The Papers of John C. Calhoun
University of South Carolina Press, 1979

SPEECH ON THE BILL AUTHORIZING AN ISSUE OF TREASURY NOTES

[In the Senate, September 18, 1837]
Appendix is in error, September 19

The bill for the issue of Treasury notes having been postponed to this day, in order to give Mr. Calhoun an opportunity of preparing an amendment, and of offering his sentiments generally upon the subject, was now resumed by the Senate.

Mr. Calhoun rose and addressed the Chair as follows :

Mr. President :  An extraordinary course of events, with which all are too familiar to need recital, has separated, in fact, the Government and the banks.  What relation shall they bear hereafter ?  Shall the banks again be used as fiscal agents of the Government—be the depositories of the public money—and, above all, shall their notes be considered and treated as money, in the receipts and expenditures of the Government ?  This is the great and leading question ;  one of the first magnitude, and full of consequences.  I have given it my most anxious and deliberate attention ;  and have come to the conclusion that we have reached the period when the interest both of the Government and the banks forbids a reunion.  I now propose to offer my reasons for this conclusion.  I shall do it with that perfect frankness due to the subject, to the country, and to the position I occupy.  All I ask is, that I may be heard with a candor and fairness corresponding to the sincerity with which I shall deliver my sentiments.

Those who support a reunion of the banks and the Government have to overcome a preliminary difficulty.  They are now separated by operation of law, and cannot be reunited while the present state of things continues, without repealing the law which has disjoined them.  I ask, who is willing to propose its repeal ?  Is there any one who, during the suspension of specie payments, would advocate their employment as the fiscal agents of the Government, who would make them the depositories of the public revenue, or who would receive and pay away their notes in the public dues ?  If there be none, then it results that the separation must continue for the present, and that the reunion must be the work of time, depending on the contingency of the resumption of specie payments.

But suppose this difficulty to be removed, and that the banks were regularly redeeming their notes :  from what party in this body can the proposition come, or by which can it be supported, for a reunion between them and the Government ?  Who, after what has happened, can advocate the reunion of the Government with the league of State banks ?  Can the opposition, who for years have been denouncing it as the most dangerous instrument of power, and efficient means of corrupting and controlling the Government and country ?  Can they, after the exact fulfilment of all their predictions of disastrous consequences from the connexion, now turn round and support that which they have so long and loudly condemned ?  We have heard much from the opposite side of untried experiments on the currency.  I concur in the justice of the censure.  Nothing can be more delicate than the currency.  Nothing can require to be more delicately handled.  It ought never to be tampered with, nor touched, until it becomes absolutely necessary.  But if untried experiments justly deserve censure, what condemnation would a repetition of an experiment that has failed deserve ?—an experiment that has so signally failed, both in the opinion of supporters and opponents, as to call down the bitter denunciation of those who tried it[?]  If to make the experiment was folly, the repetition would be madness.

But if the opposition cannot support the measure, how can it be expected to receive support from the friends of the administration, in whose hands the experiment has so signally failed as to call down from them execrations deep and loud ?

If, Mr. President, there be any one point fully established by experience and reason, I hold it to be the utter incompetency of the State banks to furnish, of themselves, a sound and stable currency.  They may succeed in prosperous times, but the first adverse current necessarily throws them into utter confusion.  Nor has any device yet been found to give them the requisite strength and stability, but a great central and controlling bank, instituted under the authority of this Government.  I go farther.  If we must continue our connexion with the banks—if we must receive and pay away their notes as money, we not only have the right to regulate and give uniformity and stability to their value, but we are bound to do so, and to use the most effective means for that purpose.  The constitution makes it our duty to lay and collect the taxes and duties uniformly throughout the Union ;  to fulfil which, we are bound to give the highest possible equality of value, throughout every part of the country, to whatever medium it may be collected in ;  and, if that be bank-notes, to adopt the most effective means of accomplishing it, which experience has shown to be a Bank of the United States.  This has been long my opinion.  I entertained it in 1816, and repeated it in my place here on the deposite question in 1834.  The only alternative then is, disguise it as you may, between a disconnexion and a Bank of the United States.  This is the real issue to which all must come, and ought now to be openly and fairly met.

But there are difficulties in the way of a national bank, no less formidable than a reconnexion with the State banks.  It is utterly impracticable, at present, to establish one.  There is reason to believe that a majority of the people of the United States are deliberately and unalterably opposed to it.  At all events, there is a numerous, respectable, and powerful party—I refer to the old State rights party—who are, and ever have been, from the beginning of the Government, opposed to the bank ;  and whose opinions, thus long and firmly entertained, ought at least to be so much respected as to forbid the creation of one, without an amendment of the constitution.  To this must be added the insuperable difficulty, that the Executive branch of the Government is openly opposed to it, and pledged to interpose his veto, on constitutional grounds, should a bill pass to incorporate one.  For four years, at least, then, it will be impracticable to charter a bank.  What must be done in the mean time ?  Shall the treasury be reorganized to perform the functions which have been recently discharged by the banks ;  or shall the State institutions be again employed until a bank can be created ?  In the one case, we shall have the so much vilified and denounced sub-treasury, as it is called; and, in the other, difficulties insurmountable would grow up against the establishment of a bank.  Let the State institutions be once reinstated, and reunited to the Government as their fiscal agents, and they will be found the first and most strenuous opponents of a national bank, by which they would be overshadowed and curtailed in their profits.  I hold it certain, that, in prosperous times, when State banks are in full operation, it is impossible to establish a national bank.  Its creation, then, should the reunion with the State banks take place, will be postponed until some disaster, similar to the present, shall again befall the country.  But it requires little of the spirit of prophecy to see that such another disaster would be the death of the whole system.  Already it has had two paralytic strokes—the third would prove fatal.

But, suppose these difficulties were overcome, I would still be opposed to the incorporation of a bank.  So far from affording the relief which many anticipate, it would be the most disastrous measure that could be adopted.  As great as is the calamity under which the country is suffering, it is nothing to what would follow the creation of such an institution under existing circumstances.  In order to compel the State institutions to pay specie, the bank must have a capital as great, or nearly as great, in proportion to the existing institutions, as the late bank had, when established, to those of that day.  This would give it an immense capital—not much less than one hundred millions of dollars, of which a large proportion (say twenty millions) must be specie.  From what source is it to be derived ?  From the State banks ?  It would empty their vaults, and leave them in the most helpless condition.  From abroad, and England in particular ?  It would reproduce that revulsive current which has lately covered the country with desolation.  The tide is still running to Europe, and if forced back by any artificial cause before the foreign debt is paid, cannot but be followed by the most disastrous consequences.

But suppose this difficulty overcome, and the bank re-established ;  I ask what would be the effects under such circumstances ?  Where would it find room for business, commensurate with its extended capital, without crushing the State institutions, enfeebled by the withdrawal of their means in order to create the instrument of their oppression ?  A few of the more vigorous might survive ;  but the far greater portion, with their debtors, creditors, and stockholders, would be involved in common ruin.  The bank would, indeed, give a specie currency, not by enabling the existing institutions to resume, but by destroying them and taking their place.

