RESUMPTION OF SPECIE PAYMENTS: HISTORICAL NOTICES: MR. BENTON'S
SPEECH: EXTRACTS.
There are two of those periods, each marking the termination of
a national bank charter, and each presenting us with the actual
results of the operations of those institutions upon the general
currency, and each replete with lessons of instruction applicable to
the present day, and to the present state of things. The first of
these periods is the year 1811, when the first national bank had run
its career of twenty years, and was permitted by Congress to expire
upon its own limitation. I take for my guide the estimate of Mr.
Lloyd, then a senator in Congress from the State of Massachusetts,
whose dignity of character and amenity of manners is so pleasingly
remembered by those who served with him here, and whose intelligence
and accuracy entitle his statements to the highest degree of credit.
That eminent senator estimated the total currency of the country,
at the expiration of the charter of the first national bank, at
sixty millions of dollars, to wit: ten millions of specie, and fifty
millions in bank notes. Now compare the two quantities, and mark the
results. Our population has precisely doubled itself since 1811. The
increase of our currency should, therefore, upon the same principle
of increase, be the double of what it then was; yet it is three
times as great as it then was! The next period which challenges
our attention is the veto session of 1832, when the second Bank
of the United States, according to the opinion of its eulogists,
had carried the currency to the ultimate point of perfection. What
was the amount then? According to the estimate of a senator from
Massachusetts, then and now a member of this body [Mr. WEBSTER],
then a member of the Finance Committee, and with every access to the
best information, the whole amount of currency was then estimated
at about one hundred millions; to wit: twenty millions in specie,
and seventy-five to eighty millions in bank notes. The increase of
our population since that time is estimated at twenty per cent.;
so that the increase of our currency, upon the basis of increased
population, should also be twenty per cent. This would give an
increase of twenty millions of dollars, making, in the whole, one
hundred and twenty millions. Thus, our currency in actual existence,
is nearly one-third more than either the ratio of 1811 or of 1832
would give. Thus, we have actually about fifty millions more,
in this season of ruin and destitution, than we should have, if
supplied only in the ratio of what we possessed at the two periods
of what is celebrated as the best condition of the currency, and
most prosperous condition of the country. So much for quantity; now
for the solidity of the currency at these respective periods. How
stands the question of solidity? Sir, it stands thus: in 1811, five
paper dollars to one of silver; in 1822, four to one; in 1838, one
to one, as near as can be! Thus, the comparative solidity of the
currency is infinitely preferable to what it ever was before; for
the increase, under the sagacious policy of General Jackson, has
taken place precisely where it was needed--at the bottom, and not
at the top; at the foundation, and not in the roof; at the base,
and not at the apex. Our paper currency has increased but little;
we may say nothing, upon the bases of 1811 and 1832; our specie has
increased immeasurably; no less than eight-fold, since 1811, and
four-fold since 1832. The whole increase is specie; and of that we
have seventy millions more than in 1811, and sixty millions more
than in 1832. Such are the fruits of General Jackson's policy! a
policy which we only have to persevere in for a few years, to have
our country as amply supplied with gold and silver as France and
Holland are; that France and Holland in which gold is borrowed at
three per cent. per annum, while we often borrow paper money at
three per cent. a month.
But there is no specie. Not a ninepence to be got for a servant; not
a picayune for a beggar; not a ten cent piece for the post-office.
Such is the assertion; but how far is it true? Go to the banks, and
present their notes at their counter, and it is all too true. No
gold, no silver, no copper to be had there in redemption of their
solemn promises to pay. Metaphorically, if not literally speaking,
a demand for specie at the counter of a bank might bring to the
unfortunate applicant more kicks than coppers. But change the
direction of the demand; go to the brokers; present the bank note
there; no sooner said than done; gold and silver spring forth in any
quantity; the notes are cashed; you are thanked for your custom,
invited to return again; and thus, the counter of the broker, and
not the counter of the bank, becomes the place for the redemption
of the notes of the bank. The only part of the transaction that
remains to be told, is the per centum which is shaved off! And,
whoever will submit to that shaving, can have all the bank notes
cashed which he can carry to them. Yes, Mr. President, the brokers,
and not the bankers, now redeem the bank notes. There is no dearth
of specie for that purpose. They have enough to cash all the notes
of the banks, and all the treasury notes of the government into the
bargain. Look at their placards! not a village, not a city, not a
town in the Union, in which the sign-boards do not salute the eye of
the passenger, inviting him to come in and exchange his bank notes,
and treasury notes, for gold and silver. And why cannot the banks
redeem, as well as the brokers? Why can they not redeem their own
notes? Because a _veto_ has issued from the city of Philadelphia,
and because a political revolution is to be effected by injuring the
country, and then charging the injury upon the folly and wickedness
of the republican administrations. This is the reason, and the sole
reason. The Bank of the United States, its affiliated institutions,
and its political confederates, are the sole obstacles to the
resumption of specie payments. They alone prevent the resumption. It
is they who are now in terror lest the resumption shall begin and
to prevent it, we hear the real shout, and feel the real application
of the rallying cry, so pathetically uttered on this floor by the
senator from Massachusetts [Mr. WEBSTER]--_once more to the breach,
dear friends, once more!_
Yes, Mr. President, the cause of the non-resumption of specie
payments is now plain and undeniable. It is as plain as the sun
at high noon, in a clear sky. No two opinions can differ about
it, how much tongues may differ. The cause of not resuming is
known, and the cause of suspension will soon be known likewise.
