RECHARTER OF THE DISTRICT BANKS: MR. BENTON'S SPEECH: EXTRACTS.
Mr. BENTON then proposed the following amendment:
"_And be it further enacted_, That each and every of said banks
be, and they are hereby, expressly prohibited from issuing or
paying out, under any pretence whatever, any bill, note, or
other paper, designed or intended to be used and circulated
as money, of a less denomination than five dollars, or of any
denomination between five and ten dollars, after one year from
the passage of this bill; or between ten and twenty dollars,
after two years from the same time; and for any violation of the
provisions of this section, or for issuing or paying out the
notes of any bank in a state of suspension, its own inclusive,
the offending bank shall incur all the penalties and forfeitures
to be provided and directed by the first section of this act
for the case of suspension or refusal to pay in specie; to be
enforced in like manner as is directed by that section."
Mr. BENTON. The design of the amendment is to suppress two great
evils in our banking system: the evil of small notes, and that of
banks combining to sustain each other in a state of suspension.
Small notes are a curse in themselves to honest, respectable banks,
and lead to their embarrassment, whether issued by themselves or
others. They go into hands of laboring people, and become greatly
diffused, and give rise to panics; and when a panic is raised it
cannot be stopped among the holders of these small notes. Their
multitudinous holders cannot go into the counting-room to examine
assets, and ascertain an ultimate ability. They rush to the counter,
and demand pay. They assemble in crowds, and spread alarm. When
started, the alarm becomes contagious--makes a run upon all banks;
and overturns the good as well as the bad. Small notes are a curse
to all good banks. They are the cause of suspensions. When the Bank
of England commenced operations, she issued no notes of a less
denomination than one hundred pounds sterling; and when the notes
were paid into the Bank, they were cancelled and destroyed. But in
the course of one hundred and three years, she worked down from one
hundred pound notes to one pound notes. And when did they commence
reducing the amount of their notes? During the administration of
Sir Robert Walpole. When the notes got down to one pound, specie
was driven from circulation, and went to France and Holland, and a
suspension of six and twenty years followed.
They are a curse to all good banks in another way: they banish
gold and silver from the country: and when that is banished the
foundation which supports the bank is removed: and the bank itself
must come tumbling down. While there is gold and silver in the
country--in common circulation--banks will be but little called upon
for it: and if pressed can get assistance from their customers. But
when it is banished the country, they alone are called upon, and get
no help if hard run. All good banks should be against small notes on
their own account.
These small notes are a curse to the public. They are the great
source of counterfeiting. Look at any price current, and behold the
catalogue of the counterfeits. They are almost all on the small
denominations--under twenty dollars. And this counterfeiting,
besides being a crime in itself, leads to crimes--to a general
demoralization in passing them. Holders cannot afford to lose
them: they cannot trace out the person from whom they got them.
They gave value for them; and pass them to somebody--generally the
most meritorious and least able to bear the loss--the day-laborer.
Finally, they stop in somebody's hands--generally in the hands of a
working man or woman.
Why are banks so fond of issuing these small notes? Why, in the
first place, banks of high character are against them: it is only
the predatory class that are for them: and, unfortunately, they
are a numerous progeny. It is in vain they say they issue them for
public accommodation. The public would be much better accommodated
with silver dollars, gold dollars--with half, whole, double, and
quarter eagles--whereof they would have enough if these predatory
notes were suppressed. No! they are issued for profit--for dishonest
profit--for the shameful and criminal purpose of getting something
for nothing. It is for the wear and tear of these little pilfering
messengers! for their loss in the hands of somebody! which loss
is the banker's gain! the gain of a day's or a week's work from
a poor man, or woman, for nothing. Shame on such a spirit, and
criminal punishment on it besides. But although the gains are small
individually, and in the petty larceny spirit, yet the aggregate is
great; and enters into the regular calculation of profit in these
paper money machines; and counts in the end. There is always a large
per centum of these notes outstanding--never to come back. When,
at the end of twenty-five years, Parliament repealed the privilege
granted to the Bank of England to issue notes under five pounds,
a large amount were outstanding; and though the repeal took place
more than twenty years ago, yet every quarterly return of the Bank
now shows that millions of these notes are still outstanding, which
are lost or destroyed, and never will be presented. The Bank of
England does not now issue any note under five pounds sterling: nor
any other bank in England. The large banks repulsed the privilege
for themselves, and got it denied to all the small class. To carry
the iniquity of these pillaging little notes to the highest point,
and to make them open swindlers, is to issue them at one place,
redeemable at another. That is to double the cheat--to multiply the
chance of losing the little plunderer by sending him abroad, and to
get a chance of "_shaving_" him in if he does not go.
The statistics of crime in Great Britain show, that of all the
counterfeiting of bank bills and paper securities in that kingdom,
more is counterfeited on notes under five pounds than over and
it is the same in this country. On whom does the loss of these
counterfeit notes fall? On the poor and the ignorant--the laborer
and the mechanic. Hence these banks inflict a double injury on the
poorer classes; and of all the evils of the banking system, the most
revolting is its imposing unequal burdens on that portion of the
people the least able to bear them.
