APRIL 6, 1836.] Incendiary Publications--Revolutionary Pensions. Mr. CALHOUN briefly explained the provisions of the bill, and moved to fill up the first blank with $100, and the second blank with $1,000; which motion was agreed to. [These sums apply to the penalty imposed on the deputy postmasters for a violation of the law, being a fine of not less than $100, and not more than $1,000.] [SENATE. some length the nature and effect of it. He said, in the present state of things, the amendment of the gentleman from Missouri [Mr. BENTON] might operate too suddenly, and in effect produce a sort of panic; and he had offered his amendment with a view to give more time, and to effect the object more gradually. Mr. WHITE approved most highly of the objects of the bill, but thought, if there was any defect in it, it consisted in there being no penalty imposed on the officers or agents of the Government for disobeying the law. Mr. BENTON most cordially concurred with the Senator from Tennessee. He had turned over the subject in his own mind, and had not inserted a penalty in the bill, partly because he was unwilling to embarrass a measure which he had so much at heart, and partly because he knew that the officers of the army would be Mr. DAVIS said this was a very important bill, and subject to the rules and articles of war if they disobeyed ought not to be acted on without some deliberation. He the injunctions of the bill, for its provisions would be had hoped some gentleman would have been prepared sent to them with instructions from the War Departto deliver his views at length upon it. As for himself, ment. But he was heartily willing, and would warmly he was not now prepared to speak on it. He would and cordially concur in inserting the penalty that the move to postpone it for the present. disobedience of the officer shall be followed by a dismis Mr. GRUNDY observed that he had lately turned his sal from the service. He knew that great oppressions attention to the subject, and approved of the principles had been practised by officers on laborers and others of the bill though he did not think it altogether calcu- who could not help themselves. The main stress of the lated to effect the objects it had in view. if the gentle- amendment, said Mr. B., lies in the last clause of the man from South Carolina would consent to a postpone- amendment, that is, in making our mark at $20, and ment for two or three days, he should then be prepared which goes to cut off every bank note which is not payto offer some amendments that he thought would be able in gold and silver upon the spot. This would be satisfactory to the gentleman, and would answer the pur- of incalculable benefit to the soldier who could not leave pose intended; his duties in the committee of which he his post to get uncurrent paper exchanged. Gentlemen was chairman preventing him from attending to the sub-might say that this amendment was to carry gold and ject sooner. Mr. G., after further consideration, and a suggestion from Mr. CALHOUN, assented to the postponement till to-morrow, and the bill was accordingly so postponed. Mr. DAVIS did not know that he would or would not address the Senate on the subject, but if he did he should want it laid over longer than till to-morrow. REVOLUTIONARY PENSIONS. On motion of Mr. WRIGHT, the Senate took up the bill making appropriations for the payment of the revofutionary and other pensioners of the Government for the year 1836; the question being on the following amendment, submitted by Mr. BENTON: "Szc. - And be it further enacted, That no bank note of less denomination than twenty dollars shall hereafter be offered in payment in any case whatsoever in which money is to be paid by the United States or the Post Office Department; nor shall any bank note, of any other denomination, be so offered, unless the same shall be payable and paid on demand, in gold or silver coin, at the place where issued, and which shall not be equivalent to specie at the place where offered, and convertible into gold or silver upon the spot, at the will of the holder, and without delay or loss to him." Mr. NILES submitted the following amendment to the amendment: "That hereafter no bank note of less denomination than ten dollars, and that from and after the third day of March, A. D. 1837, no bank note of less denomination than twenty dollars, shall be offered in payment in any case whatsoever in which money is to be paid by the United States or the Post Office Department; nor shall any bank note, of any denomination, be so offered, unless the same shall be payable and paid on demand, in gold or silver coin, at the place where issued, and which shall not be equivalent to specie at the place where offered, and convertible into gold or silver upon the spot, at the will of the holder, and without delay or loss to him." Mr. N., after submitting his amendment, explained at silver to the soldiers. He said, God grant that it might. The largest payments to the army were made in the West; and there were three paymasters there, Major Massias, Major Stewart, and Major Harney, who deter mined to carry nothing to the soldiers but gold and silver, and that equivalent to it; and they did carry it, and the beneficial effects were soon discovered. The largest sum that was carried was carried by Major Harney. He carried about $40,000, $10,000 of which was in gold, and he did it without any expense to the United States. All he had to do was to make a requisition on the next military post for baggage wagons and a guard; and