Fourth, that the present administration, by acknowledgments emanating
from the highest and most authentic source, has succeeded to the
principles, plans, and policy, of the preceding administration, and
stands solemnly pledged to complete and perfect them.
The proofs on this subject are brief; but they are clear, direct, and
plenary. It is impossible for any unbiased mind to doubt for a moment
about them. You, sir, will be surprised, when I shall array them before
you, at their irresistible force. The first that I shall offer is an
extract from Mr. Van Buren’s letter of acceptance of the nomination of
the Baltimore convention, dated May 23d, 1835. In that letter he says:
‘I content myself, on this occasion, with saying, that I
consider myself the honored _instrument_, selected by the
friends of the present administration, _to carry out its
principles and policy_; and that, as well from inclination
as from _duty_. I shall, if honored with the choice of the
American people, endeavor generally to follow in the footsteps
of president Jackson; happy if I shall be able to _perfect the
work_ which he has so gloriously _begun_.’
Mr. Van Buren announces that he was the honored instrument selected by
the friends of the present administration, to carry out its principles
and policy. The honored instrument! That word, according to the most
approved definition, means _tool_. He was, then, the honored tool――to
do what? to promote the honor, and advance the welfare of the people of
the United States, and to add to the glory of his country? No, no; his
country was not in his thoughts. Party, party, filled the place in his
bosom which country should have occupied. He was the honored tool to
carry out the principles and policy of general Jackson’s administration;
and, if elected, he should, as well from inclination as from _duty_,
endeavor, generally, to tread in the footsteps of general Jackson;
happy if he should be able to perfect the work which he had so
gloriously begun. Duty to whom? to the country, to the whole people of
the United States? No such thing; but duty to the friends of the then
administration; and that duty required him to tread in the footsteps
of his illustrious predecessor, and to perfect the work which he had
begun! Now, the senate will bear in mind that the most distinguishing
features of general Jackson’s administration related to the currency;
that he had denounced the banking institutions of the country; that
he had overthrown the bank of the United States; that he had declared,
when that object was accomplished, only one half the work was completed;
that he then commenced war against the state banks, in order to finish
the other half; that he constantly persevered in, and never abandoned,
his favorite project of a great government treasury bank; and that
he retired from the office of chief magistrate, pouring out, in his
farewell address, anathemas against paper money, corporations, and
the spirit of monopoly. When all these things are recollected, it
is impossible not to comprehend clearly what Mr. Van Buren means, by
carrying out the principles and policy of the late administration. No
one can mistake that those principles and that policy require him to
break down the local institutions of the states, and to discredit and
destroy the paper medium which they issue. No one can be at a loss to
understand, that, in following in the footsteps of president Jackson,
and in perfecting the work which he begun, Mr. Van Buren means to
continue attacking, systematically, the banks of the states, and
to erect on their ruins, that great government bank, begun by his
predecessor, and which he is the honored instrument selected to
complete. The next proof which I shall offer is supplied by Mr. Van
Buren’s inaugural address, from which I request permission of the
senate to read the following extract.
‘In receiving from the people the sacred trust twice confided
to my illustrious predecessor, and which he has discharged so
faithfully and so well, I know that I cannot expect to perform
the arduous task with equal ability and success. But, _united as
I have been in his counsels_, a daily witness of his exclusive
and unsurpassed devotion to his country’s welfare, _agreeing
with him in sentiments_ which his countrymen have warmly
supported, and permitted to partake _largely_ of his confidence,
I may hope that somewhat of the same cheering approbation will
be found to attend upon my path.’
Here we find Mr. Van Buren distinctly avowing, what the American people
well knew before, that he had been united in the counsels of general
Jackson; that he had agreed with him in sentiments, and that he had
partaken largely of his confidence. This intimacy and confidential
intercourse could not have existed without the concurrence of Mr. Van
Buren in all those leading and prominent measures of his friend, which
related to the establishment of a government bank, the overthrow of
the bank of the United States, the attack upon the state institutions,
and the denunciation of the paper currency, the spirit of monopoly,
and corporations. Is it credible to believe that general Jackson should
have aimed at the accomplishment of all those objects, and entertained
all these sentiments, without Mr. Van Buren’s participation?
I proceed to another point of powerful evidence, in the conduct of
Mr. Van Buren, in respect to the famous treasury order. That order had
been promulgated, originally, in defiance of the opinion of congress,
had been continued in operation, in defiance of the wishes and will of
the people, and had been repealed by a bill passed at the last ordinary
session of congress, by overwhelming majorities. The fate of that
bill is well known. Instead of being returned to the house in which it
originated, according to the requirement of the constitution, it was
sent to one of the pigeon-holes of the department of state, to be filed
away with an opinion of a convenient attorney-general, always ready
to prepare one in support of executive encroachment. On the fifth of
March last, not a doubt was entertained, as far as my knowledge or
belief extends, that Mr. Van Buren would rescind the obnoxious order.
I appeal to the senator from Missouri, who sits near me, (Mr. Linn,) to
the senator from Mississippi, who sits furthest from me, (Mr. Walker,)
to the senator from Alabama, (Mr. King,) and to the whole of the
administration senators, if such was not the expectation of all of them.
Was there ever an occasion in which a new administration had so fine an
opportunity to signalize its commencement by an act of grace and wisdom,
demanded by the best interests and most anxious wishes of the people?
But Mr. Van Buren did not think proper to embrace it. He had shared too
largely in the confidence of his predecessor, agreed too fully with him
in sentiments, had been too much united with him in his counsels, to
rescind an order which constituted so essential a part of the system
which had been deliberately adopted to overthrow the state banks.
Another course pursued by the administration, after the catastrophe
of the suspension of specie payments by the banks, demonstrates the
hostile purposes towards them of the present administration. When a
similar event had occurred during the administration of Mr. Madison,
did he discredit and discountenance the issues of the banks, by
refusing to receive them in payment of the public dues? Did the state
governments, upon the former or the late occasion, refuse to receive
them in payment of the dues to them, respectively? And if irredeemable
bank notes are good enough for state governments and the people, are
they not good enough for the federal government of the same people?
By exacting specie, in all payments to the general government, that
government presented itself in the market as a powerful and formidable
competitor with the banks, demanding specie at a moment when the banks
were making unexampled struggles to strengthen themselves, and prepare
for the resumption of specie payments. The extent of this government
demand for specie does not admit of exact ascertainment; but when we
reflect that the annual expenditures of the government were at the rate,
including the post-office department, of about thirty-three millions
of dollars, and that its income, made up either of taxes or loans, must
be an equal sum, making together an aggregate of sixty-six millions,
it will be seen that the amount of specie required for the use of
government must be immensely large. It cannot be precisely determined,
but would not be less, probably, than fifteen or twenty millions of
dollars per annum. Now, how is it possible for the banks, coming into
the specie market in competition with all the vast power and influence
of the government, to provide themselves with specie, in a reasonable
time to resume specie payments? That competition would have been
avoided, if, upon the stoppage of the banks, the notes of those of
whose solidity there was no doubt, had been continued to be received in
payment of the public dues, as was done in Mr. Madison’s administration.
