provided for, by intrusting to the discretion of the bank | but on a political state of things producing, or likely itself the charge of conducting and completing the operation, and by allowing to the bank so ample a period of time for conducting it, as will be more than sufficient to effect its completion. To the discretion, experience, and integrity of the directors of the bank, your committee believe that parliament may safely intrust the charge of effecting that which parliament may in its wisdom determine upon as necessary to be effected; and that the directors of that great institution, far from making themselves a party with those who have a temporary interest in spreading alarm, will take a much longer view of the permanent interests of the bank, as indissolubly blended with those of the public. The particular mode of gradually effecting the resumption of cash payments ought therefore, in the opinion of your committee, to be left in a great measure to the discretion of the bank, and parliament ought to do little more than to fix, definitively, the time at which cash payments are to become as before compulsory. The period allowed ought to be ample, in order that the bank directors may feel their way, and that, having a constant watch upon the varying circumstances that ought to guide them, and availing themselves only of favourable circumstances, they may tread back their steps slowly, and may preserve both the course of their own affairs as a company, and that of public and commercial credit, not only safe but unembarrassed.

With this view, your committee would suggest that the restriction on cash payments cannot safely be removed at an earlier period than two years from the present time but your committee are of opinion that early provision ought to be made by parliament for ter. ninating, by the end of that period, the operation of the several statutes which have imposed and continued

that restriction.

very soon to produce, an alarm at home, leading to so
indefinite a demand for cash for domestic uses as it
must be impossible for any banking establishment to
provide against. A return to the ordinary system of
banking is, on the very ground of the late extravagant
fall of the exchanges and high price of gold, peculiarly
requisite. That alone can effectually restore general
confidence in the value of the circulating medium of
the kingdom; and the serious expectation of this event
must enforce a preparatory reduction of the quantity
of paper, and all other measures which accord with the
true principles of banking. The anticipation of the
time when the bank will be constrained to open, may
also be expected to contribute to the improvement of
the exchanges; whereas a postponement of this era, so
indefinite as that of six months after the termination
of the war, and especially in the event of an exchange
continuing to fall (which more and more would gene
rally be perceived to arise from an excess of paper, and
a consequent depreciation of it), may lead under an un-
favourable state of public affairs to such a failure of
confidence (and especially among foreigners), in the de-
termination of parliament to enforce a return to the
professed standard of the measure of payments, as may
serve to precipitate the further fall of the exchanges,
and lead to consequences at once the most discreditable
and disastrous.

Although the details of the best mode of returning to cash payments ought to be left to the discretion of the Bank of England, as already stated, certain provisions would be necessary, under the authority of parliament, both for the convenience of the bank itself, and for the security of the other banking establishments in this country and in Ireland.

Your committee conceive it may be convenient for the bank to be permitted to issue notes under the value of £5 for some little time after it had resumed pay

It will be convenient also for the chartered banks of Ireland and Scotland, and all the country banks, that they should not be compelled to pay in specie until some time after the resumption of the payments in cash by the Bank of England; but that they should continue for a short period upon their present footing, of being liable to pay their own notes on demand in Bank of England paper.

In suggesting this period of two years, your committee have 'not overlooked the circuinstance that, as the law stands at present, the bank would be comments in specie. pelled to pay in cash at the end of six months after the ratification of a definitive treaty of peace; so that if the peace were to be concluded within that period, the re. commendation of your committee might seem to have the effect of postponing, instead of accelerating, the resumption of payments. But your committee are of opinion that, if peace were immediately to be ratified, in the present state of our circulation it would be most hazardous to compel the bank to pay cash in six Inonths, and would be found wholly impracticable. Indeed, the restoration of peace, by opening new fields of commercial enterprise, would multiply instead of abridging the demands upon the bank for discount, and would render it peculiarly distressing to the commer. cial world if the bank were suddenly and materially to restrict their issues. Your committee are, therefore, of opinion that, even if peace should intervene, two years should be given to the bank for resuming its pay. ments; but that, even if the war should be prolonged, cash payments should be resumed by the end of that period.

