ernment caused a large quantity of paper to be issued, which was to be received in imposts and taxes. The paper immediately fell to a depreciation of four for one. The consequence was, that the government lost its revenue, and with it the means of supplying its armies and defending its empire. Is this government now ready, Sir, to put its resources all at hazard, by pursuing a similar course? Is it ready to sacrifice its whole substantial revenue and permanent supplies to an ill-contrived, ill-considered, dangerous, and ruinous project, adopted only as the means of obtaining a little present and momentary relief?

It ought to be considered, also, what effects this bank will produce on other banking institutions already existing, and on the paper which they have issued. The aggregate capital of these institutions is large. The amount of their notes is large, and these notes constitute, at present, in a great portion of the country, the only circulating medium, if they can be called a circulating medium. Whatever affects this paper, either to raise it or depress it lower than it is, affects the interests of every man in the community. It is sufficient on this point to refer to the memorial from the banks of New York. That assures us, that the operation of such a bank as this bill would establish must be to increase the difficulties and distress which the existing banks now experience, and to render it nearly impossible for them to resume the payment of their notes. This is what every man would naturally expect. Paper already depreciated will necessarily be sunk still lower, when another flood of depreciated paper is forced into circulation.

Very recently this government refused to extend the charter of the Bank of the United States, upon the ground that it was unconstitutional for Congress to create banks. Many of the State banks owe their existence to this decision. It was an invitation to the States to incorporate as much banking capital as would answer all the purposes of the country. Notwithstanding what we may now see and hear, it would then have been deemed a gross imputation on the consistency of government, if any man had expressed an expectation, that in five years all these constitutional scruples would be forgotten, all the dangers to political liberty from moneyed institutions disregarded, and a bank proposed upon the most extraordinary principles, with an

unprecedented amount of capital, and with no obligation to fulfil its contracts. The State banks have not forced themselves in the way of government. They were established, many of them at least, when government had declared its purpose to have no bank of its own. They deserve some regard on their own account, and on account of those particularly concerned in them. But they deserve much more consideration, on account of the quantity of paper which is in circulation, and the interest which the whole community has in it.

Let it also be recollected, Sir, that the present condition of the banks is principally owing to their advances to government. The treasury has borrowed of the banks, or of those who themselves borrowed of the banks, till the banks have become as poor, and almost as much discredited, as the treasury itself. They have depreciated their paper, nearly ruined themselves, and brought the sorest distress on the country, by doing that on a small scale which this bank is to perform on a scale vastly larger. It is almost unpardonable in the conductors of these institutions, not to have foreseen the consequences which have resulted from the course pursued by them. They were all plain and visible. If they have any apology, it is that they were no blinder than the government, and that they yielded to those who would take no denial. It will be altogether unpardonable in us, if, with this as well as all other experience before us, we continue to pursue a system which must inevitably lead us through depreciation of currency, paper-money, tender-laws, and all the contemptible and miserable contrivances of disordered finance and national insolvency, to complete and entire bankruptcy in the end.

I hope the House will recommit the bill for amendment.

THE LEGAL CURRENCY.*

A BILL reported by Mr. Calhoun for the restoration of the currency was rejected in the House of Representatives on the 25th of April, 1816. On the 26th, Mr. Webster introduced three resolutions having the same object in view; and in support of them made the following speech. The first two, being declaratory of principles only, were withdrawn at the request of several gentlemen, who were in favor of the third resolution, which contained Mr. Webster's plan for restoring the currency.

It provided that the Secretary of the Treasury should adopt such measures as he might deem necessary, to cause, as soon as might be, all sums of money due to the United States "to be collected and paid in the legal currency of the United States, or treasury-notes, or notes of the Bank of the United States, as by law provided and declared, or in notes of banks which are payable and paid on demand, in the said legal currency of the United States"; and it directed that, after the 20th of February next ensuing, nothing else should be received in payment of the public dues.

