(CIRCULAR)
TREASURY DEPARTMENT, 22d July, 1816
SIR:
BY the Constitution and Laws of the United
Sates, current as a legal tender in all cases
whatsoever.
By particular Acts of Congress, Treasury
Notes issued by the government, and notes
issued by the Bank of the United States, are
made receivable in all payments to the United
States.
But in consequence of the suspension of
payments in coin, at many of the principal
State Banks, the lawful money of the United
States suddenly ceased to be a circulating
medium, and the Treasury Notes issued by the
government, having suffered an undue
depreciation, the government as well as
private citizens, yielded to the necessity of
receiving and paying the notes of the State
Banks, as a national currency.
The State Banks have hitherto excused the
suspension of their payments in coin, upon the
alleged necessity of the act; and assurances
have been given, repeatedly, that preparations
were making to resume those payments.
The effect of such preparations has not,
however, become visible; and an apprehension
has at length been excited in the public mind,
that the temptation of profit, according to
the present irregular course of banking, is
too great, to admit of voluntary return to the
legitimate system of banking, upon the basis
of a metallic capital.
The Banks of the New England states,
(which have always paid their own notes in
coin) are ready and willing to co-operate in
the general revival of the metallic currency.
The Banks in the States to the South, and to
the West, of Maryland, are ready and willing,
it is believed, to co-operate in the same
measure. The objection, or the obstacle, to
the measure, principally rests with the Banks
of the middle States; but the most important
of these Banks have converted their
unproductive capital of Gold and Silver, into
the productive capital of Public Stock, and a
restoration of the metallic capital is alone
wanting to enable them, also, to resume their
payments in coin.
Under these circumstances, it will not be
doubted by any candid and intelligent citizen,
that a simultaneous and uniform movement of
the State Banks, would, at this period be
successful, in the revival of the public
confidence, and the restoration of the lawful
currency of the United States. An appeal is,
therefore, made to these Banks; in the hope
and confidence, that they will adopt a policy
dictated by their own real and permanent
interests, as well as by the justice due to
the community.
By a resolution of Congress, passed on the
29th of April, 1816, it is declared, that
"from and after the 20th day of February next,
no duties, taxes, debts, or sums of money
accruing, or becoming payable to the united
States, ought to be collected, or received,
otherwise then in the legal currency of the
united States, or Treasury Notes, or Notes of
the Bank of the United States, or in Notes of
Banks, which are payable and paid on demand,
in the said legal currency of the United
States."
But in addition to this positive
limitation, the Resolution "requires and
directs the Secretary of the Treasury to
adopt such measures, as he may deem necessary,
to cause as soon as may be, all such
duties, taxes, debts, or sums of money, to be
collected and paid in the legal currency of
the United States, or Treasury Notes, or Notes
of the Bank of the United States, as by law
provided and declared; or in Notes of Banks,
which are payable, and paid, on demand in the
legal currency of the United States." After
the 20th of February 1817, therefore, the
Revenue must be collected in the mode
prescribed; but even previously, the Secretary
of the Treasury is required and directed to
pursue the proper measures, for an earlier
establishment of that mode of collection.
It is the sincere desire of this
department, to execute the duty thus assigned
to it, in a manner the most convenient and
acceptable to the State Banks, and, indeed,
rather to invite the Banks to a spontaneous
adoption of the measures, which appear to be
necessary upon the occasion, than to proceed
by the mere force of official regulations. In
the draft of a Treasury Notice, which
accompanies this communication, and which you
will consider in the light of an amicable
proposition, the views of the Department are
conveyed, as to the incipient and preparatory
steps, that may, I think, be safely taken,
with reference to a general resumption of
payments in coin, on the 20th of February
next. If the State Banks concur in the
opinion, so far as their interests and
operations are affected, their voluntary
assent to the arrangement, will undoubtedly
produce the most beneficial consequences, and
I shall proceed to announce it in official
form. Permit me, therefore, to request an
early communication of the decision of your
Bank upon the subject.
