Report on the Plan of Finance.
(To accompany bill H.R. 206.)
February 17, 1842.
from the select committee appointed on so much of the President’s message as relates to a plan of finance
Mr. Cushing, Chairman.
The Select Committee, to whom was referred so much of the Message of the President as relates to the plan of finance therein recommended to Congress, as also the Letter from the Secretary of the Treasury, accompanied by a draught of a bill for the establishment of a Board of Exchequer at the seat of Government, –report, in part.
The Committee have bestowed, on the subjects committed to them, all the deliberate and anxious consideration, which the importance of those subjects demands.
It became their duty to inquire as to the wisest and best method of keeping the public moneys of the United States; the material in which the same should be collected and disbursed; and the power and obligations of the Federal Government in regard to the currency and exchanges of the Union.
They entered upon the discharge of this duty at a period when, in consequence of the magnitude and pressure of the public debts of many of the States of the Union, the condition of their banking institutions, and other causes, the currency and exchanges of a large part of the United States were involved in calamitous disorder; at a period, when the pecuniary disasters of the country, the extreme differences so long existing among eminent statesmen as to the nature and causes of those disasters and the proper remedy for them, and the uncertainty and instability of the financial policy of the Federal Government, had conspired to render a sort of anarchy of opinion characteristic of the times.
Under these circumstances, the Committee felt themselves called on by the highest claims of patriotism and of honor, to endeavor to look steadily and calmly at the facts surrounding them; to emancipate their minds so far as possible from the dominion of all preconceived opinions; to bring to the solution of the great questions before them the benefit at least of uncommitted judgments and unshackled freedom of decision; to inquire not merely what might be best in the past or present view of each, but also what was the best of things now practicable; and having thus, without fear or favor, fully discharged their own duty to their country and themselves; to submit unhesitatingly the result of their deliberations to the candor and wisdom of the House.
They were the more strongly impelled to the adoption of these principles of action, in consideration that the duty they were to perform was one imposed on them by the command of the House, not sought nor desired by themselves; and that under subsisting political relations, for the success of any measure they might propose, they must of necessity rely on its intrinsic propriety, and the impartial sense of the Legislature.
Powers of Congress.
The Constitution of the United States empowers Congress “to lay and collect taxes, duties, imposts and excises, to pay the debts, and provide for the common defence and general welfare of the United States,” it being requisite that “all such duties, imposts and excises shall be uniform throughout the United States.” And it recognizes the existence of “the Treasury of the United States.” But it does not prescribe the organization of that Treasury, nor set forth the mode in which its personnel shall be constituted or its business transacted, otherwise than as it provides that the President with the advice and consent of the Senate, shall appoint the principal officers of the United States. But the Constitution further provides that Congress shall have power to make all laws “necessary and proper for carrying into execution” all other powers vested by it in the Federal Government. And under these constitutional provisions is the Treasury of the United States to be organized by legislation, and its concerns conducted; the President being empowered and enjoined “to take care that the laws be faithfully executed.”
Besides this, Congress has power “to regulate commerce with foreign nations and among the several States; power to coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures;” and power “to borrow money on the credit of the United States.”
And, on the other hand, while conferring these powers on the Federal Government, the States have expressly forbidden to themselves and to each other to emit bills of credit, to make any thing but gold and silver coin a tender in payment of debts, or to pass any law impairing the obligation of contracts.
Duty of the Treasury Department.
By the act to establish the Treasury Department, passed on the 2d of September, 1789, it was provided that it shall be the duty of the Treasurer to receive and keep the moneys of the United States, and to disburse the same, upon warrants drawn by the Secretary of the Treasury; but the plan and mode of so keeping the moneys of the United States were not specifically prescribed, unlimited scope of choice being left to the Treasurer in this respect, subject always to the authority of the President to see to the due execution of the laws, and in his Executive capacity, to guard the interests of the Government.
History of the Bank United States.
Under these provisions of law, the fiscal operations of the Federal Government, as now constituted, commenced, and so proceeded, until the 25th of February, 1791, when the Bank of the United States was incorporated for a period of twenty years.
Prior to which, there existed in the United States three incorporated banks, namely, that of North America, in Philadelphia; that of New York, in the city of New York; and that of Massachusetts, in Boston; all of them established before the adoption of the Constitution. Each of these banks was a State corporation; for, though the Bank of North America was originally established by Congress, in 1781, yet it had since accepted and now acted under a charter from Pennsylvania.
These banks, it was thought, were unfit or incompetent to perform the fiscal business of the Government; besides which, they could not absorb any amount of the public debt nor be relied on for advances of money to the United States. The incorporation of the Bank of the United States originated in an order of Congress calling on the Secretary of the Treasury to prepare and report a proper plan for establishing the public credit. In obedience to which, the Secretary presented two reports; in one of them recommending that the public debt be funded, and additional taxes raised to pay the interest on it; and, in the other, recommending the incorporation of a national bank, as being of “primary importance to the prosperous administration of the finances,” and “of the greatest utility in the operations connected with the support of public credit,” or, as set forth in the preamble of the act, as tending “to give facility to the obtaining of loans for the use of the Government;” to which, in the same preamble, was added the further reason of “advantages to trade and industry.”
This bank answered immediately three purposes of the Government, namely, 1. Of its capital of ten millions of dollars, three-fourths was composed of funded debt; 2. It was made the fiscal agent of the United States; 3. Its notes became a legalized currency, being declared receivable in all payments at the Treasury.
And the system of the Government was completed by the act of the 2d of April, 1792, establishing a mint, and regulating the coins of the United States upon the basis of the dollar unit, previously prescribed by the Continental Congress.
The incorporation of this bank was resisted, in the outset, on considerations of expediency and of constitutionality; which considerations led to the refusal of Congress to renew its charter. On the expiration of its charter, it does not appear to have been deemed necessary or expedient to legislate further, either as to the means of collecting or the mode of keeping the public moneys; but this was left to stand on the authority vested in the Treasurer, by the act of 1789, to receive and keep the moneys of the United States.
Meanwhile, the number of banks, incorporated by the several States, had increased, previous to or at this time, to one hundred, and in 1812 about twenty more were incorporated, with an aggregate capital, in the whole, of upwards of seventy-seven millions of dollars; and the business of the Treasury was conducted in their notes, and by deposits with them. In the progress of the war with Great Britain, all the State banks south of New England ceased to pay coin for their bills, (in 1814,) as the United States Bank would, in all probability, have done, if it had continued to exist, as the suspension was chiefly in consequence of advances made by them to the Government; but, notwithstanding the non-redeemability of their bills, they continued, from the necessity of the case, to be received and paid in the business of the Treasury, though gold and silver coin was at this time, by express enactment, the only legal currency of the United States.
