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THE LEGAL CURRENCY.*
A BILL reported by Mr. Calhoun for the restoration of the currency was rejected in the House of Representatives on the 25th of April, 1816. On the 26th, Mr. Webster introduced three resolutions having the same object in view ; and in support of them made the following speech. The first two, being declaratory of principles only, were withdrawn at the request of several gentlemen, who were in favor of the third resolution, which contained Mr. Webster's plan for restoring the currency.
It provided that the Secretary of the Treasury should adopt such measures as he might deem necessary, to cause, as soon as might be, all sums of money due to the United States “to be collected and paid in the legal currency of the United States, or treasury-notes, or notes of the Bank of the United States, as by law provided and declared, or in notes of banks which are payable and paid on demand, in the said legal currency of the United States"; and it directed that, after the 20th of February next ensuing, nothing else should be received in payment of the public dues.
This resolution was received with great favor by the House, and passed through all the stages of legislation on the same day (the 26th of April) by a majority of more than two thirds. It was approved by President Madison on the 30th, and was completely successful in restoring a sound currency.
MR. SPEAKER, - I have felt it to be my duty to call the attention of the House once more to the subject of the collection of the revenue, and to present the resolutions which are
• A Speech delivered in the House of Representatives of the United States, on the 26th of April, 1816, on the Collection of the Revenue in the Legal Currency of the Country,
now submitted. I have been the more inclined to do this from an apprehension that the rejection, yesterday, of the bill which had been introduced, may be construed into an abandonment, on the part of the House, of all hope of remedying the existing evil. I have had, it is true, some objections against proceeding by way of bill; because the case is not one in which the law is deficient, but one in which the execution of the law is deficient. The great object, however, is to obtain a decision of this and the other house, that the present mode of receiving the revenue shall not be continued; and as this might be substantially effected by the bill, I had hoped that it might pass. This hope has been disappointed. The bill has been rejected. The House has put its negative upon the only proposition which has been submitted to it, for correcting a state of things which every body knows to exist in plain violation of the Constitution, and in open defiance of the written letter of the law. For one, I can never consent to adjourn, leaving this implied sanction of the House upon all that has taken place, and all that may hereafter take place. I hope not to hear again that there is not now time to act on this question. If other gentlemen consider the question as important as I do, they will not forbear to act on it from any desire, however strong, to bring the session to an early close.
The situation of the country, in regard to its finances and the collection of its revenues, is most deplorable. With a perfectly sound legal currency, the national revenues are not collected in this currency, but in paper of various sorts and various degrees of value. The origin and progress of this evil are distinctly known, but it is not easy to see its duration or its future extent, if an adequate remedy be not soon found. Before the war, the business of the country was conducted principally by means of the paper of the different State banks. As these were in good credit, and paid their notes in gold and silver on demand, no great evil was experienced from the circulation of their paper. Not being, however, a part of the legal money of the country, it could not, by law, be received in the payment of duties, taxes, or other debts to government. But being payable, and hitherto regularly paid, on demand, the collectors and agents of government had generally received it as cash; it had been deposited as cash in the banks which received the deposits
of government, and from them it had been drawn as cash, and paid off to creditors of the public.
During the war this state of things changed. Many of the banks had been induced to make loans to a very great amount to the government. These loans were made by an issue of their own bills. This proceeding threw into circulation an immense quantity of bank paper, in no degree corresponding with the mercantile business of the country, and resting, for its payment and redemption, on nothing but the government stocks, which were held by the banks. The consequence immediately followed, which it would be imputing a great degree of blindness both to the government and to the banks to suggest that they had not foreseen. The excess of paper which was found everywhere created alarm. Demands began to be made on the banks, and they all stopped payment. No contrivance to get money without inconvenience to the people ever had a shorter course of experiment, or a more unequivocal termination. The depreciation of bank-notes was the necessary consequence of a neglect or refusal to pay them, on the part of those who issued them. It took place immediately, and has continued, with occasional fluctuations in the depression, to the present moment. What still further increases the evil is, that this bank paper, being the issue of very many institutions, situated in different parts of the country, and possessing different degrees of credit, the depreciation has not been, and is not now, uniform throughout the United States. It is not the same at Baltimore as at Philadelphia, nor the same at Philadelphia as at New York. In New England, the banks have not stopped payment in specie, and of course their paper has not been depressed at all. But the notes of banks which have ceased to pay specie have, nevertheless, been, and still are, received for duties and taxes, in the places where such banks exist. The consequence of all this is, that the people of the United States pay their duties and taxes in currencies of different values in different places. In other words, taxes and duties are higher in some places than they are in others, by as much as the value of gold and silver is greater than the value of the several descriptions of bank paper which are received by government. This difference in relation to the paper of the District where we now are, is twenty-five per cent. Taxes and duties, therefore, col
lected in Massachusetts, are one quarter higher than the taxes and duties which are collected, by virtue of the same laws, in the District of Columbia.
