ON THE SUB-TREASURY.

IN THE SENATE of the United STATES, SEPTEMBER 25 1837.

[The State Bank Deposite system of keeping and disbursing the Public Moneys having exploded on the general suspension of Specie Payments by the Banks throughout the Country in May, 1837, leaving the government nearly destitute of pecuniary means or financial machinery, Mr. VAN BUREN (then newly inaugurated as President) promptly summoned the new Congress to meet in Washington on the first Monday of September of that year. Although the Elections after the suspension went heavily against him, yet the previous choice of members from one half the States, including New York, Pennsylvania, Virginia, and Ohio, had secured to his Administration a decided preponderance in each House. Congress assembled on the 4th, and the President in his message submitted the fiscal plan known as the INDEPENDENT TREASURY or Sub-Treasury, for the collection, safe keeping, and disbursement of the Public Moneys entirely 'divorced' from Banks. A bill embodying this proposition having been reported to the Senate, from its Committe on Finance by Mr. WRIGHT of New York, upon its consideration Mr. CLAY addressed the Senate as follows:]

FEELING an anxious desire to see some effectual plan presented to correct the disorders in the currency, and to restore the prosperity of the country, I have avoided precipitating myself into the debate now in progress, that I may attentively examine every remedy that may be proposed, and impartially weigh every consideration urged in its support. No period has ever existed in this country, in which the future was covered by a darker, denser, or more impenetrable gloom. None, in which the duty was more imperative to discard all passion and prejudice, all party ties, and previous bias, and look exclusively to the good of our afflicted country. In one respect, and I think it a fortunate one-our present difficulties are distinguishable from former domestic trouble, and that is their universality. They are felt it is true, in different degrees, but they reach every section, every State, every interest, almost every man in the Union. All feel, see, hear, know their existence. As they do not array, like our former divisions, one portion of the confederacy against another, it is to be hoped that common sufferings may lead to common sympathies

and common counsels, and that we shall, at no distant day, be able to see a clear way of deliverance. If the present state of the country were produced by the fault of the people; if it proceeded from their wasteful extravagance, and their indulgence of a reckless spirit of ruinous speculation; if public measures had no agency whatever in bringing it about, it would nevertheless be the duty of government to exert all its energies and to employ all its legitimate powers to devise an efficacious remedy. But if our present deplorable condition has sprung from our rulers; if it is to be clearly traced to their acts and operations, that duty becomes infinitely more obligatory; and gov ernment would be faithless to the highest and most solemn of human trusts should it neglect to perform it. And is it not too true that the evils which surround us are to be ascribed to those who have had the conduct of our public affairs?

In glancing at the past, nothing can be further from my intention than to excite angry feelings, or to find grounds of reproach. It would be far more congenial to my wishes that, on this occasion we should forget all former unhappy divisions and animosities. But in order to discover how to get out of our difficulties, we must ascertain if we can how we got into them.

Prior to that series of unfortunate measures which had for its object the overthrow of the Bank of the United States, and the discontinuance of its fiscal agency for the government, no people upon earth ever enjoyed a better currency, or had exchanges better regulated than the people of the United States. Our monetary system appeared to have attained as great perfection as anything human can possibly reach. The combination of United States and local Banks presented a true image of our system of general and State governments, and worked quite as well. Not only within the country had we a local and general currency perfectly sound, but in whatever quarter of the globe American commerce had penetrated, there also did the bills of the United States Bank command unbounded credit and confidence. Now we are in danger of having fixed upon us, indefinitely as to time, that medium, an irredeemable paper currency, which, by the universal consent of the commercial world, is regarded as the worst. How has this reverse come upon us? Can it be doubted that it is the result of those measures to which I have adverted? When, at the very moment of adopting them, the very consequences which have hap

pened were foretold as inevitable, is it necessary to look elsewhere for their cause? Never was prediction more distinctly made; never was fulfilment more literal and exact.

Let us suppose that those measures had not been adopted; that the Bank of the United States had been rechartered; that the public deposites had remained undisturbed; and that the treasury order had never issued: is there not every reason to believe that we should be now in the enjoyment of a sound currency; that the public deposites would be now safe and forthcoming, and that the suspension of specie payments in May last would not have happened?

