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IN T H E

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U P O N T H E Q L K S T i O N * OF R K N K W I X G T U K

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SPEECH.
After the bill had been read, and M r . DALLAS had spolteQt
m M R . W E B S T E R said, that, though he was entirely satisfied with the general
view taken by the Chairman of the Committee, ( M r . Dallas,) and with nis explanation of the details of the bill, yet there were a few topics upon which he
desired to offer some remarks, and if no other gentleman wished, at present,
to address the Senate, he would avail himself of this opportunity.
A considerable portion of the active part of life has elapsed, said M r . W . ,
since you and I, Mr. President, and three or four other gentlemen, now in
the Senate, acted our respective parts, in the passage of the bill, creating the
present Bank of the United States. W e have lived to little purpose, as public men, if the experience of this period has not enlightened our judgments,
and enabled us to revise our opinions; and to correct any errors into which
we have fallen, if such there are, either in regard to the general utility of
a National Bank, or the details of its constitution* I trust it will m>t be
unbecoming the occasion, if I allude to your own important agency in that
transaction. T h e bill incorporating the B a n k , and giving it a constitution,
proceeded from a committee in the Houses of Representatives, of which you
were Chairman, and was conducted through that House under your distinguished lead. Having recently looked back to the proceedings of that d a y , I
must be permitted to say, that I have perused the speech, by which the subj e c t was introduced to the consideration of the House, with a revival of the
feeling of approbation and pleasure with which I heard it; and I will add,
that it would not, perhaps, now be easy to find a better brief synopsis of those
principles of currency and of banking, which, since they spring Iroin the nature of money and of commerce, m u s t be essentially the same, at all times* in
all commercial communities, than thut cpooch contains- T h e other gentlemen, now with us in the Senate, all of them, I believe, concurred with the
Chairman of the Committee, and voted for the bill. M y own vote was against
it* This is a matter of little importance; but it is connected with other circumstances, to which I will, tor a moment, advert. T h e gentlemen with
whom L acted on that occasion had no doubts of the constitutional power of
Congress to establish a National B a n k ; nor had we any doubts of the general
utility of an institution of that kind. W e had, indeed, most of us, voted for a
bank, at a preceding session. B u t the object of our regard was not whatever
might be called a Bank. W e required that it should be established on certain
principles, which alone we deemed safe and useful, made subject t^ certain
fixed liabilities, and so guarded, that it could neither move voluntarily, nor
be moved by others, out of its proper sphere of action. W e wished for an
i ^ e p e n d e n t bank, a„§pe£icpaying bank, a steady ami cautious, not a speculative bank. W e dreaded all irregularities in the currency; we resisted any, the
least, tendency to paper money, or the suspension principle; and of all modes
of speculation, we most abhorred that which finds opportunity to enrich itself in the disordered state of the circulating medium, the daily interchange
of payment and receipts* T h e bill, when first introduced, contained features, to which we should never have assented, and we set ourselves a c cordingly to work, with a good deal of xeal, in order to effect s u n d r y
amendments. In some of these proposed amendments, the Chairman, and
those who acted with him, finally concurred. Others they opposed. T h e
result was, that several most important amendments, as I thought, prevailed.
B u t there still remained, in my opinion, objections to the bill, which j u s tified a persevering opposition, till they should be removed.
