with the advice and consent of the Senate. The public moneys in the first instance must, therefore, in all cases, pass through hands selected by the executive. Other officers appointed in the same way or as in some cases, by the President alone, must also be entrusted with them when drawn for the purposes of disbursement. It is thus seen that even when banks were employed, the public funds must twice pass through the hands of the executive officers. Besides this, the head of the treasury department, who also holds his office at the pleasure of the President, and some other officers of the same department, must necessarily be invested with more or less power in the selection, continuance, and supervision of the banks that may be employed. The question is then narrowed to the single point whether, in the intermediate stage between the collection and disbursement of the public money, the agency of banks is necessary to avoid a dangerous extension of the patronage and influence of the executive? But is it clear that the connection of the executive with powerful moneyed institutions, capable of ministering to the interests of men in points where they are most accessible to corruption, is less liable to abuse than his constitutional agency in the appointment and control of the few public officers required by the proposed plan? Will the public money, when in their hands, be necessarily exposed to any improper interference on the part of the executive? May it not be hoped that a prudent fear of public jealousy and disapprobation, in a matter so peculiarly exposed to them, will deter him from any such interference, even if higher motives be found inoperative? May not Congress so regulate by law the duty of those officers, and subject it to such supervision and publicity, as to prevent the possibility of any serious abuse on the part of the executive ? And is there equal room for such supervision and publicity in a connection. with banks, acting under the shield of corporate immunities, and conducted by persons irresponsible to the government and the people? It is believed that a considerate and candid investigation of these questions will result in the conviction that the proposed plan is far less liable to objection, on the score of executive patronage and control, than any bank agency that has been or can be devised.

With these views, I leave to Congress the measures necessary to regulate, in the present emergency, the safe-keeping and transfer of the public moneys. In the performance of constitutional duty, I have stated to them, without reserve, the result of my own reflections. The subject is of great importance; and one on which we can scarcely expect to be as united in sentiment as we are in interest. It deserves a full and free discussion, and cannot fail to be benefited by a dispassionate comparison of opinions. Well aware myself of the duty of reciprocal concession among the co-ordinate branches of the government, I can promise a reasonable spirit of co-operation, so far as it can be indulged in without the surrender of constitutional objections which I believe to be well founded. Any system that may be adopted should be subjected to the fullest legal provision, so as to leave nothing to the executive but what is necessary to the discharge of the duties imposed on him; and whatever plan may be ultimately established, my own part shall be so discharged, as to give it a fair trial and the best prospect of success.

The character of the funds to be received and disbursed in the transactions of the government, likewise demands your most careful consideration. There can be no doubt that those who framed and adopted the constitution, having in immediate view the depreciated paper of the confederacy

of which five hundred dollars in paper were at times only equal to one dollar in coin — intended to prevent the recurrence of similar evils, so far at least as related to the transactions of the new government. They gave to Congress express powers to coin money, and to regulate the value thereof, and of foreign coin; they refused to give it power to establish corporations, the agents then, as now, chiefly employed to create a paper cur rency; they prohibited the states from making anything but gold and silver a legal tender in payment of debts; and the first Congress directed, by positive law, that the revenue should be received in nothing but gold and silver.

Public exigency at the outset of the government, without direct legisla tive authority, led to the use of banks as the fiscal aids to the treasury. In admitted deviation from the law, at the same period, and under the same exigency, the secretary of the treasury received their notes in payment of duties. The sole ground on which the practice, thus commenced, was then or has since been justified, is the certain, immediate, and convenient exchange of such notes for specie. The government did indeed receive the inconvertible notes of state banks during the difficulties of war; and the community submitted without a murmur to the unequal taxation and multiplied evils of which such a course was productive. With the war this indulgence ceased, and the banks were obliged again to redeem their notes. in gold and silver. The treasury, in accordance with previous practice, continued to dispense with the currency required by the act of 1789, and took the notes of banks in full confidence of their being paid in specie on demand; and Congress, to guard against the slightest violation of this principle, have declared by law, that if notes are paid in the transactions of the government; it must be under such circumstances as to enable the holder to convert them into specie without depreciation or delay.

Of my own duties under the existing laws, when the banks suspended specie payments, I could not doubt. Directions were immediately given to prevent the reception into the treasury of anything but gold and silver, or its equivalent; and every practicable arrangement was made to preserve the public faith, by similar and equivalent payments to the public creditors. The revenue from lands had been for some time substantially so collected, under the order issued by the directions of my predecessor. The effects of that order had been so salutary, and its forecast, in regard to the increasing insecurity of bank paper, had become so apparent, that even before the catastrophe, I had resolved not to interfere with its operation. Congress is now to decide whether the revenue shall continue to be so collected or not.

