Thirty Years' View (Vol. I of 2)

Having vindicated the treasury order from the charge of illegality, Mr. Benton took up the head of the new distress, and said:

"The news of all this approaching calamity was given out in advance in the Kentucky speech and the Philadelphia letter, already referred to; and the fact of its positive advent and actual presence was vouched by the senator from Ohio [Mr. Ewing] on the last day that the Senate was in session. I do not permit myself (said Mr. B.) to bandy contradictory asseverations and debatable assertions across this floor. I choose rather to make an issue, and to test assertion by the application of evidence. In this way I will proceed at present. I will take the letter of the president of the Bank of the United States as being official in this case, and most authoritative in the distress department of this combined movement against President Jackson. He announces, in November, the forthcoming of the national calamity in December; and after charging part of this ruin and mischief on the mode of executing what he ostentatiously styles the distribution law, when there is no such law in the country, he goes on to charge the remainder, being ten-fold more than the former upon the Treasury order which excludes paper money from the land offices."

Mr. Benton then read Mr. Biddle's description of the new distress, which, in his publication was awful and appalling, but which, he said, was nowhere visible except in the localities where the bank had power to make it. It was a picture of woe and ruin, but not without hope and remedy if Congress followed his directions; in the mean time he thus instructed the country how to behave, and promised his co-operation – that of the bank – in the overthrow of President Jackson, and his successor, Mr. Van Buren (for that is what he meant in this passage):

"In the mean time, all forbearance and calmness should be maintained. There is great reason for anxiety – none whatever for alarm; and with mutual confidence and courage, the country may yet be able to defend itself against the government. In that struggle my own poor efforts shall not be wanting. I go for the country, whoever rules it. I go for the country, loved when worst governed – and it will afford me far more gratification to assist in repairing wrongs, than to triumph over those who inflict them."

This pledge of aid in a struggle with the government was a key to unlock the meaning of the movements then going on to produce the general suspension of specie payments in all the banks which saluted the administration of Mr. Van Buren in the first quarter of its existence, and intended to produce it in its first month. Considering specie payments as the only safety of the country, and foreseeing the general bank explosions, chiefly contrived by the Bank of the United States, which was to re-appear in the ruin, and claim its re-establishment as the only remedy for the evils which itself and its confederates created, Mr. Benton said:

"There is no safety for the federal revenues but in the total exclusion of local paper, and that from every branch of the revenue – customs, lands, and post office. There is no safety for the national finances but in the constitutional medium of gold and silver. After forty years of wandering in the wilderness of paper money, we have approached the confines of the constitutional medium. Seventy-five millions of specie in the country, with the prospect of annual increase of ten or twelve millions for the next four years; three branch mints to commence next spring, and the complete restoration of the gold currency; announce the success of President Jackson's great measures for the reform of the currency and vindicate the constitution from the libel of having prescribed an impracticable currency. The success is complete; and there is no way to thwart it, but to put down the treasury order, and to re-open the public lands to the inundation of paper money. Of this, it is not to be dissembled, there is great danger. Four deeply interested classes are at work to do it – speculators, local banks, United States Bank, and politicians out of power. They may succeed, but he (Mr. B.) would not despair. The darkest hour of night is just before the break of day; and, through the gloom ahead, he saw the bright vision of the constitutional currency erect, radiant, and victorious. Through regulation, or explosion, success must eventually come. If reform measures go on, gold and silver will be gradually and temperately restored; if reform measures are stopped, then the paper system runs riot, and explodes from its own expansion. Then the Bank of the United States will exult in the catastrophe, and claim its own re-establishment as the only adequate regulator of the local banks. Then it will be said the specie experiment has failed! But no; the contrary will be known, that the specie experiment has not failed, but it was put down by the voice and power of the interested classes, and must be put up again by the voice and power of the disinterested community."

This was uttered in December 1836: in April 1837 it was history.