Those who take a different view, and so fondly anticipate relief from a national bank, are deceived by a supposed analogy between the present situation of the country and that of 1816, when the late bank was chartered, after the war with Great Britain.  I was an actor in that scene, and may be permitted to speak in relation to it with some little authority.  Between the two periods there is little or no analogy.  They stand almost in contrast.  In 1816, the Government was a debtor to the banks—now, it is a creditor ;  a difference of the greatest importance, as far as the present question is concerned.  The banks had overissued, it is true, but their over-issues were to the Government—a solvent and able debtor, whose credit, held by the banks in the shape of stock, was at par.  It was their excessive issues to the Government on its stock which mainly caused the suspension ;  in proof of which, it is a remarkable fact, that the depreciation of bank paper under gold and silver was about equal to the proportion which the Government stock held by the banks bore to their issues.  It was this excess that hung on the market and depressed the value of their notes.  The solution is easy.  The banks took the Government stock, payable in twelve years, and issued their notes for the same, payable on demand, in violation of the plainest principles of banking.  It followed, of course, that when their notes were presented for payment, they had nothing but Government stock to meet them.  But its stock was at par, and all the banks had to do was to go into market with the stock they held, and take up their notes ;  and thus the excess, which hung upon the market, and depressed their value, would have been withdrawn from circulation, and the residue would have risen to par, or nearly par, with gold and silver ;  when specie payments might be easily resumed.

This they were unwilling to do.  They were profiting every way by drawing interest on the stock, by discounting on it as capital, and by its continued rise in the market.  It became necessary to compel them to surrender these advantages.  Two methods presented themselves :  one a bankrupt law, and the other a national bank.  I was opposed to the former then, as I am now.  I regarded it as a harsh and unconstitutional measure, opposed to the rights of the States.  If they have not surrendered the right to incorporate banks, as is conceded, its exercise cannot be controlled by the action of this Government, which has no power but what is expressly granted, and no authority to control the States in the exercise of their reserved powers.  It remained to resort to a national bank as the means of compulsion.  It proved effectual.  Specie payments were restored ;  but even with these striking advantages, it was followed by great pressure in 1818, [18]19 and [18]20, as all who are old enough to remember that period must recollect.  Such, in fact, must ever be the consequence of resumption, when forced, under the most favorable circumstances ;  and such, accordingly, it proved even in England, with all her resources, and with all the caution she used in restoring a specie circulation, after the long suspension of 1797.  What, then, would be its effects in the present condition of the country, when the Government is a creditor instead of a debtor—when there are so many newly-created banks without established credit—when the over-issues are so great, and when so large a portion of the debtors are not in a condition to be coerced ?  As great as is the tide of disaster which is passing over the land, it would be as nothing to what would follow were a national bank to be established as the means of coercing specie payments.

I am bound to speak without reserve on this important point.  My opinion then is, that, if it should be determined to compel the restoration of specie payments by the agency of banks, there is but one way ;  but to that I have insuperable objections—I mean the adoption of the Pennsylvania Bank of the United States as the fiscal agent of the Government.  It is already in operation, and sustained by great resources and powerful connexions, both at home and abroad.  Through its agency specie payments might undoubtedly be restored, and that with far less disaster than through a newly created bank ;  but not without severe pressure.  I cannot, however, vote for such a measure.  I cannot agree to give a preference and such advantages to a bank of one of the members of this confederacy over those of others—a bank dependent upon the will of a State, and subject to its influence and control.  I cannot consent to confer such favors on the stockholders, many of whom, if rumor is to be trusted, are foreign capitalists, and without claim on the bounty of the Government.  But, if all these and many other objections were overcome, there is still one which I cannot surmount.

There has been, as we all know, a conflict between one of the departments of the Government and that institution, in which, in my opinion, the department was the assailant ;  but I cannot consent, after what has occurred, to give to the bank a triumph over the Government—for such its adoption as the fiscal agent of the Government would necessarily be considered.  It would degrade the Government in the eyes of our citizens and of the world, and go far to make that bank the Government itself.

But if all these difficulties were overcome, there are others, to me, wholly insurmountable.  I belong to the State-rights party, which, at all times, from the beginning of the Government to this day, has been opposed to such an institution as unconstitutional, inexpedient, and dangerous.  They have ever dreaded the union of the political and the moneyed power, and the central action of the Government to which it so strongly tends ;  and at all times, have strenuously resisted their junction.  Time and experience have confirmed the truth of their principles ;  and this, above all other periods, is the one at which it would be most dangerous to depart from them.  Acting on them, I have never given my countenance or support to a national bank, but under a compulsion which I felt to be imperious, and never without an open declaration of my opinion as unfavorable to a bank.

In supporting the bank of 1816, I openly declared that, as a question de novo, I would be decidedly against the bank, and would be the last to give it my support.  I also stated that, in supporting the bank then, I yielded to the necessity of the case, growing out of the then existing and long-established connexion between the Government and the banking system.  I took the ground, even at that early period, that so long as the connexion existed, so long as the Government received and paid away bank-notes as money, they were bound to regulate their value, and had no alternative but the establishment of a national bank.

February 26, 1816:--
There had been an extraordinary revolution in the currency of the country. By a sort of under current, the power of Congress to regulate the money of the country had caved in, and upon its ruin had sprung up those institutions which now exercised the right of making money in and for the United States: for gold and silver are not the only money, but whatever is the medium of purchase and sale, in which Bank paper alone was now employed, and had therefore become the money of the country. A change, great and wonderful, has taken place, which divests you of your rights, and turns you back to the condition of the Revolutionary War, in which every State issued bills of credit, which were made a legal tender, and were of various values. We have in lieu of gold and silver, a paper medium, unequally but generally depreciated, which affects the trade and industry of the nation: which paralyzes the national arm: which sullies the faith both public and private of the United States. According to estimation there were in circulation, within the United States, two hundred millions of dollars of Bank notes, credits and Bank paper, in one shape or other. Supposing thirty millions of these to be in possession of the Banks themselves, there were, perhaps, one hundred and seventy millions actually in circulation, or on which they draw interest, while there were not, according to estimation, in the vaults of all the Banks, more than fifteen million in specie. The Banks had undertook to make loans to Government, not as brokers, but as stockholders -- a practice wholly inconsistent with the system of specie payments. Of public stock the Banks held on, the thirtieth day of September last, about eighteen millions and a half, and a nearly equal amount of treasury notes, besides stock for long loans made to the State Governments, amounting altogether to within a small amount of forty millions. If the Banks would regularly and consentaneously begin to dispose of their stock, to call in their notes for the treasury notes they have, and moderately curtail their private discounts: if they would act in concert in this manner, they might resume specie payments. A National Bank, paying specie itself, would have a tendency to make specie payments general, as well by its influence as its example.

I found the connexion in existence and established before my time, and over which I could have no control.  I yielded to the necessity, in order to correct the disordered state of the currency, which had fallen exclusively under the control of the States.  I yielded to what I could not reverse, just as any member of the Senate now would, who might believe that Louisiana was unconstitutionally admitted into the Union, but who would, nevertheless, feel compelled to vote to extend the laws to that State, as one of its members, on the ground that its admission was an act, whether constitutional or unconstitutional, which he could not reverse.

In 1834 I acted in conformity to the same principle, in proposing the renewal of the bank charter for a short period.  My object, as expressly avowed, was to use the bank to break the connexion between the Government and the banking system gradually, in order to avert the catastrophe which has now befallen us, and which I then clearly perceived.  But the connexion, which I believed to be irreversible in 1816, has now been broken by operation of law.  It is now an open question.  I feel myself free, for the first time, to choose my course on this important subject ;  and, in opposing a bank, I act in conformity to principles which I have entertained ever since I have fully investigated the subject.

But my opposition to a reunion with the banks is not confined to objections limited to a national or State banks.  It goes beyond, and comprehends others of a more general nature, relating to the currency, which to me are decisive.  I am of the impression that the connexion has a most pernicious influence over bank currency ;  that it tends to disturb that stability and uniformity of value which is essential to a sound currency ;  and is among the leading causes of that tendency to expansion and contraction, which experience has shown is incident to bank-notes as a currency.  They are, in my opinion, at best, without the requisite qualities to constitute a currency, even when unconnected with the Government ;  and are doubly disqualified by reason of that connexion, which subjects them to sudden expansions and contractions, and exposes them to fatal catastrophes, such as the present.