And why, Mr. President, should they not have been? Why should not this
government receive the same description of medium which is found to
answer all the purposes of the several state governments? Why should
they have resorted to the expedient of issuing an inferior paper medium,
in the form of treasury notes, and refusing to receive the better
notes of safe and solid banks? Do not misunderstand me, Mr. President.
No man is more averse than I am, to a permanent, inconvertible paper
medium. It would have been as a temporary measure only, that I should
have thought it expedient to receive the notes of good local banks.
If, along with that measure, the treasury order had been repealed, and
other measures adopted to encourage and coerce the resumption of specie
payments, we should have been much nigher that desirable event, than,
I fear, we now are. Indeed, I do not see when it is possible for the
banks to resume specie payments, as long as the government is in the
field, making war upon them, and in the market demanding specie.
Another conclusive evidence of the hostility to the state banks,
on the part of Mr. Van Buren, is to be found in that extraordinary
recommendation of a bankrupt law, contained in his message at the extra
session. According to all the principles of any bankrupt system with
which I am acquainted, the banks, by the stoppage of specie payment,
had rendered themselves liable to its operation. If the recommended law
had been passed, commissions of bankruptcy could have been immediately
sued out against all the suspended banks, their assets seized, and the
administration of them transferred from the several corporations to
which it is now intrusted, to commissioners appointed by the president
himself. Thus, by one blow, would the whole of the state banks have
been completely prostrated, and the way cleared for the introduction
of the favorite treasury bank; and is it not in the same spirit of
unfriendliness to those banks, and with the same view of removing all
obstacles to the establishment of a government bank, that the bill was
presented to the senate a few days ago by the senator from Tennessee,
(Mr. Grundy,) against the circulation of the notes of the old bank of
the United States? At a time when there is too much want of confidence,
and when every thing that can be done, should be done, to revive and
strengthen it, we are called upon to pass a law denouncing the heaviest
penalty and ignominious punishment against all who shall reissue the
notes of the old bank of the United States, of which we are told that
about seven millions of dollars are in circulation; and they constitute
the best portion of the paper medium of the country; the only portion
of it which has a credit every where, and which serves the purpose of
a general circulation; the only portion with which a man can travel
from one end of the continent to the other; and I do not doubt that
the senator who has fulminated these severe pains and penalties against
that best part of our paper medium, provides himself with a sufficient
amount of it, whenever he leaves Nashville, to take him to Washington.
[Here Mr. Grundy rose and remarked, no, sir; I always travel on
specie.]
Ah! continued Mr. Clay, my old friend is always _specieous_. I am quite
sure that members from a distance in the interior generally find it
indispensable to supply themselves, on commencing their journey, with
an adequate amount of these identical notes to defray its expenses. Why,
sir, will any man in his senses deny, that these notes are far better
than those which have been issued by that government banker, Mr. Levi
Woodbury, aided though he be by the chancellor of the exchequer, (I
beg his pardon, I mean the ex-chancellor,) the senator from New York,
(Mr. Wright?) I am not going to stop here to inquire into the _strict_
legality of the reissue of these notes; that question, together with
the power of the government to pass the proposed bill, will be taken up
when it is considered. I am looking into the motive of such a measure.
Nobody doubts the perfect safety of the notes; no one can believe that
they will not be fairly and fully paid. What, then, is the design of
the bill? It is to assail the only sure general medium which the people
possess. It is because it may come in competition with treasury notes
or other government paper. Sir, if the bill had not been proposed by
my old friend from Tennessee, I would say its author better deserved
a penitentiary punishment than those against whom it is directed. I
remember to have heard of an illustrious individual, now in retirement,
having, on some occasion, burst out into the most patriotic indignation,
because of a waggish trick played off upon him, by putting a note of
the late bank of the United States into his silk purse with his gold.
But it is unnecessary to dwell longer on the innumerable proofs of
the hostility against the state banks, and the deliberate purpose of
those in power to overthrow them. We hear and see daily, throughout the
country, among their partisans and presses, denunciations against banks,
corporations, rag barons, the spirit of monopoly, and so forth; and
the howl for gold, hard money, and the constitutional currency; and
no one can listen to the speeches of honorable members, friends of the
administration, in this house and the other, without being impressed
with a perfect conviction that he destruction of the state banks is
meditated.
I have fulfilled my promise, Mr. President, to sustain the first
four propositions with which I sat out. I now proceed to the fifth
proposition.
Fifth, that the bill under consideration is intended to execute
Mr. Van Buren’s pledge, to complete and perfect the principles, plans,
and policy, of the past administration, by establishing, upon the ruins
of the late bank of the United States and the state banks, a government
bank, to be managed and controlled by the treasury department, acting
under the commands of the president of the United States.
The first impression made by the perusal of the bill is the prodigal
and boundless discretion which it grants to the secretary of the
treasury, irreconcilable with the genius of our free institutions,
and contrary to the former cautious practice of the government. As
originally reported, he was authorized by the bill to allow any number
of clerks he thought proper to the various receivers-general, and to
fix their salaries. It will be borne in mind that this is the mere
commencement of a system; and it cannot be doubted that, if put into
operation, the number of receivers-general, and other depositaries
of the public money, would be indefinitely multiplied. He is allowed
to appoint as many examiners of the public money, and to fix their
salaries, as he pleases; he is allowed to erect at pleasure costly
buildings; there is no estimate for any thing; and all who are
conversant with the operations of the executive branch of the
government know the value and importance of previous estimates. There
is no other check upon wasteful expenditure but previous estimates; and
that was a point always particularly insisted upon by Mr. Jefferson.
The senate will recollect, that, a few days ago, when the salary of the
receiver-general at New York was fixed, the chairman of the committee
of finance rose in his place and stated, that it was _suggested_
by the secretary of the treasury, that it should be placed at three
thousand dollars; and the blank was accordingly so filled. There was no
statement of the nature or extent of the duties to be performed, of the
time that he would be occupied, of the extent of his responsibility,
or the expense of living at the several points where they were to be
located; nothing but the _suggestion_ of the secretary of the treasury,
and that was deemed all-sufficient by a majority. There is no limit
upon the appropriation which is made to carry into effect the bill,
contrary to all former usage, which invariably prescribed a sum not
to be transcended.
A most remarkable feature in the bill is that to which I have already
called the attention of the senate, and of which no satisfactory
explanation has been given. It is that which proceeds upon the idea,
that the treasury is a thing distinct from the treasure of the United
States, and gives to the treasury a local habitation and a name, in
the new building which is erecting for the treasury department in the
city of Washington. In the treasury, so constituted, is to be placed
that pittance of the public revenue which is gleaned from the District
of Columbia. All else, that is to say, nine hundred and ninety-nine
hundredths of the public revenue of the United States, is to be placed
in the hands of the receivers-general, and the other depositaries
beyond the District of Columbia. Now, the constitution of the United
States provides that no money shall be drawn from the public treasury,
but in virtue of a previous appropriation by law. That trifling portion
of it, therefore, which is within the District of Columbia, will be
under the safeguard of the constitution, and all else will be at the
arbitrary disposal of the secretary of the treasury.