Mr. Crittenden, of Kentucky, replied to Mr. Benton; and said:

"The senator from Missouri had exhibited a table, the results of which he had pressed with a very triumphant air. Was it extraordinary that the deposit banks should be strengthened? The effect of the order went directly to sustain them. But it was at the expense of all the other banks of the country. Under this order, all the specie was collected and carried into their vaults: an operation which went to disturb and embarrass the general circulation of the country, and to produce that pecuniary difficulty which was felt in all quarters of the Union. Mr. C. did not profess to be competent to judge how far the whole of this distress was attributable to the operation of the treasury order, but of this at least he was very sure, through a great part of the Western country, it was universally attributed to that cause. The senator from Missouri supposed that the order had produced no part of this pressure. If not, he would ask what it had produced? Had it increased the specie in the country? Had it increased the specie in actual and general circulation? If it had done no evil, what good had it done? This, he believed was as yet undiscovered. So far as it had operated at all, it had been to derange the state of the currency, and to give it a direction inverse to the course of business. The honorable senator, however, could not see how moving money across a street could operate to affect the currency; and seemed to suppose that moving money from west to east, or from east to west, would have as little effect. Money, however, if left to itself, would always move according to the ordinary course of business transactions. This course might indeed be disturbed for a time, but it would be like forcing the needle away from the pole: you might turn it round and round as often as you pleased, but, left to itself, it would still settle at the north. Our great commercial cities were the natural repositories where money centred and settled. There it was wanted, and it was more valuable if left there than if carried into the interior. Any intelligent business man in the West would rather have money paid him for a debt in New-York than at his own door. It was worth more to him. If, then, specie was forced, by treasury tactics, to take a direction contrary to the natural course of business, and to move from east to west, the operation would be beneficial to none, injurious to all. It was not in the power of government to keep it in a false direction or position. Specie was in exile whenever it was forced out of that place where business called for it. Such an operation did no real good. It was a forced movement and was soon overcome by the natural course of things.

"Mr. C. was well aware that men might be deluded and mystified on this subject, and that while the delusion lasted, this treasury order might be held up before the eyes of men as a splendid arrangement in finance; but it was only like the natural rainbow, which owed its very existence to the mist in which it had its being. The moment the atmosphere was clear, its bright colors vanished from the view. So it would be with this matter. The specie of the country must resume its natural course. Man might as well escape from the physical necessities of their nature, as from the laws which governed the movements of finance: and the man who professed to reverse or dispense with the one was no greater quack than he who made the same professions with regard to the other.

"But it was said to be the distribution bill which had done all the mischief; and Mr. C. was ready to admit that the manner in which the government had attempted to carry that law into effect might in part have furnished the basis for such a supposition. He had no doubt that the pecuniary evils of the country had been aggravated by the manner in which this had been done."

Mr. Webster also replied to Mr. Benton, in an elaborate speech, in which, before arguing the legal question, he said:

"The honorable member from Missouri (Mr. Benton) objects even to giving the resolution to rescind a second reading. He avails himself of his right, though it be not according to general practice, to arrest the progress of the measure at its first stage. This, at least, is open, bold, and manly warfare. The honorable member, in his elaborate speech, founds his opposition to this resolution, and his support of the treasury order, on those general principles respecting currency which he is known to entertain, and which he has maintained for many years. His opinions some of us regard as altogether ultra and impracticable; looking to a state of things not desirable in itself, even if it were practicable; and, if it were desirable, as being far beyond the power of this government to bring about.

"The honorable member has manifested much perseverance and abundant labor, most undoubtedly, in support of his opinions; he is understood, also, to have had countenance from high places; and what new hopes of success the present moment holds out to him, I am not able to judge, but we shall probably soon see. It is precisely on these general and long-known opinions that he rests his support of the treasury order. A question, therefore, is at once raised between the gentleman's principles and opinions on the subject of the currency, and the principles and opinions which have generally prevailed in the country, and which are, and have been, entirely opposite to his. That question is now about to be put to the vote of the Senate. In the progress and by the termination of this discussion, we shall learn whether the gentleman's sentiments are or are not to prevail, so far, at least, as the Senate is concerned. The country will rejoice, I am sure, to see some declaration of the opinions of Congress on a subject about which so much has been said, and which is so well calculated, by its perpetual agitation, to disquiet and disturb the confidence of society.

