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 INTO THE 
 
 EXPEDIENCY OF DISPENSING 
 
 BANK AGENCY AND BANK PAPER 
 
 IN THE 
 
 OF THE 
 
 BY WILUAMn. GOUGE, 
 
 AUTHOR OF A SHORT HISTORY OF JAPER MONET AND BANKING. 
 
 PRINTED HY \v I I. ), I v M STAVELY, 
 
 No. 12 Pear Street. f ^j 
 1837. 
 
3PHECKELS 
 
PREFACE. 
 
 IF any thing advanced in this publication, in relation to the 
 characteristics of our Banking System, should appear to the 
 reader to require explanation, he is respectfully referred, for 
 the best explanation the writer is able to give, to a work pub- 
 lished originally at Philadelphia, in 1833, and afterwards 
 stereotyped at New York. The whole title, as it was framed 
 with the intention of making it as descriptive as possible of the 
 contents of the work, is here given, viz: 
 
 "A Short History of Paper Money and Banking in the 
 United States, including an Account of Provincial and Conti- 
 nental Paper Money. To which is prefixed, An Inquiry into 
 the Principles of the System, with considerations of its effects on 
 Morals and Happiness. The whole intended as a Plain Ex- 
 position of the way in which Paper Money and Money Corpo- 
 rations affect the interests of different portions of the Commu- 
 nity." 
 
 Of the Philadelphia edition, no copies are for sale. The 
 type of the New York edition is rather small. But it was 
 impossible, without using small type, to make a twenty-five 
 cents' book out of matter which, if printed in the style usually 
 adopted in publications relative to currency and finance, 
 would cost two or three dollars. 
 
 In that work the writer analyzed the various operations of 
 the Banking System with as much accuracy as he could; en- 
 deavored to trace out the remote effects of these operations 
 on society ; illustrated the nature of the system by as copious 
 extracts from historical documents as his limits would permit 
 him to introduce ; and supported the principal positions he took, 
 by quotations from the writings and speeches of the most emi- 
 nent men of all parties. He has since re-examined the sub- 
 ject, without being able to detect any material error in his 
 analysis: and the events of the last few years have, certainly, 
 
IV 
 
 not been such as to convince him that he had over-rated the 
 evils of Paper-money Banking. 
 
 A leading doctrine of the afore-mentioned work is, that the 
 fiscal concerns of the United States ought to be entirely sepa- 
 rated from the concerns of the Banks. In the First Part, one 
 chapter is devoted exclusively to this subject. In various 
 other places it is adverted to, and towards the close of the 
 twenty-second chapter of the Second Part, in which chapter 
 a narrative is given of certain proceedings of the United States 
 Bank, it is expressly said, " If the State Banks were made the 
 depositories of the public funds, the evil would be increased." 
 
 In the early part of the year 1835, the writer made par- 
 ticular inquiries into the feasibility of dispensing with bank 
 paper and bank agency in our fiscal concerns. He had long 
 been convinced that this was quite practicable, but he never, 
 till after having instituted this particular examination, had 
 supposed that the money affairs of the General Government 
 could be conducted with so very great safety, so very great 
 ease, and so very great economy, through a system of Sub- 
 Treasury Offices, as utterly to take away every pretext for 
 employing any Bank in this business. The second chapter of 
 this publication is part of an article written in 1835, but not 
 then printed. 
 
 It is possible, that under a Sub-Treasury System, the num- 
 ber of payments and receipts would be greater than is sup- 
 posed in the second chapter. In some branches of the public 
 service, a habit may have insensibly crept in, of " lumping" 
 the public accounts, for the sake of convenience. Using banks 
 as fiscal agents would naturally lead to this kind of " lump- 
 ing." Be this as it may, the whole amount to be received and 
 paid away is not so great as to make it impossible to go through 
 the business with ease, even if the receipts and payments 
 should be so divided as to be of no greater sum than fifty dol- 
 lars each. " Lumping" is very convenient, but individuali- 
 zation ensures correctness. This is a leading feature in the 
 French financial system, the machinery of which is so excel- 
 lent, that it has excited the admiration of the most distinguish- 
 ed Political Economists of Great Britain. 
 
 May 29M, 1837. 
 
CHAPTER I. 
 
 Preliminary Remarks. 
 
 AT the present moment, all the Banks in the United States 
 are bankrupt; and, not only they, but all the Insurance Com- 
 panies, all the Rail-road Companies, all the Canal Companies, 
 all the City Governments, all the County Governments, all 
 the State Governments, the General Government, and a great 
 number of the people. This is literally true. The only legal 
 tender is gold and silver. Whoever cannot pay, on demand, 
 in the authorized coin of the country, a debt actually due, is, 
 in point of fact, bankrupt : although he may be at the very 
 moment in possession of immense wealth, and although, on the 
 winding up of his affairs, he may be shown to be worth mil- 
 lions. 
 
 The consequences of this state of things will not be confined 
 to our own country. They will be felt wherever credit and 
 commerce is known. In Great Britain the effects will, in 
 all probability, be very momentous. Nor will they termi- 
 nate there. France, though she has little paper money, 
 is borne down by an immense public debt. So is Holland. 
 So are other countries of Europe. The explosion will 
 shake every government which has depended on credit as 
 a means of carrying on its fiscal operations. Thrones may 
 be toppled over, and ancient forms of government abolish- 
 ed. The political consequences may not extend beyond Eu- 
 rope: but the commercial consequences will be felt in Africa 
 and Asia. The panic of 1825, produced a scarcity of money 
 at the Cape of Good Hope, and bankruptcies in Calcutta. 
 The effects of this convulsion will be felt in Canton; and 
 though the Japanese resolutely refuse to trade with Christians, 
 
even they will not escape : they will be made to feel through 
 their commercial connexions with the Chinese. 
 
 The wonder, however, ought not to be that the catastrophe 
 has happened, but that it did not happen sooner. It was, as ap- 
 pears from Mr. Nicholas Biddle's declaration, prevented from 
 happening in the year 1825, by his hurrying from Philadelphia 
 to New York, and prevailing on a certain bank, in the latter 
 city, to accept of a draft on New Orleans, in place of no very 
 large amount of specie. In the same memorable year, the 
 Bank of England was prevented from stopping payment, by 
 incidents which, in themselves, were apparently of as little 
 moment as Mr. Nicholas Biddle's night-journey from Phila- 
 delphia to New York. 
 
 That the system would explode, has long been known ; but 
 the exact time none could foretell. Though' nothing is more 
 certain than death, nothing is more uncertain than the day of 
 its occurrence. Equally impossible was it to foresee the proxi- 
 mate cause of the catastrophe. In the middle states, the un- 
 expected and lamented death of Mr. Flemming, appears to 
 have hastened the event. This produced a run on the Me- 
 chanics Bank, of which he had been president, which was 
 followed by a run on the other banks of New York. But 
 while one spark fired the magazine in the middle states, an- 
 other must have fired it in the south-western for the banks 
 of Natchez, Mobile, and New Orleans, stopped payment be- 
 fore intelligence could be conveyed to them of what had oc- 
 curred in the east The system was as combustible as tinder, 
 in every part of the country. It would have blown up even 
 if Mr. Flemming had not died. It is very difficult to believe 
 that the principal banks had not some understanding with one 
 another, in regard to a result, which they must for some 
 time have been convinced was inevitable. Great would have 
 been their triumph if they could have caused the western 
 banks to be the first to stop. And not a little manoeuvring 
 has probably been played off between the banks of Philadel- 
 phia, New York, Baltimore, and Boston, each anxious that 
 the banks of some other city should take the lead in suspend- 
 ing payment, and each ready and willing to imitate the ex- 
 ample. The event has been such as must deeply impress the 
 
public with the nature of the system. The banks in the 
 great commercial emporium have been the first, in the mid- 
 dle states, to suspend payment ; yet the banks in the south- 
 western states cannot declare that this was the efficient cause 
 of their closing their vaults. They were forced to acknow- 
 ledge their inability to meet their engagements before they 
 could possibly know what had taken place in New York. 
 Thus the public have evidence of the unsoundness of the sys- 
 tem in its different parts. A spark dropped any where would 
 have fired the whole train. 
 
 The consequences will not be confined to the present age. 
 war between specie and paper money is now fairly begun. 
 There may be many traitors, and many trimmers, but there 
 can be no rieutralsj So long as this conflict lasts, the disasters 
 it will produce will be greater than would be occasioned by a 
 contest with the most powerful nation on the globe. The 
 sooner it is terminated, the better for all concerned. The re- 
 sult will determine the destinies of the country. 
 
 The opposition party ascribe the calamities of the present 
 times to the measures of the late administration. The ad- 
 ministration party ascribe them to the proceedings of the op- 
 position. In a certain extent, both may here be right, and 
 both may be wrong. The exact degree in which each is to 
 blame must be left to the decision of future ages. Men who 
 are in the vortex of party politics, are not competent judges of 
 either their own actions or those of their opponents. The 
 philosopher will endeavor to place himself in the situation of 
 the man of after-times, and strive to prevent his political sym- 
 pathies and antipathies, and also his personal interests from 
 influencing his judgment. The patriot will carefully inves- 
 tigate the causes of the present calamities, but he will do so 
 with the single eye of being thereby the better able to apply 
 a remedy, and to prevent the recurrence of evils. 
 
 A simple arithmetical equation will determine the degree in 
 which the State Banks, and the United States Bank, have con- 
 tributed to the present disastrous state of affairs. 'The United 
 States Bank has, or had, one principal and twenty-five sub- 
 ordinate offices. The State Banks are about seven hundred 
 in number, with one hundred and twenty branches, more or 
 
less. Now, as twenty-six are to eight hundred and twenty, 
 so are the evils produced by the United States Bank, to 
 the evils produced by the State Banks. 
 
 Another way of determining the degree of evil they have 
 produced, is by comparing the amount of their capitals. Then, 
 as thirty-five millions, are to two hundred and forty-one mil- 
 lions, less or more, so are the evils produced by the United 
 States Bank to the evils produced by the State Banks. 
 
 An examination of the peculiarities in the constitution of 
 different banks, and an inquiry into the particulars of their 
 management, might lead to a more accurate apportionment 
 of the censure each should bear. But this would be a tedious 
 operation, and, at the present moment, it may be dispensed 
 with. 
 
 Our present condition is very accurately set forth in the 
 Holy Scriptures. We therein read, that, " when the unclean 
 spirit is gone out of a man, he walketh through dry places, 
 seeking rest : and finding none, he saith to himself, I will re- 
 turn unto my house whence I came out, and when he cometh 
 he findeth it swept and garnished : then goeth he and taketh 
 to him seven spirits more wicked than himself, and they enter 
 in and dwell there, and the last state of that man is worse than 
 the first." 
 
 For man, read country, and you might suppose you were 
 reading American history. The unclean spirit is the Bank 
 of the United States. We cast it out, or apparently cast it 
 out, but it has returned upon us with seven spirits more wicked 
 than itself, that is to say, with the Deposit Banks, and the last 
 state of our country is worse than the first. 
 
 Such must ever be the result of efforts to cast out devils 
 by Beelzebub, the prince of devils. ! . England will have woful 
 experience of this as well as the United States. She has been 
 endeavoring to correct the evils produced by the smaller banks, 
 through the medium of one great bank. We have tried to 
 escape from the evils of a great bank, by cherishing the smaller 
 banks. The result in both countries will be essentially the 
 same, though differing according to circumstances. 
 
 The simple truth is, that paper money banking is radi- 
 cally wrong. Sophistry may disguise the fact as it will, 
 
but there is an everlasting distinction between a promise to 
 pay gold and silver, and an actual payment of gold and silver: 
 and if one man's promises to pay are made to go as far as an- 
 other's actual payment, whatever one man gains by paper 
 money another man loses. Besides this, tjirough JJie _work- 
 ingsof the Banking System, the natural operations of credit are 
 inverted. A bank note is nothing more than an evidence of 
 debt, and docs not differ in its essential character from any 
 other simple acknowledgment of debt. But when individuals 
 incur debts which it is known will remain for a time undis- 
 charged, they pay interest to those to whom the debt is due. 
 In the case of the banks this is reversed. It is to them that 
 trust is given, yet they receive interest as if they trusted 
 the public. Interest should, if paid to any, be paid to the 
 farmers, mechanics, and other producers and proprietors whose 
 capital is transferred from them to speculators, through the 
 medium of the notes the banks put in circulation. 
 