he was informed by that officer that there was a general rejoicing in the camp when he arrived there with the money. There was but one rueful countenance to be seen, and that was of the sutler, who complained that, if that practice was continued, he would be ruined; that formerly, when payments were made to the soldiers, they rushed to him in crowds, with their bank notes; but that now they would keep the gold and silver, instead of spending it in drink and other superfluities. He believed that under this provision nothing but gold and silver would be carried to the outer military posts. If the Senator from Tennessee would suggest an amendment to suit his views, he would heartily concur in it. Mr. WHITE spoke in favor of pensions being paid in specie, and that it was of more importance that their interests should be subserved in this matter than even the soldiers of the army. That class of them who received their forty-eight dollars were, of all things, most glad to receive the specie. He was, on the whole, content with the amendment of the Senator from Connecticut, [Mr. NILES.] The question was here taken on Mr. NILES's amendment, and it was adopted: Yeas 22, nays 13, as follows: YEAS-Messrs. Benton, Brown, Calhoun, Grundy, Hendricks, Hill, Hubbard, King of Alabama, Leigh, Linn, McKean, Morris, Nicholas, Niles, Porter, Robinson, Ruggles, Shepley, Tomlinson, Walker, White, Wright-22. NAYS--Messrs. Black, Clay, Davis, Ewing of Ohio, Kent, King of Georgia, Knight, Mangum, Moore, Naudain, Prentiss, Robbins, Swift-13. Mr. CLAY thought it worthy of serious consideration whether it would not be better to leave the matter as it now stood, as, under the present laws, the creditors of the Government were bound to take nothing but gold and silver in payment. It was worthy of consideration whether the passing this amendment would not be giving an implied sanction to the reception, by the officers of Government, of bank notes of every description. [APRIL 6, 1836. be construed to make any thing but gold or silver a legal tender, by any individual, or by the United States." Mr. BENTON assented to the amendment, and said that the gentleman might make it as strong as he pleased. Mr. KING, of Alabama, presumed it was intended by gentlemen to follow up this amendment by a repeal of the law which forced on them the reception of the notes of the Bank of the United States in payment of the revenue. There was a bill pending, not before them, however, for that purpose; and he did not know whether gentlemen were prepared to give it their support, if the bill did come up. He only made this suggestion to gentlemen, that they might give their attention to the subject. Mr. EWING said there was nothing in this bill to prevent the receiving of the notes of the United States Bank. If there was a compact or obligation on the part of the Government, in pursuance of the charter, to receive them, it could not be violated. He understood it had been so construed by the Secretary of the Treasury that that Department was bound to receive them. He, (Mr. E.,) however, did not wish to be considered as giving any opinion on the subject. Mr. CLAY. The notes of the Bank of the United States were never a legal tender; the law only authorized them to be received in payment of debts due the Government. If any Senator had any of those notes, and wanted to get rid of them, he might hand them to him. He would be glad to give the notes of any of these small banks, or even specie, for them. Mr. KNIGHT considered the amendment altogether useless. There was no obligation on any one to receive any thing but specie in payment from the Government; and he presumed that, when notes less than ten dollars were paid to an individual, it was only for his convenience. If the individual was paid in notes over five dollars, he only had to turn round and ask the cashier to change them for fives; and he could also, if paid in five dollar notes, get them changed for tens or twenties, by asking for them. He considered the amendment alogether useless; but if the gentleman would introduce a proposition, requiring payments to be made only in gold and silver, he should vote for it. Mr. BENTON observed that the subject of receiving and disbursing the revenues of the United States had occupied the attention of all; it certainly had occupied his attention; and, after spending years in thinking about it, he had come to the conclusion that there was but one safe course for the United States to pursue, and that was, to return to gold and silver for the treasury. He had been of that mind for years past; and had made the rough draft of a bill to accomplish that object; the only difficulty was to arrange the times, so as to enable the Government to cut loose from bank paper without giving a shock to the community. It was a lamentable circumstance that the federal Government, while receiving the depreciated currency of the States, was able, at the passage of the very first revenue law, and at the first session of its Legislature, to declare that gold and silver only should be received in payment, and that they were not now able to do it without producing a convulsion, so much had they become entangled in the paper system. Now, the little amendment which he had offered to the appropriation bill was only the commencement of a system which he hoped to see carried out; and the rough bill he had drawn out was to take up and carry on the system thus commenced. While they were complaining of the States for the sanctioning the inordinate increase of banking