The receipts into the treasury of bank notes not redeemed in specie on demand, will not, I presume, be sanctioned. It would destroy, without the excuse of war or public distress, that equality of imposts, and identity of commercial regulation, which lie at the foundation of our confederacy, and would offer to each state a direct temptation to increase its foreign trade by depreciating the currency received for duties in its ports. Such a proceed ing would also in a great degree frustrate the policy so highly cherished of infusing into our circulation a large proportion of the precious metals; a policy, the wisdom of which none can doubt, though there may be dif ferent opinions as to the extent to which it should be carried. Its results have been already too auspicious, and its success is too closely interwoven with the future prosperity of the country, to permit us for a moment to con template its abandonment. We have seen, under its influence, our specie augmented beyond eighty millions; our coinage increased so as to make

that of the gold amount, between August, 1834, and December, 1836, to ten millions of dollars; exceeding the whole coinage at the mint during the thirty-one previous years. The prospect of farther improvement continued without abatement, until the moment of the suspension of specie payments. This policy has now indeed been suddenly checked, but is still far from being overthrown. Amidst all conflicting theories, one position is undeniable: the precious metals will invariably disappear when there ceases to be a necessity for their use as a circulating medium. It was in strict accordance with this truth, that whilst in the month of May last, they were every where seen, and were current for all ordinary purposes, they disappeared from circulation the moment the payment of specie was refused by the banks, and the community tacitly agreed to dispense with its employment. Their place was supplied by a currency exclusively of paper, and in many cases of the worst description. Already are the bank notes now in circulation greatly depreciated, and they fluctuate in value between one place and another; thus diminishing and making uncertain the worth of property and the price of labor, and failing to subserve, except at a heavy loss, the purposes of business. With each succeeding day the metallic currency decreases; by some it is hoarded, in the natural fear that once parted with it cannot be replaced; while by others it is diverted from its more legitimate uses for the sake of gain. Should Congress sanction this condition of things by making irredeemable paper money receivable in payment of public dues, a temporary check to a wise and salutary policy will in all probability be converted into its absolute destruction.

It is true that bank notes actually convertible into specie may be received in payment of the revenue without being liable to all these objections, and that such a course may to some extent promote individual convenience; an object always to be considered where it does not conflict with the principles of our government or the general welfare of the country. If such notes only were received, and always under circumstances allowing their early presentation for payment, and if, at short and fixed periods, they were converted into specie, to be kept by the officers of the treasury, some of the most serious obstacles to their reception would perhaps be removed. To retain the notes in the treasury would be to renew, under another form, the loans of public money to the banks, and the evils consequent thereon.

It is, however, a mistaken impression that any large amount of specie is required for public payments. Of the seventy or eighty millions now estimated to be in the country, ten millions would be abundantly sufficient for that purpose, provided an accumulation of a large amount of revenue, beyond the necessary wants of the government be hereafter prevented. If to these considerations be added the facilities which will arise from enabling the treasury to satisfy the public creditors by its drafts or notes received in payment of the public dues, it may be safely assumed that no motive of convenience to the citizen requires the reception of bank paper. To say that the refusal of paper money by the government introduces an unjust discrimination between the currency received by it, and that used by individuals in their ordinary affairs, is, in my judgment, to view it in a very erroneous light. The constitution prohibits the states from making anything but gold and silver a tender in the payment of debts, and thus secures to every citizen a right to demand payment in the legal currency. To provide by law that the government will only receive its dues in gold and silver, is not to confer on it any peculiar privilege, but merely to place

it on an equality with the citizen, by reserving to it a right secured to him by the constitution. It is doubtless for this reason that the principle has been sanctioned by successive laws, from the time of the first Congress under the constitution down to the last. Such precedents, never objected to and proceeding from such sources, afford a decisive answer to the imputation of inequality or injustice.

But, in fact, the measure is one of restriction, not of favor. To forbid the public agent to receive in payment any other than a certain kind of money, is to refuse him a discretion possessed by every citizen. It may be left to those who have the management of their own transactions, to make their own terms; but no such discretion should be given to him who acts merely as an agent of the people, who is to collect what the law requires, and to pay the appropriations it makes. When bank notes are redeemed on demand, there is then no discrimination in reality, for the individual who receives them may at his option substitute the specie for them; he takes them from convenience or choice. When they are not so redeemed, it will scarcely be contended that their receipt and payment by a public officer should be permitted, though none deny that right to an individual; if it were, the effect would be most injurious to the public, since the officer could make none of those arrangements to meet or guard against the depre ciation which an individual is at liberty to do. Nor can inconvenience to the community be alleged as an objection to such a regulation. Its object and motive are their convenience and welfare.