T h e first objection was to the magnitude of the capital. I n its original
form, the bill provided for a capital of thirty-five millions, with a power in
Congress to increase it to fifty millions. This latter provision was struck out,
on the motion of a very intelligent gentleman from N e w York, (Mr* C a d y , )
and I believe, sir, with your assent- But I was of opinion that a capital of
thirty-five millions was more than was called for by the circumstances of the
country. T h e capital of the first Bank was but ten millions, and it had not



4
b e e n s h o w n t o b o t o o s m a l l ; a n d t h e r e c e r t a i n l y w a s no good g r o u n d s to s a y *
t h a t t h e b u s i n e s s , or t h e w a n t s of t h e c o u n t r y , h a d g r o w n , in t h e m e a n t i m e ,
in t h e p r o p o r t i o n of t h i r t y five t o t e n . B u t t h e s t a t e of t h i n g s h a s n o w b e c o m e
changed. A greatly increased population, and a greatly extended commercial
activity, especially in the west a n d southwest, evidently require a n e n l a r g e d
c a p a c i t y i n t h e ^National B a n k * T h e c a p i t a l , t h e r e f o r e , is less d i s p r o p o r t i o n e d
t o t h e o c c a s i o n , t h a n it w a s s i x t e e n y e a r s a ^ o , a n d w h a t e v e r of d i s p r o p o r t i o n
m a y b e t h o u g h t still to e x i s t will be c o n s t a n t l y d e c r e a s i n g . T h e a u g m e n t a t i o n
of b a n k i n g c a p i t a l i n S t a t e i n s t i t u t i o n s is b y n o m e a n s a g r o u n d for r e d u c i n g
t h e c a p i t a l of t h i s B a n k . A t first v i e w t h e r e m i g h t a p p e a r t o b e s o m e r e a s o n
in such a suggestion, but I think a further reflection, on the d u t i e s e x p e c t e d
to b e p e r f o r m e d b y t h e B a n k , i n r e l a t i o n t o t h e g e n e r a l c u r r e n c y of t h e c o u n t r y , will r e j e c t i t . O n e o b j e c t of t h e B a n k u n d o u b t e d l y i s , to e x e r c i s e a s a l u *
t a r y c h e c k o v e r t h e s u p e r a b u n d a n t i s s u e s of o t h e r i n s t i t u t i o n s , s h o u l d s u c h
happen to t a k e p l a c e ; and its means ought to be a d e q u a t e to this e n d .
On
t h e w h o l e , I a m d i s p o s e d t o c o n t i n u e t h e c a p i t a l a s it is.
T h e r e w a s a n o t h e r o b j e c t i o n . T h e bill h a d d i v i d e d t h e s t o c k i n t o s h a r e s of o n e
h u n d r e d d o l l a r s e a c h , n o t of four h u n d r e d d o l l a r s e a c h , a s in t h e first B a n k s
a n d i t h a s e s t a b l i s h e d s u c h a s c a l e of v o t i n g , b y t h e s t o c k h o l d e r s , a s s h o w e d
it t o b e q u i t e p r a c t i c a b l e for a m i n o r i t y , in i n t e r e s t , t o c o n t r o l all e l e c t i o n s *
a n d t o s e i z e o n t h e e n t i r e d i r e c t i o n of t h e B a n k . I t w a s on t h i s v e r y g r o u n d *
i t w a s u n d e r t h e r e p r e h e n s i o n of t h i s v e r y e v i l , t h a t t h e l a s t a t t e m p t t o a m e n d
t h e bill, m a d e by m e , p r o c e e d e d . T h a t a t t e m p t w a s , a motion to diminish,
t h e n u m b e r of s h a r e s , b y r a i s i n g t h e a m o u n t of e a c h , from o n e h u n d r e d d o l l a r s
t o four h u n d r e d .
If w e were now creating a n e w B a n k , I should insist, a s
b e f o r e , o n s u c h a c h a n g e ; b u t t h e evil is n o t to b e f e a r e d , n o w t h a t t h e s t o c k
is d i s t r i b u t e d , h a s found i t s w a y i n t o h a n d s d e s i r o u s , g e n e r a l l y s p e a k i n g , o f
h o l d i n g i t , a n d t h u s offering n o o p p o r t u n i t y t o t h a t k i n d of m a n a g e m e n t a n d
speculation.
T h e r e w a s y e t o n e o t h e r p r o v i s i o n of t h e b i l l , w h i c h w a s r e g a r d e d a s u n necessary and objectionable.