Gentlemen of the opposition charge the suspension upon the folly,
the wickedness, the insanity, the misrule, and misgovernment of the
outlandish administration, as they classically call it; expressions
which apply to the people who created the administration which have
been so much vilified, and who have sanctioned their policy by
repeated elections. The opposition charge the suspension to them--to
their policy--to their acts--to the veto of 1832--the removal of
the deposits of 1833--the Treasury order of 1836--and the demand
for specie for the federal Treasury. This is the charge of the
politicians, and of all who follow the lead, and obey the impulsion
of the denationalized Bank of the United States. But what say others
whose voice should be potential, and even omnipotent, on this
question? What say the New York city banks, where the suspension
began, and whose example was alleged for the sole cause of
suspension by all the rest? What say these banks, whose position is
at the fountain-head of knowledge, and whose answer for themselves
is an answer for all. What say they? Listen, and you shall hear! for
I hold in my hand a report of a committee of these banks, made under
an official injunction, by their highest officers, and deliberately
approved by all the city institutions. It is signed by Messrs.
Albert Gallatin, George Newbold, C. C. Lawrence, C. Heyer, J. J.
Palmer, Preserved Fish, and G. A. Worth,--seven gentlemen of known
and established character; and not more than one out of the seven
politically friendly to the late and present administrations of the
federal government. This is their report:
"The immediate causes which thus compelled the banks of the
city of New York to suspend specie payments on the 10th of May
last, are well known. The simultaneous withdrawing of the large
public deposits, and of excessive foreign credits, combined with
the great and unexpected fall in the price of the principal
article of our exports, with an import of corn and bread stuffs,
such as had never before occurred, and with the consequent
inability of the country, particularly in the south-western
States, to make the usual and expected remittances, did, at one
and the same time, fall principally and necessarily, on the
greatest commercial emporium of the Union. After a long and most
arduous struggle, during which the banks, though not altogether
unsuccessfully, resisting the imperative foreign demand for the
precious metals, were gradually deprived of a great portion of
their specie; some unfortunate incidents of a _local_ nature,
operating in concert with other previous exciting causes,
produced distrust and panic, and finally one of those general
runs, which, if continued, no banks that issue paper money,
payable on demand, can ever resist; and which soon put it out of
the power of those of this city to sustain specie payments. The
example was followed by the banks throughout the whole country,
with as much _rapidity_ as the news of the suspension in New
York reached them, without waiting for an _actual run_; and
principally, if not exclusively, on the alleged grounds of the
effects to be apprehended from that suspension. Thus, whilst the
New York city banks were almost _drained_ of their specie, those
in other places preserved the _amount_ which they held before
the final catastrophe."
These are the reasons! and what becomes now of the Philadelphia
cry, re-echoed by politicians and subaltern banks, against the
ruinous measures of the administration? Not a measure of the
administration mentioned! not one alluded to! Not a word about the
Treasury order; not a word about the veto of the National Bank
charter; not a word about the removal of the deposits from the
Bank of the United States; not a word about, the specie policy of
the administration! Not one word about any act of the government,
except that distribution act, disguised as a deposit law, which
was a measure of Congress, and not of the administration, and the
work of the opponents, and not the friends of the administration,
and which encountered its only opposition in the ranks of those
friends. I opposed it, with some half dozen others; and among my
grounds of opposition, one was, that it would endanger the deposit
banks, especially the New York city deposit banks,--that it would
reduce them to the alternative of choosing between breaking their
customers, and being broken themselves. This was the origin of
that act--the work of the opposition on this floor; and now we
find that very act to be the cause which is put at the head of all
the causes which led to the suspension of specie payments. Thus,
the administration is absolved. Truth has performed its office. A
false accusation is rebuked and silenced. Censure falls where it is
due; and the authors of the mischief stand exposed in the double
malefaction of having done the mischief, and then charged it upon
the heads of the innocent.
