A Biography of Henry Clay, the Senator from Kentucky / Containing Also, a Complete Report of All His Speeches; Selections From His Private Correspondence; Eulogies in the Senate and House; and a Poem, by George D. Prentice, Esq.

by Unknown

I have fulfilled my promise, Mr. President, to sustain the first four propositions with which I sat out. I now proceed to the fifth proposition.

Fifth, that the bill under consideration is intended to execute Mr. Van Buren’s pledge, to complete and perfect the principles, plans, and policy, of the past administration, by establishing, upon the ruins of the late bank of the United States and the state banks, a government bank, to be managed and controlled by the treasury department, acting under the commands of the president of the United States.

The first impression made by the perusal of the bill is the prodigal and boundless discretion which it grants to the secretary of the treasury, irreconcilable with the genius of our free institutions, and contrary to the former cautious practice of the government. As originally reported, he was authorized by the bill to allow any number of clerks he thought proper to the various receivers-general, and to fix their salaries. It will be borne in mind that this is the mere commencement of a system; and it cannot be doubted that, if put into operation, the number of receivers-general, and other depositaries of the public money, would be indefinitely multiplied. He is allowed to appoint as many examiners of the public money, and to fix their salaries, as he pleases; he is allowed to erect at pleasure costly buildings; there is no estimate for any thing; and all who are conversant with the operations of the executive branch of the government know the value and importance of previous estimates. There is no other check upon wasteful expenditure but previous estimates; and that was a point always particularly insisted upon by Mr. Jefferson. The senate will recollect, that, a few days ago, when the salary of the receiver-general at New York was fixed, the chairman of the committee of finance rose in his place and stated, that it was suggested by the secretary of the treasury, that it should be placed at three thousand dollars; and the blank was accordingly so filled. There was no statement of the nature or extent of the duties to be performed, of the time that he would be occupied, of the extent of his responsibility, or the expense of living at the several points where they were to be located; nothing but the suggestion of the secretary of the treasury,and that was deemed all-sufficient by a majority. There is no limit upon the appropriation which is made to carry into effect the bill, contrary to all former usage, which invariably prescribed a sum not to be transcended.

A most remarkable feature in the bill is that to which I have already called the attention of the senate, and of which no satisfactory explanation has been given. It is that which proceeds upon the idea, that the treasury is a thing distinct from the treasure of the United States, and gives to the treasury a local habitation and a name, in the new building which is erecting for the treasury department in the city of Washington. In the treasury, so constituted, is to be placed that pittance of the public revenue which is gleaned from the District of Columbia. All else, that is to say, nine hundred and ninety-nine hundredths of the public revenue of the United States, is to be placed in the hands of the receivers-general, and the other depositaries beyond the District of Columbia. Now, the constitution of the United States provides that no money shall be drawn from the public treasury, but in virtue of a previous appropriation by law. That trifling portion of it, therefore, which is within the District of Columbia, will be under the safeguard of the constitution, and all else will be at the arbitrary disposal of the secretary of the treasury.

It was deemed necessary, no doubt, to vest in the secretary of the treasury this vast and alarming discretionary power. A new and immense government bank is about to be erected. How it would work in all its parts could not be anticipated with certainty; and it was thought proper, therefore, to bestow a discretion commensurate with its novelty and complexity, and adapted to any exigencies which might arise. The tenth section of the bill is that in which the power to create a bank is more particularly conferred. It is short, and I will read it to the senate.

‘Section 10. And be it further enacted, that it shall be lawful for the secretary of the treasury to transfer the moneys in the hands of any depositary hereby constituted, to the treasury of the United States; to the mint at Philadelphia; to the branch mint at New Orleans; or to the offices of either of the receivers-general of public moneys, by this act directed to be appointed; to be there safely kept, according to the provisions of this act; and also to transfer moneys in the hands of any one depositary constituted by this act to any other depositary constituted by the same, AT HIS DISCRETION, and as the safety of the public moneys, and the convenience of the public service shall seem to him to require. And for the purpose of payments on the public account, it shall be lawful for the said secretary to draw upon any of the said depositaries, as he may think most conducive to the public interests, or to the convenience of the public creditors, or both.’