T h a t w a s , t h e p o w e r r e s e r v e d to t h e G o v e r n m e n t of a p p o i n t i n g five of t h e D i r e c t o r s . W e h a d h a d n o e x p e r i e n c e of o u r
o w n of t h e effect of s u c h G o v e r n m e n t i n t e r f e r e n c e i n t h e d i r e c t i o n o f t h e
B a n k ; a n d , i n o t h e r c o u n t r i e s , it h a d b e e n f o u n d t h a t s u c h c o n n e x i o n b e t w e e n
G o v e r n m e n t a n d banking institutions produces nothing but evil. T h e credit
of B a n k s h a s g e n e r a l l y b e e n v e r y m u c h in p r o p o r t i o n t o t h e i r i n d e p e n d e n c e o f
G o v e r n m e n t c o n t r o l . W h i l e a c t i n g on t r u e c o m m e r c i a l p r i n c i p l e s , t h e y a r e
u s e f u l b o t h t o G o v e r n m e n t a n d t h e P e o p l e ; b u t t h e h i s t o r y of t h e p r i n c i p a l
m o n e y e d i n s t i t u t i o n s of E u r o p e h a s d e m o n s t r a t e d , t h a t t h e i r efficiency a n d s t a b i l i t y c o n s i s t v e r y m u c h in t h e i r f r e e d o m from all s u b j e c t i o n t o S t a t e i n t e r e s t s
a n d S t a t e n e c e s s i t i e s . T h e r e a l s a f e t y t o t h e p u b l i c lies i n t h e r e s t r a i n t s a n d
liabilities i m p o s e d b y l a w , a n d in t h e i n t e r e s t w h i c h t h e p r o p r i e t o r s t h e m s e l v e s h a v e in a j u d i c i o u s m a n a g e m e n t of t h e affairs of t h e c o r p o r a t i o n . I w i l l
o n l y s a y , o n t h i s p a r t of t h e s u b j e c t , t h a t it is u n q u e s t i o n a b l y t r u e t h a t t h e
s u c c e s s f u l c a r e e r of t h i s i n s t i t u t i o n t h e n c o m m e n c e d , w h e n i t s s t o c k , l e a v i n g
t h e h a n d s of s p e c u l a t i o n , c a m e t o b e o w n e d , for t h e c o m m o n p u r p o s e s o f
i n v e s t m e n t , by s u c h as d e s i r e d t o m a k e i n v e s t m e n t s , a n d w h e n t h e p r o p r i e t o r s
e x e r c i s e d t h e i r p r o p e r d i s c r e t i o n in c o n s t i t u t i n g t h e i r p a r t of t h e d i r e c t i o n ,
w i t h a s i n g l e v i e w of g i v i n g t o t h e B a n k a safe a n d c o m p e t e n t a d m i n i s t r a t i o n .
A l l B a n k s w i l l b e sufficiently r e a d y t o a c c o m m o d a t e G o v e r n m e n t .
Their
i n t e r e s t is a s e c u r i t y for t h e i r good d i s p o s i t i o n in t h a t r e s p e c t . I c a n n o t s a y ,
h o w e v e r , t h a t I s e e , a t p r e s e n t , a n y evil a r i s i n g from t h e a p p o i n t m e n t of five
of t h e D i r e c t o r s b y t h e G o v e r n m e n t * a n d s h a l l , t h e r e f o r e , p r o p o s e n o c h a n g e
in t h a t particular.
T h e q u e s t i o n n o w i s , sir^ w h e t h e r this i n s t i t u t i o n s h a l l b e c o n t i n u e d ? W e
o u g h t t o t r e a t it a s a g r e a t p u b l i c s u b j e c t ; t o c o n s i d e r it, l i k e s t a t e s m e n , a s i t
r e g a r d s t h e g r e a t i n t e r e s t s of t h e c o u n t r y , a n d w i t h a s l i t t l e m i x t u r e as p o s s i b l e of all m i n o r m o t i v e s .
