ish the influence of our political system; and bring once more into exist ence a concentrated moneyed power, hostile to the spirit, and threatening the permanency, of our republican institutions.

Local banks have been employed for the deposite and distribution of the revenue, at all times partially, and on three different occasions exclusively; first, anterior to the establishment of the first bank of the United States; secondly, in the interval between the termination of that institution and the charter of its successor; and thirdly, during the limited period which has now so abruptly closed. The connection thus repeatedly attempted, proved unsatisfactory on each successive occasion, notwithstanding the various measures which were adopted to facilitate or insure its success. On the last occasion, in the year 1833, the employment of the state banks was guarded especially in every way which experience and caution could suggest. Personal security was required for the safe-keeping and prompt payment of the moneys to be received, and full returns of their condition were from time to time to be made by the depositories. In the first stages, the measure was eminently successful, notwithstanding the violent opposition of the Bank of the United States, and the unceasing efforts made to overthrow it. The selected banks performed with fidelity and without any embarrassment to themselves or to the community, their engagements to the government, and the system promised to be permanently useful. But when it became necessary, under the act of June, 1836, to withdraw from them the public money for the purpose of placing it in additional institutions, or of transferring it to the states, they found it in many cases inconvenient to comply with the demands of the treasury, and numerous and pressing invitations were made for indulgence or relief. As the instalments under the deposite law became payable, their own embarrassments, and the necessity under which they lay of curtailing their discounts and calling in their debts, increased the general distress, and contributed, with other causes, to hasten the revulsion in which at length they, in common with the other banks, were fatally involved.

Under these circumstances, it becomes our solemn duty to inquire whether there are not, in any connection between the government and the banks of issue, evils of great magnitude, inherent in its very nature, and against which no precautions can effectually guard.

Unforeseen in the organization of the government, and forced on the treasury by early necessities, the practice of employing banks was, in truth, from the beginning, more a measure of emergency than of sound policy. When we started into existence as a nation, in addition to the burdens of the new government, we assumed all the large but honorable load of debt which was the price of our liberty; but we hesitated to weigh down the infant industry of the country by resorting to adequate taxation for the necessary revenue. The facilities of banks, in return for the privileges they acquired, were promptly offered, and perhaps too readily received by an embarrassed treasury. During the long continuance of a national debt, and the intervening difficulties of a foreign war, the connection was continued from motives of convenience; but these causes have long since passed away. We have no emergencies that make banks necessary to aid the wants of the treasury, we have no load of national debt to provide for, and we have on actual deposite a large surplus. No public interest, therefore, now requires the renewal of a connection that circumstances have dissolved. The complete organization of our government, the abundance of our resources, the general harmony which prevails between the different states and with

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foreign powers, all enable us now to select the system most consistent with the constitution, and most conducive to the public welfare. Should we, then, connect the treasury for a fourth time with the local banks, it can only be under a conviction that past failures have arisen from accidental, not inherent defects.

A danger, difficult if not impossible to be avoided, in such an arrangement, is made strikingly evident in the very event by which it has now been defeated. A sudden act of the banks intrusted with the funds of the people, deprives the treasury, without fault or agency of the government, of the ability to pay its creditors in the currency they have by law a right to demand. This circumstance no fluctuation of commerce could have produced, if the public revenue had been collected in the legal currency, and kept in that form by the officers of the treasury. The citizen whose money was in bank receives it back, since the suspension, at a sacrifice in its amount; while he who kept it in the legal currency of the country, and in his own possession, pursues without loss the current of his business. The government, placed in the situation of the former, is involved in embarrassments it could not have suffered had it pursued the course of the latter. These embarrassments are, moreover, augmented by those salutary and just laws which forbid it to use a depreciated currency, and, by so doing, take from the government the ability which individuals have of accommodating their transactions to such a catastrophe.

A system which can, in a time of profound peace, when there is a large revenue laid by, thus suddenly prevent the application and the use of the money of the people, in the manner and for the objects they have directed, cannot be wise; but who can think, without painful reflection, that under it the same unforeseen events might have befallen us in the midst of a war, and taken from us, at the moment when most wanted, the use of those very means which were treasured up to promote the national welfare and guard our national rights? To such embarrassments and to such dangers will this government be always exposed, whilst it takes the moneys raised for, and necessary to, the public service, out of the hands of its own officers, and converts them into a mere right of action against corporations entrusted with the possession of them. Nor can such results be effectually guarded against in such a system, without investing the executive with a control over the banks themselves, whether state or national, that might with reason be objected to. Ours is probably the only government in the world that is liable, in the management of its fiscal concerns, to occurrences like these. But this immense risk is not the only danger attendant on the surrender of the public money to the custody and control of local corporations. Though the object is to aid the treasury, its effect may be to introduce into the operations of the government, influences the most subtle, founded on interests the most selfish.

