FROM A SPEECH DELIVERED IN THE SENATE OF THE UNITED STATES, ON THE 22D
OF FEBRUARY, 1834.
Mr. President,--The honorable member from Georgia stated yesterday, more
distinctly than I have before learned it, what that experiment is which
the government is now trying on the revenues and the currency, and, I
may add, on the commerce, manufactures, and agriculture of this country.
If I rightly apprehend him, this experiment is an attempt to return to
an exclusive specie currency, first, by employing the State banks as a
substitute for the Bank of the United States; and then by dispensing
with the use of the State banks themselves.
This, Sir, is the experiment. I thank the gentleman for thus stating its
character. He has done his duty, and dealt fairly with the people, by
this exhibition of what the views of the executive government are, at
this interesting moment. It is certainly most proper that the people
should see distinctly to what end or for what object it is that so much
suffering is already upon them, and so much more already in visible and
near prospect.
And now, Sir, is it possible,--is it possible that twelve millions of
intelligent people can be expected voluntarily to subject themselves to
severe distress, of unknown duration, for the purpose of making trial of
an experiment like this? Will a nation that is intelligent, well
informed of its own interest, enlightened, and capable of
self-government, submit to suffer embarrassment in all its pursuits,
loss of capital, loss of employment, and a sudden and dead stop in its
onward movement in the path of prosperity and wealth, until it shall be
ascertained whether this new-hatched theory shall answer the hopes of
those who have devised it? Is the country to be persuaded to bear every
thing, and bear patiently, until the operation of such an experiment,
adopted for such an avowed object, and adopted, too, without the
co-operation or consent of Congress, and by the executive power alone,
shall exhibit its results?
In the name of the hundreds of thousands of our suffering
fellow-citizens, I ask, for what reasonable end is this experiment to be
tried? What great and good object, worth so much cost, is it to
accomplish? What enormous evil is to be remedied by all this
inconvenience and all this suffering? What great calamity is to be
averted? Have the people thronged our doors, and loaded our tables with
petitions for relief against the pressure of some political mischief,
some notorious misrule, which this experiment is to redress? Has it been
resorted to in an hour of misfortune, calamity, or peril, to save the
state? Is it a measure of remedy, yielded to the importunate cries of an
agitated and distressed nation? Far, Sir, very far from all this. There
was no calamity, there was no suffering, there was no peril, when these
measures began. At the moment when this experiment was entered upon,
these twelve millions of people were prosperous and happy, not only
beyond the example of all others, but even beyond their own example in
times past.
There was no pressure of public or private distress throughout the whole
land. All business was prosperous, all industry was rewarded, and
cheerfulness and content universally prevailed. Yet, in the midst of all
this enjoyment, with so much to heighten and so little to mar it, this
experiment comes upon us, to harass and oppress us at present, and to
affright us for the future. Sir, it is incredible; the world abroad will
not believe it; it is difficult even for us to credit, who see it with
our own eyes, that the country, at such a moment, should put itself upon
an experiment fraught with such immediate and overwhelming evils, and
threatening the property and the employments of the people, and all
their social and political blessings, with severe and long-enduring
future inflictions.
And this experiment, with all its cost, is to be tried, for what? Why,
simply, Sir, to enable us to try another "experiment"; and that other
experiment is, to see whether an exclusive specie currency may not be
better than a currency partly specie and partly bank paper! The object
which it is hoped we may effect, by patiently treading this path of
endurance, is to banish all bank paper, of all kinds, and to have coined
money, and coined money only, as the actual currency of the country!
Now, Sir, I altogether deny that such an object is at all desirable,
even if it could be attained. I know, indeed, that all paper ought to
circulate on a specie basis; that all bank-notes, to be safe, must be
convertible into gold and silver at the will of the holder; and I admit,
too, that the issuing of very small notes by many of the State banks has
too much reduced the amount of specie actually circulating. It may be
remembered that I called the attention of Congress to this subject in
1832, and that the bill which then passed both houses for renewing the
bank charter contained a provision designed to produce some restraint on
the circulation of very small notes. I admit there are conveniences in
making small payments in specie; and I have always, not only admitted,
but contended, that, if all issues of bank-notes under five dollars were
discontinued, much more specie would be retained in the country, and in
the circulation; and that great security would result from this. But we
are now debating about an _exclusive_ specie currency; and I deny that
an exclusive specie currency is the best currency for any highly
commercial country; and I deny, especially, that such a currency would
be best suited to the condition and circumstances of the United States.
