DATE: February 22, 1838 

TOWN: Augusta, Maine 

SOURCE: The Age

Debate on the Small Bill Law. -- The question being on the adoption of the amendment offered by Mr. ROBINSON of Hancock, viz: to strike out of  the 1st section of Mr. GREENE'S substitute for the House Bill, the words "suspended for two years," &c, and insert in lieu thereof the word "repeal," -- 

Mr. EMERY rose and said -- 
 
Mr. PRESIDENT: -- Before the Small Bill Law went into operation, the currency of our State consisted mostly of paper. The Legislature of 1835, alarmed in view of this fact, enacted the law in question, to remedy as far as possible, this defect, by the progressive suppression of Bank bills of small denominations; and obliging the Banks to supply the vacuum created by their withdrawal, with specie. This measure, though it lessened to an extent Bank profits, was intended to place those institutions on safe foundation, and to give to the public additional guaranty against failures arising from the excessive and ill-advised issues to which the idea of large dividends too often stimulate those interested therein to resort. This was the express object of the law. Now by what other mode could this end have been attained, better than by the means which was adopted, by the framers of the law? All then, as now admitted, that something was necessary to be done in relation to our paper system currency. No other mode was then, as now, proposed. And, he believed, that it was the only means by which we could reasonably hope to accomplish the desired reform--he repeated that the gradual suppression of Small Bills was the only practicable measure for the reformation of the currency -- the only means by which we could check over-issues of Banks -- the only measure by which we could keep in circulation any thing like a respectable quota of specie. -- It may be said, compel the Banks to keep on hand a due proportion of specie -- restrict them &c. He would ask if those measures have not proved abortive. Have not all your thousand restrictions on Bank issues failed? All your requisitions compelling banks to keep in their vaults a certain amount of specie proved futile? Have not all your guards by which you have hedged your Banks round been vain? They have all been evaded -- and sometimes openly disregarded. Banks can only be compelled to provide themselves with an amount of specie adequate to their own safety and that of the public, but by prohibiting them from issuing bills of small denominations. The Legislature, or that part of it, which projected and carried through the measure, was aware of this fact. It was a settled principle, and they regarded it as such, that specie and Bank Bills of the same denominations cannot circulate together. The latter will inevitably drive the former out of circulation, and it will go where its value will be just appreciated. They cannot subsist together and paper remain at the par of specie. This proposition has become an axiom in political economy--it is admitted by all writers on the currency, who lay claim to any knowledge of the subject. To us, experience had demonstrated its truth. Was it not a fact that specie was scarce and small bills plenty before the law took effect? None would deny it. Was it not equally true, that after the law went into operation specie was comparatively plenty and hardly a small bill was to be seen? He thought this could not with truth be denied. Now, he would ask, what did all this prove, but the efficiency of the law to accomplish the object for which it was enacted? Indeed it proved most conclusively the "wisdom and policy" of the measure, in regard to the necessity of its creation, as well as with reference to the expediency of continuing in operation its salutary and wholesome provisions. 

It had been said by gentlemen, that this law was never in good odor with the people -- that it was always regarded by them with disfavor and want of respect -- that they never called for its enactment, and that they always desired its repeal. -- Now what was the fact on this head? Not a petition was before the Legislature of 1836 -- and in that year, the representatives coming directly and fresh from the people, deemed that public sentiment demanded, and they accordingly passed additional prohibitions and restrictions in furtherance of the law of 1835. Was this evidence of its being in bad odor with the people? How was it in the next year? In 1837, but one petition--one single petition, was presented at that session for the repeal of this law;--and how was it received -- what was its fate--what its treatment. He would tell gentlemen. It was referred to the "Committee on Leave of Absence!" 

