REPEAL OF THE INDEPENDENT TREASURY ACT: MR. BENTON'S SPEECH.
The lateness of the hour, the heat of the day, the impatience of the majority, and the determination evinced to suffer no delay in gratifying the feeling which demanded the sacrifice of the Independent Treasury system, shall not prevent me from discharging the duty which I owe to the friends and authors of that system, and to the country itself, by defending it from the unjust and odious character which clamor and faction have fastened upon it. A great and systematic effort has been made to cry down the sub-treasury by dint of clamor, and to render it odious by unfounded representations and distorted descriptions. It seems to have been selected as a subject for an experiment at political bamboozling; and nothing is too absurd, too preposterous, too foreign to the truth, to be urged against it, and to find a lodgment, as it is believed, in the minds of the uninformed and credulous part of the community. It is painted with every odious color, endowed with every mischievous attribute, and made the source and origin of every conceivable calamity. Not a vestige of the original appears; and, instead of the old and true system which it revives and enforces, nothing is seen but a new and hideous monster, come to devour the people, and to destroy at once their liberty, happiness and property. In all this the opponents of the system copy the conduct of the French jacobins of the year '89, in attacking the veto power reserved to the king. The enlightened historian, Thiers, has given us an account of these jacobinical experiments upon French credulity; and we are almost tempted to believe he was describing, with the spirit of prophecy, what we have seen taking place among ourselves. He says that, in some parts of the country, the people were taught to believe that the veto was a tax, which ought to be abolished; in others, that it was a criminal, which ought to be hung; in others again, that it was a monster, which ought to be killed; and in others, that it was a power in the king to prevent the people from eating or drinking. As a specimen of this latter species of imposition which was attempted upon the ignorant, the historian gives a dialogue which actually took place between a jacobin politician and a country peasant in one of the remote departments of France, and which ran in about these terms: "My friend, do you know what the veto is?" "I do not." "Then I will tell you what it is. It is this: You have some soup in your porringer; you are going to eat it; the king commands you to empty it on the ground, and you must instantly empty it on the ground: that is the veto!" This, said Mr. B. is the account which an eminent historian gives us of the means used to bamboozle ignorant peasants and to excite them against a constitutional provision in France, made for their benefit, and which only arrested legislation till the people could speak; and I may say that means little short of such absurdity and nonsense have been used in our country to mislead and deceive the people, and to excite them against the sub-treasury here.
It is my intention, said Mr. B., to expose and to explode these artifices; to show the folly and absurdity of the inventions which were used to delude the people in the country, and which no senator of the opposite party will so far forget himself as to repeat here; and to exhibit the independent treasury as it is—not as a new and hurtful measure just conceived; but as an old and salutary law, fallen into disuse in evil times, and now revived and improved for the safety and advantage of the country.
What is it, Mr. President, which constitutes the system called and known by the name of the sub-treasury, or the independent treasury? It is two features, and two features alone, which constitute the system—all the rest is detail—and these two features are borrowed and taken from the two acts of Congress of September first, and September the second, 1789; the one establishing a revenue system, and the other establishing a treasury department for the United States. By the first of these acts, and by its 30th section, gold and silver coin alone was made receivable in payments to the United States; and by the second of them, section four, the treasurer of the United States is made the receiver, the keeper, and the payer, of the moneys of the United States, to the exclusion of banks, of which only three then existed. By these two laws, the first and the original financial system of the United States was established; and they both now stand upon the statute book, unrepealed, and in full legal force, except in some details. By these laws, made in the first days of the first session of the first Congress, which sat under the constitution, gold and silver coin only was made the currency of the federal treasury, and the treasurer of the United States was made the fiscal agent to receive, to keep, and to pay out that gold and silver coin. This was the system of Washington's administration; and as such it went into effect. All payments to the federal government were made in gold and silver; all such money paid remained in the hands of the treasurer himself, until he paid it out; or in the hands of the collectors of the customs, or the receivers of the land offices, until he drew warrants upon them in favor of those to whom money was due from the government. Thus it was in the beginning—in the first and happy years of Washington's administration. The money of the government was hard money; and nobody touched that money but the treasurer of the United States, and the officers who collected it; and the whole of these were under bonds and penalties for their good behavior, subject to the lawful orders and general superintendence of the Secretary of the Treasury and the President of the United States, who was bound to see the laws faithfully executed. The government was then what it was made to be—a hard-money government. It was made by hard-money men, who had seen enough of the evils of paper money and wished to save their posterity from such evils in future. The money was hard, and it was in the hands of the officers of the government—those who were subject to the orders of the government—and not in the hands of those who were only subject to requisitions—who could refuse to pay, protest a warrant, tell the government to sue, and thus go to law with the government for its own money. The framers of the constitution, and the authors of the two acts of 1789, had seen enough of the evils of the system of requisitions under the confederation to warn them against it under the constitution. They determined that the new government should keep its own hard money, as well as collect it; and thus the constitution, the law, the practice under the law, and the intentions of the hard-money and independent treasury men, were all in harmony, and in full, perfect, and beautiful operation, under the first years of General Washington's administration. All was right, and all was happy and prosperous, at the commencement.