It was deemed necessary, no doubt, to vest in the secretary of the
treasury this vast and alarming discretionary power. A new and immense
government bank is about to be erected. How it would work in all its
parts could not be anticipated with certainty; and it was thought
proper, therefore, to bestow a discretion commensurate with its novelty
and complexity, and adapted to any exigencies which might arise. The
tenth section of the bill is that in which the power to create a bank
is more particularly conferred. It is short, and I will read it to the
senate.
‘Section 10. And be it further enacted, that it shall be lawful
for the secretary of the treasury to transfer the moneys in the
hands of _any_ depositary hereby constituted, to the treasury
of the United States; to the mint at Philadelphia; to the
branch mint at New Orleans; or to the offices of either of the
receivers-general of public moneys, by this act directed to be
appointed; to be there safely kept, according to the provisions
of this act; and _also to transfer moneys in the hands of any
one depositary constituted by this act to any other depositary
constituted by the same_, AT HIS DISCRETION, and as the safety
of the public moneys, _and the convenience of the public
service_ shall seem to him to require. And for the purpose of
payments on the public account, it shall be lawful for the said
secretary _to draw upon any of the said depositaries, as he
may think most conducive to the public interests_, or to the
convenience of the public creditors, or both.’
It will be seen, that it grants a power, perfectly undefined, to the
secretary of the treasury, to shift and transfer the public money, from
depositary to depositary, as he pleases. He is expressly authorized to
transfer moneys in the hands of any one depositary constituted by the
act, to any other depositary constituted by it, _at his discretion_,
and as the safety of the public moneys, _and the convenience of
the public service_, shall seem to him to require. There is no
specification of any contingency or contingencies, on which he is to
act. All is left to his discretion. He is to judge when the public
service, (and more indefinite terms could not have been employed,)
shall seem to him to require it. It has been said, that this is nothing
more than the customary power of transfer, exercised by the treasury
department, from the origin of the government. I deny it; utterly deny
it. It is a totally different power from that which was exercised by
the cautious Gallatin, and other secretaries of the treasury――a power,
by-the-bye, which, on more than one occasion, has been controverted,
and which is infinitely more questionable than the power to establish
a bank of the United States. The transfer was made by them rarely, in
large sums, and were left to the banks to remit. When payments were
made, they were effected in the notes of banks with which the public
money was deposited, or to which it was transferred. The rates of
exchange were regulated by the state of the market, and under the
responsibility of the banks. But here is a power given to transfer
the public moneys without limit, as to sum, place, or time, leaving
every thing to the discretion of the secretary of the treasury, the
receivers-general, and other depositaries. What a scope is allowed in
the fixation of the rates of exchange, whether of premium or discount,
to regulate the whole domestic exchanges of the country, to exercise
favoritism? These former transfers were not made for disbursement, but
as preparatory to disbursement; and when disbursed, it was generally
in bank notes. The transfers of this bill are immediate payments, and
payments made not in bank notes, but specie.
The last paragraph in the section provides, that, for the purpose of
payments on the public account, it shall be lawful for the secretary
_to draw upon any of the said depositaries, as he may think most
conducive to the public interest_, or to the convenience of the public
creditors, or both. It will be seen, that no limit whatever is imposed
upon the amount or form of the draft, or as to the depositary upon
which it is drawn. He is made the exclusive judge of what is ‘most
conducive to the public interests.’ Now, let us pause a moment, and
trace the operation of the powers thus vested. The government has a
revenue of from twenty to thirty millions. The secretary may draw it
to any one or more points, as he pleases. More than a moiety of the
revenue arising from customs is receivable at the port of New York,
to which point the secretary may draw all portions of it, if he think
it conducive to the public interest. A man has to receive, under an
appropriation law, ten thousand dollars, and applies to Mr. Secretary
for payment. Where will you receive it? he is asked. On New York. How?
In drafts from five dollars to five hundred dollars. Mr. Secretary will
give him these drafts accordingly, upon bank note paper, impressed like
and simulating bank notes, having all suitable emblazonry, signed by my
friend the treasurer, (whose excellent practical sense, and solid and
sound judgment, if he had been at the head of the treasury, instead of
Mr. Levi Woodbury, when the suspension of specie payments took place,
would have relieved or mitigated the pecuniary embarrassments of the
government and the people,) counter-signed by the comptroller, and
filled up in the usual way of bank notes. Here is one of them, said
Mr. Clay. (He here held up, to the gaze of the senate, a treasury
note, having all the appearance of a bank note, colored, engraved, and
executed, like any other bank note, for fifty dollars.) This, continued
Mr. Clay, is a government _post_ note, put into circulation, paid out
as money, and prepared and sent forth, gradually to accustom the people
of this country to government paper.
I have supposed ten thousand dollars to be received in the mode
stated by a person entitled to receive it under an appropriation law.
Now, let us suppose what he will do with it. Any where to the south or
west it will command a premium of from two to five per centum. Nowhere
in the United States will it be under par. Do you suppose that the
holder of these drafts would be fool enough to convert them into specie,
to be carried and transported at his risk? Do you think that he would
not prefer that his money should be in the responsible custody of
the government, rather than in his own insecure keeping? Do you think
he will deny to himself the opportunity of realizing the premium of
which he may be perfectly sure? The greatest want of the country is
a medium of general circulation, and of uniform value every where.
That, especially, is our want in the western and interior states.
Now, here is exactly such a medium; and, supposing the government
bank to be honestly and faithfully administered, it will, during
such an administration, be the best convertible paper money in the
world, for two reasons. The first is, that every dollar of paper
out will be the representative of a dollar of specie in the hands of
the receivers-general, or other depositaries; and, secondly, if the
receivers-general should embezzle the public money, the responsibility
of the government to pay the drafts issued upon the basis of that money
would remain unimpaired. The paper, therefore, would be as far superior
to the paper of any private corporation as the ability and resources
of the government of the United States are superior to those of such
corporations.
The banking capacity may be divided into three faculties: deposits,
discount of bills of exchange, and promissory notes, or either, and
circulation. This government bank would combine them all, except that
it will not discount private notes, or receive private deposits. In
payments for the public lands, indeed, individuals are allowed to
make deposits, and to receive certificates of their amount. To guard
against their negotiability, a clause has been introduced to render
them unassignable. But how will it be possible to maintain such an
inconvenient restriction, in a country where every description of paper
importing an obligation to pay money or deliver property is assignable,
at law or in equity, from the commercial nature and trading character
of our people.
Of all the faculties which I have stated of a bank, that which
creates a circulation is the most important to the community at large.
It is that in which thousands may be interested, who never obtained a
discount, or made a deposit with a bank. Whatever a government agrees
to receive in payment of the public dues is a medium of circulation; is
money, current money, no matter what its form may be――treasury notes,
drafts drawn at Washington, by the treasurer, on the receiver-general
at New York, or, to use the language employed in various parts of this
bill, ‘such notes, bills, or paper, issued under the authority of the
United States.’ These various provisions were probably inserted not
only to cover the case of treasury notes, but that of these drafts in
due season. But if there were no express provision of law, that these
drafts should be receivable in payment of public dues, they would,
necessarily, be so employed, from their own intrinsic value.