I will explain my views.  A bank-note circulates not merely on account of the credit of the institution by which it is issued, but because Government receives it like gold and silver in all its dues, and thus adds its own credit to that of the bank.  It, in fact, virtually endorses on the note of every specie-paying bank, “receivable by the Government in its dues.”  To understand how greatly this adds to the circulation of bank-notes, we must remember that Government is the great money-dealer of the country, and the holder of immense public domains ;  and that it has the power of creating a demand against every citizen, as high as it pleases, in the shape of a tax, or duty, which can be discharged, as the law now is, only by bank-notes or gold and silver.  This, of course, cannot but add greatly to the credit of bank-notes, and contribute much to their circulation, though it may be difficult to determine, with any precision, to what extent.  It certainly is very great.  For why is it that an individual of the first credit, whose responsibility is so indisputable that his friend of equal credit endorses his note for nothing, should put his name with his friend’s, being their joint credit, into a bank, and take out the notes of the bank, which is, in fact, but the credit of the bank itself, and pay six per cent. discount between the credit of himself and his friend and that of the bank ?  The known and established credit of the bank may be one reason, but there is another and powerful one :  the Government treats the credit of the bank as gold and silver in all its transactions, and does not treat the credit of individuals in the same manner.  To test the truth :  let us reverse the case, and suppose the Government to treat the joint credit of the individuals as money, and not the credit of the bank ;  and is it not obvious that, instead of borrowing from the bank, and paying six per cent. discount, the bank would be glad to borrow from them on the same terms ?  From this we may perceive the powerful influence which bank circulation derives from the connexion with the credit of the Government.

It follows, as a necessary consequence, that to the extent of this influence the issues of the banks expand and contract with the expansion and contraction of the fiscal action of the Government ;  with the increase of its duties, taxes, income, and expenditure ;  with the deposites in its vaults, acting as additional capital, and the amount of bank-notes withdrawn, in consequence, from circulation ;  all of which must directly affect the amount of their business and issues, and bank currency, and must, of course, partake of all those vibrations to which the fiscal action of the Government is necessarily exposed, and, when great and sudden, must expose the system to catastrophes such as we now witness.  In fact, a more suitable instance cannot be selected to illustrate the truth of what I assert than the present, as I shall proceed to show.

To understand the causes which have led to the present state of things, we must go back to the year 1824, when the tariff system triumphed in Congress—a system which imposed duties not for the purpose of revenue, but to encourage the industry of one portion of the Union at the expense of the other.  This was followed up by the act of 1828, which consummated the system.  It raised the duties so extravagantly, that out of an annual importation of sixty-four millions, thirty-two passed into the Treasury ;  that is, Government took one-half for the liberty of introducing the other.  Countless millions were thus poured into the Treasury beyond the wants of the Government, which became in time the source of the most extravagant expenditures.  This vast increase of receipts and expenditures was followed by a corresponding expansion of the business of the banks.  They had to discount and issue freely, to enable the merchants to pay their duty bonds, as well as to meet the vastly-increased expenditures of the Government.  Another effect followed the act of 1828, which gave a still further expansion to the action of the banks, and which is worthy of notice.  It turned the exchange with England in favor of this country.  That portion of the proceeds of our exports, which, in consequence of the high duties, could no longer return with profit in the usual articles which we had been in the habit of receiving principally from that country in exchange for our exports, returned in gold and silver, in order to purchase similar articles at the North.  This was the first cause which gave that western direction to the precious metals, the revulsive return of which has been followed by so many disasters.  With the exchange in our favor, and consequently no demand for gold and silver abroad, and the vast demand for money attendant on an increase of the revenue, almost every restraint was removed on the discounts and issues of the banks, especially in the northern section of the Union, where these causes principally operated.  With their increase, wages and prices of every description rose in proportion, followed, of course, by an increasing demand on the banks for further issues.  This is the true cause of that expansion of the currency, which began about the commencement of the late administration, but which was erroneously charged by it to the Bank of the United States.  It rose out of the action of the Government.

The bank, in increasing its business, acted in obedience to the condition of things at the time, and in conformity with the banks generally in the same section.  It was at this juncture that the late administration came into power ;  a juncture remarkable in many respects, but more especially in relation to the question of the currency.  Most of the causes which have since terminated in the complete prostration of the banks and the commercial prosperity of the country were in full activity.

Another cause, about that time (I do not remember the precise date,) began to produce powerful effects.  I refer to the last renewal of the charter of the Bank of England.  It was renewed for ten years, and, among other provisions, contained one making the notes of that bank a legal tender in all cases except between the bank and its creditors.  The effect was to dispense still further with the use of the precious metals in that great commercial country, which, of course, caused them to flow out in every direction throughout the various channels of its commerce.  A large portion took their direction hitherward, and served still further to increase the current which, from causes already enumerated, was flowing in this direction ;  and which still further increased the force of the returning current, on the turn of the tide.

The administration did not comprehend the difficulties and dangers which surrounded it.  Instead of perceiving the true reason of the expansion of the currency, and adopting the measures necessary to arrest it, they attributed it to the Bank of the United States, and made it the cause or pretext of waging war on that institution.  Among the first acts of hostility, the deposites were removed, and transferred to selected State banks ;  the effect of which, instead of resisting the tendency to expansion, was to throw off the only restraint that held the banking institutions of the country in check ;  and, of course, gave to the swelling tide, which was destined to desolate the country, a powerful impulse.  Banks sprung up in every direction ;  discounts and issues increased almost without limitation ;  and an immense surplus revenue accumulated in the deposite banks, which, after the payment of the public debt, the most extravagant appropriations could not exhaust, and which acted as additional banking capital.  The value of money daily depreciated ;  prices rose ;  and then commenced those unbounded speculations, particularly in public lands, which were transferred, by millions of acres, from the public to the speculators for worthless bank-notes, till at length the swelling flood was checked, and the revulsive current burst its barriers, and overspread and desolated the land.

The first check came from the Bank of England, which, alarmed at the loss of its precious metals, refused to discount American bills, in order to prevent a further decrease of its cash means, and cause a return of those which it had lost.  Then followed the execution of the deposite act, which, instead of a remedial measure, as it might have been made if properly executed, was made the instrument of weakening the banks at the point of pressure, especially in the great commercial metropolis of the Union [New York City], where so large a portion of the surplus revenue was accumulated.  And, finally, the Treasury order [that is, Jackson’s “Specie Circular”], which still further weakened those banks, by withdrawing their cash means to be invested in public lands in the West.

It is often easy to prevent what cannot be remedied, which the present instance strongly illustrates.  If the administration had formed a true conception of the danger in time, what has since happened might have then been easily averted.  The near approach of the expiration of the charter of the United States Bank would have afforded ample means of staying the desolation, if it had been timely and properly used.  I saw it then, and purposed [on 3/21/1834] to renew the charter, for a limited period, with such modifications as would have effectually resisted the increasing expansion of the currency, and, at the same time, gradually and finally wear out the connexion between the bank and the Government.  To use the expression I then used, “to unbank the banks”;  to let down the system easily, and so to effect the separation between the bank and the Government as to avoid the possibility of that shock which I then saw was inevitable without some such remedy.  The moment was eminently propitious.  The precious metals were flowing in on us from every quarter, and the vigorous measures I purposed to adopt in the renewal of the charter would have effectually arrested the increase of banks, and checked the excess of their discounts and issues ;  so that the accumulating mass of gold and silver, instead of being converted into bank capital, and swelling the tide of paper circulation, would have been substituted in the place of bank-notes, as a permanent and wholesome addition to the currency of the country.