Your committee have not been indifferent to the consideration of the possible occurrence of political circumstances, which may be thought hereafter to furnish an argument in favour of some prolongation of the proposed period of resuining cash payments, or even in favour of a new law for their temporary restriction after the bank shall have opened. They are, however, far from anticipating a necessity, even in any case, of returning to the present system. But if occasion for a new measure of restriction could be supposed at any time to arise, it can in no degree be grounded, as your committee think, on any state of the foreign exchanges, (which they trust that they have abundantly shown the bank itself to have the general power of controlling,)

TERMS.

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OF THE

UNITED STATES.

DEVOTED CHIEFLY TO FINANCE AND CURRENCY, AND TO BANKING AND COMMERCIAL STATISTICS.

"It is the interest of every country that the standard of its money, once settled, should be inviolably and immutably kept to perpetuity. For whenever that is altered, upon whatever pretence soever, the public will lose by it. "Men in their bargains contract, not for denominations or sounds, but for the intrinsic value.”—Locke on Money.

Vol. I.

WEDNESDAY, AUGUST 2, 1837.

DISTRIBUTION OF THE SURPLUS
REVENUE.

An act to regulate the deposites of the public

money.

No. 3.

in his opinion, safe depositories of the public. money, and shall be willing to undertake to do and perform the several duties and services, and to conform to the several conditions prescribed by this act.

SEC. 2. And be it further enacted, That if, at any point or place at which the public revenue may be collected, there shall be no bank located, which, in the opinion of the secretary of the treasury, is in a safe condition, or where all the banks at such point or place shall fail or refuse to be employed as depositories of the public money of the United States, or to comply with the conditions prescribed by this act, or where such banks shall not have sufficient capital to become depositories of the whole amount of moneys collected at such point or place, he shall and may order and direct the public money collected at such point or place to be deposited in a bank or banks in the same state, or in some one or more of the adjacent states, upon the terms and conditions hereinafter prescribed: Provided, That nothing in this act contained shall be so construed as to prevent congress, at any time, from passing any law for the removal of the public money from any of the said banks, or from changing the terms of deposite, or to prevent the said banks at any time from declining any longer to be the depositories of the public money upon paying over, or tendering to pay, the whole amount of public moneys on hand, according to the terms of its agreement with the said secretary.

Be it enacted, &c., That it shall be the duty of the secretary of the treasury to select, as soon as may be practicable, and employ as the depositories of the money of the United States, such of the banks incorporated by the several states, by congress for the District of Columbia, or by the legislative councils of the respective territories for those territories, as may be located at, adjacent or convenient to, the points or places at which the revenues may be collected or disbursed; and in those states, territories, or districts, in which there are no banks, or in which no bank can be employed as a deposite bank, and within which the public collections or disbursements require a depository, the said secretary may make arrangements with a bank, or banks, in some other state, territory, or district, to establish an agency, or agencies, in the states, territories, or district, so destitute of banks, as banks of deposite; and to receive through such agencies such deposites of the public money as may be directed to be made at the points designated, and to make such disbursements as the public service may require at those points; the duties and liabilities of every bank thus establishing any such agency, to be the same, in respect to its agency, as are the duties and liabilities of deposite banks generally under the provisions of this act: Provided, That at least one such bank shall be selected in each SEC. 3. And be it further enacted, That no state and territory, if any can be found in bank shall hereafter be selected and employed each state and territory willing to be employed by the secretary of the treasury as a depoas depositories of the public money, upon the sitory of the public money until such bank terms and conditions hereinafter prescribed, shall have first furnished to the said secretary and continue to conform thereto; and that a statement of its condition and business, a the secretary of the treasury shall not suffer list of its directors, the current price of its to remain in any deposite bank an amount of stock, and also a copy of its charter; and, the public moneys more than equal to three likewise, such other information as may be fourths of the amount of its capital stock necessary to enable him to judge of the safety actually paid in, for a longer time than may of its condition. be necessary to enable him to make the transfers required by the twelfth section of this act; and that the banks so selected shall be,

SEC. 4. And be it further enacted, That the said banks, before they shall be employed as the depositories of the public money, shall

agree to receive the same upon the following | so selected and employed as aforesaid, collaterms and conditions, viz.

teral or additional securities for the safe keeping of the public moneys deposited therein, and the faithful performance of the duties required by this act.