But the spoiler came! General Hamilton was Secretary of the Treasury. He was the advocate of the paper system, the banking system, and the funding system, which were fastened upon England by Sir Robert Walpole, in his long and baneful administration under the first and second George. General Hamilton was the advocate of these systems, and wished to transplant them to our America. He exerted his great abilities, rendered still more potent by his high personal character, and his glorious revolutionary services, to substitute paper money for the federal currency, and banks for the keepers of the public money; and he succeeded to the extent of his wishes. The hard-money currency prescribed by the act of September 1st, 1789, was abolished by construction, and by a Treasury order to receive bank notes; the fiscal agent for the reception, the keeping, and the disbursement of the public moneys, consisting of the treasurer, and his collectors and receivers, was superseded by the creation of a national bank, invested with the privilege of keeping the public moneys, paying them out, and furnishing supplies of paper money for the payment of dues to the government. Thus, the two acts of 1789 were avoided, or superseded; not repealed, but only avoided and superseded by a Treasury order to receive paper, and a bank to keep it and pay it out. From this time paper money became the federal currency, and a bank the keeper of the federal money. It is needless to pursue this departure farther. The bank had its privileges for twenty years—was succeeded in them by local banks—they superseded by a second national bank—it again by local banks—and these finally by the independent treasury system—which was nothing but a return to the fundamental acts of 1789.
This is the brief history—the genealogy rather—of our fiscal agents; and from this it results, that after more than forty years of departure from the system of our forefathers—after more than forty years of wandering in the wilderness of banks, local and national—after more than forty years of wallowing in the slough of paper money, sometimes sound, sometimes rotten—we have returned to the point from which we sat out—hard money for our Federal Treasury; and our own officers to keep it. We returned to the acts of '89, not suddenly and crudely, but by degrees, and with details, to make the return safe and easy. The specie clause was restored, not by a sudden and single step, but gradually and progressively, to be accomplished in four years. The custody of the public moneys was restored to the treasurer and his officers; and as it was impossible for him to take manual possession of the moneys every where, a few receivers-general were given to him to act as his deputies, and the two mints in Philadelphia and New Orleans (proper places to keep money, and their keys in the hands of our officers), were added to his means of receiving and keeping them. This return to the old acts of '89 was accomplished in the summer of 1840. The old system, with a new name, and a little additional organization, has been in force near one year. It has worked well. It has worked both well and easy, and now the question is to repeal it, and to begin again where General Hamilton started us above forty years ago, and which involved us so long in the fate of banks and in the miseries and calamities of paper money. The gentlemen on the other side of the House go for the repeal; we against it; and this defines the position of the two great parties of the day—one standing on ground occupied by General Hamilton and the federalists in the year '91; the other standing on the ground occupied at the same time by Mr. Jefferson and the democracy.