With the enlightened writers and practical statesmen of all commercial
communities in modern times, I have supposed it to be admitted that a
well regulated, properly restrained, safely limited paper currency,
circulating on an adequate specie basis, was a thing to be desired, a
political public advantage to be obtained, if it might be obtained; and,
more especially, I have supposed that in a new country, with resources
not yet half developed, with a rapidly increasing population and a
constant demand for more and more capital,--that is to say, in just such
a country as the United States are, I have supposed that it was admitted
that there are particular and extraordinary advantages in a safe and
well regulated paper currency; because in such a country well regulated
bank paper not only supplies a convenient medium of payments and of
exchange, but also, by the expansion of that medium in a reasonable and
safe degree, the amount of circulation is kept more nearly commensurate
with the constantly increasing amount of property; and an extended
capital, in the shape of credit, comes to the aid of the enterprising
and the industrious. It is precisely on this credit, created by
reasonable expansion of the currency in a new country, that men of small
capital carry on their business. It is exactly by means of this, that
industry and enterprise are stimulated. If we were driven back to an
exclusively metallic currency, the necessary and inevitable consequence
would be, that all trade would fall into the hands of large capitalists.
This is so plain, that no man of reflection can doubt it. I know not,
therefore, in what words to express my astonishment, when I hear it said
that the present measures of government are intended for the good of the
many instead of the few, for the benefit of the poor, and against the
rich; and when I hear it proposed, at the same moment, to do away with
the whole system of credit, and place all trade and commerce, therefore,
in the hands of those who have adequate capital to carry them on without
the use of any credit at all. This, Sir, would be dividing society, by a
precise, distinct, and well-defined line, into two classes; first, the
small class, who have competent capital for trade, when credit is out of
the question; and, secondly, the vastly numerous class of those whose
living must become, in such a state of things, a mere manual occupation,
without the use of capital or of any substitute for it.
Now, Sir, it is the effect of a well-regulated system of paper credit to
break in upon this line thus dividing the many from the few, and to
enable more or less of the more numerous class to pass over it, and to
participate in the profits of capital by means of a safe and convenient
substitute for capital; and thus to diffuse far more widely the general
earnings, and therefore the general prosperity and happiness, of
society. Every man of observation must have witnessed, in this country,
that men of heavy capital have constantly complained of bank
circulation, and a consequent credit system, as injurious to the rights
of capital. They undoubtedly feel its effects. All that is gained by the
use of credit is just so much subtracted from the amount of their own
accumulations, and so much the more has gone to the benefit of those who
bestow their own labor and industry on capital in small amounts. To the
great majority, this has been of incalculable benefit in the United
States; and therefore, Sir, whoever attempts the entire overthrow of the
system of bank credit aims a deadly blow at the interest of that great
and industrious class, who, having some capital, cannot, nevertheless,
transact business without some credit. He can mean nothing else, if he
have any intelligible meaning at all, than to turn all such persons over
to the long list of mere manual laborers. What else can they do, with
not enough of absolute capital, and with no credit? This, Sir, this is
the true tendency and the unavoidable result of these measures, which
have been undertaken with the patriotic object of assisting the poor
against the rich!
I am well aware that bank credit may be abused. I know that there is
another extreme, exactly the opposite of that of which I have now been
speaking, and no less sedulously to be avoided. I know that the issue of
bank paper may become excessive; that depreciation will then follow; and
that the evils, the losses, and the frauds consequent on a disordered
currency fall on the rich and the poor together, but with especial
weight of ruin on the poor. I know that the system of bank credit must
always rest on a specie basis, and that it constantly needs to be
strictly guarded and properly restrained; and it may be so guarded and
restrained. We need not give up the good which belongs to it, through
fear of the evils which may follow from its abuse. We have the power to
take security against these evils. It is our business, as statesmen, to
adopt that security; it is our business not to prostrate, or attempt to
prostrate, the system, but to use those means of precaution, restraint,
and correction which experience has sanctioned, and which are ready at
our hands.
It would be to our everlasting reproach, it would be placing us below
the general level of the intelligence of civilized states, to admit that
we cannot contrive means to enjoy the benefits of bank circulation, and
of avoiding, at the same time, its dangers. Indeed, Sir, no contrivance
is necessary. It is _contrivance_, and the love of contrivance, that
spoil all. We are destroying ourselves by a remedy which no evil called
for. We are ruining perfect health by nostrums and quackery. We have
lived hitherto under a well constructed, practical, and beneficial
system; a system not surpassed by any in the world; and it seems to me
to be presuming largely, largely indeed, on the credulity and
self-denial of the people, to rush with such sudden and impetuous haste
into new schemes and new theories, to overturn and annihilate all that
we have so long found useful.
