J. Rodgers, sc.

View of the Senate of the United States in Session.
M^R. BENTON ON THE FLOOR.
from a large Engraving Published by E. Anthony
New York, D Appleton & C^o.

THIRTY YEARS' VIEW;
OR,
A HISTORY OF THE WORKING OF THE AMERICAN
GOVERNMENT FOR THIRTY YEARS,
FROM 1820 TO 1850.

CHIEFLY TAKEN
FROM THE CONGRESS DEBATES, THE PRIVATE PAPERS OF GENERAL JACKSON,
AND THE SPEECHES OF EX-SENATOR BENTON, WITH HIS
ACTUAL VIEW OF MEN AND AFFAIRS:

WITH

HISTORICAL NOTES AND ILLUSTRATIONS, AND SOME NOTICES OF EMINENT
DECEASED COTEMPORARIES.

BY A SENATOR OF THIRTY YEARS.

IN TWO VOLUMES.
VOL. II.

NEW YORK:
D. APPLETON AND COMPANY,
1, 3, AND 5 BOND STREET.
LONDON: 16 LITTLE BRITAIN.
1883.

Entered according to act of Congress, in the year 1856, by
D. APPLETON AND COMPANY,
in the Clerk's Office of the District Court of the United States for the
Southern District of New York.

CONTENTS OF VOLUME II.

THIRTY YEARS' VIEW.

ADMINISTRATION OF MARTIN VAN BUREN.

[CHAPTER I.]

INAUGURATION OF MR. VAN BUREN.

March the 4th of this year, Mr. Van Buren was inaugurated President of the United States with the usual formalities, and conformed to the usage of his predecessors in delivering a public address on the occasion: a declaration of general principles, and an indication of the general course of the administration, were the tenor of his discourse: and the doctrines of the democratic school, as understood at the original formation of parties, were those professed. Close observance of the federal constitution as written—no latitudinarian constructions permitted, or doubtful powers assumed—faithful adherence to all its compromises—economy in the administration of the government—peace, friendship and fair dealing with all foreign nations—entangling alliances with none: such was his political chart: and with the expression of his belief that a perseverance in this line of foreign policy, with an increased strength, tried valor of the people, and exhaustless resources of the country, would entitle us to the good will of nations, protect our national respectability, and secure us from designed aggression from foreign powers. His expressions and views on this head deserve to be commemorated, and to be considered by all those into whose hands the management of the public affairs may go; and are, therefore, here given in his own words:

"Our course of foreign policy has been so uniform and intelligible, as to constitute a rule of executive conduct which leaves little to my discretion, unless, indeed, I were willing to run counter to the lights of experience, and the known opinions of my constituents. We sedulously cultivate the friendship of all nations, as the condition most compatible with our welfare, and the principles of our government. We decline alliances, as adverse to our peace. We desire commercial relations on equal terms, being ever willing to give a fair equivalent for advantages received. We endeavor to conduct our intercourse with openness and sincerity; promptly avowing our objects, and seeking to establish that mutual frankness which is as beneficial in the dealings of nations as of men. We have no disposition, and we disclaim all right, to meddle in disputes, whether internal or foreign, that may molest other countries; regarding them, in their actual state, as social communities, and preserving a strict neutrality in all their controversies. Well knowing the tried valor of our people, and our exhaustless resources, we neither anticipate nor fear any designed aggression; and, in the consciousness of our own just conduct, we feel a security that we shall never be called upon to exert our determination, never to permit an invasion of our rights, without punishment or redress."

These are sound and encouraging views, and in adherence to them, promise to the United States a career of peace and prosperity comparatively free from the succession of wars which have loaded so many nations with debt and taxes, filled them with so many pensioners and paupers, created so much necessity for permanent fleets and armies; and placed one half the population in the predicament of living upon the labor of the other. The stand which the United States had acquired among nations by the vindication of her rights against the greatest powers—and the manner in which all unredressed aggressions, and all previous outstanding injuries, even of the oldest date, had been settled up and compensated under the administration of President Jackson—authorized this language from Mr. Van Buren; and the subsequent conduct of nations has justified it. Designed aggression, within many years, has come from no great power: casual disagreements and accidental injuries admit of arrangement: weak neighbors can find no benefit to themselves in wanton aggression, or refusal of redress for accidental wrong: isolation (a continent, as it were, to ourselves) is security against attack; and our railways would accumulate rapid destruction upon any invader. These advantages, and strict adherence to the rule, to ask only what is right, and submit to nothing wrong, will leave us (we have reason to believe) free from hostile collision with foreign powers, free from the necessity of keeping up war establishments of army and navy in time of peace, with our great resources left in the pockets of the people (always the safest and cheapest national treasuries), to come forth when public exigencies require them, and ourselves at liberty to pursue an unexampled career of national and individual prosperity.

One single subject of recently revived occurrence in our domestic concerns, and of portentous apparition, admitted a departure from the generalities of an inaugural address, and exacted from the new President the notice of a special declaration: it was the subject of slavery—an alarming subject of agitation near twenty years before—quieted by the Missouri compromise—resuscitated in 1835, as shown in previous chapters of this View; and apparently taking its place as a permanent and most pestiferous element in our presidential elections and federal legislation. It had largely mixed with the presidential election of the preceding year: it was expected to mix with ensuing federal legislation: and its evil effect upon the harmony and stability of the Union justified the new President in making a special declaration in relation to it, and even in declaring beforehand the cases of slavery legislation in which he would apply the qualified negative with which the constitution invested him over the acts of Congress. Under this sense of duty and propriety the inaugural address presented this passage:

"The last, perhaps the greatest, of the prominent sources of discord and disaster supposed to lurk in our political condition, was the institution of domestic slavery. Our forefathers were deeply impressed with the delicacy of this subject, and they treated it with a forbearance so evidently wise, that, in spite of every sinister foreboding, it never, until the present period disturbed the tranquillity of our common country. Such a result is sufficient evidence of the justice and the patriotism of their course; it is evidence not to be mistaken, that an adherence to it can prevent all embarrassment from this, as well as from every other anticipated cause of difficulty or danger. Have not recent events made it obvious to the slightest reflection, that the least deviation from this spirit of forbearance is injurious to every interest, that of humanity included? Amidst the violence of excited passions, this generous and fraternal feeling has been sometimes disregarded; and, standing as I now do before my countrymen in this high place of honor and of trust, I cannot refrain from anxiously invoking my fellow-citizens never to be deaf to its dictates. Perceiving, before my election, the deep interest this subject was beginning to excite, I believed it a solemn duty fully to make known my sentiments in regard to it; and now, when every motive for misrepresentations have passed away, I trust that they will be candidly weighed and understood. At least, they will be my standard of conduct in the path before me. I then declared that, if the desire of those of my countrymen who were favorable to my election was gratified, 'I must go into the presidential chair the inflexible and uncompromising opponent of every attempt, on the part of Congress, to abolish slavery in the District of Columbia, against the wishes of the slaveholding States; and also with a determination equally decided to resist the slightest interference with it in the States where it exists.' I submitted also to my fellow-citizens, with fulness and frankness, the reasons which led me to this determination. The result authorizes me to believe that they have been approved, and are confided in, by a majority of the people of the United States, including those whom they most immediately affect. It now only remains to add, that no bill conflicting with these views can ever receive my constitutional sanction. These opinions have been adopted in the firm belief that they are in accordance with the spirit that actuated the venerated fathers of the republic, and that succeeding experience has proved them to be humane, patriotic, expedient, honorable and just. If the agitation of this subject was intended to reach the stability of our institutions, enough has occurred to show that it has signally failed; and that in this, as in every other instance, the apprehensions of the timid and the hopes of the wicked for the destruction of our government, are again destined to be disappointed."

The determination here declared to yield the presidential sanction to no bill which proposed to interfere with slavery in the States; or to abolish it in the District of Columbia while it existed in the adjacent States, met the evil as it then presented itself—a fear on the part of some of the Southern States that their rights of property were to be endangered by federal legislation: and against which danger the veto power was now pledged to be opposed. There was no other form at that time in which slavery agitation could manifest itself, or place on which it could find a point to operate—the ordinance of 1787, and the compromise of 1820, having closed up the Territories against it. Danger to slave property in the States, either by direct action, or indirectly through the District of Columbia, were the only points of expressed apprehension; and at these there was not the slightest ground for fear. No one in Congress dreamed of interfering with slavery in the States, and the abortion of all the attempts made to abolish it in the District, showed the groundlessness of that fear. The pledged veto was not a necessity, but a propriety;—not necessary, but prudential;—not called for by anything in congress, but outside of it. In that point of view it was wise and prudent. It took from agitation its point of support—its means of acting on the fears and suspicions of the timid and credulous: and it gave to the country a season of repose and quiet from this disturbing question until a new point of agitation could be discovered and seized.

The cabinet remained nearly as under the previous administration: Mr. Forsyth, Secretary of State; Mr. Woodbury, Secretary of the Treasury; Mr. Poinsett, Secretary at War; Mr. Mahlon Dickerson, Secretary of the Navy; Mr. Amos Kendall, Postmaster General; and Benjamin F. Butler, Esq. Attorney General. Of all these Mr. Poinsett was the only new appointment. On the bench of the Supreme Court, John Catron, Esq. of Tennessee, and John McKinley, Esq. of Alabama, were appointed Justices; William Smith, formerly senator in Congress from South Carolina, having declined the appointment which was filled by Mr. McKinley. Mr. Butler soon resigning his place of Attorney General, Henry D. Gilpin, Esq. of Pennsylvania (after a temporary appointment of Felix Grundy, Esq. of Tennessee), became the Attorney General during the remainder of the administration.

[CHAPTER II.]

FINANCIAL AND MONETARY CRISIS: GENERAL SUSPENSION OF SPECIE PAYMENTS BY THE BANKS.

The nascent administration of the new President was destined to be saluted by a rude shock, and at the point most critical to governments as well as to individuals—that of deranged finances and broken-up treasury; and against the dangers of which I had in vain endeavored to warn our friends. A general suspension of the banks, a depreciated currency, and the insolvency of the federal treasury, were at hand. Visible signs, and some confidential information, portended to me this approaching calamity, and my speeches in the Senate were burthened with its vaticination. Two parties, inimical to the administration, were at work to accomplish it—politicians and banks; and well able to succeed, because the government money was in the hands of the banks, and the federal legislation in the hands of the politicians; and both interested in the overthrow of the party in power;—and the overthrow of the finances the obvious means to the accomplishment of the object. The public moneys had been withdrawn from the custody of the Bank of the United States: the want of an independent, or national treasury, of necessity, placed them in the custody of the local banks: and the specie order of President Jackson having been rescinded by the Act of Congress, the notes of all these banks, and of all others in the country, amounting to nearly a thousand, became receivable in payment of public dues. The deposit banks became filled up with the notes of these multitudinous institutions, constituting that surplus, the distribution of which had become an engrossing care with Congress, and ended with effecting the object under the guise of a deposit with the States. I recalled the recollection of the times of 1818-19, when the treasury reports of one year showed a superfluity of revenue for which there was no want, and of the next a deficit which required to be relieved by a loan; and argued that we must now have the same result from the bloat in the paper system which we then had. I demanded—

"Are we not at this moment, and from the same cause, realizing the first part—the illusive and treacherous part—of this picture? and must not the other, the sad and real sequel, speedily follow? The day of revulsion must come, and its effects must be more or less disastrous; but come it must. The present bloat in the paper system cannot continue: violent contraction must follow enormous expansion: a scene of distress and suffering must ensue—to come of itself out of the present state of things, without being stimulated and helped on by our unwise legislation."

Of the act which rescinded the specie order, and made the notes of the local banks receivable in payment of all federal dues, I said:

"This bill is to be an era in our legislation and in our political history. It is to be a point on which the view of the future age is to be thrown back, and from which future consequences will be traced. I separate myself from it: I wash my hands of it: I oppose it. I am one of those who promised gold—not paper. I promised the currency of the constitution, not the currency of corporations. I did not join in putting down the Bank of the United States to put up a wilderness of local banks. I did not join in putting down the paper currency of a national bank, to put up a national paper currency of a thousand local banks. I did not strike Cæsar to make Antony master of Rome."

The condition of our deposit banks was desperate—wholly inadequate to the slightest pressure on their vaults in the ordinary course of business, much less that of meeting the daily government drafts and the approaching deposit of near forty millions with the States. The necessity of keeping one-third of specie on hand for its immediate liabilities, was enforced from the example and rule of the Bank of England, while many of our deposit banks could show but the one-twentieth, the one-thirtieth, the one-fortieth, and even the one-fiftieth of specie in hand for immediate liabilities in circulation and deposits. The sworn evidence of a late Governor of the Bank of England (Mr. Horsely Palmer), before a parliamentary committee, was read, in which he testified that the average proportion of coin and bullion which the bank deems it prudent to keep on hand, was at the rate of the third of the total amount of all her liabilities—including deposits as well as issues. And this was the proportion which that bank deemed it prudent to keep—that bank which was the largest in the world, situated in the moneyed metropolis of Europe, with its list of debtors within the circuit of London, supported by the richest merchants in the world, and backed by the British government, which stood her security for fourteen millions sterling, and ready with her supply of exchequer bills (the interest to be raised to insure sales), at any moment of emergency. Tested by the rule of the Bank of England, and our deposit banks were in the jaws of destruction; and this so evident to me, that I was amazed that others did not see it—those of our friends who voted with the opponents of the administration in rescinding the specie order, and in making the deposit with the States. The latter had begun to take effect, at the rate of about ten millions to the quarter, on the first day of January preceding Mr. Van Buren's inauguration: a second ten millions were to be called for on the first of April: and like sums on the first days of the two remaining quarters. It was utterly impossible for the banks to stand these drafts; and, having failed in all attempts to wake up our friends, who were then in the majority, to a sense of the danger which was impending, and to arrest their ruinous voting with the opposition members (which most of them did), I determined to address myself to the President elect, under the belief that, although he would not be able to avert the blow, he might do much to soften its force and avert its consequences, when it did come. It was in the month of February, while Mr. Van Buren was still President of the Senate, that I invited him into a committee room for that purpose, and stated to him my opinion that we were on the eve of an explosion of the paper system and of a general suspension of the banks—intending to follow up that expression of opinion with the exposition of my reasons for thinking so: but the interview came to a sudden and unexpected termination. Hardly had I expressed my belief of this impending catastrophe, than he spoke up, and said, "Your friends think you a little exalted in the head on that subject." I said no more. I was miffed. We left the room together, talking on different matters, and I saying to myself, "You will soon feel the thunderbolt." But I have since felt that I was too hasty, and that I ought to have carried out my intention of making a full exposition of the moneyed affairs of the country. His habitual courtesy, from which the expression quoted was a most rare departure, and his real regard for me, both personal and political (for at that time he was pressing me to become a member of his cabinet), would have insured me a full hearing, if I had shown a disposition to go on; and his clear intellect would have seized and appreciated the strong facts and just inferences which would have been presented to him. But I stopped short, as if I had nothing more to say, from that feeling of self-respect which silences a man of some pride when he sees that what he says is not valued. I have regretted my hastiness ever since. It was of the utmost moment that the new President should have his eyes opened to the dangers of the treasury, and my services on the Committee of Finance had given me opportunities of knowledge which he did not possess. Forewarned is forearmed; and never was there a case in which the maxim more impressively applied. He could not have prevented the suspension: the repeal of the specie circular and the deposit with the States (both measures carried by the help of votes from professing friends), had put that measure into the hands of those who would be sure to use it: but he could have provided against it, and prepared for it, and lessened the force of the blow when it did come. He might have quickened the vigilance of the Secretary of the Treasury—might have demanded additional securities from the deposit banks—and might have drawn from them the moneys called for by appropriation acts. There was a sum of about five millions which might have been saved with a stroke of the pen, being the aggregate of sums drawn from the treasury by the numerous disbursing officers, and left in the banks in their own names for daily current payments: an order to these officers would have saved these five millions, and prevented the disgrace and damage of a stoppage in the daily payments, and the spectacle of a government waking up in the morning without a dollar to pay the day-laborer with, while placing on its statute book a law for the distribution of forty millions of surplus. Measures like these, and others which a prudent vigilance would have suggested, might have enabled the government to continue its payments without an extra session of Congress, and without the mortification of capitulating to the broken banks, by accepting and paying out their depreciated notes as the currency of the federal treasury.

[CHAPTER III.]

PREPARATION FOR THE DISTRESS AND SUSPENSION.

In the autumn of the preceding year, shortly before the meeting of Congress, Mr. Biddle, president of the Pennsylvania Bank of the United States (for that was the ridiculous title it assumed after its resurrection under a Pennsylvania charter), issued one of those characteristic letters which were habitually promulgated whenever a new lead was to be given out, and a new scent emitted for the followers of the bank to run upon. A new distress, as the pretext for a new catastrophe, was now the object. A picture of ruin was presented, alarm given out, every thing going to destruction; and the federal government the cause of the whole, and the national recharter of the defunct bank the sovereign remedy. The following is an extract from that letter.

"The Bank of the United States has not ceased to exist more than seven months, and already the whole currency and exchanges are running into inextricable confusion, and the industry of the country is burdened with extravagant charges on all the commercial intercourse of the Union. And now, when these banks have been created by the Executive, and urged into these excesses, instead of gentle and gradual remedies, a fierce crusade is raised against them, the funds are harshly and suddenly taken from them, and they are forced to extraordinary means of defense against the very power which brought them into being. They received, and were expected to receive, in payment for the government, the notes of each other and the notes of other banks, and the facility with which they did so was a ground of special commendation by the government; and now that government has let loose upon them a demand for specie to the whole amount of these notes. I go further. There is an outcry abroad, raised by faction, and echoed by folly, against the banks of the United States. Until it was disturbed by the government, the banking system of the United States was at least as good as that of any other commercial country. What was desired for its perfection was precisely what I have so long striven to accomplish—to widen the metallic basis of the currency by a greater infusion of coin into the smaller channels of circulation. This was in a gradual and judicious train of accomplishment. But this miserable foolery about an exclusively metallic currency, is quite as absurd as to discard the steamboats, and go back to poling up the Mississippi."

The lead thus given out was sedulously followed during the winter, both in Congress and out of it, and at the end of the session had reached an immense demonstration in New York, in the preparations made to receive Mr. Webster, and to hear a speech from him, on his return from Washington. He arrived in New York on the 15th of March, and the papers of the city give this glowing account of his reception:

"In conformity with public announcement, yesterday, at about half past 3 o'clock, the Honorable Daniel Webster arrived in this city in the steamboat Swan from Philadelphia. The intense desire on the part of the citizens to give a grateful reception to this great advocate of the constitution, set the whole city in motion towards the point of debarkation, for nearly an hour before the arrival of the distinguished visitor. At the moment when the steamboat reached the pier, the assemblage had attained that degree of density and anxiety to witness the landing, that it was feared serious consequences would result. At half past 3 o'clock Mr. Webster, accompanied by Philip Hone and David B. Ogden, landed from the boat amidst the deafening cheers and plaudits of the multitude, thrice repeated, and took his seat in an open barouche provided for the occasion. The procession, consisting of several hundred citizens upon horseback, a large train of carriages and citizens, formed upon State street, and after receiving their distinguished guest, proceeded with great order up Broadway to the apartments arranged for his reception at the American Hotel. The scene presented the most gratifying spectacle. Hundreds of citizens who had been opposed to Mr. Webster in politics, now that he appeared as a private individual, came forth to demonstrate their respect for his private worth and to express their approbation of his personal character; and thousands more who appreciated his principles and political integrity, crowded around to convince him of their personal attachment, and give evidence of their approval of his public acts. The wharves, the shipping, the housetops and windows, and the streets through which the procession passed, were thronged with citizens of every occupation and degree, and loud and continued cheers greeted the great statesman at every point. There was not a greater number at the reception of General Jackson in this city, with the exception of the military, nor a greater degree of enthusiasm manifested upon that occasion, than the arrival upon our shores of Daniel Webster. At 6 o'clock in the evening, the anxious multitude began to move towards Niblo's saloon, where Mr. Webster was to be addressed by the committee of citizens delegated for that purpose, and to which it was expected he would reply. A large body of officers were upon the ground to keep the assemblage within bounds, and at a quarter past six the doors were opened, when the saloon, garden, and avenues leading thereto were instantly crowded to overflowing.

The meeting was called to order by Alderman Clark, who proposed for president, David B. Ogden, which upon being put to vote was unanimously adopted. The following gentlemen were then elected vice-presidents, viz: Robert C. Cornell, Jonathan Goodhue, Joseph Tucker, Nathaniel Weed; and Joseph Hoxie and G. S. Robins, secretaries.

Mr. W. began his remarks at a quarter before seven o'clock, P.M. and concluded them at a quarter past nine. When he entered the saloon, he was received with the most deafening cheers. The hall rang with the loud plaudits of the crowd, and every hat was waving. So great was the crowd in the galleries, and such was the apprehension that the apparently weak wooden columns which supported would give way, that Mr. W. was twice interrupted with the appalling cry "the galleries are falling," when only a window was broken, or a stove-pipe shaken. The length of the address (two and a half hours), none too long, however, for the audience would with pleasure have tarried two hours longer, compels us to give at present only the heads of a speech which we would otherwise now report in detail."

