the collection is very different in different places; and it has happened, not unfrequently, that the demand for payment was the greatest when the means of payment were the least.

The rule which has already been mentioned was applied, wherever it was practicable, by directing Warrants to be paid at the places of rendering the services, or furnishing the supplies for which they were respectively granted. But if the Treasury possessed no funds at those places, the differences of exchange rendered it extremely difficult to locate the payment of the Warrants in a manner equitable, impartial, and satisfactory. For some months after the War, the Treasury was scantily supplied with the Local Currency of every place, except the District of Columbia and the City of Baltimore; and consequently, during that period, the Warrants which could not be discharged at the seat of the original transaction, were paid in the Currency of the District, or of Baltimore. The progressive accumulation of the Revenue opened a wider scope for payments, enabling the Treasury to draw next upon the Banks of Philadelphia, and more recently, upon the Banks of New York. The Public Funds in the Banks of the Southern and Western States having also become generally adequate to the local demands, it may now be considered that the active resources of the Treasury are co-extensive with the Union, excepting always the Eastern Section. The difficult task of locating the payment of Warrants still, however, continues, and must continue, as long as the differences of exchange shall operate. It is fiscally impossible to pay all the demands upon the Treasury at one place; and every Holder of a Warrant is naturally desirous to be paid at the place where the medium is of the highest current value. Under such circumstances, it is to be expected that Individuals will sometimes feel disappointment, and express dissatisfaction; but it has been the constant and anxious endeavor of the Treasury to perform its arduous task with the exercise of a sound discretion, guided by the requisitions of the Departments, by the origin and nature of the Debts, and by the state of the Public Funds.

4. The Treasury has been compelled to increase the number, and extend the range of Banks employed as the depositories of the Public Revenue, with consequences unavoidably inconvenient and injurious.

As soon as the differences of the current value of Bank Notes were introduced, and particularly when one Bank refused to credit, as cash, a deposit of the Notes of another, the Treasury was driven to a choice of expedients; that is, either to take the hazard of the accumulation of masses of Revenue in the hands of the individual Collectors and Receivers, or to recognize, as places of deposit the Banks (being, however, Banks of unquestioned solidity,) established in the Districts which were most affected by the course of exchanges. Many power

ful reasons led to an adoption of the latter measure; Instructions were issued to the Collectors and Receivers to act accordingly; and the number of Banks thus necessarily employed by the Treasury, from Maine to Louisiana, may be be stated at 94.

To the inconveniences incident to this multiplication of the places of deposit, was added the complexity inevitably arising from the various kinds of Paper in circulation as money, upon some of which minute calculations were required, Generally speaking, the Treasury has with each Bank 4 Accounts:

An Account of cash, meaning (in the absence of coin) the Local Currency.

An Account of special deposits of Bank Notes, being Notes issued by banks, other than the Depository.

An Account of special deposits of Treasury Notes, bearing Interest.

An Account of deposits of small Treasury Notes, not bearing Interest.

Owing to this untoward condition of the machinery for the collection, custody, and distribution of the Revenue; to the great extension of the business of receipts and expenditures; and to several accidental causes; the punctual statement and settlement of the Treasurer's Accounts have not been found practicable. To expedite and facilitate, however, the accomplishment of that object, proceedings have been instituted to withdraw the Treasury Notes from the Banks, for the purpose of cancelling them; to ascertain the character of the Bank Notes upon special deposit, for the purpose of claiming payment, or an effective credit, from the Banks which issued them; and to induce the Banks of the Interior to transfer, from time to time, the Treasurer's Balances to the Banks of the commercial Cities on the Atlantic, for the purposes of a periodical settlement. The success of these proceedings, the operation of the Bank of The United States, the collection of the Revenue in the lawful Currency; and, above all, the improvements contemplated by Congress in the constitution of the Department, are objects of high and urgent importance, demanding constant vigilance and care.

The successive attempts made by this Department to relieve the administration of the Finances from its embarrassments, have been ineffectual.

There was no magic in a mere Treasury Instruction to the Collectors of the Revenue, which could, by its own virtue, charm gold and silver again into circulation. The People, individually, did not possess a metallic medium, and could not be expected to procure it, throughout the Country, as well as in the Cities, by any exertion, unaided by the Banks. And the Banks, too timid, or too interested, declined every overture to a co-operation, for reinstating the lawful

currency. In this state of things, the Treasury, nay, the Legislature, remained passive. The power of coercing the Banks was limited to the rejection of their Notes in the payment of duties and taxes, and to the exclusion of their agency in the custody and distribution of the Revenue; but the exercise of that power would not generate a Coin Currency, although it would certainly act oppressively upon the People, and put at hazard every sum of money which was due to the Government. Until, therefore, a substitute was provided for the Paper of the Banks, it would have been a measure of useless and impolitic severity towards the Community, to insist that all contributions to the expenses of the Government should be paid in a medium, which, it is repeated, the Community did not possess, and could not procure.