The use by the banks, for their own benefit, of the money deposited with them, has received the sanction of the government from the commencement of this connection. The money received from the people, instead of being kept till it is needed for their use, is, in consequence of this authority, a fund, on which discounts are made for the profit of those who happen to be owners of stock in the banks selected as depositories. The supposed and often exaggerated advantages of such a boon will always cause it to be sought for with avidity. I will not stop to consider on whom the patronage incident to it is to be conferred; whether the selection and control to be

trusted to Congress or to the executive, either will be subjected to appeals made in every form which the sagacity of interest can suggest. The banks, under such a system, are stimulated to make the most of their fortunate acquisition; the deposites are treated as an increase of capital; loans and circulations are rashly augmented, and when the public exigencies require a return, it is attended with embarrassments not provided for nor foreseen. Thus banks that thought themselves most fortunate when the public funds were received, find themselves most embarrassed when the season of payment suddenly arrives.

Unfortunately, too, the evils of the system are not limited to the banks. It stimulates a general rashness of enterprise, and aggravates the fluctuations of commerce and the currency. This result was strikingly exhibited during the operations of the late deposite system, and especially in the purchases of public lands. The order which ultimately directed the payment of gold and silver in such purchases greatly checked, but could not altoge ther prevent the evil. Specie was indeed more difficult to be procured than the notes which the banks could themselves create at pleasure; but still being obtained from them as a loan, and returned as a deposite, which they were again at liberty to use, it only passed round the circle with diminished speed. This operation could not have been performed, had the funds of the government gone into the treasury, to be regularly disbursed, and not into the banks, to be loaned out for their own profit, while they were per mitted to substitute for it a credit in account.

In expressing these sentiments, I desire not to undervalue the benefits of a salutary credit to any branch of enterprise. The credit bestowed on probity and industry is the just reward of merit, and an honorable incentive to farther acquisition. None oppose it who love their country and understand its welfare. But when it is unduly encouraged-when it is made to inflame the public mind with the temptations of sudden and unsubstantial wealth— when it turns industry into paths that lead sooner or later to disappointment and distress-it becomes liable to censure, and needs correction. Far from helping probity and industry, the ruin to which it leads falls most severely on the great laboring classes, who are thrown suddenly out of employment, and by the failure of magnificent schemes, never intended to enrich them, are deprived in a moment of their only resource. Abuses of credit, an excess in speculation, will happen in despite of the most salutary laws; no government, perhaps, can altogether prevent them; but surely every government can refrain from contributing the stimulus that calls them into life.

Since, therefore, experience has shown, that to lend the public money to the local banks, is hazardous to the operations of the government, at least of doubtful benefit to the institutions themselves, and productive of disas trous derangement in the business and currency of the country, is it the part of wisdom again to renew the connection?

It is true that such an agency is in many respects convenient to the trea sury, but it is not indispensable. A limitation of the expenses of the gov ernment to its actual wants, and of the revenue to those expenses, with convenient means for its prompt application to the purposes for which it was raised, are the objects which we should seek to accomplish. The col lection, safe-keeping, transfer, and disbursements of the public money can, it is believed, be well managed by officers of the government. Its collection, and, to a great extent, its disbursements also, have indeed been hitherto con

ducted solely by them; neither national nor state banks, when employed, being required to do more than keep it safely while in their custody, and transfer and pay it in such portions and at such time as the treasury shall direct.

Surely banks are not more able than the government to secure the money in their possession against accident, violence, or fraud. The assertion that they are so, must assume that a vault in a bank is stronger than a vault in the treasury; and that directors, cashiers, and clerks, not selected by the government, not under its control, are more worthy of confidence than officers selected from the people and responsible to the government; officers bound by official oaths and bonds for a faithful performance of their duties, and constantly subject to the supervision of Congress.

The difficulties of transfer, and the aid heretofore rendered by banks have been less than is usually supposed. The actual accounts show that by far the larger portion of payments is made within short or convenient distances from the places of collection; and the whole number of warrants issued at the treasury in the year 1834, a year, the result of which will, it is believed, afford a safe test for the future, fell short of five thousand, on an average of less than one daily for each state; in the city of New York they did not average more than two a day, and at the city of Washington only four.