 Another very strong objection to our present mode of bank- 
 ing, is its being carried on by corporations. It should be an 
 object with a republican government, to preserve the indivi- 
 duality of its citizens. The moment two men are banded to- 
 gether by act jrfjaw^nd an artificial pnwpf foprphy given 
 
 them, the natural equilibrium ofjsocial order is disturbed. 
 This is done by our Banking system. The most powerful 
 men in the community are thereby confederated, and a money- 
 ed aristocracy established. 
 
 A no less strong objection to modern banking is, the ruinous 
 fluctuations it causes in all kinds of business, by alternate ex- 
 pansions and contractions of the currency. These are inse- 
 perable from the system. Bank credit, as a branch of com- 
 mercial credit, is affected by every wind that blows; and bank 
 medium is affected by every change in bank credit. If any 
 individual can discover the means by which the weight, mal- 
 leability, and other physical properties of gold can be imparted 
 to lead, that individual may be able to devise a plan by which 
 credit money may be made as secure and as stable a medium 
 as metallic money. 
 
 The especial object of the present publication is not, how- 
 '\cr. to expose all the eviN of paper money banking, but to 
 
10 
 
 endeavor to show, that, even if it shall be deemed best, or 
 found necessary to continue the system, the fiscal concerns of 
 the United States ought to be completely separated therefrom; 
 that it will be quite practicable to carry on the affairs of go- 
 vernment without the agency of either a National Bank or 
 the State Banks; and that great advantages will arise from 
 keeping the proper concerns of government as separate as 
 possible from the proper concerns of individuals and of cor- 
 porations. 
 
 The attempt to do this is not premature. 
 An effort will, no doubt, be made by some to reconstruct the 
 State Bank Deposit System, or to build up some other system 
 of the like character on its ruins. 
 
 Others will be very desirous to see the, Bank of the United 
 States re-chartered by Congress. 
 
 Others, who have constitutional scruples about the power of 
 Congress to charter a National Bank, will be anxious that 
 government shall employ, as its agent, the United States Bank 
 chartered by the State of Pennsylvania, 
 
 Others, again, who will be violently opposed tore-chartering 
 the Bank of the United States, will be warmly in favor of 
 chartering a Bank of the United States. This party will be 
 divided into many sub-parties. Some will be simple specula- 
 tors, looking solely to lucre. Others will be politicians, fond 
 enough of money, but loving, besides, both power and popu- 
 larity. They would like well enough to have a National 
 Bank for the exclusive benefit of themselves and their parti- 
 cular friends ; but in a case of emergency they will join hands 
 with the mere speculators, and, not without reluctance, share 
 the profits with them. Some of these will be modest enough 
 to cloak their scheme by calling their new National Bank a 
 Loan Office, or giving it some other name less offensive to the 
 democracy than that of " Bank of the United States." Some 
 will try to evade the force of constitutional objections, by pro- 
 posing the establishment of an immense bank in the District 
 of Columbia, with which alone the Treasury shall have imme- 
 diate transactions, while the great bank of the District of Co- 
 lumbia shall, through its connexions with the State Banks, 
 manage the money concerns of the government in various parts 
 
j OP THE 
 
 UNIVERSITY 
 
 of the Union. Others will go more directly to work and bring 
 forward plans for an enormous credit and currency institution, 
 in which the United States Government, each of the State 
 Governments, and a multitude of private individuals shall all 
 be partners together. Others, again, will be for converting 
 the very Government itself into a Banking Institution, through 
 the issue of Treasury notes, or some other kind of national 
 paper money, to be lent out for the benefit of individuals, or, 
 perhaps, of corporations. 
 
 Plausible, no doubt, will be many of the schemes which will 
 be brought forward, and plausible will be the arguments by 
 which they will be supported. But one objection will apply 
 to them all. The business of banking is entirely distinct from 
 the business of government; and any two subjects which are 
 so completely distinct ought to be kept completely separate. 
 This point is conceded by all the more intelligent of the advo- 
 cates of banking. All these declare, that the less government 
 has to do with banks, and the less banks have to do with go- 
 vernment, the better for both. The, government ought to 
 manage its fiscal concerns through the agency of its own offi- 
 cers. It should have no more to do with banking and broker- 
 age, than with tailoring and shoemaking. The trade in money 
 ought to be conducted in the same way as the trade in flour 
 or in tobacco. The business of receiving deposits, making dis- 
 counts, and dealing in exchanges, should be left to the free 
 competition of individuals. If there are any public banks, 
 they should be mere offices of deposit and transfer, like the 
 old Bank of Amsterdam. 
 
 Any institution, call it by what name you will, which shall 
 make loans and discounts, and in which the concerns of go- 
 vernment shall be mixed up with those of individuals, will be 
 a National Bank a bank of the United States. Such an in- 
 stitution must be either controlled by the government, or in- 
 dependent in its management. If controlled by the govern- 
 ment, money power and political power will be in the same 
 hands a union which will be fatal to republicanism. If in- 
 dependent in its management, and powerful enough to regulate 
 our seven hundred State Banks, with their one hundred and 
 twenty branches, it will be powerful enough to control both 
 
12 
 
 the government and the people. If not powerful enough to 
 regulate the seven hundred State Banks, and thus to control 
 both the government and the people, it will not answer the 
 principal end which the advocates of such an institution urge 
 as a reason for its establishment. 
 
 If instead of a National Bank, we select a number of State 
 Banks as fiscal agents, we have, instead of one, many United 
 States Banks. Calling them Deposit Banks does not alter 
 their nature. The United States Bank or banks of Mr. 
 Nicholas Biddle, was a league of twenty-six banks, situated in 
 different States, with one of those banks acting as head to the 
 others. The United States Bank or banks of Mr. Reuben 
 M. Whitney, was a league, at first of three or four banks, 
 gradually increased to ninety-one banks, situated in different 
 parts of the country. If Mr. Whitney's banks have done more 
 evil than Mr. Biddle's, it ought not thence to be inferred that 
 the financial talents of the former gentleman are inferior to 
 those of the latter. Ninety-one banks, with a capital of eighty- 
 one millions of dollars, will necessarily do more evil than 
 twenty-six banks with a capital of thirty-five millions. 
 
 If the head of twenty -six paper money institutions was so 
 powerful, that it was at one time a question which had the 
 most influence, Andrew Jackson, President of the United 
 States, or Nicholas Biddle, President of the United States 
 Bank; and if the mere agent of a half formed league of some- 
 thing less than one hundred State Banks had so much power 
 as to be able to bid defiance to all the force and talent of the 
 opposition, in Congress and out of Congress, (including Mr. 
 Biddle himself,) what will be the power of the man who shall 
 be at the head of a credit institution sufficiently strong to re- 
 gulate Mr. Biddle's bank, Mr. Whitney's banks, and all the 
 other banks in the country ? Suppose such a bank to be con- 
 trolled by the government: would not the President of the 
 United States, or, peradventure, the Secretary of the Trea- 
 sury, be the most powerful monarch on earth? Suppose it to 
 be independent of the government: might it not crush the go- 
 vernment, and, with the government, crush also the people ? 
 
 Happily we are not reduced to a choice of either of these 
 awful alternatives. The only reasons urged in favor of a Na- 
 
13 
 
 tional Bank, or for connecting the affairs of the United States 
 in any way with Banking institutions, are 
 
 1st. That the issues of the States Banks may be checked. 
 
 2nd. That exchanges between different parts of the coun- 
 try may be regulated. 
 
 3d. That the fiscal concerns of the United States may be 
 conducted with safety and convenience. 
 
 We shall take up these points in order ; bestow a few 
 thoughts on the two first, and treat of the third more at 
 large. 
 
 First, in relation to the power of a National Institution to 
 regulate the issues of the State Banks. The circumstances 
 which in ordinary times lead banks to expand are usually some 
 favorable change in business prospects, inspiring enterprising 
 men with confidence. The circumstances which lead banks to 
 contract their issues in ordinary times are, of course, exactly 
 the reverse of those which lead them to expand. A national 
 credit money institution would be operated upon by exactly the 
 same causes as the great body of State Banks, and in exact- 
 ly the same way. It would expand and contract just as they 
 did, in addition to which it would be exposed to additional 
 contractions and expansions from the favorable or unfavor- 
 able circumstances in which the government might be placed. 
 
 The natural tendency of such a bank would, however, be 
 to expansion. Unless it did a great amount of business it 
 would have very little effect on the State Banks. Neither 
 could the president of such an institution, unless he pursued 
 this course, make heavy dividends for his stockholders, or ac- 
 quire the reputation of being a great financier. To keep a 
 very large amount of notes in circulation is regarded by the 
 banks as evidence of superior generalship. The president 
 of the U. S. Bank has repeatedly called the attention of the 
 stockholders to his own skill and success in this branch of ma- 
 nagement. His predecessor was very unpopular with his stock- 
 holders because he did not flood the country with paper, and 
 raise the price of stock in the market. 
 
 The mere errors of judgment which might be committed by 
 the managers of a National Bank, sufficiently powerful to re- 
 gulate the State Banks, might throw the whole business of the 
 
14 
 
 country into confusion. The Bank of England has been the 
 chief cause of the commercial convulsions that country has 
 experienced. But for it, the private bankers, and even the 
 recently established joint-stock banks, would have done com- 
 paratively little evil. 
 
 By simply disconnecting itself with all kinds of credit in- 
 stitutions, the United States government may exercise a more 
 salutary influence over the State Banks than it can possibly 
 do by any corporation it may establish. "The constant ten- 
 dency of banks," as Mr. Biddle has said, " is to lend too much 
 and to put too many notes in circulation." The great secret, 
 then, in regulating the State Banks, is to prevent their lend- 
 ing too much and putting too many notes in circulation. And 
 to effect this a constant check is necessary. We shall have 
 such a check in steady operation if the United States govern- 
 ment constantly refuses to let the banks have its funds to work 
 with, to receive bank notes in payment of public dues, or to 
 employ banks in any case as fiscal agents. 
 
 It must be obvious to every person that if three or four of the 
 most wealthy and most respectable men in New York should 
 resolve to have nothing to do with banks or with bank notes, 
 such conduct on their part would go a considerable way to- 
 wards regulating the paper money institutions of that city. 
 In the first place, the banks would no longer have the spare 
 funds of these men to work upon. In the second place, as 
 these gentlemen would pay nothing but specie they would throw 
 quite a considerable amount of the precious metals into circu- 
 lation. In the third place, as they would receive nothing but 
 specie, the merchants with whom they had dealings would be 
 obliged to import specie from foreign countries if they could 
 not obtain enough at home to meet their just demands. By 
 all these operations the amount of metallic medium would 
 be increased, and the amount of paper medium diminished. 
 In the fourth place, the example of these three or four gentle- 
 men would have considerable effect on the rest of the com- 
 munity. 
 
 Now, the relation the United States government bears to 
 the people of the Union, is, in this respect, similar to that 
 which the three or four principal men bear to the rest of the 
 
15 
 
 citizens of New York, i The United States government is 
 the greatest capitalist, and the greatest dealer in the country .J 
 It has in one year sold twenty million dollars worth of real 
 estate, and hardly thereby diminished in a perceptible degree 
 the extent of its landed possessions. Its income from customs 
 alone amounts in some years to twenty millions of dollars. (Let 
 such a capitalist and such a dealer decline receiving and pay- 
 ing bank paper, and no small part of the people will begin to 
 make the proper distinctions between cash and credit whereby 
 the issues of the banks will be brought within the limits of 
 rationality. 
 
 Only separate the government from the banks, and those 
 institutions will be shorn of half their power to do evil. 
 