T h e i n f l u e n c e of t h e B a n k , M r . P r e s i d e n t , o n t h e i n t e r e s t s of t h e G o v e r n m e n t , a n d t h e i n t e r e s t s of t h e P e o p l e , m a y be c o n s i d e r e d i n s e v e r a l p o i n t s o f
v i e w . I t m a y be r e g a r d e d a s it aftects t h e c u r r e n c y of t h e c o u n t r y ; a s it aff e c t s t h e c o l l e c t i o n a n d d i s b u r s e m e n t of t h e p u b l i c r e v e n u e ; a s it r e s p e c t s fo~
r e i g n e x c h a n g e s ; a s i t r e s p e c t s d o m e s t i c e x c h a n g e s ; a n d a s it a f t e c t s , e i t h e r



generally or locally, tho agriculture, commerce, and manufactures of the
Union*
First, as to the currency of the country. This is, at all times, a most important political object. A sound currency is an essential and indispensable
security for the fruits of industry and honest enterprize. Every man of property or industry, every man who desires to preserve what he honestly possesses, or to obtain what he can honestly earn, has a direct interest in mantainm g a safe circulating medium; such a medium as shall be a real and substantial
representative of property, not liable to vibrate with opinions, not subject to
be blown up or blown down, by the breath of speculation, but made stable
a n d secure by its immediate relation to that which the whole world regards as
ot permanent value. A disordered currency is one of the greatest political evils. I t undermines the virtues necessary for the support of the social
system, and encourages propensities destructive of its happiness- ^ I t wars
against industry, frugality, and economy; and it fosters the evil spirits of extravagance and speculation- Of all the contrivances for cheating the laboring
classes of mankind, none has been more effectual than that which deludes
t h e m with paper money- This is the most effectual of inventions to fertilise
the rich man's field by the sweat of the poor man's brow. Ordinary tyr a n n y , oppression, excessive taxation, these bear lightly on the happiness of
t h e mass of the community, compared with fraudulent currencies, and the
robberies committed by depreciated paper. Our own history has recorded, for
our instruction, enough, and more than enough, of the demoralising tendency,
the injustice,and the intolerable oppression, on the virtuous and wefi-disposeu,
of a degraded paper currency, authorised by law, or any way countenanced
by Government.
W e all know, sir, that the establishment of a sound and uniform currency
>vas one ofwthe great ends contemplated in the adoption of the present constitution. If e could now fully explore all the motive* of those who framed and
those who supported it, pet-imps we should hardly find a more powerful one
t h a n this. T h e object, indeed, is sufficiently prominent on the face of the Constitution itself* It cannot well be questioned, that it was intended by that
Constitution to submit the whole subject of the currency of the country, all
that regards the actual medium of payment, and exchange, whatever that
should"be, to the control and legislation of Congress. Congress can alone
coin money—Congress can alone fix the value of foreign coins. N o State can
coin money; no State can fix the value of foreign coins; no State (nor even Congress itself) can make any thing a tender but gold and silver in the payment
of debts? no State can emit bills of credit. T h e exclusive power of regulating
t h e metallic currency of the country would seem necessarily to imply, or, more
properly, to include, as part of itself, a power to decide how far that currency
should be exclusive—how far any substitute should interfere with it, and what
that substitute should be. T h e generality and extent of the power .granted to
Congress, and the clear and well defined prohibitions, on the States, leave
little doubt of an intent to rescue the whole subject of currency trom the
hands of local legislation, and to confer it on the General Government. But,
notwithstanding this apparent purpose in the Constitution, the truth is, that
the currency of the country is now, to a very great extent, practically and effectually under the control of the several State governments, if it be not more
correct to say, that it is under the control of the banking institutions, created
by the States; for the States seem first to have taken possession ot the power,
and ^then to have delegated it.
* _(
\V hether the States can constitutionally exercise this power, or delegate it
to other?, is a point, which I do not intend, at present, either to concede or to
argue. It is much tube hoped, that no controversy on the point may ever become necessary, B u t it is matter highly deserving of consideration, that
although clothed by the Constitution with exclusive power over the metallic
currency, Congress, unless through the agency of a Bank established by its
authority, has no control whatever over that which, in the character of a
mere representative of (he metallic currency, fills up almost all the channels
< f pecuniary circulation.
In the absence of a Bank of the United States, the State banks become efiectually tho regulator* of the public eurreney. Their numbers, their capital



6
a n d t h e i n t e r e s t s c o n n e c t e d w i t h t h e m , give t h e m , in t h a t s t a t e of t h i n g s , a
ttJwer which n o t h i n g is c o m p e t e n t to c o n t r o l - W e s a w , t h e r e f o r e , w h e n t h e
a t e w a r b r o k e o u t , a n d w h e n t h e r e w a s n o n a t i o n a l b a n k in b e i n g , t h a t t h e
S t a t e i n s t i t u t i o n s , of t h e i r o w n a u t h o r i t y , a n d by an u n d e r s t a n d i n g a m o n g
t h e m s e l v e s , u n d e r t h e g e n t l e p h r a s e of s u s p e n d i n g specie p a y m e n t s , everyw h e r e s o u t h of N e w E n g l a n d , refused to r e d e e m t h e i r notes* T h e y w e r e
n o t c a l l e d to a n s w e r for this violation of t h e i r c h a r t e r s , as far as I r e m e m b e r ,
in a n y one S t a t e , T h e y pleadetl t h e u r g e n c y of the o c c a s i o n , a n d t h e p u b l i c
d i s t r e s s e s ; a n d in this apology the S t a t e G o v e r n m e n t s a c q u i e s c e d .
