without any allowance or compensation, except for the actual cost of books and stationary.

"6thly. To pay interest, quarterly, into the treasury, at the rate of ten per cent. per annum, on the average balance of the public moneys on deposite, over and above a sum which shall be equal to five per centum of its capital actually paid in; provided that no interest be payable when the said average quarterly balance does not exceed fifty thousand dollars."

Mr. POLK, who was entitled to the floor, proceeded to say that, under existing circumstances, he should confine what he had to say within as brief a space as possible, and proceed to show the inexpediency of adopting the amendment in question. He remarked that he had the other day demonstrated, to some extent, that if the construction of the gentleman from Pennsylvania [Mr. BINNEY] were to be placed upon the amendment, it would utterly destroy and break up the whole system of employing local banks as fiscal agents of the Government in every part of the country, except in the larger cities. In the cities, the banks were enabled to make daily settlements, and strike daily balances; but the country banks had no such opportunity. He would put a strong case. The Choctaw lands were in market, and the deposite bank at Natchez had necessarily, at occasional times, a large amount of the public money, and the receivers being compelled to receive, not specie but notes of the Bank of the United States, how would the deposite bank be able to answer the call required by the above amendment? In September, last year, the amount of public deposites in that bank was a half million or more; and in January of the present year it was nearly $900,000. Some of this was in notes payable in Philadelphia, some in Boston, New York, and other cities, and of all the branches perhaps in the Union, for it was required to receive them; and what did the amendment propose? Why, that they should not count any thing as specie that was not metallic. It would be compelled instantly to transmit to Boston, Savannah, New York, and other places, the notes payable there; and receive their balances back at Natchez. This would take months in transmitting, besides running a great risk in the double transportation. Nor was this all; during the time the deposite bank was lying out of all this money, she must procure specie, at whatever cost, so as to keep up the requisite proportion, although the deposites were made in notes of the Bank of the United States. In other words, you would be requiring the deposite bank to receive the paper of the Bank of the United States, and not specie; while, at the same time, you would require that bank to answer for the same notes in specie, losing the interest upon and use of the money, by the time consumed in procuring the balances and returns from the Bank of the United States. He affirmed, that at no period since the Bank of the United States came into operation, could the bank, or any one of its branches, have stood up under such a restriction as that proposed by the gentleman from Pennsylvania; nor was a provision of such a character ever required before.

He had procured the several official returns of the branches of the Bank of the United States, which all showed that they could not have existed under such a restriction. Take one, the branch at Mobile. On the 1st of April, 1833, before the public deposites were removed from the Bank of the United States, it had, of public and private deposites, notes in circulation, &c., over and above what was owing to the bank, $2,631,000. Now, according to the amendment proposed, this branch bank should have had $526,200, being one fifth: so far from it, that it had only $136,000 in specie and the notes of specie-paying banks. The branch bank at Natchez, at the same period, had, of public and private deposites and notes in circulation, $1,531,000; while of specie, and

[H. OF R.

notes of specie-paying banks, it had only $76,000 to meet these liabilities-about a twentieth, instead of a fifth. The result of carrying out the principle of the gentleman from Pennsylvania would be destructive of the whole system of local depositories. Mr. P. would call upon all those gentlemen who desired this system to be carried out, to examine this point thoroughly, and they would see that, if this amendment was adopted, it would be impracticable, and would tend to drive them out of the public service, and throw the public treasury into the hands of receivers, or to compel the re-establishment of a national bank; a contingency which would inevitably follow. The provision was altogether a novel one, and had never been imposed upon the Bank of the United States or its branches. It added no greater security for the public moneys; it was no additional guarantee; and the provisions of the bill offered sufficient security. Mr. P. here referred to several of them, such as the limited powers with which the Secretary of the Treasury was clothed, &c.

There was another view of the matter. The Bank of the United States was not compelled to take the notes of every other bank unless she chose to do so, while the deposite bank was compelled to take hers, and to keep a proportionate amount of specie for it also. By the amendment, they would be compelled to increase their specie, as money might be paid in, and to hold it from circulation, however necessary it might be.