Again--it has been said this law was gotten up for political purposes. It was not true. But it was true that the law found all its support in the democratic ranks -- it originated with that party; and, this fact induced all the opposition in 1835 to turn against it, and to resist its passage. And they have from the very beginning up to the present time, thrown all the obstacles in the way to prevent its observance by the people they could raise. They have kept up the most systematic warfare against it -- they have denounced it on all occasions, in the Newspapers, and in stump speeches--at conventions and other places--they have recommended and encouraged its open violation. Never has there been a more relentless and unmitigated denunciation of any measure. But with all their drilling and marshalling of their forces, with all drumming up of recruits, and with all their sending out of emissaries to get up petitions for its repeal, they have been able to muster only from five to eight thousand -- the larger number being only about one-twelfth of the actual votes thrown in the State. These petitions are said to be the voice of the people -- that the people demand the repeal, the immediate repeal of this law; and accompanying this declaration, is the threat, "disobey that once if you dare!" There was nothing so very imposing in those six or eight thousands petitions, as to create terror in his mind. He would venture to assert, that even since the suspension, if as much exertion had been used to get up remonstrances again, as there was to obtain petitions for the repeal, there might have been procured an equal number of names. 

He believed that this law was satisfactory to the people of this State before the suspension. It worked well--there was specie enough--and people felt very little inconvenience from its operation. But when the Banks suspended the state of things was changed. The Banks held on to all the specie they had, and would not emit a single dollar. What there was in circulation, was either seized upon by the Banks, or bought up and sent off and sold a premium. We had no other alternative than to take small bills of other States; it was impossible to get along without doing so. This was no fault of the measure itself. But gentlemen come forward and very sagaciously remark, that the law is inoperative, that it is disregarded, and that it ought to be repealed. It was admitted on all hands that the object was in part defeated by the suspension of specie payments. And it has been thought advisable to suspend it for a limited period in order to drive out the small bills of the Banks of other States, and replace them by our own more safe bills. But some gentlemen contend that nothing short of an unconditional repeal will satisfy their minds. Now I ask those gentlemen if this was be wholly repealed, whether it will not defeat the very object which they profess to have a desire to accomplish, viz. to drive out the shin-plasters that now compose the circulation under five dollars? If those parts of the present law which related to small bills of other States being issued by the Banks of our own, be repealed, whether the shin-plasters, the presence of which they profess so much to deprecate, will not be as plenty as they now are? He thought that such would be the case. Let foreign small bills be allowed to circulate in this State, and it was useless to talk about getting rid of them.-- The Banks of other States can afford to let money, consisting of small bills, at 5 per cent, better than they can their large bills at 6 -- because they will not return upon them so soon. If people of this State can hire money for five per cent in Massachusetts, when they have to pay six per cent here, they will do it. Now, if there is any benefit to be derived from loaning money, it should be given to our Banks in preference to any others. If we must have small bills, let us have them exclusively of Banks in our own State, whose character and solvency are known to use, and not permit Banks elsewhere to flood us with their small notes whose standing we know nothing of. If gentlemen would stop at a repeal of this law so far as our own Banks were concerned, they would show more consistency than they now do. 

In the discussion of the propriety of the repeal of this law, gentlemen have gone largely into the causes of the present deranged state of the currency, and have laid whole load at the door of the administration. He thought the load belonged in a very different quarter. He should not, however, discuss at large at this time the subject; but would only remark, that it was his opinion that there had been a little too much buying and selling of property, without adding to the value of it by the transaction -- too much speculating in stocks -- in timber lands - in house and fancy lots - in granite ledges, gold mines, rocks, sticks and stones -- and too little done in the way of useful employment and honest industry, to be of any very material benefit to the state of the currency, or the lasting prosperity of the country. And he would merely suggest the idea to the candor of gentlemen, whether the causes he had just enumerated had not contributed, more than any thing else, to the derangement of the currency, of which so much had been said? Whether they did not really think these causes had more instrumentality in launching the country into its present state of indebtedness, than the "removal of the deposits," and the "specie circular: into the bargain? 

