ACTUAL SUSPENSION OF THE BANKS: PROPAGATION OF THE ALARM.
None of the public meetings, and there were many following the
leading one in New York, recommended in terms a suspension of specie
payments by the banks. All avoided, by concert or instinct, the
naming of that high measure; but it was in the list, and at the head
of the list, of the measures to be adopted; and every thing said or
done was with a view to that crowning event; and to prepare the way
for it before it came; and to plead its subsequent justification by
showing its previous necessity. It was in the programme, and bound
to come in its appointed time; and did--and that within a few days
after the last great meeting in New York. It took place quietly
and generally, on the morning of the 10th of May, altogether, and
with a concert and punctuality of action, and with a military and
police preparation, which announced arrangement and determination;
such as attend revolts and insurrections in other countries. The
preceding night all the banks of the city, three excepted, met
by their officers, and adopted resolutions to close their doors
in the morning: and gave out notice to that effect. At the same
time three regiments of volunteers, and a squadron of horse, were
placed on duty in the principal parts of the city; and the entire
police force, largely reinforced with special constables, was on
foot. This was to suppress the discontent of those who might be
too much dissatisfied at being repulsed when they came to ask for
the amount of a deposit, or the contents of a bank note. It was
a humiliating spectacle, but an effectual precaution. The people
remained quiet. At twelve o'clock a large mercantile meeting took
place. Resolutions were adopted by it to sustain the suspension,
and the newspaper press was profuse and energetic in its support.
The measure was consummated: the suspension was complete: it was
triumphant in that city whose example, in such a case, was law to
the rest of the Union. But, let due discrimination be made. Though
all the banks joined in the act, all were not equally culpable; and
some, in fact, not culpable at all, but victims of the criminality,
or misfortunes of others. It was the effect of necessity with the
deposit banks, exhausted by vain efforts to meet the quarterly
deliveries of the forty millions to be deposited with the States;
and pressed on all sides because they were government banks, and
because the programme required them to stop first. It was an act of
self-defence in others which were too weak to stand alone, and which
followed with reluctance an example which they could not resist.
With others it was an act of policy, and of criminal contrivance,
as the means of carrying a real distress into the ranks of the
people, and exciting them against the political party to whose
acts the distress was attributed. But the prime mover, and master
manager of the suspension, was the Bank of the United States, then
rotten to the core and tottering to its fall, but strong enough to
carry others with it, and seeking to hide its own downfall in the
crash of a general catastrophe. Having contrived the suspension, it
wished to appear as opposing it, and as having been dragged down
by others; and accordingly took the attitude of a victim. But the
impudence and emptiness of that pretension was soon exposed by the
difficulty which other banks had in forcing her to resume; and by
the facility with which she fell back, "solitary and alone," into
the state of permanent insolvency from which the other banks had
momentarily galvanized her. But the occasion was too good to be lost
for one of those complacent epistles, models of quiet impudence and
cool mendacity, with which Mr. Biddle was accustomed to regale the
public in seasons of moneyed distress. It was impossible to forego
such an opportunity; and, accordingly, three days after the New York
suspension, and two days after his own, he held forth in a strain
of which the following is a sample:
"All the deposit banks of the government of the United States in
the city of New York suspended specie payments this week--the
deposit banks elsewhere have followed their example; which was
of course adopted by the State banks not connected with the
government. I say of course, because it is certain that when
the government banks cease to pay specie, all the other banks
must cease, and for this clear reason. The great creditor in
the United States is the government. It receives for duties the
notes of the various banks, which are placed for collection in
certain government banks, and are paid to those government banks
in specie if requested. From the moment that the deposit banks
of New York, failed to comply with their engagements, it was
manifest that all the other deposit banks must do the same, that
there must be a universal suspension throughout the country, and
that the treasury itself in the midst of its nominal abundance
must be practically bankrupt."
This was all true. The stoppage of the deposit banks was the
stoppage of the Treasury. Non-payment by the government, was an
excuse for non-payment by others. Bankruptcy was the legal condition
of non-payment; and that condition was the fate of the government as
well as of others; and all this was perfectly known before by those
who contrived, and those who resisted the deposit with the States
and the use of paper money by the federal government. These two
measures made the suspension and the bankruptcy; and all this was so
obvious to the writer of this View that he proclaimed it incessantly
in his speeches, and was amazed at the conduct of those professing
friends of the administration who voted with the opposition on
these measures, and by their votes insured the bankruptcy of the
government which they professed to support. Mr. Biddle was right.
The deposit banks were gone; the federal treasury was bankrupt; and
those two events were two steps on the road which was to lead to the
re-establishment of the Bank of the United States! and Mr. Biddle
stood ready with his bank to travel that road. The next paragraph
displayed this readiness.
"In the midst of these disorders the Bank of the United States
occupies a peculiar position, and has special duties. Had it
consulted merely its own strength it would have continued its
payments without reserve. But in such a state of things the
first consideration is how to escape from it--how to provide
at the earliest practicable moment to change a condition which
should not be tolerated beyond the necessity which commanded it.
The old associations, the extensive connections, the established
credit, the large capital of the Bank of the United States,
rendered it the natural rallying point of the country for the
resumption of specie payments. It seemed wiser, therefore, not
to waste its strength in a struggle which might be doubtful
while the Executive persevered in its present policy, but to
husband all its resources so as to profit by the first favorable
moment to take the lead in the early resumption of specie
payments. Accordingly the Bank of the United States assumes that
position. From this moment its efforts will be to keep itself
strong, and to make itself stronger; always prepared and always
anxious to assist in recalling the currency and the exchanges of
the country to the point from which they have fallen. It will
co-operate cordially and zealously with the government, with the
government banks, with all the other banks, and with any other
influences which can aid in that object."
