foreign debt would probably be remitted, retaining at home or drawing from abroad the equivalent in specie.

A great, if not the greatest existing evil is the want of confidence, not merely in the government, but in distant banks, and between the banks themselves. There is no tie or connection binding them together, and they are often suspicious of each other. To this want of confidence among the banks themselves, is to be ascribed that extraordinary derangement in the exchanges of the country. How otherwise can we account for the fact, that the paper of the banks of Mississippi cannot now be exchanged against the paper of the banks of Louisiana, without a discount on the former of ten or fifteen per centum; nor that of the banks of Nashville, without a discount of eight or ten per centum against the paper of the banks of the adjoining state of Kentucky? It is manifest, that, whatever may be the medium of circulation, whether it be inconvertible paper, or convertible paper and specie, supposing confidence to exist, the rates of exchange in both cases ought to be nearly the same. But, in times like these, no bank will allow its funds to accumulate, by the operations of exchange, at points where no present use can be made of them.

Now, if a bank of the United States were established, with a proper capital, and it were made the sole depository of the public moneys, and its notes were receivable in all government dues, it might commence operations forthwith, with a small amount of specie, perhaps not more than two millions. That sum would probably be drawn from the community, where it is now hoarded and dormant; or if it were taken even from the local banks, they would be more than compensated in the security which they would enjoy, by the remittance of the stock of the new bank to Europe, as a substitute for their specie.

Such a new bank, once commencing business, would form a rallying point; confidence would revive, exchanges be again regulated, and the business and prosperity of the country be restored. And it is by no means certain that there would be any actual augmentation of the banking capital of the country, for it is highly probable that the aggregate amount of unsound banks, which can never resume specie payments, would be quite equal to that of the new bank.

An auxiliary resolution might be adopted with salutary effect, similar to that which was adopted in 1816, offering to the state banks, as a motive to resume specie payments, that their paper should be received for the public dues; or, as their number has since that period greatly increased, to make the motive more operative, the offer might be confined to one or two banks in each state, known to be trustworthy. Let them, and a bank of the United States, commence specie payments, and all the other sound banks would be constrained, by the united force of public opinion and the law, to follow the example.

If, in contrasting the two periods of 1817 and 1837, some advantages for the resumption of specie payments existed at the former epoch, others which distinguish the present greatly preponderate. At the first there were none except the existence of a public debt, and a smaller number of banks. But then an exhausting war had wasted our means. Now we have infinitely greater wealth, our resources are vastly more developed and increased, our population nearly doubled, our knowledge of the disease much better, and, what is of the utmost importance, a remedy, if applied now, would be administered in a much earlier stage of the disorder.

A general currency, of sound and uniform value, is necessary to the well being of all parts of the confederacy, but it is indispensable to the interior states. The seaboard states have each of them banks, whose paper freely circulates within their respective limits, and serves all the purposes of their business and commerce at their capitals, and throughout their whole extent. The variations in the value of this paper, in passing through those states, from one commercial metropolis to another, are not ordinarily very great. But how are we of the interior to come to the Atlantic cities to purchase our supplies of foreign and domestic commodities, without a general medium? The paper of our own banks will not be received but at an enormous discount. We want a general currency, which will serve at home and enable us to carry on our accustomed trade with our brethren of the Atlantic states. And such a currency we have a right to expect.

I do not arrogate to myself a right to speak for and in behalf of all the western states; but as a senator from one of them I am entitled to be heard. This union was formed to secure certain general, but highly important objects, of which the common defence, commerce, and a uniform currency, were the leading ones. To the interior states none is of more importance than that of currency. Nowhere is the attachment to the union more ardent than in those states; but if this government should neglect to perform its duty, the value of the union will become impaired, and its very existence in process of time may become endangered. do believe, that between a sound general currency, and the preservation of itself, in full vigor and perfect safety, there is the most intimate connection.

I

If, Mr. President, the remedies which I have suggested were successful, at a former period of our history, there is every reason to hope, that they would again prove efficacious; but let me suppose that they should not, and that some unknown cause, which could not then, should now, thwart their operation, we should have, in any event, the consolation of knowing that we had endeavored to profit by the lessons of experience; and if they failed, we should stand acquitted in the judgment of the people. They are heartily tired of visionary schemes and wild experiments. They wish to

get out of the woods, into which they have been conducted, back to the plain, beaten, wide road, which they had before trod.

How, and when, without such measures as I have suggested, are the state banks to resume specie payments? They never can resume without concert; and concert springs from confidence; and confidence from knowledge. But what knowledge can eight hundred banks, scattered over our own vast territory, have of the actual condition of each other? It is in vain that statements of it be periodically published. It depends, at last, mainly upon the solvency of the debtors to the bank; and how, whenever their names are not known, can that be ascertained?