If, at a moment of simultaneous and unexpected suspension by the banks, it adds something to the many embarrassments of that proceeding, yet these are far overbalanced by its direct tendency to produce a wider circulation of gold and silver, to increase the safety of bank paper, to improve the general currency, and thus to prevent altogether such occurrences, and the other and far greater evils that attend them.

It may, indeed, be questioned whether it is not for the interest of the banks themselves that the government should not receive their paper. They would be conducted with more caution, and on sounder principles. By using specie only in its transactions, the government would create a demand for it, which would, to a great extent, prevent its exportation, and by keeping it in circulation, maintain a broader and safer basis for the paper currency. That the banks would thus be rendered more sound, and the community more safe, cannot admit of a doubt.

The foregoing views, it seems to me, but fairly carry out the provisions of the federal constitution in relation to the currency, as far as relates to the public revenue. At the time that instrument was framed, there were but three or four banks in the United States; and had the extension of the bank. ing system, and the evils growing out of it, been foreseen, they would proba bly have been specially guarded against. The same policy which led to the prohibition of bills of credit by the states would doubtless, in that event, have also interdicted their issue as a currency in any other form. The constitution, however, contains no such prohibition; and, since the states have exercised for nearly half a centnry, the power to regulate the business of banking, it is not to be expected that it will be abandoned. The whole matter is now under discussion before the proper tribunal, - the people of the states. Never before has the public mind been so thoroughly awakened to a proper sense of its importance; never has the subject in all its bearings been submitted to so searching an inquiry. It would be distrusting the intel

ligence and virtue of the people, to doubt the speedy and efficient adoption of such measures of reform as the public good demands. All that can rightfully be done by the federal government to promote the accomplishment of that important object will, without doubt, be performed.

In the mean time, it is our duty to provide all the remedies against a depreciated paper currency which the constitution enables us to afford. The treasury department, on several former occasions, has suggested the propriety and importance of a uniform law concerning bankruptcies of corporations and others. Through the instrumentality of such a law, a salutary check may doubtless be imposed on the issues of paper money, and an effectual remedy given to the citizens in a way at once equal in all parts of the Union, and fully authorized by the constitution.

The indulgence granted by executive authority in the payment of bonds for duties, has been already mentioned. Seeing that the immediate enforcement of these engagements would subject a large and highly respectable portion of our citizens to great sacrifices, and believing that a temporary postponement could be made without detriment to other interests, and with increased certainty of ultimate payment, I did not hesitate to comply with the request that was made of me. The terms already are to the full extent as liberal as any that are to be found in the practice of the executive department. It remains for Congress to decide whether a farther postponement may not with propriety be allowed, and if so, their legislation upon the subject is respectfully invited.

other

The report of the secretary of the treasury will exhibit the condition of these debts; the extent and effect of the present indulgence; the probable result of its farther extension of the state of the treasury, and every fact necessary to a full consideration of the subject. Similar information is communicated in regard to such depositaries of the public moneys as are indebted to the government, in order that Congress may also adopt the proper measures in regard to them.

The receipts and expenditures for the first half of the year, and an estimate of those for the residue, will be laid before you by the secretary of the treasury. In his report of December last, it was estimated that the current receipts would fall short of the expenditures by about three millions of dollars. It will be seen that the difference will be much greater. This is to be attributed not only to the occurrence of greater pecuniary embarrassments in the business of the country than those which were then predicted, and consequently, a greater diminution in the revenue, but also to the fact that the appropriations exceeded, by nearly six millions, the amount which was asked for in the estimates then submitted. The sum necessary for the service of the year, beyond the probable receipts, and the amount which it was intended should be reserved in the treasury at the commencement of the year, will be about six millions. If the whole of the reserved balance be not at once applied to the current expenditures, but four millions be still kept in the treasury, as seems most expedient for the uses of the mint, and to meet contingencies, the sum needed will be ten millions.

In making this estimate the receipts are calculated on the supposition of some farther extension of the indulgence granted in the payment of bonds for duties, which will affect the amount of the revenue for the present year to the extent of two and a half millions.

It is not proposed to procure the required amount by loans or increased taxation. There are now in the treasury nine millions three hundred and