Certainly Mr. Webster was worthy of all honors in the great city of New York; but having been accustomed to pass through that city several times in every year during the preceding quarter of a century, and to make frequent sojourns there, and to speak thereafter, and in all the characters of politician, social guest, and member of the bar,—it is certain that neither his person nor his speaking could be such a novelty and rarity as to call out upon his arrival so large a meeting as is here described, invest it with so much form, fire it with so much enthusiasm, fill it with so much expectation, unless there had been some large object in view—some great effect to be produced—some consequence to result: and of all which this imposing demonstration was at once the sign and the initiative. No holiday occasion, no complimentary notice, no feeling of personal regard, could have called forth an assemblage so vast, and inspired it with such deep and anxious emotions. It required a public object, a general interest, a pervading concern, and a serious apprehension of some uncertain and fearful future, to call out and organize such a mass—not of the young, the ardent, the heedless—but of the age, the character, the talent, the fortune, the gravity of the most populous and opulent city of the Union. It was as if the population of a great city, in terror of some great impending unknown calamity, had come forth to get consolation and counsel from a wise man—to ask him what was to happen? and what they were to do? And so in fact it was, as fully disclosed in the address with which the orator was saluted, and in the speech of two hours and a half which he made in response to it. The address was a deprecation of calamities; the speech was responsive to the address—admitted every thing that could be feared—and charged the whole upon the mal-administration of the federal government. A picture of universal distress was portrayed, and worse coming; and the remedy for the whole the same which had been presented in Mr. Biddle's letter—the recharter of the national bank. The speech was a manifesto against the Jackson administration, and a protest against its continuation in the person of his successor, and an invocation to a general combination against it. All the banks were sought to be united, and made to stand together upon a sense of common danger—the administration their enemy, the national bank their protection. Every industrial pursuit was pictured as crippled and damaged by bad government. Material injury to private interests were still more vehemently charged than political injuries to the body politic. In the deplorable picture which it presented of the condition of every industrial pursuit, and especially in the "war" upon the banks and the currency, it seemed to be a justificatory pleading in advance for a general shutting up of their doors, and the shutting up of the federal treasury at the same time. In this sense, and on this point, the speech contained this ominous sentence, more candid than discreet, taken in connection with what was to happen:

"Remember, gentlemen, in the midst of this deafening din against all banks, that if it shall create such a panic, or such alarm, as shall shut up the banks, it will shut up the treasury of the United States also."

The whole tenor of the speech was calculated to produce discontent, create distress, and excite alarm—discontent and distress for present sufferings—alarm for the greater, which were to come. This is a sample:

"Gentlemen, I would not willingly be a prophet of ill. I most devoutly wish to see a better state of things; and I believe the repeal of the treasury order would tend very much to bring about that better state of things. And I am of opinion, gentlemen, that the order will be repealed. I think it must be repealed. I think the east, west, north and south, will demand its repeal. But, gentlemen, I feel it my duty to say, that if I should be disappointed in this expectation, I see no immediate relief to the distresses of the community. I greatly fear, even, that the worst is not yet. I look for severer distresses; for extreme difficulties in exchange; for far greater inconveniences in remittance, and for a sudden fall in prices. Our condition is one not to be tampered with, and the repeal of the treasury order being something which government can do, and which will do good, the public voice is right in demanding that repeal. It is true, if repealed now, the relief will come late. Nevertheless its repeal or abrogation is a thing to be insisted on, and pursued till it shall be accomplished."

The speech concluded with an earnest exhortation to the citizens of New York to do something, without saying what, but which with my misgivings and presentiments, the whole tenor of the speech and the circumstances which attended it—delivered in the moneyed metropolis of the Union, at a time when there was no political canvass depending, and the ominous omission to name what was required to be done—appeared to me to be an invitation to the New York banks to close their doors! which being done by them would be an example followed throughout the Union, and produce the consummation of a universal suspension. The following is that conclusion:

"Whigs of New York! Patriotic citizens of this great metropolis!—Lovers of constitutional liberty, bound by interest and affection to the institutions of your country, Americans in heart and in principle! You are ready, I am sure, to fulfil all the duties imposed upon you by your situation, and demanded of you by your country. You have a central position; your city is the point from which intelligence emanates, and spreads in all directions over the whole land. Every hour carries reports of your sentiments and opinions to the verge of the Union. You cannot escape the responsibility which circumstances have thrown upon you. You must live and act on a broad and conspicuous theatre either for good or for evil, to your country. You cannot shrink away from public duties; you cannot obscure yourselves, nor bury your talent. In the common welfare, in the common prosperity, in the common glory of Americans, you have a stake, of value not to be calculated. You have an interest in the preservation of the Union, of the constitution, and of the true principles of the government, which no man can estimate. You act for yourselves, and for the generations that are to come after you; and those who, ages hence, shall bear your names, and partake your blood, will feel in their political and social condition, the consequences of the manner in which you discharge your political duties."

The appeal for action in this paragraph is vehement. It takes every form of violent desire which is known to the art of entreaty. Supplication, solicitation, remonstrance, importunity, prayer, menace! until rising to the dignity of a debt due from a moneyed metropolis to an expectant community, he demanded payment as matter of right! and enforced the demand as an obligation of necessity, as well as of duty, and from which such a community could not escape, if it would. The nature of the action which was so vehemently desired, could not be mistaken. I hold it a fair interpretation of this appeal that it was an exhortation to the business population of the commercial metropolis of the Union to take the initiative in suspending specie payments, and a justificatory manifesto for doing so; and that the speech itself was the first step in the grand performance: and so it seemed to be understood. It was received with unbounded applause, lauded to the skies, cheered to the echo, carefully and elaborately prepared for publication,—published and republished in newspaper and pamphlet form; and universally circulated. This was in the first month of Mr. Van Buren's presidency, and it will be seen what the second one brought forth.

The specie circular—that treasury order of President Jackson, which saved the public lands from being converted into broken bank paper—was the subject of repeated denunciatory reference—very erroneous, as the event has proved, in its estimate of the measure; but quite correct in its history, and amusing in its reference to some of the friends of the administration who undertook to act a part for and against the rescission of the order at the same time.

"Mr. Webster then came to the treasury circular, and related the history of the late legislation upon it. 'A member of Congress,' said he, 'prepared this very treasury order in 1836, but the only vote he got for it was his own—he stood 'solitary' and 'alone' (a laugh); and yet eleven days after Congress had adjourned—only six months after the President in his annual message had congratulated the people upon the prosperous sales of the public lands,—this order came out in known and direct opposition to the wishes of nine-tenths of the members of Congress.'"

This is good history from a close witness of what he relates. The member referred to as having prepared the treasury order, and offered it in the shape of a bill in the Senate, and getting no vote for it but his own,—who stood solitary and alone on that occasion, as well as on some others—was no other than the writer of this View; and he has lived to see about as much unanimity in favor of that measure since as there was against it then. Nine-tenths of the members of Congress were then against it, but from very different motives—some because they were deeply engaged in land speculations, and borrowed paper from the banks for the purpose; some because they were in the interest of the banks, and wished to give their paper credit and circulation; others because they were sincere believers in the paper system; others because they were opposed to the President, and believed him to be in favor of the measure; others again from mere timidity of temperament, and constitutional inability to act strongly. And these various descriptions embraced friends as well as foes to the administration. Mr. Webster says the order was issued eleven days after that Congress adjourned which had so unanimously rejected it. That is true. We only waited for Congress to be gone to issue the order. Mr. Benton was in the room of the private secretary (Mr. Donelson), hard by the council chamber, while the cabinet sat in council upon this measure. They were mostly against it. General Jackson ordered it, and directed the private Secretary to bring him a draft of the order to be issued. He came to Mr. Benton to draw it—who did so: and being altered a little, it was given to the Secretary of the Treasury to be promulgated. Then Mr. Benton asked for his draft, that he might destroy it. The private secretary said no—that the time might come when it should be known who was at the bottom of that Treasury order: and that he would keep it. It was issued on the strong will and clear head of President Jackson, and saved many ten millions to the public treasury. Bales of bank notes were on the road to be converted into public lands which this order overtook, and sent back, to depreciate in the vaults of the banks instead of the coffers of the treasury. To repeal the order by law was the effort as soon as Congress met, and direct legislation to that effect was proposed by Mr. Ewing, of Ohio, but superseded by a circumlocutory bill from Mr. Walker and Mr. Rives, which the President treated as a nullity for want of intelligibility: and of which Mr. Webster gave this account:

"If he himself had had power, he would have voted for Mr. Ewing's proposition to repeal the order, in terms which Mr. Butler and the late President could not have misunderstood; but power was so strong, and members of Congress had now become so delicate about giving offence to it, that it would not do, for the world, to repeal the obnoxious circular, plainly and forthwith; but the ingenuity of the friends of the administration must dodge around it, and over it—and now Mr. Butler had the unkindness to tell them that their views neither he, lawyer as he is, nor the President, could possibly understand (a laugh), and that, as it could not be understood, the President had pocketed it—and left it upon the archives of state, no doubt to be studied there. Mr. W. would call attention to the remarkable fact, that though the Senate acted upon this currency bill in season, yet it was put off, and put off—so that, by no action upon it before the ten days allowed the President by the constitution, the power over it was completely in his will, even though the whole nation and every member of Congress wished for its repeal. Mr. W., however, believed that such was the pressure of public opinion upon the new President, that it must soon be repealed."

This amphibology of the bill, and delay in passing it, and this dodging around and over, was occasioned by what Mr. Webster calls the delicacy of some members who had the difficult part to play, of going with the enemies of the administration without going against the administration. A chapter in the first volume of this View gives the history of this work; and the last sentence in the passage quoted from Mr. Webster's speech gives the key to the views in which the speech originated, and to the proceedings by which it was accompanied and followed. "It is believed that such is the pressure of public opinion upon the new President that it must soon be repealed."

In another part of his speech, Mr. Webster shows that the repealing bill was put by the whigs into the hands of certain friends of the administration, to be by them seasoned into a palatable dish; and that they gained no favor with the "bold man" who despised flinching, and loved decision, even in a foe. Thus:

"At the commencement of the last session, as you know, gentlemen, a resolution was brought forward in the Senate for annulling and abrogating this order, by Mr. Ewing, a gentleman of much intelligence, of sound principles, of vigorous and energetic character, whose loss from the service of the country, I regard as a public misfortune. The whig members all supported this resolution, and all the members, I believe, with the exception of some five or six, were very anxious, in some way, to get rid of the treasury order. But Mr. Ewing's resolution was too direct. It was deemed a pointed and ungracious attack on executive policy. Therefore, it must be softened, modified, qualified, made to sound less harsh to the ears of men in power, and to assume a plausible, polished, inoffensive character. It was accordingly put into the plastic hands of the friends of the executive, to be moulded and fashioned, so that it might have the effect of ridding the country of the obnoxious order, and yet not appear to question executive infallibility. All this did not answer. The late President is not a man to be satisfied with soft words; and he saw in the measure, even as it passed the two houses, a substantial repeal of the order. He is a man of boldness and decision; and he respects boldness and decision in others. If you are his friend, he expects no flinching; and if you are his adversary, he respects you none the less, for carrying your opposition to the full limits of honorable warfare."

Mr. Webster must have been greatly dissatisfied with his democratic allies, when he could thus, in a public speech, before such an audience, and within one short month after they had been co-operating with him, hold them up as equally unmeritable in the eyes of both parties.

History deems it essential to present this New York speech of Mr. Webster as part of a great movement, without a knowledge of which the view would be imperfect. It was the first formal public step which was to inaugurate the new distress, and organize the proceedings for shutting up the banks, and with them, the federal treasury, with a view to coerce the government into submission to the Bank of the United States and its confederate politicians. Mr. Van Buren was a man of great suavity and gentleness of deportment, and, to those who associated the idea of violence with firmness, might be supposed deficient in that quality. An experiment upon his nerves was resolved on—a pressure of public opinion, in the language of Mr. Webster, under which his gentle temperament was expected to yield.

[CHAPTER IV.]

PROGRESS OF THE DISTRESS, AND PRELIMINARIES FOR THE SUSPENSION.

The speech of Mr. Webster—his appeal for action—was soon followed by its appointed consequence—an immense meeting in the city of New York. The speech did not produce the meeting, any more than the meeting produced the speech. Both were in the programme, and performed as prescribed, in their respective places—the speech first, the meeting afterwards; and the latter justified by the former. It was an immense assemblage, composed of the elite of what was foremost in the city for property, talent, respectability; and took for its business the consideration of the times: the distress of the times, and the nature of the remedy. The imposing form of a meeting, solemn as well as numerous and respectable, was gone through: speeches made, resolutions adopted: order and emphasis given to the proceedings. A president, ten vice-presidents, two secretaries, seven orators (Mr. Webster not among them: he had performed his part, and made his exit), officiated in the ceremonies; and thousands of citizens constituted the accumulated mass. The spirit and proceedings of the meeting were concentrated in a series of resolves, each stronger than the other, and each more welcome than the former; and all progressive, from facts and principles declared, to duties and performances recommended. The first resolve declared the existence of the distress, and made the picture gloomy enough. It was in these words:

"Whereas, the great commercial interests of our city have nearly reached a point of general ruin—our merchants driven from a state of prosperity to that of unprecedented difficulty and bankruptcy—the business, activity and energy, which have heretofore made us the polar star of the new world, is daily sinking, and taking from us the fruits of years of industry—reducing the aged among us, who but yesterday were sufficiently in affluence, to a state of comparative want; and blighting the prospects, and blasting the hopes of the young throughout our once prosperous land: we deem it our duty to express to the country our situation and desires, while yet there is time to retrace error, and secure those rights and perpetuate those principles which were bequeathed us by our fathers, and which we are bound to make every honorable effort to maintain."

After the fact of the distress, thus established by a resolve, came the cause; and this was the condensation of Mr. Webster's speech, collecting into a point what had been oratorically diffused over a wide surface. What was itself a condensation cannot be farther abridged, and must be given in its own words:

"That the wide-spread disaster which has overtaken the commercial interests of the country, and which threatens to produce general bankruptcy, may be in a great measure ascribed to the interference of the general government with the commercial and business operations of the country; its intermeddling with the currency; its destruction of the national bank; its attempt to substitute a metallic for a credit currency; and, finally, to the issuing by the President of the United States of the treasury order, known as the 'specie circular.'"

The next resolve foreshadowed the consequences which follow from governmental perseverance in such calamitous measures—general bankruptcy to the dealing classes, starvation to the laboring classes, public convulsions, and danger to our political institutions; with an admonition to the new President of what might happen to himself, if he persevered in the "experiments" of a predecessor whose tyranny and oppression had made him the scourge of his country. But let the resolve speak for itself:

"That while we would do nothing which might for a moment compromit our respect for the laws, we feel it incumbent upon us to remind the executive of the nation, that the government of the country, as of late administered, has become the oppressor of the people, instead of affording them protection—that his perseverance in the experiment of his predecessor (after the public voice, in every way in which that voice could be expressed, has clearly denounced it as ruinous to the best interests of the country) has already caused the ruin of thousands of merchants, thrown tens of thousands of mechanics and laborers out of employment, depreciated the value of our great staple millions of dollars, destroyed the internal exchanges, and prostrated the energies and blighted the prospects of the industrious and enterprising portion of our people; and must, if persevered in, not only produce starvation among the laboring classes, but inevitably lead to disturbances which may endanger the stability of our institutions themselves."

This word "experiment" had become a staple phrase in all the distress oratory and literature of the day, sometimes heightened by the prefix of "quack," and was applied to all the efforts of the administration to return the federal government to the hard money currency, which was the currency of the constitution and the currency of all countries; and which efforts were now treated as novelties and dangerous innovations. Universal was the use of the phrase by one of the political parties some twenty years ago: dead silent are their tongues upon it now! Twenty years of successful working of the government under the hard money system has put an end to the repetition of a phrase which has suffered the fate of all catch-words of party, and became more distasteful to its old employers than it ever was to their adversaries. It has not been heard since the federal government got divorced from bank and paper money! since gold and silver has become the sole currency of the federal government! since, in fact, the memorable epoch when the Bank of the United States (former sovereign remedy for all the ills the body politic was heir to) has become a defunct authority, and an "obsolete idea."

The next resolve proposed a direct movement upon the President—nothing less than a committee of fifty to wait upon him, and "remonstrate" with him upon what was called the ruinous measures of the government.

"That a committee of not less than fifty be appointed to repair to Washington, and remonstrate with the Executive against the continuance of "the specie circular;" and in behalf of this meeting and in the name of the merchants of New York, and the people of the United States, urge its immediate repeal."

This formidable committee, limited to a minimum of fifty, open to a maximum of any amount, besides this "remonstrance" against the specie circular, were also instructed to petition the President to forbear the collection of merchants' bonds by suit; and also to call an extra session of Congress. The first of these measures was to stop the collection of the accruing revenues: the second, to obtain from Congress that submission to the bank power which could not be obtained from the President. Formidable as were the arrangements for acting on the President, provision was discreetly made for a possible failure, and for the prosecution of other measures. With this view, the committee of fifty, after their return from Washington, were directed to call another general meeting of the citizens of New York, and to report to them the results of their mission. A concluding resolution invited the co-operation of the other great cities in these proceedings, and seemed to look to an imposing demonstration of physical force, and strong determination, as a means of acting on the mind, or will of the President; and thus controlling the free action of the constitutional authorities. This resolve was specially addressed to the merchants of Philadelphia, Boston and Baltimore, and generally addressed to all other commercial cities, and earnestly prayed their assistance in saving the whole country from ruin.

"That merchants of Philadelphia, Boston, Baltimore, and the commercial cities of the Union, be respectfully requested to unite with us in our remonstrance and petition, and to use their exertions, in connection with us, to induce the Executive of the nation to listen to the voice of the people, and to recede from a measure under the evils of which we are now laboring, and which threatens to involve the whole country in ruin."

The language and import of all these resolves and proceedings were sufficiently strong, and indicated a feeling but little short of violence towards the government; but, according to the newspapers of the city, they were subdued and moderate—tame and spiritless, in comparison to the feeling which animated the great meeting. A leading paper thus characterized that feeling:

"The meeting was a remarkable one for the vast numbers assembled—the entire decorum of the proceedings—and especially for the deep, though subdued and restrained, excitement which evidently pervaded the mighty mass. It was a spectacle that could not be looked upon without emotion,—that of many thousand men trembling, as it were, on the brink of ruin, owing to the measures, as they verily believe, of their own government, which should be their friend, instead of their oppressor—and yet meeting with deliberation and calmness, listening to a narrative of their wrongs, and the causes thereof, adopting such resolutions as were deemed judicious; and then quietly separating, to abide the result of their firm but respectful remonstrances. But it is proper and fit to say that this moderation must not be mistaken for pusillanimity, nor be trifled with, as though it could not by any aggravation of wrong be moved from its propriety. No man accustomed, from the expression of the countenance, to translate the emotions of the heart, could have looked upon the faces and the bearing of the multitude assembled last evening, and not have felt that there were fires smouldering there, which a single spark might cause to burst into flame."

Smouldering fires which a single spark might light into a flame! Possibly that spark might have been the opposing voice of some citizen, who thought the meeting mistaken, both in the fact of the ruin of the country and the attribution of that ruin to the specie circular. No such voice was lifted—no such spark applied, and the proposition to march 10,000 men to Washington to demand a redress of grievances was not sanctioned. The committee of fifty was deemed sufficient, as they certainly were, for every purpose of peaceful communication. They were eminently respectable citizens, any two, or any one of which, or even a mail transmission of their petition, would have commanded for it a most respectful attention. The grand committee arrived at Washington—asked an audience of the President—received it; but with the precaution (to avoid mistakes) that written communications should alone be used. The committee therefore presented their demands in writing, and a paragraph from it will show the degree to which the feeling of the city had allowed itself to be worked up.

"We do not tell a fictitious tale of woe; we have no selfish or partisan views to sustain, when we assure you that the noble city which we represent, lies prostrate in despair, its credit blighted, its industry paralyzed, and without a hope beaming through the darkness of the future, unless the government of our country can be induced to relinquish the measures to which we attribute our distress. We fully appreciate the respect which is due to our chief magistrate, and disclaim every intention inconsistent with that feeling; but we speak in behalf of a community which trembles upon the brink of ruin, which deems itself an adequate judge of all questions connected with the trade and currency of the country, and believes that the policy adopted by the recent administration and sustained by the present, is founded in error, and threatens the destruction of every department of industry. Under a deep impression of the propriety of confining our declarations within moderate limits, we affirm that the value of our real estate has, within the last six months, depreciated more than forty millions: that within the last two months, there have been more than two hundred and fifty failures of houses engaged in extensive business: that within the same period, a decline of twenty millions of dollars has occurred in our local stocks, including those railroad and canal incorporations, which, though chartered in other States, depend chiefly upon New York for their sale: that the immense amount of merchandise in our warehouses has within the same period fallen in value at least thirty per cent.; that within a few weeks, not less than twenty thousand individuals, depending on their daily labor for their daily bread, have been discharged by their employers, because the means of retaining them were exhausted—and that a complete blight has fallen upon a community heretofore so active, enterprising and prosperous. The error of our rulers has produced a wider desolation than the pestilence which depopulated our streets, or the conflagration, which laid them in ashes. We believe that it is unjust to attribute these evils to any excessive development of mercantile enterprise, and that they really flow from that unwise system which aimed at the substitution of a metallic for a paper currency—the system which gave the first shock to the fabric of our commercial prosperity by removing the public deposits from the United States bank, which weakened every part of the edifice by the destruction of that useful and efficient institution, and now threatens to crumble it into a mass of ruins under the operations of the specie circular, which withdrew the gold and silver of the country from the channels in which it could be profitably employed. We assert that the experiment has had a fair—a liberal trial, and that disappointment and mischief are visible in all its results—that the promise of a regulated currency and equalized exchanges has been broken, the currency totally disordered, and internal exchanges almost entirely discontinued. We, therefore, make our earnest appeal to the Executive, and ask whether it is not time to interpose the paternal authority of the government, and abandon the policy which is beggaring the people."