Instead of coming to the aid of these prostrate institutions, and assisting them by a mild and parental exercise of your power, in a mode sanctioned and approved by experience, you propose to abandon them and the country to their fate. You propose worse, to discredit their paper, to distrust them even as special depositories, and to denounce against them all the pains and penalties of bankruptcy. How, and when, will they resume specie payments? Never, as far as my information extends, have exertions been greater than those which the banks have generally made, to open again their vaults. It is wonderful that the community should have been able to bear, with so much composure and resignation, the prodigious curtailments which have been made. Confidence reestablished, the foreign debt extinguished, and a national institution created, most of them could quickly resume specie payments, some of them, urged by a high sense of probity, and smarting under severe reproaches, will no doubt make the experiment of resuming and continuing specie payments. They may even go on a while; but without the coöperation of the state banks generally, and without the coöperation of a national bank, it is to be apprehended that they will be again seized with a paralysis. It is my deliberate conviction, that the preservation of the existence of the state banks themselves, depends upon the institution of a national bank. It is as necessary to them as the union is to the welfare of the states in our political system. Without it, no human being can foresee when we shall emerge from the difficulties which surround us. It has been my fortune, several times, to see the country involved in great danger, but never before have I beheld it encompassed with any more menacing and portentous.

Entertaining the views which I have presented, it may be asked, why I do not at once propose the establishment of a national bank. I have already adverted to the cause, constituted as congress now is, I know that such a proposition would be defeated; and that it would be, therefore, useless to make it. I do not desire to force upon the senate, or upon the country, against its will, if I could, my opinion, however sincerely or strongly entertained. national bank be established, its stability and its utility will depend upon the general conviction which is full of its necessity. And

If a

until such a conviction is deeply impressed upon the people, and clearly manifested by them, it would, in my judgment, be unwise even to propose a bank.

Of the scheme of the senator from Virginia, (Mr. Rives,) I think now as I thought in 1834, I do not believe that any practical connection of state banks can supply a general currency, be a safe depository of the public moneys, or act efficiently as a fiscal agent of the general government. I was not then opposed to the state banks in their proper sphere. I thought that they could not be relied upon to form exclusively a banking system for the country, although they were essential parts of a general system.

The amendment of the senator, considered as a measure to bring about the resumption of specie payments, so much desired, I think must fail. The motive which it holds out of the receivability in all payments to the government of the paper of such banks as may resume at a given day, coupled with the conditions proposed, is wholly inadequate. It is an offer to eight hundred banks; and the revenue, payment of which in their notes is held out as the inducement, amounts to some twenty or twenty-five millions. To entitle them to the inconsiderable extension of their circulation, which would result from the credit given by government to the paper of all of them, they are required to submit to a suppression of all notes below five dollars, and at no very distant period, to all below twenty. The enlargement of their circulation, produced by making it receivable by government, would be much less than the contraction which would arise from the suppression of the prohibited notes. Besides, if the quality proposed again to be attached to the notes of these local banks was insufficient to prevent the suspension, how can it be efficacious enough to stimulate a resumption of specie payments?

I shall, nevertheless, if called upon to give a vote between the project of the administration and the amendment of the senator from Virginia, vote for the latter, because it is harmless, if it effects no good, and looks to the preservation of the state banks; whilst the other is fraught with mischiefs, as believe, and tends, if it be not designed, to the utter destruction of those institutions. But preferring to either the postponement moved by the senator from Georgia, I shall, in the first instance, vote for that.

Such, Mr. President, are the views which I entertain on the present state of our public affairs. It is with the deepest regret that I can perceive no remedy, but such as is in the hands of the people themselves. Whenever they shall impress upon congress a conviction of that which they wish applied, they will obtain it, and not before. In the mean time, let us go home, and mix with and consult our constituents. And do not, I entreat you, let us carry with us the burning reproach, that our measures here display a selfish solicitude for the government itself, but a cold and heartless insensibility to the sufferings of a bleeding people.

ON THE PREËMPTION BILL

IN THE SENATE OF THE UNITED STATES, JANUARY 26, 1838.

[THE system of granting preemption rights to settlers on the public lands, or squatters, as they are called, being persons who locate themselves on those lands without first obtaining the right by purchase, Mr. Clay has always opposed. In taking this course he has shown his disregard of the effect calculated to be produced on his personal popularity in the newly settled states, by opposing a measure which he considered detrimental to the interests of the country, however desirable it might be to the pioneers in the new settlements. At the session of congress in 1838, a bill granting preemption rights to settlers on the public lands was introduced and passed the senate by a large majority, but, while the measure was under consideration, Mr. Clay did not hesitate to oppose it in the following remarks.]

MR. CLAY said, that in no shape which should be given to this. bill could he give it his vote. In any aspect it was to be considered as a bounty, or a grant of the property of the whole people to a small part of the people; often the speculator; and he would like to know by what authority such a bill could be passed. He regarded it as a reward for the violation of law; as a direct encouragement to intruding lawlessly on the lands of the United States, and for selecting and taking what the trespasser pleased of the property of the whole people; and he was not to be deterred from the most strenuous opposition to such measures by any denunciation, come from what quarter it might, let these measures be supported by whom they might.

But he would not now enter into the consideration of granting the public property in the manner proposed by this bill. He had risen to notice a subject which seemed to have been lost sight of. It had been said, the government lost nothing by preemption; but he could not conceive how the accounts were made out in proof of this assertion. The president tells us, that the whole average amount gained above the minimum price is only about six cents. per acre; others state it at two, four, and five cents; and the secretary of the treasury asserted, in his annual report, that the revenue would be augmented by the passage of a preëmption law. The preemption law! As if the competition of a fair, open, public sale would not produce more; as if preemptioners would not go to