But neither the administration nor the opposition sustained me, and the precious opportunity passed unsiezed.  I then clearly saw the coming calamity was inevitable ;  and it has neither arrived sooner, nor is it greater, than I anticipated.

Such are the leading causes which have produced the present disordered state of the currency.  There are others of a minor character, connected with the general condition of the commercial world, and the operations of the Executive branch of the Government, but which, of themselves, would have produced but little effect.  To repeat the causes in a few words :  the vast increase which the tariffs of 1824 and 1828 gave to the fiscal action of the Government, combined with the causes I have enumerated, gave the first impulse to the expansion of the currency.  These, in turn, gave that extraordinary impulse to overtrading and speculation (they are effects, and not causes) which has finally terminated in the present calamity.  It may thus be ultimately traced to the connexion between the banks and the Government ;  and it is not a little remarkable that the suspension of specie payments in 1816 in this country, and that of 1797 in Great Britain, were produced by like causes.

There is another reason against the union of the Government and the banks, intimately connected with that under consideration, which I shall next proceed to state.  It gives a preference to one portion of citizens over another, that is neither fair, equal, nor consistent with the spirit of our institutions.

That the connexion between the banks and the Government, the receiving and paying away their notes as cash, and the use of the public money from the time of the collection to the disbursement, is the source of immense profit to the banks, cannot be questioned.  It is impossible, as I have said, to ascertain with any precision to what extent their issues and circulation depend upon it, but it certainly constitutes a large proportion.  A single illustration may throw light upon this point.  Suppose the Government were to take up the veriest beggar in the street, and enter into a contract with him that nothing should be received in payment of its dues or for the sale of its public lands in future except gold and silver and his promissory notes, and that he should have the use of the public funds from the time of their collection until their disbursement :  can any one estimate the wealth which such a contract would confer ?  His notes would circulate far and wide over the whole extent of the Union ;  would be the medium through which the exchanges of the country would be performed ;  and his ample and extended credit would give him a control over all the banking institutions and moneyed transactions of the community.  The possession of a hundred millions would not give a control more effectual.  I ask, would it be fair, would it be equal, would it be consistent with the spirit of our institutions, to confer such advantages on any individual ?  And if not on one, would it be if conferred on any number ?  And if not, why should it be conferred on any corporate body of individuals ?  How can they possibly be entitled to benefits so vast, which all must acknowledge could not be justly conferred on any number of unincorporated individuals ?

I state not these views with any intention of bringing down odium on banking institutions.  I have no unkind feeling towards them whatever.  I do not hold them responsible for the present state of things.  It has grown up gradually, without either the banks or the community perceiving the consequences which have followed the connexion between them.  My object is to state facts as they exist, that the truth may be seen in time by all.  This is an age of investigation.  The public mind is broadly awake upon this all-important subject.  It affects the interests and condition of the whole community, and will be investigated to the bottom.  Nothing will be left unexplored, and it is for the interest both of the banks and of the community that the evils incident to the connexion should be fully understood in time, and the connexion be gradually terminated, before such convulsions shall follow as to sweep away the whole system, with its advantages as well as its disadvantages.

But it is not only between citizen and citizen that the connexion is unfair and unequal.  It is as much so between one portion of the country and another.  The connexion of the Government with the banks, whether it be with a combination of State banks or with a national institution, will necessarily centralize the action of the system at the principal point of collection and disbursement, and at which the mother bank, or the head of the league of State banks, must be located.  From that point the whole system, through the connexion with the Government, will be enabled to control the exchanges both at home and abroad ;  and with it, the commerce, foreign and domestic, including exports and imports.

After what has been said, these points will require but little illustration.  A single one will be sufficient ;  and I will take, as in the former instance, that of an individual.

Suppose, then, the Government, at the commencement of its operation, had selected an individual merchant, at any one point in the Union, (say New York,) and had connected itself with him, as it has with the banks, by giving him the use of the public funds from the time of their collection until their disbursement, and of receiving and paying away, in all its transactions, nothing but his promissory notes, except gold and silver :  is it not manifest that a decisive control would be given to the port where he resided over all the others ?  that his promissory notes would circulate everywhere, through all the ramifications of commerce ?  that they would regulate exchanges ?  that they would be the medium of paying duty bonds ?  and that they would attract the imports and exports of the country to the port where such extraordinary facilities were afforded ?  If such would clearly be the effects in the case supposed, it is equally clear that the concentration of the currency at the same point, through the connexion of the Government with the banks, would have equal, if not greater, effects ;  and that, whether one general bank should be used as an agent, or a league of banks, which should have their centre there.  To other ports of the country, the trifling advantages which a branch or deposite bank would give, in the safekeeping of the public revenue, would be as nothing, compared to the losses caused to their commerce by centralizing the moneyed action of the country at a remote point.  Other gentlemen can speak for their own sections ;  I can speak, with confidence, of that which I have the honor in part to represent.  The entire staple States, I feel a deep conviction, banks and all, would, in the end, be great gainers by the disseverance, whatever might be the temporary inconvenience.  If there be any other section in which the effects will be different, it would be but to confirm the views which I have presented.

As connected with this, there is a point well deserving consideration.  The union between banks and Government is not only a main source of that dangerous expansion and contraction in the banking system which I have already illustrated, but is also one of the principal causes of that powerful and almost irresistible tendency to the increase of banks, which even its friends see and deplore.  I dwelt on this point on a former occasion, (on Mr. [Daniel] Webster’s motion to renew the bank charter in 1833,) [sic; on 3/21/1834] and I will not repeat what I then said.  But, in addition to the causes then enumerated, there are many others very powerful, and among others the one under consideration.  They all may be summed up in one general cause.  We have made banking too profitable—far, very far, too profitable ;  and I may add, too influential.  One of the most ample sources of this profit and influence may be traced, as I have shown, to the connexion with the Government ;  and is, of course, among the prominent causes of the strong and incessant tendency of the system to increase, which even its friends see must finally overwhelm either the banks or the institutions of the country.  With a view to check its growth, they have proposed to limit the number of banks and the amount of banking capital by an amendment of the constitution ;  but it is obvious that the effects of such amendment, if it were practicable, would but increase the profits and influence of bank capital ;  and that, finally, it would justly produce such indignation on the part of the rest of the community against such unequal advantages, that in the end, after a long and violent struggle, the overthrow of the entire system would follow.  To obviate this difficulty, it has been proposed to add a limitation upon the amount of their business ;  the effects of which would be, the accommodation of favorites, to the exclusion of the rest of the community, which would be no less fatal to the system.  There can be, in fact, but one safe and consistent remedy—the rendering banking as a business less profitable and influential ;  and the first and decisive step towards this is a disseverance between the banks and the Government.  To this may be added some effectual limitation on the denomination of the notes to be issued, which would operate in a similar manner.

I pass over other important objections to the connexion—the corrupting influence and the spirit of speculation which it spreads far and wide over the land.  Who has not seen and deplored the vast and corrupting influence brought to bear upon the Legislatures to obtain charters and means necessary to participate in the profits of the institutions ?  This gives a control to the Government which grants such favors, of a most extensive and pernicious character ;  all of which must continue to spread and increase, if the connexion should continue, until the whole community must become one contaminated and corrupted mass.