Mr. B. then instanced a case in point of an Insurance Company in
St. Louis, which, in violation of law, assumed banking privileges,
and circulated to a large extent the notes of a suspended bank. Up
to Saturday night these notes were paid out from its counter, and
the working man and mechanics of St. Louis were paid their week's
wages in them. Well, when Monday morning came, the Insurance Company
refused to receive one of them, and they fell at once to fifty cents
on the dollar. Thus the laborer and the mechanic had three days of
their labor annihilated, or had worked three days for the exclusive
benefit of those who had swindled them; and all this by a bank
having power to receive or refuse what paper they please, and when
they please. And the Senate are now called upon to confer the same
privilege upon the banks of this district.
Mr. B. said it was against the immutable principles of justice--in
opposition to God's most holy canon, to make a thing of value
to-day, which will be of none to-morrow. You might as well permit
the dry goods merchant to call his yard measure three yards, or the
grocer to call his quart three quarts, as to permit the banker to
call his dollar three dollars. There is no difference in principle,
though more subtle in the manner of doing it. Money is the standard
of value, as the yard, and the gallon, and the pound weight, were
the standards of measure.
When he proposed the amendment, he considered it a proper
opportunity to bring before the people of the United States the
great question, whether they should have an exclusive paper currency
or not. He wished to call their attention to this war upon the
currency of the constitution--a war unremitting and merciless--to
establish in this country an exclusive paper currency. This war
to subvert the gold and silver currency of the constitution, is
waged by that party who vilify your branch mints, ridicule gold,
ridicule silver, go for banks at all times and at all places; and go
for a paper circulation down to notes of six and a quarter cents.
He rejoiced that this question was presented in that body, on a
platform so high that every American can see it--the question of a
sound or depreciated currency. He was glad to see the advocates of
banks, State and national, show their hand on this question.
To hear these paper-money advocates celebrate their idols--for
they really seem to worship bank notes--and the smaller and meaner
the better--one would be tempted to think that bank notes were the
ancient and universal currency of the world, and that gold and
silver were a modern invention--an innovation--an experiment--the
device of some quack, who deserved no better answer than to be
called humbug. To hear them discoursing of "sound banks," and "sound
circulating medium," one would suppose that they considered gold and
silver unsound, and subject to disease, rottenness, and death. But,
why do they apply this phrase "sound" to banks and their currency?
It is a phrase never applied to any thing which is not subject to
unsoundness--to disease--to rottenness--to death. The very phrase
brings up the idea of something subject to unsoundness; and that is
true of banks of circulation and their currency: but it is not true
of gold and silver: and the phrase is never applied to them. No one
speaks of the gold or silver currency as being sound, and for the
reason that no one ever heard of it as rotten.
Young merchants, and some old ones, think there is no living without
banks--no transacting business without a paper money currency. Have
these persons ever heard of Holland, where there are merchants
dealing in tens of millions, and all of it in gold and silver? Have
they ever heard of Liverpool and Manchester, where there was no
bank of circulation, not even a branch of the Bank of England; and
whose immense operations were carried on exclusively upon gold and
the commercial bill of exchange? Have they ever heard of France,
where the currency amounts to four hundred and fifty millions of
dollars, and it all hard money? For, although the Bank of France
has notes of one hundred and five hundred, and one thousand francs,
they are not used as currency but as convenient bills of exchange,
for remittance, or travelling. Have they ever heard of the armies,
and merchants, and imperial courts of antiquity? Were the Roman
armies paid with paper? did the merchant princes deal in paper? Was
Nineveh and Babylon built on paper? Was Solomon's temple so built?
And yet, according to these paper-money idolaters, we cannot pay a
handful of militia without paper! cannot open a dry goods store in
a shanty without paper! cannot build a house without paper! cannot
build a village of log houses in the woods, or a street of shanties
in a suburb, without a bank in their midst! This is real humbuggery;
and for which the industrial classes--the whole working population,
have to pay an enormous price. Does any one calculate the cost to
the people of banking in our country? how many costly edifices have
to be built? what an army of officers have to be maintained? what
daily expenses have to be incurred? how many stockholders must
get profits? in a word, what a vast sum a bank lays out before it
begins to make its half yearly dividend of four or five per centum,
leaving a surplus--all to come out of the productive classes of
the people? And after that comes the losses by the wear and tear
of small notes--by suspensions and breakings--by expansions and
contractions--by making money scarce when they want to buy, and
plenty when they want to sell. We talk of standing armies in Europe,
living on the people: we have an army of bank officers here doing
the same. We talk of European taxes; the banks tax us here as much
as kings tax their subjects. And this district is crying out for
banks. It has six, and wants them rechartered--Congress all the time
spending more hard money among them than they can use. They had
twelve banks: and what did they have to do? Send to Holland, where
there is not a single bank of circulation, to borrow one million
of dollars in gold, which they got at five per centum per annum;
and then could not pay the interest. At the end of the third year
the interest could not be paid; and Congress had to pay it to save
the whole corporate effects of the city from being sold--sold to
the Dutch, because the Dutch had no banks. And sold it would have
been if Congress had not put up the money: for the distress warrant
was out, and was to be levied in thirty days. Then what does this
city want with banks of circulation? She has no use for them; but I
only propose to make them a little safer by suppressing their small
notes, and preventing them from dealing in the depreciated notes of
suspended, or broken banks.