Congress*
a t t h e s a m e t i m e , found itself in a n a w k w a r d p r e d i c a m e n t . I t held t h e
whole p o w e r o v e r c o i n s . N o S t a t e , or S t a t e i n s t i t u t i o n , c o u l d give c i r c u l a t i o n to a n o u n c e of gold or of s i l v e r , n o t s a n c t i o n e d b y C o n g r e s s . Y e t all the_
S t a t e s , a n d a h u n d r e d S t a t e i n s t i t u t i o n s , c l a i m e d , a n d e x e r c i s e d , t h e right o f
d r i v i n g coin o u t of c i r c u l a t i o n by t h e i n t r o d u c t i o n of their o w n p a p e r ; a n d
t h e n ot d e p r e c i a t i n g a n d d e g r a d i n g that p a p e r , by refusing to r e d e e m itAs
t h e y w e r e n o t i n s t i t u t i o n s c r e a t e d by this G o v e r n m e n t , t h e y w e r e n o t a n s w e r a b l e t o it. C o n g r e s s could n o t call t h e m to a c c o u n t ; a n d if it c o u l d *
C o n g r e s s had n o b a n k of its o w n w h o s e c i r c u l a t i o n could s u p p l y t h e w a n t s
of t h e c o m m u n i t y - C o i n , t h e s u b s t a n t i a l c o n s t i t u e n t , w a s , a n d w a s a d m i t t e d
t o b e , s u b j e c t o n l y to t h e c o n t r o l of C o n g r e s s ; b u t p a p e r , a s s u m i n g t o be a
r e p r e s e n t a t i v e of t h i s c o n s t i t u e n t , w a s t a k i n g g r e a t liberties w i t h it, a t t h e
s a m e t i m e t h a t it w a s no May a m e n a b l e to its c o n s t i t u t i o n a l g u a r d i a n .
This
s u s p e n s i o n of specie p a y m e n t s w a s , of c o u r s e , i m m e d i a t e l y followed b y g r e a t
d e p r e c i a t i o n of t h e p a p e r . I t s h o r t l y fell so l o w , t h a t a bill on B o s t o n c o u l d n o t
b e p u r c h a s e d a t W a s h i n g u m u n d e r an a d v a n c e of from t w e n t y to t w e n t y - f i v e r
p e r c e n t . I d o n o t m e a n to r e i l e c t o n t h e p r o c e e d i n g s of t h e S t a t e b a n k s *
P e r h a p s t h e i r best justification is to be found in t h e r e a d i n e s s with w h i c h G o v e r n m e n t itself b o r r o w e d of t h e m t h e i r p a p e r , d e p r e c i a t e d as it w a s ; b u t i t
c e r t a i n l v b e c o m e s us to r e g a r d , a t t e n t i v e l y , this p a r t of o u r e x p e r i e n c e , a n d
t o g u a r d , a s far a s we c a n , a g a i n s t similar o c c u r r e n c e s .
1 a m of o p i n i o n , s i r , t h a t a w e l l c o n d u c t e d N a t i o n a l B a n k h a s an e x c e e d *
i n g l y useful a n d effective o p e r a t i o n o n t h e g e n e r a l p a p e r c i r c u l a t i o n of t h e
c o u n t r y . I t h i n k its t e n d e n c y is m a n i f e s t l y to r e s t r a i n , within s o m e b o u n d s ,
t h e p a p e r issues of o t h e r institutions* I f i t b e s a i d , on t h e o t h e r h a n d , t h a t
t h e s e i n s t i t u t i o n s , in t u r n , hold in c h e c k t h e issues of t h e N a t i o n a l f i a n k , s o
m u c h t h e b e t t e r . L e t t h a t c h e c k go to its full e x t e n t . A n o v e r - i s s u e b y t h e
B a n k itself no one can d e s i r e . B u t it is p l a i n , t h a t , by h o l d i n g t h e S t a t e i n *
s t i t u t i o u s , which c o m e into i m m e d i a t e c o n t a c t with itself a n d its b r a n c h e s ,
t o a n a c c o u n t a b i l i t y for their i s s u e s , not y e a r l y or q u a r t e r l y , but d a i l y a n d
h o u r l y , a n i m p o r t a n t r e s t r a i n t is e x e r c i s e d , l i e it r e m e m b e r e d a l w a y s , t h a t
w h a t it is to e x p e c t from o t h e r s , it is to perform itself; a n d that its o w n p a p e r
i s , a t all t i m e s , to t u r n i n t o coin by t h e first touch of its o w n c o u n t e r .