The address was read to the President. He heard it with entire composure—made no sort of remark upon it—treated the gentlemen with exquisite politeness—and promised them a written answer the next day. This was the third of May: on the fourth the answer was delivered. It was an answer worthy of a President—a calm, quiet, decent, peremptory refusal to comply with a single one of their demands! with a brief reason, avoiding all controversy, and foreclosing all further application, by a clean refusal in each case. The committee had nothing to do but to return, and report: and they did so. There had been a mistake committed in the estimate of the man. Mr. Van Buren vindicated equally the rights of the chief magistrate, and his own personal decorum; and left the committee without any thing to complain of, although unsuccessful in all their objects. He also had another opportunity of vindicating his personal and official decorum in another visit which he received about the same time. Mr. Biddle called to see the President—apparently a call of respect on the chief magistrate—about the same time, but evidently with the design to be consulted, and to appear as the great restorer of the currency. Mr. Van Buren received the visit according to its apparent intent, with entire civility, and without a word on public affairs. Believing Mr. Biddle to be at the bottom of the suspension, he could not treat him with the confidence and respect which a consultation would imply. He (Mr. Biddle) felt the slight, and caused this notice to be put in the papers:

"Being on other business at Washington, Mr. Biddle took occasion to call on the President of the United States, to pay his respects to him in that character, and especially, to afford the President an opportunity, if he chose to embrace it, to speak of the present state of things, and to confer, if he saw fit, with the head of the largest banking institution in the country—and that the institution in which such general application has been made for relief. During the interview, however, the President remained profoundly silent upon the great and interesting topics of the day; and as Mr. Biddle did not think it his business to introduce them, not a word in relation to them was said."

Returning to New York, the committee convoked another general meeting of the citizens, as required to do at the time of their appointment; and made their report to it, recommending further forbearance, and further reliance on the ballot box, although (as they said) history recorded many popular insurrections where the provocation was less. A passage from this report will show its spirit, and to what excess a community may be excited about nothing, by the mutual inflammation of each other's passions and complaints, combined with a power to act upon the business and interests of the people.

"From this correspondence it is obvious, fellow-citizens, that we must abandon all hope that either the justice of our claims or the severity of our sufferings will induce the Executive to abandon or relax the policy which has produced such desolating effects—and it remains for us to consider what more is to be done in this awful crisis of our affairs. Our first duty under losses and distresses which we have endured, is to cherish with religious care the blessings which we yet enjoy, and which can be protected only by a strict observance of the laws upon which society depends for security and happiness. We do not disguise our opinion that the pages of history record, and the opinions of mankind justify, numerous instances of popular insurrection, the provocation to which was less severe than the evils of which we complain. But in these cases, the outraged and oppressed had no other means of redress. Our case is different. If we can succeed in an effort to bring public opinion into sympathy with the views which we entertain, the Executive will abandon the policy which oppresses, instead of protecting the people. Do not despair because the time at which the ballot box can exercise its healing influence appears so remote—the sagacity of the practical politician will perceive the change in public sentiment before you are aware of its approach. But the effort to produce this change must be vigorous and untiring."

The meeting adopted corresponding resolutions. Despairing of acting on the President, the move was to act upon the people—to rouse and combine them against an administration which was destroying their industry, and to remove from power (at the elections) those who were destroying the industry of the country. Thus:

"Resolved, That the interests of the capitalists, merchants, manufacturers, mechanics and industrious classes, are dependent upon each other, and any measures of the government which prostrate the active business men of the community, will also deprive honest industry of its reward; and we call upon all our fellow-citizens to unite with us in removing from power those who persist in a system that is destroying the prosperity of our country."

Another resolve summed up the list of grievances of which they complained, and enumerated the causes of the pervading ruin which had been brought upon the country. Thus:

"Resolved, That the chief causes of the existing distress are the defeat of Mr. Clay's land bill, the removal of the public deposits, the refusal to re-charter the Bank of the United States, and the issuing of the specie circular. The land bill was passed by the people's representatives, and vetoed by the President—the bill rechartering the bank was passed by the people's representatives, and vetoed by the President. The people's representatives declared by a solemn resolution, that the public deposits were safe in the United States Bank; within a few weeks thereafter, the President removed the public deposits. The people's representatives passed a bill rescinding the specie circular: the President destroyed it by omitting to return it within the limited period; and in the answer to our addresses, President Van Buren declares that the specie circular was issued by his predecessor, omitting all notice of the Secretary of the Treasury, who is amenable directly to Congress, and charged by the act creating his department with the superintendence of the finances, and who signed the order."

These two resolves deserve to be noted. They were not empty or impotent menace. They were for action, and became what they were intended for. The moneyed corporations, united with a political party, were in the field as a political power, to govern the elections, and to govern them, by the only means known to a moneyed power—by operating on the interests of men, seducing some, alarming and distressing the masses. They are the key to the manner of conducting the presidential election, and which will be spoken of in the proper place. The union of Church and State has been generally condemned: the union of Bank and State is far more condemnable. Here the union was not with the State, but with a political party, nearly as strong as the party in possession of the government, and exemplified the evils of the meretricious connection between money and politics; and nothing but this union could have produced the state of things which so long afflicted the country, and from which it has been relieved, not by the cessation of their imputed causes, but by their perpetuation. It is now near twenty years since this great meeting was held in New York. The ruinous measures complained of have not been revoked, but become permanent. They have been in full force, and made stronger, for near twenty years. The universal and black destruction which was to ensue their briefest continuance, has been substituted by the most solid, brilliant, pervading, and abiding prosperity that any people ever beheld. Thanks to the divorce of Bank and State. But the consummation was not yet. Strong in her name, and old recollections, and in her political connections—dominant over other banks—bribing with one hand, scourging with the other—a long retinue of debtors and retainers—desperate in her condition—impotent for good, powerful for evil—confederated with restless politicians, and wickedly, corruptly, and revengefully ruled: the Great Red Harlot, profaning the name of a National Bank, was still to continue a while longer its career of abominations—maintaining dubious contest with the government which created it, upon whose name and revenues it had gained the wealth and power of which it was still the shade, and whose destruction it plotted because it could not rule it. Posterity should know these things, that by avoiding bank connections, their governments may avoid the evils that we have suffered; and, by seeing the excitements of 1837, they may save themselves from ever becoming the victims of such delusion.

[CHAPTER V.]

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.

[CHAPTER VI.]

TRANSMIGRATION OF THE BANK OF THE UNITED STATES FROM A FEDERAL TO A STATE INSTITUTION.

This institution having again appeared on the public theatre, politically and financially, and with power to influence national legislation, and to control moneyed corporations, and with art and skill enough to deceive astute merchants and trained politicians,—(for it is not to be supposed that such men would have committed themselves in her favor if they had known her condition,)—it becomes necessary to trace her history since the expiration of her charter, and learn by what means she continued an existence, apparently without change, after having undergone the process which, in law and in reason, is the death of a corporation. It is a marvellous history, opening a new chapter in the necrology of corporations, very curious to study, and involving in its solution, besides the biological mystery, the exposure of a legal fraud and juggle, a legislative smuggle, and a corrupt enactment. The charter of the corporation had expired upon its own limitation in the year 1836: it was entitled to two years to wind up its affairs, engaging in no new business: but was seen to go on after the expiration, as if still in full life, and without the change of an attribute or feature. The explanation is this:

On the 19th day of January, in the year 1836, a bill was reported in the House of Representatives of the General Assembly of Pennsylvania, entitled, "An act to repeal the State tax, and to continue the improvement of the State by railroads and canals; and for other purposes." It came from the standing committee on "Inland navigation and internal improvement;" and was, in fact, a bill to repeal a tax and make roads and canals, but which, under the vague and usually unimportant generality of "other purposes," contained the entire draught of a charter for the Bank of the United States—adopting it as a Pennsylvania State bank. The introduction of the bill, with this addendum, colossal tail to it, was a surprise upon the House. No petition had asked for such a bank: no motion had been made in relation to it: no inquiry had been sent to any committee: no notice of any kind had heralded its approach: no resolve authorized its report: the unimportant clause of "other purposes," hung on at the end of the title, could excite no suspicion of the enormous measures which lurked under its unpretentious phraseology. Its advent was an apparition: its entrance an intrusion. Some members looked at each other in amazement. But it was soon evident that it was the minority only that was mystified—that a majority of the elected members in the House, and a cluster of exotics in the lobbies, perfectly understood the intrusive movement:—in brief, it had been smuggled into the House, and a power was present to protect it there. This was the first intimation that had reached the General Assembly, the people of Pennsylvania, or the people of the United States, that the Bank of the United States was transmigrating! changing itself from a national to a local institution—from a federal to a State charter—from an imperial to a provincial institution—retaining all the while its body and essence, its nature and attributes, its name and local habitation. It was a new species of metempsychosis, heretofore confined to souls separated from bodies, but now appearing in a body that never had a soul: for that, according to Sir Edward Coke, is the psychological condition of a corporation—and, above all, of a moneyed corporation.

The mystified members demanded explanations; and it was a case in which explanations could not be denied. Mr. Biddle, in a public letter to an eminent citizen, on whose name he had been accustomed to hang such productions, (Mr. John Quincy Adams,) attributed the procedure, so far as he had moved in it, to a "formal application on the part of the legislature to know from him on what terms the expiring bank would receive a charter from it;" and gave up the names of two members who had conveyed the application. The legislature had no knowledge of the proceeding. The two members whose names had been vouched disavowed the legislative application, but admitted that, in compliance with suggestions, they had written a letter to Mr. Biddle in their own names, making the inquiry; but without the sanction of the legislature, or the knowledge of the committees of which they were members. They did not explain the reason which induced them to take the initiative in so important business; and the belief took root that their good nature had yielded to an importunity from an invisible source, and that they had consented to give a private and bungling commencement to what must have a beginning, and which could not find it in any open or parliamentary form. It was truly a case in which the first step cost the difficulty. How to begin was the puzzle, and so to begin as to conceal the beginning, was the desideratum. The finger of the bank must not be seen in it, yet, without the touch of that finger, the movement could not begin. Without something from the Bank—without some request or application from it, it would have been gratuitous and impertinent, and might have been insulting and offensive, to have offered it a State charter. To apply openly for a charter was to incur a publicity which would be the defeat of the whole movement. The answer of Mr. Biddle to the two members, dexterously treating their private letter, obtained by solicitation, as a formal legislative application, surmounted the difficulty! and got the Bank before the legislature, where there were friends enough secretly prepared for the purpose to pass it through. The terms had been arranged with Mr. Biddle beforehand, so that there was nothing to be done but to vote. The principal item in these terms was the stipulation to pay the State the sum of $1,300,000, to be expended in works of internal improvements; and it was upon this slender connection with the subject that the whole charter referred itself to the committee of "Inland navigation and internal improvement;"—to take its place as a proviso to a bill entitled, "To repeal the State tax, and to continue the improvements of the State by railroads and canals;"—and to be no further indicated in the title to that act than what could be found under the addendum of that vague and flexible generality, "other purposes;" usually added to point attention to something not worth a specification.

Having mastered the first step—the one of greatest difficulty, if there is truth in the proverb—the remainder of the proceeding was easy and rapid, the bill, with its proviso, being reported, read a first, second, and third time, passed the House—sent to the Senate; read a first, second, and third time there, and passed—sent to the Governor and approved, and made a law of the land: and all in as little time as it usually requires to make an act for changing the name of a man or a county. To add to its titles to infamy, the repeal of the State tax which it assumed to make, took the air of a bamboozle, the tax being a temporary imposition, and to expire within a few days upon its own limitation. The distribution of the bonus took the aspect of a bribe to the people, being piddled out in driblets to the inhabitants of the counties: and, to stain the bill with the last suspicion, a strong lobby force from Philadelphia hung over its progress, and cheered it along with the affection and solicitude of parents for their offspring. Every circumstance of its enactment announced corruption—bribery in the members who passed the act, and an attempt to bribe the people by distributing the bonus among them: and the outburst of indignation throughout the State was vehement and universal. People met in masses to condemn the act, demand its repeal, to denounce the members who voted for it, and to call for investigation into the manner in which it passed. Of course, the legislature which passed it was in no haste to respond to these demands; but their successors were different. An election intervened; great changes of members took place; two-thirds of the new legislature demanded investigation, and resolved to have it. A committee was appointed, with the usual ample powers, and sat the usual length of time, and worked with the usual indefatigability, and made the usual voluminous report; and with the usual "lame and impotent conclusion." A mass of pregnant circumstances were collected, covering the whole case with black suspicion: but direct bribery was proved upon no one. Probably, the case of the Yazoo fraud is to be the last, as it was the first, in which a succeeding general assembly has fully and unqualifiedly condemned its predecessor for corruption.

The charter thus obtained was accepted: and, without the change of form or substance in any particular, the old bank moved on as if nothing had happened—as if the Congress charter was still in force—as if a corporate institution and all its affairs could be shifted by statute from one foundation to another;—as if a transmigration of corporate existence could be operated by legislative enactment, and the debtors, creditors, depositors, and stockholders in one bank changed, transformed, and constituted into debtors, creditors, depositors and stockholders in another. The illegality of the whole proceeding was as flagrant as it was corrupt—as scandalous as it was notorious—and could only find its motive in the consciousness of a condition in which detection adds infamy to ruin; and in which no infamy, to be incurred, can exceed that from which escape is sought. And yet it was this broken and rotten institution—this criminal committing crimes to escape from the detection of crimes—this "counterfeit presentment" of a defunct corporation—this addendum to a Pennsylvania railroad—this whited sepulchre filled with dead men's bones, thus bribed and smuggled through a local legislature—that was still able to set up for a power and a benefactor! still able to influence federal legislation—control other banks—deceive merchants and statesmen—excite a popular current in its favor—assume a guardianship over the public affairs, and actually dominate for months longer in the legislation and the business of the country. It is for the part she acted—the dominating part—in contriving the financial distress and the general suspension of the banks in 1837—the last one which has afflicted our country,—that renders necessary and proper this notice of her corrupt transit through the General Assembly of the State of Pennsylvania.

[CHAPTER VII.]

EFFECTS OF THE SUSPENSION: GENERAL DERANGEMENT OF BUSINESS: SUPPRESSION AND RIDICULE OF THE SPECIE CURRENCY: SUBMISSION OF THE PEOPLE: CALL OF CONGRESS.

A great disturbance of course took place in the business of the country, from the stoppage of the banks. Their agreement to receive each others' notes made these notes the sole currency of the country. It was a miserable substitute for gold and silver, falling far below these metals when measured against them, and very unequal to each other in different parts of the country. Those of the interior, and of the west, being unfit for payments in the great commercial Atlantic cities, were far below the standard of the notes of those cities, and suffered a heavy loss from difference of exchange, as it was called (although it was only the difference of depreciation,) in all remittances to those cities:—to which points the great payments tended. All this difference was considered a loss, and charged upon the mismanagement of the public affairs by the administration, although the clear effect of geographical position. Specie disappeared as a currency, being systematically suppressed. It became an article of merchandise, bought and sold like any other marketable commodity; and especially bought in quantities for exportation. Even metallic change disappeared, down to the lowest subdivision of the dollar. Its place was supplied by every conceivable variety of individual and corporation tickets—issued by some from a feeling of necessity; by others, as a means of small gains; by many, politically, as a means of exciting odium against the administration for having destroyed the currency. Fictitious and burlesque notes were issued with caricatures and grotesque pictures and devices, and reproachful sentences, entitled the "better currency:" and exhibited every where to excite contempt. They were sent in derision to all the friends of the specie circular, especially to him who had the credit (not untruly) of having been its prime mover—most of them plentifully sprinkled over with taunting expressions to give them a personal application: such as—"This is what you have brought the country to:" "the end of the experiment:" "the gold humbug exploded:" "is this what was promised us?" "behold the effects of tampering with the currency." The presidential mansion was infested, and almost polluted with these missives, usually made the cover of some vulgar taunt. Even gold and silver could not escape the attempted degradation—copper, brass, tin, iron pieces being struck in imitation of gold and silver coins—made ridiculous by figures and devices, usually the whole hog, and inscribed with taunting and reproachful expressions. Immense sums were expended in these derisory manufactures, extensively carried on, and universally distributed; and reduced to a system as a branch of party warfare, and intended to act on the thoughtless and ignorant through appeals to their eyes and passions. Nor were such means alone resorted to to inflame the multitude against the administration. The opposition press teemed with inflammatory publications. The President and his friends were held up as great state criminals, ruthlessly destroying the property of the people, and meriting punishment—even death. Nor did these publications appear in thoughtless or obscure papers only, but in some of the most weighty and influential of the bank party. Take, for example, this paragraph from a leading paper in the city of New York:

"We would put it directly to each and all of our readers, whether it becomes this great people, quietly and tamely to submit to any and every degree of lawless oppression which their rulers may inflict, merely because resistance may involve us in trouble and expose those who resist, to censure? We are very certain their reply will be, 'No, but at what point is "resistance to commence?"—is not the evil of resistance greater "than the evil of submission?"' We answer promptly, that resistance on the part of a free people, if they would preserve their freedom, should always commence whenever it is made plain and palpable that there has been a deliberate violation of their rights; and whatever temporary evils may result from such resistance, it can never be so great or so dangerous to our institutions, as a blind submission to a most manifest act of oppression and tyranny. And now, we would ask of all—what shadow of right, what plea of expediency, what constitutional or legal justification can Martin Van Buren offer to the people of the United States, for having brought upon them all their present difficulties by a continuance of the specie circular, after two-thirds of their representatives had declared their solemn convictions that it was injurious to the country and should be repealed? Most assuredly, none, and we unhesitatingly say, that it is a more high-handed measure of tyranny than that which cost Charles the 1st his crown and his head—more illegal and unconstitutional than the act of the British ministry which caused the patriots of the revolution to destroy the tea in the harbor of Boston—and one which calls more loudly for resistance than any act of Great Britain which led to the Declaration of Independence."

Taken by surprise in the deprivation of its revenues,—specie denied it by the banks which held its gold and silver,—the federal government could only do as others did, and pay out depreciated paper. Had the event been foreseen by the government, it might have been provided against, and much specie saved. It was now too late to enter into a contest with the banks, they in possession of the money, and the suspension organized and established. They would only render their own notes: the government could only pay in that which it received. Depreciated paper was their only medium of payment; and every such payment (only received from a feeling of duresse) brought resentment, reproach, indignation, loss of popularity to the administration; and loud calls for the re-establishment of the National Bank, whose notes had always been equal to specie, and were then contrived to be kept far above the level of those of other suspended banks. Thus the administration found itself, in the second month of its existence, struggling with that most critical of all government embarrassments—deranged finances, and depreciated currency; and its funds dropping off every day. Defections were incessant, and by masses, and sometimes by whole States: and all on account of these vile payments in depreciated paper. Take a single example. The State of Tennessee had sent numerous volunteers to the Florida Indian war. There were several thousands of them, and came from thirty different counties, requiring payments to be made through a large part of the State, and to some member of almost every family in it. The paymaster, Col. Adam Duncan Steuart, had treasury drafts on the Nashville deposit banks for the money to make the payments. They delivered their own notes, and these far below par—even twenty per cent. below those of the so-called Bank of the United States, which the policy of the suspension required to be kept in strong contrast with those of the government deposit banks. The loss on each payment was great—one dollar in every five. Even patriotism could not stand it. The deposit banks and their notes were execrated: the Bank of the United States and its notes were called for. It was the children of Israel wailing for the fleshpots of Egypt. Discontent, from individual became general, extending from persons to masses. The State took the infection. From being one of the firmest and foremost of the democratic States, Tennessee fell off from her party, and went into opposition. At the next election she showed a majority of 20,000 against her old friends; and that in the lifetime of General Jackson; and contrary to what it would have been if his foresight had been seconded. He foresaw the consequences of paying out this depreciated paper. The paymaster had foreseen them, and before drawing a dollar from the banks he went to General Jackson for his advice. This energetic man, then aged, and dying, and retired to his beloved hermitage,—but all head and nerve to the last, and scorning to see the government capitulate to insurgent banks,—acted up to his character. He advised the paymaster to proceed to Washington and ask for solid money—for the gold and silver which was then lying in the western land offices. He went; but being a military subordinate, he only applied according to the rules of subordination, through the channels of official intercourse: and was denied the hard money, wanted for payments on debenture bonds and officers of the government. He did not go to Mr. Van Buren, as General Jackson intended he should do. He did not feel himself authorized to go beyond official routine. It was in the recess of Congress, and I was not in Washington to go to the President in his place (as I should instantly have done); and, returning without the desired orders, the payments were made, through a storm of imprecations, in this loathsome trash: and Tennessee was lost. And so it was, in more or less degree, throughout the Union. The first object of the suspension had been accomplished—a political revolt against the administration.

Miserable as was the currency which the government was obliged to use, it was yet in the still more miserable condition of not having enough of it! The deposits with the States had absorbed two sums of near ten millions each: two more sums of equal amount were demandable in the course of the year. Financial embarrassment, and general stagnation of business, diminished the current receipts from lands and customs: an absolute deficit—that horror, and shame, and mortal test of governments—showed itself ahead. An extraordinary session of Congress became a necessity, inexorable to any contrivance of the administration: and, on the 15th day of May—just five days after the suspension in the principal cities—the proclamation was issued for its assembling: to take place on the first Monday of the ensuing September. It was a mortifying concession to imperative circumstances; and the more so as it had just been refused to the grand committee of Fifty—demanding it in the imposing name of that great meeting in the city of New York.

[CHAPTER VIII.]

EXTRA SESSION: MESSAGE, AND RECOMMENDATIONS.

The first session of the twenty-fifth Congress, convened upon the proclamation of the President, to meet an extraordinary occasion, met on the first Monday in September, and consisted of the following members:

SENATE.

New Hampshire—Henry Hubbard and Franklin Pierce.

Maine—John Ruggles and Ruel Williams.

Vermont—Samuel Prentiss and Benjamin Swift.

Massachusetts—Daniel Webster and John Davis.

Rhode Island—Nehemiah R. Knight and Asher Robbins.

Connecticut—John M. Niles and Perry Smith.

New York—Silas Wright and Nathaniel P. Tallmadge.

New Jersey—Garret D. Wall and Samuel L. Southard.

Delaware—Richard H. Bayard and Thomas Clayton.

Pennsylvania—James Buchanan and Samuel McKean.

Maryland—Joseph Kent and John S. Spence.