"We are now fast approaching the day when one administration goes out of office, and another is to come in. The country has an interest in learning, as soon as possible, whether the new administration, while it receives the power and patronage, is to inherit, also, the topics and the projects of the past; whether it is to keep up the avowal of the same objects and the same schemes, especially in regard to the currency. The order of the Secretary is prospective, and, on the face of it, perpetual. Nothing in or about it gives it the least appearance of a temporary measure. On the contrary, its terms imply no limitation in point of duration, and the gradual manner in which it is to come into operation shows plainly an intention of making it the settled and permanent policy of government. Indeed, it is but now beginning its complete existence. It is only five or six days since its full operation has commenced. Is it to stand as the law of the land and the rule of the treasury, under the administration which is to ensue? And are those notions of an exclusive specie currency, and opposition to all banks, on which it is defended, to be espoused and maintained by the new administration, as they have been by its predecessor? These are questions, not of mere curiosity, but of the highest interest to the whole country. In considering this order, the first thing naturally is, to look for the causes which led to it, or are assigned for its promulgation. And these, on the face of the order itself, are declared to be 'complaints which have been made of frauds, speculations, and monopolies, in the purchase of the public lands, and the aid which is said to be given to effect these objects, by excessive bank credits, and dangerous, if not partial, facilities through bank drafts and bank deposits, and the general evil influence likely to result to the public interest, and especially the safety of the great amount of money in the treasury, and the sound condition of the currency of the country, from the further exchange of the national domain in this manner, and chiefly for bank credits and paper money.'

"This is the catalogue of evils to be cured by this order. In what these frauds consist, what are the monopolies complained of, or what is precisely intended by these injurious speculations, we are not informed. All is left on the general surmise of fraud, speculation, and monopoly. It is not avowed or intimated that the government has sustained any loss, either by the receipt of the bank notes which proved not to be equivalent to specie, or in any other way. And it is not a little remarkable that these evils, of fraud, speculation, and monopoly, should have become so enormous and so notorious, on the 11th of July, as to require this executive interference for their suppression, and yet that they should not have reached such a height as to make it proper to lay the subject before Congress, although Congress remained in session until within seven days of the date of the order. And what makes this circumstance still more remarkable, is the fact that, in his annual message, at the commencement of the same session, the President had spoken of the rapid sales of the public lands as one of the most gratifying proofs of the general prosperity of the country, without suggesting that any danger whatever was to be apprehended from fraud, speculation, or monopoly. His words were: 'Among the evidences of the increasing prosperity of the country, not the least gratifying, is that afforded by the receipts from the sales of the public lands, which amount, in the present year, to the unexpected sum of eleven millions.' From the time of the delivery of that message, down to the date of the treasury order, there had not been the least change, so far as I know, or so far as we are informed, in the manner of receiving payment for the public lands. Every thing stood, on the 11th of July, 1836, as it had stood at the opening of the session, in December, 1835. How so different a view of things happened to be taken at the two periods, we may be able to learn, perhaps, in the further progress of this debate.

"The order speaks of the 'evil influence' likely to result from the further exchange of the public lands into 'paper money.' Now, this is the very language of the gentleman from Missouri. He habitually speaks of the notes of all banks, however solvent, and however promptly their notes may be redeemed in gold and silver, as 'paper money.' The Secretary has adopted the honorable member's phrases, and he speaks, too, of all the bank notes received at the land offices, although every one of them is redeemable in specie, on demand, but as so much 'paper money.' In this respect, also, sir, I hope we may know more as we grow older, and be able to learn whether, in times to come, as in times recently passed, the justly obnoxious and odious character of 'paper money' is to be applied to the issues of all the banks in all the States, with whatever punctuality they redeem their bills. This is quite new, as financial language. By paper money, in its obnoxious sense, I understand paper issues on credit alone, without capital, without funds assigned for its payment, resting only on the good faith and the future ability of those who issue it. Such was the paper money of our revolutionary times; and such, perhaps, may have been the true character of the paper of particular institutions since. But the notes of banks of competent capitals, limited in amount to a due proportion to such capitals, made payable on demand in gold and silver, and always so paid on demand, are paper money in no sense but one; that is to say, they are made of paper, and they circulate as money. And it may be proper enough for those who maintain that nothing should so circulate but gold and silver, to denominate such bank notes 'paper money,' since they regard them but as paper intruders into channels which should flow only with gold and silver. If this language of the order is authentic, and is to be so hereafter, and all bank notes are to be regarded and stigmatized as mere 'paper money,' the sooner the country knows it the better.