capital, it was lamentable that this was owing to the fault of the federal Government in receiving these notes to the extent they did, and paying them out to the public creditors. It was by this means that a fictitious credit was given to them; it was by this means that they got the money of the United States to bank on; and it was by this means that a piece of worthless paper with a little lampblack on it, and made at Passamaquoddy, and called five dollars, was made to pass at Attakapas, because it was receivable in payment | for public lands. He saw it announced in the New Orleans papers, that a Mr. Armand had, in the Louisiana Legislature, proposed, in bitter irony, that the ancient and renowned company of fox hunters should be incorporated with banking privileges. He did it in bittering in it that could cure the wretched state of the curirony, as a reproach to the wild spirit of speculation, by which the evils of a paper currency were so much extended. As a consequence of this expansion of the paper system, they are purchasing bread from Europe --the starvelings of Europe were sending them bread; and it was because those who made this bank paper did it with such facility that they could give a bundle of it for a single loaf. He held that all this was the fault of the federal Government rather than of the States; for if they did not give this paper money the wings to fly on, by making it payable for the revenues, it would fall back on those who issued it; and those charters, by which uncounted millions were circulated, and which encouraged an extravagant and demoralizing system of gambling in stocks, would soon cease, for the quantity of bank capital in the United States was brought back to the lawful operations of trade; he believed that four fifths of the stock now held would be surrendered as unprofitable. So far from giving sanction to the receipt of paper money, his object was to cut loose from the whole of it. Mr. PORTER here submitted the following amendment: "Provided that nothing herein contained shall Mr. BENTON said he should certainly do so; but not for a single suggestion, and not at that time. Mr. CALHOUN doubted whether much if any good could come out of this proposition. He could see noth rency. It would be better to draw the fifteen millions of Government money out of these deposite banks, and distribute it where it could be usefully employed. They were using this money without paying any thing for the use of it, and drawing from the Government something like two and a half millions of dollars profit. The administration was responsible for that thoughtless, mischievious, and imprudent act, of withdrawing the de posites from the United States Bank, and placing them in these pet banks; notwithstanding they were told that, instead of stopping the evils of banking, these Hydras would spring up like mushrooms. It was amazing to see the majority sitting quietly by, without proposing a remedy to this evil, which was making beggars of thousands, and enriching speculators. These pet banks had an agent by the name of Whitney, (Mr. C. did not know him,) who had a control over the pecuniary affairs of the country which no other man ever had. He could raise or depress stocks at pleasure. There was an awful responsibility resting on the supporters of the administration. The gulf into which they were rushing was before their eyes. The dreadful explosion was coming. The injury to the manufacturers would be immense. But, he thanked God, it would not be so great to those of the South. If the growing crop should be cut off, no one could tell the state of things it would bring about. Money that had been won by blood was put into public lands, and drawn out to be put into pet banks. Withdraw them (the deposites) from the banks, said he, and if you cannot return them to the people in any other way, loan them without interest. The money of the United States deposited in these irresponsible banks was an annual tax of something like two millions of dol- | lars. He approved of the spirit in which this resolution was offered, but it would not meet the crisis. Let the Senate follow up this resolution with measures that would make this money cease to be banking capital. The Senate would do him justice for predicting, in 1834, that the state of things then would shake the country to its very centre. He could not let the matter pass with out warning the Senate and the country of the dangers that threatened the country. Br. BENTON said that, among the other papers in his possession, he had an amendment that he had prepared for the bill to regulate the deposites of the public moneys. Would the Secretary be so good as to tell him how that bill stood on the calendar. [The SECRETARY answered that bill was only eight ahead.] Well, continued Mr. BENTON, we shall come to it pretty soon, and he was then for making these deposite banks pay something handsome for the use of the public money. He also had a provision to prevent them from issuing notes less than twenty dollars, and to make them pay in gold and silver, or that equivalent to it, so that the holder of the bills should have a right to demand specie, and one half in gold, on the spot. He should stake his political existence against suffering the notes of any of these banks from becoming the currency of the country. We cannot, said Mr. B., cut them off at once; but must come to a specie circulation gradually. He would state, before he sat down, that his bill to supply the mint with coin (proposed a few days ago) would take up a