Virginia—William C. Rives and William H. Roane.

North Carolina—Bedford Brown and Robert Strange.

South Carolina—John C. Calhoun and Wm. Campbell Preston.

Georgia—John P. King and Alfred Cuthbert.

Alabama—Wm. Rufus King and Clement C. Clay.

Mississippi—John Black and Robert J. Walker.

Louisiana—Robert C. Nicholas and Alexander Mouton.

Tennessee—Hugh L. White and Felix Grundy.

Kentucky—Henry Clay and John Crittenden.

Arkansas—Ambrose H. Sevier and William S. Fulton.

Missouri—Thomas H. Benton and Lewis F. Linn.

Illinois—Richard M. Young and John M. Robinson.

Indiana—Oliver H. Smith and John Tipton.

Ohio—William Allen and Thomas Morris.

Michigan—Lucius Lyon and John Norvell.

HOUSE OF REPRESENTATIVES.

Maine—George Evans, John Fairfield, Timothy J. Carter, F. O. J. Smith, Thomas Davee, Jonathan Cilley, Joseph C. Noyes, Hugh J. Anderson.

New Hampshire—Samuel Cushman, James Farrington, Charles G. Atherton, Joseph Weeks, Jared W. Williams.

Massachusetts—Richard Fletcher, Stephen C. Phillips, Caleb Cushing, Wm. Parmenter, Levi Lincoln, George Grinnell, jr., George N. Briggs, Wm. B. Calhoun, Nathaniel B. Borden, John Q. Adams, John Reed, Abbott Lawrence, Wm. S. Hastings.

Rhode Island—Robert B. Cranston, Joseph L. Tillinghast.

Connecticut—Isaac Toucey, Samuel Ingham, Elisha Haley, Thomas T. Whittlesey, Launcelot Phelps, Orrin Holt.

Vermont—Hiland Hall, William Slade, Heman Allen, Isaac Fletcher, Horace Everett.

New York—Thomas B. Jackson, Abraham Vanderveer, C. C. Cambreleng, Ely Moore, Edward Curtis, Ogden Hoffman, Gouverneur Kemble, Obadiah Titus, Nathaniel Jones, John C. Broadhead, Zadoc Pratt, Robert McClelland, Henry Vail, Albert Gallup, John I. DeGraff, David Russell, John Palmer, James B. Spencer, John Edwards, Arphaxad Loomis, Henry A. Foster, Abraham P. Grant, Isaac H. Bronson, John H. Prentiss, Amasa J. Parker, John C. Clark, Andrew D. W. Bruyn, Hiram Gray, William Taylor, Bennett Bicknell, William H. Noble, Samuel Birdsall, Mark H. Sibley, John T. Andrews, Timothy Childs, William Patterson, Luther C. Peck, Richard P. Marvin, Millard Fillmore, Charles F. Mitchell.

New Jersey—John B. Aycrigg, John P. B. Maxwell, William Halstead, Jos. F. Randolph, Charles G. Stratton, Thomas Jones Yorke.

Pennsylvania—Lemuel Paynter, John Sergeant, George W. Toland, Charles Naylor, Edward Davies, David Potts, Edward Darlington, Jacob Fry, jr., Matthias Morris, David D. Wagener, Edward B. Hubley, Henry A. Muhlenberg, Luther Reilly, Henry Logan, Daniel Sheffer, Chas. McClure, Wm. W. Potter, David Petriken, Robert H. Hammond, Samuel W. Morris, Charles Ogle, John Klingensmith, Andrew Buchanan, T. M. T. McKennan, Richard Biddle, William Beatty, Thomas Henry, Arnold Plumer.

Delaware—John J. Milligan.

Maryland—John Dennis, James A. Pearce, J. T. H. Worthington, Benjamin C. Howard, Isaac McKim, William Cost Johnson, Francis Thomas, Daniel Jenifer.

Virginia—Henry A. Wise, Francis Mallory, John Robertson, Charles F. Mercer, John Taliaferro, R. T. M. Hunter, James Garland, Francis E. Rives, Walter Coles, George C. Dromgoole, James W. Bouldin, John M. Patton, James M. Mason, Isaac S. Pennybacker, Andrew Beirne, Archibald Stuart, John W. Jones, Robert Craig, Geo. W. Hopkins, Joseph Johnson, Wm. S. Morgan.

North Carolina—Jesse A. Bynum, Edward D. Stanley, Charles Shepard, Micajah T. Hawkins, James McKay, Edmund Deberry, Abraham Rencher, William Montgomery, Augustine H. Shepherd, James Graham, Henry Connor, Lewis Williams, Samuel T. Sawyer.

South Carolina—H. S. Legare, Waddy Thompson, Francis W. Pickens, W. K. Clowney, F. H. Elmore, John K. Griffin, R. B. Smith, John Campbell, John P. Richardson.

Georgia—Thomas Glascock, S. F. Cleveland, Seaton Grantland, Charles E. Haynes, Hopkins Holsey, Jabez Jackson, Geo. W. Owens, Geo. W. B. Townes, W. C. Dawson.

Tennessee—Wm. B. Carter, A. A. McClelland, Joseph Williams, (one vacancy,) H. L. Turney, Wm. B. Campbell, John Bell, Abraham P. Maury, James K. Polk, Ebenezer J. Shields, Richard Cheatham, John W. Crockett, Christopher H. Williams.

Kentucky—John L. Murray, Edward Rumsey, Sherrod Williams, Joseph R. Underwood, James Harlan, John Calhoun, John Pope, Wm. J. Graves, John White, Richard Hawes, Richard H. Menifee, John Chambers, Wm. W. Southgate.

Ohio—Alexander Duncan, Taylor Webster, Patrick G. Goode, Thomas Corwin, Thomas L. Hamer, Calvary Morris, Wm. K. Bond, J. Ridgeway, John Chaney, Samson Mason, J. Alexander, jr., Alexander Harper, D. P. Leadbetter, Wm. H. Hunter, John W. Allen, Elisha Whittlesey, A. W. Loomis, Matthias Shepler, Daniel Kilgore.

Alabama—Francis S. Lyon, Dixon H. Lewis, Joab Lawler, Reuben Chapman, J. L. Martin.

Indiana—Ratliff Boon, John Ewing, William Graham, George H. Dunn, James Rariden, William Herrod, Albert S. White.

Illinois—A. W. Snyder, Zadoc Casey, Wm. L. May.

Louisiana—Henry Johnson, Eleazer W. Ripley, Rice Garland.

Mississippi—John F. H. Claiborne, S. H. Gholson.

Arkansas—Archibald Yell.

Missouri—Albert G. Harrison, John Miller.

Michigan—Isaac E. Crary.

Florida—Charles Downing.

Wisconsin—George W. Jones.

In these ample lists, both of the Senate and of the House, will be discovered a succession of eminent names—many which had then achieved eminence, others to achieve it:—and, besides those which captivate regard by splendid ability, a still larger number of those less brilliant, equally respectable, and often more useful members, whose business talent performs the work of the body, and who in England are well called, the working members. Of these numerous members, as well the brilliant as the useful, it would be invidious to particularize part without enumerating the whole; and that would require a reproduction of the greater part of the list of each House. Four only can be named, and they entitled to that distinction from the station attained, or to be attained by them:—Mr. John Quincy Adams, who had been president; Messrs. James K. Polk, Millard Fillmore and Franklin Pierce, who became presidents. In my long service I have not seen a more able Congress; and it is only necessary to read over the names, and to possess some knowledge of our public men, to be struck with the number of names which would come under the description of useful or brilliant members.

The election of speaker was the first business of the House; and Mr. James K. Polk and Mr. John Bell, both of Tennessee, being put in nomination, Mr. Polk received 116 votes; and was elected—Mr. Bell receiving 103. Mr. Walter S. Franklin was elected clerk.

The message was delivered upon receiving notice of the organization of the two Houses; and, with temperance and firmness, it met all the exigencies of the occasion. That specie order which had been the subject of so much denunciation,—the imputed cause of the suspension, and the revocation of which was demanded with so much pertinacity and such imposing demonstration,—far from being given up was commended for the good effects it had produced; and the determination expressed not to interfere with its operation. In relation to that decried measure the message said:

"Of my own duties under the existing laws, when the banks suspended specie payments, I could not doubt. Directions were immediately given to prevent the reception into the Treasury of any thing but gold and silver, or its equivalent; and every practicable arrangement was made to preserve the public faith, by similar or equivalent payments to the public creditors. The revenue from lands had been for some time substantially so collected, under the order issued by the directions of my predecessor. The effects of that order had been so salutary, and its forecast in regard to the increasing insecurity of bank paper had become so apparent, that, even before the catastrophe, I had resolved not to interfere with its operation. Congress is now to decide whether the revenue shall continue to be so collected, or not."

This was explicit, and showed that all attempts to operate upon the President at that point, and to coerce the revocation of a measure which he deemed salutary, had totally failed. The next great object of the party which had contrived the suspension and organized the distress, was to extort the re-establishment of the Bank of the United States; and here again was an equal failure to operate upon the firmness of the President. He reiterated his former objections to such an institution—not merely to the particular one which had been tried—but to any one in any form, and declared his former convictions to be strengthened by recent events. Thus:

"We have seen for nearly half a century, that those who advocate a national bank, by whatever motive they may be influenced, constitute a portion of our community too numerous to allow us to hope for an early abandonment of their favorite plan. On the other hand, they must indeed form an erroneous estimate of the intelligence and temper of the American people, who suppose that they have continued, on slight or insufficient grounds, their persevering opposition to such an institution; or that they can be induced by pecuniary pressure, or by any other combination of circumstances, to surrender principles they have so long and so inflexibly maintained. My own views of the subject are unchanged. They have been repeatedly and unreservedly announced to my fellow-citizens, who, with full knowledge of them, conferred upon me the two highest offices of the government. On the last of these occasions, I felt it due to the people to apprise them distinctly, that, in the event of my election, I would not be able to co-operate in the re-establishment of a national bank. To these sentiments, I have now only to add the expression of an increased conviction, that the re-establishment of such a bank, in any form, whilst it would not accomplish the beneficial purpose promised by its advocates, would impair the rightful supremacy of the popular will; injure the character and diminish the influence of our political system; and bring once more into existence a concentrated moneyed power, hostile to the spirit, and threatening the permanency, of our republican institutions."

Having noticed these two great points of pressure upon him, and thrown them off with equal strength and decorum, he went forward to a new point—the connection of the federal government with any bank of issue in any form, either as a depository of its moneys, or in the use of its notes;—and recommended a total and perpetual dissolution of the connection. This was a new point of policy, long meditated by some, but now first brought forward for legislative action, and cogently recommended to Congress for its adoption. The message, referring to the recent failure of the banks, took advantage of it to say:

"Unforeseen in the organization of the government, and forced on the Treasury by early necessities, the practice of employing banks, was, in truth, from the beginning, more a measure of emergency than of sound policy. When we started into existence as a nation, in addition to the burdens of the new government, we assumed all the large, but honorable load, of debt which was the price of our liberty; but we hesitated to weigh down the infant industry of the country by resorting to adequate taxation for the necessary revenue. The facilities of banks, in return for the privileges they acquired, were promptly offered, and perhaps too readily received, by an embarrassed treasury. During the long continuance of a national debt, and the intervening difficulties of a foreign war, the connection was continued from motives of convenience; but these causes have long since passed away. We have no emergencies that make banks necessary to aid the wants of the Treasury; we have no load of national debt to provide for, and we have on actual deposit a large surplus. No public interest, therefore, now requires the renewal of a connection that circumstances have dissolved. The complete organization of our government, the abundance of our resources, the general harmony which prevails between the different States, and with foreign powers, all enable us now to select the system most consistent with the constitution, and most conducive to the public welfare."

This wise recommendation laid the foundation for the Independent Treasury—a measure opposed with unwonted violence at the time, but vindicated as well by experience as recommended by wisdom; and now universally concurred in—constituting an era in our financial history, and reflecting distinctive credit on Mr. Van Buren's administration. But he did not stop at proposing a dissolution of governmental connection with these institutions; he went further, and proposed to make them safer for the community, and more amenable to the laws of the land. These institutions exercised the privilege of stopping payment, qualified by the gentle name of suspension, when they judged a condition of the country existed making it expedient to do so. Three of these general suspensions had taken place in the last quarter of a century, presenting an evil entirely too large for the remedy of individual suits against the delinquent banks; and requiring the strong arm of a general and authoritative proceeding. This could only be found in subjecting them to the process of bankruptcy; and this the message boldly recommended. It was the first recommendation of the kind, and deserves to be commemorated for its novelty and boldness, and its undoubted efficiency, if adopted. This is the recommendation:

"In the mean time, it is our duty to provide all the remedies against a depreciated paper currency which the constitution enables us to afford. The Treasury Department, on several former occasions, has suggested the propriety and importance of a uniform law concerning bankruptcies of corporations, and other bankers. Through the instrumentality of such a law, a salutary check may doubtless be imposed on the issues of paper money, and an effectual remedy given to the citizen, in a way at once equal in all parts of the Union, and fully authorized by the constitution."

A bankrupt law for banks! That was the remedy. Besides its efficacy in preventing future suspensions, it would be a remedy for the actual one. The day fixed for the act to take effect would be the day for resuming payments, or going into liquidation. It would be the day of honesty or death to these corporations; and between these two alternatives even the most refractory bank would choose the former, if able to do so.

The banks of the District of Columbia, and their currency, being under the jurisdiction of Congress, admitted a direct remedy in its own legislation, both for the fact of their suspension and the evil of the small notes which they issued. The forfeiture of the charter, where the resumption did not take place in a limited time, and penalties on the issue of the small notes, were the appropriate remedies;—and, as such were recommended to Congress.

There the President not only met and confronted the evils of the actual suspension as they stood, but went further, and provided against the recurrence of such evils thereafter, in four cardinal recommendations: 1, never to have another national bank; 2, never to receive bank notes again in payment of federal dues; 3, never to use the banks again for depositories of the public moneys; 4, to apply the process of bankruptcy to all future defaulting banks. These were strong recommendations, all founded in a sense of justice to the public, and called for by the supremacy of the government, if it meant to maintain its supremacy; but recommendations running deep into the pride and interests of a powerful class, and well calculated to inflame still higher the formidable combination already arrayed against the President, and to extend it to all that should support him.

The immediate cause for convoking the extraordinary session—the approaching deficit in the revenue—was frankly stated, and the remedy as frankly proposed. Six millions of dollars was the estimated amount; and to provide it neither loans nor taxes were proposed, but the retention of the fourth instalment of the deposit to be made with the States, and a temporary issue of treasury notes to supply the deficiency until the incoming revenue should replenish the treasury. The following was that recommendation:

"It is not proposed to procure the required amount by loans or increased taxation. There are now in the treasury nine millions three hundred and sixty-seven thousand two hundred and fourteen dollars, directed by the Act of the 23d of June, 1836, to be deposited with the States in October next. This sum, if so deposited, will be subject, under the law, to be recalled, if needed, to defray existing appropriations; and, as it is now evident that the whole, or the principal part of it, will be wanted for that purpose, it appears most proper that the deposits should be withheld. Until the amount can be collected from the banks, treasury notes may be temporarily issued, to be gradually redeemed as it is received."

Six millions of treasury notes only were required, and from this small amount required, it is easy to see how readily an adequate amount could have been secured from the deposit banks, if the administration had foreseen a month or two beforehand that the suspension was to take place. An issue of treasury notes, being an imitation of the exchequer bill issues of the British government, which had been the facile and noiseless way of swamping that government in bottomless debt, was repugnant to the policy of this writer, and opposed by him: but of this hereafter. The third instalment of the deposit, as it was called, had been received by the States—received in depreciated paper, and the fourth demanded in the same. A deposit demanded! and claimed as a debt!—that is to say: the word "deposit" used in the act admitted to be both by Congress and the States a fraud and a trick, and distribution the thing intended and done. Seldom has it happened that so gross a fraud, and one, too, intended to cheat the constitution, has been so promptly acknowledged by the high parties perpetrating it. But of this also hereafter.

The decorum and reserve of a State paper would not allow the President to expatiate upon the enormity of the suspension which had been contrived, nor to discriminate between the honest and solvent banks which had been taken by surprise and swept off in a current which they could not resist, and the insolvent or criminal class, which contrived the catastrophe and exulted in its success. He could only hint at the discrimination, and, while recommending the bankrupt process for one class, to express his belief that with all the honest and solvent institutions the suspension would be temporary, and that they would seize the earliest moment which the conduct of others would permit, to vindicate their integrity and ability by returning to specie payments.

[CHAPTER IX.]

ATTACKS ON THE MESSAGE: TREASURY NOTES.

Under the first two of our Presidents, Washington, and the first Mr. Adams, the course of the British Parliament was followed in answering the address of the President, as the course of the sovereign was followed in delivering it. The Sovereign delivered his address in person to the two assembled Houses, and each answered it: our two first Presidents did the same, and the Houses answered. The purport of the answer was always to express a concurrence, or non-concurrence with the general policy of the government as thus authentically exposed; and the privilege of answering the address laid open the policy of the government to the fullest discussion. The effect of the practice was to lay open the state of the country, and the public policy, to the fullest discussion; and, in the character of the answer, to decide the question of accord or disaccord—of support or opposition—between the representative and the executive branches of the government. The change from the address delivered in person, with its answer, to the message sent by the private secretary, and no answer, was introduced by Mr. Jefferson, and considered a reform; but it was questioned at the time, whether any good would come of it, and whether that would not be done irregularly, in the course of the debates, which otherwise would have been done regularly in the discussion of the address. The administration policy would be sure to be attacked, and irregularly, in the course of business, if the spirit of opposition should not be allowed full indulgence in a general and regular discussion. The attacks would come, and many of Mr. Jefferson's friends thought it better they should come at once, and occupy the first week or two of the session, than to be scattered through the whole session and mixed up with all its business. But the change was made, and has stood, and now any bill or motion is laid hold of, to hang a speech upon, against the measures or policy of an administration. This was signally the case at this extra session, in relation to Mr. Van Buren's policy. He had staked himself too decisively against too large a combination of interests to expect moderation or justice from his opponents; and he received none. Seldom has any President been visited with more violent and general assaults than he received, almost every opposition speaker assailing some part of the message. One of the number, Mr. Caleb Cushing, of Massachusetts, made it a business to reply to the whole document, formally and elaborately, under two and thirty distinct heads—the number of points in the mariner's compass: each head bearing a caption to indicate its point: and in that speech any one that chooses, can find in a condensed form, and convenient for reading, all the points of accusation against the democratic policy from the beginning of the government down to that day.

Mr. Clay and Mr. Webster assailed it for what it contained, and for what it did not—for its specific recommendations, and for its omission to recommend measures which they deemed necessary. The specie payments—the disconnection with banks—the retention of the fourth instalment—the bankrupt act against banks—the brief issue of treasury notes; all were condemned as measures improper in themselves and inadequate to the relief of the country: while, on the other hand, a national bank appeared to them to be the proper and adequate remedy for the public evils. With them acted many able men:—in the Senate, Bayard, of Delaware, Crittenden, of Kentucky, John Davis, of Massachusetts, Preston, of South Carolina, Southard, of New Jersey, Rives, of Virginia:—in the House of Representatives, Mr. John Quincy Adams, Bell, of Tennessee, Richard Biddle, of Pennsylvania, Cushing, of Massachusetts, Fillmore, of New York, Henry Johnson, of Louisiana, Hunter and Mercer, of Virginia, John Pope, of Kentucky, John Sargeant, Underwood of Kentucky, Lewis Williams, Wise. All these were speaking members, and in their diversity of talent displayed all the varieties of effective speaking—close reasoning, sharp invective, impassioned declamation, rhetoric, logic.

On the other hand was an equal array, both in number and speaking talent, on the other side, defending and supporting the recommendations of the President:—in the Senate, Silas Wright, Grundy, John M. Niles, King, of Alabama, Strange, of North Carolina, Buchanan, Calhoun, Linn, of Missouri, Benton, Bedford Brown, of North Carolina, William Allen, of Ohio, John P. King, of Georgia, Walker, of Mississippi:—in the House of Representatives, Cambreleng, of New York, Hamer, of Ohio, Howard and Francis Thomas, of Maryland, McKay, of North Carolina, John M. Patton, Francis Pickens.

The treasury note bill was one of the first measures on which the struggle took place. It was not a favorite with the whole body of the democracy, but the majority preferred a small issue of that paper, intended to operate, not as a currency, but as a ready means of borrowing money, and especially from small capitalists; and, therefore, preferable to a direct loan. It was opposed as a paper money bill in disguise, as germinating a new national debt, and as the easy mode of raising money, so ready to run into abuse from its very facility of use. The President had recommended the issue in general terms: the Secretary of the Treasury had descended into detail, and proposed notes as low as twenty dollars, and without interest. The Senate's committee rejected that proposition, and reported a bill only for large notes—none less than 100 dollars, and bearing interest; so as to be used for investment, not circulation. Mr. Webster assailed the Secretary's plan, saying—

"He proposes, sir, to issue treasury notes of small denominations, down even as low as twenty dollars, not bearing interest, and redeemable at no fixed period; they are to be received in debts due to government, but are not otherwise to be paid until at some indefinite time there shall be a certain surplus in the treasury beyond what the Secretary may think its wants require. Now, sir, this is plain, authentic, statutable paper money; it is exactly a new emission of old continental. If the genius of the old confederation were now to rise up in the midst of us, he could not furnish us, from the abundant stores of his recollection, with a more perfect model of paper money. It carries no interest; it has no fixed time of payment; it is to circulate as currency, and it is to circulate on the credit of government alone, with no fixed period of redemption! If this be not paper money, pray, sir, what is it? And, sir, who expected this? Who expected that in the fifth year of the experiment for reforming the currency, and bringing it to an absolute gold and silver circulation, the Treasury Department would be found recommending to us a regular emission of paper money? This, sir, is quite new in the history of this government; it belongs to that of the confederation which has passed away. Since 1789, although we have issued treasury notes on sundry occasions, we have issued none like these; that is to say, we have issued none not bearing interest, intended for circulation, and with no fixed mode of redemption. I am glad, however, Mr. President, that the committee have not adopted the Secretary's recommendation, and that they have recommended the issue of treasury notes of a description more conformable to the practice of the government."