Under this condition of things, the act of the 10th of April 1816, was passed, establishing the second Bank of the United States.
The prime inducement to the establishment of this corporation, as stated by the President (Mr. Madison) in the message recommending it, was to restore to the community “a uniform national currency;” to provide a “substitute” for coin, “which might engage the confidence and accommodate the wants of the citizens throughout the Union,” until the time when the precious metals could again be rendered “the general medium of exchange.” The same precise object was dwelt upon more at length by the Secretary of the Treasury, (Mr. Dallas.)
The President, in his message, indicated three means of providing a “common (paper) medium of circulation,” viz: 1. By the bills of the State banks; 2. By a national bank; and, 3. By ” the notes of the Government.”
In deciding for the second of these means, rather than the third, the Secretary of the Treasury put his decision simply on the point, that there was no “adequate motive,” that is, no Government exigency, to induce the use of its credit as the basis of a circulation, expressly asserting, at the same time, the power of the Government “to supply and maintain a paper medium of exchange.”
The bank, then, like its predecessor, furnished a paper currency declared by law to be receivable in all payments at the Treasury; it was made the fiscal agent and the depository of the Treasury; and it absorbed in its capital a portion of the public debt; since, of the thirty-five millions of dollars constituting its stock, only seven millions were required to be in specie, the remaining twenty-one millions of private subscription being authorized to be received in stock, as also the seven millions to be subscribed by the Government.
In further regulation of the currency, at the same session of Congress, by an act in the form of a resolution, passed on the 30th of April, 1816, it was provided that all duties, taxes, debts, or sums of money, accruing or becoming payable to the United States, shall be collected and paid in nothing but the legal currency of the United States, or Treasury notes, or notes of the United States Bank, or the notes of banks payable and paid on demand in the legal currency of the United States.
And by the combined action of the Government, the United States Bank, and other causes, the bank currency of the country was brought back to a specie standard.
On the expiration of the legal term of the charter of this bank in 1836, (a bill for its re-charter having been vetoed by President Jackson, and the public deposits withdrawn from it,) the business of the Treasury was again transferred to the banks of the States, and transacted by them, at first, under the general authority of the act establishing the Treasury Department, and afterwards according to the more specific provisions of the act of Congress passed the 23d June, 1836, to regulate the deposits of the public money.
Under the system thus organized, the public revenue on hand was deposited in selected banks, to be discounted on by them, with various regulations of security; the public funds were transferred by their agency; their notes were received and paid out in the dealings of the Treasury; and they were relied on to conduct the exchanges of the country, and furnish its paper currency.
At this period, (1836,) the number of banks chartered by the several States had greatly increased, many being created for the alleged purpose of supplying the anticipated vacuum in business by reason of the refusal of a new charter to the United States Bank; the total number of bank: in operation in the United States being six hundred and seventy-six, with a capital of upwards of three hundred and twenty-four millions of dollars. This amount of capital was greatly beyond the true wants of the country; much of it was fictitious; the business was altogether overdone; excessive bank issues and overtrading followed hand in hand; and at length, (in 1837,) the whole machinery fell into pieces, and a general suspension of cash payments by all the banks in the United States occurred.
Thereupon, the President, (Mr. Van Buren,) considering the incorporation of a national bank unconstitutional, and if constitutional, yet unwise, and deeming the continued use of the State banks either impracticable or inexpedient, recommended a radical change in the fiscal operations of the Federal Government, which (with some modification of the original plan) became the law of the land on the 4th of July, 1840, by the passage of the act to provide for the collection, safe-keeping, transfer, and disbursement of the public money.
The principle of this plan was the ultimate total separation of the Federal Government from all dependence on banks and bank paper in the business of the Treasury. The Treasurer of the United States and various officers of the Government under him, were required to keep the public moneys in the vaults of the Government, and perform all the duties of transfer as well as deposit, and provision was made for exacting immediately one-fourth of all public dues to be paid in gold and silver, and for the addition of one fourth to that requisition yearly; so that, on and after the expiration of three years, all payments to the Government should be made in gold and silver only, as the sole and exclusive legal currency of the United States. This act continued in force only one year, being repealed by the act of 1841, which threw back the business of the Treasury on the provisions of the resolution of 1816, and the original act establishing the Treasury Department, where it now stands.
And thus, by the vicissitudes of opinion and of party, and the successive rejection of the plan of a Bank of the United States, that of deposit in State banks, and of the Independent Treasury, Congress is invited and required to examine the whole subject anew, free from all impediments of existing law, and to settle it on the principles of justice and general expediency, and the letter and spirit of the Constitution.
Of the public revenue.
In all times and all countries, under every form of institutions and every condition of society, the same common question of the public revenue, –how best it shall be collected, guarded, and disbursed; in what form and on what objects of taxation it shall be levied; in what material it shall be received and paid out; its custody in the interval between the time of collection and that of disbursement; its transmission, and the description and combination of agents or officers by whom all these operations shall be performed,– has never ceased to be one of the most perplexing problems of Government.
Every wise Government, whatever may be the source or tenure of its power, will, of course, in the solution of this problem, aim to reconcile its own interests with those of the community it governs. If it be a constitutional government, established and existing only by the consent of the governed, its functions are nothing but a high trust, to be exercised for their advantage. If it be a despotic government, holding its power by force or prescription, still its own greatness is inseparably connected with the welfare and prosperity of those whom it rules, and the extent of its own pecuniary resources depends upon theirs.
The question, therefore, becomes complicated at once, by the duty Government lies under, of considering, not only what is convenient for itself in a merely fiscal point of view, but what, compatibly with the great exigency, will most promote, or at all events least impair, the productive industry and social well being of the community at large, in all private relations. To the combination of these two primary objects it should look in the collection of its revenues, and to the same in their custody, transmission, and disbursement.
Money standard, or measure of value.
Whatever course of policy Government may choose to adopt in these respects, it must, of necessity, as the indispensable condition precedent of any regular system of fiscal measures, fix a money standard, or measure of value, for the regulation of all dealings between itself and the community, unless it receive every thing in kind, and pay out the same. Even then, it must have some sort of measure of value; otherwise all taxation will be arbitrary, unequal, and oppressive. It is convenient that the standard of value between itself and the community shall, if possible, be the same as that between the individuals of the community themselves in their own mutual dealings. It, is moreover, in other relations, a proper function of government, for the sake of uniformity, for the prevention of disputes, and for the execution of the laws between man and man, to prescribe the measure by which the value of property, the exchange of commodities, and the collection of debts shall be regulated. Unless there be such a fixed standard of value, the property and the labor of all are at the mercy of the government and of individuals. Hence the universal exercise, by all civilized governments, of the power to coin money, and assign to it a standard denomination of value.
