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alely entertained by Congress), would require a restoration of the duty on European silks, now entirely free. Other articles could be selected, on which the present duties could be reduced and repealed, at least to the extent of $400,000 annually, without injuring, it is expected, any domestic manufactures, or agricultural branch of industry, or impairing the spirit and good faith of the compromise intended by the act of Congress, of March 3, 1833, and which the undersigned would most scrupuiously preserve unviolated. On this subject, a detailed report will soon be presented to the Senate, in-conformity to a resolution of that body, passed at the last session. It is his deliberate opinion, that such of those reductions as are deemed perosissible under the above limitations, should now be made ; and the balance remaining, if too great for common fiscal purposes, be temporarily and profitably invested, rather than a large surplus should continue to be collected for the express end of being, in any way, finally disposed of, otherwise than by appropriations to useful and constitutional objects.
The People themselves, it is believed can best manage all their own muney, which they and their Representatives think may not be wanted for public purposes ; and it would seem to be far preferable to leave it originally in their possession, than to withdraw for the expensive operation of returóing it suhstantially to the place whence it came, and that probably in a manner not conformable to the constitution, till after the delay of procuring an amendment to it, and even then, not expedient, because calculated injudiciously to strengthen the General Government, and to render the States more dependent on a great central power for yearly and important resources. Indeed, a reduction in the price of
public lands, whose unusually large sales the past year are the source of most of the present surplus, would, if their sales should not thereby be much increased, seem another more far more natural to obviate the present difficulty. But before adopting it, this and various other considerations must be weighed, and it must be fully considered, whether all the revenue anticipated from them at their present prices, would not be necessary, after the great reductions in the tariff, iu 1842, and whether a resort to a higher tariff would not then become indispensable, if the average receipts from lands or customs should, from any new legislation, become then much diminished below the estimates which have been submitted on the occasion
VI.-DEPOSITÉ BANKS AND THE CURRENCY. This Department takes pleasure in stating that the public money continues to be collected and deposited, under the present system of selected
banks, with great ease and economy in all cases, and with greater in some than at any former period. The transfers of it to every quarter of the country where it is needed for disbursement, have never been effected with more promptitude, and have been made entirely free of expense to the Treasury. The payments to creditore, offierrs, and pensioners have břer: punctual and convenient ; and the whole fiscal operations through the State banks have, as yet, proved highly satisfactory. Incidental to this, the facilities that have been furnished to the commercial coinmunity in domestic exchanges, were probably never greater, or at so moderate rates. la the course of this year, additional, depositories have been selected in
four States where no new ones before existed, aud all the branches of the United States Bank, for some months, have been discontinued for ordinary fiscal purposes. They are, however, still used, as claimed by the Bank, under acts of Congress, for the payment of the outstanding portions of the funded debt, and of invalid and other pensions, prior to 1332, except) where the Department has been notified that the branches were withdrawn, as in New Hampshire, Connecticut, Kentucky, Ohio, Missouri, Western Pennsylvania, Maryland, South Carolina, and the interior of New York. The whole number of selected backs, without including branches, is now thirty-four, being, notwithstanding the addition of four new ones, less by six, than last year.
This diminution has been effected by the discontinuance of various old, and to the Treasury, unimportant institutions, employed before 1833, in connexion with the United States Bank, and by adding no new ones, except where the public interests seemed to render it imperative or
expedient. A great, though not the chief, cause of some loss, which formerly happened in the deposites in State banks, is believed to have been the multiplication of them to something over one hundred in number. The system is now arranged so as probably to require hereafter few changes, excepting two or three instances, concerning which a correspondence is now pending, unless, as is not anticipated, such onerous conditions should be exacted by Congress, of the present safe and efficient depositories, as to derange the system, induce soine of them to withdraw, and conipel the Department to intrust the public funds to other agents, less cautious, skilful and trustworthy. Great care has been exercised in preparing, from the last returns made to this Department, and from data since obtained by an extensive correspondence, tabular statements which show, in the most essential particulars, as near the 1st of January, 1835, and as fully as could be obtained, the names and condition of each of the State banks in the Union, of each of the selected banks, of the United States, Bank, and of all combined. They exhibit, further, the capital and situation of all the banks in each of the large cities in the United States, as well as of all in each State, arranged together for convenience of reference, and the changes which have since happened in the condition of the deposite and United States banks. So far as regards the capital, discounts, &c., of all the State banks, only the general exhi
bit of the aggregate results in each State, is now communicated, but, in a few days, all the voluminous details on those points will be submitted to the House of Representatives, in compliauce with its resolution of the 10th of July, 1832.