 As to the much talked of subject of exchanges, that can be 
 despatched in a few words. The proper trade between dif- 
 ferent parts of the country is not an interchange of bank notes 
 or of specie, but of commodities. If a national or a state 
 corporation is not requisite to carry the cotton of Alabama 
 from Mobile to New York, or the flour of Ohio from Cincin- 
 nati to New Orleans, much less is a chartered institution re- 
 quisite to convey from point to point the specie which may 
 be the equivalent of the different products of our industry, or 
 the bills of exchange which are the representatives of these 
 products. The natural rate of exchange is determined by 
 the cost of transporting specie. This, between the two most 
 remote trading places in the Union, can never exceed two or two 
 and a half per cent, in times of exemption from public calamity. 
 If the rate of exchange ever, under ordinary circumstances, 
 exceeds the limits above stated, it is owing to disorders in our 
 currency and commerce, produced by some of the operations 
 of paper money banking. If the United States government 
 resolutely refuses to receive any kind of bank paper, specie 
 paying banks will seldom make over issues, and exchanges 
 will regulate themselves. If the State governments support 
 the State banks for any length of time in the suspension of 
 specie payments, it is desirable we should have some standard 
 to refer to by which the extent of the depreciation of notes 
 in different parts of the country may be readily ascertained. 
 Otherwise it will be impossible for the trade between different 
 
16 
 
 parts of the country to be carried on with any degree of fair- 
 ness ; and a portion of dealers will confound together three 
 things which are perfectly distinct, viz: the rate of commer- 
 cial exchanges, depreciation of bank notes, and the usurious 
 interest which is sometimes demanded under the name of ex- 
 change, whereby they will for ever remain ignorant of the 
 truth in regard to these important particulars. 
 
 Thus, whether the State Banks resume, or whether they do not 
 resume specie payments, the true policy of the United States 
 government is to separate its fiscal concerns from 4 private 
 concerns of individuals and corporations. If the State Banks 
 resume specie payments, the refusal of the United States to 
 receive their notes will prevent over issues, and thereby pre- 
 vent over trading. If the State Banks do not resume specie 
 payments, this policy of the United States government will 
 enable the people to determine in what degree the currency 
 of various parts of the country is below the specie standard, 
 and to regulate their transactions accordingly. 
 
 We shall next endeavor to show that the fiscal concerns of 
 the United States may be carried on with perfect ease and 
 perfect safety without the use of bank paper, and without the 
 agency of any credit money institution, whether incorporated 
 by Congress or by a State government. This we hope to suc- 
 ceed in demonstrating to the satisfaction of every unpreju- 
 diced mind. 
 
CHAPTER II. 
 
 Outline of a System of Sub-Treasury Offices. 
 
 GREAT changes have taken place in the times since the last 
 quarter of 1834, which was the period for which the public 
 documents were consulted to ascertain the extent of business 
 Sub-T^iiisury Offices would have to perform. But no quar- 
 ter that has succeeded would afford as fair means of judging 
 what the nature and extent of our fiscal operations are likely 
 to be in future years, and under ordinary circumstances. The 
 two last years have been years of inflation of business and of 
 surplus revenue, not likely soon to return; and the public money 
 has been deposited in various places, and kept rolling through 
 the country, not to meet the wants of the General Government, 
 but to answer other objects. The last quarter of 1834, affords, 
 therefore, fairer means for judgment than any other that can 
 be selected. Our revenue may, for several years, be below 
 what used to be its ordinary amount; but the principles of a 
 sound fiscal system are equally applicable to any amount of 
 revenue, from one million to one hundred millions. 
 
 I. NECESSARY NUMBER OF SUB-TREASURIES. 
 
 On the 5th of January, 1835, the public moneys were, as 
 appears from the Treasurer's statement on that day, kept in. 
 forty-two local banks, and in the United States Bank, and four- 
 teen of its branches in all, in fifty-seven depositories. These 
 were situated in thirty-six places, viz: 
 
 Portland, Newport, Washington, Mobile, 
 Portsmouth, Providence, Richmond, New Orleans, 
 
 Boston, Bristol, Petersburg, Pittsburgh, 
 
 Salem, Albany, Norfolk, Cincinnati, 
 
 Burlington, New York, Fredericksburg, Louisville, 
 Hartford, Philadelphia, Lynchburg, Nashville, 
 New London, Harrisburg, Charleston, Natchez, 
 
 New Haven, Newcastle, Savannah, Detroit, 
 
 Middletown, Baltimore, Augusta, St. Louis. 
 
18 
 
 If there were Sub-Treasuries in the thirty-six places above 
 mentioned, performing for government the functions performed 
 by the banks, the Secretary of the Treasury would have as 
 many conveniencies for conducting the fiscal concerns of the 
 Union, as he had formerly in the United States Bank and its 
 branches, and as he had in the beginning of the year (1835) 
 in the selected State Banks. 
 
 II. EXPENSES OF SUB-TREASURIES. 
 
 The expenses of Sub-Treasuries would be less than those of 
 banks. Banks often deem it expedient to erect costly build- 
 ings, in order that they may impress passers by with an idea of 
 their great wealth, and thereby get credit among the people. 
 As their operations are multifarious, they require extensive 
 accommodations, The officers of banks have much labor to 
 perform in getting notes engraved and printed, in signing and 
 countersigning them, in discounting bills, in renewing accom- 
 modation notes, in exchanging specie for notes, and notes for 
 specie, in serving notices on the drawers and endorsers of bills, 
 In protesting bills for non-payment, and the like. From all 
 these labors the officers of Sub-Treasuries would be exempt. 
 The receiving of the money due to government, the safe-keep- 
 ing of the same, the payment of it when legally demanded, 
 and the transmitting of certain amounts from one place to an- 
 other, would be all the duties they would be required to per- 
 form. 
 
 A gentleman of Philadelphia, who is intimately acquainted 
 with the fiscal concerns of the United States in that city, states, 
 that they could all be performed by the following officers, at 
 the following salaries : 
 
 A Sub-Treasurer, at a salary of from 83000 to $3850 
 
 A Receiver of Public Moneys, 1600 to 1800 
 
 A Payer of Public Moneys, 1800 to 2000 
 
 Three Clerks, each at 750 to 850 
 
 A Messenger, a Porter, and a Watchman. 
 He is governed in his estimate by the amount paid to the 
 Cashiers, First and Second Tellers, and Clerks, in the most re- 
 spectable banks in Philadelphia. .He believes that men of 
 
19 
 
 equal business talents, equal respectability, and who could 
 give as good security as is given by the officers of the bank, 
 will be found willing to undertake the management of the 
 Sub-Treasury in that city, and that they would manage it 
 with fidelity. 
 
 The salaries of the various officers mentioned above, would, 
 at the highest rates specified, amount to $10,200 a year. 
 If to this sum should be added $100O as compensation to 
 the Messenger, Porter, and Watchman, $1000 for contin- 
 gent expenses, and $500 as interest on $10,000, which it 
 might be expedient to invest in permanent fixtures, the whole 
 necessary expense of a Sub-Treasury at Philadelphia would 
 be $12,700 a year. 
 
 In ordinary times, one-eighth part of the fiscal business of 
 the United States, is transacted at Philadelphia. Supposing 
 the expense of managing financial concerns to be no greater 
 in other places, the whole cost of a Sub-Treasury System 
 would be one hundred and one thousand and six hundred 
 dollars a year. 
 
 The people ought to know at how little expense, the busi- 
 ness which has been performed for them by the United States 
 Bank and its branches, and more recently by the Deposit 
 Banks, could be performed by the government's own agents. 
 
 The amount seems small, but other facts show that the 
 necessary expense of conducting the fiscal concerns of the 
 country, by the agency of Sub-Treasuries, would be inconside- 
 rable. 
 
 In seven of the places, in which there were on the 5th of 
 January, 1835, deposits of public money, the amount in each 
 was less than $1000. These places were Middletown, Al- 
 bany, New London, Harrisburg, New Castle, Fredericksburg, 
 and Lynchburg. In four other places, namely, Salem, New 
 Haven, Newport, and Bristol, the amount was less than $10,000 
 in each. 
 
 An account of the receipts and expenditures of government, 
 in different parts of the Union, would show that New York, 
 Boston, Philadelphia, Washington, New Orleans, Louisville, 
 and Detroit, would be the only places at which it would be 
 necessary to have Sub-Treasuries, with organizations sepa- 
 
rate from those of the Custom Houses, Land Offices, and Post 
 Offices. Even in the places where the receipts and payments 
 would be greatest, the number and amount of transactions 
 would be small when compared with those of a bank. Sup- 
 posing the revenue collected at New Fork to be nine mil- 
 lions a year, the average receipts in a day would be less than 
 thirty thousand dollars. In particular seasons the amount of 
 receipts is much greater than at others ; but even when the 
 amount is greatest, the business connected therewith could 
 be despatched without difficulty. In no one week of either of 
 the years 1833 or 1834, did the amount received at the Cus- 
 tom House, in New York, exceed 650,000 dollars, in Boston, 
 160,000, or in Philadelphia, 130,000. 
 
 In the last quarter of 1834, the number of payments 
 made, on account of the Treasury, by all the Deposit Banks 
 in the city of New York, was, independent of those for trans-? 
 fer drafts, one hundred and sixty-two, being less than two a 
 day. The whole amount of payments, on public account, in 
 that city, in that quarter, was, independent of transfer drafts 
 and payments by the United States Branch Bank, $711,162. 
 The payments averaged $4,389,88. 
 
 The payments made on account of the Treasurer, at the 
 Bank of the Metropolis, at Washington, during the -last quar- 
 ter of 1834, amounted to $1,001,265. The whole number of 
 payments was $351 less than four a day. They averaged 
 $2852,32. 
 
 The receipts of the Bank of the Metropolis, on the public 
 account, in the same period, amounted to $56,939, exclusive 
 of what was received by transfers from other banks. The 
 whole number of receipts was $301 less than four a day, and 
 averaging $184,23. 
 
 The Sub-Treasuries at New York and Washington would 
 have the most business. To be convinced that the- necessary 
 expense of the system would not be great, we need only 
 take into consideration the number, nature, and amount of 
 transactions. Many a village bank has more business to at- 
 tend to than would devolve on the principal Sub-Treasuries of 
 the union. 
 
 There are, indeed, payments to be made on account of va- 
 
21 
 
 nous public officers, as well as those to be made on account 
 of the treasurer of the United States. In the deposit banks 
 of New York, the receipts from public officers during the last 
 quarter of 1834, amounted to $480,130, the payments on their 
 account amounted to $568,000. In the Bank of the Metro- 
 polis the receipts from public officers during the month of Oc- 
 tober, 1834, amounted to $61,000, the payments to 70,000. 
 If the number of receipts and payments on account of public 
 officers should be equal to those on account of the Treasurer 
 of the United States, the payments in New York would be 
 about four a day. In Washington the payments would be 
 about eight a day : the receipts about six a day. If they 
 should be five or six times as numerous the whole business 
 could be performed without difficulty. 
 
 The expense of collecting the revenue from the customs is 
 about 1,300,000 dollars a year. It may be made a question 
 whether the establishment of a Sub-Treasury system would 
 add one cent to this amount. The task of reducing the num- 
 ber of officers is an invidious one. When brought down to the 
 lowest probable number there will still remain enough to per- 
 form all the duties required to be done in Sub-Treasuries. A 
 new apportionment of duties would be the only change that 
 would be necessary. If, however, additional officers should be 
 required, the whole expense need not, as has already been 
 shown, exceed one hundred thousand dollars a year. If 
 sound moral and political considerations require the govern- 
 ment to dispense with the agency of banks, it should not hesir 
 tate as to what course it should pursue, even if that course 
 should involve it in an expense of a million a year. 
 
 IIL ORGANIZATION OF SUB-TREASURIES, AND MANNER OP 
 TRANSACTING BUSINESS IN THEM. 
 
 The. business of the Sub-Treasuries, would naturally divide 
 itself into the receiving, safe-keeping and paying away of the 
 public money, together with that of transmitting certain 
 amounts from one place to another. So few would be the 
 number of transactions and so simple their nature that a com- 
 plex organization would not be necessary. So plain would 
 be the accounts that we might choose for chief book-keepers 
 
22 
 
 of these Sub-Treasuries, the disciples of the ingenious cord- 
 wainer, who daily threw into the leg of one boot a slip con- 
 taining a statement of his receipts for the day, and into the 
 leg of another boot a slip containing a statement of his ex- 
 penditures. 
 
 The names of the officers would proclaim their different 
 duties, and all persons who had any business to transact at the 
 Sub-Treasuries would know at once at what desk to apply. 
 