If it were possible to discover or devise any substance or thing, of the same unchangeable quantity and value at all times and places, imperishable, safe, portable, perfectly convenient, indefinitely divisible, and upon which neither time nor man could act to its injury or abuse, that would be the true money standard.
In the adoption, amongst nearly all civilized nations, from the earliest periods, of gold and silver as the money-standard, makind have but selected that which, by the common consent of all, approached the nearest in its qualities to the thing required. The use of the precious metals, in this way, resulted from their intrinsic adaptation to that use; and governments only added the legal rate of value, and the stamp or certificate of purity and denomination, for convenience in counting, and in passing from hand to hand.
But the precious metals themselves, in addition to their uses for coin, are likewise, whether coined or uncoined, a commodity, or article for production, consumption and merchandise. Themselves are a part of that general property of the community, of all the rest of which they are the measure; and they are of actual value, different in different places, according to the contingencies of government or commerce. Their aggregate quantity is subject to be diminished by casual destruction or absorption in the arts of manufacture, or to be diminished or augmented by the greater or less number or productiveness of mines, and thus their aggregate value relatively to other commodities is liable to perpetual change. The influence of these facts upon prices, upon public affairs, and upon commerce, is visible in all the financial history of modern times.
Besides which, coin is subject to debasement, or to be made a legal tender at a rate exceeding its actual value, by the arbitrary act of the government which controls its coinage and prescribes its legal value. In times when the uses of a paper currency, and of public stocks, were not understood or not practised, and communities had not begun to resort to a paper symbol or nominal representative of money capable of being fabricated at will, the adulteration of coin instead of it was, it is well known, the frequent expedient of public necessity or public cupidity to obtain relief from some pressing pecuniary embarrassment.
Moreover, the precious metals, though of less bulk in proportion to their value than most other commodities, yet cannot be transported from place to place without cost and risk; coin is subject to be stolen or lost, and in that case cannot easily be identified so as to be reclaimed; the continual counting of it in large sums is inconvenient: it would be unsafe, and cause much money to remain idle and unfruitful, if every merchant kept constantly on hand a sum of coin for all his transactions; and the displacement of large amounts of coin, its transfer from one community or one country to another, is liable to occasion fluctuations in the value of property and labor, and to embarrass commercial operations. And there is no necessity that, for each and every commercial transaction between two individuals or two communities, there should be a transfer of coin from one to the other to make payment therefor. The mutual dealings of all the members of a community, or of two separate communities, will, to a certain degree, produce a state of reciprocal indebtedness, the indebtedness of the one balancing more or less that of the other, and the excess only of which needs to be paid in coin. And to release individuals and governments from the inconveniences attending the continual personal custody and handling and the unnecessary transportation of specie from one place to another, bills of exchange, banks, and other establishments for dealing in bills and money and receiving money in deposit, and for the adjustment of commercial and other accounts by bank credits, checks, and bills, came into use, and became fixed ingredients in all the monetary operations of the modern civilized world.
Bills of exchange, it is obvious, though performing the functions of a medium of exchange like money, are not money. They are, for the most part, and in their proper use, only the representatives of the money or of the value of the merchandise on which they are drawn; and in this respect they are of such universally admitted utility as to render certain their continued employment in the business of society.
Bank credits, checks, or bills, though they also perform some of the functions of money, and constitute a circulating currency, are not money. They are nothing but promises or orders for the payment of money according to their tenor. And whilst paper, actually and truly redeemable in coin on demand, is not money, still less is that paper in any sense money which, whether professedly or not, is yet in point of fact not redeemable in coin on demand.
Bank paper, if it stand on a solid spade basis, has circulation by reason of its convenience, and its being therefore preferred to the coin itself. This preference may continue to exist so as to have the effect of preference suspended in circulation at all times a certain quantity of the paper, and to free the bank from the necessity of retaining always on hand an amount of specie equal to the amount of paper issued. –And thus a cheap medium of circulation is supplied in place of a dear one. And if the redemption of its bills be continually enforced, and the prudence of its conduct incessantly tested and secured, the operation is a useful one to the community as well as a profitable one to the bank.
But in this way the bank acquires the faculty, not indeed of creating value, but of creating at will that which commands value. It is tempted by the cupidity of gain to expand its issues. The redeemability in coin set forth on the face of its paper comes to be a fiction or a falsehood. If the Government of the country see fit to permit this operation to go on, or the people inadvertently acquiesce in it, the gradual expansion of the currency stimulates to an artificial excitement in business; property rises in nominal value; it is quickly exchanged for that which has no intrinsic value; and everything wears the aspect of high prosperity, until the bubble of inflated paper circulation bursts, throwing all the currency into confusion, suddenly reducing prices, arresting business, and filling the community with bankruptcy and distress.
Hence, if it be needful to legislate concerning the coined standard of value, it is equally, and for the same reasons, needful to legislate concerning that which takes its place, reforms its functions, augments its nominal quantity, affects its value, and acts potentially on all the relations of labor and property. It is idle to forbid individuals to coin if they be left to make at will that which usurps all the uses of money. And, accordingly, in those countries where the issue of paper to circulate as money exists, it exists by permission and under regulation of government.
Government Bills of Credit.
And it speedily becomes a government question in another and a still move important point of view. To issue paper having currency as money, is in fact to borrow money, and command commercial values at will. Why, then, should individuals or corporations have the exclusive enjoyment of this wealth-creating power ? Why should not government itself participate in it, or take it to itself ? It has done so. By the issue of bills of credit or assignats, it has, under the pressure of war and foreign invasion, absorbed all the labor and property of the community for public uses.
There is no difference in principle between bills not redeemable in specie, issued by the Government for circulation as currency, and similar bills issued in the same way by corporations or by individuals, except that Government may have the power to make them a forced legal tender. Nor is it material, if they be not actually redeemable in specie, whether they be issued on faith and credit only, like the common promissory notes of individuals, or whether they be nominally secured by the pledge of lands or effects set apart for their redemption. In either case, such bills constitute an act of borrowing, not an emission of money. In both cases the course of things is the same, whether they be issued on public or private responsibility. They continue to have currency as money, so long as, from ignorance, inadvertence, or necessity, men voluntarily receive them. –But, under the most favorable circumstances possible, and when such bills are issued upon the highest conceivable credit, and though governments inculcate, and communities believe, that the bills are equal in value to coin, still they speedily begin to undergo a gradual depreciation, indicated in the rise of the comparative price of the precious metals. And, in general, of all such issues the fate is the same, a depreciation in value to a greater or less extent, sometimes absolutely to nothing, having the effect to impose and levy a tax on the community, to abstract from it property or labor without compensation, nearly to the total amount of such depreciation.