There is another and a final reason which I shall assign against the reunion with the banks.  We have reached a new era with regard to these institutions.  He who would judge of the future by the past, in reference to them, will be wholly mistaken.  The year 1833 marks the commencement of this era.  That extraordinary man [Andrew Jackson], who had the power of imprinting his own feelings on the community, then commenced his hostile attacks, which have left such effects behind, that the war then commenced against the banks, I clearly see, will not terminate, unless there be a separation between them and the Government, until one or the other triumphs—till the Government becomes the bank, or the bank the Government.  In resisting their union, I act as the friend of both.  I have, as I have said, no unkind feeling toward the banks.  I am neither a bank man, nor an antibank man.  I have had little connexion with them.  Many of my best friends, for whom I have the highest esteem, have a deep interest in their prosperity, and, as far as friendship or personal attachment extends, my inclination would be strongly in their favor.  But I stand up here as the representative of no particular interest.  I look to the whole, and to the future, as well as the present ;  and I shall steadily pursue that course which, under the most enlarged view, I believe to be my duty.  In 1834 I saw the present crisis.  I in vain raised a warning voice, and endeavored to avert it.  I now see, with equal certainty, one far more portentous.  If this struggle is to go on—if the banks will insist upon a reunion with the Government against the sense of a large and influential portion of the community—and, above all, if they should succeed in effecting it, a reflux flood will inevitably sweep away the whole system.  A deep popular excitement is never without some reason, and ought ever to be treated with respect ;  and it is the part of wisdom to look timely into the cause, and correct it before the excitement shall become so great as to demolish the object, with all its good and evil, against which it is directed.

The only safe course for both Government and banks is to remain, as they are, separated—each in the use of their own credit, and in the management of their own affairs.  The less the control and the influence of the one over the other, the better.  Confined to their legitimate sphere—that of affording temporary credit to commercial and business men, bank-notes would furnish a safe and convenient circulation in the range of commerce and business within which the banks may be respectively situated, exempt almost entirely from those fluctuations and convulsions to which they are now so exposed ;  or, if they should occasionally be subject to them, the evil would be local and temporary, leaving undisturbed the action of the Government, and the general currency of the country, on the stability of which the prosperity and safety of the community so much depend.

I have now stated my objections to the reunion of the Government and the banks.  If they are well founded ;  if the State banks are of themselves incompetent agents ;  if a Bank of the United States be impracticable, or, if practicable, would, at this time, be the destruction of a large portion of the existing banks, and of renewed and severe pecuniary distress ;  if it would be against the settled conviction of an old and powerful party, whose opposition time cannot abate ;  if the union of Government and banks add to the unfitness of their notes for circulation, and be unjust and unequal between citizen and citizen, and one portion of the Union and another ;  and, finally, if it would excite an implacable and obstinate war, which could only terminate in the overthrow of the banking system or the institutions of the country, it then remains that the only alternative would be permanently to separate the two, and to reorganize the Treasury so as to enable it to perform those duties which have heretofore been performed by the banks as its fiscal agents.  This proposed reorganization has been called a sub-treasury—an unfortunate word, calculated to mislead and conjure up difficulties and dangers that do not really exist.  So far from an experiment, or some new device, it is only returning to the old mode of collecting and disbursing public money, which, for thousands of years, has been the practice of all enlightened people till within the last century.

In what manner it is intended to reorganize the Treasury, by the bill [recently] reported [“imposing additional duties as depositories, in certain cases, on public officers,”] I do not know.  I have been too much engaged to read it ;  and I can only say that, for one, I shall assent to no arrangement which provides for a Treasury bank, or that can be perverted into one.  If there can be any scheme more fatal than a reunion with the banks at this time, it would be such a project.  Nor will I give my assent to any arrangement which shall add the least unnecessary patronage.  I am the sworn foe to patronage, and have done as much and suffered as much in resisting it as any one.  Too many years have passed over me to change, at this late day, my course or principles.  But I will say, that it is impossible so to organize the Treasury for the performance of its own functions as to give to the Executive a tenth part of the patronage it will lose by the proposed separation, which, when the bill for the reorganization comes up, I may have an opportunity to show.  I have ventured this assertion after much reflection, and with entire confidence in its correctness.  But something more must be done besides the reorganization of the Treasury.  Under the resolution of 1816, bank-notes would again be received in the dues of the Government, if the banks should resume specie payments.  The legal as well as the actual connexion must be severed.  But I am opposed to all harsh or precipitate measures.  No great process can be effected without a shock, but through the agency of time.  I accordingly propose to allow time for the final separation ;  and, with this view, I have drawn up an amendment to this bill, which I shall offer at the proper time, to modify the resolution of 1816, by providing that after the 1st of January next, three-fourths of all sums due to the Government may be received in the notes of specie-paying banks ;  and after the 1st of January next following, one-half ;  and after the 1st of January next subsequent, one-fourth ;  and after the 1st of January thereafter, nothing but the legal currency of the United States, or bills, notes, or paper issued under their authority, and which may by law be authorized to be received in their dues.  If the time is not thought to be ample, I am perfectly disposed to extend it.  The period is of little importance in my eyes, so that the object be effected.

In addition to this, it seems to me that some measure of a remedial character, connected with the currency, ought to be adopted, to ease off the pressure while the process is going through.  It is desirable that the Government should make as few and small demands on the specie market as possible during the time, so as to throw no impediment in the way of the resumption of specie payments.  With this view, I am of the impression that the sum necessary for the present wants of the Treasury should be raised by a paper, which should at the same time have the requisite qualities to enable it to perform the functions of a paper circulation.  Under this impression, I object to the interest to be allowed on the Treasury notes which this bill authorizes to be issued, on the very opposite ground that the Senator from Massachusetts bestows his opposition [sic; approbation].  He approves of interest, because it would throw them out of circulation into the hands of capitalists, as a convenient and safe investment ;  and I disapprove, because it will have that effect.  I am disposed to ease off the process ;  he, I would suppose, is very little solicitous on that point.

But I go farther.  I am of the impression, to make this great measure successful, and secure it against reaction, that some stable and safe medium of circulation, to take the place of bank-notes in the fiscal operations of the Government, ought to be issued.  I intend to propose nothing.  It would be impossible, with so great a weight of opposition, to pass any measure without the entire support of the administration ;  and, if it were possible, it ought not to be attempted where so much must depend on the mode of execution.  The best measure that could be devised might fail, and impose a heavy responsibility on its author, unless it met with the hearty approbation of those who are to execute it.  I, then, intend merely to throw out suggestions, in order to excite the reflection of others on a subject so delicate, and of so much importance—acting on the principle that it is the duty of all, in so great a juncture, to present their views without reserve.

It is, then, my impression, that, in the present condition of the world, a paper currency, in some form, if not necessary, is almost indispensable in financial and commercial operations of civilized and extensive communities.  In many respects it has a vast superiority over a metallic currency, especially in great and extended transactions, by its greater cheapness, lightness, and the facility of determining the amount.  The great desideratum is, to ascertain what description of paper has the requisite qualities of being free from fluctuation in value, and liability to abuse, in the greatest perfection.  I have shown, I trust, that the bank-notes do not possess these requisites in a degree sufficiently high for this purpose.  I go farther.  It appears to me, after bestowing the best reflection I can give the subject, that no convertible paper—that is, no paper whose credit rests upon a promise to pay—is suitable for currency.  It is the form of credit proper in private transactions between man and man, but not for a standard of value, to perform exchanges generally, which constitute the appropriate functions of money or currency.  The measures of safety in the two cases are wholly different.  A promissory note, or convertible paper, is considered safe so long as the drawer has ample means to meet his engagements ;  and, in passing from hand to hand, regard is had only to his ability and willingness to pay.  Very different is the case in currency.

