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those particularly concerned in them. But they deserve much more consideration, on account of the quantity of paper which is in circulation, and the interest which the whole community has in it.
Let it be recollected also, sir, that the present condition of the banks is principally owing to their advances to government. The treasury has borrowed of the banks, or of those who themselves borrowed of the banks, till the banks have become as poor, and almost as much discredited, as the treasury itself. They have depreciated their paper, nearly ruined themselves, and brought the sorest distress on the country, by doing that on a small scale, which this bank is to perform on a scale vastly larger,
It is almost unpardonable in the conductors of these institutions, not to have foreseen the consequences which have resulted from the course pursued by them. They were all plain and visible. If they have any apology, it is, that they were no blinder than the government, and that they yielded to those who would take no denial. It will be altogether unpardonable in us, if with this, as well as all other experience before us, we continue to pursue a system which must inevitably lead us through depreciation of currency, paper-money, tender-laws, and all the contemptible and miserable contrivances of disordered finance and national insolvency, to complete and entire bankruptcy in the end.
I hope the House will recommit the bill for amendment.
ON A RESOLUTION RELATIVE TO THE MORE EFFECTUAL COLLEC
TION OF THE PUBLIC REVENUE, DELIVERED IN THE HOUSE OF REPRESENTATIVES OF THE UNITED STATES, 1816.
The disordered state, in which the Currency of the country was left by the late war, is well known. With a view to correct the evil, Mr. Webster moved the followiny Resolution, in the House of Representatives. It passed both Houses, and was attended with complete success, in its operation.
Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of Treasury be, and be hereby is, required and directed to adopt such measures as he may deem necessary, to cause, as soon as may be, all duties, taxes, debts, or sums of money, accruing or becoming payable 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 that, from and after the twentieth day of February next, no such duties, taxes, debts, or sums of money, accruing or becoming payable to the United States, as aforesaid, ought to be collected or received otherwise than in the legal currency of the United States, or Treasury notes, or notes of the Bank of the United State, or in notes of Banks which are payable and paid on demand, in the said legal currency of the United States.Approved, April 30, 1816.
The Resolution was introduced by the following Speech.
MR. Webster said, that he had felt it to be his 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 had been submitted. He had been the more inclined to do this from an apprehension that the rejection, yesterday, of the bill which had been introduced, might be construed into an abandonment, on the part of the House, of all hope of remedying the existing evil.' He had had, it was true, some objections against proceeding by way of bill ; because the case was not one in which the law was deficient, but one in which the execution of the law was deficient. The great object, however, was to obtain a decision of this and the other House, that the present mode of receiving the revenue should not be continued; and as this might be substantially effected by the bill, he had hoped that it might pass. This hope had been disappointed. The bill had been rejected. The House had put its negative upon the only proposition which had been submitted to it, for correcting a state of things, which everybody knows to exist in plain violation of the constitution, and in open defiance of the written letter of the law. For one, he could never consent to adjourn, leaving this implied sanction of the House upon all that had taken place, and all that might hereafter take place. He hoped not to hear again that there was not now time to act on this question. If other gentlemen considered the question as important as he did, they would not forbear to act on it from any desire, however strong, to bring the session to an early close.
The situation of the country, said Mr. Webster, in regard to 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 is 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 gove ernment, 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 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 on nothing for its payment and redemption, but the government stocks, which were holden 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 on the part of those who issued them to pay them. It took place immediately, and has continued, with occasional fluctuations in the depression, to the present moment. What still farther 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, collected 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 government, it is certain that all duties, taxes and excises ought to be uniform throughout the United States; 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 notes 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 could be continued, would be sufficient to annihilate the commerce of some cities and some states, while they would extremely 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 are not to be tolerated. 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 system it may be called, if not rather the want of all system, that call for 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 to 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 proportion 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 an 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 further 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 that condition, from which it can hardly be able to extricate itself for twenty years, if indeed it shall ever be able to extricate itself; and if that state of things, instead of being changed by the government, shall not change the government.
It is our business to foresee this danger, and to avoid it. There are some political evils which are seen as soon as they are dangerous, and which alarm at once as well the people as the government. Wars and invasions therefore are not always the most certain destroyers. of national prosperity. They come in no questionable shape. They announce their own approach, and the general security is preserved by the general alarm. Not so with the evils of a debased coin, a : depreciated paper currency, or a depressed and falling public credit. Not so with the plausible and insidious mischiefs of a paper money system. These insinuate themselves in the shape of facilities, accommodation, and relief. They hold out the most fallacious hope of an easy payment of debts, and a lighter burden of taxation. It is easy for a portion of the people to imagine that government may properly continue to receive depreciated paper, because they have received it, and because it is more convenient to obtain it than to obtain other paper, or specie. But on these subjects it is, that government ought to exercise its own peculiar wisdom and caution. It is