There have been, and may once more be, occasions imposing upon Government the indispensable necessity of resorting to such means of obtaining resources as the only possible ones to maintain its independence or existence. In such cases, Government, representing the political unity and wielding the physical force of the nation, has the right to take the property or the labor of individuals for the salvation of all, and the question of the form of taxation in which this shall be done, whether by the forced course of a paper currency, or otherwise, may be reduced to a mere problem of expediency or practicability. But, in every such operation, the premises are a case of overwhelming public necessity.
But there can be no such considerations to justify governments in allowing private individuals or corporations to issue irredeemable bills to circulate as money, and thus to extort a tax from the community, for the purposes of mere private gain. It is conceded that individuals ought not to adulterate the coin, or falsify its denomination; for which reason the coin is placed under the safeguard of the public authority. The reason is greater for subjecting the issues of paper currency to public authority, because the extent of the possible evil is greater, and the nature of the effect on private rights and interests is in both cases substantially the same.
In addition to which, of all these diverse forms of paper currency not redeemable in specie on demand, the inherent and (so far as yet shown) the incurable vice is a tendency to excess of issues, a fatal facility in the creation of what is called and received as money, which seems to afford all but irresistible temptation to the cupidity of individuals and of governments. This is apparent in regard to all paper currency, of whatever description, and wheresoever it originates, which does pot undertake to be redeemable in coin.
And the position is not less true in principle of that other form of paper currency, which professes to be redeemable in coin on presentation, which is intended so to be, but for which the coin is not actually kept on hand, in the confidence that a certain quantity of the paper will be held suspended in circulation by the wants of the community, as in the case of the bills of what are commonly called specie-paying banks. The persons issuing this may err in judgment as to the capacity of the market to hold it in circulation; a temporary and unnatural capacity of the market in this respect may be suddenly followed by a constriction of it which they could not foresee in season; or they may, in the pursuit of gain, extend their circulation by artificial means to the certain prejudice of the community. The true and efficient check to this excess of issues, whether the excess be wilful or accidental, is the rigorous enforcement of payment of the bills in coin, at all hazards, and by the full power of the Government.
Without this, the evils of a paper currency are greater than its benefits. For one of the advantages of metallic money is its comparative stability in value, it having a natural price, measured by the cost of production. But paper currency has no intrinsic value; it is susceptible of illimitable augmentation in quantity; and the amount of it, which may be held in circulation at a given moment, depends in part on the hopes and expectations of men, and the extent of business which they may thus be prompted to undertake. Hence the injurious fluctuations to which a paper currency is subject. Perpetual redeemability in coin is at once the check to, and the partial remedy for, this disease of a paper circulation.
For, be it still remembered, that, in the opinion of the best and most experienced writers, the issue of a paper currency is not the creation of money; and it is most perfect when no more than equal in amount in a given country to what the currency of that country would be if it consisted only of gold and silver.
Governments have generally seen that the faculty of issuing a paper to circulate as money should not be conceded to persons engaged in the business of trade; for if it were, issuing bills at discretion, they might engross directly an indefinite amount of the property of the community. Accordingly, the privilege has usually been granted only to persons or companies engaged in the business of lending money. But the persons constituting the company, or controlling its affairs, may themselves be borrowers; and then the restriction becomes a nugatory one: for in that came they create a currency to use it in trade themselves; which is not the least frequent cause of excessive bank issues, and has led to the opinion, entertained now by many, that inasmuch as the business of trading and of issuing a paper currency should be separated, for the same reason that of lending money, and of issuing a paper currency ought not to be entrusted to the same hands.
In case, however, the Government itself be a borrower, and does not choose to issue a paper of its own to circulate as money, it may, and often does, attain the same end by the establishment of a bank of issues, for the very purpose of arranging its debts or anticipating its revenues. Hence the origin, in many cases, of the direct association between governments and banks.
So that in all communities, and in every form in which currency exists, whether as coined money or as a paper representative of it, and whether this be issued by banks or by public authority directly, the question of the currency of the country and that of its fiscal affairs are inseparable facts.
And next to taxation itself, the question of the material in which taxes shall be levied, whether in coin or an equivalent, and if so, whether in coin or not, is the most important of all. The question of the place and agent of deposit or transmission, is one of convenience, security, or use; that of the standard and material of payment is one of the substance of the thing.
These general results, applicable to all systems of finance, are derived from the common experience of Europe and America. In the United States the application of them depends on the peculiar form and organization of our Government.
Our political institutions are the work of compact and consent. To the Federal Government belongs all such legislative and administrative power, and such only, as the Constitution defines; all functions of Government not thereby granted to the Union, remaining to the separate States or to the people thereof, and the States themselves possessing many of the substantive powers of political sovereignty.
Among the substantive powers of political sovereignty exercised (whether rightfully or not) by each of the States, is that of authorizing and regulating, by means of chartered instruments of their own, the issue of bank paper to circulate as currency.
The faculty of issuing paper to circulate as currency is no more a necessary incident of the faculty to receive money in deposit, and to loan it in the discount of notes and purchase of bills, than it is a necessary incident of the faculty to buy and sell merchandise. A bank having authority to issue bills, after purchasing bills with (that is, loaning out) the whole of its capital, proceeds to purchase other bills with its own promises to pay. Thus it does more business than if rigidly confined to its capital it could, and makes an interest on its own credit or promises, as well as on its capital. The real operation would be the same if a merchant had the same authority. Yet, by the practice in the United States, (not so generally in other countries,) the two faculties of loaning money and of issuing a currency are conjoined in the banks of the States.
It may well be doubted whether the bills so issued by the banks of the States, and constituting a currency, are not bills of credit within the meaning of the prohibition of the Constitution.
Bills of Credit.
Historically, it is demonstrable that the expression “bills of credit” applied, in all the period anterior to the adoption of the Constitution, to these bills of banks. There were two forms of bills of credit, recognized in legislation, speech, and written, namely, “government bills of credit” and “bank bills of credit.”
It seems difficult to conceive how these two species of the same generic thing came to be considered so far different as that one should be constitutional and the other not. To be a legal tender is not of the essence of either; that is, each had been issued extensively without being declared a legal tender; and in all other respects they are in effect and mischief the same; tending in the same way to excess, alike usurping the place of money, producing the same disorders in the currency, and having the same deleterious influence over the relations of labor and property.
And it would seem to be a strange anomaly of the fundamental law, or, if not anomaly, then oversight, to provide that a State shall not issue bills of credit by the instrumentality of a legal person called its “treasurer,” but may by means of a legal person celled its “bank;” in other words, that it cannot, and yet that it can, be the derivative source of the issue of bills of credit.