The want of the community of a general circulation of uniform value
every where in the United States, would occasion vast amounts of the
species of draft which I have described to remain in circulation. The
appropriations this year will probably fall not much short of thirty
millions. Thirty millions of treasury drafts on receivers-general, of
every denomination, and to any amount, may be issued by the secretary
of the treasury. What amount would remain in circulation cannot
be determined _a priori_, I suppose not less than ten or fifteen
millions; at the end of another year, some ten or fifteen millions more;
they would fill all the channels of circulation. The war between the
government and state banks continuing, and this mammoth government bank
being in the market, constantly demanding specie for its varied and
ramified operations, confidence would be lost in the notes of the local
banks, their paper would gradually cease to circulate, and the banks
themselves would be crippled and broken. The paper of the government
bank would ultimately fill the vacuum, as it would instantly occupy the
place of the notes of the late bank of the United States.
I am aware Mr. President, that by the twenty-fifth section of the bill,
in order to disguise the purpose of the vast machinery which we are
about constructing, it is provided that it shall be the duty of the
secretary of the treasury, to issue and publish regulations to enforce
the speedy presentation of all government drafts for payment at the
place where payable, and so forth. Now, what a tremendous power is here
vested in the secretary! He is to prescribe rules and regulations to
enforce the _speedy_ presentation of all government drafts for payment
at the place where payable. The speedy presentation! In the case I
have supposed, a man has his ten thousand dollars, in drafts on the
receiver-general at New York. The secretary is empowered to enact
regulations requiring him speedily to present them, and if he do not,
the secretary may order them to be paid at St. Louis. At New York they
may be worth a premium of five per centum; on St. Louis, they may be
liable to a discount of five per centum. Now, in a free government, who
would ever think of subjecting the property or money of a citizen to
the exercise of such a power by any secretary of the treasury? What
opportunity does it not afford to reward a partisan, or punish an
opponent? It will be impossible to maintain such an odious and useless
restriction for any length of time. Why should the debtor, (as the
government would be, in the case of such drafts as I have supposed,)
require his creditor, (as the holder of the draft would be,) to
apply within a prescribed time for his payment? No, sir; the system
would control you; you could not so control the system. But if
such a ridiculous restriction could be continued, the drafts would,
nevertheless, whilst they were out, be the time long or short, perform
the office of circulation and money.
Let us trace a little further the operation of this government
bank, and follow it out to its final explosion. I have supposed
the appropriation of some thirty millions of dollars annually by the
government, to be disbursed in the form of drafts, issued at Washington
by the treasury department, upon the depositaries. Of that amount, some
ten or fifteen millions would remain, the first year, in circulation;
at the end of another year, a similar amount would continue in
circulation; and so on, from year to year, until, at the end of a
series of some five or six years, there would be in circulation, to
supply the indispensable wants of commerce and of a general medium of
uniform value, not less than some sixty or eighty millions of drafts,
issued by the government. These drafts would be generally upon the
receiver-general at New York, because on that point, they would be
preferred over all others, as they would command a premium, or be at
par, throughout the whole extent of the United States; and we have seen
that the secretary of the treasury is invested with ample authority to
concentrate at that point the whole revenue of the United States.
All experience has demonstrated, that in banking operations, a much
larger amount of paper can be kept out in circulation than the specie
which it is necessary to retain in the vaults to meet it when presented
for payment. The proportions which the same experience has ascertained
to be entirely safe, are one of specie to three of paper. If, therefore,
the executive government had sixty millions of dollars accumulated at
the port of New York, in the hands of the receiver-general, represented
by sixty millions of government drafts in circulation, it would be
known that twenty of that sixty millions would be sufficient to retain
to meet any amount of drafts, which, in ordinary times, would be
presented for payment. There would then remain forty millions in the
vaults, idle and unproductive, and of which no practical use could be
made. Well; a great election is at hand in the state of New York, the
result of which will seal the fate of an existing administration. If
the application of ten millions of that dormant capital could save, at
some future day, a corrupt executive from overthrow, can it be doubted,
that the ten millions would be applied to preserve it in power? Again;
let us suppose some great exigency to arise; a season of war, creating
severe financial pressure and embarrassment. Would not an issue of
paper, founded upon and exceeding the specie in the vaults, in some
such proportions as experience had demonstrated might be safely emitted,
be authorized? Finally, the whole amount of specie might be exhausted,
and then, as it is easier to engrave and issue bank notes, than
to perform the unpopular office of imposing taxes and burdens, the
discovery would be made, that the _credit_ of the government was a
sufficient basis whereupon to make emissions of paper money, to be
redeemed when peace and prosperity returned. Then we should have the
days of continental money, and of assignats, restored! Then we should
have that government paper medium which the senator from South Carolina,
(Mr. Calhoun,) considers the most perfect of all currency!
Meantime, and during the progress of this vast government machine,
the state banks would be all prostrated. Working well, as it may, if
honestly administered, in the first period of its existence, it will
be utterly impossible for them to maintain the unequal competition.
They could not maintain it, even if the government were actuated by
no unfriendly feelings towards them. But when we know the spirit which
animates the present executive towards them, who can doubt that they
must fall in the unequal contest? Their issues will be discredited and
discountenanced, and that system of bankruptcy which the president
would even now put into operation against them, will, in the sequel,
be passed and enforced without difficulty.
Assuming the downfall of the local banks――the inevitable consequence
of the operations of this great government bank; assuming, as I have
shown would be the case, that the government would monopolize the paper
issues of the country, and obtain the possession of a great portion
of the specie of the country, we should then behold a combined and
concentrated moneyed power, equal to that of all the existing banks
of the United States, with that of the late bank of the United States
superadded. This tremendous power would be wielded by the secretary of
the treasury acting under the immediate commands of the president of
the United States. Here would be a perfect union of the sword and the
purse; here would be no imaginary, but an actual, visible, tangible,
consolidation of the moneyed power. Who or what could withstand it? The
states themselves would become suppliants at the feet of the executive
for a portion of those paper emissions, of the power to issue which
they had been stripped, and which he now exclusively possessed.
Mr. President, my observation and experience have satisfied me, that
the safety of liberty and property consists in the division of power,
whether political or pecuniary. In our federative system, our security
is to be found in that happy distribution of power which exists between
the federal government and the state governments. In our monetary
system, as it lately existed, its excellence resulted from that
beautiful arrangement, by which the states had their institutions for
local purposes, and the general government its institution for the
more general purposes of the whole union. There existed the greatest
congeniality between all the parts of this admirable system. All was
homogeneous. There was no separation of the federal government from the
states or from the people. There was no attempt to execute practically,
that absurdity of sustaining, among the same people, two different
currencies of unequal value. And how admirably did the whole system,
during the forty years of its existence, move and work! And on the
two unfortunate occasions of its ceasing to exist, how quickly did the
business and transactions of the country run into wild disorder and
utter confusion!
Hitherto, I have considered this new project as it is, according to
its true nature and character, and what it must inevitably become. I
have not examined it as it is not, but as its friends would represent
it to be. They hold out the idea that it is a simple contrivance to
collect, to keep, and to disburse, the public revenue. In that view of
it, every consideration of safety and security, recommends the agency
of responsible corporations, rather than the employment of particular
individuals. It has been shown, during the course of this debate, that
the amount which has been lost by the defalcation of individuals has
exceeded three or four times the amount of all that has been lost by
the local banks, although the sums confided to the care of individuals
have not been probably one tenth part of the amount that has been in
the custody of the local banks. And we all know, that, during the forty
years of existence of the two banks of the United States, not one cent
was lost of the public revenue.