It will be seen, that it grants a power, perfectly undefined, to the secretary of the treasury, to shift and transfer the public money, from depositary to depositary, as he pleases. He is expressly authorized to transfer moneys in the hands of any one depositary constituted by the act, to any other depositary constituted by it, at his discretion, and as the safety of the public moneys, and theconvenience of the public service, shall seem to him to require. There is no specification of any contingency or contingencies, on which he is to act. All is left to his discretion. He is to judge when the public service, (and more indefinite terms could not have been employed,) shall seem to him to require it. It has been said, that this is nothing more than the customary power of transfer, exercised by the treasury department, from the origin of the government. I deny it; utterly deny it. It is a totally different power from that which was exercised by the cautious Gallatin, and other secretaries of the treasury—a power, by-the-bye, which, on more than one occasion, has been controverted, and which is infinitely more questionable than the power to establish a bank of the United States. The transfer was made by them rarely, in large sums, and were left to the banks to remit. When payments were made, they were effected in the notes of banks with which the public money was deposited, or to which it was transferred. The rates of exchange were regulated by the state of the market, and under the responsibility of the banks. But here is a power given to transfer the public moneys without limit, as to sum, place, or time, leaving every thing to the discretion of the secretary of the treasury, the receivers-general, and other depositaries. What a scope is allowed in the fixation of the rates of exchange, whether of premium or discount, to regulate the whole domestic exchanges of the country, to exercise favoritism? These former transfers were not made for disbursement, but as preparatory to disbursement; and when disbursed, it was generally in bank notes. The transfers of this bill are immediate payments, and payments made not in bank notes, but specie.

The last paragraph in the section provides, that, for the purpose of payments on the public account, it shall be lawful for the secretary to draw upon any of the said depositaries, as he may think most conducive to the public interest, or to the convenience of the public creditors, or both. It will be seen, that no limit whatever is imposed upon the amount or form of the draft, or as to the depositary upon which it is drawn. He is made the exclusive judge of what is ‘most conducive to the public interests.’ Now, let us pause a moment, and trace the operation of the powers thus vested. The government has a revenue of from twenty to thirty millions. The secretary may draw it to any one or more points, as he pleases. More than a moiety of the revenue arising from customs is receivable at the port of New York, to which point the secretary may draw all portions of it, if he think it conducive to the public interest. A man has to receive, under an appropriation law, ten thousand dollars, and applies to Mr. Secretary for payment. Where will you receive it? he is asked. On New York. How? In drafts from five dollars to five hundred dollars. Mr. Secretary will give him these drafts accordingly, upon bank note paper, impressed like andsimulating bank notes, having all suitable emblazonry, signed by my friend the treasurer, (whose excellent practical sense, and solid and sound judgment, if he had been at the head of the treasury, instead of Mr. Levi Woodbury, when the suspension of specie payments took place, would have relieved or mitigated the pecuniary embarrassments of the government and the people,) counter-signed by the comptroller, and filled up in the usual way of bank notes. Here is one of them, said Mr. Clay. (He here held up, to the gaze of the senate, a treasury note, having all the appearance of a bank note, colored, engraved, and executed, like any other bank note, for fifty dollars.) This, continued Mr. Clay, is a government post note, put into circulation, paid out as money, and prepared and sent forth, gradually to accustom the people of this country to government paper.

I have supposed ten thousand dollars to be received in the mode stated by a person entitled to receive it under an appropriation law. Now, let us suppose what he will do with it. Any where to the south or west it will command a premium of from two to five per centum. Nowhere in the United States will it be under par. Do you suppose that the holder of these drafts would be fool enough to convert them into specie, to be carried and transported at his risk? Do you think that he would not prefer that his money should be in the responsible custody of the government, rather than in his own insecure keeping? Do you think he will deny to himself the opportunity of realizing the premium of which he may be perfectly sure? The greatest want of the country is a medium of general circulation, and of uniform value every where. That, especially, is our want in the western and interior states. Now, here is exactly such a medium; and, supposing the government bank to be honestly and faithfully administered, it will, during such an administration, be the best convertible paper money in the world, for two reasons. The first is, that every dollar of paper out will be the representative of a dollar of specie in the hands of the receivers-general, or other depositaries; and, secondly, if the receivers-general should embezzle the public money, the responsibility of the government to pay the drafts issued upon the basis of that money would remain unimpaired. The paper, therefore, would be as far superior to the paper of any private corporation as the ability and resources of the government of the United States are superior to those of such corporations.

The banking capacity may be divided into three faculties: deposits, discount of bills of exchange, and promissory notes, or either, and circulation. This government bank would combine them all, except that it will not discount private notes, or receive private deposits. In payments for the public lands, indeed, individuals are allowed to make deposits, and to receive certificates of their amount. To guard against their negotiability, a clause hasbeen introduced to render them unassignable. But how will it be possible to maintain such an inconvenient restriction, in a country where every description of paper importing an obligation to pay money or deliver property is assignable, at law or in equity, from the commercial nature and trading character of our people.