This resolution was received with great favor by the House, and passed through all the stages of legislation on the same day (the 26th of April) by a majority of more than two thirds. It was approved by President Madison on the 30th, and was completely successful in restoring a sound currency.

MR. SPEAKER, I have felt it to be my duty to call the attention of the House once more to the subject of the collection of the revenue, and to present the resolutions which are

* A Speech delivered in the House of Representatives of the United States, on the 26th of April, 1816, on the Collection of the Revenue in the Legal Currency of the Country.

now submitted. I have been the more inclined to do this from an apprehension that the rejection, yesterday, of the bill which had been introduced, may be construed into an abandonment, on the part of the House, of all hope of remedying the existing evil. I have had, it is true, some objections against proceeding by way of bill; because the case is not one in which the law is deficient, but one in which the execution of the law is deficient. The great object, however, is to obtain a decision of this and the other house, that the present mode of receiving the revenue shall not be continued; and as this might be substantially effected by the bill, I had hoped that it might pass. This hope has been disappointed. The bill has been rejected. The House has put its negative upon the only propo sition which has been submitted to it, for correcting a state of things which every body knows to exist in plain violation of the Constitution, and in open defiance of the written letter of the law. For one, I can never consent to adjourn, leaving this implied sanction of the House upon all that has taken place, and all that may hereafter take place. I hope not to hear

again that there is not now time to act on this question. If other gentlemen consider the question as important as I do, they will not forbear to act on it from any desire, however strong, to bring the session to an early close.

The situation of the country, in regard to its finances and the collection of its revenues, is most deplorable. With a perfectly sound legal currency, the national revenues are not collected in this currency, but in paper of various sorts and various degrees of value. The origin and progress of this evil are distinctly known, but it is not easy to see its duration or its future extent, if an adequate remedy be not soon found. Before the war, the business of the country was conducted principally by means of the paper of the different State banks. As these were in good credit, and paid their notes in gold and silver on demand, no great evil was experienced from the circulation of their paper. Not being, however, a part of the legal money of the country, it could not, by law, be received in the payment of duties, taxes, or other debts to government. But being payable, and hitherto regularly paid, on demand, the collectors and agents of government had generally received it as cash; it had been deposited as cash in the banks which received the deposits

of government, and from them it had been drawn as cash, and paid off to creditors of the public.

During the war this state of things changed. Many of the banks had been induced to make loans to a very great amount to the government. These loans were made by an issue of their own bills. This proceeding threw into circulation an immense quantity of bank paper, in no degree corresponding with the mercantile business of the country, and resting, for its payment and redemption, on nothing but the government stocks, which were held by the banks. The consequence immediately followed, which it would be imputing a great degree of blindness both to the government and to the banks to suggest that they had not foreseen. The excess of paper which was found every⚫ where created alarm. Demands began to be made on the banks, and they all stopped payment. No contrivance to get money without inconvenience to the people ever had a shorter course of experiment, or a more unequivocal termination. The depreciation of bank-notes was the necessary consequence of a neglect or refusal to pay them, on the part of those who issued them. It took place immediately, and has continued, with occa sional fluctuations in the depression, to the present moment. What still further increases the evil is, that this bank paper, being the issue of very many institutions, situated in different parts of the country, and possessing different degrees of credit, the depreciation has not been, and is not now, uniform throughout the United States. It is not the same at Baltimore as at Philadelphia, nor the same at Philadelphia as at New York. In New England, the banks have not stopped payment in specie, and of course their paper has not been depressed at all. But the notes of banks which have ceased to pay specie have, nevertheless, been, and still are, received for duties and taxes, in the places where such banks exist. The consequence of all this is, that the people of the United States pay their duties and taxes in currencies of different values in different places. In other words, taxes and duties are higher in some places than they are in others, by as much as the value of gold and silver is greater than the value of the several descriptions of bank paper which are received by government. This difference in relation to the paper of the District where we now are, is twenty-five per cent. Taxes and duties, therefore, col