First. Each bank shall furnish to the secretary of the treasury, from time to time, as often as he may require, not exceeding once a week, statements setting forth its condition SEC. 7. And be it further enacted, That it and business, as prescribed in the foregoing shall be lawful for the secretary of the treasection of this act, except that such statements sury to enter into contracts, in the name and need not, unless requested by said secretary, for and on behalf of the United States, with contain a list of the directors, or a copy of the said banks so selected or employed, the charter. And the said banks shall furnish whereby the said banks shall stipulate to do to the secretary of the treasury, and to the and perform the several duties and services treasurer of the United States, a weekly state-prescribed by this act.

ment of the condition of his account upon their SEC. 8. And be it further enacted, That no books. And the secretary of the treasury bank which shall be selected or employed as shall have the right, by himself, or an agent the place of deposite of the public money, appointed for that purpose, to inspect such shall be discontinued as such depository, or general accounts in the books of the bank as the public money withdrawn therefrom, exshall relate to the said statements: Provided, cept for the causes hereinafter mentioned, That this shall not be construed to imply a that is to say, if, at any time, any one of said right of inspecting the account of any private banks shall fail or refuse to perform any of individual or individuals with the bank. said duties, as prescribed by this act, and sti Secondly. To credit as specie all sums de-pulated to be performed by its contract, or if posited therein to the credit of the treasurer any of said banks shall at any time refuse to of the United States, and to pay all checks, pay its own notes in specie, if demanded, or warrants, or drafts, drawn on such deposites, shall fail to keep in its vaults such an amount in specie, if required by the holder thereof. of specie as shall be required by the secretary Thirdly. To give, whenever required by of the treasury, and shall be, in his opinion, nethe secretary of the treasury, the necessary cessary to render the said bank a safe depository facilities for transferring the public funds from of the public moneys, having due regard to place to place, within the United States, and the nature of the business transacted by the the territories thereof, and for distributing the bank; in any and every such case it shall be same in payment of the public creditors, the duty of the secretary of the treasury to without charging commissions or claiming al- discontinue any such bank as a depository, lowance on account of difference of exchange. and withdraw from it the public moneys which Fourthly. To render to the government of it may hold on deposite at the time of such the United States all the duties and services discontinuance. And, in case of the disconheretofore required by law to be performed by the late bank of the United States and its several branches or offices.

tinuance of any of said banks, it shall be the duty of the secretary of the treasury to report to congress immediately, if in session, SEC. 5. And be it further enacted, That no and, if not in session, then at the commencebank shall be selected or continued as a placement of its next session, the facts and reasons of deposite of the public money, which shall which have induced such discontinuance. And not redeem its notes and bills on demand in in case of the discontinuance of any of said specie; nor shall any bank be selected or continued as aforesaid, which shall, after the fourth of July, in the year one thousand eight hundred and thirty-six, issue or pay out any note or bill of a less denomination than five dollars; nor shall the notes or bills of any bank be received in payment of any debt due to the United States which shall, after the said fourth day of July, in the year one thousand eight hundred and thirty-six, issue any note or bill of a less denomination than five dollars. SEC. 6. And be it further enacted, That the secretary of the treasury shall be, and he is hereby, authorised, and it shall be his duty, whenever in his judgment the same shall be necessary or proper, to require of any bank,

banks as a place of deposite of the public money for any of the causes hereinbefore provided, it shall be lawful for the secretary of the treasury to deposite the money thus withdrawn in some other banks of deposite already selected, or to select some other bank as a place of deposite, upon the terms and conditions prescribed by this act. And, in default of any bank to receive such deposite, the money thus withdrawn shall be kept by the treasurer of the United States according to the laws now in force, and shall be subject to be disbursed according to law.