 The receiver of public moneys would receive the amount 
 paid in by public officers and by debtors to the public, and give 
 receipts for the same. All payments made to him would be 
 regularly entered into a register kept for that purpose. The 
 amount should be summed up at the close of each day, and 
 paid over to the sub-treasurer, who should in the margin of 
 the register enter an acknowledgment of the amount thus 
 received. 
 
 In like manner the other officers would go through their 
 respective duties, as designated by the names of their offices, 
 the Sub-Treasurer having the general superintendence of the 
 establishment, and the especial care of the public money. 
 
 That the amount of money in a Sub-Treasury might be, at 
 any moment, readily ascertained, if only an orderly mode of 
 keeping the specie should be adopted. To this end the safety 
 room in each of the principal Sub-Treasuries should be fitted up 
 with sliding shelves of such a size as to contain a definite number 
 of pieces of coin, say 1,000 or 5,000 dollars in half-dollars, eagle 
 or half-eagles. By simply drawing out the shelves it could 
 be seen whether they were full or not, and, in this way, the 
 amount of money in the largest Sub-Treasuries could be ascer- 
 tained in a few moments. 
 
 A fraud might, indeed, be practised by substituting base 
 coin for genuine. To guard against this the weight of each shelf 
 should be marked on it as tare, and suitable scales provided. 
 Then by putting the money shelves into the scales the accura- 
 cy of the ocular examination could tested. Inasmuch as 
 gold and silver differ in their specific gravity from other me- 
 tals, a hydrostatic balance would afford infallible means of 
 detecting any fraud that might be attempted by substituting 
 counterfeit coin for genuine. 
 
23 
 
 Especial reference is here had to the organization of the 
 principal Sub-Treasuries, and the manner of transacting busi- 
 ness in them, namely, the Sub-Treasuries at New York, 
 Washington, Boston, Philadelphia, New Orleans, Louisville, 
 and Detroit. But at whatever place public money is received, 
 retained, or disbursed, accounts should be kept and business 
 transacted according to one set of general principles. 
 
 To give unity and congruity to the fiscal system of the 
 country, all the Custom Houses, Land Offices, Pension Agencies, 
 and Post Offices, might be classed as Sub-Treasuries of the 
 second, third, fourth, fifth, or sixth order, according to the na- 
 ture and number of the receipts and payments made at each. 
 But as too great attention to details, when the object is to 
 establish general principles, serves only to confuse the mind, a 
 particular view of the rules and regulations which it would be 
 proper to adopt for the government of the inferior Sub-Trea- 
 suries, would here be out of place. Let only the principles of 
 the system be well matured in the organization of the seven 
 principal Sub- Treasuries, and it will be easy to apply them, 
 with such modifications as circumstances may require, to the 
 Sub-Treasuries of the inferior orders. 
 
 IV. TRANSMISSION OF PUBLIC FUNDS. 
 
 On this subject it is necessary to say but little, as it is satis- 
 factorily shown in the Treasury Report of the 15th of Decem- 
 ber, 1834, that all the transfers which the discontinuance of 
 the agency of the United States Bank makes it incumbent on 
 government to effect, will amount to only a few millions in 
 a year, and that as the accumulations of government funds are 
 at those points which have the rate of exchange in their favor, 
 a profit might be made on these transfers. The exchange 
 dealings of the United States Bank are stated to have amount- 
 ed, in one year, to two hundred and twenty-four millions. 
 The whole amount of transfers, which it would be necessary 
 for the United States government to make, in the course of 
 the year, would not exceed seven millions of dollars, and not 
 more than three millions of this amount would be to any great 
 distance. 
 
24 
 
 In relation to but few subjects has error been more current 
 than in relation to the agency of the United States Bank, in 
 the transmission of the public funds. The public revenue has 
 been collected at more than ten thousand points, if we include 
 the Post Offices, and disbursed at quite as many. The Bank 
 of the United States, has, on ordinary occasions, transferred 
 the public funds to and from only twenty-six of these points. 
 At the most difficult points of transmission, as, for example, 
 from the remote Land Offices to the places where branch 
 banks have been established, and from such places to the Indian 
 country and the frontier settlements, the United States Go- 
 vernment has transferred the public funds at its own risk and 
 its own expense. The agency of the United States Bank has 
 been confined to the transmission of the public funds to and 
 from the points most intimately connected by commerce an 
 agency by which a private exchange merchant would have 
 realized an immense fortune* 
 
 V. SAFEGUARDS AGAINST LOSS. 
 
 It must be evident that if the same precautions against fire* 
 robbers, and peculators, should be adopted by the government 
 that have been adopted by the banks, the security of the go- 
 vernment would be as great as that of the banks. Safety- 
 rooms, iron-chests, iron-doors, double-locks, double-keys, night- 
 watchmen, and security bonds, would be of as much service to 
 the one as to the other. The banks lose by bad debts ; but 
 all their losses from other sources, in the course of any given 
 year, bear a very small proportion to the aggregate amount 
 they have at stake. Supposing, then, that there were no other 
 guards against robbery, peculation, and fire, in Sub-Treasuries 
 than in banks, the risk of loss would be proportionally no 
 greater, and as the whole amount at risk would be trifling 
 compared with what is risked by the banks, the amount which 
 might, on the common doctrine of chances, be expected to be 
 lost, would, in a national point of view, be altogether insig- 
 nificant. 
 
 The safeguards against loss, would, however, be much 
 greater in Sub-Treasuries than in banks. 
 
25 
 
 In the first place, the safeguard against fire would be greater. 
 A fire might destroy great part of the valuables of a bank. 
 The most it would do in the safety-room of a Sub-Treasury, 
 would be to melt the gold and silver. The coin might dis- 
 appear, but the metal would remain. 
 
 In the second place, the security against robbers would be 
 greater. Instances have occurred of bank robbers carrying 
 oflf $70,000, and, perhaps, more, at one sweep, in paper money. 
 As the money in the Sub-Treasuries would all be metallic, 
 robbers, if they should break in, could not conveniently carry 
 off* any very great amount. 
 
 In the third place, the securities against peculation would 
 be much greater in Sub-Treasuries than in banks. In the Sub- 
 Treasury books there would be no fictitious accounts to con- 
 fuse and confound plain people no room for mystification. 
 
 The principal losses which the banks have sustained through 
 their officers, have been from the said officers having running 
 accounts, which gave them an opportunity of making over- 
 drafts, or from the said officers or their friends being engaged 
 in business connected, either directly or indirectly, with the 
 system of bank accommodations. There would be no oppor- 
 tunity for such acts of malversation in Sub-Treasuries, because 
 the private affairs of the officers would be kept totally dis- 
 tinct from those of the public. 
 
 In the fourth place, the slate of the affairs of a Sub-Treasury 
 could be subjected to much more frequent and much more 
 rigid examinations than the state of the affairs of a bank. 
 A committee of the directors of the United States Bank make 
 an examination once a quarter into the condition of the funds 
 of that institution. Bundles of notes are then handed them 
 by the cashier or one of the clerks, and they having full con- 
 fidence in the cashier or clerk, usually take his word for the 
 amount in each bundle. The real security against loss is thus 
 the fidelity of the sub-officer. The examination of the state 
 of the funds in the Sub-Treasury offices might be monthly, 
 weekly, and even daily, if required, and be, in each instance, 
 a real examination, provided only an orderly mode of keeping 
 the specie should be adopted. 
 
 Without adverting to other safe-guards which might be 
 
26 
 
 proposed, it may be affirmed that the chance of loss of money 
 in Sub-Treasuries would be altogether too small to afford the 
 slightest objection to the system. Of the millions which have 
 been deposited in the Mint every cent has been faithfully ac- 
 counted for, and money in the Sub-Treasuries of the United 
 States may he made as safe and as secure as human 
 prudence can make money in any mint or bank in the world. 
 Every week, or oftener if necessary, specific accounts of 
 the transactions in each Sub-Treasury could be forwarded to 
 the Treasurer of the United States, with duplicates to the 
 Secretary of the Treasury. In this way the whole system 
 would be subject to constant supervision. And while the 
 accounts of the collectors, post-masters, registers of land 
 offices, pay masters, and other officers, would be checks on 
 the accounts of the Sub-Treasurers; the accounts of the 
 Sub-Treasurers would, in their turn, be checks on those of 
 the receiving and disbursing officers. In a system founded 
 on these principles, with such minor regulations as experience 
 might show to be appropriate, it would be almost impossible 
 that any great abuse of the public funds should ever occur. 
 
CHAPTER III. 
 
 Objections Considered. 
 
 THE objections which will be made to the plan, of which an 
 outline is given in the preceding chapter, will be as various as 
 the passions, prejudices, and interests of those who wish, in 
 some way or other, to connect the proper affairs of govern- 
 ment, with the proper affairs of corporations and of individuals. 
 A prominent objection will be, that it will deprive the banks, 
 and thereby the customers of the banks, of the use of the pub- 
 lic money. To this, it ought to be a sufficient reply, that 
 there is no kind of hocus pocus by which one and the same 
 sum of money can, at one and the same time, serve the pur- 
 poses of both the government and the banks. The public 
 service will be likely to require more money than it will, for 
 some years, be easy to raise from customs and land sales. It 
 will be time enough to consider what disposition shall be made 
 of the surplus, when a surplus actually exists. It has been 
 through the attempt to make the same funds serve both the 
 purposes of the public and of corporations, that all the affairs 
 of the country have been thrown into confusion. 
 
 If there ever should be a surplus of public funds, we know 
 riot what particular merit there is in the banking and specu- 
 lating interests, that they should lay claim to its exclusive 
 use. A perpetual loan of money, without any demand of in- 
 terest for the same, is equivalent to a gift of money. If that 
 perpetual free loan of money, by the government to the banks 
 and speculators, gives them a credit which enables them to 
 transfer into their own possession the capital of producers and 
 honest proprietors, it is the most objectionable application of 
 the public funds that can be devised. 
 
 The maxim of a republican government should be JUSTICE 
 
28 
 
 TO ALL, FAVORS TO NONE. It cannot grant favors to some with- 
 out doing injustice to others. It should take no more from 
 the people, in the way of taxes, than is absolutely necessary 
 for public purposes. If, through any unforseen events, it 
 should accumulate a surplus, that surplus should be expended 
 on public works of a permanent character, within the design 
 of the Constitution, so that the amount of necessary taxation 
 in future years may be diminished. 
 
 If any classes of the community deserve the favor of govern- 
 ment, in any country, they are the farmers, mechanics, and 
 other hard-working men. But the surplus public fund divided 
 among them, either in the way of loan or gift, would amount 
 to so little to each, as to be unworthy of their consideration. 
 Add to this that our farmers, mechanics, and other hard-work- 
 ing men, want no favors from government : all they ask is 
 equal handed justice. And as they want no favors for them- 
 selves, they may demand as a right, that no favors be granted 
 to the banks and speculators, especially since granting favors 
 to them will be doing injustice, either directly or indirectly, 
 to the great body of the community. 
 
 The average amount of public money in the banks, did not, 
 for a series of years preceding 1835, exceed seven million dol- 
 lars. Against a part of this, warrants were constantly outstand- 
 ing, so that the amount the banks could use for their proper 
 purposes did not probably exceed five millions of dollars. Now 
 five millions of public money may be quite sufficient to build 
 up a National Bank, or a league of State Banks, and in con- 
 junction with a law making the notes of such bank or banks 
 receivable for customs and lands, give those institutions such 
 power and credit, that certain leading speculators may, through 
 their operations, realize immense fortunes. But five millions, 
 fairly divided among a nation of fifteen millions, will be only 
 one-third of a dollar to each. Supposing that amount to re- 
 main permanently in the Treasury, the interest on it, at six 
 per cent, would be $300,000 a year. This, divided among the 
 individuals that compose the nation, would be two cents a 
 piece. 
 
 Wherever there is an abundance of wealth there will be a 
 portion of it not in active use. We have much excellent land, 
 
29 
 
 (the great source of wealth,) lying unfilled. We have houses 
 which are occasionally untenanted, wharves occasionally un- 
 occupied, ships occasionally without freight. Such is the na- 
 tural effect of having abundance of all things. The portion 
 of money capital which, under a Sub-Treasury System, would 
 not be every moment productive, would be small when com- 
 pared with the portions of other capital which would not be 
 constantly in active employment. 
 