But, gentlemen of the opposition say, there can be no resumption
until Congress "_acts upon the currency_." Until Congress acts upon
the currency! that is the phrase! and it comes from Philadelphia;
and the translation of it is, that there shall be no resumption
until Congress submits to Mr. Biddle's bank, and recharters that
institution. This is the language from Philadelphia, and the meaning
of the language; but, happily, a different voice issues from the
city of New York! The authentic notification is issued from the
banks of that city, pledging themselves to resume by the 10th day
of May. They declare their ability to resume, and to continue
specie payments; and declare they have nothing to fear, except from
"_deliberate hostility_"--an hostility for which they allege there
can be no motive--but of which they delicately intimate there is
danger. Philadelphia is distinctly unveiled as the seat of this
danger. The resuming banks fear hostility--deliberate acts of
hostility--from that quarter. They fear nothing from the hostility,
or folly, or wickedness of this administration. They fear nothing
from the Sub-Treasury bill. They fear Mr. Biddle's bank, and nothing
else but his bank, with its confederates and subalterns. They mean
to resume, and Mr. Biddle means that they shall not. Henceforth two
flags will be seen, hoisted from two great cities. The New York flag
will have the word resumption inscribed upon it; the Philadelphia
flag will bear the inscription of non-resumption, and destruction to
all resuming banks.
I have carefully observed the conduct of the leading banks in the
United States. The New York banks, and the principal deposit banks,
had a cause for stopping which no others can plead, or did plead.
I announced that cause, not once, but many times, on this floor;
not only during the passage of the distribution law, but during the
discussion of those famous land bills, which passed this chamber;
and one of which ordered a peremptory distribution of sixty-four
millions, by not only taking what was in the Treasury, but by
reaching back, and taking all the proceeds of the land sales for
years preceding. I then declared in my place, and that repeatedly,
that the banks, having lent this money under our instigation, if
called upon to reimburse it in this manner, must be reduced to
the alternative of breaking their customers, or of being broken
themselves. When the New York banks stopped, I made great allowances
for them, but I could not justify others for the rapidity with
which they followed their example; and still less can I justify
them for their tardiness in following the example of the same banks
in resuming. Now that the New York banks have come forward to
redeem their obligations, and have shown that sensibility to their
own honor, and that regard for the punctual performance of their
promises, which once formed the pride and glory of the merchant's
and the banker's character, I feel the deepest anxiety for their
success in the great contest which is to ensue. Their enemy is a
cunning and a powerful one, and as wicked and unscrupulous as it is
cunning and strong. Twelve years ago, the president of that bank
which now forbids other banks to resume, declared in an official
communication to the Finance Committee of this body, "_that there
were but few State banks which the Bank of the United States could
not DESTROY by an exertion of its POWER_." Since that time it has
become more powerful; and, besides its political strength, and
its allied institutions, and its exhaustless mine of resurrection
notes, it is computed by its friends to wield a power of one
hundred and fifty millions of dollars! all at the beck and nod of
one single man! for his automaton directors are not even thought
of! The wielding of this immense power, and its fatal direction to
the destruction of the resuming banks, presents the prospect of
a fearful conflict ahead. Many of the local banks will doubtless
perish in it; many individuals will be ruined; much mischief will be
done to the commerce and to the business of different places; and
all the destruction that is accomplished will be charged upon some
act of the administration--no matter what--for whatever is given
out from the Philadelphia head is incontinently repeated by all the
obsequious followers, until the signal is given to open upon some
new cry.
Sir, the honest commercial banks have resumed, or mean to resume.
They have resumed, not upon the fictitious and delusive credit
of legislative enactments, but upon the solid basis of gold and
silver. The hundred millions of specie which we have accumulated
in the country has done the business. To that hundred millions
the country is indebted for this early, easy, proud and glorious
resumption!--and here let us do justice to the men of this
day--to the policy of General Jackson--and to the success of
the experiments--to which we are indebted for these one hundred
millions. Let us contrast the events and effects of the stoppages
in 1814, and in 1819, with the events and effects of the stoppage
in 1837, and let us see the difference between them, and the causes
of that difference. The stoppage of 1814 compelled the government
to use depreciated bank notes during the remainder of the war, and
up to the year 1817. Treasury notes, even bearing a large interest,
were depreciated ten, twenty, thirty per cent. Bank notes were at an
equal depreciation. The losses to the government from depreciated
paper in loans alone, during the war, were computed by a committee
of the House of Representatives at eighty millions of dollars.