Mr. Benton, though opposed to the policy of issuing these notes, and preferring himself a direct loan in this case, yet defended the particular bill which had been brought in from the character and effects ascribed to it, and said:

"He should not have risen in this debate, had it not been for the misapprehensions which seemed to pervade the minds of some senators as to the character of the bill. It is called by some a paper-money bill, and by others a bill to germinate a new national debt. These are serious imputations, and require to be answered, not by declamation and recrimination, but by facts and reasons, addressed to the candor and to the intelligence of an enlightened and patriotic community.

"I dissent from the imputations on the character of the bill. I maintain that it is neither a paper-money bill, nor a bill to lay the foundation for a new national debt; and will briefly give my reasons for believing as I do on both points.

"There are certainly two classes of treasury notes—one for investment, and one for circulation; and both classes are known to our laws, and possess distinctive features, which define their respective characters, and confine them to their respective uses.

"The notes for investment bear an interest sufficient to induce capitalists to exchange gold and silver for them, and to lay them by as a productive fund. This is their distinctive feature, but not the only one; they possess other subsidiary qualities, such as transferability only by indorsement—payable at a fixed time—not re-issuable—nor of small denomination—and to be cancelled when paid. Notes of this class are, in fact, loan notes—notes to raise loans on, by selling them for hard money—either immediately by the Secretary of the Treasury, or, secondarily, by the creditor of the government to whom they have been paid. In a word, they possess all the qualities which invite investment, and forbid and impede circulation.

"The treasury notes for currency are distinguished by features and qualities the reverse of those which have been mentioned. They bear little or no interest. They are payable to bearer—transferable by delivery—re-issuable—of low denominations—and frequently reimbursable at the pleasure of the government. They are, in fact, paper money, and possess all the qualities which forbid investment, and invite to circulation. The treasury notes of 1815 were of that character, except for the optional clause to enable the holder to fund them at the interest which commanded loans—at seven per cent.

"These are the distinctive features of the two classes of notes. Now try the committee's bill by the test of these qualities. It will be found that the notes which it authorizes belong to the first-named class; that they are to bear an interest, which may be six per cent.; that they are transferable only by indorsement; that they are not re-issuable; that they are to be paid at a day certain—to wit, within one year; that they are not to be issued of less denomination than one hundred dollars; are to be cancelled when taken up; and that the Secretary of the Treasury is expressly authorized to raise money upon them by loaning them.

"These are the features and qualities of the notes to be issued, and they define and fix their character as notes to raise loans, and to be laid by as investments, and not as notes for currency, to be pushed into circulation by the power of the government; and to add to the curse of the day by increasing the quantity of unconvertible paper money."

Though yielding to an issue of these notes in this particular form, limited in size of the notes to one hundred dollars, yet Mr. Benton deemed it due to himself and the subject to enter a protest against the policy of such issues, and to expose their dangerous tendency, both to slide into a paper currency, and to steal by a noiseless march into the creation of public debt, and thus expressed himself:

"I trust I have vindicated the bill from the stigma of being a paper currency bill, and from the imputation of being the first step towards the creation of a new national debt. I hope it is fully cleared from the odium of both these imputations. I will now say a few words on the policy of issuing treasury notes in time of peace, or even in time of war, until the ordinary resources of loans and taxes had been tried and exhausted. I am no friend to the issue of treasury notes of any kind. As loans, they are a disguised mode of borrowing, and easy to slide into a currency: as a currency, it is the most seductive, the most dangerous, and the most liable to abuse of all the descriptions of paper money. 'The stamping of paper (by government) is an operation so much easier than the laying of taxes, or of borrowing money, that a government in the habit of paper emissions would rarely fail, in any emergency, to indulge itself too far in the employment of that resource, to avoid as much as possible one less auspicious to present popularity.' So said General Hamilton; and Jefferson, Madison Macon, Randolph, and all the fathers of the republican church, concurred with him. These sagacious statesmen were shy of this facile and seductive resource, 'so liable to abuse, and so certain of being abused.' They held it inadmissible to recur to it in time of peace, and that it could only be thought of amidst the exigencies and perils of war, and that after exhausting the direct and responsible alternative of loans and taxes. Bred in the school of these great men, I came here at this session to oppose, at all risks, an issue of treasury notes. I preferred a direct loan, and that for many and cogent reasons. There is clear authority to borrow in the constitution; but, to find authority to issue these notes, we must enter the field of constructive powers. To borrow, is to do a responsible act; it is to incur certain accountability to the constituent, and heavy censure if it cannot be justified; to issue these notes, is to do an act which few consider of, which takes but little hold of the public mind, which few condemn and some encourage, because it increases the quantum of what is vainly called money. Loans are limited by the capacity, at least, of one side to borrow, and of the other to lend: the issue of these notes has no limit but the will of the makers, and the supply of lamp-black and rags. The continental bills of the Revolution, and the assignats of France, should furnish some instructive lessons on this head. Direct loans are always voluntary on the part of the lender; treasury note loans may be a forced borrowing from the government creditor—as much so as if the bayonet were put to his breast; for necessity has no law, and the necessitous claimant must take what is tendered, whether with or without interest—whether ten or fifty per cent. below par. I distrust, dislike, and would fain eschew, this treasury note resource. I prefer the direct loans of 1820-'21. I could only bring myself to acquiesce in this measure when it was urged that there was not time to carry a loan through its forms; nor even then could I consent to it, until every feature of a currency character had been eradicated from the face of the bill."

The bill passed the Senate by a general vote, only Messrs. Clay, Crittenden, Preston, Southard, and Spence of Maryland, voting against it. In the House of Representatives it encountered a more strenuous resistance, and was subjected to some trials which showed the dangerous proclivity of these notes to slide from the foundation of investment into the slippery path of currency. Several motions were made to reduce their size—to make them as low as $25; and that failing, to reduce them to $50; which succeeded. The interest was struck at in a motion to reduce it to a nominal amount; and this motion, like that for reducing the minimum size to $25, received a large support—some ninety votes. The motion to reduce to $50 was carried by a majority of forty. Returning to the Senate with this amendment, Mr. Benton moved to restore the $100 limit, and intimated his intention, if it was not done, of withholding his support from the bill—declaring that nothing but the immediate wants of the Treasury, and the lack of time to raise the money by a direct loan as declared by the Secretary of the Treasury, could have brought him to vote for treasury notes in any shape. Mr. Clay opposed the whole scheme as a government bank in disguise, but supported Mr. Benton's motion as being adverse to that design. He said:

"He had been all along opposed to this measure, and he saw nothing now to change that opinion. Mr. C. would have been glad to aid the wants of the Treasury, but thought it might have been done better by suspending the action of many appropriations not so indispensably necessary, rather than by resorting to a loan. Reduction, economy, retrenchment, had been recommended by the President, and why not then pursued? Mr. C.'s chief objection, however, was, that these notes were mere post notes, only differing from bank notes of that kind in giving the Secretary a power of fixing the interest as he pleases.

"It is, said Mr. C., a government bank, issuing government bank notes; an experiment to set up a government bank. It is, in point of fact, an incipient bank. Now, if government has the power to issue bank notes, and so to form indirectly and covertly a bank, how is it that it has not the power to establish a national bank? What difference is there between a great government bank, with Mr. Woodbury as the great cashier, and a bank composed of a corporation of private citizens? What difference is there, except that the latter is better and safer, and more stable, and more free from political influences, and more rational and more republican? An attack is made at Washington upon all the banks of the country, when we have at least one hundred millions of bank paper in circulation. At such a time, a time too of peace, instead of aid, we denounce them, decry them, seek to ruin them, and begin to issue paper in opposition to them! You resort to paper, which you profess to put down; you resort to a bank, which you pretend to decry and to denounce; you resort to a government paper currency, after having exclaimed against every currency except that of gold and silver! Mr. C. said he should vote for Mr. Benton's amendment, as far as it went to prevent the creation of a government bank and a government currency."

Mr. Webster also supported the motion of Mr. Benton, saying:

"He would not be unwilling to give his support to the bill, as a loan, and that only a temporary loan. He was, however, utterly opposed to every modification of the measure which went to stamp upon it the character of a government currency. All past experience showed that such a currency would depreciate; that it will and must depreciate. He should vote for the amendment, inasmuch as $100 bills were less likely to get into common circulation than $50 bills. His objection was against the old continental money in any shape or in any disguise, and he would therefore vote for the amendment."

The motion was lost by a vote of 16 to 25, the yeas and nays being:

Yeas—Messrs. Allen, Benton, Clay, of Kentucky, Clayton, Kent, King, of Georgia, McKean, Pierce, Rives, Robbins, Smith, of Connecticut, Southard, Spence, Tipton, Webster, White—16.

Nays—Messrs. Buchanan, Clay, of Alabama, Crittenden, Fulton, Grundy, Hubbard, King, of Alabama, Knight, Linn, Lyon, Morris, Nicholas, Niles, Norvell, Roane, Robinson, Smith, of Indiana, Strange, Swift, Talmadge, Walker, Williams, Wall, Wright, Young—25.

[CHAPTER X.]

RETENTION OF THE FOURTH DEPOSIT INSTALMENT.

The deposit with the States had only reached its second instalment when the deposit banks, unable to stand a continued quarterly drain of near ten millions to the quarter, gave up the effort and closed their doors. The first instalment had been delivered the first of January, in specie, or its equivalent; the second in April, also in valid money; the third one demandable on the first of June, was accepted by the States in depreciated paper: and they were very willing to receive the fourth instalment in the same way. It had cost the States nothing,—was not likely to be called back by the federal government, and was all clear gains to those who took it as a deposit and held it as a donation. But the Federal Treasury needed it also; and likewise needed ten millions more of that amount which had already been "deposited" with the States; and which "deposit" was made and accepted under a statute which required it to be paid back whenever the wants of the Treasury required it. That want had now come, and the event showed the delusion and the cheat of the bill under which a distribution had been made in the name of a deposit. The idea of restitution entered no one's head! neither of the government to demand it, nor of the States to render back. What had been delivered, was gone! that was a clear case; and reclamation, or rendition, even of the smallest part, or at the most remote period, was not dreamed of. But there was a portion behind—another instalment of ten millions—deliverable out of the "surplus" on the first day of October: but there was no surplus: on the contrary a deficit: and the retention of this sum would seem to be a matter of course with the government, only requiring the form of an act to release the obligation for the delivery. It was recommended by the President, counted upon in the treasury estimates, and its retention the condition on which the amount of treasury notes was limited to ten millions of dollars. A bill was reported for the purpose, in the mildest form, not to repeal but to postpone the clause; and the reception which it met, though finally successful, should be an eternal admonition to the federal government never to have any money transaction with its members—a transaction in which the members become the masters, and the devourers of the head. The finance committee of the Senate had brought in a bill to repeal the obligation to deposit this fourth instalment; and from the beginning it encountered a serious resistance. Mr. Webster led the way, saying:

"We are to consider that this money, according to the provisions of the existing law, is to go equally among all the States, and among all the people; and the wants of the Treasury must be supplied, if supplies be necessary, equally by all the people. It is not a question, therefore, whether some shall have money, and others shall make good the deficiency. All partake in the distribution, and all will contribute to the supply. So that it is a mere question of convenience, and, in my opinion, it is decidedly most convenient, on all accounts, that this instalment should follow its present destination, and the necessities of the Treasury be provided for by other means."

Mr. Preston opposed the repealing bill, principally on the ground that many of the States had already appropriated this money; that is to say, had undertaken public works on the strength of it; and would suffer more injury from not receiving it than the Federal Treasury would suffer from otherwise supplying its place. Mr. Crittenden opposed the bill on the same ground. Kentucky, he said, had made provision for the expenditure of the money, and relied upon it, and could not expect the law to be lightly rescinded, or broken, on the faith of which she had anticipated its use. Other senators treated the deposit act as a contract, which the United States was bound to comply with by delivering all the instalments.

In the progress of the bill Mr. Buchanan proposed an amendment, the effect of which would be to change the essential character of the so called, deposit act, and convert it into a real distribution measure. By the terms of the act, it was the duty of the Secretary of the Treasury to call upon the States for a return of the deposit when needed by the Federal Treasury: Mr. Buchanan proposed to release the Secretary from this duty, and devolve it upon Congress, by enacting that the three instalments already delivered, should remain on deposit with the States until called for by Congress. Mr. Niles saw the evil of the proposition, and thus opposed it:

"He must ask for the yeas and nays on the amendment, and was sorry it had been offered. If it was to be fully considered, it would renew the debate on the deposit act, as it went to change the essential principles and terms of that act. A majority of those who voted for that act, about which there had been so much said, and so much misrepresentation, had professed to regard it—and he could not doubt that at the time they did so regard it—as simply a deposit law; as merely changing the place of deposit from the banks to the States, so far as related to the surplus. The money was still to be in the Treasury, and liable to be drawn out, with certain limitations and restrictions, by the ordinary appropriation laws, without the direct action of Congress. The amendment, if adopted, will change the principles of the deposit act, and the condition of the money deposited with the States under it. It will no longer be a deposit; it will not be in the Treasury, even in point of legal effect or form: the deposit will be changed to a loan, or, perhaps more properly, a grant to the States. The rights of the United States will be changed to a mere claim, like that against the late Bank of the United States; and a claim without any means to enforce it. We were charged, at the time, of making a distribution of the public revenue to the States, in the disguise and form of a deposit; and this amendment, it appeared to him, would be a very bold step towards confirming the truth of that charge. He deemed the amendment an important one, and highly objectionable; but he saw that the Senate were prepared to adopt it, and he would not pursue the discussion, but content himself with repeating his request for the ayes and noes on the question."

Mr. Buchanan expressed his belief that the substitution of Congress for the Secretary of the Treasury, would make no difference in the nature of the fund: and that remark of his, if understood as sarcasm, was undoubtedly true; for the deposit was intended as a distribution by its authors from the beginning, and this proposed substitution was only taking a step, and an effectual one, to make it so: for it was not to be expected that a Congress would ever be found to call for this money from the States, which they were so eager to give to the States. The proposition of Mr. Buchanan was carried by a large majority—33 to 12—all the opponents of the administration, and a division of its friends, voting for it. Thus, the whole principle, and the whole argument on which the deposit act had been passed, was reversed. It was passed to make the State treasuries the Treasury pro tanto of the United States—to substitute the States for the banks, for the keeping of this surplus until it was wanted—and it was placed within the call of a federal executive officer that it might be had for the public service when needed. All this was reversed. The recall of the money was taken from the federal executive, and referred to the federal legislative department—to the Congress, composed of members representing the States—that is to say, from the payee to the payor, and was a virtual relinquishment of the payment. And thus the deposit was made a mockery and a cheat; and that by those who passed it.

In the House of Representatives the disposition to treat the deposit as a contract, and to compel the government to deliver the money (although it would be compelled to raise by extraordinary means what was denominated a surplus), was still stronger than in the Senate, and gave rise to a protracted struggle, long and doubtful in its issue. Mr. Cushing laid down the doctrine of contract, and thus argued it:

"The clauses of the deposit act, which appertain to the present question, seem to me to possess all the features of a contract. It provides that the whole surplus revenue of the United States, beyond a certain sum, which may be in the Treasury on a certain day, shall be deposited with the several States; which deposit the States are to keep safely, and to pay back to the United States, whenever the same shall be called for by the Secretary of the Treasury in a prescribed time and mode, and on the happening of a given contingency. Here, it seems to me, is a contract in honor; and, so far as there can be a contract between the United States and the several States, a contract in law; there being reciprocal engagements, for a valuable consideration, on both sides. It is, at any rate, a quasi-contract. They who impugn this view of the question argue on the supposition that the act, performed or to be performed by the United States, is an inchoate gift of money to the States. Not so. It is a contract of deposit; and that contract is consummated, and made perfect, on the formal reception of any instalment of the deposit by the States. Now, entertaining this view of the transaction, I am asked by the administration to come forward and break this contract. True, a contract made by the government of the United States cannot be enforced in law. Does that make it either honest or honorable for the United States to take advantage of its power and violate its pledged faith? I refuse to participate in any such breach of faith. But further. The administration solicits Congress to step in between the United States and the States as a volunteer, and to violate a contract, as the means of helping the administration out of difficulties, into which its own madness and folly have wilfully sunk it, and which press equally upon the government and the people. The object of the measure is to relieve the Secretary of the Treasury from the responsibility of acting in this matter as he has the power to do. Let him act. I will not go out of my way to interpose in this between the Executive and the several States, until the administration appeals to me in the right spirit. This it has not done. The Executive comes to us with a new doctrine, which is echoed by his friends in this House, namely, that the American government is not to exert itself for the relief of the American people. Very well. If this be your policy, I, as representing the people, will not exert myself for the relief of your administration."

Such was the chicanery, unworthy of a pie-poudre court—with which a statute of the federal Congress, stamped with every word, invested with every form, hung with every attribute, to define it a deposit—not even a loan—was to be pettifogged into a gift! and a contract for a gift! and the federal Treasury required to stand and deliver! and all that, not in a low law court, where attorneys congregate, but in the high national legislature, where candor and firmness alone should appear. History would be faithless to her mission if she did not mark such conduct for reprobation, and invoke a public judgment upon it.

After a prolonged contest the vote was taken, and the bill carried, but by the smallest majority—119 to 117;—a difference of two votes, which was only a difference of one member. But even that was a delusive victory. It was immediately seen that more than one had voted with the majority, not for the purpose of passing the bill, but to gain the privilege of a majority member to move for a reconsideration. Mr. Pickens, of South Carolina, immediately made that motion, and it was carried by a majority of 70! Mr. Pickens then proposed an amendment, which was to substitute definite for indefinite postponement—to postpone to a day certain instead of the pleasure of Congress: and the first day of January, 1839, was the day proposed; and that without reference to the condition of the Treasury (which might not then have any surplus), for the transfer of this fourth instalment of a deposit to the States. The vote being taken on this proposed amendment, it was carried by a majority of 40: and that amendment being concurred in by the Senate, the bill in that form became a law, and a virtual legalization of the deposit into a donation of forty millions to the States. And this was done by the votes of members who had voted for a deposit with the States; because a donation to the States was unconstitutional. The three instalments already delivered were not to be recalled until Congress should so order; and it was quite certain that it never would so order. At the same time the nominal discretion of Congress over the deposit of the remainder was denied, and the duty of the Secretary made peremptory to deliver it in the brief space of one year and a quarter from that time. But events frustrated that order. The Treasury was in no condition on the first day of January, 1839, to deliver that amount of money. It was penniless itself. The compromise act of 1833, making periodical reductions in the tariff, until the whole duty was reduced to an ad valorem of twenty per cent., had nearly run its course, and left the Treasury in the condition of a borrower, instead of that of a donor or lender of money. This fourth instalment could not be delivered at the time appointed, nor subsequently;—and was finally relinquished, the States retaining the amount they had received: which was so much clear gain through the legislative fraud of making a distribution under the name of a deposit.

This was the end of one of the distribution schemes which had so long afflicted and disturbed Congress and the country. Those schemes began now to be known by their consequences—evil to those they were intended to benefit, and of no service to those whose popularity they were to augment. To the States the deposit proved to be an evil, in the contentions and combinations to which their disposition gave rise in the general assemblies—in the objects to which they were applied—and the futility of the help which they afforded. Popularity hunting, on a national scale, gave birth to the schemes in Congress: the same spirit, on a smaller and local scale, took them up in the States. All sorts of plans were proposed for the employment of the money, and combinations more or less interested, or designing, generally carried the point in the universal scramble. In some States a pro rata division of the money, per capite, was made; and the distributive share of each individual being but a few shillings, was received with contempt by some, and rejected with scorn by others. In other States it was divided among the counties, and gave rise to disjointed undertakings of no general benefit. Others, again, were stimulated by the unexpected acquisition of a large sum, to engage in large and premature works of internal improvement, embarrassing the State with debt, and commencing works which could not be finished. Other States again, looking upon the deposit act as a legislative fraud to cover an unconstitutional and demoralizing distribution of public money to the people, refused for a long time to receive their proffered dividend, and passed resolutions of censure upon the authors of the act. And thus the whole policy worked out differently from what had been expected. The States and the people were not grateful for the favor: the authors of the act gained no presidential election by it: and the gratifying fact became evident that the American people were not the degenerate Romans, or the volatile Greeks, to be seduced with their own money—to give their votes to men who lavished the public moneys on their wants or their pleasures—in grain to feed them, or in shows and games to delight and amuse them.

[CHAPTER XI.]

INDEPENDENT TREASURY AND HARD MONEY PAYMENTS.

These were the crowning measures of the session, and of Mr. Van Buren's administration,—not entirely consummated at that time, but partly, and the rest assured;—and constitute in fact an era in our financial history. They were the most strenuously contested measures of the session, and made the issue completely between the hard money and the paper money systems. They triumphed—have maintained their supremacy ever since—and vindicated their excellence on trial. Vehemently opposed at the time, and the greatest evil predicted, opposition has died away, and given place to support; and the predicted evils have been seen only in blessings. No attempt has been made to disturb these great measures since their final adoption, and it would seem that none need now be apprehended; but the history of their adoption presents one of the most instructive lessons in our financial legislation, and must have its interest with future ages as well as with the present generation. The bills which were brought in for the purpose were clear in principle—simple in detail: the government to receive nothing but gold and silver for its revenues, and its own officers to keep it—the Treasury being at the seat of government, with branches, or sub-treasuries at the principal points of collection and disbursement. And these treasuries to be real, not constructive—strong buildings to hold the public moneys, and special officers to keep the keys. The capacious, strong-walled and well-guarded custom houses and mints, furnished in the great cities the rooms that were wanted: the Treasury building at Washington was ready, and in the right place.