"The member from Missouri charges those who wish to rescind the treasury order with two objects: first, to degrade and disgrace the President; and, next, to overthrow the constitutional currency of the country. For my own part, sir, I denounce nobody; I seek to degrade or disgrace nobody. Holding the order illegal and unwise, I shall certainly vote to rescind it; and, in the discharge of this duty, I hope I am not expected to shrink back, lest I might do something which might call in question the wisdom of the Secretary, or even of the President. And I hope that so much of independence as may be manifested by free discussion and an honest vote is not to cause denunciation from any quarter. If it should, let it come."

It became a very extended debate, in which Mr. Niles, Mr. Rives, Mr. Hubbard, Mr. Southard, Mr. Strange of N. C., Mr. Clay, Mr. Walker of Miss., and others partook. The subject having been referred to the committee of public lands, of which Mr. Walker was chairman, reported a bill, "limiting and designating the funds receivable for the revenues of the United States;" the object of which was to rescind the treasury circular without naming it, and to continue the receipt of bank notes in payment of all dues to the government. Soon after the bill was reported, and had received its second reading, a motion was made in the Senate to lay the impending subject (public lands) on the table for the purpose of considering the bill reported by Mr. Walker to limit and designate the funds receivable in public dues. Mr. Benton was taken by surprise by this motion, which was immediately agreed to, and the bill ordered to be engrossed for a third reading the next day. To that third reading Mr. Benton looked for his opportunity to speak; and availed himself of it, commencing his speech with giving the reason why he did not speak the evening before when the question was on the engrossment of the bill. He said he could not have foreseen that the subject depending before the Senate, the bill for limiting the sales of the public lands to actual settlers, would be laid down for the purpose of taking up this subject out of its order; and, therefore, had not brought with him some memorandums which he intended to use when this subject came up. He did not choose to ask for delay, because his habit was to speak to subjects when they were called; and in this particular cause he did not think it material when he spoke; for he was very well aware that his speaking would not affect the fate of the bill. It would pass; and that was known to all in the chamber. It was known to the senator from Ohio (Mr. Ewing) who indulged himself in saying he thought otherwise a few days ago; but that was only a good-natured way of stimulating his friends, and bringing them up to the scratch. The bill would pass, and that by a good vote, for it would have the vote of the opposition, and a division of the administration vote. Why, then, did he speak? Because it was due to his position, and the part he had acted on the currency questions, to express his sentiments more fully on this bill, so vital to the general currency, than could be done by a mere negative vote. He should, therefore, speak against it, and should direct his attention to the bill reported by the Public Land Committee, which had so totally changed the character of the proceeding on this subject. The recision of the treasury order was introduced a resolution – it went out a resolution – but it came back a bill, and a bill to regulate, not the land office receipts only, but all the receipts of the federal government; and in this new form is to become statute law, and a law to operate on all the revenues, and to repeal all other laws upon the subject to which it related. In this new form it assumes an importance, and acquires an effect, infinitely beyond a resolution, and becomes in fact, as well as in name, a totally new measure. Mr. B. reminded the Senate that he had, in his first speech on this subject, given it as his opinion, that two main objects were proposed to be accomplished by the rescinding resolution; first, the implied condemnation of President Jackson for violating the laws and constitution, and destroying the prosperity of the country; and, secondly, the imposition of the paper currency of the States upon the federal government. With respect to the first of these objects, he presumed it was fully proved by the speeches of all the opposition senators who had spoken on this subject; and, with respect to the second, he believed it would find its proof in the change which the original resolution had undergone, and the form it was now assuming of statute law, and especially with the proviso which was added at the end of the second section.