Individuals suffered in the same proportion; and every transaction
of life bore the impress of the general calamity. Specie was not
to be had. There was, nationally speaking, none in the country.
The specie standard was gone; the measure of values was lost; a
fluctuating paper money, ruinously depreciated, was the medium of
all exchanges. To extricate itself from this deplorable condition,
the expedient of a National Bank was resorted to--that measure of so
much humiliation, and of so much misfortune to the republican party.
For the moment it seemed to give relief, and to restore national
prosperity; but treacherous and delusive was the seeming boon. The
banks resumed--relapsed--and every evil of the previous suspension
returned upon the country with increased and aggravated force.
Politicians alone have taken up this matter and have proposed, for
the first time since the foundation of the government--for the first
time in 48 years--to compel the government to receive paper money
for its dues. The pretext is, to aid the banks in resuming! This,
indeed, is a marvellous pretty conception! Aid the banks to resume!
Why, sir, we cannot prevent them from resuming. Every solvent,
commercial bank in the United States either has resumed, or has
declared its determination to do so in the course of the year. The
insolvent, and the political banks, which did not mean to resume,
will have to follow the New York example, or die! Mr. Biddle's bank
must follow the New York lead, or die! The good banks are with the
country: the rest we defy. The political banks may resume or not,
as they please, or as they dare. If they do not, they die! Public
opinion, and the laws of the land, will exterminate them. If the
president of the miscalled Bank of the United States has made a
mistake in recommending indefinite non-resumption, and in proposing
to establish a confederation of broken banks, and has found out his
mistake, and wants a pretext for retreating, let him invent one.
There is no difficulty in the case. Any thing that the government
does, or does not--any thing that has happened, will happen, or can
happen--will answer the purpose. Let the president of the Bank of
the United States give out a tune: incontinently it will be sung by
every bank man in the United States; and no matter how ridiculous
the ditty may be, it will be celebrated as superhuman music.
But an enemy lies in wait for them! one that foretells their
destruction, is able to destroy them, and which looks for its own
success in their ruin. The report of the committee of the New York
banks expressly refers to "_acts of deliberate hostility_" from a
neighboring institution as a danger which the resuming banks might
have to dread. The reference was plain to the miscalled Bank of
the United States as the source of this danger. Since that time an
insolent and daring threat has issued from Philadelphia, bearing
the marks of its bank paternity, openly threatening the resuming
banks of New York with destruction. This is the threat: "_Let the
banks of the Empire State come up from their Elba, and enjoy their
hundred days of resumption; a Waterloo awaits them, and a St.
Helena is prepared for them._" Here is a direct menace, and coming
from a source which is able to make good what it threatens. Without
hostile attacks, the resuming banks have a perilous process to go
through. The business of resumption is always critical. It is a case
of impaired credit, and a slight circumstance may excite a panic
which may be fatal to the whole. The public having seen them stop
payment, can readily believe in the mortality of their nature, and
that another stoppage is as easy as the former. On the slightest
alarm--on the stoppage of a few inconsiderable banks, or on the
noise of a groundless rumor--a general panic may break out. _Sauve
qui peut_--save himself who can--becomes the cry with the public;
and almost every bank may be run down. So it was in England after
the long suspension there from 1797 to 1823; so it was in the United
States after the suspension from 1814 to 1817; in each country a
second stoppage ensued in two years after resumption; and these
second stoppages are like relapses to an individual after a spell of
sickness: the relapse is more easily brought on than the original
disease, and is far more dangerous.
The banks in England _suspended_ in 1797--they _broke_ in 1825;
in the United States it was a _suspension_ during the war, and a
_breaking_ in 1819-20. So it may be again with us. There is imminent
danger to the resuming banks, without the pressure of premeditated
hostility; but, with that hostility, their prostration is almost
certain. The Bank of the United States can crush hundreds on any day
that it pleases. It can send out its agents into every State of the
Union, with sealed orders to be opened on a given day, like captains
sent into different seas; and can break hundreds of local banks
within the same hour, and over an extent of thousands of miles. It
can do this with perfect ease--the more easily with resurrection
notes--and thus excite a universal panic, crush the resuming banks,
and then charge the whole upon the government. This is what it can
do; this is what it has threatened; and stupid is the bank, and
doomed to destruction, that does not look out for the danger, and
fortify against it. In addition to all these dangers, the senator
from Kentucky, the author of the resolution himself, tells you that
these banks must fail again! he tells you they will fail! and in
the very same moment he presses the compulsory reception of all the
notes on all these banks upon the federal treasury! What is this but
a proposition to ruin the finances--to bankrupt the Treasury--to
disgrace the administration--to demonstrate the incapacity of the
State banks to serve as the fiscal agents of the government, and to
gain a new argument for the creation of a national bank, and the
elevation of the bank party to power? This is the clear inference
from the proposition; and viewing it in this light, I feel it to
be my duty to expose, and to repel it, as a proposition to inflict
mischief and disgrace upon the country.