SEC. 9. And be it further enacted, That, until the secretary of the treasury shall have selected and employed said banks as places of

deposite of the public money, in conformity | sions of this act, in consequence of too great to the provisions of this act, the several state an accumulation of deposites in any bank, and district banks at present employed as depositories of the money of the United States shall continue to be the depositories aforesaid, upon the terms and conditions upon which they have been so employed.

such transfers shall be made to the nearest deposite banks which are considered safe and secure, and which can receive the moneys to be transferred under the limitations in this act imposed: Provided, That it may be lawful SEC. 10. And be it further enacted, That it for the president of the United States to direct shall be the duty of the secretary of the trea- transfers of public money to be made from sury to lay before congress, at the commence-time to time to the mint and branch mints of ment of each annual session, a statement of the the United States, for supplying metal for number and names of the banks employed as coining. depositories of the public money, and of their condition, and the amount of public money deposited in each, as shown by their returns at the treasury; and if the selection of any bank as a depository of the public money be made by the secretary of the treasury while congress is in session, he shall immediately report the name and condition of such bank to congress; and, if any such selection shall be made during the recess of congress, he shall report the same to congress during the first week of its next session.

SEC. 13. And be it further enacted, That the money which shall be in the treasury of the United States on the first day of January, eighteen hundred and thirty-seven, reserving the sum of five millions of dollars, shall be deposited with the several states, in proportion to their respective representation in the senate and house of representatives of the United States, as shall, by law, authorise their treasurers, or the competent authorities, to receive the same on the terms hereinafter specified; and the secretary of the treasury shall SEC. 11. And be it further enacted, That deliver the same to such treasurers or other whenever the amount of the public deposites competent authorities, on receiving certificates to the credit of the treasurer of the United of deposite therefor, signed by such compeStates, in any bank, shall, for a whole quarter tent authorities, in such form as may be preof a year, exceed the one fourth part of the scribed by the secretary aforesaid, which amount of the capital stock of such bank ac-certificates shall express the usual and legal tually paid in, the bank shall allow and pay obligations, and pledge the faith of the state to the United States for the use of the excess for the safe-keeping and repayment thereof, of the deposites over the one fourth part of and shall pledge the faith of the states receivits capital, an interest at the rate of two per ing the same to pay the said moneys, and centum per annum, to be calculated, for each every part thereof, from time to time, whenquarter, upon the average excesses of the ever the same shall be required by the secrequarter; and it shall be the duty of the secretary of the treasury, for the purpose of detary of the treasury, at the close of each fraying any wants of the public treasury quarter, to cause the amounts on deposite in beyond the amount of the five millions aforeeach deposite bank for the quarter to be ex- said: Provided, That if any state declines to amined and ascertained, and to see that all receive its proportion of the surplus aforesaid, sums of interest accruing under the provisions on the terms before named, the same shall be of this section are by the banks respectively deposited with the other states agreeing to passed to the credit of the treasurer of the accept the same on deposite, in the proportion United States in his accounts with the re- aforesaid: And provided further, That when spective banks. said money, or any part thereof, shall be wanted SEC. 12. And be it further enacted, That by the said secretary, to meet the appropriaall warrants or orders for the purpose of trans-tions made by law, the same shall be called ferring the public funds from the banks in for in rateable proportions, within one year, which they now are, or may hereafter be de- as nearly as conveniently as may be, from the posited, to other banks, whether of deposite different states with which the same is depoor not, for the purpose of accommodating the sited, and shall not be called for in sums exbanks to which the transfer may be made, or ceeding ten thousand dollars, from any one to sustain their credit, or for any other pur-state, in any one month, without previous nopose whatever, except it be to facilitate the tice of thirty days for every additional sum public disbursements, and to comply with the of twenty thousand dollars which at any time provisions of this act, be, and the same are may be required.

hereby, prohibited and declared to be illegal ; SEC. 14. And be it further enacted, That and in cases where transfers shall be required the said deposites shall be made with the said for purposes of equalisation under the provi-states in the following proportions, and at the

following times, viz.: one quarter part on the | hand forty or fifty millions-it would receive first day of January, eighteen hundred and in the course of the operation thirty or forty thirty-seven, or as soon thereafter as may be; millions of revenue more-and as there was one quarter part on the first day of April; one quarter part on the first day of July; and one quarter part on the first day of October, all in the same year.