This proposed total separation of the federal government from all banks—called at the time in the popular language of the day, the divorce of Bank and State—naturally arrayed the whole bank power against it, from a feeling of interest; and all (or nearly so) acted in conjunction with the once dominant, and still potent, Bank of the United States. In the Senate, Mr. Webster headed one interest—Mr. Rives, of Virginia, the other; and Mr. Calhoun, who had long acted with the opposition, now came back to the support of the democracy, and gave the aid without which these great measures of the session could not have been carried. His temperament required him to have a lead; and it was readily yielded to him in the debate in all cases where he went with the recommendations of the message; and hence he appeared, in the debate on these measures, as the principal antagonist of Mr. Webster and Mr. Rives.

The present attitude of Mr. Calhoun gave rise to some taunts in relation to his former support of a national bank, and on his present political associations, which gave him the opportunity to set himself right in relation to that institution and his support of it in 1816 and 1834. In this vein Mr. Rives said:

"It does seem to me, Mr. President, that this perpetual and gratuitous introduction of the Bank of the United States into this debate, with which it has no connection, as if to alarm the imaginations of grave senators, is but a poor evidence of the intrinsic strength of the gentleman's cause. Much has been said of argument ad captandum in the course of this discussion. I have heard none that can compare with this solemn stalking of the ghost of the Bank of the United States through this hall, to 'frighten senators from their propriety.' I am as much opposed to that institution as the gentleman or any one else is, or can be. I think I may say I have given some proofs of it. The gentleman himself acquits me of any design to favor the interest of that institution, while he says such is the necessary consequence of my proposition. The suggestion is advanced for effect, and then retracted in form. Whatever be the new-born zeal of the senator from South Carolina against the Bank of the United States, I flatter myself that I stand in a position that places me, at least, as much above suspicion of an undue leaning in favor of that institution as the honorable gentleman. If I mistake not, it was the senator from South Carolina who introduced and supported the bill for the charter of the United States Bank in 1816; it was he, also, who brought in a bill in 1834, to extend the charter of that institution for a term of twelve years; and none were more conspicuous than he in the well-remembered scenes of that day, in urging the restoration of the government deposits to this same institution."

The reply of Mr. Calhoun to those taunts, which impeached his consistency—a point at which he was always sensitive—was quiet and ready, and the same that he had often been heard to express in common conversation. He said:

"In supporting the bank of 1816, I openly declared that, as a question de novo, I would be decidedly against the bank, and would be the last to give it my support. I also stated that, in supporting the bank then, I yielded to the necessity of the case, growing out of the then existing and long-established connection between the government and the banking system. I took the ground, even at that early period, that so long as the connection existed, so long as the government received and paid away bank notes as money, they were bound to regulate their value, and had no alternative but the establishment of a national bank. I found the connection in existence and established before my time, and over which I could have no control. I yielded to the necessity, in order to correct the disordered state of the currency, which had fallen exclusively under the control of the States. I yielded to what I could not reverse, just as any member of the Senate now would, who might believe that Louisiana was unconstitutionally admitted into the Union, but who would, nevertheless, feel compelled to vote to extend the laws to that State, as one of its members, on the ground that its admission was an act, whether constitutional or unconstitutional, which he could not reverse. In 1834, I acted in conformity to the same principle, in proposing the renewal of the bank charter for a short period. My object, as expressly avowed, was to use the bank to break the connection between the government and the banking system gradually, in order to avert the catastrophe which has now befallen us, and which I then clearly perceived. But the connection, which I believed to be irreversible in 1816, has now been broken by operation of law. It is now an open question. I feel myself free, for the first time, to choose my course on this important subject; and, in opposing a bank, I act in conformity to principles which I have entertained ever since I have fully investigated the subject."

Going on with his lead in support of the President's recommendations, Mr. Calhoun brought forward the proposition to discontinue the use of bank paper in the receipts and disbursements of the federal government, and supported his motion as a measure as necessary to the welfare of the banks themselves as to the safety of the government. In this sense he said:

"We have reached a new era with regard to these institutions. He who would judge of the future by the past, in reference to them, will be wholly mistaken. The year 1833 marks the commencement of this era. That extraordinary man who had the power of imprinting his own feelings on the community, then commenced his hostile attacks, which have left such effects behind, that the war then commenced against the banks, I clearly see, will not terminate, unless there be a separation between them and the government,—until one or the other triumphs—till the government becomes the bank, or the bank the government. In resisting their union, I act as the friend of both. I have, as I have said, no unkind feeling toward the banks. I am neither a bank man, nor an anti-bank man. I have had little connection with them. Many of my best friends, for whom I have the highest esteem, have a deep interest in their prosperity, and, as far as friendship or personal attachment extends, my inclination would be strongly in their favor. But I stand up here as the representative of no particular interest. I look to the whole, and to the future, as well as the present; and I shall steadily pursue that course which, under the most enlarged view, I believe to be my duty. In 1834 I saw the present crisis. I in vain raised a warning voice, and endeavored to avert it. I now see, with equal certainty, one far more portentous. If this struggle is to go on—if the banks will insist upon a reunion with the government, against the sense of a large and influential portion of the community—and, above all, if they should succeed in effecting it—a reflux flood will inevitably sweep away the whole system. A deep popular excitement is never without some reason, and ought ever to be treated with respect; and it is the part of wisdom to look timely into the cause, and correct it before the excitement shall become so great as to demolish the object, with all its good and evil, against which it is directed."

Mr. Rives treated the divorce of bank and State as the divorce of the government from the people, and said:

"Much reliance, Mr. President, has been placed on the popular catch-word of divorcing the government from all connection with banks. Nothing is more delusive and treacherous than catch-words. How often has the revered name of liberty been invoked, in every quarter of the globe, and every age of the world, to disguise and sanctify the most heartless despotisms. Let us beware that, in attempting to divorce the government from all connection with banks, we do not end with divorcing the government from the people. As long as the people shall be satisfied in their transactions with each other, with a sound convertible paper medium, with a due proportion of the precious metals forming the basis of that medium, and mingled in the current of circulation, why should the government reject altogether this currency of the people, in the operations of the public Treasury? If this currency be good enough for the masters it ought to be so for the servants. If the government sternly reject, for its uses, the general medium of exchange adopted by the community, is it not thereby isolated from the general wants and business of the country, in relation to this great concern of the currency? Do you not give it a separate, if not hostile, interest, and thus, in effect, produce a divorce between government and people?—a result, of all others, to be most deprecated in a republican system."

Mr. Webster's main argument in favor of the re-establishment of the National Bank (which was the consummation he kept steadily in his eye) was, as a regulator of currency, and of the domestic exchanges. The answer to this was, that these arguments, now relied on as the main ones for the continuance of the institution, were not even thought of at its commencement—that no such reasons were hinted at by General Hamilton and the advocates of the first bank—that they were new-fangled, and had not been brought forward by others until after the paper system had deranged both currency and exchanges;—and that it was contradictory to look for the cure of the evil in the source of the evil. It was denied that the regulation of exchanges was a government concern, or that the federal government was created for any such purpose. The buying and selling of bills of exchange was a business pursuit—a commercial business, open to any citizen or bank; and the loss or profit was an individual, and not a government concern. It was denied that there was any derangement of currency in the only currency which the constitution recognized—that of gold and silver. Whoever had this currency to be exchanged—that is, given in exchange at one place for the same in another place—now had the exchange effected on fair terms, and on the just commercial principle—that of paying a difference equal to the freight and insurance of the money: and, on that principle, gold was the best regulator of exchanges; for its small bulk and little weight in proportion to its value, made it easy and cheap of transportation; and brought down the exchange to the minimum cost of such transportation (even when necessary to be made), and to the uniformity of a permanent business. That was the principle of exchange; but, ordinarily, there was no transportation in the case: the exchange dealer in one city had his correspondent in another: a letter often did the business. The regulation of the currency required an understanding of the meaning of the term. As used by the friends of a National Bank, and referred to its action, the paper currency alone was intended. The phrase had got into vogue since the paper currency had become predominant, and that is a currency not recognized by the constitution, but repudiated by it; and one of its main objects was to prevent the future existence of that currency—the evils of which its framers had seen and felt. Gold and silver was the only currency recognized by that instrument, and its regulation specially and exclusively given to Congress, which had lately discharged its duty in that particular, in regulating the relative value of the two metals. The gold act of 1834 had made that regulation, correcting the error of previous legislation, and had revived the circulation of gold, as an ordinary currency, after a total disappearance of it under an erroneous valuation, for an entire generation. It was in full circulation when the combined stoppage of the banks again suppressed it. That was the currency—gold and silver, with the regulation of which Congress was not only intrusted, but charged: and this regulation included preservation. It must be saved before it can be regulated; and to save it, it must be brought into the country—and kept in it. The demand of the federal treasury could alone accomplish these objects. The quantity of specie required for the use of that treasury—its large daily receipts and disbursements—all inexorably confined to hard money—would create the demand for the precious metals which would command their presence, and that in sufficient quantity for the wants of the people as well as of the government. For the government does not consume what it collects—does not melt up or hoard its revenue, or export it to foreign countries, but pays it out to the people; and thus becomes the distributor of gold and silver among them. It is the greatest paymaster in the country; and, while it pays in hard money, the people will be sure of a supply. We are taunted with the demand: "Where is the better currency?" We answer: "Suppressed by the conspiracy of the banks!" And this is the third time in the last twenty years in which paper money has suppressed specie, and now suppresses it: for this is a game—(the war between gold and paper)—in which the meanest and weakest is always the conqueror. The baser currency always displaces the better. Hard money needs support against paper, and that support can be given by us, by excluding paper money from all federal receipts and payments; and confining paper money to its own local and inferior orbit: and its regulation can be well accomplished by subjecting delinquent banks to the process of bankruptcy, and their small notes to suppression under a federal stamp duty.

The distress of the country figured largely in the speeches of several members, but without finding much sympathy. That engine of operating upon the government and the people had been over-worked in the panic session of 1833-'34 and was now a stale resource, and a crippled machine. The suspension appeared to the country to have been purposely contrived, and wantonly continued. There was now more gold and silver in the country than had ever been seen in it before—four times as much as in 1832, when the Bank of the United States was in its palmy state, and was vaunted to have done so much for the currency. Twenty millions of silver was then its own estimate of the amount of that metal in the United States, and not a particle of gold included in the estimate. Now the estimate of gold and silver was eighty millions; and with this supply of the precious metals, and the determination of all the sound banks to resume as soon as the Bank of the United States could be forced into resumption, or forced into open insolvency, so as to lose control over others, the suspension and embarrassment were obliged to be of brief continuance. Such were the arguments of the friends of hard money.

The divorce bill, as amended, passed the Senate, and though not acted upon in the House during this called session, yet received the impetus which soon carried it through, and gives it a right to be placed among the measures of that session.

[CHAPTER XII.]

ATTEMPTED RESUMPTION OF SPECIE PAYMENTS.

The suspension of the banks commenced at New York, and took place on the morning of the 10th of May: those of Philadelphia, headed by the Bank of the United States, closed their doors two days after, and merely in consequence, as they alleged, of the New York suspension; and the Bank of the United States especially declared its wish and ability to have continued specie payments without reserve, but felt it proper to follow the example which had been set. All this was known to be a fiction at the time; and the events were soon to come, to prove it to be so. As early as the 15th of August ensuing—in less than one hundred days after the suspension—the banks of New York took the initiatory steps towards resuming. A general meeting of the officers of the banks of the city took place, and appointed a committee to correspond with other banks to procure the appointment of delegates to agree upon a time of general resumption. In this meeting it was unanimously resolved: "That the banks of the several States be respectfully invited to appoint delegates to meet on the 27th day of November next, in the city of New York, for the purpose of conferring on the time when specie payments may be resumed with safety; and on the measures necessary to effect that purpose." Three citizens, eminently respectable in themselves, and presidents of the leading institutions—Messrs. Albert Gallatin, George Newbold, and Cornelius W. Lawrence—were appointed a committee to correspond with other banks on the subject of the resolution. They did so; and, leaving to each bank the privilege of sending as many delegates as it pleased, they warmly urged the importance of the occasion, and that the banks from each State should be represented in the proposed convention. There was a general concurrence in the invitation; but the convention did not take place. One powerful interest, strong enough to paralyze the movement, refused to come into it. That interest was the Philadelphia banks, headed by the Bank of the United States! So soon were fallacious pretensions exploded when put to the test. And the test in this case was not resumption itself, but only a meeting to confer upon a time when it would suit the general interest to resume. Even to unite in that conference was refused by this arrogant interest, affecting such a superiority over all other banks; and pretending to have been only dragged into their condition by their example. But a reason had to be given for this refusal, and it was—and was worthy of the party; namely, that it was not proper to do any thing in the business until after the adjournment of the extra session of Congress. That answer was a key to the movements in Congress to thwart the government plans, and to coerce a renewal of the United States Bank charter. After the termination of the session it will be seen that another reason for refusal was found.

[CHAPTER XIII.]

BANKRUPT ACT AGAINST BANKS.

This was the stringent measure recommended by the President to cure the evil of bank suspensions. Scattered through all the States of the Union, and only existing as local institutions, the federal government could exercise no direct power over them; and the impossibility of bringing the State legislatures to act in concert, left the institutions to do as they pleased; or rather, left even the insolvent ones to do as they pleased; for these, dominating over the others, and governed by their own necessities, or designs, compelled the solvent banks, through panic or self-defence, to follow their example. Three of these general suspensions had occurred in the last twenty years. The notes of these banks constituting the mass of the circulating medium, put the actual currency into the hands of these institutions; leaving the community helpless; for it was not in the power of individuals to contend with associated corporations. It was a reproach to the federal government to be unable to correct this state of things—to see the currency of the constitution driven out of circulation, and out of the country; and substituted by depreciated paper; and the very evil produced which it was a main object of the constitution to prevent. The framers of that instrument were hard-money men. They had seen the evils of paper money, and intended to guard their posterity against what they themselves had suffered. They had done so, as they believed, in the prohibition upon the States to issue bills of credit; and in the prohibition upon the States to make any thing but gold and silver a tender in discharge of debts. The invention of banks, and their power over the community, had nullified this just and wise intention of the constitution; and certainly it would be a reproach to that instrument if it was incapable of protecting itself against such enemies, at such an important point. Thus far it had been found so incapable; but it was a question whether the fault was in the instrument, or in its administrators. There were many who believed it entirely to be the fault of the latter—who believed that the constitution had ample means of protection, within itself, against insolvent, or delinquent banks—and that, all that was wanted was a will in the federal legislature to apply the remedy which the evil required. This remedy was the process of bankruptcy, under which a delinquent bank might be instantly stopped in its operations—its circulation called in and paid off, as far as its assets would go—itself closed up, and all power of further mischief immediately terminated. This remedy it was now proposed to apply. President Van Buren recommended it: he was the first President who had had the merit of doing so; and all that was now wanted was a Congress to back him: and that was a great want! one hard to supply. A powerful array, strongly combined, was on the other side, both moneyed and political. All the local banks were against it; and they counted a thousand—their stockholders myriads;—and many of their owners and debtors were in Congress: the (still so-called) Bank of the United States was against it: and its power and influence were still great: the whole political party opposed to the administration were against it, as well because opposition is always a necessity of the party out of power, as a means of getting in, as because in the actual circumstances of the present state of things opposition was essential to the success of the outside party. Mr. Webster was the first to oppose the measure, and did so, seeming to question the right of Congress to apply the remedy rather than to question the expediency of it. He said:

"We have seen the declaration of the President, in which he says that he refrains from suggesting any specific plan for the regulation of the exchanges of the country, and for relieving mercantile embarrassments, or for interfering with the ordinary operation of foreign or domestic commerce; and that he does this from a conviction that such measures are not within the constitutional province of the general government; and yet he has made a recommendation to Congress which appears to me to be very remarkable, and it is of a measure which he thinks may prove a salutary remedy against a depreciated paper currency. This measure is neither more nor less than a bankrupt law against corporations and other bankers.

"Now, Mr. President, it is certainly true that the constitution authorizes Congress to establish uniform rules on the subject of bankruptcies; but it is equally true, and abundantly manifest that this power was not granted with any reference to currency questions. It is a general power—a power to make uniform rules on the subject. How is it possible that such a power can be fairly exercised by seizing on corporations and bankers, but excluding all the other usual subjects of bankrupt laws! Besides, do such laws ordinarily extend to corporations at all? But suppose they might be so extended, by a bankrupt law enacted for the usual purposes contemplated by such laws; how can a law be defended, which embraces them and bankers alone? I should like to hear what the learned gentleman at the head of the Judiciary Committee, to whom the subject is referred, has to say upon it. How does the President's suggestion conform to his notions of the constitution? The object of bankrupt laws, sir, has no relation to currency. It is simply to distribute the effects of insolvent debtors among their creditors; and I must say, it strikes me that it would be a great perversion of the power conferred on Congress to exercise it upon corporations and bankers, with the leading and primary object of remedying a depreciated paper currency.

"And this appears the more extraordinary, inasmuch as the President is of opinion that the general subject of the currency is not within our province. Bankruptcy, in its common and just meaning, is within our province. Currency, says the message, is not. But we have a bankruptcy power in the constitution, and we will use this power, not for bankruptcy, indeed, but for currency. This, I confess, sir, appears to me to be the short statement of the matter. I would not do the message, or its author, any intentional injustice, nor create any apparent, where there was not a real inconsistency; but I declare, in all sincerity, that I cannot reconcile the proposed use of the bankrupt power with those opinions of the message which respect the authority of Congress over the currency of the country."

The right to use this remedy against bankrupt corporations was of course well considered by the President before he recommended it and also by the Secretary of the Treasury (Mr. Woodbury), bred to the bar, and since a justice of the Supreme Court of the United States, by whom it had been several times recommended. Doubtless the remedy was sanctioned by the whole cabinet before it became a subject of executive recommendation. But the objections of Mr. Webster, though rather suggested than urged, and confined to the right without impeaching the expediency of the remedy, led to a full examination into the nature and objects of the laws of bankruptcy, in which the right to use them as proposed seemed to be fully vindicated. But the measure was not then pressed to a vote; and the occasion for the remedy having soon passed away, and not recurring since, the question has not been revived. But the importance of the remedy, and the possibility that it may be wanted at some future time, and the high purpose of showing that the constitution is not impotent at a point so vital, renders it proper to present, in this View of the working of the government, the line of argument which was then satisfactory to its advocates: and this is done in the ensuing chapter.

[CHAPTER XIV.]

BANKRUPT ACT FOR BANKS: MR. BENTON'S SPEECH.

The power of Congress to pass bankrupt laws is expressly given in our constitution, and given without limitation or qualification. It is the fourth in the number of the enumerated powers, and runs thus: "Congress shall have power to establish a uniform rule of naturalization, and uniform laws on the subject of bankruptcies throughout the United States." This is a full and clear grant of power. Upon its face it admits of no question, and leaves Congress at full liberty to pass any kind of bankrupt laws they please, limited only by the condition, that whatever laws are passed, they are to be uniform in their operation throughout the United States. Upon the face of our own constitution there is no question of our right to pass a bankrupt law, limited to banks and bankers; but the senator from Massachusetts [Mr. Webster] and others who have spoken on the same side with him, must carry us to England, and conduct us through the labyrinth of English statute law, and through the chaos of English judicial decisions, to learn what this word bankruptcies, in our constitution, is intended to signify. In this he, and they, are true to the habits of the legal profession—those habits which, both in Great Britain and our America, have become a proverbial disqualification for the proper exercise of legislative duties. I know, Mr. President, that it is the fate of our lawyers and judges to have to run to British law books to find out the meaning of the phrases contained in our constitution; but it is the business of the legislator, and of the statesman, to take a larger view—to consider the difference between the political institutions of the two countries—to ascend to first principles—to know the causes of events—and to judge how far what was suitable and beneficial to one might be prejudicial and inapplicable to the other. We stand here as legislators and statesmen, not as lawyers and judges; we have a grant of power to execute not a statute to interpret; and our first duty is to look to that grant, and see what it is; and our next duty is to look over our country, and see whether there is any thing in it which requires the exercise of that grant of power. This is what our President has done, and what we ought to do. He has looked into the constitution, and seen there an unlimited grant of power to pass uniform laws on the subject of bankruptcies; and he has looked over the United States, and seen what he believes to be fit subjects for the exercise of that power, namely, about a thousand banks in a state of bankruptcy, and no State possessed of authority to act beyond its own limits in remedying the evils of a mischief so vast and so frightful. Seeing these two things—a power to act, and a subject matter requiring action—the President has recommended the action which the constitution permits, and which the subject requires; but the senator from Massachusetts has risen in his place, and called upon us to shift our view; to transfer our contemplation—from the constitution of the United States to the British statute book—from actual bankruptcy among ourselves to historical bankruptcy in England; and to confine our legislation to the characteristics of the English model.

As a general proposition, I lay it down that Congress is not confined, like jurists and judges, to the English statutory definitions, or the Nisi Prius or King's Bench construction of the phrases known to English legislation, and used in our constitution. Such a limitation would not only narrow us down to a mere lawyer's view of a subject, but would limit us, in point of time, to English precedents, as they stood at the adoption of our constitution, in the year 1789. I protest against this absurdity, and contend that we are to use our granted powers according to the circumstances of our own country, and according to the genius of our republican institutions, and according to the progress of events and the expansion of light and knowledge among ourselves. If not, and if we are to be confined to the "usual objects," and the "usual subjects," and the "usual purposes," of British legislation at the time of the adoption of our constitution, how could Congress ever make a law in relation to steamboats, or to railroad cars, both of which were unknown to British legislation in 1789; and therefore, according to the idea that would send us to England to find out the meaning of our constitution, would not fall within the limits of our legislative authority. Upon their face, the words of the constitution are sufficient to justify the President's recommendation, even as understood by those who impugn that recommendation. The bankrupt clause is very peculiar in its phraseology, and the more strikingly so from its contrast with the phraseology of the naturalization clause, which is coupled with it. Mark this difference: there is to be a uniform rule of naturalization: there are to be uniform laws on the subject of bankruptcies. One is in the singular, the other in the plural; one is to be a rule, the other are to be laws; one acts on individuals, the other on the subject; and it is bankruptcies that are, and not bankruptcy that is, to be the objects of these uniform laws.