Mr. P. said, without intending any disrespect to the honorable member from Pennsylvania, [Mr. BINNEY,] and without supposing any such intention could have been entertained by that gentleman, yet the conviction forced itself upon Mr. P's mind that the source of the amendment had been prepared by that portion of the intelligent men in this country who were most desirous, he would not say from improper motives, for the establishment of a national bank. The effect of all the amendments, if finally adopted by the House, would be to embarrass those new fiscal agents of the Government, and to bring them, at least, into disrepute. No plan could have been devised more effectually than these amendments. Why should these deposite banks be required to do what had never been done by the Bank of the United States or by any other bank? He alluded now particularly to the requisition that a monthly publication of the affairs of each deposite bank throughout the country should be made in three newspapers in the city of Washington, so that their condition might be exposed to the Bank of the United States and to other banks, whilst the condition of the Bank of the United States and all the other banks would be concealed. By doing this the Bank of the United States would be enabled to select its victim, and, by means of its extensive exchanges and in other ways, concentrate its immense power to crush one of those fiscal agents, and thus, by producing a temporary interruption to business, embarrass the whole country. We were at no loss to know what would be the effect of public clamor. The experience of the past year, especially from the temporary suspension of two or three banks in this District, proved what might be done. Mr. P. had no doubt there were those who would have rejoiced to see every institution of the kind in the country stop specie payments, reckless of the ruin that might be brought about thereby. You would first require a certain proportion of specie to be kept in each bank upon the amount of its deposites, at the same time paying in those deposites, not in specie, but in paper of other banks. Not content with this, they must publish in the newspapers a monthly exposé of all their affairs! Where was the necessity for this? Under the bill returns were to be made to the Treasury, and every guarantee had been thrown around that was considered forcible and practicable at the same time.

What was the next provision? The first was that of requiring a certain amount of specie in proportion to the liabilities. The second was that of throwing open the condition of each bank. And the third was, that the deposite banks should pay interest on the public money in their hands. Mr. P. would ask, had interest ever been required of any depository from the foundation of this Government up to the present time? It was scarcely necessary to go into this branch of the argument. The subject was also amply discussed at the last session of Congress. What duties had these fiscal agents to perform? They would have to perform the duties of pension agent, without any allowance or compensation, except for the actual cost of books and stationery. They had to furnish the Government with facilities in collecting, receiving, and disbursing the public money, and in this way alone he would venture to affirm there would be a great saving to the Government. Besides, how could interest be charged for the use of money, the amount of which was liable to such fluctuation as the public deposites? Mr. P. felt no hesitation, then, in saying that, if you imposed such hard terms upon these banks, you would be driven to select those of a second rate character, instead of the best, the most solvent, and the most efficient. He hoped and trusted that the plan for the employment of these banks would not be so crippled with regulations as to make it altogether impracticable.

The gentleman from Pennsylvania thought the system must fail. Permit him (Mr. P.) to say that, if the bill should have thrown around it the provisions proposed by that gentleman, in his judgment those institutions would be so trammelled and fettered as to render it very difficult, perhaps wholly impracticable, for many of them to succeed. They would then have to resort either to the scheme of the gentleman from Virginia or the gentleman from Pennsylvania, or be thrown back again upon a national bank. The gentleman from Pennsylvania distinctly averred that the system could not succeed, unless it should be converted into a national bank; he also avowed his hostility to this bill in any and every form or shape in which it could be presented, and he informed the House at the outset that he intended to vote against it. The gentleman also further told the House that, if it passed the bill, the responsibility would be upon them; if they rejected it, the responsibility would be elsewhere. The gentleman had predicted that the whole system must fail, and that the scheme was altogether impracticable. Now, Mr. P. submitted to the gentleman whether it was fair to that part of the House who differed in opinion with himself, and who thought it a practicable scheme, to embarrass that scheme with these amendments, and strive to render it wholly inoperative? To put the proposed provisions into this bill would, indeed, have this effect.

The gentleman from Pennsylvania further said that the success of the State banks as fiscal agents of the Government, for the last six months, was mainly to be attributed to the forbearance exercised by the Bank of the United States during the spring of 1834, and the effect of the panic. Forbearance of the Bank of the United States! Mr. P. then knew not what forbearance was; but he did know that, during the whole of last session, nothing was seen or heard but one general stream of invective from the party sustaining the bank, and that institution could not extend its accommodations, because, on account of the removal of the deposites, they were compelled to make provisions to pay off their own liabilities. So far from forbearing, we were again and again assured that the bank had been rendered powerless, and could not relieve the country; but as soon as Congress adjourned, we saw a correspondence between the bank and a committee of merchants of New

[FEB. 19, 1835.