This was a bold face for an eviscerated institution to assume--one
which was then nothing but the empty skin of an immolated
victim--the contriver of the suspension to cover its own rottenness,
and the architect of distress and ruin that out of the public
calamity it might get again into existence and replenish its
coffers out of the revenues and credit of the federal government.
"Would have continued specie payments, if it had only consulted
its own strength"--"only suspended from a sense of duty and
patriotism"--"will take the lead in resuming"--"assumes the position
of restorer of the currency"--"presents itself as the rallying
point of the country in the resumption of specie payments"--"even
promises to co-operate with the government:" such were the impudent
professions at the very moment that this restorer of currency, and
rallying point of resumption, was plotting a continuance of the
distress and suspension until it could get hold of the federal
moneys to recover upon; and without which it never could recover.
Indissolubly connected with this bank suspension, and throwing
a broad light upon its history, (if further light were wanted,)
was Mr. Webster's tour to the West, and the speeches which he
made in the course of it. The tour extended to the Valley of the
Mississippi, and the speeches took for their burden the distress and
the suspension, excusing and justifying the banks, throwing all
blame upon the government, and looking to the Bank of the United
States for the sole remedy. It was at Wheeling that he opened the
series of speeches which he delivered in his tour, it being at that
place that he was overtaken by the news of the suspension, and which
furnished him with the text for his discourse.
"Recent evils have not at all surprised me, except that they
have come sooner and faster than I had anticipated. But, though
not surprised, I am afflicted; I feel any thing but pleasure
in this early fulfilment of my own predictions. Much injury is
done which the wisest future counsels can never repair, and
much more that can never be remedied but by such counsels and
by the lapse of time. From 1832 to the present moment I have
foreseen this result. I may safely say I have foreseen it,
because I have presented and proclaimed its approach in every
important discussion and debate, in the public body of which I
am a member. We learn to-day that most of the eastern banks have
stopped payment; deposit banks as well as others. The experiment
has exploded. That bubble, which so many of us have all along
regarded as the offspring of conceit, presumption and political
quackery, has burst. A general suspension of payment must be the
result; a result which has come, even sooner than was predicted.
Where is now that better currency that was promised? Where is
that specie circulation? Where are those rupees of gold and
silver, which were to fill the treasury of the government as
well as the pockets of the people? Has the government a single
hard dollar? Has the treasury any thing in the world but credit
and deposits in banks that have already suspended payment? How
are public creditors now to be paid in specie? How are the
deposits, which the law requires to be made with the states on
the 1st of July, now to be made."
This was the first speech that Mr. Webster delivered after the
great one before the suspension in New York, and may be considered
the epilogue after the performance as the former was the prologue
before it. It is a speech of exultation, with bitter taunts to
the government. In one respect his information was different from
mine. He said the suspension came sooner than was expected: my
information was that it came later, a month later; and that he
himself was the cause of the delay. My information was that it was
to take place in the first month of Mr. Van Buren's administration,
and that the speech which was to precede it was to be delivered
early in March, immediately after the adjournment of Congress:
but it was not delivered till the middle of that month, nor got
ready for _pamphlet_ publication until the middle of April; which
delay occasioned a corresponding postponement in all the subsequent
proceedings. The complete shutting up of the treasury--the loss
of its moneys--the substitution of broken bank paper for hard
money--the impossibility of paying a dollar to a creditor: these
were the points of his complacent declamation: and having made
these points strong enough and clear enough, he came to the remedy,
and fell upon the same one, in almost the same words, that Mr.
Biddle was using at the same time, four hundred miles distant, in
Philadelphia: and that without the aid of the electric telegraph,
not then in use. The recourse to the Bank of the United States was
that remedy! that bank strong enough to hold out, (unhappily the
news of its suspending arrived while he was speaking:) patriotic
enough to do so! but under no obligation to do better than the
deposit banks! and justifiable in following their example. Hear him:
"The United States Bank, now a mere state institution, with no
public deposits, no aid from government, but, on the contrary,
long an object of bitter persecution by it, was at our latest
advices still firm. But can we expect of that Bank to make
sacrifices to continue specie payment? If it continue to do so,
now the deposit banks have stopped, the government will draw
from it its last dollar, if it can do so, in order to keep up a
pretence of making its own payments in specie. I shall be glad
if this institution find it prudent and proper to hold out; but
as it owes no more duty to the government than any other bank,
and, of course, much less than the deposit banks, I cannot see
any ground for demanding from it efforts and sacrifices to favor
the government, which those holding the public money, and owing
duty to the government, are unwilling or unable to make; nor do
I see how the New England banks can stand alone in the general
crush."
The suspension was now complete; and it was evident, and as good
as admitted by those who had made it, that it was the effect of
contrivance on the part of politicians, and the so-called Bank of
the United States, for the purpose of restoring themselves to power.
The whole process was now clear to the vision of those who could see
nothing while it was going on. Even those of the democratic party
whose votes had helped to do the mischief, could now see that the
attempt to deposit forty millions with the States was destruction
to the deposit banks;--that the repeal of the specie circular was
to fill the treasury with paper money, to be found useless when
wanted;--that distress was purposely created in order to throw the
blame of it upon the party in power;--that the promptitude with
which the Bank of the United States had been brought forward as a
remedy for the distress, showed that it had been held in reserve for
that purpose;--and the delight with which the whig party saluted the
general calamity, showed that they considered it their own passport
to power. All this became visible, after the mischief was over, to
those who could see nothing of it before it was done.