 As long ago as 1828, the aggregate wealth of the nation 
 was estimated by political economists, at ten thousand million 
 dollars. A little pocket money is as necessary to nations as to 
 individuals ; and five million dollars are, to a nation worth ten 
 thousand millions, as five dollars are to a man worth ten thou- 
 sand dollars. 
 
 Supposing, however, five millions too large an amount to be 
 constantly in the Treasury, it may be considerably reduced 
 by substituting a warehousing for a debenture system. The 
 money now paid in, afterwards to be paid out on account of 
 drawbacks, would then be left in the hands of the merchants, 
 and the use of it given to those to whom it properly belongs. 
 The interests of commerce call loudly for an extension of the 
 warehousing system ; and the call ought not to be disregarded, 
 especially since attention to it would aid in perfecting our 
 fiscal system. 
 
 In sober truth, however, the public service will never, in 
 time of peace, require us to keep so large an amount on hand 
 as seven millions, or even five millions, or even three millions. 
 Under a Sub-Treasury System, our monthly payments may 
 be so arranged as to be met by our monthly receipts; and the 
 balance in all the Sub-Treasuries of the Union, need seldom 
 exceed one million dollars. 
 
 If any individual should, after duly considering the subject, 
 still object to a separation of the concerns of government from 
 those of corporations, on the ground that this policy would de- 
 prive the "public at large" of the public funds, he may not, 
 perhaps, expose himself to the suspicion of wishing to apply 
 the public funds to his own private uses, but he will certainly 
 commit the most egregious blunder of mistaking the bankers 
 and speculators for " the public at large." 
 
30 
 
 The next objection that may be brought against a Sub- 
 Treasury System may be, that it will be inconvenient to carry 
 on the fiscal concerns of the United States with gold and silver. 
 This objection may be disposed of in a few words. 
 
 Mr. Raguet states, in one of the numbers of his late Journal 
 of Political Economy, that he has found by experiment, that 
 a clerk can count four thousand dollars an hour. A cashier 
 of a bank, to whom we have applied for information, says, 
 much would depend on the skill of the clerk, but he should 
 look upon four thousand an hour as very slow work. Another 
 gentleman, who was for some time assistant in a bank, says, 
 he could " count out gold as fast as he could shell corn." 
 
 At the Sub-Treasury at New York, where the greatest 
 amount of revenue would be paid in, the receipts would pro- 
 bably be between thirty thousand and forty thousand dollars 
 a day, on an average. Supposing the sum to be paid in half 
 eagles, the receiving clerk, even if he should count but four 
 thousand an hour, would be employed but two hours a day- 
 In times of the greatest stress of business, the receipts would 
 hardly exceed one hundred thousand dollars a day. Then he 
 would be employed five hours. 
 
 Half eagles are here taken as the basis of the estimate, be- 
 cause there is no doubt that, under the present mint valua- 
 tion, considerable part of the revenue would be paid in gold. 
 If silver should be used to any great extent, the labor of 
 counting would be increased. Then six hours a day of the 
 clerk's time would be occupied in counting the revenue at 
 New York. 
 
 The inconvenience to the receivers of the revenue would 
 certainly not be very great ; and to payers, it would be very 
 trifling indeed for it would be divided among many. Neither 
 payers nor receivers need, if they choose, undergo the labor of 
 counting large sums. Coins, to be a legal tender, must be 
 of a certain weight and fineness. The value of any given 
 mass of coins can readily be ascertained by a hydrostatic 
 balance. Thus the operation of counting, which would re- 
 quire hours, may be superseded by that of weighing, which 
 would occupy only minutes. 
 
 In addition to this, it should be considered that the drafts 
 
31 
 
 which the Treasurer of the United States would issue on all 
 the Sub-Treasuries put together, would, in each year, equal, 
 or nearly equal the amount to be paid in by public debtors 
 Those having claims on any Sub-Treasuries might transfer 
 their drafts to those having payments to make, and in this 
 way large amounts might be liquidated. 
 
 The carting of silver from the banks to the Land Offices, 
 and back again from the Land Offices to the banks, has excit- 
 ed much ridicule. Under a Sub-Treasury System, this cart- 
 ing and re-carting would be unnecessary. Any person who 
 wished to purchase a tract of public land, might deposit his 
 silver or gold in the nearest Sub-Treasury, receive a certifi- 
 cate for the same, and pay in his certificate at any Land 
 Office where he might choose to make a purchase. 
 
 Thus the objection drawn from the inconvenience of making 
 payments to the government in gold and silver, vanishes on a 
 close examination. 
 
 A third objection will probably be, that it will be impossi- 
 ble^ so long as the banks suspend specie payments, for debtors 
 to government to pay the amount of their duty bonds in gold 
 and silver.* In support of this objection it will be urged that 
 a country cannot, at the same time, have two circulating me- 
 diums of the same numerical denominations, and yet so totally 
 distinct in their nature as specie and paper. The medium of 
 the less value, it will be added, will drive the medium of 
 the greater value out of use. 
 
 In reply to this, it may be urged, that though the free issue 
 of paper money, by banks, city governments, and private 
 dealers, will certainly drive specie out of general circulation, 
 it will not, unless the Constitution of the United States be 
 violated, drive it all out of the country. Gold and silver, 
 whether in the form of bullion or coin, are merchandise. 
 They always have been merchandise, and always will be. 
 Specie is only merchandise of a peculiar character. This is 
 the merchandise which the government has a lawful claim to 
 receive, and the merchandise which the merchants have en- 
 tered into solemn stipulations to give. They can obtain it 
 from two sources. They can exchange the merchandise which 
 they have in their stores, for the gold and silver which indi- 
 
32 
 
 viduals have, in the present moment of panic, very prudently 
 stored away in their chests and drawers; or they may send their 
 cotton and other commodities to foreign countries, and there- 
 with purchase gold and silver. As foreign coins are a legal 
 tender for customs, they need not send such as they import to 
 the Mint to make them available in the payment of debts to 
 the government. 
 
 But it is not necessary that an additional dollar's worth of 
 the precious metals should be imported to enable the mer- 
 chants to pay what they owe to the government. According to 
 the estimate of some of our leading statesmen, the whole 
 amount of gold and silver coin in the country is not less than 
 eighty million dollars. But a small portion of this will be re- 
 quisite to meet the demands of the Treasury: for what the go- 
 vernment receives one day, it will pay out the next. In this 
 way, even though all the State Legislatures shall support the 
 banks in the suspension of specie payments, there will be *a 
 circulation of specie in the country, though a very limited one, 
 viz : a circulation from the public debtors to the government, 
 from the government to those having just claims upon it, and 
 from the latter to those with whom they have dealings, whence 
 it will find its way back to those having payments to make to 
 government. Thus the circle will be completed; and as the 
 same pieces of coin may be repeatedly paid into the Treasury 
 and paid out again, the collection of a revenue of twenty mil- 
 lions may not require the use of more than five millions, per- 
 haps not more than two millions of metallic money. 
 
 When the Bank of England suspended specie payments 
 from 1797 to 1821, the government sanctioned the measure. 
 Yet there never was a time in which gold and silver money 
 could not be purchased in England, with either bank notes or 
 merchandise. 
 
 When the American banks suspended specie payments in 
 1814, the General Government connived at their proceedings, 
 and the people, from patriotic motives, endured the inconve- 
 nience without much murmuring. Yet, during that period, 
 specie could be procured by all who were willing to pay a fair 
 price for it. Now the General Government cannot possibly 
 receive inconvertible paper, and though the commercial classes 
 
->F / 33 
 
 N^ALJ '&r 
 
 in large towns may sustain the banks in their present conduct, 
 they will not find their country brethren, the farmers, heartily 
 co-operating with them in this policy. 
 
 There is too much reason to fear that the greater number 
 of the State Legislatures will sanction the suspension of specie 
 payments, and that the city governments will increase the 
 mass of paper money by issuing tickets for small amounts. 
 The tendency of these measures will be, in the first place, to 
 cause specie to be hoarded, and in the second, to drive it out 
 of the country. Yet this tendency will, in some degree, be 
 counteracted by the general feeling of the farmers in favor of 
 metallic money, and by the inflexible integrity of the General 
 Government in refusing to sanction the deep-laid project for 
 the depreciation of the currency. Through the combined 
 action of the agricultural interest and of the General Govern- 
 ment, it may be hoped, that a larger amount of specie will be 
 retained in the country than was in it during the time of the 
 former suspension, and thus that it may be more easily pro- 
 cured by those to whom it is indispensable. 
 
 Whatever measures the State Governments may adopt 
 to sustain the credit of their bankrupt banks, they cannot be 
 more severe than those which they formerly adopted to sustain 
 the credit of their own paper money and of continental money, 
 during the revolutionary war. In vain did they pass laws, 
 visiting with the severest penalties those dealers who made a 
 difference between the paper and the specie price of their 
 goods. The laws could not be enforced. There were two 
 prices for every thing a paper price and a specie price. 
 And for two or three years near the close of the war, specie 
 was more abundant in the country than it ever was before. 
 
 How many of the scenes of the old paper money times are 
 to be acted over again in these modern days we shall not ven- 
 ture to predict. But one thing is certain, let the State Go- 
 vernments do what they will to sustain the broken banks, and 
 let the City Governments increase the mass of paper money 
 by issues of small notes, they will not, both together, be able 
 so effectually to drive specie out of the country as not to leave 
 enough to serve the fiscal purposes of the General Govern- 
 
34 
 
 merit: and this is the only point of view in which it is herene- 
 cessary to consider the subject. 
 
 But it will probably be urged that, " although the govern- 
 ment might dispense with bank agency, still it ought not to 
 do so, because it will be only through the employment of 
 bank agency in some form or other, that it can prevail on the 
 banks generally to resume specie payments, and that to effect 
 so desirable an object not only the capital of the government 
 should be employed, but its credit should be strained to its 
 utmost extent." 
 
 In this argument the friends of the United States Bank, and 
 of the Deposit Banks, will probably unite, however they may 
 differ on other points. It opens a wide field of inquiry, and no- 
 thing that can be said will possibly convince the banking and 
 speculating interests that their argument is unsound, and for 
 this plain reason, viz : it is their interest that the concerns of 
 government shall, in some way or other, be mixed up with 
 the concerns of corporations and of speculators. It may, how- 
 ever, be briefly remarked, 
 
 First. That the banks are institutions incorporated by the 
 states, and it is the duty of the government and people of each 
 state to bring the institutions of that state into order. 
 
 Secondly. That from the result of the effort to put down 
 the United States Bank, by the agency of the Deposit Banks, 
 banks do not appear to be the best instruments in the world 
 for bringing one another into order. 
 
 Thirdly. That till the United States Bank shall repay ta 
 government the eight or nine millions for which it stands in- 
 debted, and till the State Banks shall repay the thirty millions 
 of public money they have received, neither the United States- 
 Bank, nor the State Banks, can be regarded as entitled to 
 further favors from government in the way of either capital 
 or credit. The forty millions which the banks now owe to 
 government, is so much taken out of the pockets of the tax- 
 payers. Would you make that forty millions eighty, or would 
 you make it one hundred and twenty 1 
 
 Fourthly. That the efficient cause of the resumption of 
 specie payments in 1817, was not the Bank of the United 
 States, but the resolution of Congress, directing nothing 
 
35 
 
 but specie and the notes of specie-paying banks to be re- 
 ceived by collectors of public money. The Bank of the 
 United States was a mere instrument for carrying this reso- 
 lution into effect, and an exceedingly clumsy and ill-worked 
 instrument, which, by the mode of its operation, did more evil 
 in 1819 than it did good in 1817. The resumption of specie 
 payments could have been effected better without it than 
 with it. 
 
 Fifthly, That it is not expedient for the United States Go- 
 vernment to grapple with seven or eight hundred paper money 
 institutions, each wielding a gigantic power. We may think 
 ourselves happy if it escapes unscathed from their grasp. 
 Creating a new National Bank, or a new league of State 
 Banks to contend with the " great monster" and the troop of 
 " little monsters," will only be creating new enemies as much 
 lo be dreaded as those which now exist. 
 
