A Compilation of the Messages and Papers of the Presidents | Page 8

were withdrawn from the United
States Bank they were placed in deposit with the State banks, and the
result of that policy has been before the country. To say nothing as to
the question whether that experiment was made under propitious or
adverse circumstances, it may safely be asserted that it did receive the
unqualified condemnation of most of its early advocates, and, it is

believed, was also condemned by the popular sentiment. The existing
subtreasury system does not seem to stand in higher favor with the
people, but has recently been condemned in a manner too plainly
indicated to admit of a doubt. Thus in the short period of eight years the
popular voice may be regarded as having successively condemned each
of the three schemes of finance to which I have adverted. As to the first,
it was introduced at a time (1816) when the State banks, then
comparatively few in number, had been forced to suspend specie
payments by reason of the war which had previously prevailed with
Great Britain. Whether if the United States Bank charter, which expired
in 1811, had been renewed in due season it would have been enabled to
continue specie payments during the war and the disastrous period to
the commerce of the country which immediately succeeded is, to say
the least, problematical, and whether the United States Bank of 1816
produced a restoration of specie payments or the same was
accomplished through the instrumentality of other means was a matter
of some difficulty at that time to determine. Certain it is that for the
first years of the operation of that bank its course was as disastrous as
for the greater part of its subsequent career it became eminently
successful. As to the second, the experiment was tried with a redundant
Treasury, which continued to increase until it seemed to be the part of
wisdom to distribute the surplus revenue among the States, which,
operating at the same time with the specie circular and the causes
before adverted to, caused them to suspend specie payments and
involved the country in the greatest embarrassment. And as to the third,
if carried through all the stages of its transmutation from paper and
specie to nothing but the precious metals, to say nothing of the
insecurity of the public moneys, its injurious effects have been
anticipated by the country in its unqualified condemnation. What is
now to be regarded as the judgment of the American people on this
whole subject I have no accurate means of determining but by
appealing to their more immediate representatives. The late contest,
which terminated in the election of General Harrison to the Presidency,
was decided on principles well known and openly declared, and while
the subtreasury received in the result the most decided condemnation,
yet no other scheme of finance seemed to have been concurred in. To
you, then, who have come more directly from the body of our common

constituents, I submit the entire question, as best qualified to give a full
exposition of their wishes and opinions. I shall be ready to concur with
you in the adoption of such system as you may propose, reserving to
myself the ultimate power of rejecting any measure which may, in my
view of it, conflict with the Constitution or otherwise jeopardize the
prosperity of the country--a power which I could not part with even if I
would, but which I will not believe any act of yours will call into
requisition.
I can not avoid recurring, in connection with this subject, to the
necessity which exists for adopting some suitable measure whereby the
unlimited creation of banks by the States may be corrected in future.
Such result can be most readily achieved by the consent of the States,
to be expressed in the form of a compact among themselves, which
they can only enter into with the consent and approbation of this
Government--a consent which might in the present emergency of the
public demands justifiably be given by Congress in advance of any
action by the States, as an inducement to such action, upon terms well
defined by the act of tender. Such a measure, addressing itself to the
calm reflection of the States, would find in the experience of the past
and the condition of the present much to sustain it; and it is greatly to
be doubted whether any scheme of finance can prove for any length of
time successful while the States shall continue in the unrestrained
exercise of the power of creating banking corporations. This power can
only be limited by their consent.
With the adoption of a financial agency of a satisfactory character the
hope may be indulged that the country may once more return to a state
of prosperity. Measures auxiliary thereto, and in