I have been curious, Mr. President, to know whence this idea
of receivers-general was derived. It has been supposed to have
been borrowed from France. It required all the power of that most
extraordinary man that ever lived, Napoleon Bonaparte, when he
was in his meridian greatness, to displace the farmers-general,
and to substitute in their place the receivers-general. The new
system requires, I think I have heard it stated, something like one
hundred thousand employees to have it executed. And, notwithstanding
the modesty of the infant promises of this new project, I have no
doubt that ultimately we shall have to employ a number of persons
approximating to that which is retained in France. That will
undoubtedly be the case whenever we shall revive the system of internal
taxation. In France, what reconciled them to the system was, that
Napoleon first, and the Bourbons afterwards, were pleased with the
immense patronage which it gave them. They liked to have one hundred
thousand dependents to add strength to the throne, which had been
recently constructed or reascended. I thought, however, that the
learned chairman of the committee of finance must have had some other
besides the French model for his receivers-general; and, accordingly,
upon looking into Smith’s history of his own state, I found, that, when
it was yet a colony, some century and a half ago, and when its present
noble capital still retained the name of New Amsterdam, the historian
says; ‘among the principal laws enacted at this session, we may mention
that for establishing the revenue, which was drawn into precedent. The
sums raised by it were made payable into the hands of receivers-general,
and issued by the governor’s warrant. By this means the governor became,
for a season, independent of the people, and hence we find frequent
instances of the assemblies contending with him for the discharge of
debts to private persons, contracted on the faith of the government.’
The then governor of the colony was a man of great violence of temper,
and arbitrary in his conduct. How the sub-treasury system of that day
operated, the same historian informs us in a subsequent part of his
work. ‘The revenue,’ he says, ‘established the last year, was at this
session continued five years longer than was originally intended. This
was rendering the governor independent of the people. For, at that
day, the assembly had no treasure, but the amount of all taxes went,
of course, into the hands of the receiver-general, who was appointed
by the crown. Out of this fund, moneys were only issuable by the
governor’s warrant, so that every officer in the government, from
Mr. Blaithwait, who drew annually five per centum out of the revenue,
as auditor-general, down to the meanest servant of the public, became
dependent, solely, of the governor. And hence we find the house, at
the close of every session, humbly addressing his excellency, for the
trifling wages of their own clerk.’ And, Mr. President, if this measure
should unhappily pass, the day may come, when the senate of the United
States will have humbly to implore some future president of the United
States to grant it money to pay the wages of its own sergeant-at-arms,
and doorkeeper.
Who, Mr. President, are the most conspicuous of those, who
perseveringly pressed this bill upon congress and the American people?
Its drawer is the distinguished gentleman in the white house, not far
off; its endorser is the distinguished senator from South Carolina,
here present. What the drawer thinks of the endorser, his cautious
reserve and stifled enmity prevent us from knowing. But the frankness
of the endorser has not left us in the same ignorance with respect to
his opinion of the drawer. He has often expressed it upon the floor of
the senate. On an occasion not very distant, denying to him any of the
nobler qualities of the royal beast of the forest, he attributed to him
those which belong to the most crafty, most skulking, and one of the
meanest of the quadruped tribe. Mr. President, it is due to myself
to say, that I do not altogether share with the senator from South
Carolina in this opinion of the president of the United States. I have
always found him, in his manners and deportment, civil, courteous,
and gentlemanly; and he dispenses, in the noble mansion which he now
occupies, one worthy the residence of the chief magistrate of a great
people, a generous and liberal hospitality. An acquaintance with him,
of more than twenty years’ duration, has inspired me with a respect
for the man, although, I regret to be compelled to say, I detest the
magistrate.
The eloquent senator from South Carolina has intimated that the course
of my friends and myself, in opposing this bill, was unpatriotic, and
that we ought to have followed in his lead; and, in a late letter of
his, he has spoken of his alliance with us, and of his motives for
quitting it. I cannot admit the justice of his reproach. We united, if,
indeed, there were any alliance in the case, to restrain the enormous
expansion of executive power; to arrest the progress of corruption; to
rebuke usurpation; and to drive the Goths and Vandals from the capital;
to expel Brennus and his horde from Rome, who, when he threw his sword
into the scale, to augment the ransom demanded from the mistress of
the world, showed his preference for gold; that he was a hard-money
chieftain. It was by the much more valuable metal of iron that he was
driven from her gates. And how often have we witnessed the senator from
South Carolina, with woful countenance, and in doleful strains, pouring
forth touching and mournful eloquence on the degeneracy of the times,
and the downward tendency of the republic? Day after day, in the senate,
have we seen the displays of his lofty and impassioned eloquence.
Although I shared largely with the senator, in his apprehension for
the purity of our institutions, and the permanency of civil liberty,
disposed always to look at the brighter side of human affairs, I was
sometimes inclined to hope that the vivid imagination of the senator
had depicted the dangers by which we were encompassed in somewhat
stronger colors than they justified. The arduous contest in which we
were so long engaged, was about to terminate in a glorious victory.
The very object for which the alliance was formed, was about to be
accomplished. At this critical moment the senator left us; he left us
for the very purpose of preventing the success of the common cause.
He took up his musket, knapsack, and shot-pouch, and joined the other
party. He went, horse, foot, and dragoon, and he himself composed the
whole corps. He went, as his present most distinguished ally commenced
with his expunging resolution, _solitary and alone_. The earliest
instance recorded in history, within my recollection, of an ally
drawing off his forces from the combined army, was that of Achilles,
at the siege of Troy. He withdrew with all his troops, and remained in
the neighborhood, in sullen and dignified inactivity. But he did not
join the Trojan forces; and when, during the progress of the siege,
his faithful friend fell in battle, he raised his avenging arm, drove
the Trojans back into the gates of Troy, and satiated his vengeance
by slaying Priam’s noblest and dearest son, the finest hero in the
immortal Iliad. But Achilles had been wronged, or imagined himself
wronged, in the person of the fair and beautiful Briseis. We did no
wrong to the distinguished senator from South Carolina. On the contrary,
we respected him, confided in his great and acknowledged ability, his
uncommon genius, his extensive experience, his supposed patriotism;
above all, we confided in his stern and inflexible fidelity.
Nevertheless, he left us, and joined our common opponents, distrusting
and distrusted. He left us, as he tells us in his Edgefield letter,
because the victory which our common arms were about to achieve, was
not to enure to him and his party, but exclusively to the benefit of
his allies and their cause. I thought that, actuated by patriotism,
(that noblest of human virtues,) we had been contending together for
our common country, for her violated rights, her threatened liberties,
her prostrate constitution. Never did I suppose that personal or party
considerations entered into our views. Whether, if victory shall ever
again be about to perch upon the standard of the spoils party, (the
denomination which the senator from South Carolina has so often given
to his present allies,) he will not feel himself constrained, by the
principles on which he has acted, to leave them, because it may not
enure to the benefit of himself and his party, I leave to be adjusted
between themselves.