The aggregate value of the currency of a country necessarily bears a small proportion to the aggregate value of its property.  This proportion is not well ascertained, and is probably subject to considerable variation in different countries, and at different periods in the same country.  It may be assumed, conjecturally, in order to illustrate what I say, at one to thirty.  Assuming this proportion to be correct, (which probably is not far from the truth,) it follows that, in a sound condition of the country, where the currency is metallic, the aggregate value of the coin is not more than one in thirty of the aggregate value of the property.  It also follows, that an increase in the amount of the currency, by the addition of a paper circulation of no intrinsic value, but increases the nominal value of the aggregate property of the country in the same proportion that the increase bears to the whole amount of currency ;  so that, if the currency be doubled, the nominal value of the property will also be doubled.  Hence it is, that, when the paper currency of a country is in the shape of promissory notes, there is a constant tendency to excess.  We look for their safety to the ability of the drawer ;  and so long as his means are ample to meet his engagements, there is no distrust ;  without reflecting that, considered as currency, it cannot safely exceed one in thirty in value, compared to property ;  and the delusion is farther increased by the constant increase in value of property, with the increase of the notes in circulation, so as to maintain the same relative proportion.  It follows that a Government may safely contract a debt many times the amount of its aggregate circulation ;  but, if it were to attempt to put its promissory notes in circulation in amount equal to its debts, an explosion in the currency would be inevitable.  And hence, with other causes, the constant tendency to an excessive issue of banknotes in prosperous times, when so large a portion of the community are anxious to obtain accommodation, and who are disappointed when negotiable paper is refused by the banks ;  not reflecting that it would not be safe to discount beyond the limits I have assigned for a safe circulation, however good the paper offered.

On what, then, ought a paper currency to rest ?  I would say on demand and supply simply, which regulates the value of every thing else—the constant demand which the Government has on the community for its necessary supplies.  A medium resting on this demand, which simply obligates the Government to receive it in all of its dues, to the exclusion of every thing else except gold and silver, and which shall be optional with those who have demands on Government to receive or not, would, it seems to me, be as stable in its value as those metals themselves, and be as little liable to abuse as the power of coining.  It would contain within itself a self-regulating power.  It could only be issued to those who had claims on the Government, and to those only with their consent, and, of course, only at or above par with gold and silver, which would be its habitual state ;  for, so far as the Government was concerned, it would be equal in every respect, to gold and silver, and superior in many, particularly in regulating the distant exchanges of the country.  Should, however, a demand for gold and silver from abroad, or other accidental causes, depress it temporarily, as compared with the precious metals, it would then return to the Treasury ;  and as it could not be paid out during such depression, its gradual diminution in the market would soon restore it to an equality, when it would again flow out into the general circulation.  Thus there would be a constant alternate flux and reflux into and from the Treasury, between it and the precious metals ;  but, if at any time a permanent depression in its value be possible from any cause, the only effect would be to operate as a reduction of taxes on the community, and the only sufferer would be the Government itself.  Against this its own interest would be a sufficient guaranty.

Nothing but experience can determine what amount and of what denominations might be safely issued ;  but it may be safely assumed that the country would absorb an amount greatly exceeding its annual income.  Much of its exchanges, which amount to a vast sum, as well as its banking business, would revolve about it, and many millions would thus be kept in circulation beyond the demands of the Government.  It may throw some light on this subject to state that North Carolina, just after the Revolution, issued a large amount of paper, which was made receivable in dues to her.  It was also made a legal tender, but which, of course, was not obligatory after the adoption of the federal constitution.  A large amount—say between four and five hundred thousand dollars—remained in circulation after that period, and continued to circulate for more than twenty years, at par with gold and silver during the whole time, with no other advantage than being received in the revenue of the State, which was much less than $100,000 per annum.  I speak on the information of citizens of that State, on whom I can rely.

But, whatever may be the amount that can be circulated, I hold it clear that, to that amount, it would be as stable in value as gold and silver itself, provided the Government be bound to receive it exclusively with those metals in all its dues, and that it be left perfectly optional with those who have claims on the Government to receive it or not.  It will also be a necessary condition that notes of too small a denomination should not be issued, so that the Treasury shall have ample means to meet all demands, either in gold or silver, or the bills of the Government, at the option of those who have claims on it.  With these conditions, no further variation could take place between it and gold and silver than that which would be caused by the action of commerce.  An unusual demand from abroad for the metals would, of course, raise them a little in their relative value, and depress relatively the Government bills in the same proportion, which would cause them to flow into the Treasury, and gold and silver to flow out ;  while, on the contrary, an increased demand for the bills in the domestic exchange would have the reverse effect, causing, as I have stated, an alternate flux and reflux into the Treasury, between the two, which would at all times keep their relative values either at or near par.

No one can doubt that the fact of the Government receiving and paying away bank-notes in all its fiscal transactions is one of the principal sources of their great circulation ;  and it was mainly on that account that the notes of the late Bank of the United States so freely circulated all over the Union.  I would ask, then, why should the Government mingle its credit with that of private corporations ?  No one can doubt but that the Government credit is better than that of any bank—more stable and more safe.  Why, then, should it mix it up with the less perfect credit of those institutions ?  Why not use its own credit to the amount of its own transactions ?  Why should it not be safe in its own hands, while it shall be considered safe in the hands of 800 private institutions scattered all over the country, and which have no other object but their own private profits, to increase which they almost constantly extend their business to the most dangerous extremes ?  And why should the community be compelled to give six per cent. discount for the Government credit blended with that of the banks, when the superior credit of the Government could be furnished separately, without discount, to the mutual advantage of the Government and the community ?  Why, let me ask, should the Government be exposed to such difficulties as the present, by mingling its credit with the banks, when it could be exempt from all such, by using by itself its own safe credit ?  It is time the community, which has so deep an interest in a sound and cheap currency, and the equality of the laws between one portion of the citizens of the country and another, should reflect seriously on these things—not for the purpose of oppressing any interest, but to correct gradually disorders of a dangerous character, which have insensibly, in the long course of years, without being perceived by any one, crept into the state.

The question is, not between credit and no credit, as some would have us believe ;  but in what form credit can best perform the functions of a sound and safe currency.  On this important point I have freely thrown out my ideas, leaving it to this body and the public to determine what they are worth.  Believing that there might be a sound and safe paper currency founded on the credit of Government exclusively.  I was desirous that those who are responsible and have the power should have availed themselves of the opportunity of a temporary deficit of the Treasury, and the postponement of the fourth instalment intended to be deposited with the States, to use them as the means of affording a circulation for the present relief of the country and the banks, during the process of separating them from Government ;  and, if experience should justify it, of furnishing a permanent and safe circulation, which would greatly facilitate the operations of the Treasury, and afford, incidentally, much facility to the commercial operations of the country.  But a different direction was given ;  and when the alternative was presented, of a loan, or the withholding of the fourth instalment from the States, I did not hesitate to give a decided vote for withholding it.  My aversion to a public debt is deep and durable.  It is, in my opinion, pernicious, and is little short of a fraud on the public.  I saw too much of it during the late war [of 1812] not to understand something of the nature and character of public loans.  Never was a country more egregiously imposed on.