SEC. 15. And be it further enacted, That, to enable the secretary of the treasury to carry into effect the provisions of this act, he be authorised to appoint three additional clerks for his department, the one at a salary of one thousand six hundred dollars per annum, and the remaining two at a salary of one thousand dollars each per annum; and to pay the said clerks quarter-yearly, out of any money in the treasury not otherwise appropropriated.

Approved, June 23, 1836.

ANDREW JACKSON.

probably money in every state, the operation was so simple and easy that it ought not to have occasioned the slightest pressure either on public or private interests; and the whole might have been accomplished without any derangement of trade, and without the movement of a single dollar in specie. That this not only could be done, but has actually been done, you will find in the public documents of 1829.

In that year the new administration of Mr. Jackson, anxious to appropriate every dispos able dollar of the revenue to the reduction of the public debt, sought and obtained the aid of the Bank of the United States. Notice was accordingly given on the 31st of March, 1829, that, on the 1st of July, the debt and interest, amounting to $8,715,462 87, would be paid.

LETTER FROM MR. BIDDLE TO HON. At the period of the notice, the whole availaJOHN QUINCY ADAMS.

Philadelphia, Nov. 11, 1836.

ble means of the treasury were only six millions, scattered throughout the United States, and these, with the accruing revenue in the To Hon. J. Q. ADAMS. interval, were, at a notice of ninety days, to My dear sir,-I proceed to the second sub-be collected, to pay nearly nine millions. So ject of our conversation-the present state of closely was the government pressed, that, the currency-which I shall treat dispassion-after paying these sums, the actual balance in ately, as an abstract question of mere finance. the treasury throughout the United States, Our pecuniary condition seems to be a was reduced to $164,365 04. The bank, strange anomaly. When congress adjourned, however, undertook the arrangement, with it left the country with abundant crops and what success may be seen in the following high prices for them-with every branch of part of the message of Mr. Jackson to conindustry flourishing-with more specie than gress in December, 1829. "The payment we ever possessed before-with all the ele-on account of the public debt, made on the 1st ments of universal prosperity. Not one of of July last, was $8,715,462 87. It was ap these has undergone the slightest change, yet prehended that the sudden withdrawal of so after a few months congress will reassemble large a sum from the banks in which it was and find the whole country suffering intense pecuniary distress. The occasion of this, and the remedy for it, may well occupy our thoughts.

deposited, at a time of unusual pressure in the money market, might cause much injury to the interests dependent on bank accommodations. But this evil was wholly averted by an early In my judgment, the main cause of it is the anticipation of it at the treasury, aided by the mismanagement of the revenue-mismanage-judicious arrangement of the officers of the ment in two respects: the mode of executing Bank of the United States." The respective the distribution law, and the order requiring shares of the bank and the treasury may be specie for the public lands.

conjectured from the secretary's letter of the 1st. The distribution law. 14th July, 1829, in which he takes occasion In July, 1836, congress declared that the to express" the great satisfaction of the treasurplus in the treasury on the 1st of January, sury department in the preparation of the 1837, should be divided among the states. heavy payment of the public debt on the first That it might be done as gently as possible, instant-which has been affected by means of the payments were to be made, not at once the prudent arrangement of your board, at the on the 1st of January, but quarterly through-time of severe depression on all the productive out the whole year 1837; and as the aggre-employments of the country, without causing gate sum to be distributed is from thirty-six any sensible addition to the pressure, or even to forty millions, we may assume the first visible effect upon the ordinary operations of payment in January to be about nine millions. the state banks."

Το prepare for this, the treasury has had in

If then nine millions, being almost the last