considerable portion of the revenue; for the mint would require, as he had been informed by the director of that institution, a million of dollars a month. Mr. CALHOUN rose to express his approbation of the measures the Senator from Missouri proposed to introduce, and said he would co-operate in any measures that would prevent that greatest of all calamities to any country, a ruined currency, a state of things which gave the sagacious and cunning man the advantage over the honest laborer. Mr. NILES said that the Senator from South Carolina [Mr. CALHOUN] had delivered the speeeh we had just heard, or the substance of it, three or four times during the session, on different occasions. The surplus in the deposite banks appears to give the gentleman great anxiety and alarm. In addition to his apprehensions for the security of the public funds, which he has not now enlarged upon, he represents the surplus as an alarming evil, by its tendency to enlarge the action of the deposite banks, and give dangerous expansion to the whole paper system. So far the gentleman is correct. Aside from all other weighty objections to an accruing surplus, if it shall appear that there is a surplus, this is, no doubt, an evil of no small magnitude. The money now in the treasury, however, cannot be regarded as a surplus; it has accumulated by the tardiness of our legislation, and the delay of the appropriation bill; it is much of it required for the public expenditures of the current year. The evil, therefore, to a considerable extent, may be regarded as a temporary one. But if there shall prove to be a surplus beyond the appropriation, such surplus, whether of thirty millions or ten millions, being, [SENATE. as of course must be the case, deposited in the banks, becomes a capital on which the banks will make discounts and enlarge their operations. This operates like a sudden creation of additional bank capital to the amount of the permanent surplus, and will enable the banks to increase their loans to perhaps twice the amount of these deposites. This state of things, in common with the improvident legislation of the States for the last two years, in creating bank capital to an unprecedented amount, exceeding, probably, fifty millions, has had a pernicious influence, by giving a dangerous expansion to the whole paper system. The profits which the deposite banks derive from the public funds, although large, and what they ought not to receive, is the smallest part of the evils of this state of things. Did I suppose there was to be a permanent surplus, I should be as anxious to make some disposition of it as the Senator from South Carolina can be; and although I will not say that I would support any of the proposed schemes for the distribution of it, yet I would go as far as he who goes the farthest in support of anv plan to get rid of it, founded in justice, and which shall not conflict with the constitution. He did not, however, wish to see it distributed among the States, but desired to see it returned to the people; or, rather, that no more money should be drawn into the treasury than what was required to meet the wants of the Government. Let us stop the money from flowing into the treasury, and leave it to distribute itself among the people. This was the scheme of distribution which he should prefer. But the Senator represents the evils of this surplus as arising from the public funds being withdrawn from the Bank of the United States, and deposited in certain State banks. He could not understand how this had either caused the evil, or increased it; it was unaccountable to him how a given amount of money deposited in one set of banks should have more influence to extend banking operations than if deposited in another set of banks. The banks are all governed by the same principles, and act from the same motives. Their object is to make the greatest profit; and the public funds, let them be in what bank they may, will be used for this purpose. It is now claimed that the public revenues being in State banks have occasioned an alarming extension of banking operations and expansion of the paper system, which threatens general ruin. Would not these evils, so far as they do exist, have been the same if these funds had been in the Bank of the United States and its branches? He should like to have the explanation of this matter. It was to him as great a mystery as one of an opposite character two years ago. Then it was claimed by the Senator and others, that the removal of the public funds from the Bank of the United States to these same pet banks occasioned a money pressure and a panic. It was then said that the public revenues, while deposited in the United States Bank, were a fund in which that bank extended accommodations to merchants and others; but that being removed to State banks, they were not available for such purpose. The public could not be benefited by them in the State banks; and this was gravely alleged as the cause of the money pressure. Men of plain common sense could not then comprehend how it was that the removal of eight or ten millions of dollars from one to another set of banks, all acting on the same principles, and using it as a capital, should create a scarcity of money. This was a mystery two years ago; and now it seems we have another mystery quite as great; the deposite of the public funds in State banks, or what the gentleman calls pet banks, producing an alarming expansion of the paper system, deranging the currency, and threatening a general explosion, when none of these evils