The speech of the senator from South Carolina was plausible, ingenious,
abstract, metaphysical, and generalizing. It did not appear to me to
be adapted to the bosoms and business of human life. It was aërial, and
not very high up in the air, Mr. President, either, not quite as high
as Mr. Clayton was in his last ascension in his balloon. The senator
announced that there was a single alternative, and no escape from one
or the other branch of it. He stated that we must take the bill under
consideration, or the substitute proposed by the senator from Virginia.
I do not concur in that statement of the case. There is another course
embraced in neither branch of the senator’s alternative; and that
course is, to do nothing; always the wisest, when you are not certain
what you ought to do. Let us suppose that neither branch of the
alternative is accepted, and that nothing is done. What, then, would be
the consequence? There would be a restoration of the law of 1789, with
all its cautious provisions and securities, provided by the wisdom of
our ancestors, which has been so trampled upon by the late and present
administrations. By that law, establishing the treasury department, the
treasure of the United States is to be received, kept, and disbursed,
by the treasurer, under a bond with ample security, under a large
penalty fixed by law, and not left, as this bill leaves it, to the
uncertain discretion of a secretary of the treasury. If, therefore, we
were to do nothing, that law would be revived; the treasurer would have
the custody, as he ought to have, of the public money, and doubtless
he would make special deposits of it, in all instances, with safe and
sound state banks, as in some cases the secretary of the treasury is
now obliged to do. Thus, we should have in operation that very special
deposit system, so much desired by some gentlemen, by which the public
money would remain separate and unmixed with the money of banks. There
is yet another course, unembraced by either branch of the alternative
presented by the senator from South Carolina; and that is, to establish
a bank of the United States, constituted according to the old and
approved method of forming such an institution, tested and sanctioned
by experience; a bank of the United States, which should blend public
and private interests, and be subject to public and private control,
united together in such manner as to present safe and salutary checks
against all abuses. The senator mistakes his own abandonment of that
institution as ours. I know that the party in power has barricaded
itself against the establishment of such a bank. It adopted, at the
last extra session, the extraordinary and unprecedented resolution,
that the people of the United States should not have such a bank,
although it might be manifest that there was a clear majority of them
demanding it. But the day may come, and I trust is not distant, when
the will of the people must prevail in the councils of their own
government; and, when it does arrive, a bank will be established.
The senator from South Carolina reminds us that we denounced the pet
bank system; and so we did, and so we do. But does it therefore follow,
that, bad as that system was, we must be driven into the acceptance
of a system infinitely worse? He tells us that the bill under
consideration takes the public funds out of the hands of the executive,
and places them in the hands of the law. It does no such thing. They
are now without law, it is true, in the custody of the executive; and
the bill proposes by law to confirm them in that custody, and to convey
new and enormous powers of control to the executive over them. Every
custodary of the public funds, provided by the bill, is a creature
of the executive, dependent upon his breath, and subject to the
same breath for removal, whenever the executive, from caprice, from
tyranny, or from party motives, shall choose to order it. What safety
is there for the public money, if there were a hundred subordinate
executive officers charged with its care, whilst the doctrine of
the absolute unity of the whole executive power, promulgated by the
last administration, and persisted in by this, remains unrevoked and
unrebuked.
Whilst the senator from South Carolina professes to be the friend
of state banks, he has attacked the whole banking system of the
United States. He is their friend; he only thinks they are all
unconstitutional! Why? Because the coining power is possessed by the
general government, and that coining power, he argues, was intended to
supply a currency of the precious metals; but the state banks absorb
the precious metals, and withdraw them from circulation, and, therefore,
are in conflict with the coining power. That power, according to my
view of it, is nothing but a naked authority to stamp certain pieces
of the precious metals, in fixed proportions of alloy and pure metal,
prescribed by law, so that their exact value may be known. When that
office is performed, the power is _functus officio_; the money passes
out of the mint, and becomes the lawful property of those who legally
acquire it. They may do with it as they please, throw it into the ocean,
bury it in the earth, or melt it in a crucible, without violating any
law. When it has once left the vaults of the mint, the law-maker has
nothing to do with it, but to protect it against those who attempt to
debase or counterfeit, and, subsequently, to pass it as lawful money.
In the sense in which the senator supposes banks to conflict with the
coining power, foreign commerce, and especially our commerce with China,
conflict with it much more extensively. That is the great absorbent
of the precious metals, and is, therefore, much more unconstitutional
than the state banks. Foreign commerce sends them out of the country;
banks retain them within it. The distinguished senator is no enemy to
the banks; he merely thinks them injurious to the morals and industry
of the country. He likes them very well, but he nevertheless believes
that they levy a tax of twenty-five millions annually on the industry
of the country! Let us examine, Mr. President, how this enormous and
iniquitous assessment is made, according to the argument of the senator
from South Carolina. He states that there is a mass of debt due from
the community to the banks, amounting to four hundred and seventy-five
millions of dollars, the interest upon which, constituting about that
sum of twenty-five millions of dollars, forms the exceptionable tax.
Now, this sum is not paid by the whole community, but only by those
individuals who obtain discounts from the banks. They borrow money at
six per centum interest, and invest it in profitable adventures, or
otherwise employ it. They would not borrow it if they did not suppose
they could make profit by it; and the probability is, that they do
make profit by it. Instead, therefore, of there being any loss in the
operation, there is an actual gain to the community, by the excess of
profit made beyond six per centum interest, which they pay. What are
banks? They are mere organized agencies, for the loan of money, and the
transaction of monetary business; regulated agencies, acting under the
prescriptions of law, and subject to a responsibility, moral and legal,
far transcending that under which any private capitalist operates.
A number of persons, not choosing to lend out their money privately,
associate together, bring their respective capitals into a common stock,
which is controlled and managed by the corporate government of a bank.
If no association whatever had been formed, a large portion of this
capital, a large portion, therefore, of that very debt of four hundred
and seventy-five millions of dollars, would still exist, in the shape
of private loans. The senator from South Carolina might as well collect
the aggregate amount of all the mortgages, bonds, and notes, which
have been executed in the United States, for loans, and assert that the
interest paid upon the total sum, constituted a tax, levied upon the
community.
In the liquidation of the debt due to the banks from the community, and
from the banks to the community, there would not be as much difficulty
as the senator seems to apprehend. From the mass of debts due to the
banks are to be deducted, first, the amount of subscriptions which
constitute their capitals; secondly, the amount of deposits to the
credit of individuals in their custody; and, thirdly, the amount
of their notes in circulation. How easily will these mutual debts
neutralize each other! The same person, in numberless instances, will
combine in himself the relations both of creditor and debtor.
The only general operation of banks beyond their discounts and
deposits, which pervades the whole community, is that of furnishing a
circulation in redeemable paper, beyond the amount of specie to redeem
it in their vaults. And can it be doubted that this additional supply
of money furnishes a powerful stimulus to industry and production,
fully compensating any casual inconveniences, which sometimes,
though rarely, occur? Banks reduce the rate of interest, and repress
inordinate usury. The salutary influence of banking operations is
demonstrated in countries and sections of country where they prevail,
when contrasted with those in which they are not found. In the former,
all is bustle, activity, general prosperity. The country is beautified
and adorned by the noble works of internal improvement; the cities are
filled with splendid edifices, and the wharves covered with the rich
productions of our own or of foreign climates. In the latter, all is
sluggishness, slothfulness, and inactivity. England, in modern times,
illustrates the great advantages of banks, of credit, and of stimulated
industry. Contrast her with Spain, destitute of all those advantages.