Nor does it vary the principle, to enact that the bank shall consist in part, or in whole, of incorporated private stock. –This appears by the practical fact of the times. Most of the banks in the United States, south of New York, have ceased to pay their bills in cash, a large part of them having failed to make any effective redemption for the space of more then four years. Their bills are an irredeemable paper currency. And their continued irredeemability has been legalized by State Legislatures, in many instances, as the means of procuring to the use of the State Government an issue of bills of credit with which to defray the charges of the State, instead of levying taxes on the inhabitants for that purpose. The State cannot issue bills of credit by its treasurer; but it can and does by its banks; which is one great cause of the existing disorders in the currency of the United States.
Thus, of the sovereign function to make issue, and regulate money, (or its substitute,) the State Governments (whether by usurpation or constitutionally is immaterial to the result) possess a part in common with the Federal Government.
And this is the radical difficulty in the whole matter of the currency. For if the States have the power so to issue bank bills of credit, then the Federal Government cannot (by any direct legislation) prevent their issue, and of course, cannot (by any direct legislation) apply a cure to the inherent chronic disease of the paper circulation of the United States. Whether it may administer any indirect remedy will be seen hereafter.
The power and duty of the Federal Government.
It is of the power and duty of the Federal Government, in the first place, to provide for itself a safe and suitable fiscal agent to receive, keep, and disburse the public moneys. This it does under the tax power and other powers of the Constitution.
The Federal Government has, in the second place, under more than one clause of the Constitution, certain powers to exert and duties to discharge concerning the currency of the United States.
In what way shall Congress exercise these powers and discharge these duties ?
If the duty of the Federal Government consisted only in doing what is absolutely necessary for itself in a fiscal point of view, and stopped there, the question might be more easily answered.
But, in the opinion of the Committee, the Federal Government should consider, not only what is for the convenience of itself, but also, incidentally, what is for the convenience and welfare of the people of the United States.
In the first place, then, what cannot and what can the Federal Government at this time do, to remedy and relieve the currency difficulties of the United States ?
It cannot assume and pay that great mass of individual indebtedness of the people of the United States, which now weighs them down, and is one primary evil of their present condition; debts contracted when the currency was excessive, for things having a factitiously large or wholly unreal value, and the possession of which by the debtor, owing to their present depreciated value, affords to him no adequate means of payment. What alone Congress can directly do in this respect it has done, by the passage of a bankrupt law, which, whether rightful or not in its provisions, yet enables the insolvent debtor to settle these debts with such means of payment as he possesses. For the rest, and so far as this indebtedness is a general evil affecting the whole country, “therein the patient must minister to himself.” The remedy, and the only remedy, is industry, economy and prudence, and a return to proper principles of trade; by means of which, and with the immense and various productive resources of the country, and the productive energy of its people, with no extraneous cause of war or the like to waste and exhaust them, the speedy return to our accustomed prosperity is as certain as anything in human affairs can be.
It cannot, by any direct legislation, prevent unwise extension of credit in time or amount, overtrading, speculation, the excessive importation and consumption of foreign luxuries, and the consequent excess of imports over exports, and displacements of coin to pay foreign balances. What alone it can do in this respect, besides itself setting an example of integrity and frugality in its own affairs, is to regulate its own system of taxation and finance so as at any rate not to injure the domestic production of the country, and, if it may, incidentally to foster it impartially in all its forms, and do equal justice to the rights and interests alike of all parts of the Union.
It cannot assume and pay the debts which the individual States have contracted on their own account. All that in this relation it can assume to do it has (whether rightfully or not) done, by ceding to the States the annual nett proceeds of the public lands. For the rest, the people of the United States, who are also the people of the States, have the remedy for this evil in their own hands by the better regulation of their own finances, and the imposition of taxes to pay the interest of their public debts.
It cannot command and compel the State Legislatures to cease to authorize the suspension of cash payments by their banks, nor prevent those banks from issuing bills of credit to accommodate the present wants and postpone the final pay day of individual debtors or of the States. It cannot, by its own direct set, retire from circulation their depreciated bills, the currency of which is the greatest evil of the times. But it can act on the subject-matter by the refusal to receive or use anything but coin or equivalent paper in its own dealings, and if it receive bank bills, by exacting payment of them at frequent specified periods. And in the opinion of many, who are conversant with the subject, and whose experience and judgment are entitled to consideration, it can, to some degree, remedy the disorders of the currency, by applying to legal or artificial persons the same laws for the immediate distribution of their assets and discharge of their debts, which apply to natural persons.
It cannot give to the country a paper currency in the bills of an incorporated joint-stock bank of private stockholders; for the constitutional opinions of the President, and of a considerable part of the members of the two Houses, and of the people at large, constitute at present an insuperable impediment to the incorporation of a National Bank; and if it could be incorporated, it would be impossible, and if possible, would aggravate rather than lighten existing evils, to collect the stock of such an institution. It can, however, provide a national paper currency of adequate quantity, and of better quality, by other means.
It cannot equalize the exchanges throughout the country, so long as the currency of most parts of it consists of irredeemable bank bills in various degrees and stages of depreciation, and the business of buying and selling is transacted in one part of the country by means of specie values; and in another by paper values. Most of the existing rate of exchange between different parts of the country is not the difference in price between legal coin in one place and legal coin in another, or of the cost of transporting it to settle ballances, but the difference between the price of the coin currency and of the paper currency at the same place. This Congress cannot prevent. But it may provide a safe and economical medium of exchanges, correspondent to the true value of exchange as regulated by the course of business, according to supply and demand, in a specie medium of payment.
It cannot, by any act of its own whatever, proceed immediately to fill the channels of commerce with a paper currency equal in rate of value to gold and silver, neither by means of a national bank nor by any other instrumentality whatever. For the same reason that, in the market of a depreciated paper currency, coin cannot be kept in circulation, but becomes at once an article of merchandise, and is bought up as such, and disappears, just so will it always be with a specie value paper currency alongside of a depreciated paper currency. Until State Governments cease to authorize or sanction the issue of irredeemable bank paper in a given community, that community cannot have any better currency. But the Federal Government can adopt the means to furnish a paper currency of par value, to be ready to take the place o the depreciated paper currency, so soon as that shall be driven or withdrawn from circulation by the direct action of the State Governments, or by the indirect action of the Federal Government.
What, then, shall Congress do ? What ought it to do ? To reach the answer to these questions, let us consider the advantages and the disadvantages of the plans heretofore used in the fiscal business of the Treasury.