 Sixthly. That the time in which the banks in different parts 
 of the country will be able to resume specie payments, without 
 pressing too heavily on their customers, will differ according to 
 circumstances. Any direct, general action on them might 
 do harm. The negative action of having nothing to do with 
 them is all that is expedient in the United States Government, 
 at this moment, to adopt. Let public opinion and the State 
 Legislatures do the rest. 
 
 Arguments of this kind might be multiplied greatly, and if 
 no suitable answer could be found to them, it would then be 
 urged that, " inasmuch as the General Government is itself 
 bankrupt, a bank of some kind is absolutely necessary to re- 
 establish its own credit." But this is not necessary. The go- 
 vernment's credit is not gone. It is as sound as ever, and will 
 carry it safely through the present crisis, unless the bankers 
 and speculators should again get it into their clutches. 
 
 To reply to other objections, by way of anticipation, would 
 be only to task the ingenuity of the friends of paper money 
 in inventing new ones. Some will object to the details of the 
 method proposed in this publication for carrying on the fiscal 
 concerns of the Union. No doubt they could be modified with 
 great advantage. The single point of importance is to sepa- 
 rate the proper concerns of government from the proper 
 
m 
 
 concerns of individuals and of corporations. Let this once 
 be done, and a sound fiscal system cannot fail to be adopted. 
 
 If we have not succeeded to the perfect satisfaction of every 
 reader, in replying to all the objections that may be urged 
 against a Sub-Treasury System, we would respectfully ask 
 him if the advocates of other systems have been more success- 
 ful ? There are only three modes of conducting our fiscal con- 
 cerns, namely: through an institution incorporated by Con- 
 gress, through institutions incorporated by the states, or by the 
 government's, and, consequently, the people's own officers. 
 
 For the true character of the United States Bank, or Na- 
 tional Bank System, see the speeches of the members of Con- 
 gress, and the newspapers friendly to the late administration. 
 
 For the true character of the Deposit Bank, or State Bank 
 System, see the speeches of the members of Congress and the 
 newspapers friendly to the opposition. 
 
 For confirmation of the truth of many of the declarations 
 of both parties, behold the present condition of the country 
 a condition into which it has been brought by the joint opera^ 
 tions of the United States Bank and of the State Banks.. 
 

 CHAPTER IV. 
 
 Concluding Remarks. 
 
 THE fiscal system of the United States, is, considered in it- 
 self, by no means complex. The receipts of the government 
 are from customs, postages, fees to certain officers, and sales 
 of public land. The payments are for the support of the 
 army and navy, and the civil establishment: for transactions 
 with the Indians, and pensions to revolutionary soldiers. Con- 
 nected with these, are incidental receipts and expenditures, 
 but they are, with a few exceptions, of such a nature as to be 
 appropriately brought under these general heads. 
 
 The postages, fees to marshals, clerks of courts, &c., have 
 always been collected with the utmost ease by the officers of 
 government, and with no other inconvenience to the tax payer 
 than that which the paying of money always occasions. 
 
 The business of disposing of the public lands is as plain and 
 simple an operation as can well be imagined. 
 
 The greater part of the revenue from customs is collected at 
 a few ports. The nett amount from this source, in the year 
 ending December 31st, 1834, was $13,770,736, of which 
 amount about $13,140,000 accrued at seven ports, viz: 
 8,000,000 at New York, 2,000,000 at Boston, 1,300,000 at 
 Philadelphia, 800,000 at New Orleans, 500,000 at Baltimore, 
 400,000 at Charleston, and 140,000 at Portland. The resi- 
 due, viz: 8630,000, was divided among one hundred and 
 twenty-one custom houses. 
 
 Our business of disbursing, if we except disbursements on 
 the Indian frontier, is simpler than that of any other General 
 Government. This is owing to affairs, properly local, being 
 in our country the appropriate business of the state, county, 
 city, and township authorities. In making disbursements on the 
 
38 
 
 Indian frontier, banks can afford us no aid. In other places 
 we do not want their assistance. Our fleets come to the ports 
 where the greatest amount of revenue is collected. Part of 
 our little army garrison the fortifications which defend these 
 very ports. Great part of the persons in the employ of go- 
 vernment live on the very spots where the revenue is received. 
 Those who live in more remote places, would be very happy 
 to receive orders for their compensation on the principal Sub- 
 Treasuries, for they would bear a premium as bills of exchange. 
 
 Our Post Office establishment is now so arranged, that 
 it may yield great aid to the Treasury Department. The 
 ramifications of our post roads resemble the ramifications of 
 the veins and arteries in the human body. Every part of the 
 country, no matter how remote, and every place, no matter 
 how small, can be reached through the medium of the Post 
 Office establishment. Through it the government can collect 
 a debt at any given point, and pay a claim wherever due. 
 
 In point of fact, the officers of government have at all times 
 performed much of the public duty which the people have sup- 
 posed was performed for them by the banks. The business of 
 collecting and disbursing has almost every where been per- 
 formed by the officers of government, and for the proper dis- 
 charge of these duties they have always been held responsi- 
 ble. The business of safe keeping the public funds, and trans- 
 mitting certain amounts from place to place, is all that the 
 banks have done, (except when acting as agents for collecting 
 and disbursing officers,) and all for which they have been held 
 responsible. In some of the points where the public money has 
 been most exposed, as, for example, at the remote Land Offices, 
 the safe keeping of it has devolved entirely on the officers of 
 government ; and the transmission of money, where attended 
 with most danger and expense, has, as observed in another 
 place, been generally performed at the risk and cost of the' 
 government. 
 
 A Sub-Treasury System is not something absolutely new. 
 We have one at this moment. We always have had one. 
 Every Land Office has been, in a certain sense, a Sub-Trea- 
 sury ; for public money has been received there, kept there, 
 and some public claims discharged there. The same is true 
 
39 
 
 of many of the Post Offices and Custom Houses. But our pre- 
 sent system, owing to the dependence we have placed on 
 banks, wants that congruity, uniformity, and centralization, 
 which is desirable, and many of the safeguards which are 
 almost indispensable. But let it once be determined that 
 the proper concerns of government shall be separated from 
 the private concerns of corporations and individuals, and 
 surely the combined wisdom of Congress, the Executive, and 
 the people put together, will be able to devise some means by 
 which to effect so very simple an object as collecting, secur- 
 ing, and disbursing, the public money. 
 
 Through the separation of public from private affairs, the 
 public officers will be the better able to watch over the public 
 concerns, and the public at large the better able to watch the 
 conduct of the public officers. Increased economy in every 
 department of government will be the consequence. 
 
 For the welfare of the country, it is absolutely essential that 
 the fiscal operations of the United States be placed on such 
 a basis that they may be embarrassed as little as possible by 
 the doings of banks and speculators. 
 
 A Sub-Treasury System is the common sense system. It 
 is the system which would naturally suggest itself to every 
 man who would set down to consider the subject free from 
 prejudice. Yet it is matter of doubt whether it will be adopt- 
 ed, and for one plain reason it will aid no ma?i's private 
 speculations. Both earth and hell will, at the next session of 
 Congress, be put in commotion to advance the views of the 
 speculators, and while common sense is cast behind the back, 
 common justice will be trampled under foot. 
 
 The banking interest exercises an influence in this country 
 similar to that which the landed interest exercises in Great 
 Britain. Their number, fairly told, may not exceed one 
 hundred and fifty thousand men, but with their women and 
 children, and their dependents of all kinds, they may amount 
 to one million five hundred thousand, or one-tenth part of the 
 nation. It -would seem at first sight as if there was little dan- 
 ger to be apprehended of one-tenth part of the nation having 
 more influence in its general councils than the other nine- 
 tenths. But this danger does exist. The bankers and specu- 
 
40 
 
 lators are the most powerful men in the country. They have 
 at this very moment enclosed some members of Congress within 
 their drag-net, and will make a wide sweep to catch as many 
 more as they can. They are leagued together by a common 
 principle of interest, a tie far stronger than parchment bonds. 
 They command nearly all the daily, and the greater number 
 of the weekly papers, those powerful instruments for good or 
 evil. They control the principal city governments. Their 
 influence is felt in every State Legislature. Many of them 
 are men of great powers of mind. They write with ability, 
 and speak with eloquence. Not a few of them are, moreover, 
 very estimable men in most of the relations of life. 
 
 Such an influence as this must naturally and necessarily 
 exercise great influence in the councils of the nation. And 
 if the people do not stand forth, and in their primary assem- 
 blies support those members of Congress who support the 
 people's interest, the conflict in both the Senate Chamber and 
 the House of Representatives may be very doubtful. 
 
 A stop-law in favor of the banks has been passed by the 
 Legislature of New York. The stop-laws passed by Kentucky 
 and other western states have been standing themes of re- 
 proach* But the stop-laws of the west had for their ostensi- 
 ble object, the relief of the injured. The stop-law of New 
 York is for the benefit of the injurers. The banking interest 
 throughout the country will make strenuous efforts to have 
 laws, similar in character to that of New York, enacted by 
 every State Legislature. 
 
 Nor will they stop here. They will make every exertion 
 to compel Congress to make paper money of some kind' the 
 legal currency of the country. 
 
 Stop-laws in favor of banks will soon require stop-laws in 
 favor of individuals. Then the history of Kentucky, from 1818 
 to 1828, will be the history of the whole United States to 
 future generations. 
 
 In this alarming state of things, a writer, from whom better 
 things might have been expected, has exhorted the people to 
 make the United States Bank their rallying point. Let theirral- 
 lying point rather be the Constitution of the United States, and 
 the laws of the same and of the different states enacted in con- 
 
41 
 
 fortuity thereto. The Constitution of the United States de- 
 clares that no state " shall coin money, emit bills of credit, 
 make any thing but gold and silver coin a tender in payment 
 of debts, pass any law impairing the obligations of contracts, 
 or grant any title of nobility." A fundamental law of the 
 United States declares that duties and fees shall be received 
 in " gold and silver coin only. " 
 
 If the Constitution of the United States be preserved invio- 
 late, and the fundamental laws of the country left untouched, 
 all will at last come right. If the opposite course be pursued, 
 injustice will triumph in a thousand ways, and such a state of 
 society be produced, that thousands of men will throw aside 
 even the mere pretension to honesty. 
 
 Considerations of temporary expediency as well as those of 
 lasting benefit, require that we should continue in force the 
 laws which make gold and silver the only legal currency 
 of the United States. Bank paper will, probably, for a time, 
 be the principal commercial medium. It is desirable to have 
 a standard by which we may be able to determine the degree 
 in which the paper of different parts of the country depreciates. 
 During the last war we had such a standard, for then the 
 banks of New England continued specie payments, and the rate 
 of exchange in favor of Boston, showed, after making the neces- 
 sary deduction for the cost of transporting specie, the degree 
 of depreciation of notes in various parts of the Union. Now 
 the stoppage of specie payments is universal, and quotations 
 of the prices at which bank notes are sold at different places, 
 will afford no certain index to ttieir degree of depreciation* 
 Two things, totally distinct in themselves, will be confounded 
 together, viz : the simple rate of commercial exchange and 
 the depreciation of paper money. Let, however, the United 
 States Government continue to demand specie at all the 
 Custom Houses, all the Land Offices, all the Post Offices, and 
 wherever else it collects a claim, and there will be, in every 
 part of the country, a standard by which the exact deprecia- 
 tion of bank notes can be determined. The notes of every bank 
 will vary in value according to their distance from the place 
 where issued, and according to a multitude of other circum- 
 stances. Yet trade may be carried on, with this most objec- 
 
42 
 
 tionable medium, with some slight approximations to fairness, 
 provided only we have a standard to which to refer the depre- 
 ciation of the paper of each bank at different times and places. 
 If, for example, the bank currency of Mississippi should de- 
 preciate twenty per cent, below the bank currency of Phila- 
 delphia, the merchant of Mississippi must add twenty per cent, 
 to the price of his goods in order that what he receives on his 
 sales may enable him to pay for his purchases. 
 
