condition. He had seen the Government deposits, in the State banks, loaned and loaned over again in aid of speculations in the public lands; so that instead of selling from two to four millions in a year, in a little over one year the sales had risen to nearly forty millions. It was also known that the Bank of England had declined to discount for American houses in London, who relied upon these State banks for reimbursement, and that their drafts were returned protested. It was clear that the State bank system could not be relied upon, and could not be rendered safe and efficient by legislation. Advising with men like Silas Wright, Levi Woodbury, and John Forsyth, his own views were strengthened, and he determined to recommend a complete divorce of the Government from all banks, and the establishment of additional Treasury offices for keeping and disbursing the public money. He was of opinion that, while one set of officers were generally safely intrusted to collect our revenues, another, under suitable guards and restrictions, and provided with proper means, might be relied upon for keeping and paying out on the Secretary's warrants. We then had only a treasurer, who really kept and handled very little money, it remaining in banks. This recommendation contemplated assistants at points where large amounts were collected. This system, when eventually passed, was called the "Sub-Treasury." On the meeting of Congress, Mr. Van Buren communicated his views in one of the clearest and ablest messages ever sent to that body. As he expected and had foretold, his recommendation brought down upon him the combined friends of the national and State banks, which, for the time being, threw him and his party in the minority. When he had determined upon this recommendation, he informed Benjamin F. Butler, Francis P. Blair, and others, that it would probably be the means of his political destruction, but that it was necessary and right, and would eventually receive the strong, decided, and lasting approval of the nation, and that he preferred hazarding his own position to resorting to temporary expedients, which must end in disappointment and loss; and that he should cheerfully take upon himself all the hazards that doing right might subject him to. His predictions proved true. Act passed was one to post At the extra session, the first pone the making the fourth and last deposit with the States; and the second to borrow ten millions of dollars, and, if not obtained, to issue Treasury notes, in order to carry on the Government. As it was provided that this loan should not be sold below par, our agents sent abroad to negotiate it, returned without selling any part of it, and the Government was compelled to resort to Treasury notes to meet its necessary expenses. Such were the fruits of unwise, ill-advised, anti-democratic measures, by which the Government lost literally millions, the people were subjected to heavy losses and trying evils, and the Democratic party for the time defeated. Distribution had its origin with the enemies of Mr. Van Buren, who sought to organize a third party, which should hold the balance of power in Congress by the management of the public money—or rather giving it away—so as to make that party a favorite. It was intended to divide the Democratic party, then strong and powerful, and to bring such men as William C. Rives, Nathaniel P. Tallmadge, Hugh L. White, and others prominently before the public for the succession, to the exclusion of Colonel Benton and Silas Wright. They more than accomplished their work. They not only temporarily divided and in that way defeated the Democratic party, but they prostrated themselves, and never rose again. The Whigs, from policy, aided in the division and overthrow of the Democratic party, hoping to prevent Mr. Van Buren's reëlection, and expecting to secure a President from their own party. In this they were not disappointed. Their President, Harrison, only lived a month, and their Vice-President, Tyler, proved more fatal to their party than distribution, and bank failures, and combinations did to Mr. Van Buren and the Democratic party. Of the sub-Treasury growing out of this disastrous policy, we shall hereafter speak. 74.-THE SPECIE CIRCULAR. Prior to the adjournment of Congress on the 4th of July, 1836, a movement was made by Colonel Benton to test the feeling of Congress on the subject of refusing the receipt of bankpaper for public lands, and he became satisfied that no action unfavorable to its receipt could be expected from that body. After 1835-236, and added fuel to increase their burning. The surplus on hand became large, and the question arose, "How shall it be disposed of?" General Jackson preferred that it should be used in fortifications, in favor of which, General Cass, Secretary of War, made an able report. Some desired to improve the navigation of rivers and harbors, while not a few desired the Government to construct new harbors in aid of their speculations. But nothing definite was agreed upon. In June, 1836, a bill establishing a system of depositing public moneys in State banks was before Congress. Sections, directing a distribution among the States, in form of deposits with the States, were proposed, under which the sovereign States apparently became the agents and money-keeping servants of the national Government. The provision covered all the moneys then on hand but five million dollars. The writer moved to except from the operation of the bill the money already appropriated, and sustained his views in a short speech. On this amendment, Mr. Hamer, from Ohio, demanded the yeas and nays, which were refused, and the proposed amendment was rejected. The bill passed the Senate on the 18th of June, 1836, by yeas 40, and nays 6—Benton, Black, Cuthburt, Grundy, Walker, and Wright. It passed the House on the 22d of June-yeas, 155, nays 38. Fourteen of the latter were from New York, including the writer, and two from New Hampshire, including ex-President Pierce. Undoubtedly some members believed that this was a real deposit act and that the States would consent to become deposit agents, and upon no other ground can many votes be accounted for. But that such was not the object, and that the States so understood it, cannot now be questioned. Some States refused to receive, others distributed per capita, and others applied the amount received in different ways. No interest was to be paid for the deposit, which has not to this day been called for, and no one expects it ever will be. New York added her share of this distribution to her common-school fund, applying the interest derived to the use of common schools. It is possible that Congress thought that the then twenty-five 165 States comprised in the Union would estate that This act organized the State bank system foc. But duty required action, and he was not the man: sirok- the suspension of specie payments, and the Katy of be an end to ill ks and specuto the Presimed his duty, his life shows ery bad health atural that he ble terms with friend in the wishes. But the interest of to postpone or value of our es of the Govued use of a he stepped in ure the rights Le better parts resident land s measure he acy fully susdemand and s, condemned xt session his var upon him. a after the 4th irers at WashThe last time His venerable 1 and in front ble and Psalm 1, and leaning he gazed when to the memory They now sleep condition. He had seen the Government deposits, in the State banks, loaned and loaned over again in aid of speculations in the public lands; so that instead of selling from two to four millions in a year, in a little over one year the sales had risen to nearly forty millions. It was also known that the Bank of England had declined to discount for American houses in London, who relied upon these State banks for reimbursement, and that their drafts were returned protested. It was clear that the State bank system could not be relied upon, and could not be rendered safe and efficient by legislation. Advising with men like Silas Wright, Levi Woodbury, and John Forsyth, his own views were strengthened, and he determined to recommend a complete divorce of the Government from all banks, and the establishment of additional Treasury offices for keeping and disbursing the public money. He was of opinion that, while one set of officers were generally safely intrusted to collect our revenues, another, under suitable guards and restrictions, and provided with proper means, might be relied upon for keeping and paying out on the Secretary's warrants. We then had only a treasurer, who really kept and handled very little money, it remaining in banks. This recommendation contemplated assistants at points where large amounts were collected. This system, when eventually passed, was called the "Sub-Treasury." On the meeting of Congress, Mr. Van Buren communicated his views in one of the clearest and ablest messages ever sent to that body. As he expected and had foretold, his recommendation brought down upon him the combined friends of the national and State banks, which, for the time being, threw him and his party in the minority. When he had determined upon this recommendation, he informed Benjamin F. Butler, Francis P. Blair, and others, that it would probably be the means of his political destruction, but that it was necessary and right, and would eventually receive the strong, decided, and lasting approval of the nation, and that he preferred hazarding his own position to resorting to temporary expedients, which must end in disappointment and loss; and that he should cheerfully take upon himself all the hazards that doing right might subject him to. His predictions proved true. At the extra session, the first Act passed was one to post |