Thirty Years' View (Vol. 1 of 2) / or, A History of the Working of the American Government for Thirty Years, from 1820 to 1850

by Thomas Hart Benton

"This extraordinary paper was issued by the Secretary of the Treasury on the 11th of July last, in the form of a circular to the receivers of public money in the several land offices in the United States, directing them, after the 15th of August then next, to receive in payment for public lands nothing but gold and silver and certificates of deposits, signed by the Treasurer of the United States, with a saving in favor of actual settlers, and bona fide residents in the State in which the land happened to lie. This saving was for a limited time, and expires, I think, to-morrow. The professed object of this order was to check the speculations in public lands; to check excessive issues of bank paper in the West, and to increase the specie currency of the country; and the necessity of the measure was supported, or pretended to be supported, by the opinions of members of this body and the other branch of Congress. But, before I proceed to examine in detail this paper, its character, and its consequences, I will briefly advert to the state of things out of which it grew. I am confident, and I believe I can make the thing manifest, that the avowed objects were not the only, nor even the leading objects for which this order was framed; they may have influenced the minds of some who advised it, but those who planned, and those who at last virtually executed it, were governed by other and different motives, which I shall proceed to explain. It was foreseen, prior to the commencement of the last session of Congress, that there would be a very large surplus of money in the public treasury beyond the wants of the country for all their reasonable expenditures. It was also well understood that the land bill, or some other measure for the distribution of this fund, would be again presented to Congress; and, if the true condition of the public sentiment were known and understood, that its distribution, in some form or other, would be demanded by the country. On the other hand, it seems to have been determined by the party, and some of those who act with it thoroughly, that the money should remain where it was in the deposit banks, so that it could be wielded at pleasure by the executive. This order grew out of the contest to which I have referred. It was issued not by the advice of Congress or under the sanction of any law. It was delayed until Congress was fairly out of the city, and all possibility of interference by legislation was removed; and then came forth this new and last expedient. It was known that these funds, received for public lands, had become a chief source of revenue, and it may have occurred to some that the passage of a treasury order of this kind would have a tendency to embarrass the country; and as the bill for the regulation of the deposits had just passed, the public might be brought to believe that all the mischief occasioned by the order was the effect of the distribution bill. It has, indeed, happened, that this scheme has failed; the public understand it rightly, but that was not by any means certain at the time the measure was devised. It was not then foreseen that the people would as generally see through the contrivance as it has since been found that they do. There may have been various other motives which led to the measure. Many minds were probably to be consulted; for it is not to be presumed that a step like this was taken without consultation, and guided by the will of a single individual alone. That is not the way in which these things are done. No doubt one effect hoped for by some was, that a check would be put to the sales of the public lands. The operation of the order would naturally be, to raise the price of land by raising the price of the currency in which it was to be paid for. But, while this would be the effect on small buyers, those who purchased on a large scale would be enabled to sell at an advance of ten or fifteen per cent. over what would have been given if the United States lands had been open to purchasers in the ordinary way. Those who had borrowed money of the deposit banks and paid it out for lands, would thus be enabled to make sales to advantage; and by means of such sales make payment to the banks who found it necessary to call in their large loans, in order to meet the provisions of the deposit bill. The order, therefore, was likely to operate to the common benefit of the deposit banks and the great land dealers, while it counteracted the effect of the obnoxious deposit bill. There may have been yet another motive actuating some of those who devised this order. There was danger that the deposit banks, when called upon to refund the public treasure, would be unable to do it: indeed, it was said on this floor that the immediate effect of the distribution bill would be to break those banks. How this treasury order would operate to collect the specie of the country into the land offices, whence it would immediately go into the deposit banks, and would prove an acceptable aid to them while making the transfers required by law. These seem to me to have been among the real motives which led to the adoption of that order."

Mr. Ewing then argued at length against the legality of the treasury circular, quoting the joint resolution of 1816, and insisting that its provisions had been violated; also insisting on the largeness of the surplus, and that it had turned out to be much larger than was admitted by the friends of the administration; which latter assertion was in fact true, because the appropriations for the public service (the bills for which were in the hands of the opposition members) had been kept off till the middle of the summer, and could not be used; and so left some fifteen millions in the treasury of appropriated money which fell under the terms of the deposit act, and became divisible as surplus.

Mr. Benton replied to Mr. Ewing, saying:

"In the first of these objects the present movement is twin brother to the famous resolution of 1833, but without its boldness; for that resolution declared its object upon its face, while this one eschews specification, and insidiously seeks a judgment of condemnation by inference and argument. In the second of these objects every body will recognize the great design of the second branch of the same famous resolution of 1833, which, in the restoration of the deposits to the Bank of the United States, clearly went to the establishment of the paper system, and its supremacy over the federal government. The present movement, therefore, is a second edition of the old one, but a lame and impotent affair compared to that. Then, we had a magnificent panic; now, nothing but a miserable starveling! For though the letter of the president of the Bank of the United States announced, early in November, that the meeting of Congress was the time for the new distress to become intense, yet we are two weeks deep in the session, and no distress memorial, no distress deputation, no distress committees, to this hour! Nothing, in fact, in that line, but the distress speech of the gentleman from Ohio [Mr. Ewing]; so that the new panic of 1836 has all the signs of being a lean and slender affair—a mere church-mouse concern—a sort of dwarfish, impish imitation of the gigantic spectre which stalked through the land in 1833."