 If the United States Government shall resolutely continue 
 to demand specie in payment of its claims, there will be a cir- 
 culation of specie in the country, though to a very small amount, 
 and in a very little circle. But if it perseveres in this course, 
 one little circle of this kind will be added to another, till at 
 length they will overspread the whole country. Any city or 
 town government that chooses can, within one week, or at 
 furthest within one month, make silver the circulating medium 
 within its own limits for all amounts less than one dollar. To 
 do this it has only to call in its change tickets, and compel the 
 associations and individuals who have issued the like currency 
 to forbear further violations of the laws in this respect provid- 
 ed. That, in the panic produced by the bankruptcy of the 
 banks, silver change should disappear, was natural. But it 
 would have reappeared within one week, if the city govern- 
 ments, and other violators of the laws of the states, had not 
 taken the most effectual means to banish even copper from 
 circulation by their abundant issues of paper. 
 
 Every state within the Union can, in no very long time, 
 make gold and silver the medium for paying wages, and the 
 general medium of retail trade. It can do this by first pro- 
 hibiting, under such penalties as shall be effective, the issue of 
 all notes for less than two dollars, where notes so small have 
 actually been used, and gradually rising to those of higher de- 
 nominations. In this way, each state acting for itself, a gene- 
 ral resumption of specie payments may be effected, with much 
 less inconvenience than would be possible if the General Go- 
 vernment should attempt to act directly on the State Banks, 
 or establish a National Bank to regulate the paper money 
 institutions throughout the country. 
 
 The state which shall first undertake this work will perform 
 
43 
 
 it with the greatest ease, for it will draw great part of the 
 necessary supply from the adjoining states. 
 
 Measures of this kind would quickly draw out a part of the 
 specie that has been hoarded, and enough gold would probably 
 be brought into circulation to pay travelling expenses. If the 
 eighty millions now in the country will not suffice, we can 
 easily add eighty millions more. Every tyro in political eco- 
 nomy knows, that an efficient demand ensures a supply. He also 
 knows, or ought to know, that while abundant issues of paper 
 cause specie to flow out of a country, destroying the paper 
 causes specie to flow in. This is the way to create an efficient 
 demand for gold and silver, and of all demands it is the one 
 which is most readily met. Light of carriage and small in 
 bulk, when compared with their value, the precious metals defy 
 all the political regulations which are intended to prevent 
 their obeying the laws of effective demand. They flow into 
 a country where such effective demand exists as naturally as 
 the waters of rivers flow into the sea. And they flow in from 
 all quarters. If we want teas we can procure them with ad- 
 vantage only from China. If we want British broad cloths we 
 can get them only from England. But if we create an efficient 
 demand for gold and silver in the United States, every commer- 
 cial country will contribute a portion of the supply. With- 
 draw your paper money, and the precious metals will flow in 
 from Mexico and South America, from the West Indies, from 
 England, from France, from Holland, from the East Indies, 
 and from China. 
 
 Within the limits of a pamphlet, it is impossible to set forth 
 all the advantages that will arise, both directly and indirectly, 
 from completely separating the fiscal concerns of the United 
 States from the affairs of corporations and of individuals. Equal- 
 ly impossible is it to depict all the evils which will follow, if the 
 United States Government shall, by means of any credit money 
 institution or institutions, whether created by itself or by the 
 states, endeavor to remedy the evils produced by our existing 
 banks. 
 
 Let there be no more efforts to cast out devils by Beelzebub, 
 the prince of devils. We have been quite long enough at this 
 kind of work already. We have made two efforts to regulate 
 
44 
 
 credit and currency by means of State Banks, and two by 
 means of United States Banks. All these have failed, 
 as is proved by every year in the country's history since 
 the establishment of the old Bank of North America. 
 Credit and currency have never been sound with us, 
 though in some years they have appeared to be so, because in 
 those years they were less unsound than in others. Yet hardly 
 has an interval of three years elapsed, since the close of the 
 revolutionary war, without manifesting in a striking way the 
 tendency of our banking system to produce disorders in com- 
 merce, and confusion in the various operations of society. To 
 be silent in regard to other epochs, there were the troubles in 
 1807, under the cincien regime, or that of the first United 
 States Bank. Then there were the troubles from 1814 to 
 1817 under the State Banks. Then there were the troubles 
 from 1819 onwards, under the second United States Bank 
 troubles which were not surmounted, in some of the western 
 states, till the year 1828. Then there were the panics of 
 1825, 1828, and 1834, and lastly, here is the present tremen- 
 dous convulsion of 1837. 
 
 If the history of our own country will not suffice to convince 
 us of the folly of all such attempts, let us look abroad. England 
 has for many years been trying to regulate credit and currency 
 by means of banking institutions, with no better success than 
 ourselves. If that all-powerful government, with so mighty 
 an instrument to work with as the Bank of England, has not 
 been able, in that small country where every thing favors 
 such a design, to prevent the most ruinous convulsions, what 
 ground have we to build a hope upon, where we have twenty- 
 six State Governments seldom acting in concert, and a General 
 Government whose powers are strictly, and very properly, 
 limited to a few objects. 
 
 A singular train of decisions, which may by future ages be 
 regarded as evidence of the influence of the banking interest 
 reaching even to the Judiciary, makes it a matter of dispute 
 whether the United States Government possesses any currency- 
 regulating power, by direct grant, using the word currency 
 in so wide a sense as to include the notes of banks chartered 
 by the states. Be this as it may, that power has been usurped 
 
45 
 
 by the states, and cannot now be resumed. All that remains 
 for the United States Government now to do is to separate its 
 own fiscal affairs, at once and forever, from the affairs of cor- 
 porations and of individuals. If by so doing it regulates the 
 currency, it does so by a negative rather than a positive ac- 
 tion. It simply withdraws the sanction it has heretofore given 
 to paper money and money corporations, and the aid it has 
 yielded them in their mischievous operations by lending them 
 its capital and its credit. " It leaves both the states and the 
 people to act in regard to this important matter as they shall 
 deem best. 
 
 The simple question now submitted to the people is, whether 
 the laws and Constitution of the United States shall be pre- 
 served inviolate, or whether they shall be trampled under foot. 
 It ought not to be a party question. All ought to unite to pre- 
 vent any thing but gold and silver being a legal tender to 
 either the United States or to private persons, and to put this 
 matter beyond doubt or danger, it will be necessary to separate 
 for ever the proper concerns of the government from the pro- 
 per concerns of corporations and of individuals. 
 
 One party has made trial of United States Banks, and the 
 other of State Banks. Let each be content with the result of 
 its experiment. One party is, (to use a common phrase,) 
 committed on the subject of a National Bank as a fiscal 
 agent, and the other on the subject of State Deposit Banks. 
 In relation to a Sub-Treasury System, neither party has com- 
 mitted itself. Here, then, is a ground on which both can 
 honorably unite and strive which can do most to promote the 
 country's good. Many of the most distinguished men of both 
 parties have at times expressed sentiments having a friendly 
 bearing towards such a system. 
 
 The friends of State Rights ought to be warm in support of 
 it. While it avoids the difficulties which the incorporation of 
 any kind of national bank must present, it leaves to the states 
 the entire control of the institutions of their own creation. 
 
 The friends of domestic industry should be amongst the 
 foremost in maintaining that nothing but gold and silver should 
 be received in payment of duties. Without this, no tariff that 
 can be adopted will be " protective." 
 
46 
 
 Whether the principle of protecting duties is right or wrong 
 need not here be discussed. The friends of free trade may 
 postpone their efforts to give us a perfectly unrestricted com- 
 merce with foreign nations, till we have something like fair 
 trade among ourselves. This fair trade we cannot have, 
 unless we have some standard by which to determine the de- 
 preciation of bank notes in different parts of the country. 
 
 The foes to an increase of Executive patronage ought to 
 come out manfully in behalf of a Sub-Treasury System. The 
 few officers it will require, will all be appointed with the con- 
 currence of the Senate : and the economy and method it will 
 introduce into different branches of the public service, will 
 render practicable a reduction of the whole number of per- 
 sons in the employ of government. 
 
 Those who are fearful of the public money being used to 
 increase offical influence, should be most active in endeavoring 
 to separate entirely the proper concerns of government from 
 those of corporations and of individuals. The mooted points, 
 whereis the Treasury of the United States, andwhat is money 
 in the Treasury, will then be settled. Not a dollar in any one 
 of the Sub-Treasuries can be drawn out except according to 
 appropriations made by law. A Sub-Treasurer will not dare 
 to touch even the amount of his own salary, except upon war- 
 rant from the Secretary of the Treasury, revised by the Comp- 
 trollers, countersigned by the Treasurer, and recorded by the 
 Register, agreeably to the provisions of the existing laws. 
 
 Seeing, then, 
 
 That a National Bank, powerful enough to regulate the State 
 Banks, would, if independent of the government, be powerful 
 enough to crush both the government and the people, and, if 
 under the control of the government, would make the President 
 the most powerful monarch on earth : 
 
 That a league of State Banks, powerful enough to regulate 
 all the others, would be only another form of the same evil : 
 
 That the fiscal concerns of the United States can be con- 
 ducted with ease and with safety, without the agency of any 
 bank, and without the use of any kind of bank paper : 
 
 That by the United States Government's receiving only gold 
 and silver in payment of dues, there will be a standard by 
 
47 
 
 which the depreciation of bank notes, at different times and 
 different places, can be readily determined : 
 
 That this policy will lead to a gradual resumption of specie 
 payments in the mildest way in which it is possible to effect so 
 desirable an object : 
 
 That after the banks shall resume specie payments it will 
 be a constant check " on the constant tendency of banks to 
 lend too much and to put too many notes in circulation :" 
 
 That it does not interfere in any way with State Rights, but 
 leaves to each state the entire control of the institutions of its 
 own creation : 
 
 That without it no tariff can afford adequate protection to 
 domestic industry : 
 
 That without it we cannot have fair trade among our- 
 selves, without which free trade with foreigners will avail but 
 little: 
 
 And lastly, that it will ultimately diminish Executive pa- 
 tronage, and prevent the very possibility of the public money's 
 being used to increase official influence : 
 
 Seeing all this, 
 
 Let us all, with one accord, rally, not around the United 
 States Bank, nor yet around the Deposit Banks, but around 
 the Constitution of the United States. Let us all, with- 
 out distinction of party, be in this respect as one man : and let 
 a leading principle of our policy be, 
 
 AN ENTIRE SEPARATION, NOW, HENCEFORTH, AND FOR EVER, 
 OF THE FISCAL CONCERNS OF THE UNITED STATES, FROM THE 
 PROPER AND PRIVATE CONCERNS OF INDIVIDUALS AND OF COR- 
 PORATIONS. 
 

APPENDIX 
 
 The following tables and notes have been extracted from 
 a document sent to the House of Representatives, by the 
 Secretary of the Treasury, on the 12th of December, 1834, 
 and referred by that House to the Committee of Ways and 
 Means, on the 15th of the same month. The amounts stated 
 are in part estimates, as full returns for the last quarter of 
 1834 had not then been received: but they are sufficiently 
 accurate for the purposes of illustration. They show, in a 
 general way, where the revenue of the United States is col- 
 lected, where it is expended, for what objects it is ex- 
 pended, and what amount of public money it is neces- 
 sary to transmit from one part of the country to another. 
 
50 
 
 A TABLE of the whole appropriations for the year 1834, of the expendi- 
 tures from them, and of the collections during that year in the several 
 States and Territories. 
 
 Whole appropriations 
 for 1834.* 
 
 Expenditures from 
 ihem in 1834. 
 
 Collections in 1834. 
 
 VERMONT. 
 
 Special,f 
 Pensions, 
 Army, 
 Miscellaneous, 
 
 $20,000 
 
 200,000 
 
 2,000 
 
 10,000 
 
 232,000 
 
 Deduct 20 per ct. 
 not expended 
 this year.* 46,400 
 
 Balance, $185,600 
 
 Customs, 
 
 $179 
 
 Special, 
 Pensions, 
 Army and forti- 
 fications, 
 Miscellaneous, 
 Public debt, 
 
 38,000 
 180,000 
 
 60,000 
 30,000 
 20,000 
 
 348,000 
 Deduct as above, 69,600 
 
 HEW HAMPSHIRE. 
 
