considerations merely political or official. A very wide discretion will be thus restricted, and a prolific source of suspicion and imputation of favoritism and partiality be entirely stopped.

The officers, under the plans proposed, will likewise be amenable exclusively to the General Government, and not be embarrassed, like the officers of the banks, by conflicting duties and interests in respect to the States; nor involved in those collisions, jealousies, and recriminations, often attendant on that position.

The independent and harmonious action of each government in its appropriate sphere will thus be more fully secured. The local institutions, as a general principle, will be left to the care and uses of the several States which established them, without interference on the part of the General Government, and to be regulated or discontinued, as deemed most useful under their own State policies, and most conducive to the original purposes of their creation. Nor would any general monied corporation, aside from the grave doubts which exist as to both its constitutionality and general expediency, have been likely, in such a crisis as that of the war of 1812, or perhaps that of the last spring, to have proved a much safer public depository than those local institutions. Though more convenient in form for fiscal purposes than they, and free from some objections as to want of symmetry and accountability which obtain against them, yet, if chartered on usual principles, and judging from experience here as well as abroad, it must have failed, in a trial like those, to have sustained either our pecuniary operations or its own, in strict good faith and in due vigor.

Without entering into details to illustrate this position, it is necessary to notice only the single circumstance, that the Bank of England, during a severe war, suspended specie payments near a quarter of a century, and that neither of the two United States Banks existed so as to be obliged to encounter such a peril. But since the last Spring, the notes of the second one, to the amount of several millions, have been allowed to sink into the mass of irredeemable and depreciated paper, though issued under all the high securities and sanctions of a charter from the General Government, and with very large funds, still under the control of officers and trustees deemed by the stockholders exceedingly skilful, and bound by both law and contract to redeem those notes in specie, and on demand.

The systems which have been proposed in this report, if adopted, could not be expected to continue entirely exempt from losses by that unfaithfulness or casualty to which all trusts in human affairs are exposed. But they may be surrounded with strong safeguards, and would very probably soon be enabled to answer in a satisfactory manner every purpose of the government, in its condition so different in many respects from that which formerly existed, and which was the paramount cause urged for the incorporation of our two former United States Banks. Its finances are not now burdened with a national debt of from seventy to one hundred and thirty millions, and, besides

our ordinary expenses, with the annual payment, on account of principal and interest, of from ten to sixteen millions, to be first widely collected, and then transferred and disbursed at only a few points on the sea-board. It is now with a yearly revenue reduced from thirty and forty millions to near twenty, and probably soon to be only sixteen or seventeen, and with a course of expenditure which can readily be diminished so as not much, if any, to exceed the revenue in a natural state of business. In large sections of our country, and in such a state of business, this expenditure happens nearly and very conveniently to correspond in amount with the receipts in the same sections.

We are, likewise, reposing in peace, with very superior means of communication, whether by mail or personal intercourse, and with a greatly increased and increasing portion of gold in the currency, to render distant transfers and payments more easy. It is manifest, therefore, that our fiscal concerns will be greatly lessened in amount as well as difficulty, unless we shall be visited by wars or other scourges involving us in debts and embarrassments of an aggravated character, and which, fortunately, no sufficient reason appears for anticipating at an early day.

Under the proposed arrangements, the transfers from certain points could be often effected, when required by the department for public purposes, not only with ease, but so as greatly to facilitate the domestic exchanges, in the mode of employing drafts suggested in a subsequent portion of this report. In a more natural and ordinary state of receipts and expenditures, like that in 1834, the transfers required to a great distance would not exceed two or three millions during the year; and almost the whole of them were, at that time, in such a direction as to yield a profit, rather than be expensive to the banks which made them.

If the treasurer were required to receive payment in advance, at certain convenient points, for all lands sold, as has once been the construction of the act of 1820, the probability is, that very soon all the unfavorable transfers rendered necessary would become quite unimportant in amount, and less expensive than the transportation of specie and paper has been heretofore, from the distant land offices to the nearest deposite banks, before much of it was paid to the public creditors. It will be seen that, by these modes of keeping the public money, it would not be indispensable to employ any banks as a prescribed part of the system, although it might sometimes be convenient to use them as individuals do, and as subordinate fiscal officers often do, in other countries, for the deposit and transfer of large sums, and particularly for special deposites, when looking merely to safety and an early occasion to use the money.

No act of Congress, until the charter of the last Bank of the United States in 1816, required the public money in the treasury to be kept on deposit in any bank whatever. The whole subject was left to the discretion of this department. Even that charter permitted the Sec

retary of the Treasury to remove the deposites from the Bank of the United States, when he thought proper.

In the supplemental report from this department, in 1834, on the keeping and disbursing of the public money, a state of things like the present was adverted to and considered. It was observed, in regard to such an occurrence, that it will then "become necessary to devolve these duties on some receiver or collector already in office, or on some safe agent not now in office, as has been the practice for years, in this country, in paying pensions at convenient places, near which there was no State bank or branch of the United States Bank, and as has long been the usage in some countries of Europe, by having the revenue in certain districts chiefly received, kept and transmitted, through private agents and brokers."