Mr. Benton then showed that this subaltern and Lilliputian panic was brought upon the stage in the same way, and by the same managers, with its gigantic brother of 1833-'34; and quoted from a published letter of Mr. Biddle in November preceding, and a public speech of Mr. Clay in the month of September preceding, in which they gave out the programme for the institution of the little panic; and the proceeding against the President for violating the laws; and against the treasury order itself as the cause of the new distress. Mr. Biddle in his publication said: "Our pecuniary condition seems to be a strange anomaly. When Congress adjourned, it left the country with abundant crops, and high prices for them—with every branch of industry flourishing, and with more specie than we ever had before—with all the elements of universal prosperity. None of these have undergone the slightest change; yet, after a few months, Congress will re-assemble, and find the whole country suffering intense pecuniary distress. The occasion of this, and the remedy for it, will occupy our thoughts. In my judgment, the main cause of it is the mismanagement of the revenue—mismanagement in two respects: the mode of executing the distribution law, and the order requiring specie for the payment of the public lands—an act which seems to me a most wanton abuse of power, if not a flagrant usurpation. The remedy follows the causes of the evils. The first measure of relief, therefore, should be the instant repeal of the treasury order requiring specie for lands; the second, the adoption of a proper system to execute the distribution law. These measures would restore confidence in twenty-four hours, and repose in at least as many days. If the treasury will not adopt them voluntarily, Congress should immediately command it." This was the recommendation, or mandate, of the president of the Bank of the United States, still acting as a part of the national legislative power even in its new transformation, and keeping an eye upon that distribution which Congress passed as a deposit, which he had recommended as raising the price of the State stocks held by the bank; and the delay in the delivery of which he considers as one of the causes which had brought on the new distress. Mr. Clay in his Lexington speech had taken the same grounds; and speaking of the continued tampering with the currency by the administration, went on to say:

"One rash, lawless, and crude experiment succeeds another. He considered the late treasury order, by which all payments for public lands were to be in specie, with one exception, for a short duration, a most ill-advised, illegal, and pernicious measure. In principle it was wrong, in practice it will favor the very speculation which it professes to endeavor to suppress. The officer who issued it, as if conscious of its obnoxious character, shelters himself behind the name of the President. But the President and Secretary had no right to promulgate any such order. The law admits of no such discrimination. If the resolution of the 30th of April, 1816, continued in operation (and the administration on the occasion of the removal of the deposits, and on the present occasion, relies upon it as in full force), it gave the Secretary no such discretion as he has exercised. That resolution required and directed the Secretary of the Treasury to adopt such measures as he might 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 said legal currency of the United States.' This resolution was restrictive and prohibitory upon the Secretary only as to the notes of banks not redeemable in specie on demand. As to all such notes, he was forbidden to receive them from and after the 20th of February, 1817. As to the notes of banks which were payable and paid on demand in specie, the resolution was not merely permissive, it was compulsory and mandatory. He was bound, and is yet bound, to receive them, until Congress interfere."

Mr. Benton replied to the arguments of Mr. Ewing, the letter of Mr. Biddle, and the speech of Mr. Clay; and considered them all as identical, and properly answered in the lump, without special reference to the co-operating assailants. On the point of the alleged illegality of the treasury order, he produced the Joint Resolution of 1816 under which it was done; and then said:

"This is the law, and nothing can be plainer than the right of selection which it gives to the Secretary of the Treasury. Four different media are mentioned in which the revenue may be collected, and the Secretary is made the actor, the agent, and the power, by which the collection is to be effected. He is to do it in one, or in another. He may choose several, or all, or two, or one. All are in the disjunctive. No two are joined together, but all are disjoined, and presented to him individually and separately. It is clearly the right of the Secretary to order the collections to be made in either of the four media mentioned. That the resolution is not mandatory in favor of any one of the four, is obvious from the manner in which the notes of the Bank of the United States are mentioned. They were to be received as then provided for by law; for the bank charter had then just passed; and the 14th section had provided for the reception of the notes of this institution until Congress, by law, should direct otherwise. The right of the institution to deliver its notes in payment of the revenue, was anterior to this resolution, and always held under that 14th section, never under this joint resolution, and when that section was repealed at the last session of this Congress, that right was admitted to be gone, and has never been claimed since. The words of the law are clear; the practice under it has been uniform and uninterrupted from the date of its passage to the present day. For twenty years, and under three Presidents, all the Secretaries of the Treasury have acted alike. Each has made selections, permitting the notes of some specie-paying banks to be received, and forbidding others. Mr. Crawford did it in numerous instances; and fierce and universal as were the attacks upon that eminent patriot, during the presidential canvass of 1824, no human being ever thought of charging him with illegality in this respect. Mr. Rush twice made similar selections, during the administration of Mr. Adams, and no one, either in the same cabinet with him, or out of the cabinet against him, ever complained of it. For twenty years the practice has been uniform; and every citizen of the West knows that that practice was the general, though not universal, exclusion of the Western specie-paying bank paper from the Western land offices. This every man in the West knows, and knows that that general exclusion continued down to the day that the Bank of the United States ceased to be the depository of the public moneys. It was that event which opened the door to the receivability of State bank paper which has since been enjoyed."

Having vindicated the treasury order from the charge of illegality, Mr. Benton took up the head of the new distress, and said:

"The news of all this approaching calamity was given out in advance in the Kentucky speech and the Philadelphia letter, already referred to; and the fact of its positive advent and actual presence was vouched by the senator from Ohio [Mr. Ewing] on the last day that the Senate was in session. I do not permit myself (said Mr. B.) to bandy contradictory asseverations and debatable assertions across this floor. I choose rather to make an issue, and to test assertion by the application of evidence. In this way I will proceed at present. I will take the letter of the president of the Bank of the United States as being official in this case, and most authoritative in the distress department of this combined movement against President Jackson. He announces, in November, the forthcoming of the national calamity in December; and after charging part of this ruin and mischief on the mode of executing what he ostentatiously styles the distribution law, when there is no such law in the country, he goes on to charge the remainder, being ten-fold more than the former upon the Treasury order which excludes paper money from the land offices."