 Balance, 278,400 
 
 Customs, 
 
 174,754 
 
 Special, 
 Pensions, 
 
 42,000 
 160,000 
 
 * Besides the appropriations made for the year 1834, there was a balance of old 
 appropriations unexpended of about six millions ; and, besides the collections made in 
 1834, there was an available balance in the Treasury on the 1st January, 1834, of 
 about ten millions, being more than enough to pay the old appropriations then out- 
 standing. The actual expenditures in 1834, out of the appropriations for that year, 
 correspond so nearly with the collections in 1834, that they illustrate the objects pro- 
 posed in this table, without extending it to the old appropriations or collections made 
 before January, 1834, and then remaining unexpended. 
 
 t The apportionment of the several appropriations among the States and Territories 
 has been made in conformity to what was specified in the acts of Congress, and the 
 estimates for the year, and are termed " special" whenever the person or object, such 
 as a creditor, fort, officer, navy yard, &c. was known to be within any State. The 
 other designations need no explanation, except that under army, navy, fyc., are not in- 
 eluded such sums in connexion with them as were before included under the word 
 ** special ;" and that our expenditures abroad are arranged to the States whence the 
 remittances are made ; and that the payments required to be made in particular States 
 for the public convenience, though the objects of expenditure are situated elsewhere, 
 have been charged to those States. The word " army" includes every thing under the 
 administration of the War Department, except what is otherwise enumerated. 
 
 t It is estimated that about five millions of the appropriations made for 1834 will not 
 be expended within that year, and hence the deduction has been made of twenty per 
 cent., or about the sum of five millions, for the present year. The amount of collections 
 is made up from actual returns for the first three quarters of this year, and from esti- 
 mates for the fourth quarter, which will probably prove very near the true result. 
 
51 
 
 TABLE Continued. 
 
 Whole appropriations 
 for 1834. 
 
 Army, - $16,000 
 
 Miscellaneous, 10,000 
 
 Navy, 140,000 
 
 Public debt, 50,000 
 
 418,000 
 
 Deduct 20 per ct. 
 not expended 
 this year, 83,600 
 
 MASSACHUSETTS. 
 
 Special, 496,000 
 
 Pensions, 350,000 
 
 Army, 370,000 
 
 Miscellaneous, 100,000 
 
 Public debt, 300,000 
 
 Navy, 350,000 
 
 1,966,000 
 Ded. as above, 393,200 
 
 RHODE ISLAND. 
 
 Special, 116,000 
 
 Pensions, 75,000 
 
 Army, 110,000 
 
 Miscellaneous, 40,000 
 
 Public debt, 30,000 
 
 Navy, 10,000 
 
 381,000 
 Deduct as above, 76,200 
 
 CONNECTICUT. 
 
 Special, 15,000 
 
 Pensions, 200,000 
 
 Army, 60,000 
 
 Miscellaneous, 10,000 
 
 Public debt, 20,000 
 
 305,000 
 Deduct as above, 61,000 
 
 Expenditures from 
 them in 1834. 
 
 Balance, $334,400 
 
 Balance, 1,572,800 
 
 Balance, 304,800 
 
 Balance, 244,000 
 
 Eastern, $2,920,000 
 
 Collections in 1834. 
 
 Customs, 
 
 $16,373 
 
 
 Customs, 
 
 2,590,572 
 
 Customs, 
 
 119,140 
 
 Customs, 
 
 47,890 
 $2,948,908 
 
52 
 
 TABLE -Continued. 
 
 Whole appropriations 
 for 1834. 
 
 Expenditures from 
 them in 1834. 
 
 Collections in 1834. 
 
 NEW YORK. 
 
 Special, $662,000 
 
 Pensions, 700,000 
 
 Army, 500,000 
 
 Miscellaneous, 100,000 
 Navy, 500,000 
 
 Public debt, 2,000,000 
 Foreign inter- 
 course, 100,000 
 
 4,562,000 
 Deduct 20 per ct. 
 not expended 
 this year, 912,400 
 
 NEW JERSEY. 
 
 Special, 6,000 
 
 Pensions, 110,000 
 
 Miscellaneous, 20,000 
 
 136,000 
 Deduct as above, 27,200 
 
 PENNSYLVANIA. 
 
 Special, 424,000 
 Pensions, 250,000 
 Miscellaneous, 60,000 
 Army, 700,000 
 Navy, 160,000 
 Public debt, 1,800,000 
 Foreign inter- 
 course, 100,000 
 
 3,494,000 
 
 Ded. as above, 
 
 DELAWARE. 
 
 Special, 36,00( 
 
 Pensions, 5,00 
 
 Army, 150,00 
 
 Miscellaneous 10,00( 
 
 201,00 
 Deduct as above, 40,20 
 
 MARYLAND. 
 
 Special, 48,00 
 
 Pensions, 40,00 
 
 Balance, $3,649,600 
 
 Customs, 
 
 $9,021,491 
 
 Balance, 108,000 
 
 Customs, 
 
 8,653 
 
 Balance, 2,795,20 
 
 Customs, 
 
 2,058,641 
 
 Balance, 160,80 
 
 Customs, 
 
 13,261 
 
53 
 TABLE Continued. 
 
 Whole appropriations 
 for 1834. 
 
 Army, $1,300,000 
 
 Navy, 80,000 
 
 Miscellaneous, 50,000 
 Public debt, 200,000 
 
 1,718,000 
 
 Ded. 20 per ct. 
 
 not expended 
 
 this year. 343,600 
 
 DISTniCT OF COLUMBIA 
 
 Spec. & civil, 2,013,000 
 Pensions, 11,000 
 
 Navy, 400,000 
 
 Army & Indians 550,000 
 Debt, 250,000 
 
 Miscellaneous, 500,000 
 Foreign inter- 
 course, 100,000 
 
 3,824,000 
 Ded. as above, 764,800 
 
 Expenditures from 
 them in 1834. 
 
 Balance, 1,374,400 
 
 Balance, 3,059,200 
 
 Middle, $11,148,000 
 
 Collections in 1834. 
 
 Customs, 
 
 $589,778 
 
 Customs, $33,473 
 Miscellaneous, 550,000 
 
 583,473 
 
 $12,275,297 
 
 VIRGINIA. 
 
 Special, $500,000 
 
 Pensions, 200,000 
 
 Miscellaneous, 50,000 
 Army, 1,075,000 
 
 Navy, 1,000,000 
 
 2,825,000 
 Ded. as above, 565,000 
 
 NORTH CAROLINA. 
 
 Special, 37,000 
 
 Pensions, 100,000 
 
 Army, 20,000 
 
 Miscellaneous, 20,000 
 
 177,000 
 Deduct as above 35,400 
 
 SOUTH CAROLINA. 
 
 Special, 51,000 
 
 Pensions, 50,000 
 
 Balance, $2,260,000 
 
 Customs, 
 
 #140,161 
 
 Balance, 141,600 
 
 lustoms, 
 
 34,884 
 
54 
 TABLE Continued. 
 
 Whole appropriations 
 for 1834. 
 
 Expenditures from 
 them in 1834. 
 
 Collections in 1834. 
 
 Public debt, $50,000 
 
 Navy, 30,000 
 
 Miscellaneous, 50,000 
 
 Army, 200,000 
 
 431,000 
 
 Deduct 20 per ct. 
 not expended 
 this year, 86,200 
 
 GEORGIA. 
 
 Special, 180,000 
 
 Pensions, 40,060 
 
 Army, 140,000 
 
 Miscellaneous, 20,000 
 
 Navy, 20,000 
 
 Indians, 20,000 
 
 420,000 
 Deduct as above, 84,000 
 
 LOUISIANA. 
 
 Special, 120,000 
 
 Pensions, 6,000 
 
 Army & Indians 180,000 
 Miscellaneous, 40,000 
 
 Balance, $344,800 
 
 Balance, 336,000 
 
 346,000 
 Deduct as above, 69,200 
 
 MISSISSIPPI. 
 Special, 12,000 
 
 Pensions, 2,000 
 
 Army & Indians 292,000 
 Miscellaneous, 10,000 
 
 316,000 
 Deduct as above, 63,200 
 
 ALABAMA. 
 
 Special, 18,000 
 
 Pensions, 20,000 
 
 Army & Indians 3 1 6,00( 
 Miscellaneous, 20,000 
 
 374,000 
 Deduct as'above, 74,800 
 
 Balance, 276,800 
 
 Customs, $303,835 
 
 Customs, 
 
 48,260 
 
 Customs, $817,230 
 Lands, 187,727 
 
 1,004,957 
 
 Balance, 252,800 
 
 Lands, 
 
 1,621,785 
 
 Balance, 299,200 
 
 Lands, $674,641 
 Customs, 46,659 
 
 721,300 
 
55 
 
 TABLE Continued. 
 
 Whole appropriations 
 for 1834. 
 
 Expenditures from 
 them in 1834. 
 
 Collections in 1834. 
 
 FLORIDA. 
 
 Special, $205,000 
 
 Navy, 150,000 
 
 Army, 50,000 
 
 405,000 
 
 Deduct 20 per ct. 
 not expended 
 this year, 81,000 
 
 Balance, $324,000 
 
 South and 
 southwest 
 
 Customs, $1,800 
 Lands, 1,000 
 
 $2,800 
 $3,277,982 
 
 TENNESSEE. 
 
 Special, $500 
 
 Pensions, 110,000 
 
 Army, 24,000 
 
 Indians, 250,000 
 
 384,500 
 Deduct as above, 76,900 
 
 KENTUCKY. 
 
 Special, 30,000 
 
 Pensions, 180,000 
 
 Army, 150,000 
 
 Miscellaneous, 10,000 
 
 370,000 
 Deduct as above, 74,000 
 
 OHIO. 
 
 Special, 282,000 
 
 Pensions, 125,000 
 
 Miscellaneous, 40,000 
 
 Army, 145,000 
 
 Indians, 120,000 
 
 712,000 
 Deduct as above, 142,400 
 
 INDIANA. 
 
 Special, 163,000 
 
 Pensions, 48,000 
 
 Miscellaneous. 10,000 
 
 221,000 
 Deduct as above, 44,200 
 
 Balance, $307,600 
 
 Balance, 296,000 
 
 Balance, 569,600 
 
 Customs, $1,985 
 Lands, 431,448 
 
 433,433 
 
 Balance, 176,800 
 
 Lands, 
 
 667,167 
 
;i UNIVERSITY 
 
 OF 
 
 56 
 
 TABLE Continued . 
 
 Whole appropriations 
 
 for 1834. 
 
 ILLINOIS. 
 
 Special, $140,00 
 
 Pensions, 18,00 
 
 Army, 10,00 
 
 Miscellaneous, 10,00 
 
 178,00 
 
 Deduct 20 per ct. 
 not expended 
 this year, 35,60( 
 
 MISSOURI. 
 Special, 80,00( 
 
 Pensions, 18,OOC 
 
 Army, 450,000 
 
 Indians, 250,000 
 
 Miscellaneous, 20,OOC 
 
 818,000 
 Bed. as above, 163,600 
 
 MICHIGAN. 
 
 Special, 110,000 
 
 Pensions, 8,000 
 
 Army, 584,000 
 
 Indians, 200,000 
 
 Miscellaneous, 20,000 
 
 922,000 
 Ded. as above 184,400 
 
 ARKANSAS. 
 
 Special, 20,000 
 
 Pensions, 2,000 
 
 Army & Indians 1 10,000 
 
 132,000 
 Deduct as above, 26,400 
 
 Expenditures from 
 them in 1834. 
 
 Balance, $142,40 
 
 Balance, 654,400 
 
 Balance, 737,600 
 
 Balance, 105,600 
 Western, $2,990,000 
 
 Collections in 1834. 
 
 Lands, 
 
 $248,374 
 
 L.ands, 
 
 231,696 
 
 ,ands, $469,188 
 Customs, 2,114 
 
 471,302 
 
 ands, 
 
 70,558 
 $2,122,530 
 
 $21,293,200 
 20,624,717 
 
 $28,908 
 1,127,297 
 
 $1,156,205 
 
 Expenditures more than collections in South and Southwestern States, 957,218 
 Expenditures more than collections in Western States, 867,470 
 
 The whole expenditures of appropriations for 1834 
 The whole collections in 1834, 
 
 Expenditures less than collections in Eastern States, 
 Expenditures less than collections in Middle States, 
 
 $1,824,688 
 
(\ 
 
 jot*. 
 
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