The difficulties heretofore existing, are, moreover, daily lessened by an increase in the cheapness and facility of communication; and it may be asserted with confidence, that the necessary transfers, as well as the safekeeping and disbursements of the public moneys, can be with safety and convenience accomplished through the agency of treasury officers. This opinion has been, in some degree, confirmed by actual experience since the discontinuance of banks as fiscal agents, in May last; a period which, from the embarrassments in commercial intercourse, presented obstacles as great as any that may be hereafter apprehended.

The manner of keeping the public money since that period is fully stated in the report of the secretary of the treasury. That officer also suggests the propriety of assigning, by law, certain additional duties of existing establishments and officers, which, with the modifications and safeguards referred to by him, will, he thinks, enable the department to continue to perform this branch of the public service, without any material addition either to their number or to the present expense. The extent of the business to be transacted has already been stated; and in respect to the amount of money with which the officers employed would be entrusted at any one time, it appears that, assuming a balance of five millions to be at all times kept in the treasury, and the whole of it left in the hands of the collectors and receivers, the proportion of each would not exceed an average of thirty thousand dollars; but that, deducting one million for the use of the mint, and assuming the remaining four millions to be in the hands of one half of the present number of officers a supposition deemed more likely to correspond with the fact the sum in the hands of each would still be less than the amount of most of the bonds now taken from the receivers of public money. Every apprehension, however, on the subject, either in respect to the safety of the money or the faithful discharge of these fiscal transactions, may, it appears to me, be effectually removed by adding to the present means of the treasury, the establishment by law, at a few important points, of offices for the deposite and disbursement of such portions of public revenue as cannot, with obvious safety and convenience, be left in the possession

of the collecting officers until paid over by them to the public creditors. Neither the amounts retained in their hands, nor those deposited in the offices would, in an ordinary condition of the revenue, be larger in most cases than those often under the control of disbursing officers of the army and navy, and might be made entirely safe, by requiring such securities, and exercising such controlling supervision, as Congress may by law prescribe. The principal officers whose appointments would become necessary under this plan, taking the largest number suggested by the secretary of the treasury, would not exceed ten; nor the additional expenses, at the same estimate, sixty thousand dollars a year.

There can be no doubt of the obligation of those who are entrusted with the affairs of government, to conduct them with as little cost to the nation as is consistent with the public interest; and it is for Congress, and ultimately for the people, to decide whether the benefits to be derived from keeping our fiscal concerns apart, and severing the connection which has hitherto existed between the government and the banks, offer sufficient advantages to justify the necessary expenses. If the object to be accomplished is deemed important to the future welfare of the country, I cannot allow myself to believe that the addition to the public expenditure of comparatively so small an amount as will be necessary to effect it will be objected to by the people. It will be seen by the report of the postmaster-general, herewith communicated, that the fiscal affairs of that department have been successfully conducted since May last, upon the principle of dealing only in the legal currency of the United States, and that it needs no legislation to maintain its credit, and facilitate the management of its concerns; the existing laws being, in the opinion of that officer, ample for those objects.

Difficulties will, doubtless, be encountered for a season, and increased services required from the public functionaries; such are usually incident to the commencement of every system, but they will be greatly lessened in the progress of its operations.

The power and influence supposed to be connected with the custody and disbursement of the public money, are topics on which the public mind is naturally, and with great propriety, peculiarly sensitive. Much has been said on them, in reference to the proposed separation of the government from the banking institutions; and surely no one can object to any appeals or animadversions on the subject, which are consistent with the facts, and evince a proper respect for the intelligence of the people. If a chief magistrate may be allowed to speak for himself on such a point, I can truly say, that to me nothing would be more acceptable than the withdrawal from the executive, to the greatest practicable extent, of all concern in the custody and disbursement of the public revenue; not that I would shrink from any responsibility cast upon me by the duties of my office, but because it is my firm belief that its capacity for usefulness is in no degree promoted by the possession of any patronage not actually necessary to the performance of those duties. But under our present form of government, the intervention of the executive officers in the custody and disbursement of the public money seems to be unavoidable; and before it can be admitted that the influence and power of the executive would be increased by dispensing with the agency of banks, the nature of that intervention in such an agency must be carefully regarded, and a comparison must be instituted between its extent in the two cases.

The revenue can only be collected by officers appointed by the President,