(Ed. Note:) FACT: the USA was OVER FLOWING with gold in 1836 due to General (President) Jackson's U.S. land sales. Although we know about the gold at Fort Knox today, did you know that the 26 states of the U.S.A. also received huge shipments of gold from the U.S. government in 1836 and 1837? So far, the fourth installment of the national gold surplus payment to the then 26 states of the USA, has never been made. Are the states complaining about that? I CAN'T HEAR YOU! I'm sure all that gold was spent. None of it is left, I'm sure.
—The revenues for the year (1837) were from six to ten millions short of the expenditures. The public funds already deposited with the states were unavailable, and there was another installment to be deposited on Oct. 1. The secretary recommended the withholding of this installment, and, in order to supply currency, an issue of treasury notes, the small denominations to bear no interest, and the large with interest. |
—A large party in congress were in favor of rechartering the bank of the United States. The advocates of treasury notes urged the issue principally upon the ground of necessity, there being no currency upon which the government could rely to make and receive payments. Many were in favor of a substitute to be issued by the proposed new bank of the United States. A bill was presented and passed by the senate. When it came to the house, objection was made that it was a money bill, which the senate had no constitutional right to originate. This point was not discussed, but the committee of ways and means presented their own bill, by which the issue of ten millions in treasury notes was authorized. The bill encountered much opposition, particularly from those in favor of authorizing a new bank, but passed the house on Oct. 9, 1837, by a vote of 127 to 98, which was a strict party vote. In the senate, the next day, Mr. Benton moved to make the lowest denomination of notes $100, instead of $50, as provided in the bill. He presented strong objections to the issue of treasury notes. Nothing but the fact that the government must otherwise stop for want of funds, would induce him to vote for paper money in time of peace. He particularly objected to the policy of reducing the denominations of paper currency. It was the most dangerous feature of the system, and would drive all specie from circulation. Mr. Clay spoke in favor of Mr. Benton's motion, and characterized the whole measure to be, to all intents and purposes, a great bank experiment, and alluded to the inconsistency of issuing, in time of profound peace, ten millions additional notes after decrying the banks for enlarging their circulation. Mr. Webster favored Mr. Benton's motion. It was lost by a vote of 25 to 16. The bill then passed by a vote of 35 to 6, both Mr. Benton and Mr. Webster voting for it, and Mr. Clay against it. This bill authorized the issue of treasury notes to an amount not exceeding ten millions, and in denominations not exceeding fifty dollars. The interest was not to exceed 6 per cent.; and they were to be payable, principal and interest, after one year from date, and were, for the first time, signed by the treasurer and countersigned by the register. They were to be issued in payment of the debts of the United States to any creditor who would receive them, and were to be receivable in payment of all debts and dues to the government. They were not reissuable, and the authority to issue terminated Dec. 31, 1838. The ten millions authorized were issued by Secretary Woodbury previous to July 1, 1838. About two millions were issued at the nominal rate of interest of 1 mill per cent.; three millions at 2 per cent.; and over four millions at 5 per cent. On account of the low rate of interest upon a large portion of the notes, the object for which they were issued, namely, to supply a circulating medium, was thwarted, for they were soon presented in payment of taxes, and over five millions were retired before the whole amount had been issued. |
—The whole amount which had been issued to December, 1838, was $15,709,801.01, and bore at different rates interest as follows: $6,888,809.60 bore interest at 6 per cent.; $4,280,273.72 bore interest at 5 per cent.; $2,784,844.73 bore interest at 2 per cent.; and $1,755,881.96 bore interest at 1 mill per cent. There had been redeemed, up to the same date, $7,955,250, leaving $7,754,560 outstanding. The authority to reissue expired with the year. |