would exist had the same funds been de SENATE.] Revolutionary Pensions. posited in the Bank of the United States. He had no partiality for the deposite banks nor any other banks; he wished them to be restricted, and compelled to pay for the use of the public deposites; they were enjoying advantages which they ought not to enjoy; but he could not, in silence, hear it repeated again and again on this floor, that the evils arising from the present surplus, whatever they may be, have been occasioned by the public revenues being deposited in the State banks, instead of the Bank of the United States, as that bank has greater power, is controlled by one will, can act with more energy and effect. Had it retained the public funds, the public evils would have been greatly increased. Mr. CALHOUN, in reply to Mr. NILES, said the gentleman had misunderstood him. His argument was, that the removal of the deposites, and the breaking down of the Bank of the United States, had given rise to innumerable State banks; and not that the surplus would not have accumulated in the Bank of the United States; and that the idea of limiting bank capital by removing the deposites had turned out to be wholly falJacious. But it was the security of the public money to which he had alluded; for he would venture to assert that, if an ensurance was opened, they could not get the public money ensured in the deposite banks, against loss, for a premium of twenty per cent. In the Bank of the United States the public money would have been safe; and, what was more, they would, as stockholders, be drawing an interest of $400,000 for this money, which the deposite banks used without interest. There would have arisen another advantage from leaving the public money in that bank. Had it remained there, there would have been no objection, as now, to the distribution of it among the States, because the Government was in a state of hostility to the bank. President Jackson had twice recommended this measure, and it was surprising to see the facility with which his friends changed their opinions to please him. When he first recommended the distribution, they highly applauded it; the recommendation was eagerly hailed by New York; Pennsylvania followed suit, and the whole party sung hosannas to it; now they were all opposed to it. He saw a great difference in having the public money where it was safe, from having it where it was not safe. Banking capital had increased more than one hundred millions, and he held the administration responsible for it, as well as for all the evils with which they were threatened. He had predicted this state of things again and again, as a consequence of the measures of the administration, but he had not been listened to, and they had proposed no measure to remedy or prevent the evils acknowledged to exist. They came into power in 1830-they saw the public debt was about to be paid--they saw the tariff throwing millions into the treasury which it ought not to have collected; and they recommended no measures to meet these emergencies. Instead of being employed in attending to these objects, they were employed in turning out one cabinet and putting in another, and regulating social intercourse, declaring who they should visit, and who they should not visit. He held the administration responsible for the existing state of things in regard to the currency, and for converting the public lands, the property of the people, into useless paper. Mr. WALKER said he had heard with much surprise the charge renewed by the gentleman from South Carolina, [Mr. CALHOUN,] in relation to the deposite banks; or, as that gentleman designates them, pet banks-the President's banks. Mr. W. said, that if these banks are the pets of any man, or set of men, they were the pets of the United States Bank; for Mr. W. believed that nine tenths of these very misnamed tion. [APRIL 6, 1836. Sir, pets had petitioned for, or favored the recharter of, the Sir, APRIL 7, 1836.] Public Deposites--Railroad Contracts. attacks will cease, or if renewed, it may in future have facts and specifications, instead of vague assertions and groundless insinuations. Mr. PORTER'S amendment was then agreed to, and the bill was ordered to be engrossed for a third reading. PUBLIC DEPOSITES. Mr. WRIGHT laid on the table the amendment which he proposed to move to the bill to regulate the public deposites, whenever that bill shall be called up. If the Senator from South Carolina did not call up that bill, (as he had intimated that he should not,) he (Mr. W.) would call it up at the earliest opportunity. Mr. CALHOUN expressed his gratification that the gentleman from New York and the Senator from Mis souri had taken this bill under their protection. They had the power to carry it through, and he was glad that they had it in their charge. The amendments were ordered to be printed. Mr. PRESTON stated that he had some months since Jaid on the table a resolution from the Committee on the Judiciary, on the subject of the legacy of Smithson. He would now call it up, if it suited the convenience of the Senator from Virginia, [Mr. LEIGH.] Mr. LEIGH yielded his desire to have it taken up, and, On motion of Mr. BLACK, the Senate proceeded to the consideration of executive business; and, after remaining some time in secret session, The Senate adjourned. THURSDAY, APRIL 7. RAILROAD CONTRACTS. Mr. GRUNDY, from the Committee on the Post Of fice and Post Roads, made a report on the subject of the bill to authorize contracts with the railroad companies; which he read