In ancient times, Athens would present an image of full and active
employment of all the energies of man, carried to the highest point of
civilization, whilst her neighbor, Sparta, with her iron money, affords
another of the boasted benefits of metallic circulation.
The senator from South Carolina would do the banks no harm; but
they are deemed by him highly injurious to the planting interest!
According to him, they inflate prices, and the poor planter sells
his productions for hard money, and has to purchase his supplies at
the swollen prices produced by a paper medium. Now, I must dissent
altogether from the senator’s statement of the case. England, the
principal customer of the planter, is quite as much, if not more, a
paper country than ours. And the paper-money prices of the one country
are neutralized by the paper-money prices of the other country. If the
argument were true, that a paper-money country trades disadvantageously
with a hard-money country, we ought to continue to employ a paper
medium, to counterbalance the paper medium of England. And if we were
to banish our paper, and substitute altogether a metallic currency, we
should be exposed to the very inequality which has been insisted upon.
But there is nothing in that view of the matter which is presented by
the senator from South Carolina. If, as he asserts, prices were always
inflated in this country, beyond their standard in England, the rate
of exchange would be constantly against us. An examination, however,
into the actual state of exchange between the two countries, for
a long series of years, evinces that it has generally been in our
favor. In the direct trade between England and this country, I have no
doubt there is a large annual balance against us; but that balance is
adjusted and liquidated by balances in our favor in other branches of
our foreign trade, which have finally concentrated in England, as the
great centre of the commercial world.
Of all the interests and branches of industry in this country, none has
profited more by the use and employment of credit and capital derived
from banks and other sources, than the planting interest. It habitually
employs credit in all countries where planting agriculture prevails.
The states of Alabama, Mississippi, Arkansas, and Louisiana, have
almost sprung into existence, as it were, by magic, or, at least, have
been vastly improved and extended, under the influence of the credit
system. Lands, slaves, utensils, beasts of burden, and other supplies,
have been constantly bought, and still continue to be purchased, upon
credit; and bank agency is all essential to give the most beneficial
operation to these credits. But the argument of the senator from South
Carolina, which I am combating, would not be correct, if it were true
that we have inflated prices on this side of the Atlantic, without a
corresponding inflation of price on the other side; because the planter
generally selling at home, and buying at home, the proceeds of his
sale, whatever they may be, constitute the means by which he effects
his purchases, and consequently neutralize each other. In what do we
of the west receive payment for the immense quantity of live stock and
other produce of our industry, which we annually sell to the south and
southwest, but that paper medium now so much decried and denounced?
The senator from South Carolina is very fond of the state banks; but he
thinks there is no legitimate currency except that of the constitution.
He contends that the power which the government possesses to impose
taxes, restricts it, in their payment, to the receipt of the precious
metals. But the constitution does not say so. The power is given in
broad and unrestricted terms; and the government is left at liberty to
collect the taxes in whatever medium or commodity, from the exigencies
of the case, it can collect them. It is, doubtless, much the most
convenient to collect them in money, because that represents, or can
command, every thing, the want of which is implied by the power of
taxation. But suppose there was no money in the country; none, whatever,
to be extorted by the tax-gatherer from an impoverished people? Is
the power of government to cease, and the people to be thrown back
into a state of nature? The senator asks, if taxes could be levied and
collected in tobacco, in cotton, and other commodities? Undoubtedly
they could, if the necessity existed for such an inconvenient
imposition. Such a case of necessity did exist in the colony of
Virginia, and other colonies, prior to the revolution, and taxes were
accordingly levied in tobacco or other commodities, as wolf-scalps,
even at this day, compose a part of the revenue of more than one state.
The argument, then, of the senator, against the right of the government
to receive bank notes in payment of public dues, a practice coeval with
the existence of the government, does not seem to me to be sound. It is
not accurate, for another reason. Bank notes, when convertible at the
will of the holder into specie, are so much counted or told specie,
like the specie which is counted and put in marked kegs, denoting the
quantity of their contents. The senator tells us, that it has been only
within a few days that he has discovered that it is illegal to receive
bank notes in payment of public dues. Does he think that the usage of
the government, under all its administrations, and with every party
in power, which has prevailed for nigh fifty years, ought to be set
aside by a novel theory of his, just dreamed into existence, even if it
possess the merit of ingenuity? The bill under consideration, which has
been eulogized by the senator as perfect in its structure and details,
contains a provision that bank notes shall be received in diminished
proportions, during a term of six years. He himself introduced
that identical principle. It is the only part of the bill that is
emphatically his. How, then, can he contend that it is unconstitutional
to receive bank notes in payment of public dues? I appeal from himself
to himself. The senator further contends, that general deposits cannot
be made with banks, and be thus confounded with the general mass of the
funds on which they transact business. The argument supposes that the
money collected for taxes must be preserved in identity; but that is
impossible, often, to do. May not a collector give the small change
which he has received from one tax-payer, to another tax-payer, to
enable him to effect his payment? May he not change gold for silver,
or _vice versa_, or both, if he be a distant collector, to obtain an
undoubted remittance to the public treasury? What, Mr. President, is
the process of making deposits with banks? The deposit is made, and
a credit is entered for its amount to the government. That credit is
supposed to be the exact equivalent of the amount deposited, ready and
forthcoming to the government whenever it is wanted for the purposes
of disbursement. It is immaterial to the government whether it receives
back again the identical money put in, or other money of equal value.
All that it wants is, what it put in the bank, or its equivalent; and
that, in ordinary times, with such prudent banks as alone ought to be
selected, it is sure of getting. Again: the treasury has frequently
to make remittances to foreign countries, to meet the expenditure
necessary there for our naval squadrons, and other purposes. They
are made to the bankers, to the Barings or the Rothschilds, in the
form of bills of exchange, purchased in the market by the agents of
the government here, with money drawn out of the treasury. Here is
one conversion of the money received from the tax-gatherer into the
treasury. The bills are transmitted to the bankers, honored, paid, and
the amount credited by them to the United States. Are the bankers bound
to retain the proceeds of the bills in identity? Are they bound to do
more than credit the government for an equal amount, for which they
stand responsible, whenever it is wanted? If they should happen to
use any portion of those very proceeds of bills remitted to them in
their banking operations, would it be drawing money from the treasury,
contrary to the provisions of the constitution? The senator from South
Carolina contends, that there is no constitutional power to contract
with the twenty-five selected banks, as proposed in the substitute;
yet the deposit act of 1836, which obtained the hearty approbation of
that senator, contained a similar provision; and the very bill under
consideration, so warmly supported by him, provides, under certain
contingencies, for contracts to be made with state banks, to receive
deposits of the public money upon compensation. He objects to the
substitute, that it converts twenty-five state banks into a system of
federal institutions; but the employment of state institutions by the
federal authority, no more makes them federal, than the employment
of federal institutions by the states, converts them into state
institutions. This mutual aid, and this reciprocal employment of
the several institutions of the general and particular governments,
is one of the results and beauties of our admirable, though complex
system of government. The general government has the use of the capital,
court-houses, prisons, and penitentiaries, in the several states. Do
they, therefore, cease to appertain to the states? It is to be borne
in mind, that although the state banks may occasionally be used by the
federal authority, their legal responsibility to the several states
remains unimpaired. They continue to be accountable to them, and their
existence can only be terminated or prolonged by the state authority.