The democracy oppose the repeal, because this system is proved by experience to be the safest, the cheapest, and the best mode of collecting the revenues, and keeping and disbursing the public moneys, which the wisdom of man has yet invented. It is the safest mode of collecting, because it receives nothing but gold and silver, and thereby saves the government from loss by paper money, preserves the standard of value, and causes a supply of specie to be kept in the country for the use of the people and for the support of the sound part of the banks. It is the cheapest mode of keeping the moneys; for the salaries of a few receivers are nothing compared to the cost of employing banks; for banks must be paid either by a per centum, or by a gross sum, or by allowing them the gratuitous use of the public money. This latter method has been tried, and has been found to be the dearest of all possible modes. The sub-treasury is the safest mode of keeping, for the receivers-general are our officers—subject to our orders—removable at our will—punishable criminally—suable civilly—and bound in heavy securities. It is the best mode; for it has no interest in increasing taxes in order to increase the deposits. Banks have this interest. A national bank has an interest in augmenting the revenue, because thereby it augmented the public deposits. The late bank had an average deposit for near twenty years of eleven millions and a half of public money in the name of the treasurer of the United States, and two millions and a half in the names of public officers. It had an annual average deposit of fourteen millions, and was notoriously in favor of all taxes, and of the highest tariffs, and was leagued with the party which promoted these taxes and tariffs. A sub-treasury has no interest of this kind, and in that particular alone presents an immense advantage over any bank depositories, whether a national institution or a selection of local banks. Every public interest requires the independent treasury to be continued. It is the old system of '89. The law for it has been on our statute-book for fifty-two years. Every citizen who is under fifty-two years old has lived all his life under the sub-treasury law, although the law itself has been superseded or avoided during the greater part of the time. Like the country gentleman in Molière's comedy, who had talked prose all his life without knowing it, every citizen who is under fifty-two has lived his life under the sub-treasury law—under the two acts of '89 which constitute it, and which have not been repealed.
We are against the repeal; and although unable to resist it here, we hope to show to the American people that it ought not to be repealed, and that the time will come when its re-establishment will be demanded by the public voice.
Independent of our objections to the merits of this repeal, stands one of a preliminary character, which has been too often mentioned to need elucidation or enforcement, but which cannot be properly omitted in any general examination of the subject. We are about to repeal one system without having provided another, and without even knowing what may be substituted, or whether any substitute whatever shall be agreed upon. Shall we have any, and if any, what? Shall it be a national bank, after the experience we have just had of such institutions? Is it to be a nondescript invention—a fiscality—or fiscal agent—to be planted in this District because we have exclusive jurisdiction here, and which, upon the same argument, may be placed in all the forts and arsenals, in all the dock-yards and navy-yards, in all the lighthouses and powder magazines, and in all the territories which the United States now possess, or may hereafter acquire? We have exclusive jurisdiction over all these; and if, with this argument, we can avoid the constitution in these ten miles square, we can also avoid it in every State, and in every territory of the Union. Is it to be the pet bank system of 1836, which, besides being rejected by all parties, is an impossibility in itself? Is it to be the lawless condition of the public moneys, as gentlemen denounced it, which prevailed from October, 1833, when the deposits were removed from the Bank of the United States, till June, 1836, when the State bank deposit system was adopted; and during all which time we could hear of nothing but the union of the purse and the sword, and the danger to our liberties from the concentration of all power in the hands of one man? Is it to be any one of these, and which? And if neither, then are the two acts of '89, which have never been repealed—which have only been superseded by temporary enactments, which have ceased, or by treasury constructions which no one can now defend—are these two acts to recover their vitality and vigor, and again become the law of the land, as they were in the first years of General Washington's administration, and before General Hamilton overpowered them? If so, we are still to have the identical system which we now repeal, with no earthly difference but the absence of its name, and the want of a few of its details. Be all this as it may—let the substitute be any thing or nothing—we have still accomplished a great point by the objection we have taken to the repeal before the substitute was produced, and by the vote which we took upon that point yesterday. We have gained the advantage of cutting gentlemen off from all plea for adopting their baneful schemes, founded upon the necessity of adopting something, because we have nothing. By their own vote they refuse to produce the new system before they abolish the old one. By their own vote they create the necessity which they deprecate; and having been warned in time, and acting with their eyes open, they cannot make their own conduct a plea for adopting a bad measure rather than none. If Congress adjourns without any system, and the public moneys remain as they did from 1833 to 1836, the country will know whose fault it is; and gentlemen will know what epithets to apply to themselves, by recollecting what they applied to General Jackson from the day the deposits were removed until the deposit act of '36 was passed.