Having now presented my views of the course and the measures which the permanent policy of the country, looking to its liberty and lasting prosperity, requires, I come finally to the question of relief.  I have placed this last—not that I am devoid of sympathy for the country in the pecuniary distress which now pervades it.  No one struggled earlier or longer to prevent it than myself ;  nor can any one more sensibly feel the widespread blight which has suddenly blasted the hopes of so many, and precipitated thousands from affluence to poverty.  The desolation has fallen mainly on the mercantile class—a class which I have ever held in the highest estimation.  No country ever had a superior body of merchants—of higher honor, of more daring enterprise, or of greater skill and energy.  The ruin of such a class is a heavy calamity, and I am solicitous, among other things, to give such stability to our currency as to prevent the recurrence of a similar calamity hereafter.  But it was first necessary, in the order of things, that we should determine what sound policy, looking to the future, demands to be done at the present juncture, before we consider the question of relief, which, urgent as it may be, is subordinate, and must yield to the former.  The patient lies under a dangerous disease, with a burning thirst and other symptoms, which distress him more than the vital organs which are attacked.  The skilful physician first makes himself master of the nature of the disease, and then determines on the treatment necessary for the restoration of health.  This done, he next alleviates the distressing symptoms as far as is consistent with the restoration of health, and no further.  Such shall be my course.  As far as I possibly can, consistently with the views I entertain, and what I believe to be necessary to restore the body politic to health, I will do every thing in my power to mitigate the present distress.  Further I cannot go.

After the best reflection, I am of the opinion that the Government can do but little in the way of relief, and that it is a case which must be mainly left to the constitution of the patient, who, thank God, is young, vigorous, and robust, with a constitution sufficient to sustain and overcome the severest attack.  I dread the doctor and his drugs much more than the disease itself.  The distress of the country consists in its indebtedness, and can only be relieved by the payment of its debts.  To effect this, industry, frugality, economy, and time, are necessary.  I rely more on the growing crop—on the cotton, rice, and tobacco, of the South—than on all the projects or devices of politicians.  I am utterly opposed to all coercion by this Government.  But Government may do something to relieve the distress.  It is out of debt, and is one of the principal creditors both of the banks and of the merchants, and should set an example of liberal indulgence.  This I am willing to give freely.  I am also prepared to vote freely the use of Government credit in some safe form, to supply any deficit in the circulation during the process of recovery, as far as its financial wants will permit.  I see not what more can be safely done.  But my vision may be obtuse upon this subject.  Those who differ from me, and who profess so much sympathy for the public, seem to think that much relief may be afforded.  I hope they will present their views.  I am anxious to hear their prescriptions ;  and I assure them, that whatever they may propose, if it shall promise relief, and be not inconsistent with the course which I deem absolutely necessary for the restoration of the country to perfect health, shall cheerfully receive my support.  They may be more keen-sighted than I am as to the best means of relief, but cannot have a stronger disposition to afford it.

We have, Mr. President, arrived at a remarkable era in our political history.  The days of legislative and executive encroachments, of tariffs and surpluses, of bank and public debt, and extravagant expenditure, are past for the present.  The Government stands in a position disentangled from the past, and freer to choose its future course than it ever has been since its commencement.  We are about to take a fresh start.  I move off under the State rights banner, and go in the direction in which I have been so long moving.  I seize the opportunity thoroughly to reform the Government ;  to bring it back to its original principles ;  to retrench and economize, and rigidly to enforce accountability.  I shall oppose strenuously all attempts to originate a new debt ;  to create a national bank ;  to reunite the political and money power—more dangerous than that of church and state—in any form or shape ;  to prevent the disturbances of the compromise, which is gradually removing the last vestige of the tariff system ;  and, mainly, I shall use my best efforts to give an ascendency to the great conservative principle of State sovereignty, over the dangerous and despotic doctrine of consolidation.  I rejoice to think that the Executive department of the Government is now so reduced in power and means, that it can no longer rely on its influence and patronage to secure a majority.  Henceforward it can have no hope of supporting itself but on wisdom, moderation, patriotism, and devoted attachment to the constitution, which I trust will make it, in its own defence, an ally in effecting the reform which I deem indispensable to the salvation of the country and its institutions.

I look, sir, with pride to the wise and noble bearing of the little State-rights party, of which it is my pride to be a member, throughout the eventful period through which the country has passed since 1824.  Experience already bears testimony to their patriotism, firmness, and sagacity ;  and history will do it justice.  In that year, as I have stated, the tariff system triumphed in the councils of the nation.  We saw its disastrous political bearings ;  foresaw its surpluses and the extravagances to which it would lead.  We rallied on the election of the late President [Jackson] to arrest it, through the influence of the Executive department of the Government.  In this we failed.  We then fell back on the rights and sovereignty of the States, and by the action of a small but gallant State, and through the potency of its interposition, we brought the system to the ground, sustained as it was by the opposition and the administration, and by the whole power and patronage of the Government.  The pernicious overflow of the Treasury, of which it was the parent, could not be arrested at once.  The surplus was seized on by the Executive, and, by its control over the banks, became the fruitful source of Executive influence and encroachment.  Without hesitation, we joined our old opponents on the tariff question, but under our own flag, and without merging in their ranks, and made a gallant and successful war against the encroachments of the Executive.  That terminated, we part with our late allies in peace ;  and move forward, lag, or onward who may, to secure the fruits of our long but successful struggle, under the old republican flag of 1798, which, though tattered and torn, has never yet been lowered, and, with the blessing of God, never shall be with my consent.

From Register of Debates, 25th Cong., 1st Sess., cols. 50-66.  Also printed in the Baltimore, Md., Merchant-Washington, D.C., Reformer, September 27, 1837, p. 2;  the Washington, D.C., Daily National Intelligencer, September 29, 1837, pp. 1-2;  the Washington, D.C., Globe, October 2, 1837, p. 3, and November 11, 1839, p. 2;  the Charleston, S.C., Mercury, October 2, 1837, p. 2;  the Augusta, Ga., Chronicle and Sentinel, October 6 and 9, 1837;  Niles’ National Register, vol. LIII, no. 6 (October 7, 1837), pp. 83-87;  the Edgefield, S.C., Advertiser, October 12 and 19, 1837;  the Columbia, S.C., Southern Times and State Gazette, October 13, 1837, pp. 1-3;  the Pendleton, S.C., Messenger, October 13, 20, and 27, 1837;  Congressional Globe, 25th Cong., 1st Sess., Appendix, pp. 32-37; Remarks of Mr. Calhoun, on the Bill Authorizing an Issue of Treasury Notes.  Delivered in the Senate of the United States, September 19 [sic], 1837 (Washington:  Blair and Rives, 1837), published in two different editions with nearly identical title pages, one of 12 and one of 16 pages;  Remarks of Mr. Calhoun, in the Senate of the United States, on the Bill Authorizing an Issue of Treasury Notes, on the 19th September, 1837 (No place: no publisher, no date);  Speeches of John C. Calhoun, pp. 259-275; Crallé, ed., Works, 3:60-92.  Variant in the Baltimore, Md., Merchant-Washington, D.C., Reformer, September 19, 1837, p. 2.  Another variant in the Washington, D.C., Globe, September 18, 1837, p. 3;  Congressional Globe, 25th Cong., 1st Sess., pp. 36-37.  Still another variant in the Washington, D.C., Madisonian, September 19, 1837, p. 3, and the New York, N.Y., Morning Courier and New-York Enquirer, September 20, 1837, p. 2.  Partially printed in De Bow’s Review, vol. XXXI, nos. 4 and 5 (October and November, 1861), pp. 437-438.
NOTE:  Many of the later printings of this speech erroneously dated it as having been delivered on 9/19.  When Calhoun had concluded, Thomas H. Benton rose and said he agreed with the object of Calhoun’s proposal and offered some amendments of his own for the same purpose.
It was not until 9/20 that Calhoun actually introduced in the Senate his proposal, and when he did so it was as an amendment to S-6, “a bill imposing additional duties, as depositories in certain cases, on public officers,” and not to the bill (S-2) authorizing an issue of Treasury notes.