It will be seen that the situation of the selected banks, as a whole, bears an enviable comparison with the rest.
Io all cases deemed proper, they have given collateral security, and are all believed to be entirely safe, to the extent they have been confided in. Their discounts have been, in general, somewhat increased, but, though teinpted by the enterprising spirit of the times, not usually increased in a degree disproportioned to all their immediate available
They have also, in some cases, been able to aid, and have liberally aided, other banking institutions in their neighborhood, by as large and long balances and other indulgences as would generally ap. pear to have been sanctioned by correct principles. The names of each,
with the amount of money in each belonging to the Treasury, and subject to draft, not ouly at the commencement of the present year, but at the very last returns received, can be seen in three of the columns of the statement. The distribution of these suins is generally that which has been given to them by circumstances connected with their collection and disbursement. No occasion has arisen, in which the Department felt justified in making transfers of the public money, except from points where it had accumulated, in the natural course of collection, much beyond the present and early anticipated wants of the Government in that neighborhood, or in sums not proportioned to the responsibility of the public depositories there, and to points where it either would be better secured, or probably would soon be needed for disbursement, or could, from the course of trade and exchange, be more readily applied to any new objects which Congress would be likely soon to sanction. These transfers, when rendered necessary, have been performed in such direcLions, and so gradually, that it is believed they have tended to obviale rather than create any pressure in the money market, and to aid materially the course of business in exchanges and the other commercial operations of the country.
The Department is aware, that, in the present overflowing condition of the Treasury, the regulation of these operations, with the selection and superintendence of the deposite banks, is a task of no small difficulty
and delicacy; and when governed by a strict and unisorin adherence to sound principles, as has been attempted, must necessarily lead to many
disappointed applications. But in the absence of that specific legislation on the subject, which has been, and still is, earnestly requested, the Department has not hesitated (it is boped faithfully) to discharge, and frankly to explain, the duties, and the high and painful responsibility which so much discretionary power has imposed.
For various reasons of public importance, it was deemed desirable, and measures have been adopted, and recommendations urged, that the specie in the vaults of a nuniber of the selected Banks, should be still more increased in comparison with their issues and deposites, and that a still larger portion of the whole currency of the country, especially for small purposes, should be metallic. In improvement of the currency du fring the past year, many of the selected banks have not only. continued to obtain and pay, when wanted, to the public creditors, American gold, out have entered into salutary arrangements for the redemption, in our large cities, of most of their bills, which may be received in payment of the public dues. is hoped, that in the progress of time, these beneficial arrangements may be further extended to most, if not all, of the bills in circulation, of the large institutions, and the introduction of hard money, for the ordinary uses of life, be facilitated, by all the banks ceasing to circulate bills of small denominations. It is gratifying to find, that since the adjournment of Congress, in addition to the States of Pennsylvania, Maryland, Virginia, Georgia, Tennessee, Louisiana, North Carolina, Indiana, and Kentucky, which, before that time, are believed not to have
allowed the circulation of bills under five dollars, others, viz : Maine, Connecticut, New York, New Jersey, and Alabama, have united in similar legislative measures, except Connecticut, has, as yet, extended the prohibition to only one and two dollar bills.