Leaving out of the case all debatable constitutional questions involved in it, and regarding it as a practical matter only, the considerations alleged in favor of a national bank are–
1. Its convenience in the collection, safe-keeping and disbursement of the revenue.
2. Its utility (to a certain degree) as an agent of exchange.
3. Its being the means of furnishing a paper currency to circulate in all parts of the United States.
4. Its instrumentality, by the periodical settlement of balances, in regulating the paper currency of the States.
5. Its being the means of utilizing the public deposits by discounting on them.
On the other hand, the practical objections to it are, in substance–
1. The peril to the public welfare of taking from the Government itself, appointed by the people and responsible to them, all this vast power over the public funds and the currency and exchanges, and placing it for a long period of years in the hands of a private corporation, and of bank directors, having interests of their own, and irresponsible and inaccessible to the people themselves.
2. The chances of mismanagement and corruption on the part of such a corporation, in the ratio of its power.
3. This possibility that it may itself make excessive issues, or suspend payments in specie, and instead of aiding to regulate the currency of the States, become itself the great cause of derangement.
4. That it is no part of the proper business of the Federal Government to carry on (directly or indirectly) the business of discounting notes or bills, or otherwise lending money, or to furnish funds to be so lent.
Concerning the adoption of the State banks as the fiscal agents and depositories of the Federal Government, the main consideration for it is–
That, if there be no national bank, it is necessary to employ the banks of the States, unless the Government choose to discard all bank agency.
And the main considerations against it are–
1. That the Federal Government ought not to be dependent on the legislation of the State Governments for the means of conducting the business of the Treasury.
2. The perpetual liability of the State banks to excess of issues, and to suspension of specie payments.
3. The difficulty of giving a national unity of action to institutions which are essentially local in their nature and uses, and in their currency.
4. The liability of the system to political abuse.
The system of an Independent Treasury is recommended:–
1. Because, of its independence of all agency not the Government’s and especially because independent of banks.
2. Because it holds the public funds for the public uses only.
3. Because, by the use of coin only in the dealings of the Treasury, it tends to bring back the country to the money standard of the Constitution.
And it is opposed–
1. Because, by the exclusive use of coin, it rejects the time-saving and labor-saving instrumentality of paper, which so it be of specie value, is in many respects preferable in use to coin.
2. Because it locks up the public funds from all employment, either directly or as the basis of paper issues.
3. Because, under it, the United States has no paper currency of national circulation.
4. Because it separates the Government from the people, and disavows all incidental duty towards the latter in the business of the Treasury.
Which of these three systems is the cheapest and safest, that is, involves the least expense and loss to the Treasury, is no otherwise important than as it may be a question of charge on the revenue; and which of them is most convenient, in a fiscal point of view, is a matter of no interest except to the Government.
The Committee do not believe that the wit of man can devise any scheme of finance which will satisfy every mind, or which shall combine the whole of the advantages and shun the whole of the disadvantages of the different plans, on which, at successive periods, the Government has hitherto acted. All human institution is mixed of good and evil. It is our duty, if we cannot do all the good we would, to attempt at least to do all we can. And the Committee are of opinion that many of the advantages of the different systems heretofore adopted and successively rejected by the Government are to be found, and many of the disadvantages are not found, in the plan of a Board of Exchequer recommended by the President, and which, with sundry modifications, they report to the House.
In common with a Bank of the United States, the Exchequer provides and secures–
1. A safe and convenient agency for the custody and management of the public funds.
2. A useful agent of exchanges and collections.
3. A national paper currency.
4. The regulation of the bank paper currency of the States, by receiving it in payment of public dues, and presenting it for redemption at short intervals of time.
5. The utilization of the public deposits, and of the specie funds of individuals, by rendering them the basis of a national paper circulation.
6. The bestowment incidentally to the business of the Treasury, and within the letter of the Constitution, of benefits on the people of the United States.
In common with the Independent Treasury–
1. It does not entrust the control of the public funds or of the currency to an irresponsible private corporation.
2. It does not loan out the public money to individuals.
3. It makes and can make no excessive issues, and cannot suspend cash payments. For every paper eagle on the wing, it has a gold eagle in hand.
4. It is independent of all banks.
5. It conducts the business of the Treasury without the necessity of recurring for aid to the creatures of the legislation of the States.
6. By the use either of coin only, or of paper always equivalent to coin, it follows the true spirit of the Constitution in the maintenance of the legal money standard.
7. It is at all times within the control of Congress to repeal or amend it at pleasure.
The President of the United States, in presenting this plan to Congress, has obeyed the injunction of the Constitution, which requires him to recommend to their consideration such measures as he shall judge necessary and expedient; he has fully redeemed the engagements in this respect which he had previously made to Congress; and thus he has faithfully discharged his whole duty to the Constitution and the Union. The Committee, while animated by the highest respect for his views, have yet deemed it due to him, to themselves, to the occasion, and to the country, to give to those views a free and unbiased examination. They have done so; and, in so doing, they have also discharged their duty. They respectfully submit the result to the House in the bill herewith reported. They believe this measure to contain the elements of usefulness and public good; and, as such, they recommended it to the House. But they feel no pride of opinion concerning it; and, if in error, they are ready to follow the lead of better lights, if better there be, from other quarters; being anxious only to minister to the welfare of the people whom they represent. It remains now for Congress to act in the matter; the country demands that in some way we shall act; and the times appeal to us to act with decision, with moderation, with impartiality, with independence.
Long enough, the question of the national finances has been the sport of passion and the battle-cry of party. –Foremost of all things, the country, in order to recover itself, needs repose and order for its material interests, and a settled purpose in that respect (what it shall be is of less moment, but at any rate some settled purpose) on the part of the Federal Government. If, careless of names and solicitous only for things, aiming beyond all intermediate objects to the visible mark of the practicable and attainable good –if Congress shall in its wisdom concur at length in some equitable adjustment of the currency question, it cannot fail to deserve and secure the lasting gratitude of the people of the United States.
Mr. CUSHING then read the bill, as follows:
Amendatory of the several acts establishing the Treasury Department.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there shall be, and hereby is, created and established in the Treasury Department at the Seat of Government of the United States, a board to be called the Exchequer Board of the United States, to be composed of the Secretary of the Treasury for the time being, and the Treasurer of the United States for the time being, and one commissioner, to be appointed by the President of the United States, with the advice and consent of the Senate; the said commissioner to be appointed for four years; and neither he nor the Treasurer of the United States shall be removed from office, except for physical disability, incompetency, or neglect or violation of duty; and, in case of any such removal, it shall be the duty of the President to lay the reasons thereof before the Senate; and the said commissioner shall receive an annual salary of three thousand dollars; and the Secretary of the Treasury shall preside over the board.
Sec. 2. And be it further enacted, That said board may establish agencies or offices in the United States, not exceeding ten in the whole; and one of said agencies or offices shall be established at the city of Boston, in the State of Massachusetts, one at the city of New York, in the State of New York, one at the city of Philadelphia, in the State of Pennsylvania, one at the city of Charleston, in the State of South Carolina, and one at the city of New Orleans, in the State of Louisiana, and one or more of all the other five agencies or offices, if necessary for the public service, may be established, from time to time, at such other place or places as said board may deem expedient; and it may change the location thereof at intervals of twelve months, as the public service may require for the transfer or safe-keeping and disbursement of the public money.