But it was added, that "though the fiscal operations of the government could, undoubtedly, still proceed through the personal agencies before mentioned," and without any banks, State or national, yet "it would be at some inconvenience and increase of expense, unless remedied in a manner that may hereafter be developed; and would not, in the opinion of this department, and in the present condition of things, be so eligible a system as the present one; because banks, though exposed to some dangers and evils, and though not believed to be necessary for the fiscal purposes of any government, and much less of one in the present happy financial situation of ours, are frankly acknowledged to be, in many respects, a class of agents economical, convenient, and useful."

LOSSES FROM BANKS AND BANK-PAPER.*

TREASURY DEPARTMENT, February 11, 1841. SIR: The following report is submitted, in compliance with a resolution which passed the Senate on the 7th ultimo, in these words:

"Resolved, That the Secretary of the Treasury be directed to communicate to the Senate, at as early a period as practicable, in a detailed and tabular form, all the information in the power of his department in answer to the following questions:

*Report made while Secretary of the Treasury, Feb. 12, 1841; showing, in compliance with a resolution of the Senate, the losses of the General Government, and by the people of the United States, from the use of banks and bank-paper.

"1. What amount has the Federal Government lost, from its organization to this time, by the employment of banks, by the use of bank-paper, or by its connection in anywise with banks, including the depreciation of bank-paper?

2. What amount the people of the United States have lost, from the commencement of the government to this time, by the failure and the suspension of banks, and by the depreciation of bank-paper, by the loss and destruction of bank-notes, and by the existence of banks and the use of bank-paper generally.

"3. What have the people and government of the United States paid, directly and indirectly, to the aggregate banks of the United States, for the use of those institutions, annually, for the last ten years?

4. What proportion of the stock of the several banks of the United States is at this time owned by foreigners?"

Several of these inquiries involve considerations which cannot easily be presented in the "detailed and tabular form" desired in the resolution. Again: many of them require explanations and limitations, or qualifications, that could not, amidst the pressure of numerous other engagements, and within the short period of a few weeks, be accurately prepared, even in the shape of notes to statistical statements. Most of them, also, are in themselves incapable of much certainty, and can only be approximated by a few ascertained data, and the best estimates formed upon them which the imperfect character of the materials that can be procured, and my own want of leisure, may warrant. But all the information in possession of the undersigned, bearing on the matter of the resolution, and susceptible of being brought into the form required by its provisions, will be submitted at this time, accompanied by such notes as seem to be necessary to prevent misapprehension, and give useful explanations as to the calculations. The rest must be left to future research and computation by others. The whole might fill volumes; since what is now presented, instead of exhausting the subject, is only enough to excite thinking and inquiry elsewhere.

As the data themselves, and the grounds or principles adopted in the estimates, are usually given, an opportunity will exist for others to judge of their approach to accuracy, and, so far as imperfect, to correct them, hereafter, on more certain information.

It is evident, by the language of the resolution, that, under the word "loss," or "lost," to the government and the people, are meant the gross losses, without computing or deducting any supposed benefits by the banking system. From this circumstance, and the fact that any such benefits are not required to be computed, they are not investigated and reported on under any of the different heads of inquiry. It is further manifest, from the same circumstances, that, by the word "loss," or "lost," are meant to be embraced those losses sustained by any portion of the people, without deducting the unusual gains made at the same time by the directors and other persons immediately connected with banks, or by brokers and speculators. The computations are, therefore, founded on that hypothesis.

Table A contains the answer to the first inquiry, which is in these

words: "What amount has the Federal Government lost, from its organization to this time, by the employment of banks, by the use of bank-paper, or by its connection in anywise with banks, including the depreciation of bank paper?" It presents the losses under this head as follows:

From the employment of banks as public depositories, previous to 1837, and since 1837, separately;

From their notes taken and not redeemed previous to 1837, and since; and

From depreciation on their notes taken between 1814 and 1817, inclusive, and since.

It then gives the computed interest on the whole, and the aggregate.

Various other considerations, as to indirect losses from the connection of the government with banks, could be suggested under this inquiry; but as the results would not depend on actual returns, but be very hypothetical, they are omitted, except an allusion to some of them in a note to this table.

Indeed, I do not propose to embody in this report any of the results computed in any of the tables.

They are subject to so many limitations and contingencies, requiring explanation, that it seems more proper to consider them merely in connection with the notes furnishing the explanation.

Tables B1 to B 5 exhibit data in reply to the second inquiry, which is: "What amount the people of the United States have lost, from the commencement of the government to this time, by the failure and suspension of banks, and by the depreciation of bank-paper, by the loss and destruction of bank-notes, and by the existence of banks and the use of bank-paper generally."

B 1 contains the number of banks in the United States that failed between 1789 and 1841, so far as the same can be ascertained and estimated, with the amount of their capital.

There is added to them such portion of the banks now suspended as are expected never to resume again.

B 2 contains the losses to the community by the failures before mentioned, as computed on their capital, circulation, deposites, and balances owing.

B 3 contains the losses to the people, computed on "the depreciation of bank-paper," in the case of banks that have suspended specie payments, but are not entirely failed or broken; and the loss, by such depreciation, on deposites and balances in those banks.

B 4 contains the estimated "losses and destruction of bank-notes" by accidents, &c.

B 5 exhibits an aggregate of the losses computed under the whole of the second head of inquiry.

Besides those specified in the former tables, many indirect and several general injuries have occurred from "the existence of banks,"