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Volume: III Page: 248 (extract) "It was in view
of these evils, together with the dangerous power
wielded by the Bank of the United States and its
repugnance to our Constitution that I was induced to
exert the power conferred upon me by the American people
to prevent the continuance of that institution. But
although various dangers to our republican institutions
have been obviated by the failure of that bank to extort
from the Government a renewal of its charter, it is
obvious that little has been accomplished except a
salutary change of public opinion toward restoring to
the country the second currency provided for in the
Constitution.
In the acts of several of the States prohibiting the
circulation of small notes, and the auxiliary enactments
of Congress at the last session forbidding their
reception or payment on public account, the true policy
of the country has been advanced and a larger portion of
the precious metals infused into our circulating medium.
These measures will probably be followed up in due time
by the enactment of State laws banishing from
circulation bank notes of still higher denominations,
and the object may be materially promoted by further
acts of Congress forbidding the employment as fiscal
agents of such banks as continue to issue notes of low
denominations and throw impediments in the way of the
circulation of gold and silver.
The effects of an extension of bank credits and over
issues of bank paper have been strikingly illustrated in
the sales of the public lands. From the returns made by
the various registers and receivers in the early part of
last summer it was perceived that the receipts arising
from the sales of the public lands were increasing to an
unprecedented amount. In effect, however, these receipts
amounted to nothing more than credits in bank. The banks
lent out their notes to speculators. They were paid to
the receivers and immediately returned to the banks, to
be lent out again and again, being mere instruments to
transfer to speculators the most valuable public land
and pay the Government by a credit on the books of the
banks.
Those credits on the books of some of the Western
banks, usually called deposits, were already greatly
beyond their immediate means of payment, and were
rapidly increasing. Indeed, each speculation furnished
means for another; for no sooner had one individual or
company paid in the notes than they were immediately
lent to another for a like purpose, and the banks were
extending their business and their issues so largely as
to alarm considerate men and render it doubtful whether
these bank credits if permitted to accumulate would
ultimately be of the least value to the Government. The
spirit of expansion and speculation was not confined to
the deposit banks, but pervaded the whole multitude of
banks throughout the Union and was giving rise to new
institutions to aggravate the evil.
The safety of the public funds and the interest of the
people generally required that these operations should
be checked; and it became the duty of every branch of
the General and State Governments to adopt all
legitimate and proper means to produce that salutary
effect. Under this view of my duty I directed the
issuing of the order which will be laid before you by
the Secretary of the Treasury, requiring payment for the
public lands sold to be made in specie, with an
exception until the 15th of the present month in favor
of actual settlers. This measure has produced many
salutary consequences.
It checked the career of the Western banks and gave
them additional strength in anticipation of the pressure
which has since pervaded our Eastern as well as the
European commercial cities. By preventing the extension
of the credit system it measurably cut off the means of
speculation and retarded its progress in monopolizing
the most valuable of the public lands. It has tended to
save the new States from a nonresident proprietorship,
one of the greatest obstacles to the advancement of a
new country and the prosperity of an old one.
It has tended to keep open the public lands for entry
by emigrants at Government prices instead of their being
compelled to purchase of speculators at double or triple
prices. And it is conveying into the interior large sums
in silver and gold, there to enter permanently into the
currency of the country and place it on a firmer
foundation. It is confidently believed that the country
will find in the motives which induced that order and
the happy consequences which will have ensued much to
commend and nothing to condemn.
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