But to return to the point, the contrast between the effects and
events of former bank stoppages, and the effects and events of
the present one. The effects of the former were to sink the price
of labor and of property to the lowest point, to fill the States
with stop laws, relief laws, property laws, and tender laws; to
ruin nearly all debtors, and to make property change hands at
fatal rates; to compel the federal government to witness the heavy
depreciation of its treasury notes, to receive its revenues in
depreciated paper; and, finally, to submit to the establishment of
a national bank as the means of getting it out of its deplorable
condition--that bank, the establishment of which was followed by
the seven years of the greatest calamity which ever afflicted the
country; and from which calamity we then had to seek relief from the
tariff, and not from more banks. How different the events of the
present time! The banks stopped in May, 1837; they resume in May,
1838. Their paper depreciated but little; property, except in a few
places, was but slightly affected; the price of produce continued
good; people paid their debts without sacrifices; treasury notes,
in defiance of political and moneyed combinations to depress them,
kept at or near par; in many places above it; the government was
never brought to receive its revenues in depreciated paper; and
finally all good banks are resuming in the brief space of a year;
and no national bank has been created. Such is the contrast between
the two periods; and now, sir, what is all this owing to? what
is the cause of this great difference in two similar periods of
bank stoppages? It is owing to our gold bill of 1834, by which we
corrected the erroneous standard of gold, and which is now giving us
an avalanche of that metal; it is owing to our silver bill of the
same year, by which we repealed the disastrous act of 1819, against
the circulation of foreign silver, and which is now spreading the
Mexican dollars all over the country; it is owing to our movements
against small notes under twenty dollars; to our branch mints, and
the increased activity of the mother mint; to our determination to
revive the currency of the constitution, and to our determination
not to fall back upon the local paper currencies of the States for
a national currency. It was owing to these measures that we have
passed through this bank stoppage in a style so different from what
has been done heretofore. It is owing to our "_experiments_" on
the currency--to our "_humbug_" of a gold and silver currency--to
our "_tampering_" with the monetary system--it is owing to these
that we have had this signal success in this last stoppage, and
are now victorious over all the prophets of woe, and over all the
architects of mischief. These _experiments_, this _humbugging_,
and this _tampering_, has increased our specie in six years from
twenty millions to one hundred millions; and it is these one hundred
millions of gold and silver which have sustained the country and
the government under the shock of the stoppage--has enabled the
honest solvent banks to resume, and will leave the insolvent and
political banks without excuse or justification for not resuming.
Our experiments--I love the word, and am sorry that gentlemen of
the opposition have ceased to repeat it--have brought an avalanche
of gold and silver into the country; it is saturating us with the
precious metals, it has relieved and sustained the country; and
now when these experiments have been successful--have triumphed
over all opposition--gentlemen cease their ridicule, and go to
work with their paper-money resolutions to force the government to
use paper, and thereby to drive off the gold and silver which our
policy has brought into the country, destroy the specie basis of the
banks, give us an exclusive paper currency again, and produce a new
expansion and a new explosion.
Justice to the men of this day requires these things to be stated.
They have avoided the errors of 1811. They have avoided the pit
into which they saw their predecessors fall. Those who prevented
the renewal of the bank charter in 1811, did nothing else but
prevent its renewal; they provided no substitute for the notes of
the bank; did nothing to restore the currency of the constitution;
nothing to revive the gold currency; nothing to increase the specie
of the country. They fell back upon the exclusive use of local bank
notes, without even doing any thing to strengthen the local banks,
by discarding their paper under twenty dollars. They fell back upon
the local banks; and the consequence was, the total prostration,
the utter helplessness, the deplorable inability of the government
to take care of itself, or to relieve and restore the country, when
the banks failed. Those who prevented the recharter of the second
Bank of the United States had seen all this; and they determined to
avoid such error and calamity. They set out to revive the national
gold currency, to increase the silver currency, and to reform and
strengthen the banking system. They set out to do these things;
and they have done them. Against a powerful combined political and
moneyed confederation, they have succeeded; and the one hundred
millions of gold and silver now in the country attests the greatness
of their victory, and insures the prosperity of the country against
the machinations of the wicked and the factious.