122 



F A R ]\I E R S ' REGISTER. 



[No. 2 



be the consequence 7 Why, one-third of the mo- 

 ney is suddenly abstracted from the circulation, and 

 the consequence would be a pressure in the money 

 market, as sudden and terrible as an earthquake. 

 Destroy one-third the corn, wheat, or meat, now in 

 use, and we all know what would be the dreadful 

 result. This abstraction ol'tlie currency is precise- 

 ly equivalent to a destruction of one-third ol' the 

 money of the country as long as it is withheld 

 ti'om the circulation. How would this pressure be 

 relieved ? By gradual importation of specie from 

 abroad, and by gradual extension of bank issues. 

 until the deficit occasioned by the abstraction of 

 15^40,000,000, was supplied, and the trading com- 

 munity were again in possession of ^120,000,- 

 000, the sum necessary for the functions of cir- 

 culation. Suppose, now, the government should 

 determine to disburse the money, no matter 

 in Vv'hat manner, which has been for a time 

 wiihtlrawn, what would be the effect? You 

 would then have the money of the country sud- 

 denly raised to sB 160,000,000— $40,000,000 beyond 

 the usual amount. The eflect of this would be, a 

 sudden elevation of prices, soon followed by a rage 

 for speculation, finally to be cured by large and ex- 

 travagant importations from abroad, which would 

 create a money balance against us, and drain us 

 of specie, and force a system of curtailment on the 

 entire banking system throughout the country. In 

 the mean time, the accumulation of another sur- 

 plus would force the country through the same 

 melancholy routine of grinding pressure and bloat- 

 ed prosperity, equally hostile to a pure and sound 

 state of morals, and to a steady and constant ac- 

 cumulation of wealth. But I have said this effect 

 Avould be produced by a large surplus revenue, in 

 spite even of all the eflorts of government to pre- 

 vent it. In our country, the revenue is deposited 

 in certain banks chosen for the purpose; and where 

 the revenue annually collected is annually dis- 

 bursed, there is no danger of a pressure ft-om this 

 cause, because the deposites of the government 

 are made and withdrawn with some degree of re- 

 gularit}^, and the deposite banks can easily conform 

 their operations to those of the government with- 

 out any detriment to the public. But when a sur- 

 plus revenue of !§40,000,000 is deposited in a cer- 

 tain number of banks, the case is far, very far dif- 

 ferent. The expenditure of such a revenue is a 

 very uncertain event. It may be demanded of 

 the banks tomorrow, or it may not be tor years. 

 To-day, Congress is not in session, and there is no 

 dantrer of an appropriation. The consequence 

 will be, that the deposite banks will er.large their 

 issues, and flood the country with paper. To- 

 morrow, Congress is convened, and apprehension 

 is entertained that this enormous surplus may be 

 called for. The consequence is, the deposite 

 banks must place themselves in a position of safety; 

 they must curtail theirissues; gather togethertheir 

 funds in order that they may be ready to obey the 

 summons of the government. This curtailment, 

 on the part of the deposite banks, forces a similar 

 line of policy on the others, and hence a money 

 pressure. After a short time, Congress either ap- 

 propriates the money, or rises without any action 

 on the subject. In either case, the currency will 

 again become suddenly expanded, because of the 

 restoration to the circulation of that portion, so 

 long held in a state of inactivity to meet the public 

 ealis. 



The great pressure now felt in the large cities, is 

 an exemplification of the views here submitted, 

 and shows, most conclusively, that while Congress 

 involuntarily holds suspended the sword of Damo- 

 cles over the deposite banks, they must and will 

 produce a money pressure, and a consequent de- 

 rangement of the whole monetary system. No- 

 thing but a ffuarantee that (he money will not be 

 called fur without years of" notice in advance, cin 

 possibly prevent these disastrous fluctuations in the 

 currency of our country, as long as we have a 

 large surplus revenue constituting so very conside- 

 rable a portion of the circulating medium. 



This tremendous, and I may truly say, most 

 awfiil influence over the whole trade and prosperi- 

 ty of the country, exerted by the mere existence of 

 a great surplus revenue, is one of those ov-erwhelm- 

 ing evils which statesmen scarce dream of before 

 they happen. I do not recollect ever to have heard 

 or seen one single prediction of any such calamity 

 as this, from an o\-erflowing treasury. And even 

 now I do not think our statesmen seem sufficiently 

 impressed with the deleterious influence of our 

 surplus upon the whole monetary system. In fact, 

 if this view of the subject has been presented to 

 the public at all, it has not met my eye. Now, 

 when we consider that the surplus will increase for 

 several years to come, and that if our government 

 shall be as economical in its expenditures as it 

 ought to be, the surplus may amount, before 1842, 

 to a sum equal to all the money requisite to per- 

 form the functions of circulation in this country, 

 the most vivid imagination can scarce conceive 

 the disastrous consequences of such an accumulat- 

 ed treasure. The value of every item of property in 

 the whole country will depend "upon the hazard 

 of a die.'" The sudden hoarding on the part of 

 the deposite banks to meet the calls of govern- 

 ment, would instantly paralyze the whole business 

 of the counirj', and inflict a death-like torper on all 

 the operations of commerce. The sudilen abstrac- 

 tion of so much money from circulation would at 

 one blow annihilate all exchangeable value, and 

 leave debtors every where at the mercy of credit- 

 ors. A sudden restoration, after such an abstrac- 

 tion, would again restore the currency, raise 

 prices, blow up the bubble of speculation to burst 

 once more with the same melanchol}^ consequen- 

 ces. When we take into consideration, that the 

 construction of turnpikes, rail roads, canals, the 

 building of factories, and the forming of joint stock 

 schemes throughout the country, are rapidly in- 

 creasing the amount of stocks ; that all these stocks 

 are exceedingly sensitive to all the fluctuations in 

 the money market, rising to-day and falling to- 

 morrow ; that these fluctuations in the stock mar- 

 ket generate a gambling spirit, at once destructive 

 of the morals and religion of the country, and fatal 

 to the formation of those steady and persevering 

 habits of industry which alone can insure the stea- 

 dy accumulation of national wealth. We cannot 

 but the more lament the existence of a great sur- 

 plus revenue, Avhich must, of necessity, increase 

 immeasurably all these evils. These fluctuations 

 are not matters of chance, or the result of inten- 

 tional ojipression by the government ; the)' are 

 the necessary and inevitable results of the surplus 

 revenue. Dislributions of such revenue regular- 

 ly among the states, seems to be the only remedy 

 left, if the tariff compromise of 18.32 is to be con- 