B u t , M r . . P r e s i d e n t , so i m p o r t a n t is t h i s o b j e c t , t h a t 1 t h i n k , t h a t , far f r o m
d i m i n i s h i n g , w e o u g h t r a t h e r to i n c r e a s e a n d m u l t i p l y o u r s e c u r i t i e s : a n d I
a m n o t p r e p a r e d t o s a y , t h a t e v e n with t h e c o n t i n u a n c e of t h e I ? a n k c h a r t e r ,
a n d u n d e r its wisest a d m i n i s t r a t i o n , 1 r e g a r d t h e s t a t e of our c u r r e n c y as e n *
tircJy safe. I t is e v i d e n t to m e , t h a t the g e n e r a l p a p e r c i r c u l a t i o n has b e e n
e x t e n d e d too tar for t h e specie basis on which it r e s t s . O u r s y s t e m , as a
s y s t e m , d i s p e n s e s too f a r . i n m y j u d g m e n t , with the use of gold and s i l v e r .
H a v i n g l e a r n e d t h e u s e of p a p e r , as a s u b s t i t u t e for s p e c i e , w e use t h e s u b s t i t u t e , I fear, too freely.
I t is t r u e , t h a t our c i r c u l a t i n g p a p e r is all r e d e e m *
a b l e in gold a n d silver. L e g a l l y s p e a k i n g , it is all c o n v e r t i b l e i n t o specie a t
t h e will of tiie h o l d e r .
B u t a m e r e legal c o n v e r t i b i l i t y is n o t sufficient.
T h e r e m u s t be a n a c t u a L p r a c t i c a l , n e v e r ceasing c o n v e r t i b i l i t y . T h i s , I
t h i n k , is not a t p r e s e n t sufficiently s e c u r e d : and as it is (natter of high i n t e r e s t , it well d e s e r v e s the serious c o n s i d e r a t i o n of t h e Senate* T h e p a p e r c i r c u l a t i o n of t h e c o u n t r y is, a t this t i m e , p r o b a b l y , s e v e n t y - f i v e or eighty m i l lions of d o l l a r s . Of s p e c i e , w e m a y have t w e n t y or t w e n t y - t w o millions?
a n d this p r i n c i p a l l y in m a s s e s , in t h e v a u l t s of the*banksN o w , s i r , this is *t
s t a t e of t h i n g s w h i c h , in my j u d g m e n t , l e a d s c o n s t a n t l y to o v e r t r a d i n g , a n d
t o t h e c o n s e q u e n t e x c e s s e s a n d r e v u l s i o n s , which so often d i s t u r b t h e r e g u l a r
c o u r s e of c o m m e r c i a l affairs. A c i r c u l a t i o n c o n s i s t i n g , in so g r e a t a degree-,
of paper* is easily e x p a n d e d , to furnish t e m p o r a r y capital to Mich as w i s h t o

f




7
a d v e n t u r e on n e w e n t e r p r i s e s i n t r a d e ; a n d t h e c o l l e c t i o n in t h e b a n k s of
m o s t of w h a t s p e c i e t h e r e is in t h e c o u n t r y , affords all possible facility for its
^exportation. H e n c e , over t r a d i n g d o e s f r e q u e n t l y o c c u r , a n d is a l w a y s foll o w e d b y a n i n c o n v e n i e n t , s o m e t i m e s by a d a n g e r o u s , r e d u c t i o n of specieI t is in vain t h a t w e look t o t h e p r u d e n c e of b a n k s for an effectual s e c u r i t y
a g a i n s t o v e r t r a d i n g . T h e d i r e c t o r s of s u c h i n s t i t u t i o n s will g e n e r a l l y go to
t h e l e n g t h of t h e i r m e a n s m c a s h i n g good notes., a n d l e a v e t h e b o r r o w e r to
j u d g e for h i m s e l f of t h e useful e m p l o y m e n t of his m o n e y . N o r w o u l d a c o m p e t e n t s e c u r i t y a g a i n s t o v e r t r a d i n g b e a l w a y s o b t a i n e d ) if the b a n k s w e r e to
confine t h e i r d i s c o u n t s s t r i c t l y t o b u s i n e s s p a p e r , so d e n o m i n a t e d ; t h a t is, to
n o t e s a n d bills which r e p r e s e n t r e a l t r a n s a c t i o n s , h a v i n g been g i v e n a n d r e c e i v e d , o n t h e a c t u a l p u r c h a s e a n d sale of m e r c h a n d i s e ; b e c a u s e t h e s e t r a n s a c t i o n s t h e m s e l v e s m a y be too far e x t e n d e d . I n o t h e r w o r d s , m o r e m a y b e bought
t h a n t h e w a n t s of t h e c o m m u n i t y m a y r e q u i r e , on a s p e c u l a t i v e c a l c u l a t i o n of
f u t u r e p r i c e s . M e n n a t u r a l l y h a v e a good opinion of t h e i r o w n s a g a c i t y .