from the table. Mr. EWING, of Ohio, stated that the report contained much important matter which it was proper to lay before the public; and he accordingly moved that there be 5,000 extra copies printed. Mr. GRUNDY suggested that there should be appended to the report the bill of the committee, as it was proposed to be amended. He Mr. CALHOUN said that the report was an important one, but he could not but apprehend that it might be difficult to carry out the views which it contained. feared that the Postmaster General would derive, as the agent of the Government to contract with these companies, too great an addition to his power, and in this respect the bill could not be too carefully guarded. He had not had sufficient time to turn in his mind the many difficulties which seemed to stand in the way of this plan. Whenever the bill should come before the Senate, he would co-operate heartily in guarding against too much power being given to the Department. He doubted the propriety of printing so large a number. often the case that these ex parte reports held out flattering prospects, which were doomed to be clouded, and to lead to expectations which were never realized. He hoped there would be a postponement of the question to print the extra number. It was Mr. GRUNDY expressed a wish that the gentleman from South Carolina had turned his attention to the amendments proposed to the bill. It was so framed that the Postmaster General would have no authority to make any binding contract. Every contract must be submitted to Congress, and must receive the sanction of the two Houses before it would be binding. This amendment had been proposed by the Senator from Ohio, [SENATE. [Mr. EWING,] and had been unanimously agreed to in the committee. The Postmaster General would have no power on the subject of contracts. He would act merely as a negotiator with the War Department, for the purpose of communicating to the railroad companies all possible information which would be required as to the wants of the Government. But he was not to act on the subject of contracts; all he could do was to present the offers to Congress, by whom they must be accepted or rejected. No additional power, therefore, was conferred on the Postmaster General, as he was not authorized to do any thing which was conclusive. The amendment, which took away the power from the Postmaster General, was offered by the Senator from Ohio, and had received unanimous concurrence; and the bill, in its amended form, is as free from giving any increased powers to the Postmaster General as possible. Mr. CALHOUN said he should be happy to concur in all the provisions of the bill which appeared to him to be practicable; but even in the modified form in which the bill was now presented by the Senator from Tennessee, he saw much difficulty. We are about to make a new movement. We had frequently seen plans which were equally plausible in their appearance, but which finally turned out to be mere fallacies. He was desirous that the motion to print the extra number should be postponed until there had been a little more time allowed for examination into the report. Mr. EWING, of Ohio, stated that it was only recently that the subject had been agitated at all. It was cer tainly impossible to foresee all the difficulties which might arise in carrying this new arrangement into effect. Although he had proposed the amendment, and assent-, ed to the report which had been made, he had reserved himself as to the main question of the policy of the bill itself, and had left himself entirely free to act on that subject according to the views he should then entertain. The original bill had this objectionable feature. According to its provisions, no railroad company could make a contract for the transportation of the mail without the permission of the Postmaster General. This provision was exceptionable, and he had pointed it out and suggested its impropriety. It was accordingly stricken out by the unanimous consent of the committee. The bill as it now stands provides that the Postmaster General shall send the proposals to Congress, for the action of that body, after such propositions have been submitted. To this provision he could make no objection. To the act, as it now stood, he could at first view see no objection. If, when the first contract was made, it should be found on trial that it was disadvantageous, the system could be broken up without going any further. He had proposed the printing of an extra number of copies, because he desired that the subject should be transmitted freely to the public, in order that public opinion might act upon it, and that the merits of both the report and the bill may be fairly examined. Still he had no particular objection to suspend his motion to print an extra number for a few days, until the arguments of gentlemen could go forth at the same time. Mr. GRUNDY expressed the hope that whatever number it might be thought proper to print of this report, they might be printed at once. It was a matter of business. It was important that the plan should be known abroad, in order that companies might make their contracts with a full knowledge of the views of the Department and the committee. Mr. KNIGHT said he was a member of the Committee on the Post Office and Post Roads, and had acquiesced in the report. But he did not feel himself committed as to his vote on the bill; he felt himself still at liberty to act in reference to the measure as his judgment might heareafter dictate. He regarded the bill as an indirect |