The present opportunity is embraced to
repeat the assurances, which have been
uniformly given and maintained, that this
department deems the fiscal interests of the
Government, and the successful operations of
the Bank of the United States, to be
intimately connected with the credit and
prosperity of the State Banks. Upon just and
efficient principles of co-operation, it is
hoped that the institutions, Federal and
State, will be mutually serviceable. From the
State Banks, a sincere and effectual exertion,
in the common cause of restoring the legal
currency, is certainly expected and required;
but, in return, they will merit and receive
the confidence of the Treasury and the
National Bank; the transfer of Public Funds,
from the State Banks to the National Bank and
its Branches, will be gradual; and the Notes
of the State Banks will be freely circulated
by the Treasury and the National Bank.
I am, very respectfully,
Sir,
Your Most Obedient Servant,
A. J. Dallas
To
the President of the Bank of
Warren
DRAFT OF A NOTICE,
PRESENTED FOR THE CONSIDERATION OF THE STATE
BANKS
TREASURY DEPARTMENT, JULY, 1816.
WHEREAS, by a Resolution of Congress,
passed on the 29th of April, 1816, the
Secretary of the Treasury is required and
directed to adopt such measures, as he may
deem necessary, to cause, as soon as may be,
all duties, taxes, and debts, or sums of money
accruing or becoming payable to the United
States, to be collected and paid in the legal
currency of the United States, or Treasury
Notes, or Notes of the Bank of the United
States, as by law provided and declared, or in
Notes of Banks, which are payable and paid on
demand in the legal currency of the United
States; And it is further by the said
Resolution of Congress declared, that from and
after the 20th day of February, 1817, no such
duties, taxes, debts, or sums of money, ought
to be otherwise collected or received, than in
the manner aforesaid.
And whereas it is deemed expedient and
necessary to adopt measures preparatory to the
general restoration of the legal currency of
the united States, contemplated by the said
Resolution of Congress, as well as to
facilitate the collection of the Revenue, as
soon as may be, in the manner therein
specified:-----
NOTICE IS THEREFORE GIVEN, AS FOLLOWS:
1st. That from and after the 1st day of
October next, Bank Notes of the denomination
of Five Dollars, and under, shall not be
received in any payments to the United States,
for debts, duties, or taxes, unless such Notes
are payable and paid on demand in the legal
currency of the United states, by the Banks
respectively issuing the same.
2nd. That from and after the 1st day of
October next, Bank Notes of whatever
denomination issued by any Bank, which does
not pay upon demand, its Notes of the
denomination of Five Dollars and under, in the
legal currency of the united States, shall not
be received in any payments to the United
States, for debts, duties, or taxes.
3rd. That from and after the 1st day of
October next, all sums of money accruing or
payable to the United States, for the purchase
of public lands, or other debts, or for duties
of import and tonnage of the amount of Five
Dollars, shall be paid and collected in the
legal currency of the United States, in
Treasury notes, in the Notes of the Bank of
the United States, or in Notes of Banks which
are payable and paid on demand, in said legal
currency of the united States, and not
otherwise.
4th. That from and after the 1st day of
October next, all sums of money accruing and
payable to the United states on account of
internal revenue, or direct tax, of the amount
of One Dollar and under, and all fractions of
such last mentioned sums of money, not
exceeding the amount of One dollar, shall be
paid and collected in the legal currency of
the United states, in Treasury Notes, in the
Notes of the Bank of the United States, or in
Notes of Banks, which are payable and paid on
demand, in the said legal currency of the
united States, and not otherwise.
5th. That from and after the 20th day of
February, 1817, all duties, taxes, debts, or
sums of money accruing or becoming payable to
the United States, shall be paid and collected
in the legal currency of the United States, or
Treasury Notes, or Notes of the Bank of the
United States, or in Notes of Banks, which are
payable and paid on demand, in the said legal
currency of the United States.
And all Collectors and Receivers of public
money, are required to pay due attention to
the Notice hereby given, and to govern
themselves, in the collection and receipt of
the public dues, duties, and taxes,
accordingly. |