Ho
w h o b e l i e v e s m e r c h a n d i s e is a b o u t t o rise in p r i c e , will b u y m e r c h a n d i s e , if
h e p o s s e s s e s m o n e y , or c a n obtain credit- T h e fact of a c t u a l p u r c h a s e , t h e r e *
f o r e , as not proof of r e a l l y s u b s i s t i n g w a n t ; a n d , of c o u r s e , t h e a m o u n t of all
p u r c h a s e s does n o t c o r r e s p o n d a l w a y s w i t h t h e e n t i r e w a n t s o r n e c e s s i t i e s of
t h e c o m m u n i t y . T o o f r e q u e n t l y it v e r y m u c h e x c e e d s t h a t m e a s u r e .
If,
t h e n * t h e d i s c r e t i o n of t h e b a n k s , e x e r c i s e d in d e c i d i n g t h e a m o u n t of t h e i r
d i s c o u n t s , is n o t a p r o p e r s e c u r i t y a g a i n s t o v e r t r a d i n g ; if facility i n o b t a i n i n g b a n k c r e d i t s uatura 11 y fosters t h a t s p i r i t ; if t h e d e s i r e of gain a n d love of
e n t e r p r i s e c o n s t a n t l y cherish i t ; a n d if it finds specie c o l l e c t e d in t h e b a n k s
i n v i t i n g e x p o r t a t i o n , w h a t is t h e r e m e d y , s u i t e d a n d a d e q u a t e t o t h e case?
N o w , 1 t h i n k , sir, t h a t a c l o s e r i n q u i r y i n t o t h e d i r e c t s o u r c e of t h e evil will
s u g g e s t t h e r e m e d y . ' W h y h a v e w e so s m a l l a n a m o u n t of s p e c i e in c i r c u l a tion? C e r t a i n l y the only reason is, because we do not require m o r e .
We
h a v e b u t t o a s k i t s p r e s e n c e , a n d it w o u l d r e t u r n . B u t w e V o l u n t a r i l y banish
it* b y t h e g r e a t a m o u n t of s m a l l b a n k n o t e s . I n m o s t of t h e S t a t e s t h e b a n k s
i s s u e n o t e s of all low d e n o m i n a t i o n s , d o w n e v e n t o a s i n g l e d o l l a r .
H o w i%
it p o s s i b l e , u n d e r s u c h c i r c u m s t a n c e s , to r e t a i n specie in c i r c u l a t i o n ?