The President's message asserts that the suspension has proceeded from over-action, over-trading, the indulgence of a spirit of speculation produced by bank and other facilities. I think this is a view of the case entirely too superficial. It would be quite as correct and just, in the instance of a homicide perpetrated by the discharge of a gun, to allege that the leaden ball, and not the man who levelled the piece, was responsible for the murder. The true inquiry is, how came that excessive over-trading and those extensive bank facilities which the message describes? Were they not the necessary and immediate consequences of the overthrow of the Bank, and the removal from its custody of the public deposites? And is not this proven by the vast multiplication of banks, the increase of the line of their discounts and accommodations, prompted and stimulated by Secretary Taney, and the great augmentation of their circulation which ensued?

What occurred in the State of Kentucky in consequence of the veto of the recharter of the Bank of the United States illustrates its effects throughout the Union. That State had suffered greatly by banks. It was generally opposed to the re-establishment of them. It had found the notes of the Bank of the United States answering all the purposes of a sound currency at home and abroad, and it was perfectly contented with them. At the period of the veto, it had but a single bank of limited capital and circulation. After it, the State, reluctant to engage in the banking system, and still cherishing hopes of the creation of a new Bank of the United States, encouraged by the supporters of the late President, hesitated about the incorporation of new banks. But at length, despairing of the establishment of a Bauk of the United States, and finding itself exposed to a currency in bank

notes from adjacent States, it proceeded to establish banks of its own; and since the veto, since 1833, has incorporated for that single State bank capital to the amount of ten millions of dollars—a sum equal to the capital of the first Bank of the United States created for the whole Union.

That the local banks, to which the deposites were transferred from the Bank of the United States, were urged and stimulated freely to discount upon them, we have record evidence from the treasury department.

The message, to reconcile us to our misfortunes, and to exonerate the measures of our own government from all blame in producing the present state of things, refers to the condition of Europe, and especially to that of Great Britain. It alledges that,

"In both countries we have witnessed the same redundancy of paper money, and other facilities of credit; the same spirit of speculation; the same partial success; the same difficulties and reverses; and, at length, nearly the same overwhelming catastrophe."

The very clear and able argument of the Senator from Georgia, (Mr. King) relieves me from the necessity of saying much upon this part of the subject. It appears that during the period referred to by the message of 1833-4-5, there was, in fact, no augmentation, or a very trifling augmentation, of the circulation of the country, and that the message has totally misconceived the actual state of things in Great Britain. According to the publications to which I have had access, the Bank of England in fact diminished its circulation, comparing the first with the last of that period, about two and a half millions sterling; and although the joint-stock and private banks increased theirs, the amount of increase was neutralized by the amount of diminution

If the state of things were really identical, or similar, in the two countries, it would be fair to trace it to similarity of causes. But is that the case? In Great Britain a sound currency was preserved by a recharter of the Bank of England about the same time that the recharter of the Bank of the United States was agitated here. In the United States we have not preserved a sound currency, in consequence of the veto. If Great Britain were near the same catastrophe (the suspension of specie payments) which occurred here, she never

theless escaped it; and this difference in the condition of the two countries makes all the difference in the world. Great Britain has recovered from whatever mercantile distresses she experienced; we have not; and when shall we? All is bright, and cheerful, and encouraging in the prospects which lie before her; and the reverse is our unfortunate situation.

Great Britain has, in truth, experienced only those temporary embarrassments which are incident to commercial transactions, conducted upon the scale of vast magnitude on which hers are carried on. Prosperous and adverse times, action and reaction, are the lot of all commercial countries. But our distresses sink deeper; they reach the heart, which has ceased to perform its office of circulation in the great concerns of our body politic.

Whatever of embarrassment Europe has recently experienced, may be satisfactorily explained by its trade and connexions with the United States. The degree of embarrassment has been marked, in the commercial countries there, by the degree of their connexion with the United States. All, or almost all, the great failures in Europe have been of houses engaged in the American trade. Great Britain, which, as the message justly observes, maintains the closest relations with us, has suffered most, France next, and so on, in the order of their greater or less commercial intercourse with us. Most truly was it said by the Senator from Georgia, that the recent embarrassments of Europe were the embarrassments of a creditor, from whom payment was withheld by the debtor, and from whom the precious metals have been unnecessarily withdrawn by the policy of the same debtor.

Since the intensity of suffering, and the disastrous state of things in this country, have far transcended anything that has occurred in Europe, we must look here for some peculiar and more potent causes than any which have been in operation there. They are to be found in that series of measures to which I have already adverted.

1st. The veto of the Bank.

2d. The removal of the deposites, with the urgent injunction of Secretary Taney upon the banks to enlarge their accommodations.