He believed the small bill law a good law -- he thought the "policy" a good one, and well calculated to improve and add to the stability of the currency, and increase the safety of the public, for which objects it was intended -- and he would never yield it up. He would consent, though reluctantly, to its temporary suspension -- for the purpose of displacing the unsound bills of foreign Banks, to give the people our own, they being thought safer. But if gentlemen were determined to repeal the law altogether -- both so far as regards our own Banks, as well as the prohibition of the circulation of bills of other States, in this State; the very object which we all profess to have in view will be defeated; and in that event, he could not and would not consent to any alteration of the law. it is said, repeal the law and when the time comes at which it is thought advisable that it should be in force again, it will be just as easy to re-enact it as to revive it. But the total repeal, as he said before, would defeat the object that the suspension was designed to accomplish. Besides, when we should propose to revive it, we should be met with the exclamation--what, revive that "odious" law--a law which the Legislature of '38 abandoned, &c.? It would furnish a good pretext for them to declare that the law failed--and that we abandoned it because we were satisfied that it would not work well. He had no idea of abandoning it--and he was never more satisfied of the wisdom of the measure than it this moment. 

The gentleman from Kennebec (Mr. Dumont), had said that the people demanded an unconditional repeal of this law; and that if we did not repeal it, "the places which now know us will soon know us no more, forever!" He doubtless got the idea that the people demanded a repeal, by being continually surrounded with hordes of office seekers, and hearing their clamors and shouts against it. -- It was not at all surprising that the gentleman should have been misled on this point; and that he should, if he went against a repeal, tremble lest "the place which now know him should know him no more." Such was the unparalleled numbers who had gathered about the capitol, that it was not surprising that the gentleman should think the people were coming. They had raised such a hue and cry in his ears, they had cried in so loud a voice, "down with the small bill law," the gentleman really thought the people had come up to us and demanded its repeal. But the people have not come yet -- they are at home attending to their business -- the people seldom flock about the halls of Legislation; and the gentleman has been led into a very common error of his party -- in mistaking the voice of the office seekers, for the voice of the people. 

The cry of down with the Small Bill Law, was the only qualification that was necessary to entitle their claims for office to consideration  -- and the one who could cry the loudest was sure to be the successful individual. But he would repeat it, the people have not come yet -- but he could tell the gentleman when they might be expected -- look out for them next September -- they will come up to the polls - and they will speak so audibly that none will mistake their voice. Those who now set in high places when they see the people coming, may well have reason to ejaculate "the place which now know them will soon know them no more, forever." 

To return. We must have more specie -- and he would ask how are we to get it but by prohibiting the issues of small bills. Did the framers of the Constitution, mean anything, when they said that "nothing but gold and silver should be a legal tender in payment of debts." Has not that phrase become, practically, a dead letter? Ought this state of things to exist? He thought not. He thought something out to be done to enlarge our present amount of specie. He did not ask for an "exclusive metallic currency,: but he did wish for such a quantity of specie, and would render our mixed currency less liable to ruinous fluctuations. And as a means to the attainment of this object; he hoped the measure would be continued in operation. 

Mr. E. said, we find our currency deranged -- ourselves literally overwhelmed with shin plasters; a rag currency, an irredeemable paper currency fastened upon us for the time being. It was, he took it, the desire of all to get rid of this state of things. But will a repeal of this law effect a reform of the evils under which we find ourselves place. He thought not. The best way to get our country out of debt and remove these evils, was to attend more closely to business, to attend to our accustomed avocations, and do less trafficking in all kinds of commodity. The agriculturist must go back to his farm; and the mechanic to his work shop. 

The resumption of specie payments was all that was needed to place us on our legs again, and do away with these shin plasters. He would go for a suspension for a limited time. He wished to have it revived as soon as it had accomplished the end proposed. He hoped, that not only five dollar bills would be prohibited, but the law should be made to go as high as to include tens; so as to give a chance for the highest American gold coin to circulate, the eagle, which is $10. The currency will not then be liable to such disastrous expansions and contractions. Then the gentleman from Hancock will have an opportunity of seeing the "yellow boys" shining through the interstices of the long silken purses, he spoke about; but until he abandons his present course and small bills are prohibited, he never will see it. 

In conclusion, Mr. E. said, he hoped the substitute of the gentleman from Cumberland would be permitted to pass without amendment. He hoped the law would be suspended but for a limited period. He did not think that either his constituents or the interests of the public required a repeal of this law. And he did not think it of so much consequence whether "the seats that now know us will know us again," as to feel the conviction that we have discharged our duty conscientiously.