Our system has hitherto been one in which paper has been circulating on
the strength of a specie basis; that is to say, when every bank-note was
convertible into specie at the will of the holder. This has been our
guard against excess. While banks are bound to redeem their bills by
paying gold and silver on demand, and are at all times able to do this,
the currency is safe and convenient. Such a currency is not paper money,
in its odious sense. It is not like the Continental paper of
Revolutionary times; it is not like the worthless bills of banks which
have suspended specie payments. On the contrary, it is the
representative of gold and silver, and convertible into gold and silver
on demand, and therefore answers the purposes of gold and silver; and so
long as its credit is in this way sustained, it is the cheapest, the
best, and the most convenient circulating medium. I have already
endeavored to warn the country against irredeemable paper; against the
paper of banks which do not pay specie for their own notes; against that
miserable, abominable, and fraudulent policy, which attempts to give
value to any paper, of any bank, one single moment longer than such
paper is redeemable on demand in gold and silver. I wish most solemnly
and earnestly to repeat that warning. I see danger of that state of
things ahead. I see imminent danger that a portion of the State banks
will stop specie payments. The late measure of the Secretary, and the
infatuation with which it seems to be supported, tend directly and
strongly to that result. Under pretence, then, of a design to return to
a currency which shall be all specie, we are likely to have a currency
in which there shall be no specie at all. We are in danger of being
overwhelmed with irredeemable paper, mere paper, representing not gold
nor silver; no, Sir, representing nothing but broken promises, bad
faith, bankrupt corporations, cheated creditors, and a ruined people.
This, I fear, Sir, may be the consequence, already alarmingly near, of
this attempt, unwise if it be real, and grossly fraudulent if it be only
pretended, of establishing an exclusively hard-money currency.
But, Sir, if this shock could be avoided, and if we could reach the
object of an exclusive metallic circulation, we should find in that very
success serious and insurmountable inconveniences. We require neither
irredeemable paper, nor yet exclusively hard money. We require a mixed
system. We require specie, and we require, too, good bank paper, founded
on specie, representing specie, and convertible into specie on demand.
We require, in short, just such a currency as we have long enjoyed, and
the advantages of which we seem now, with unaccountable rashness, about
to throw away.
I avow myself, therefore, decidedly against the object of a return to an
exclusive specie currency. I find great difficulty, I confess, in
believing any man serious in avowing such an object. It seems to me
rather a subject for ridicule, at this age of the world, than for sober
argument. But if it be true that any are serious for the return of the
gold and silver age, I am seriously against it.
Let us, Sir, anticipate, in imagination, the accomplishment of this
grand experiment. Let us suppose that, at this moment, all bank paper
were out of existence, and the country full of specie. Where, Sir,
should we put it, and what should we do with it? Should we ship it, by
cargoes, every day, from New York to New Orleans, and from New Orleans
back to New York? Should we encumber the turnpikes, the railroads, and
the steamboats with it, whenever purchases and sales were to be made in
one place of articles to be transported to another? The carriage of the
money would, in some cases, cost half as much as the carriage of the
goods. Sir, the very first day, under such a state of things, we should
set ourselves about the creation of banks. This would immediately become
necessary and unavoidable. We may assure ourselves, therefore, without
danger of mistake, that the idea of an exclusively metallic currency is
totally incompatible, in the existing state of the world, with an active
and extensive commerce. It is inconsistent, too, with the greatest good
of the greatest number; and therefore I oppose it.
But, Sir, how are we to get through the first experiment, so as to be
able to try that which is to be final and ultimate, that is to say, how
are we to get rid of the State banks? How is this to be accomplished? Of
the Bank of the United States, indeed, we may free ourselves readily;
but how are we to annihilate the State banks? We did not speak them into
being; we cannot speak them out of being. They did not originate in any
exercise of our power; nor do they owe their continuance to our
indulgence. They are responsible to the States; to us they are
irresponsible. We cannot act upon them; we can only act with them; and
the expectation, as it would appear, is, that, by zealously co-operating
with the government in carrying into operation its new theory, they may
disprove the necessity of their own existence, and fairly work
themselves out of the world! Sir, I ask once more, Is a great and
intelligent community to endure patiently all sorts of suffering for
fantasies like these? How charmingly practicable, how delightfully
probable, all this looks!
I find it impossible, Mr. President, to believe that the removal of the
deposits arose in any such purpose as is now avowed. I believe all this
to be an after-thought. The removal was resolved on as a strong measure
against the bank; and now that it has been attended with consequences
not at all apprehended from it, instead of being promptly retracted, as
it should have been, it is to be justified on the ground of a grand
experiment, above the reach of common sagacity, and dropped down, as it
were, from the clouds, "to witch the world with noble policy." It is not
credible, not possible, Sir, that, six months ago, the administration
suddenly started off to astonish mankind with its new inventions in
politics, and that it then began its magnificent project by removing the
deposits as its first operation. No, Sir, no such thing. The removal of
the deposits was a blow at the bank, and nothing more; and if it had
succeeded, we should have heard nothing of any project for the final
putting down of all State banks. No, Sir, not one word. We should have
heard, on the contrary, only of their usefulness, their excellence, and
their exact adaptation to the uses and necessities of this government.
But the experiment of making successful use of State banks having
failed, completely failed, in this the very first endeavor; the State
banks having already proved themselves not able to fill the place and
perform the duties of a national bank, although highly useful in their
appropriate sphere; and the disastrous consequences of the measures of
government coming thick and fast upon us, the professed object of the
whole movement is at once changed, and the cry now is, Down with all the
State banks! Down with all the State banks! and let us return to our
embraces of solid gold and solid silver!