Who demands the repeal of this system? Not the people of the United States; for there is not a solitary petition from the farmers, the mechanics, the productive classes, and the business men, against it. Politicians who want a national bank, to rule the country, and millionary speculators who want a bank to plunder it—these, to be sure, are clamorous for the repeal; and for the obvious reasons that the present system stands in the way of their great plans. But who else demands it? Who else objects to either feature of the sub-treasury—the hard-money feature, or the deposit of our own moneys with our own officers? Make the inquiry—pursue it through its details—examine the community by classes, and see who objects. The hard-money feature is in full force. It took full effect at once in the South and West, because there were no bank-notes in those quarters of the Union of the receivable description: it took full effect in New York and New England, because, having preserved specie payments, specie was just as plenty in that quarter as paper money; and all payments were either actually or virtually in hard money. It was specie, or its equivalent. The hard-money clause then went into operation at once, and who complained of it? The payers of the revenue? No, not one of them. The merchants who pay the duties have not complained; the farmers who buy the public lands have not complained. On the contrary, they rejoice; for hard-money payments keep off the speculator, with his bales of notes borrowed from banks, and enable the farmer to get his land at a fair price. The payers of the revenue then do not complain. How stands it with the next most interested class—the receivers of money from the United States? Are they dissatisfied at being paid in gold and silver? And do they wish to go back to the depreciated paper—the shinplasters—the compound of lampblack and rags—which they received a few years ago? Put this inquiry to the meritorious laborer who is working in stone, in wood, earth, and in iron for you at this moment. Ask him if he is tired of hard-money payments, and wishes the independent treasury system repealed, that he may get a chance to receive his hard-earned wages in broken bank-notes again. Ask the soldier and the mariner the same question. Ask the salaried officer and the contractor the same question. Ask ourselves here if we wish it—we who have seen ourselves paid in gold for years past, after having been for thirty years without a sight of that metal. No, sir, no. Neither the payers of money to the government, nor the receivers of money from the government, object to the hard-money clause in the sub-treasury act. How is it then with the body of the people—the great mass of the productive and business classes? Do they object to the clause? Not at all. They rejoice at it: for they receive, at second-hand, all that comes from the government. No officer, contractor, or laborer, eats the hard money which he receives from the government, but pays it out for the supplies which support his family: it all goes to the business and productive classes: and thus the payments from the government circulate from hand to hand, and go through the whole body of the people. Thus the whole body of the productive classes receive the benefit of the whole amount of the government hard-money payments. Who is it then that objects to it? Broken banks, and their political confederates, are the clamorers against it. Banks which wish to make their paper a public currency: politicians who wish a national bank as a machine to rule the country. These banks, and these politicians, are the sole clamorers against the hard-money clause in the sub-treasury system: they alone clamor for paper money. And how is it with the other clause—the one which gives the custody of the public money to the hands of our own officers, bound to fidelity by character, by official position, by responsibility, by ample securityship—and makes it felony in them to touch it for their own use? Here is a clear case of contention between the banks and the government, or between the clamorers for a national bank and the government. These banks want the custody of the public money. They struggle and strive for it as if it was their own. They fight for it: and if they get it, they will use it as their own—as we all well know; and refuse to render back when they choose to suspend. Thus, the whole struggle for the repeal resolves itself into a contest between the government, and all the productive and business classes on one side, and the federal politicians, the rotten part of the local banks, and the advocates of a national bank on the other.