As a proposition, now limited to this particular case, I lay it down that we are not confined to the modern English acceptation of this term bankrupt; for it is a term, not of English, but of Roman origin. It is a term of the civil law, and borrowed by the English from that code. They borrowed from Italy both the name and the purpose of the law; and also the first objects to which the law was applicable. The English were borrowers of every thing connected with this code; and it is absurd in us to borrow from a borrower—to copy from a copyist—when we have the original lender and the original text before us. Bancus and ruptus signifies a broken bench; and the word broken is not metaphorical but literal, and is descriptive of the ancient method of cashiering an insolvent or fraudulent banker, by turning him out of the exchange or market place, and breaking the table bench to pieces on which he kept his money and transacted his business. The term bankrupt, then, in the civil law from which the English borrowed it, not only applied to bankers, but was confined to them; and it is preposterous in us to limit ourselves to an English definition of a civil law term.

Upon this exposition of our own constitution, and of the civil law derivation of this term bankrupt, I submit that the Congress of the United States is not limited to the English judicial or statutory acceptation of the term; and so I finish the first point which I took in the argument. The next point is more comprehensive, and makes a direct issue with the proposition of the senator from Massachusetts, [Mr. Webster.] His proposition is, that we must confine our bankrupt legislation to the usual objects, the usual subjects, and the usual purposes of bankrupt laws in England; and that currency (meaning paper money and shin-plasters of course), and banks, and banking, are not within the scope of that legislation. I take issue, sir, upon all these points, and am ready to go with the senator to England, and to contest them, one by one, on the evidences of English history, of English statute law, and of English judicial decision. I say English; for, although the senator did not mention England, yet he could mean nothing else, in his reference to the usual objects, usual subjects, and usual purposes of bankrupt laws. He could mean nothing else. He must mean the English examples and the English practice, or nothing; and he is not a person to speak, and mean nothing.

Protesting against this voyage across the high seas, I nevertheless will make it, and will ask the senator on what act, out of the scores which Parliament has passed upon this subject, or on what period, out of the five hundred years that she has been legislating upon it, will he fix for his example? Or, whether he will choose to view the whole together; and out of the vast chaotic and heterogeneous mass, extract a general power which Parliament possesses, and which he proposes for our exemplar? For myself, I am agreed to consider the question under the whole or under either of these aspects, and, relying on the goodness of the cause, expect a safe deliverance from the contest, take it in any way.

And first, as to the acts passed upon this subject; great is their number, and most dissimilar their provisions. For the first two hundred years, these acts applied to none but aliens, and a single class of aliens, and only for a single act, that of flying the realm to avoid their creditors. Then they were made to apply to all debtors, whether natives or foreigners, engaged in trade or not, and took effect for three acts: 1st, flying the realm; 2d, keeping the house to avoid creditors; 3d, taking sanctuary in a church to avoid arrest. For upwards of two hundred years—to be precise, for two hundred and twenty years—bankruptcy was only treated criminally, and directed against those who would not face their creditors, or abide the laws of the land; and the remedies against them were not civil, but criminal; it was not a distribution of the effects, but corporal punishment, to wit: imprisonment and outlawry.[1] The statute of Elizabeth was the first that confined the law to merchants and traders, took in the unfortunate as well as the criminal, extended the acts of bankruptcy to inability as well as to disinclination to pay, discriminated between innocent and fraudulent bankruptcy; and gave to creditors the remedial right to a distribution of effects. This statute opened the door to judicial construction, and the judges went to work to define by decisions, who were traders, and what acts constituted the fact, or showed an intent to delay or to defraud creditors. In making these decisions, the judges reached high enough to get hold of royal companies, and low enough to get hold of shoemakers; the latter upon the ground that they bought the leather out of which they made the shoes; and they even had a most learned consultation to decide whether a man who was a landlord for dogs, and bought dead horses for his four-legged boarders, and then sold the skins and bones of the horse carcases he had bought, was not a trader within the meaning of the act; and so subject to the statute of bankrupts. These decisions of the judges set the Parliament to work again to preclude judicial constructions by the precision, negatively and affirmatively, of legislative enactment. But, worse and worse! Out of the frying-pan into the fire. The more legislation the more construction; the more statutes Parliament made, the more numerous and the more various the judicial decisions; until, besides merchants and traders, near forty other descriptions of persons were included; and the catalogue of bankruptcy acts, innocent or fraudulent, is swelled to a length which requires whole pages to contain it. Among those who are now included by statutory enactment in England, leaving out the great classes comprehended under the names of merchants and traders, are bankers, brokers, factors, and scriveners; insurers against perils by sea and land; warehousemen, wharfingers, packers, builders, carpenters, shipwrights and victuallers; keepers of inns, hotels, taverns and coffee-houses; dyers, printers, bleachers, fullers, calendrers, sellers of cattle or sheep; commission merchants and consignees; and the agents of all these classes. These are the affirmative definitions of the classes liable to bankruptcy in England; then come the negative; and among these are farmers, graziers, and common laborers for hire; the receivers general of the king's taxes, and members or subscribers to any incorporated companies established by charter of act of Parliament. And among these negative and affirmative exclusions and inclusions, there are many classes which have repeatedly changed position, and found themselves successively in and out of the bankrupt code. Now, in all this mass of variant and contradictory legislation, what part of it will the senator from Massachusetts select for his model? The improved, and approved parts, to be sure! But here a barrier presents itself—an impassable wall interposes—a veto power intervenes. For it so happens that the improvements in the British bankrupt code, those parts of it which are considered best, and most worthy of our imitation, are of modern origin—the creations of the last fifty years—actually made since the date of our constitution; and, therefore, not within the pale of its purview and meaning. Yes, sir, made since the establishment of our constitution, and, therefore, not to be included within its contemplation; unless this doctrine of searching into British statutes for the meaning of our constitution, is to make us search forwards to the end of the British empire, as well as search backwards to its beginning. Fact is, that the actual bankrupt code of Great Britain—the one that preserves all that is valuable, that consolidates all that is preserved, and improves all that is improvable, is an act of most recent date—of the reign of George IV.; and not yet a dozen years old. Here, then, in going back to England for a model, we are cut off from her improvements in the bankrupt code, and confined to take it as it stood under the reign of the Plantagenets, the Tudors, the Stuarts, and the earlier reigns of the Brunswick sovereigns. This should be a consideration, and sufficiently weighty to turn the scale in favor of looking to our own constitution alone for the extent and circumscription of our powers.

But let us continue this discussion upon principles of British example and British legislation. We must go to England for one of two things; either for a case in point, to be found in some statute, or a general authority, to be extracted from a general practice. Take it either way, or both ways, and I am ready and able to vindicate, upon British precedents, our perfect right to enact a bankrupt law, limited in its application to banks and bankers. And first, for a case in point, that is to say, an English statute of bankruptcy, limited to these lords of the purse-strings: we have it at once, in the first act ever passed on the subject—the act of the 30th year of the reign of Edward III., against the Lombard Jews. Every body knows that these Jews were bankers, usually formed into companies, who, issuing from Venice, Milan, and other parts of Italy, spread over the south and west of Europe, during the middle ages; and established themselves in every country and city in which the dawn of reviving civilization, and the germ of returning industry, gave employment to money, and laid the foundation of credit. They came to London as early as the thirteenth century, and gave their name to a street which still retains it, as well as it still retains the particular occupation, and the peculiar reputation, which the Lombard Jews established for it. The first law against bankrupts ever passed in England, was against the banking company composed of these Jews, and confined exclusively to them. It remained in force two hundred years, without any alteration whatever, and was nothing but the application of the law of their own country to these bankers in the country of their sojournment—the Italian law, founded upon the civil law, and called in Italy banco rotto, broken bank. It is in direct reference to these Jews, and this application of the exotic bankrupt law to them, that Sir Edward Coke, in his institutes, takes occasion to say that both the name and the wickedness of bankruptcy were of foreign origin, and had been brought into England from foreign parts. It was enacted under the reign of one of the most glorious of the English princes—a reign as much distinguished for the beneficence of its civil administration as for the splendor of its military achievements. This act of itself is a full answer to the whole objection taken by the senator from Massachusetts. It shows that, even in England, a bankrupt law has been confined to a single class of persons, and that class a banking company. And here I would be willing to close my speech upon a compromise—a compromise founded in reason and reciprocity, and invested with the equitable mantle of a mutual concession. It is this: if we must follow English precedents, let us follow them chronologically and orderly. Let us begin at the beginning, and take them as they rise. Give me a bankrupt law for two hundred years against banks and bankers; and, after that, make another for merchants and traders.

The senator from Massachusetts [Mr. Webster] has emphatically demanded, how the bankrupt power could be fairly exercised by seizing on corporations and bankers, and excluding all the other usual subjects of bankrupt laws? I answer, by following the example of that England to which he has conducted us; by copying the act of the 30th of Edward III., by going back to that reign of heroism, patriotism, and wisdom; that reign in which the monarch acquired as much glory from his domestic policy as from his foreign conquests; that reign in which the acquisition of dyers and weavers from Flanders, the observance of law and justice, and the encouragement given to agriculture and manufactures, conferred more benefit upon the kingdom, and more glory upon the king, than the splendid victories of Poictiers, Agincourt, and Cressy.

But the senator may not be willing to yield to this example, this case in point, drawn from his own fountain, and precisely up to the exigency of the occasion. He may want something more; and he shall have it. I will now take the question upon its broadest bottom and fullest merits. I will go to the question of general power—the point of general authority—exemplified by the general practice of the British Parliament, for five hundred years, over the whole subject of bankruptcy. I will try the question upon this basis; and here I lay down the proposition, that this five hundred years of parliamentary legislation on bankruptcy establishes the point of full authority in the British Parliament to act as it pleased on the entire subject of bankruptcies. This is my proposition; and, when it is proved, I shall claim from those who carry me to England for authority, the same amount of power over the subject which the British Parliament has been in the habit of exercising. Now, what is the extent of that power? Happily for me, I, who have to speak, without any inclination for the task; still more happily for those who have to hear me, peradventure without profit or pleasure; happily for both parties, my proposition is already proved, partly by what I have previously advanced, and fully by what every senator knows. I have already shown the practice of Parliament upon this subject, that it has altered and changed, contracted and enlarged, put in and left out, abolished and created, precisely as it pleased. I have already shown, in my rapid view of English legislation on this subject, that the Parliament exercised plenary power and unlimited authority over every branch of the bankrupt question; that it confined the action of the bankrupt laws to a single class of persons, or extended it to many classes; that it was sometimes confined to foreigners, then applied to natives, and that now it comprehends natives, aliens, denizens, and women; that at one time all debtors were subject to it; then none but merchants and traders; and now, besides merchants and traders, a long list of persons who have nothing to do with trade; that at one time bankruptcy was treated criminally, and its object punished corporeally, while now it is a remedial measure for the benefit of the creditors, and the relief of unfortunate debtors; and that the acts of the debtor which may constitute him a bankrupt, have been enlarged from three or four glaring misdeeds, to so long a catalogue of actions, divided into the heads of innocent and fraudulent; constructive and positive; intentional and unintentional; voluntary and forced; that none but an attorney, with book in hand, can pretend to enumerate them. All this has been shown; and, from all this, it is incontestable that Parliament can do just what it pleases on the subject; and, therefore, our Congress, if referred to England for its powers, can do just what it pleases also. And thus, whether we go by the words of our own constitution, or by a particular example in England, or deduce a general authority from the general practice of that country, the result is still the same: we have authority to limit, if we please, our bankrupt law to the single class of banks and bankers.

The senator from Massachusetts [Mr. Webster] demands whether bankrupt laws ordinarily extend to corporations, meaning moneyed corporations. I am free to answer that, in point of fact, they do not. But why? because they ought not? or because these corporations have yet been powerful enough, or fortunate enough, to keep their necks out of that noose? Certainly the latter. It is the power of these moneyed corporations in England, and their good fortune in our America, which, enabling them to grasp all advantages on one hand, and to repulse all penalties on the other, has enabled them to obtain express statutory exemption from bankrupt liabilities in England; and to escape, thus far, from similar liabilities in the United States. This, sir, is history, and not invective; it is fact, and not assertion; and I will speedily refresh the senator's memory, and bring him to recollect why it is, in point of fact, that bankrupt laws do not usually extend to these corporations. And, first, let us look to England, that great exemplar, whose evil examples we are so prompt, whose good ones we are so slow, to imitate. How stands this question of corporation unliability there? By the judicial construction of the statute of Elizabeth, the partners in all incorporated companies were held subject to the bankrupt law; and, under this construction, a commission of bankrupt was issued against Sir John Wolstenholme, a gentleman of large fortune, who had advanced a sum of money on an adventure in the East India Company's trade. The issue of this commission was affirmed by the Court of King's Bench; but this happened to take place in the reign of Charles II.—that reign during which so little is found worthy of imitation in the government of Great Britain—and immediately two acts of Parliament were passed, one to annul the judgment of the Court of King's Bench in the case of Sir John Wolstenholme, and the other to prevent any such judgments from being given in future. Here are copies of the two acts:

FIRST ACT, TO ANNUL THE JUDGMENT.

"Whereas a verdict and judgment was had in the Easter term of the King's Bench, whereby Sir John Wolstenholme, knight, and adventurer in the East India Company, was found liable to a commission of bankrupt only for, and by reason of, a share which he had in the joint stock of said company: Now, &c., Be it enacted, That the said judgment be reversed, annulled, vacated, and for naught held," &c.

SECOND ACT, TO PREVENT SUCH JUDGMENTS IN FUTURE.

"That whereas divers noblemen and gentlemen, and persons of quality, no ways bred up to trade, do often put in great stocks of money into the East India and Guinea Company: Be it enacted, That no persons adventurers for putting in money or merchandise into the said companies, or for venturing or managing the fishing trade, called the royal fishing trade, shall be reputed or taken to be a merchant or trader within any statutes for bankrupts."

Thus, and for these reasons, were chartered companies and their members exempted from the bankrupt penalties, under the dissolute reign of Charles II. It was not the power of the corporations at that time—for the Bank of England was not then chartered, and the East India Company had not then conquered India—which occasioned this exemption; but it was to favor the dignified characters who engaged in the trade—noblemen, gentlemen, and persons of quality. But, afterwards, when the Bank of England had become almost the government of England, and when the East India Company had acquired the dominions of the Great Mogul, an act of Parliament expressly declared that no member of any incorporated company, chartered by act of Parliament, should be liable to become bankrupt. This act was passed in the reign of George IV., when the Wellington ministry was in power, and when liberal principles and human rights were at the last gasp. So much for these corporation exemptions in England; and if the senator from Massachusetts finds any thing in such instances worthy of imitation, let him stand forth and proclaim it.

But, sir, I am not yet done with my answer to this question; do such laws ordinarily extend to corporations at all? I answer, most decidedly, that they do! that they apply in England to all the corporations, except those specially excepted by the act of George IV.; and these are few in number, though great in power—powerful, but few—nothing but units to myriads, compared to those which are not excepted. The words of that act are: "Members of, or subscribers to, any incorporated commercial or trading companies, established by charter act of Parliament." These words cut off at once the many ten thousand corporations in the British empire existing by prescription, or incorporated by letters patent from the king; and then they cut off all those even chartered by act of Parliament which are not commercial or trading in their nature. This saves but a few out of the hundreds of thousands of corporations which abound in England, Scotland, Wales, and Ireland. It saves, or rather confirms, the exemption of the Bank of England, which is a trader in money; and it confirms, also, the exemption of the East India Company which is, in contemplation of law at least, a commercial company; and it saves or exempts a few others deriving charters of incorporation from Parliament; but it leaves subject to the law the whole wilderness of corporations, of which there are thousands in London alone, which derive from prescription or letters patent; and it also leaves subject to the same laws all the corporations created by charter act of Parliament, which are not commercial or trading. The words of the act are very peculiar—"charter act of Parliament;" so that corporations by a general law, without a special charter act, are not included in the exemption. This answer, added to what has been previously said, must be a sufficient reply to the senator's question, whether bankrupt laws ordinarily extend to corporations? Sir, out of the myriad of corporations in Great Britain, the bankrupt law extends to the whole, except some half dozen or dozen.

So much for the exemption of these corporations in England; now for our America. We never had but one bankrupt law in the United States, and that for the short period of three or four years. It was passed under the administration of the elder Mr. Adams, and repealed under Mr. Jefferson. It copied the English acts including among the subjects of bankruptcy, bankers, brokers, and factors. Corporations were not included; and it is probable that no question was raised about them, as, up to that time, their number was few, and their conduct generally good. But, at a later date, the enactment of a bankrupt law was again attempted in our Congress; and, at that period, the multiplication and the misconduct of banks presented them to the minds of many as proper subjects for the application of the law; I speak of the bill of 1827, brought into the Senate, and lost. That bill, like all previous laws since the time of George II., was made applicable to bankers, brokers, and factors. A senator from North Carolina [Mr. Branch] moved to include banking corporations. The motion was lost, there being but twelve votes for it; but in this twelve there were some whose names must carry weight to any cause to which they are attached. The twelve were, Messrs. Barton, Benton, Branch, Cobb, Dickerson, Hendricks, Macon, Noble, Randolph, Reed, Smith of South Carolina, and White. The whole of the friends of the bill, twenty-one in number, voted against the proposition, (the present Chief Magistrate in the number,) and for the obvious reason, with some, of not encumbering the measure they were so anxious to carry, by putting into it a new and untried provision. And thus stands our own legislation on this subject. In point of fact, then, chartered corporations have thus far escaped bankrupt penalties, both in England, and in our America; but ought they to continue to escape? This is the question—this the true and important inquiry, which is now to occupy the public mind.

The senator from Massachusetts [Mr. Webster] says the object of bankrupt laws has no relation to currency; that their object is simply to distribute the effects of insolvent debtors among their creditors. So says the senator, but what says history? What says the practice of Great Britain? I will show you what it says, and for that purpose will read a passage from McCulloch's notes on Smith's Wealth of Nations. He says:

"In 1814-'15, and '16, no fewer than 240 country banks stopped payment, and ninety-two commissions of bankruptcy were issued against these establishments, being at the rate of one commission against every seven and a half of the total number of country banks existing in 1813."

Two hundred and forty stopped payment at one dash, and ninety-two subjected to commissions of bankruptcy. They were not indeed chartered banks, for there are none such in England, except the Bank of England; but they were legalized establishments, existing under the first joint-stock bank act of 1708; and they were banks of issue. Yet they were subjected to the bankrupt laws, ninety-two of them in a single season of bank catalepsy; their broken "promises to pay" were taken out of circulation; their doors closed; their directors and officers turned out; their whole effects, real and personal, their money, debts, books, paper, and every thing, put into the hands of assignees; and to these assignees, the holders of their notes forwarded their demands, and were paid, every one in equal proportion—as the debts of the bank were collected, and its effects converted into money; and this without expense or trouble to any one of them. Ninety-two banks in England shared this fate in a single season of bank mortality; five hundred more could be enumerated in other seasons, many of them superior in real capital, credit, and circulation, to our famous chartered banks, most of which are banks of moonshine, built upon each other's paper; and the whole ready to fly sky-high the moment any one of the concern becomes sufficiently inflated to burst. The immediate effect of this application of the bankrupt laws to banks in England, is two-fold: first, to save the general currency from depreciation, by stopping the issue and circulation of irredeemable notes; secondly, to do equal justice to all creditors, high and low, rich and poor, present and absent, the widow and the orphan, as well as the cunning and the powerful, by distributing their effects in proportionate amounts to all who hold demands. This is the operation of bankrupt laws upon banks in England, and all over the British empire; and it happens to be the precise check upon the issue of broken bank paper, and the precise remedy for the injured holders of their dishonored paper which the President recommends. Here is his recommendation, listen to it:

"In the mean time, it is our duty to provide all the remedies against a depreciated paper currency which the constitution enables us to afford. The Treasury Department, on several former occasions, has suggested the propriety and importance of a uniform law concerning bankruptcies of corporations and other bankers. Through the instrumentality of such a law, a salutary check may doubtless be imposed on the issues of paper money, and an effectual remedy given to the citizen, in a way at once equal in all parts of the Union, and fully authorized by the constitution."

The senator from Massachusetts says he would not, intentionally, do injustice to the message or its author; and doubtless he is not conscious of violating that benevolent determination; but here is injustice, both to the message and to its author; injustice in not quoting the message as it is, and showing that it proposes a remedy to the citizen, as well as a check upon insolvent issues; injustice to the author in denying that the object of bankrupt laws has any relation to currency, when history shows that these laws are the actual instrument for regulating and purifying the whole local paper currency of the entire British empire, and saving that country from the frauds, losses, impositions, and demoralization of an irredeemable paper money.