The opinion here expressed has been the opinion of all the States, except the Eastern States. In the Southern and Western States, the payments in coin had been suspended; and in most of them the Notes of the local Banks constituted the general circulating medium: for the Treasury-Note medium circulated almost exclusively in the commercial Cities. The obvious difference between the situation of the Eastern Section and of the other Sections of the Union, naturally produced a difference of interests and of dispositions upon the question of resuming payments in coin. The Eastern Section urged the measure at all hazards. The other Sections, and particularly the middle Section, objected to it; each Bank professing, nevertheless, a willingness to adopt it, upon a simultaneous and general movement of the Banks, directed to that object. With respect to the Eastern Section, a peremptory requisition for a return to payments in coin, would have left the circulating medium for the ordinary uses of the People much the same in quantity and kind, whether the distant Banks conformed to it or not. But with respect to the other Sections, such a requisition, if the local Banks did not conform to it, must have deprived the People of their only means of paying the public taxes, and of transacting the pecuniary business of life. It was not, then, an insensibility to the pernicious course of Banking which had of late been pursued, nor a disposition to relinquish the cardinal policy of restoring the lawful National Currency, that induced this Department, during the year 1815, to acquiesce in the state of the currency, such as it was found when the present Secretary was appointed, and such as it had been left by Congress, after the deliberations of a 6 months' Session; but the acquiescence, painful as it was, proceeded entirely from a sense of duty to the Government, and of justice to the Community; from a solicitude to preserve the Public Revenue, as well as to prevent private distress; and from a conviction, that the legislative wisdom and authority were alone competent to provide the means of removing the great evil that existed, without incurring the danger of introducing a greater evil.

The result of the proceedings of the last Session of Congress has justified the opinion, and realized the hope, which were formed. The establishment of the Bank of The United States will open the sources of an uniform Currency, independent of the State Banks; and, as the People will then be supplied with a medium which can be used for every public and private purpose, the peremptory requisition of the Resolution of Congress, for the collection of the Revenue in the lawful money of The United States, after the 20th of February, 1817, becomes at once just, politic, and practicable.

The steps which were taken to organize the Bank of The United States, the early and satisfactory completion of the subscriptions to its capital, and the advertisement, appointing the 28th of the ensuing October for the election of Directors by the Stockholders, have been heretofore communicated to the President, together with the Letter which was addressed to the Bank Commissioners at Philadelphia, recommending that they should provide a place, and the materials proper and requisite, for commencing the operations of the Institution, as soon as the Directors shall be chosen. The general solidity of the Subscribers, as capitalists, and the extensive distribution of the stock throughout the Union, have confirmed the public hope and confidence in the competency of the Bank to accomplish the great objects for which it is established.

As soon as it appeared, upon a reasonable calculation, that the subscription to the capital of the Bank of The United States would be filled, a proposition was offered to the consideration of the State Banks, for commencing the payment of small sums in coin on the 1st of October next, upon the principles which, with the approbation of all the Members of the Administration, were stated in the Report made to the President on the 24th of June, 1816. The terms of the Resolution of Congress seemed indeed to require, from the Treasury Department, an effort to facilitate the restoration of the lawful Currency, even before the 20th of February, 1817; and, short of a general return to that currency, nothing was thought more likely to be acceptable and useful than the proposition in question. But the effort has failed. The State Banks, with few exceptions, have deemed a partial resumption of coin payments inexpedient; and the Banks of the middle States (New York, Pennsylvania, and Maryland) have intimated that the 1st of July, 1817, will be the proper period for resuming the Banking operations, on the basis of a metallic capital.

The rejection of the Treasury proposition is regretted. Upon principle, there is no good reason why a debtor should not pay a part of his debts, although he cannot pay the whole; nor why he should refuse to pay his small debts, because he cannot pay the large. Upon experience, Banks (for instance, at this epoch, the Bank of England) have been in the practice of paying coin, for their Notes of a low (1816-17.]

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denomination, while they refused that kind of payment for Notes of a high denomination. And upon policy, it is clear, that the payment of small Notes in coin would soon beget confidence in Bank Paper of any amount; and, consequently, render a general payment in coin easy and safe.

The quantity of small Notes abroad; the probability of a run through that medium upon the Banks; and all the terrors which Bankers and Brokers may feel or imagine, will furnish no argument against the proposition, for a partial resumption of coin payments at this time, which will not be more forcible against a general resumption at all times. But it is impossible to pass from disease to health without some suffering; and the Banks cannot expect to recover from the disorders of the present banking system, without encountering risks and impairing profits. The rejection of the proposition has, however, constrained the Treasury to limit its exertions to preparatory arrangements, for the general collection of the Revenue in the lawful currency, after the day prescribed by the Legislature.

But referring the period for a general resumption of payments in coin to a day so distant as the 1st of July, 1817, (several months subsequent to the time prescribed by Congress for the collection of the Revenue in the lawful currency, as well as to the time when the operations of the Banks of The United States might be expected to commence,) is a measure of the most serious character, indicating a dangerous reliance of the State Banks upon a change in the policy, or a relaxation in the energy, of the Legislative authority. Its effects, if unresisted, or if fostered by a temporizing disposition on the part of the Government, must be, to embarrass the Bank of The United States in the onset; to confine the issues of the Notes of the National Bank to the amount of the coin in its vaults; to deprive the People of the means of complying with the Resolution of Congress, for the collection of the revenue in Coin; and to preserve to the State Banks an illegitimate control over the money and currency of the Nation. To the wisdom, patriotism, and virtue of Congress, therefore, an appeal must be made; nor can it be supposed, that the State Authorities will remain insensible to so calamitous a state of things. The powers of the Government, vigorously and steadily exercised, are ample for redress and relief, and it is yet to be hoped that the State Banks will perceive and avoid the ruinous consequences to which the threatened conflict inevitably exposes them.

The 2nd instalment of the subscription to the Bank of The United States being paid; the price of gold and silver being obviously in a rapid course of reduction; the means possessed by the Banks to reinstate their metallic capital being faithfully applied to that object; a spirit of mutual conciliation and good will actuating the National and State Institutions; and, in short, a solid foundation for public confi