And being governed, as they are, by corporate authority, emanating
from, and amenable to, state jurisdiction, and not under the control
of the executive of the United States, constitutes at once a greater
security for the public money, and more safety to the public liberty.
It has been argued that a separation of the government from the
banks will diminish the executive power. It must be admitted that the
custody of the public money in various banks, subject to the control of
state authority, furnishes some check upon the possible abuses of the
executive government. But the argument maintains, that the executive
has least power when it has most complete possession of the public
treasury! The senator from South Carolina contends that the separation
in question being once effected, the relation of the federal government
and the state banks will be antagonistical. I believe so, Mr. President.
That is the very thing I wish to prevent. I want them to live in
peace, harmony, and friendship. If they are antagonists, how is it
possible that the state banks can maintain their existence against the
tremendous influence of this government? Especially, if this government
should be backed by such a vast treasury bank, as I verily believe this
bill is intended to create! And what becomes of the argument urged by
the senator from South Carolina, and the abolition resolutions offered
by him at an early period of the session, asserting that the general
government is bound to protect the domestic institutions of the several
states?
The substitute is not, I think, what the welfare of the country
requires. It may serve the purpose of a good half-way house. Its
accommodations appear fair; and, with the feelings of a wearied
traveller, one may be tempted to stop awhile, and refresh himself
there. I shall vote for it as an amendment to the bill, because I
believe it the least of two evils, if it should, indeed, inflict any
evil; or rather, because I feel myself in the position of a patient,
to whom the physician presents, in one hand, a cup of arsenic, and, in
the other, a cup of ptisan: I reject the first, because of the instant
death with which it is charged; I take the latter, as being, at the
most, harmless, and depend upon the _vis medicatrix natura_. It would
have been a great improvement, in my opinion, if the mode of bringing
about the resumption of specie payments, contained in the substitute,
were reversed: that is to say, if instead of fixing on the first of
July for resumption, it had provided that the notes of a certain number
of safe, sound, and unquestionable banks to be selected, should be
forthwith received, by the general government, in payment of all public
dues; and that, if the selected banks did not resume, by a future
designated day, their notes should cease to be taken. Several immediate
effects would follow: first, the government would withdraw from the
market as a competitor with the banks for specie, and they would be
left undisturbed to strengthen themselves. And, secondly, confidence
would be restored, by taking off the discredit, and discountenance
thrown upon all banks by the government. And why should these notes not
be so received? They are as good as treasury notes, if not better. They
answer all the purposes of the state governments and the people. They
now would buy as much as specie could have commanded at the period of
suspension. They could be disbursed by the government. And, finally,
the measure would be temporary.
But the true and only efficacious and permanent remedy, I solemnly
believe, is to be found in a bank of the United States, properly
organized and constituted. We are told that such a bank is fraught
with indescribable danger; and that the government must, in the sequel,
get possession of the bank, or the bank of the government. I oppose
to these imaginary terrors the practical experience of forty years.
I oppose to them the issue of the memorable contest, commenced by
the late president of the United States, against the late bank of the
United States. The administration of that bank had been without serious
fault. It had given no just offence to the government, towards which
it had faithfully performed every financial duty. Under its able and
enlightened president, it had fulfilled every anticipation which had
been formed by those who created it. President Jackson pronounced
the edict that it must fall, and it did fall, against the wishes of
an immense majority of the people of the United States; against the
convictions of its utility entertained by a large majority of the
states; and to the prejudice of the best interests of the whole country.
If an innocent, unoffending, and highly beneficial institution could
be thus easily destroyed by the power of one man, where would be the
difficulty of crushing it, if it had given any real cause for just
animadversion? Finally, I oppose to these imaginary terrors the example
deducible from English history. There a bank has existed since the
year 1694, and neither has the bank got possession of the government,
nor the government of the bank. They have existed in harmony together,
both conducing to the prosperity of that great country; and they have
so existed, and so contributed, because each has avoided cherishing
towards the other that wanton and unnecessary spirit of hostility which
was unfortunately engendered in the bosom of the late president of the
United States.
I am admonished, sir, by my exhausted strength, and by, I fear, your
more exhausted patience, to hasten to a close. Mr. President, a great,
novel, and untried measure, is perseveringly urged upon the acceptance
of congress. That it is pregnant with tremendous consequences, for good
or evil, is undeniable, and admitted by all. We firmly believe that
it will be fatal to the best interests of this country, and ultimately
subversive of its liberties. You, who have been greatly disappointed
in other measures of equal promise, can only hope, in the doubtful and
uncertain future, that its operation may prove salutary. Since it was
first proposed at the extra session, the whole people have not had an
opportunity of passing in judgment upon it at their elections. As far
as they have, they have expressed their unqualified disapprobation.
From Maine to the state of Mississippi, its condemnation has
been loudly thundered forth. In every intervening election, the
administration has been defeated, or its former majorities neutralized.
Maine has spoken; New York, Pennsylvania, Maryland, Ohio, Rhode Island,
Mississippi, and Michigan, all these states, in tones and terms not
to be misunderstood, have denounced the measure. The key-stone state
(God bless her) has twice proclaimed her rejection of it; once at
the polls, and once through her legislature. Friends and foes of the
administration have united in condemning it. And, at the very moment
when I am addressing you, a large meeting of the late supporters of
the administration, headed by the distinguished gentleman who presided
in the electoral college which gave the vote of that patriotic state
to president Van Buren, are assembling in Philadelphia, to protest
solemnly against the passage of this bill. Is it right that, under
such circumstances, it should be forced upon a reluctant but free
and intelligent people? Is it right that this senate, constituted as
it now is, should give its sanction to the measure? I say it in no
disrespectful or taunting sense, but we are entitled, according to the
latest expressions of the popular will, and in virtue of manifestations
of opinion, deliberately expressed by state legislatures, to a vote of
thirty-five against the bill; and I am ready to enter, with any senator
friendly to the administration, into details to prove the assertion.
Will the senate, then, bring upon itself the odium of passing this
bill? I implore it to forbear, forbear, forbear! I appeal to the
instructed senators. Is this government made for us, or for the people
and the states whose agents we are? Are we not bound so to administer
it as to advance their welfare, promote their prosperity, and give
general satisfaction? Will that sacred trust be fulfilled, if the
known sentiments of large and respectable communities are despised and
contemned by those whom they have sent here? I call upon the honorable
senator from Alabama, (Mr. King,) with whom I have so long stood in
the public councils, shoulder to shoulder, bearing up the honor and
the glory of this great people, to come now to their rescue. I call
upon all the senators; let us bury deep and for ever the character of
the partisan, rise up patriots and statesmen, break the vile chains
of party, throw the fragments to the winds, and feel the proud
satisfaction that we have made but a small sacrifice to the paramount
obligations which we owe our common country.