The senator from Massachusetts says the object of bankrupt laws has no relation to currency. If he means hard-money currency, I agree with him; but if he means bank notes, as I am sure he does, then I point him to the British bankrupt code, which applies to every bank of issue in the British empire, except the Bank of England itself, and the few others, four or five in number, which are incorporated by charter acts. All the joint-stock banks, all the private banks, all the bankers of England, Scotland, Wales, and Ireland, are subject to the law of bankruptcy. Many of these establishments are of great capital and credit; some having hundreds, or even thousands of partners; and many of them having ten, or twenty, or thirty, and some even forty branches. They are almost the exclusive furnishers of the local and common bank note currency; the Bank of England notes being chiefly used in the great cities for large mercantile and Government payments. These joint-stock banks, private companies, and individual bankers are, practically, in the British empire what the local banks are in the United States. They perform the same functions, and differ in name only; not in substance nor in conduct. They have no charters, but they have a legalized existence; they are not corporations, but they are allowed by law to act in a body; they furnish the actual paper currency of the great body of the people of the British empire, as much so as our local banks furnish the mass of paper currency to the people of the United States. They have had twenty-four millions sterling (one hundred and twenty millions of dollars) in circulation at one time; a sum nearly equal to the greatest issue ever known in the United States; and more than equal to the whole bank-note circulation of the present day. They are all subject to the law of bankruptcy, and their twenty-four millions sterling of currency along with them; and five hundred of them have been shut up and wound up under commissions of bankruptcy in the last forty years; and yet the senator from Massachusetts informs us that the object of bankrupt laws has no relation to currency!

But it is not necessary to go all the way to England to find bankrupt laws having relation to currency. The act passed in our own country, about forty years ago, applied to bankers; the bill brought into the House of Representatives, about fifteen years ago, by a gentleman then, and now, a representative from the city of Philadelphia, [Mr. Sergeant,] also applied to bankers; and the bill brought into this Senate, ten years ago, by a senator from South Carolina, not now a member of this body, [General Hayne,] still applied to bankers. These bankers, of whom there were many in the United States, and of whom Girard, in the East, and Yeatman and Woods, in the West, were the most considerable—these bankers all issued paper money; they all issued currency. The act, then, of 1798, if it had continued in force, or the two bills just referred to, if they had become law, would have operated upon these bankers and their banks—would have stopped their issues, and put their establishments into the hands of assignees, and distributed their effects among their creditors. This, certainly, would have been having some relation to currency: so that, even with our limited essays towards a bankrupt system, we have scaled the outworks of the banking empire; we have laid hold of bankers, but not of banks; we have reached the bank of Girard, but not the Girard Bank; we have applied our law to the bank of Yeatman and Woods, but not to the rabble of petty corporations which have not the tithe of their capital and credit. We have gone as far as bankers, but not as far as banks; and now give me a reason for the difference. Give me a reason why the act of 1798, the bill of Mr. Sergeant, in 1821, and the bill of General Hayne, in 1827, should not include banks as well as bankers. They both perform the same function—that of issuing paper currency. They both involve the same mischief when they stop payment—that of afflicting the country with a circulation of irredeemable and depreciated paper money. They are both culpable in the same mode, and in the same degree; for they are both violators of their "promises to pay." They both exact a general credit from the community, and they both abuse that credit. They both have creditors, and they both have effects; and these creditors have as much right to a pro rata distribution of the effects in one case as in the other. Why, then, a distinction in favor of the bank? Is it because corporate bodies are superior to natural bodies? because artificial beings are superior to natural beings? or, rather, is it not because corporations are assemblages of men; and assemblages are more powerful than single men; and, therefore, these corporations, in addition to all their vast privileges, are also to have the privilege of being bankrupt, and afflicting the country with the evils of bankruptcy, without themselves being subjected to the laws of bankruptcy? Be this as it may—be the cause what it will—the decree has gone forth for the decision of the question—for the trial of the issue—for the verdict and judgment upon the claim of the banks. They have many privileges and exemptions now, and they have the benefit of all laws against the community. They pay no taxes; the property of the stockholders is not liable for their debts; they sue their debtors, sell their property, and put their bodies in jail. They have the privilege of stamping paper money; the privilege of taking interest upon double, treble, and quadruple their actual money. They put up and put down the price of property, labor, and produce, as they please. They have the monopoly of making the actual currency. They are strong enough to suppress the constitutional money, and to force their own paper upon the community, and then to redeem it or not, as they please. And is it to be tolerated, that, in addition to all these privileges, and all these powers, they are to be exempted from the law of bankruptcy? the only law of which they are afraid, and the only one which can protect the country against their insolvent issues, and give a fair chance for payment to the numerous holders of their violated "promises to pay!"

I have discussed, Mr. President, the right of Congress to apply a bankrupt law to banking corporations; I have discussed it on the words of our own constitution, on the practice of England, and on the general authority of Parliament; and on each and every ground, as I fully believe, vindicated our right to pass the law. The right is clear; the expediency is manifest and glaring. Of all the objects upon the earth, banks of circulation are the fittest subjects of bankrupt laws. They act in secret, and they exact a general credit. Nobody knows their means, yet every body must trust them. They send their "promises to pay" far and near. They push them into every body's hands; they make them small to go into small hands—into the hands of the laborer, the widow, the helpless, the ignorant. Suddenly the bank stops payment; all these helpless holders of their notes are without pay, and without remedy. A few on the spot get a little; those at a distance get nothing. For each to sue, is a vexatious and a losing business. The only adequate remedy—the only one that promises any justice to the body of the community, and the helpless holders of small notes—is the bankrupt remedy of assignees to distribute the effects. This makes the real effects available. When a bank stops, it has little or no specie; but it has, or ought to have, a good mass of solvent debts. At present, all these debts are unavailable to the community—they go to a few large and favored creditors; and those who are most in need get nothing. But a stronger view remains to be taken of these debts: the mass of them are due from the owners and managers of the banks—from the presidents, directors, cashiers, stockholders, attorneys; and these people do not make themselves pay. They do not sue themselves, nor protest themselves. They sue and protest others, and sell out their property, and put their bodies in jail; but, as for themselves, who are the main debtors, it is another affair! They take their time, and usually wait till the notes are heavily depreciated, and then square off with a few cents in the dollar! A commission of bankruptcy is the remedy for this evil; assignees of the effects of the bank are the persons to make these owners, and managers, and chief debtors to the institutions, pay up. Under the bankrupt law, every holder of a note, no matter how small in amount, nor how distant the holder may reside, on forwarding the note to the assignees, will receive his ratable proportion of the bank's effects, without expense, and without trouble to himself. It is a most potent, a most proper, and most constitutional remedy against delinquent banks. It is an equitable and a brave remedy. It does honor to the President who recommended it, and is worthy of the successor of Jackson.

Senators upon this floor have ventured the expression of an opinion that there can be no resumption of specie payments in this country until a national bank shall be established, meaning, all the while, until the present miscalled Bank of the United States shall be rechartered. Such an opinion is humiliating to this government, and a reproach upon the memory of its founders. It is tantamount to a declaration that the government, framed by the heroes and sages of the Revolution, is incapable of self-preservation; that it is a miserable image of imbecility, and must take refuge in the embraces of a moneyed corporation, to enable it to survive its infirmities. The humiliation of such a thought should expel it from the imagination of every patriotic mind. Nothing but a dire necessity—a last, a sole, an only alternative—should bring this government to the thought of leaning upon any extraneous aid. But here is no necessity, no reason, no pretext, no excuse, no apology, for resorting to collateral aid; and, above all, to the aid of a master in the shape of a national bank. The granted powers of the government are adequate to the coercion of all the banks. As banks, the federal government has no direct authority over them; but as bankrupts, it has them in its own hands. It can pass bankrupt laws for these delinquent institutions. It can pass such laws either with or without including merchants and traders; and the day for such law to take effect, will be the day for the resumption of specie payments by every solvent bank, and the day for the extinction of the abused privileges of every insolvent one. So far from requiring the impotent aid of the miscalled Bank of the United States to effect a resumption, that institution will be unable to prevent a resumption. Its veto power over other banks will cease; and it will itself be compelled to resume specie payment, or die!

Besides these great objects to be attained by the application of a bankrupt law to banking corporations, there are other great purposes to be accomplished, and some most sacred duties to be fulfilled, by the same means. Our constitution contains three most vital prohibitions, of which the federal government is the guardian and the guarantee, and which are now publicly trodden under foot. No State shall emit bills of credit; no State shall make any thing but gold and silver coin a tender in payment of debts; no State shall pass any law impairing the obligation of contracts. No State shall do these things. So says the constitution under which we live, and which it is the duty of every citizen to protect, preserve, and defend. But a new power has sprung up among us, and has annulled the whole of these prohibitions. That new power is the oligarchy of banks. It has filled the whole land with bills of credit; for it is admitted on all hands that bank notes, not convertible into specie, are bills of credit. It has suppressed the constitutional currency, and made depreciated paper money a forced tender in payment of every debt. It has violated all its own contracts, and compelled all individuals, and the federal government and State governments, to violate theirs; and has obtained from sovereign States an express sanction, or a silent acquiescence, in this double violation of sacred obligations, and in this triple annulment of constitutional prohibitions. It is our duty to bring, or to try to bring, this new power under subordination to the laws and the government. It is our duty to go to the succor of the constitution—to rescue, if possible, these prohibitions from daily, and public and permanent infraction. The application of the bankrupt law to this new power, is the way to effect this rescue—the way to cause these vital prohibitions to be respected and observed, and to do it in a way to prevent collisions between the States and the federal government. The prohibitions are upon the States; it is they who are not to do these things, and, of course, are not to authorize others to do what they cannot do themselves. The banks are their delegates in this three-fold violation of the constitution; and, in proceeding against these delegates, we avoid collision with the States.

Mr. President, every form of government has something in it to excite the pride, and to rouse the devotion, of its citizens. In monarchies, it is the authority of the king; in republics, it is the sanctity of the laws. The loyal subject makes it the point of honor to obey the king; the patriot republican makes it his glory to obey the laws. We are a republic. We have had illustrious citizens, conquering generals, and victorious armies; but no citizen, no general, no army, has undertaken to dethrone the laws and to reign in their stead. This parricidal work has been reserved for an oligarchy of banks! Three times, in thrice seven years, this oligarchy has dethroned the law, and reigned in its place. Since May last, it has held the sovereign sway, and has not yet vouchsafed to indicate the day of its voluntary abdication. The Roman military dictators usually fixed a term to their dictatorships. I speak of the usurpers, not of the constitutional dictators for ten days. These usurpers usually indicated a time at which usurpation should cease, and law and order again prevail. Not so with this new power which now lords it over our America. They fix no day; they limit no time; they indicate no period for their voluntary descent from power, and for their voluntary return to submission to the laws. They could agree in the twinkling of an eye—at the drop of a hat—at the crook of a finger—to usurp the sovereign power; they cannot agree, in four months, to relinquish it. They profess to be willing, but cannot agree upon the time. Let us perform that service for them. Let us name a day. Let us fix it in a bankrupt law. Let us pass that law, and fix a day for it to take effect; and that day will be the day for the resumption of specie payments, or for the trial of the question of permanent supremacy between the oligarchy of banks, and the constitutional government of the people.

We are called upon to have mercy upon the banks; the prayer should rather be to them, to have mercy upon the government and the people. Since May last the ex-deposit banks alone have forced twenty-five millions of depreciated paper through the federal government upon its debtors and the States, at a loss of at least two and a half millions to the receivers, and a gain of an equal amount to the payers. The thousand banks have the country and the government under their feet at this moment, owing to the community upwards of an hundred millions of dollars, of which they will pay nothing, not even ninepences, picayunes, and coppers. Metaphorically, if not literally, they give their creditors more kicks than coppers. It is for them to have mercy on us. But what is the conduct of government towards these banks? Even at this session, with all their past conduct unatoned for, we have passed a relief bill for their benefit—a bill to defer the collection of the large balance which they still owe the government. But there is mercy due in another quarter—upon the people, suffering from the use of irredeemable and depreciated paper—upon the government, reduced to bankruptcy—upon the character of the country, suffering in the eyes of Europe—upon the character of republican government, brought into question by the successful usurpation of these institutions. This last point is the sorest. Gentlemen speak of the failure of experiments—the failure of the specie experiment, as it is called by those who believe that paper is the ancient and universal money of the world; and that the use of a little specie for the first time is not to be attempted. They dwell upon the supposed failure of "the experiment;" while all the monarchists of Europe are rejoicing in the failure of the experiment of republican government, at seeing this government, the last hope of the liberal world, struck and paralyzed by an oligarchy of banks—seized by the throat, throttled and held as a tiger would hold a babe—stripped of its revenues, bankrupted, and subjected to the degradation of becoming their engine to force their depreciated paper upon helpless creditors. Here is the place for mercy—upon the people—upon the government—upon the character of the country—upon the character of republican government.

The apostle of republicanism, Mr. Jefferson, has left it as a political legacy to the people of the United States, never to suffer their government to fall under the control of any unauthorized, irresponsible, or self-created institutions of bodies whatsoever. His allusion was to the Bank of the United States, and its notorious machinations to govern the elections, and get command of the government; but his admonition applies with equal force to all other similar or affiliated institutions; and, since May last, it applies to the whole league of banks which then "shut up the Treasury," and reduced the government to helpless dependence.

It is said that bankruptcy is a severe remedy to apply to banks. It may be answered that it is not more severe here than in England, where it applies to all banks of issue, except the Bank of England, and a few others; and it is not more severe to them than it is to merchants and traders, and to bankers and brokers, and all unincorporated banks. Personally, I was disposed to make large allowances for the conduct of the banks. Our own improvidence tempted them into an expansion of near forty millions, in 1835 and 1836, by giving them the national domain to bank upon; a temptation which they had not the fortitude to resist, and which expanded them to near the bursting point. Then they were driven almost to a choice of bankruptcy between themselves and their debtors, by the act which required near forty millions to be distributed in masses, and at brief intervals, among the States. Some failures were inevitable under these circumstances, and I was disposed to make liberal allowances for them; but there are three things for which the banks have no excuse, and which should forever weigh against their claims to favor and confidence. These things are, first, the political aspect which the general suspension of payment was permitted to assume, and which it still wears; secondly, the issue and use of shinplasters, and refusal to pay silver change, when there are eighty millions of specie in the country; thirdly, the refusal, by the deposit banks to pay out the sums which had been severed from the Treasury, and stood in the names of disbursing officers, and was actually due to those who were performing work and labor, and rendering daily services to the government. For these three things there is no excuse; and, while memory retains their recollection, there can be no confidence in those who have done them.

[CHAPTER XV.]

DIVORCE OF BANK AND STATE: MR. BENTON'S SPEECH.

The bill is to divorce the government from the banks, or rather is to declare the divorce, for the separation has already taken place by the operation of law and by the delinquency of the banks. The bill is to declare the divorce; the amendment is to exclude their notes from revenue payments, not all at once, but gradually, and to be accomplished by the 1st day of January, 1841. Until then the notes of specie-paying banks may be received, diminishing one-fourth annually; and after that day, all payments to and from the federal government are to be made in hard money. Until that day, payments from the United States will be governed by existing laws. The amendment does not affect the Post Office department until January, 1841; until then, the fiscal operations of that Department remain under the present laws; after that day they fall under the principle of the bill, and all payments to and from that department will be made in hard money. The effect of the whole amendment will be to restore the currency of the constitution to the federal government—to re-establish the great acts of 1789 and of 1800—declaring that the revenues should be collected in gold and silver coin only; those early statutes which were enacted by the hard money men who made the constitution, who had seen and felt the evils of that paper money, and intended to guard against these evils in future by creating, not a paper, but a hard-money government.

I am for this restoration. I am for restoring to the federal treasury the currency of the constitution. I am for carrying back this government to the solidity projected by its founders. This is a great object in itself—a reform of the first magnitude—a reformation with healing on its wings, bringing safety to the government and blessings to the people. The currency is a thing which reaches every individual, and every institution. From the government to the washer-woman, all are reached by it, and all concerned in it; and, what seems parodoxical, all are concerned to the same degree; for all are concerned to the whole extent of their property and dealings; and all is all, whether it be much or little. The government with its many ten millions of revenue, suffers no more in proportion than the humble and meritorious laborer who works from sun to sun for the shillings which give food and raiment to his family. The federal government has deteriorated the currency, and carried mischief to the whole community, and lost its own revenues, and subjected itself to be trampled upon by corporations, by departing from the constitution, and converting this government from a hard-money to a paper money government. The object of the amendment and the bill is to reform these abuses, and it is a reform worthy to be called a reformation—worthy to engage the labor of patriots—worthy to unite the exertions of different parties—worthy to fix the attention of the age—worthy to excite the hopes of the people, and to invoke upon its success the blessings of heaven.

Great are the evils,—political, pecuniary, and moral,—which have flowed from this departure from our constitution. Through the federal government alone—through it, not by it—two millions and a half of money have been lost in the last four months. Thirty-two millions of public money was the amount in the deposit banks when they stopped payment; of this sum twenty-five millions have been paid over to government creditors, or transferred to the States. But how paid, and how transferred? In what? In real money, or its equivalent? Not at all! But in the notes of suspended banks—in notes depreciated, on an average, ten per cent. Here then were two and a half millions lost. Who bore the loss? The public creditors and the States. Who gained it? for where there is a loss to one, there must be a gain to another. Who gained the two and a half millions, thus sunk upon the hands of the creditors and the States? The banks were the gainers; they gained it; the public creditors and the States lost it; and to the creditors it was a forced loss. It is in vain to say that they consented to take it. They had no alternative. It was that or nothing. The banks forced it upon the government; the government forced it upon the creditor. Consent was out of the question. Power ruled, and that power was in the banks; and they gained the two and a half millions which the States and the public creditors lost.

I do not pretend to estimate the moneyed losses, direct and indirect, to the government alone, from the use of local bank notes in the last twenty-five years, including the war, and covering three general suspensions. Leaving the people out of view, as a field of losses beyond calculation, I confine myself to the federal government, and say, its losses have been enormous, prodigious, and incalculable. We have had three general stoppages of the local banks in the short space of twenty-two years. It is at the average rate of one in seven years; and who is to guaranty us from another, and from the consequent losses, if we continue to receive their bills in payment of public dues? Another stoppage must come, and that, reasoning from all analogies, in less than seven years after the resumption. Many must perish in the attempt to resume, and would do better to wind up at once, without attempting to go on, without adequate means, and against appalling obstacles. Another revulsion must come. Thus it was after the last resumption. The banks recommenced payments in 1817—in two years, the failures were more disastrous than ever. Thus it was in England after the long suspension of twenty-six years. Payments recommenced in 1823—in 1825 the most desolating crash of banks took place which had ever been known in the kingdom, although the Bank of England had imported, in less than four years, twenty millions sterling in gold,—about one hundred millions of dollars, to recommence upon. Its effects reached this country, crushed the cotton houses in New Orleans, depressed the money market, and injured all business.

The senators from New York and Virginia (Messrs. Tallmadge and Rives) push this point of confidence a little further; they address a question to me, and ask if I would lose confidence in all steamboats, and have them all discarded, if one or two blew up in the Mississippi? I answer the question in all frankness, and say, that I should not. But if, instead of one or two in the Mississippi, all the steamboats in the Union should blow up at once—in every creek, river and bay—while all the passengers were sleeping in confidence, and the pilots crying out all is well; if the whole should blow up from one end of the Union to the other just as fast as they could hear each other's explosions; then, indeed, I should lose confidence in them, and never again trust wife, or child, or my own foot, or any thing not intended for destruction, on board such sympathetic and contagious engines of death. I answer further, and tell the gentlemen, that if only one or two banks had stopped last May in New York, I should not have lost all confidence in the remaining nine hundred and ninety-nine; but when the whole thousand stopped at once; tumbled down together—fell in a lump—lie there—and when ONE of their number, by a sign with the little finger, can make the whole lie still, then, indeed, confidence is gone! And this is the case with the banks. They have not only stopped altogether, but in a season of profound peace, with eighty millions of specie in the country, and just after the annual examinations by commissioners and legislative committees, and when all was reported well. With eighty millions in the country, they stop even for change! It did not take a national calamity—a war—to stop them! They fell in time of peace and prosperity! We read of people in the West Indies, and in South America, who rebuild their cities on the same spot where earthquakes had overthrown them; we are astonished at their fatuity; we wonder that they will build again on the same perilous foundations. But these people have a reason for their conduct; it is, that their cities are only destroyed by earthquakes; it takes an earthquake to destroy them; and when there is no earthquake, they are safe. But suppose their cities fell down without any commotion in the earth, or the air—fell in a season of perfect calm and serenity—and after that the survivors should go to building again in the same place; would not all the world say that they were demented, and were doomed to destruction? So of the government of the United States by these banks. If it continues to use them, and to receive their notes for revenue, after what has happened, and in the face of what now exists, it argues fatuity, and a doom to destruction.

Resume when they will, or when they shall, and the longer it is delayed the worse for themselves, the epoch of resumption is to be a perilous crisis to many. This stopping and resuming by banks, is the realization of the poetical description of the descent into hell, and the return from it. Facilis descensus Averni—sed revocare gradum—hic opus, hic labor est. Easy is the descent into the regions below, but to return! this is work, this is labor indeed! Our banks have made the descent; they have gone down with ease; but to return—to ascend the rugged steps, and behold again the light above how many will falter, and fall back into the gloomy regions below.

Banks of circulation are banks of hazard and of failure. It is an incident of their nature. Those without circulation rarely fail. That of Venice has stood seven hundred years; those of Hamburgh, Amsterdam, and others, have stood for centuries. The Bank of England, the great mother of banks of circulation, besides an actual stoppage of a quarter of a century, has had her crisis and convulsion in average periods of seven or eight years, for the last half century—in 1783, '93, '97, 1814, '19, '25, '36—and has only been saved from repeated failure by the powerful support of the British government, and profuse supplies of exchequer bills. Her numerous progeny of private and joint stock banks of circulation have had the same convulsions; and not being supported by the government, have sunk by hundreds at a time. All the banks of the United States are banks of circulation; they are all subject to the inherent dangers of that class of banks, and are, besides, subject to new dangers peculiar to themselves. From the quantity of their stock held by foreigners, the quantity of other stocks in their hands, and the current foreign balance against the United States, our paper system has become an appendage to that of England. As such, it suffers from sympathy when the English system suffers. In addition to this, a new doctrine is now broached—that our first duty is to foreigners! and, upon this principle, when the banks of the two countries are in peril, ours are to be sacrificed to save those of England!