Sec. 3. And be it further enacted, That for the said board there shall be a principal clerk with a salary of __dollars per annum, and a register with a salary of __dollars per annum; and for each agency or office of said board, to be established as aforesaid, there shall be one superintendent with a salary of __dollars per annum, and a register with a salary of __dollars per annum; and if the business of such agency or office require it, a clerk for each superintendent with a salary of __dollars per annum, and a clerk for each register with a salary of __dollars per annum; and the said superintendent and register shall be appointed by the President of the United States, by and with the advice and consent of the Senate; and the Secretary of the Treasury shall have power to appoint the said clerks; and the said superintendents and registers shall be appointed for four years, and may be removed by the President of the United States for physical disability, or incompetency, or neglect, or violation of duty; but in all cases of removal, the reasons therefor, shall be laid before the Senate of the United States. And the Secretary of the Treasury shall have power, in case it shall be found necessary at any of the agencies, to appoint temporary clerks, not exceeding ten in the whole, for the transaction of the business of said board and its agencies, subject to the supervision of Congress, with salaries at a rate not exceeding __dollars per annum.
Sec. 4. And be it further enacted, That the Exchequer and its officers shall be the general agents of the Government of the United States for receiving, safe-keeping, and disbursing the public moneys, and transferring and transmitting the same, under the direction of the Secretary of the Treasury; and all public moneys received from whatever sources, shall, under the same direction, be paid into the said Exchequer or its agencies, or to the order of the Treasurer of the United States. And the said Board of Exchequer and its several agencies shall pay all warrants, drafts, or orders made thereon by the Treasurer of the United States, and by all disbursing officers and agents of the Government having authority to make such drafts or orders. And the said Exchequer and its officers shall perform the duties of Commissioners of Loans, in receiving subscriptions, transferring stock, and paying dividends and interest thereon under the directions of the Secretary of the Treasury: and shall render to the Treasurer of the United States all necessary facilities for transferring and disbursing the public funds as shall be required by him; and shall perform all the duties of pension agents, under the regulations prescribed by the Secretary of War; and shall render and perform all other duties and services in relation to the collecting, keeping, and disbursing of the public funds, as shall be prescribed by law, or by the Secretary of the Treasury.
Sec. 5. And be it further enacted. That it shall be lawful for the Exchequer at the seat of Government, and its several agencies, to receive on private deposit gold or silver coin or bullion, the property of individuals, to be held as in other cases of deposit made by individuals for convenience and security, and to issue certificates of such deposit having been made; but the amount so deposited shall never exceed in the whole ten millions of dollars unless otherwise provided by law, to be received on deposit as may be apportioned by the board among its several agencies according to the extent of their business respectively.
Sec. 6. And be it further enacted, That the said board and its agencies or officers are hereby authorized and directed, in all cases where the public creditors may prefer the same, to issue to them certificates of deposit for the amount or amounts of debts due them by the United States; but the amount of said certificates to be issued to said public creditors shall not exceed the sum of ten millions of dollars issued and outstanding at any one time, unless otherwise provided by law. And it shall be the duty of the said Board of Exchequer and each of its several agencies at all times so to limit the amount of certificates so issued that its gold and silver on hand shall be equal to the amount thereof outstanding.
Sec. 7. And be it further enacted, That the proper officer of the mint at Philadelphia and of the branch mints at New Orleans, in the State of Louisiana, Dahlonega in the State of Georgia, and Charlotte in the State of North Carolina, respectively, instead of the receipts now by them given, shall have power to issue like certificates of deposit to individuals or to the Government for the amount of all deposits of bullion or foreign coin of gold and silver made in said mint or its branches for the purpose of coinage, under such regulations and checks for the security thereof as the Secretary of the Treasury shall prescribe.
Sec. 8. And be it further enacted, That all the said certificates of deposit shall be redeemable on presentation at the office, agency, mint or branch mint where issued; they shall be receivable everywhere in payment of the public dues; no premium shall be demanded for issuing the same; and they shall be issued in such denominations not less than five nor more than one hundred dollars, as the depositor or public creditor may desire; and the Secretary of the Treasury shall cause to be prepared and signed certificates as aforesaid, in such form, as he shall prescribe; to be signed by the Treasurer of the United States, and countersigned by the Commissioner of Exchequer. And the amount of such certificates of deposit, public or private, outstanding at the end of every quartet shall, so soon thereafter as the same may be ascertained, be published by the Secretary of the Treasury.
Sec. 9. And be it further enacted, That the said Board of Exchequer may draw bills or drafts on any of its agencies, and may authorize any agency to draw bills or drafts on the board or any other agency, and may sell, and authorize its agencies to sell, such bills or drafts for a premium not exceeding the fair cost of remitting specie to the place of payment, and in no case to exceed two per centum on the amount of such bill or draft: Provided, That no bill or draft shall be so sold except for cash paid in funds receivable in payment of public dues, as hereinafter prescribed.
Sec. 10. And be it further enacted, That it shall be lawful for said board of Exchequer, and each of its agencies, when ordered or required so to do by the Secretary of the Treasury, to purchase domestic or foreign bills of exchange, for the purpose of transmitting the public funds of the Government to pay its creditors, or for public use, and for no other purpose whatever. And it shall not be lawful for the Board of Exchequer, or any agency, to purchase or sell any bill or draft drawn by or upon any member or officer thereof, or in which such member or officer shall be in any way interested, nor to receive any deposit of any money belonging to any such officer or member; and no bill shall be purchased, or draft sold at any agency, without the assent of two of its members.
Sec. 11. And be it further enacted, That all payments made by the said Board of Exchequer, and any of its agencies or offices, or any disbursing officer of the United States, shall be made in gold or silver coin, or, with consent of the public creditor, in Treasury notes, or certificates of deposit to public creditors as hereinbefore provided, and in no other medium of payment whatever. And all dues to the United States, or any officer or department thereof may be paid in gold or silver coin, in certificates of deposit issued under tthis act, in Treasury notes, or in the notes of banks which shall be immediately convertible into specie at the place where received. And the Board of Exchequer at the seat of Government, and each of its agencies, shall settle weekly or oftener with all banks in their neighborhood whose paper they may have received, and pay or collect, as the case may be, all balances between it and said banks; and no individual shall be allowed at any time, as debtor to the Exchequer, or any of its agencies, in account.
Sec. 12. And be it further enacted, That no agency established in any State under the provisions of this act shall, contrary to any law which such State may enact, receive any other deposits than those of the United States, or make or sell drafts, or purchase bills other than such as shall be necessary in the collection, transfer and disbursement of the public funds.
