy return, at the expense of the agriculturists, whose returns are slow. Loans for thirty or sixty days are obviously more profitable than those for longer periods. It is the difference between simple and compound interest. The merchant, therefore, whose outlay is speedily returned to him, can thus afford to deal in these short credits, whilst the agriculturist, whose returns are generally annual, finds himself forced to pay compound, for what the merchant returns only simple interest. The effect of this is so much felt, although its causes are perhaps not generally understood, that in my State it is received almost as an adage, that no farmer can afford to go into bank. There is yet another mode, sir, in which the system produces a false distribution of capital. The available profits of these institutions, within the limits presented to them, are so great that they may become credit insurance offices. The directors, under these extraordinary advantages, may run the risk of insuring a favorite's credit when it is doubtful, when he may have no real resources, and thus the fair trader will be injured by the reckless and often ruinous competition of these men who have nothing in fact to lose. This, sir, will always happen when a bank has supplied the demands of good customers without reaching the limits of circulation prescribed to them. The temptation to run this risk is so strong that they too often yield to it. Mr. Chairman, it is no answer to these objections, to say that every section of the country may be supplied with its due proportion of banking capital. The country is supplied with banks through its Legislature, and no Government has the means of ascertaining the relative wants of different sections in this respect. But, sir, if the Government could ascertain the relative proportions in which the different sections should be supplied to make the distribution just, it would be unable to make that distribu tion. A supply of all the capital wanted for loan in any country, through the medium of banks like ours, would expand the credit system so rapidly, from causes which I shall endeavor to show, as to produce revulsions which would present a scene of wide-spread ruin and disaster. A fact which is so impressed upon the public mind, that every Legislature, not perfectly wild in its movements, seems to have endeavored to restrain the system within the supposed wants of the country, rather than make the attempt to supply the value demanded. If I have been successful so far, Mr. Chairman, I have shown that this system is injurious in giving a false direction to capital; which, if left to itself, would seek those investments which had most natural advantages, and which, therefore, would have paid the highest profits. I come now, then, to the false and artificial laws of expansion and contraction, which are introduced into our currency and credit, (as I maintain,) by the banking system as it exists here. Instead of leaving currency and credit to the regulation of the great laws ordained by nature for that purpose, instead of leaving them to that selfregulating power which would adapt them to the changing condition of society, and harmonize them with each other, our Governments vainly practise their political alchemy, to the injury, and sometimes to the destruction of both. At their very creation, we arm these corporations with incompatible functions. We unite in them the money-making and the money-lending powers; and what, sir, are the inevitable consequences? Why they make as much H. OF R.] Sub-Treasury Bill. money as possible, that they may have the more to lend. I have said, Mr. Chairman, that the process which I have just described is the result of an unnatural connexion between the credit and currency systems. It may be asked, in what respect is this connexion unnatural? Why, sir, in this: we make the currency expand with the credit of the country, when in truth, although credit must expand when currency is increased, yet it may increase when currency remains the same. For instance, if we were suddenly to double the amount of money in the world, the same real value in credit must be doubled also in its nominal amount. But if the currency remained the same, new resources discovered in one country, making the employment of capital more profitable there, might readily draw a greater proportion of currency, as a measure of value, than circulated there before the discovery. Instead, then, of making the currency and credit systems the means of mutual expansion, they ought to be left separate. [Oct. 11, 1837. When each is true in the discharge of its own functions, But |