By the Constitution of the United States, it is certain that all duties, taxes, and excises ought to be uniform throughout the country; and that no preference should be given, by any regulation of commerce or revenue, to the ports of one State over those of another. This constitutional provision, it is obvious, is flagrantly violated. Duties and taxes are not uniform. They are higher in some places than in others. A citizen of New England pays his taxes in gold and silver, or their equivalent. From his hand the collector will not receive, and is instructed by government not to receive, the paper of the banks which do not pay their notes on demand, and which notes he could obtain twenty or twenty-five per cent. cheaper than that which is demanded of him. Yet a citizen of the Middle States pays his taxes in these notes at par. Can a greater injustice than this be conceived? Can constitutional provisions be disregarded in a more essential point ? Commercial preferences also are given, which, if they should be continued, would be sufficient to annihilate the commerce of some cities and some States, while they would greatly promote that of others. The importing merchant of Boston pays the duties upon his goods, either in specie or cash notes, which are at least twenty per cent., or in treasury-notes, which are ten per cent. more valuable than the notes which are paid for duties, at par, by the importing merchant at Baltimore. Surely this is not to be endured. Such monstrous inequality and injustice cannot continue. Since the commencement of this course of things, it can be shown that the people of the Northern States have paid a million of dollars more than their just proportion of the public burdens. A similar inequality, though somewhat less in degree, has fallen upon the States south of the Potomac, in which the paper in circulation, although not equivalent to specie, is yet of higher value than the bank-notes of this District, Maryland, and the Middle States.
But it is not merely the inequality and injustice of this system, if that may be called system which is rather the want of all system, that need reform. It throws the whole revenue into derangement and endless confusion. It prevents the possibility
of order, method, or certainty in the public receipts or disbursements. This mass of depressed paper, thrown out at first in loans to accommodate government, has done little else than embarrass and distress government. It can hardly be said to circulate, but it lies in the channel of circulation, and chokes it up by its bulk and its sluggishness. In a great portion of the country the dues are not paid, or are badly paid; and in an equal portion of the country the public creditors are not paid, or are paid badly.
It is quite clear, that by the statute all duties and taxes are required to be paid in the legal money of the United States, or in treasury-notes, agreeably to recent provisions. It is just as clear, that the law has been disregarded, and that the notes of banks of a hundred different descriptions, and almost as many different values, have been received, and still are received, where the statute requires legal money or treasury-notes to be paid.
In these circumstances, I cannot persuade myself that Congress will adjourn, without attempting something by way of remedy. In my opinion, no greater evil has threatened us. Nothing can more endanger, either the existence and preservation of the public revenue, or the security of private property, than the consequences which are to be apprehended from the present course of things, if they be not arrested by a timely and an effectual interference. Let gentlemen consider what will probably happen, if Congress should rise without the adoption of any measure on the subject.
Virginia, having passed a law for compelling the banks in that State to limit the circulation of their paper,
and resume specie payments by the autumn, will, doubtless, repeal it. The States farther to the south will probably fall into a similar relaxation, for it is hardly to be expected that they will have firmness and perseverance enough to persist in their present most prudent and commendable course, without the countenance of the general government. If, in addition to these events, an abandonment of the wholesome system which has thus far prevailed in the Northern States, or any relaxation of that system, should take place, the government is in danger of falling into a condition, from which it will hardly be able to extricate itself for twenty years, if indeed it shall ever be able to extricate itself; and if