Sec. 13. And be it further enacted, That the said board shall have power to provide regulations for the government of the agencies aforesaid, the transaction of their business, and the rendering accounts of all their proceedings; and, in such regulations, they shall so assign and arrange the duties of the superintendents, registers and clerks herein provided, as that the said superintendents and registers shall be checks upon each other; and, for that purpose, they shall require that the accounts and proceedings of each shall be entered by them, or by their respective clerks aforesaid, in separate and proper books; and the said board shall require of all the principal officers employed in such agencies bonds to the United States for such an amount, and in such form, as the Secretary of the Treasury shall prescribe for the faithful performance of their duties, to be renewed annually, or oftener, if the Secretary of the Treasury shall require. And full and exact accounts of the proceedings of the board and its several agencies shall be furnished to the Secretary of the Treasury as often as he may prescribe; and it shall be the duty of the said Secretary to lay abstracts of the same before Congress, at the commencement of each annual session, with an account of all regulations made for the government of said agencies, and to furnish full and particular accounts and statements of the transactions of the board and its agencies when required by Congress.
Sec. 14. And be it further enacted, That the Board of Exchequer and its several agencies shall keep separate and distinct sets of books, for the purpose of entering and recording in one set all transactions respecting the collection, keeping and disbursing of the public revenue, and transmitting the public moneys from place to place for the service of Government, and in another all transactions and accounts arising from dealings in exchange and other transactions not on Government account. And all profits accruing from dealing in exchange on individual account shall be applied, in the first place, to pay all salaries and compensation, and to defray all expenses incurred under the authority of this act, and the residue thereof shall be placed semi-annually to the credit of the Treasurer of the United States.
Sec. 15. And be it further enacted, That if it shall at any time be necessary to bring suit on any bill of exchange or other debt or liability arising out of any transactions under the provisions of this act, such suit may be brought in the name of the United States in any circuit court of the United States, or any State court having competent jurisdiction.
Sec. 16. And be it further enacted, That the necessary rooms and vaults for the safe-keeping of the public moneys, and for the transaction of the business of the Board of Exchequer and its agencies, shall be provided by the Treasury Department at the city of Washington, and in the custom-houses, mint, branch mints and other public buildings belonging to the United States, so far as the same can be furnished without detriment to the public service; and when the same cannot be so furnished, the said board may provide others.
Sec. 17. And be it further enacted, That the gross amount of the public moneys of the United States, by whomsoever it may be received or kept, and wherever it may be placed or transferred, shall be deemed and considered in the Treasury of the United States to the credit of the Treasurer of the United States; and no part of the same shall, as heretofore, be taken to pay any expenses whatever in collecting or receiving the same before it is brought into the Treasury; but the said gross amount shall be accounted for, and all the said expenses of collecting and receiving the same shall be appropriated by law out of the Treasury, as in other cases of appropriation: Provided, That nothing herein contained shall be construed to prevent the transfer of public moneys from one place, or office, or officer to another; nor to repeal or modify any of the provisions of law relative to the Post Office Department.
Sec. 18. And be it further enacted, That if any member of the Exchequer Board, or any officer or clerk employed in its business or any of its agencies, or any collecting, receiving or disbursing officer or agent of the United States whatever, in any manner concerned in the collection, safe-keeping, transfer or disbursement of the public moneys of the United States, shall convert to his own use in any way, or shall use by way of investment in any kind of property or merchandise, or shall loan, with or without interest, any money or security deposited with or belonging to the said board or any of its agencies, or belonging to any other person or persons dealing or depositing with the said board or any agency, or shall convert to his own use, appropriate, or loan money or security belonging to the United States, or shall make any discount or exchange of funds other than an exchange for gold and silver, or shall make payments on account of the public service in any currency other than that furnished him and legalized by this act: every such transaction of such person is hereby declared to be felony, and on conviction thereof before any court of the United States of competent jurisdiction, every such officer or agent of the United States, and all the persons participating in such acts, shall be sentenced to imprisonment for a term not less than one year nor more than seven years, and to a fine equal to twice the amount or value of the property so embezzled.
Sec. 19. And be it further enacted, That if any officer or member of the Board of Exchequer, or of any of its agencies established under the provisions of this act, or of the mint, or any of its branches, shall give or sign a false certificate of a deposit having been made with any agency, mint, or branch mint, or shell issue or deliver any certificate, draft or bill of exchange without having received the full value thereof, and caused the receipt of the same to be duly entered in the books of said agency, mint or branch mint, or shall be guilty of any other wilful malpractice by which any responsibility of the said agency or of the Board of Exchequer, or of the United States, shall be improperly created or increased, he shall be deemed guilty of felony, and on conviction thereof in any court of the United States of competent jurisdiction, shall be sentenced to imprisonment for a term not less than one year nor more than seven years, and to a fine equal to the amount of the false certificate so given; or of the bill or draft so issued or delivered, or to the amount of the responsibility so created or increased.
Sec. 20. And be it further enacted, That if any person shall falsely make, forge, or counterfeit, or cause or procure to be falsely made, forged, or counterfeited, or willingly aid and assist in falsely making, forging, or counterfeiting any certificate in imitation of, or purporting to be, a certificate of deposit aforesaid, or shall falsely alter, or cause or procure to be falsely altered, or willingly aid or assist in falsely altering any certificate of deposit issued as aforesaid, or shall pass, utter or publish, or attempt to pass, utter, or publish as true any falsely altered certificate of deposit issued as aforesaid, knowing the same to be falsely altered, every such person shall be deemed and adjudged guilty of felony, and being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept to hard labor for a period not less than one year nor more than seven years, and be fined in a sum not exceeding five thousand dollars.
Sec. 21. And be it further enacted, That if any person shall make or engrave, or cause or procure to be made or engraved, or shall have in his possession or custody, any metallic plate, engraved after the similitude of any plate from which any certificates issued as aforesaid shall have been printed, with intent to use such plate, or to cause or suffer the same to be used in forging or counterfeiting any of the certificates issued as aforesaid, or shall have in his custody and possession any blank certificate or certificates engraved and printed after the similitude of any certificate issued aforesaid with intent to use such blanks, or cause or suffer the same to be used in forging or counterfeiting any of the certificates issued as aforesaid; or shall have in his custody or possession any paper adapted to the making of certificates, and similar to the paper upon which any such certificates shall have been issued, with intent to use such paper, or cause or suffer the some to be used in forging or counterfeiting any of the certificates issued as aforesaid, every such person, being thereof convicted, by due course of law, shall be sentenced to be imprisoned, and kept to hard labor for a term not less than one year nor more than seven years, and fined in a sum not exceeding five thousand dollars.