---[Calhoun's amendment, as he read it on
Monday, September 18, 1837.
http://lcweb2.loc.gov/cgi-bin/ampage?collId=llcg&fileName=004/llcg004.db&recNum=48
"And be it further enacted, That from and after the 1st day of January, 1838, ¾ of the amount due to the Government, for duties, taxes, sales of public lands, or other debts, may be paid in the notes of specie-paying banks; and that from and after the 1st day of January, 1839, ½ may be so paid; and from and after the 1st day of January, 1840, ¼; and from and after the 1st day of January 1841, all sums due, for duties, sales of public lands, or other debts to the Government, shall be paid only in the legal currency of the United States, or in such notes, bills, or paper issued under the authority of the same, as may be directed to be received by law."
after which Senator Benton added his own amendments

Calhoun's amendment, as it was introduced on September 20, 1837--
Sec.  And be it further enacted, That from and after the 1st day of January, 1838, three-fourths of the amount due to the Government, for duties, taxes, sales of public lands, or other debts, may be received in the notes of specie-paying banks;  and that from and after the 1st day of January, 1839, one-half may be so received;  and from and after the 1st day of January, 1840, one-fourth;  and from and after the 1st day of January, 1841, all sums due for duties, sales of public lands, or other debts to the Government, and all payments to the General Post Office, shall be paid only in gold and silver, or in such notes, bills, or paper, issued under the authority of the same, as may be directed to be received by law;  and from and after the said first day of January, in the year 1840, every officer or agent engaged in making disbursements on account of the United States, or of the General Post Office, shall make all payments in gold and silver coin only, or in such notes, bills, or paper, issued as aforesaid, when authorized by law.  And any receiving or disbursing officer or agent who shall neglect, evade, or violate, the provisions of this section, shall be dismissed the service, and shall forfeit all compensation which may then be due.
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  During the debate that followed his speech of 9/18 on the Treasury note bill, Calhoun spoke briefly three more times.  He rose during a speech by Robert J. Walker “to move that the bill be so amended as to prevent the allowance of interest on the notes to be issued by the Treasury ;  but yielded the floor to Mr. Walker, who said he had all along intended to offer a similar amendment, and would now (by leave of Mr. C[alhoun]) do so.”  Later Calhoun “said he thought it not a desirable thing that these notes should be equal to gold and silver.”  Still later, when John P. King argued that the public creditors could not be induced to take the Treasury notes unless they bore interest, Calhoun remarked, “If the banks resume, these notes will be equal to gold and silver.”  Register of Debates, 25th Cong., 1st Sess., cols. 72-73, 75.

From “Roscoe,” published at Charleston, 9/18-22.  In four public letters addressed to Calhoun, the pseudonymous “Roscoe” questions the fiscal policies of the Van Buren administration.  He opposes the sub-treasury system and specie payments and tells Calhoun, “you suppose that the sub-treasury system is to operate an emancipation of the South from its commercial vassalage to the North.  Depend on it, this is sheer fallacy.  Our commercial dependence on the North depends on the laws of trade, and certain physical and moral causes on which the Government Deposites would have no more effect than the feeble current which the Tiber pours into the Potomac would have on the entire volume of the Ocean.”  “Roscoe” proposes as a remedy to the financial crisis the incorporation of a new Bank of the U.S. and a Constitutional amendment preventing States from excessive issuance of paper money.  PC’s in the Charleston, S.C., Mercury, September 18, 20, 21, and 22, 1837.

Sir—I have read your speech delivered in the Senate of the United States on the 19th [sic; 18th] ult[imo], and with many parts of it am highly pleased.  I am a strict constructionist, and always have been, belonging to that school at the present day who are called Nullifiers.  I perceive, among other projects, you advise a large emission of Treasury notes—first, to relieve the Government ;  secondly, to aid in facilitating exchanges, and thereby restoring uniformity in the currency.  I wish to ask you, with all respect, if you have maturely considered the power of Congress to emit Treasury notes such as you describe ?  You know that when the Convention was called in 1787, its object was, as defined at the time, “to amend the articles of confederation,” which had carried our country through the war of the revolution—but that illustrious assemblage presented the result of their labors in a new Constitution.  Under the articles of confederation, you find this distinct clause—Congress shall have authority “to borrow money, or emit bills, on the credit of the United States.”  In the Constitution as recommended by the Convention, and adopted by the States, and which now exists, the second clause, in the enumeration of the powers of Congress, is the following :  Congress shall have power “to borrow money on the credit of the U. States.”  The copy is exact from the articles of confederation, with the omission of the words “or bills of credit.”  Now, did the Convention intend nothing by this omission ? or rather, does it not irresistibly prove that the power “to emit bills on the credit of the U. States” granted by the articles of confederation, was expressly withheld in the Constitution ?  This conclusion is farther established by the fact that the Federal Constitution contains a grant of limited powers by the State sovereignties—and therefore, unless the power is given, it is withheld.  But to make this restriction, which resulted from the nature of the grant, doubly sure, that most sagacious of men, Patrick Henry, introduced an amendment which was adopted, declaring that the powers not delegated to the U. States by “the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the People.”  Now, Sir, I ask you[,] have Congress the power to emit “bills of credit ?”  And if you answer in the negative, as I think you must, then I beseech to know what are these Treasury notes which you propose, but “bills of credit,” to all intents and purposes ?  From the parts of the Constitution which I have quoted, if they were all, the power would remain to the States to “emit bills of credit” ;  but the wise framers of that instrument provided against this, and, as they believed, against “paper Money,” in the 10th section of the 1st article of the Constitution, where it says—“No State shall coin money, emit bills of credit,” &c.  The conclusion is irresistible to my mind, that the framers of the Constitution never intended that either the State or Federal Governments should emit bills of credit ;  and here, according to my views, lies the true argument against the power to establish any bank, either State or Federal.  Neither Government has power to emit “bills of credit.”  It is (as I think has been already proven) withheld from the one, and prohibited to the other.  Are Bank notes bills of credit ?  Certainly, to all intents and purposes, and nothing else.  But the reply is, neither Government, State nor Federal, emits Bank notes—they only incorporate and give being to the companies by law, which do emit the bills, and hence these are not the “Bills of Credit” contemplated by the Constitution.  I rejoin, in the legal adage, Quod facit per alium, facit per, &c.  Is not the converse equally true—what you have no rightful power to do yourself, you have no rightful power to authorize others to do ?  I then perfectly agree with Mr. [Benjamin W.] Leigh [former Senator from Va.], in the opinion expressed in his letter in 1834, “that the framers of the Constitution had no thought of any Bank agency whatever, State or Federal, &c.” and I will add, still less thought of any “Treasury Notes,” alias “Bills of Credit” to be issued and circulated by either Government.  To give to the Federal Government the power to emit Bills of Credit, alias Treasury Notes, at its option, in peace and in war, will be in effect, to make that Government Banker General of the whole Union.  It will, indeed, “unbank all other banks.”  I will only add, that, although a pretty attentive observer of the times and the signs of the times, of public men and their public course, for hard upon forty years, I do not remember to have noticed your warm State Rights notions, as early as 1816 on the Bank question or any other ;  and if any such opinions as you say you openly expressed at that time, were contained in any of your public speeches, they have totally escaped my recollection.  With very high respect, Your obedient servant, T.

PC in the Richmond, Va., Whig and Public Advertiser, October 6, 1837, p. 1.