York, in which the bank said that, as Congress had adjourned without doing its duty, it would then generously extend its loans. Was the panic got up by the friends of the State banks, or by their opponents? By the friends or enemies of the bank? The whole country would give but one response to this question.

Mr. P. wished to set the gentleman from Pennsylvania-right as to another fact. The gentleman had said that the effect of the panic had been to diminish the importation of foreign articles of commerce; but he must have overlooked the returns from the Treasury Department. If he would turn to them, he will see that, so far from our transportation trade having decreased, it had increased to an amount of fourteen millions over any other year.

[Mr. BINNEY explained. He had referred to the increase of importations in specie, and a diminution of other articles.]

Mr. POLK said, still the Treasury returns showed a great increase. The argument of the gentleman from Pennsylvania, that the panic had produced an influx of specie into the country, was fallacious. It was true that more specie was imported during the year 1834; but then the amount of imports of goods, or general fabrics, had not diminished; and this fact was borne out by official statements. The country, then, has been prosperous; but she is indebted for that prosperity neither to the bank nor to the panic, but to the new impulses springing out of the employment of State banks as fiscal agents of the Government, to which the bank and its friends had been the most inveterate enemies, and did all in their power to sweep them from the face of the earth. They have stood up against the power of that institution, and the effects of the panic also, and have been, so far, successful. The gentleman said that the parallel case of those banks, as formerly existing, viz: between 1789 and 1816, during which they were constantly employed as fiscal agents, did not hold good; because, said he, there was then as much specie in the country as now; and, moreover, that the calamity of their inability came at last. But the gentleman's argument did not hold good; for the country was then only just liberated from an expensive war. The cause of their failure ought to be ascribed to their having made their issues too large, (many of them, he believed, from patriotic motives,) and were not able to meet the sudden call upon them. We had, however, a guarantee now, which did not exist then, and that was in the regulation of the standard of our metallic currency, by which it would be kept from exportation.

Mr. P. said he would now conclude with hoping that the House would not so embarrass and trammel the bill as, in the judgment of those in favor of it, and of those who would be called upon to execute it, to render it impracticable, and thereby give the vantage ground to the Bank of the United States. He was anxious that the public should be secured in every possible way, but he could see no additional safeguards in the propositions of the gentleman from Pennsylvania.

One word in regard to these amendments. He did not know whether it was improper to allude to what had occurred elsewhere, but this he might say, that the proposition now moved by the gentleman from Pennsylvania was not heard of when the original bill was discussed in the Committee of Ways and Means. The provision relative to specie payments was inserted in the present bill; though Mr. P. had deemed it unneces sary last session, still he thought it could do no harm. Mr. P. concluded by trusting the House would alter its decision by reconsidering its vote and rejecting the

amendment.

Mr. BINNEY spoke at considerable length, in reply to the arguments of Mr. POLK, and going to show that the

amendment introduced by him, and proposed to be reconsidered, would be salutary in its tendency, and necessary in its operation on the general influence of the bill. It was not unreasonable to require of each of the deposite banks to retain within their vaults at least one fifth of the amount, in specie, of its circulation and deposites. He pursued his argument and reply for upwards of an hour; contending that the amendment proposed nothing but which the local banks were fully able to meet. The converse of this opinion must arise from a want of information as to their real situation, highly injurious to them.

Mr. CAMBRELENG followed. He expressed his satisfaction at hearing the opinions from the gentleman from Pennsylvania, [Mr. BINNEY,] that the State banks were in such high reputation. He believed it was the first time such an admission had come from that quarter of the House. Mr. C. then proceeded to show his reasons for advocating a reconsideration of the amendment of the gentleman from Pennsylvania; among which was the fact that the banks had no effectual control over the public moneys deposited in their vaults, which were liable to be drawn and transferred by the Government at any moment. On the subject of a hard-money system, he believed he would go as far as that gentleman. He concluded by repeating his conviction that the reconsideration should prevail, and the amendment be expunged.

Mr. McKINLEY then addressed the House at length, in favor of a reconsideration of the amendment. He appealed to the House to decide now, whether they were prepared to sanction, in this bill, a system which would most inevitably have broken down the old one, or to put upon these institutions such restrictions as none could bear.