Mr. B. then took up the bill reported by the committee, and remarked, first, upon its phraseology, not in the spirit of verbal criticism, but in the spirit of candid objection and fair argument. There were cases in which words were things, and this was one of those cases. Money was a thing, and the only words in the constitution of that thing were, "gold and silver coin." The bill of the committee was systematically exclusive of the words which meant this thing, and used words which included things which were not money. These words were, then, a fair subject of objection and argument, because they went to set aside the money of the constitution, and to admit the public revenues to be paid in something which was not money. The title of the bill uses the word "funds." It professes to designate the funds receivable for the revenues of the United States. Upon this word Mr. B. had remarked before, as being one of the most indefinite in the English language; and, so far from signifying money only, even paper money only, that it comprehended every variety of paper security, public or private, individual or corporate out of which money could be raised. The retention of this word by the committee, after the objections made to it, were indicative of their intentions to lay open the federal treasury to the reception of something which was not constitutional money; and this intention, thus disclosed in the title to the bill, was fully carried out in its enactments. The words "legal currency of the United States" are twice used in the first section, when the words "gold and silver" would have been more appropriate and more definite, if hard money was intended.

Mr. B. admitted that, in the eye of a regular bred constitutional lawyer, legal currency might imply constitutional currency; but certain it was that the common and popular meaning of the phrase was not limited to constitutional money, but included every currency that the statute law made receivable for debts. Thus, the notes of the Bank of the United States were generally considered as legal currency, because receivable by law in payment of public dues; and in like manner the notes of all specie-paying banks would, under the committee's bill, rise to the dignity of legal currency. The second section of the bill twice used the word "cash;" a word which, however understood at the Bank of England, where it always means ready money, and where ready money signifies gold coin in hand, yet with the banks with which we have to deal it has no such meaning, but includes all sorts of current paper money on hand, as well as gold and silver on hand.

Having remarked upon the phraseology of the bill, and shown that a paper currency composed of the notes of a thousand local banks, not only might become the currency of the federal government, but was evidently intended to be made its currency; and that in the face of all the protestations of the friends of the administration in favor of re-establishing the national gold currency, Mr. B. would now take up the bill of the committee under two or three other aspects, and show it to be as mistaken in its design as it would be impotent in its effect. In the first place, it transferred the business of suppressing the small note circulation from the deposit branch to the collecting branch of the public revenue. At present, the business was in a course of progress through the deposit banks, as a condition of holding the public moneys; and, as such, had a place in the deposit act of the last session, and also had a place in the President's message of the last session, where the suppression of paper currency under twenty dollars was expressly referred to the action of the deposit banks, and as a condition of their retaining the public deposits. It was through the deposit banks, and not through the reception of local bank paper, that the suppression of small notes should be effected. In the next place, he objected to the committee's bill, because it proposed to make a bargain with each of the thousand banks now in the United States, and the hundreds more which will soon be born; and to give them a right – a right by law – to have their notes received at the federal treasury. He was against such a bargain. He had no idea of making a contract with these thousand banks for the reception of their notes. He had no idea of contracting with them, and giving them a right to plead the constitution of the United States against us, if, at any time, after having agreed to receive their notes, upon condition that they would give up their small circulation, they should choose to say we had impaired the contract by not continuing to receive them; and so either relapse into the issue of this small trash, or have recourse to the judicial process to compel the United States to abide the contract, and continue the reception of all their notes. Mr. B. had no idea of letting down this federal government to such petty and inconvenient bargains with a thousand moneyed corporations. The government of the United States ought to act as a government, and not as a contractor. It should prescribe conditions, and not make bargains. It should give the law. He was against these bargains, even if they were good ones; but they were bad bargains, wretchedly bad, and ought to be rejected as such, even if all higher and nobler considerations were out of the question. What is the consideration that the United States is to receive? A mere individual agreement with each bank by itself, that in three years it will cease to issue notes under ten dollars and in five years it will cease to issue notes under twenty dollars. What is the price which she pays for this consideration? In the first place, it receives the notes of such bank as gold and silver at all the land-offices, custom-houses, and post-offices, of the United States; and, of course, pays them out again as gold and silver to all her debtors. In the next place, it compels the deposit banks to credit them as cash. In the third place, it accredits the whole circulation of the banks, and makes it current all over the United States, in consequence of universal receivability for all federal dues. In other words, it endorses, so far as credit is concerned, the whole circulation of every bank that comes into the bargain thus proposed. This is certainly a most wretched bargain on the part of the United States – a bargain in which what she receives is ruinous to her; for the more local payment she receives in payment of her revenues, the worse for her, and the sooner will her treasury be filled with unavailable funds.