Io Mississippi and Illinois, it is understood that bills under five dollars have not recently been issued, and Missouri has no bank issuing bills of
any denomination. So that more than two-thirds of the States have already usages or laws in existence, on this subject, of a highly salutary
tendency. The great benefits which have already resulted to the general condition of the currency where such measures have been tested, besides numerous others to the security of the banks themselves, and to the less moneyed classes of society, detailed in the supplement 10 the last annual report from this Department, would seem to be a sufficient inducement for similar legislation on this important subject in all the States. In some of them, where no laws have yet been passed to suppress the circulation of small notes, their deposite bauks have voluntarily entered into arrangements not to issue certaju descriptions of them, and most of the deposite bauks have, in a correspondence with the Department, evinced a willingness to co-operate in the suppression of small notes, whenever the regulation can be made general. The Treasury, so far as seemed practicable and judicious with its present powers, has endeavored to promote so desirable an end, not only by instituting the inquiries in that correspondence, but by instructions to its collecting officers not to receive in payment any bills under five dollars after the 30th of September, 1835. It proposes to go further on this point the ensuing year, so as to prevent the receipt for public dues of all bank notes under ten dollars, unless Congress in the mean time shall adopt some new provisions on this subject, similar, it is hoped, to what previously have been, and still are, urged by this Departnient, not only as to the deposite banks, and the kind of bills received for the revenue, but'as to the suppression entirely in the District of Columbia of the circulation of any bank notes under ten dollars in amount. The means for a sound currency in this country are at present ample. Within the last two years, or from October 1st, 1833, to November 1st, 1835, in addition to the former stock of specie, there has been imported into the
United States, beyond the exports from it, with a due allowance for what does not appear on the custom-house books, more than twenty-seven millions; and the produce of our own mines within that period, is estimated to have been over three millions. Hence the whole amount of specie
now in the country, probably exceeds the sum of sixty-four millions, and the means of the community to obtain more from abroad, to meet any contemplated changes in the character of our currency, were never greater. The actual amount of specie returned, and estimated as belonging to all the banks in the United States, about the 1st of January, 1835,
was near forty-four millions. As a portion of that may bave been bullion, a sum quite equalling, if not exceeding the remainder of twenty millions, probably consists of the amount of specie in active circulation, wbich has been somewhat increased throughout the country during the last two years, so that, is the remaining small bills in circulation under five dollars in the whole Union, which are chiefly in seven States, and which probably do not exceed six or seven millions, were withdrawn, it would not require, to supply their places, one-third of the addition which has been made in the last two years to the national stock of the precious metals. The specie on hanıl, in banks, will in this way, as it ought, soon bear a larger proportion to their notes in circulation, and the security and real usefulness of all banking institutions to the community be
thus greatly augmented. The specie in active circulation, thus increased by excluding small notes, will constitute, while retained in the country, a great and safe reliance for the banks to depend oni, (beside what belongs to them in their vaults,) whenever an unfavorable course of exchange abroad, or a panic at hoine, should cause au unusual demand for specie
to be shipped abroad, to meet a balance of trade against us, or to be used in circulation at home, by those whose confidence, from real or imaginary causes, may for a time become diminished in the security of baoks. When the further suppression of small notes, extending to all under ten dollars in amount, shall be deemed advisable by Congress and the States, no doubt is entertained that sufficient specie car and will be
readily found to supply their place, in connection with what now exists in the country. The proportion of specie to bank notes in circulation
will not then be su great as it is in all the inost conimercial nations in Europe. (See Table of Circulation, in Sup. Rept. 1834.) How much further it may be deemed feasible to go, with a fair prospect-of advantage to the community and our currency, can be better settled at that time than at the present.
Under its new valuation, the coinage of gold at the mint, from the 1st of August, 1834, to the 1st of November, 1835, has been $5,471,505, or over treble the amount supposed to have been coined in any previous period of similar length. The ratio has been somewhat lessened the last six months by sereral causes, of which an important one has been, the desire to provide more quarter eagles, and a full supply of silver change to meet the increasing demand in several States, from the withdrawal of small notes from circulation. The coiuage of silver has been extended, in the Grst eight months of this year, to over eight and a third millions of pieces, which is believed to be much beyond the number in the same portion of any preceding year. The building of the three branch mints, and the procuring of their appropriate machinery, authorized by the act of the 3d of March last, was devolved hy the President of the United States on this Department, and has been prosecuted with all practicable despatch.
The estimates and views of the Director on that subject, as well as on other improvements.connected with tbis important and increasing esiablishment, will, with its whole operations the current year, and the details on the progress made in the new buildings and machinery, be seasonably presented in a separate communication ; and this Department does not, on this occasion, deem it necessary to invite special attention to any thing further connected with either the miot or our coinage, except the several recommendations relating to them, which were contained in its last annual report.
The same reasons then assigned for closing, 'by a special act of Congress, the concerns of the sinking fund, and of the connection of the Government, after the third of March next, with the United States Bank, on the subject of both the national debt and of pensions allowed previous to 1832, apply now with increased force. It is considered that nothing need be added to the suggestions then made on these points, or on the subject of the seizure of the dividends due the United States by the Bank for its claim for damages on what is called the bill of exchange on the Government of France.