Mr. JONES, of Georgia, said: Mr. Speaker, as the gentleman from Tennessee [Mr. POLK] has called on all who are opposed to the Bank of the United States, it will not be surprising to any that I should offer a few remarks. I am as much opposed to the recharter of that bank as either the gentleman from Tennessee or Alabama, [Mr. McKINLEY.] Not that I think the bank unsafe, or that the directors have acted with any other view than to the obtainment of a charter; but because its powers are and must be, to render it effective, too great to be safely trusted to any such institution. While, therefore, I am opposed to the Bank of the United States and in favor of making the State banks depositories of the public money, I desire to put such restraints upon them as to keep them safe. For that reason I was in favor of the requisition of the amendment as modified at my suggestion to one fifth specie to the amount of circulation and deposites. I am still in favor of that, so far as regards banks in which the customs are deposited, whilst I would exempt those Western banks, so far as respects the deposites arising from sales of public land. They are the banks, and the only banks, which the gentleman from Tennessee [Mr. POLK] has called your attention to as being unable to comply with such a requisition. I entirely agree with him, that it is impracticable for them to do it. I was not unaware of this difficulty; shortly after the amendinent was agreed to, I prepared an amendment to provide for and obviate it, which I intend to offer at a proper time. That the House may see it will freely meet the exigency of the only banks which have been brought to their notice by the gentleman from Tennessee, I will read it.

Provided, That the said requisition of one fifth specie shall not be construed to apply to the deposites made in any bank or banks by the receivers of land offices, of money collected by them from sales of land belonging to the United States: And provided, also, The bills so deposited by the said receivers shall be bills of specie VOL. XI.-91

[H. OF R.

paying banks, which bills the said receivers of the land offices are hereby required to receive in payment for said lands.

I cannot believe some two or three millions will be paid into the banks in a day or two from customs. They are collected in smaller sums, and some weeks are required to swell the deposite to such an extent. Large amounts are frequently in a few days paid to the receivers of land offices, and by them deposited in those banks. They have not the opportunity, situated remotely from other banks, of converting those deposites, or any part of them, into specie; and this amendment provides for them. It is not so with banks in which the customs are collected. They are usually in large cities, where the banks are located whose bills have been collected, and it is perfectly easy to exchange them for specie.

We have been told this will compel the deposite banks to call on the other banks for frequent settlements, and to demand specie of them. This is all a mistake, sir. They cannot be compelled to call for exchanges more frequently than they now do. In large cities settlements are made every day; in other places every week or fortnight, as may be convenient. It is admitted that one fifth specie to circulation is not too high a requisition. Every bank, then, ought to have that much, at least. Now, the bills received by the deposite banks must be their own or the bills of other banks; they should have one fifth of their own bills, which were in circulation, and the other banks ought to be made to redeem the one fifth of their bills which had been received, in specie.

The gentleman from Alabama [Mr. MCKINLEY] says this is requiring more than has ever been required by any bank charter. I have not examined the charters, and therefore cannot speak certainly; but I think he is mistaken. If I recollect correctly, the charters require that the circulation shall not exceed one third the amount of specie in their vaults. And the banks have generally found it unsafe to go beyond twice the amount. And if you add to these the deposites of individuals, you will generally find in safe banks they both do not exceed five times the amount of specie. And, sir, I cannot consider any bank entirely safe which has not generally one fifth specie of its circulation and deposites.

The gentleman from Tennessee has said, and said truly, that if you adopt all the amendments of the gentleman from Pennsylvania, [Mr. BINNEY,] it will be impracti cable for the State banks to become the depositories of the public money. The adoption of this amendment does not pledge any gentleman or the House to adopt the others. On the contrary, there are several to which I am opposed. I am opposed to the monthly publication of the reports of the deposite banks. It is proper these reports should be made monthly, at least, to the Secretary of the Treasury; but it is both expensive and oppressive to have them published. It exposes the deposite banks to the tremendous power of the United States Bank, and also places them in the power of other State institutions. It gives those banks an unfair advantage, and is of no use. The information is wanted by the Secretary, to enable him to judge of their safety, and therefore ought to be given him. The community can derive no advantage from it. It is sufficient to have those reports laid before Congress at each session, to enable them to act advisedly when necessary. I am opposed to the interest. The deposite banks will have many things to do for the United States. They must make the collections; keep the money safely; transmit it from place to place as may be necessary. All these are expensive to the banks, and would be very much so to the United States. The expense to the banks cannot be