All
e x p e r i e n c e s h o w s it t o be i m p o s s i b l e . T h e p a p e r will t a k e t h e p l a c e of t h e
g o l d a n d silver. W h e n M r . P i t t , in t h e y e a r 1797, p r o p o s e d , in P a r l i a m e n t ,
t o a u t h o r i z e the B a n k of E n g l a n d to issue o n e p o u n d n o t e s , M r - B u r k e l a y
s i c k a t B a t h of a n i l l n e s s from wliich he n e v e r r e c o v e r e d , a n d h e is said t o
h a v e w r i t t e n t o t h e l a t e M r - C a n n i n g , ^ T e l l M r , P i t t , t h a t if he c o n s e n t s to
" t h e i s s u i n g of o n e p o u n d n o t e s , he m u s t n e v e r e x p e c t to see a g u i n e a a g a i n / *
T h e one pound notes were issued, and the guineas disappeared. A simil a r c a u s e is n o w p r o d u c i n g a p r e c i s e l y s i m i l a r effect w i t h u s . S m a l l n o t e s
h a v e e x p e l l e d d o l l a r s a n d half dollars* from c i r c u l a t i o n in all the S t a t e s m
w h i c h such n o t e s a r e i s s u e d . O n t h e o t h e r h a n d , d o l l a r s a n d half d o l l a r s
a b o u n d in t h o s e S t a t e s w h i c h h a v e a d o p t e d a w i s e r a n d safer p o l i c y . V i r g i n i a ,
P e n n s y l v a n i a , M a r y l a n d , ' L o u i s i a n a , ' a n i l some other States, 1 think, seven
i n a l l , d o n o t a l l o w t h e i r b a n k s to issue n o t e s u n d e r five dollars* l i v e r y
t r a v e l l e r n o t i c e s t h e d i f f e r e n c e , w h e n he p a s s e s from o n e of t h e s e S t a t e s i n t o
t h o s e w h e r e small n o t e s a r e a l l o w e d . T h e e v i l , t h e n , is t h e i s s u i n g ol s m a l l
n o t e s b y S t a t e b a n k s . Of t h e s e n o t e s , t h a t is to s a y , of n o t e s u n d e r five d o l l a r s , t h e a m o u n t n o w in c i r c u l a t i o n i s , d o u b t l e s s , e i g h t or ten million* ol d o l l a r s . C a n t h e s e n o t e s be w i t h d r a w n ? I f they c a n , t h e i r p l a c e will b e i m m e d i a t e l y s u p p l i e d by a s p e c i e c i r c u l a t i o n of e q u a l a m o u n t , T h « o b j e c t is a
g r e a t o n e , as it is c o n n e c t e d w i t h t h e safety a n d s t a b i l i t y ol t h e c u r r e n c y ,
a n d m a y well j u s t i f y a s e r i o u s reflection on t h e m e a n s ol a c c o m p l i s h i n g it.
M a y n o t C o n g r e s s a n d t h e S t a t e G o v e r n m e n t s , a c t i n g , n o t u n i t e d l y , b u t se •
v e r a l l y , to t h e s a m e e n d , e a s i l y a n d q u i e t l y a t t a i n it? I t h i n k t h e y m a y .
It
is b u t for o t h e r S t a t e s t o follow t h e good e x a m p l e ot t h o s e w h i c h 1 h a v e m e n t i o n e d , a n d t h e w o r k is done* A s a n i n d u c e m e n t to t h e S t a t e s t o d o t h i s , I
p r o p o s e , in t h e p r e s e n t bill, t o r e s e r v e t o C o n g r e s s a p o w e r of w i t h d r a w i n g
from c i r c u l a t i o n a p r e t t y l a r g e p a r t of t h e i s s u e s of t h e R a n k of t h e U n i t e i l
S t a t e s * I p r o p o s e t h i s , so that^ t h e S t a t e b a n k s m a y w i t h d r a w t h e i r s m a l l
n o t e s , a n d find t h e i r c o m p e n s a t i o n in a l a r g e r c i r c u l a t i o n of t h o s e of a h i g h e r
d e n o m i n a t i o n . M y proposition will be„ t h a t a t a n y t i m e a f t e r t h e e x p i r a t i o n
o f t h # e x i s t i n g c h a r t e r of t h e B a n k , t h a t i% after 1836, C o n g r e s s m a y . if it s e e



O

fit, r e s t r a i n t h e B a n k from issuing, for circulation, notes or bills u n d e r m.
given s u m , say t e n , or t w e n t y dollars- T h i s will riimirish the c i r c u l a t i o n ^
a n d , c o n s e q u e n t l y , t h e profits of the B a n k : but it i? of Ies> i m p o r t a n c e to m a k e
t h e B a n k a highly profitable institution to the s t o c k h o l d e r s , than that it s h o u l d
b e safe and useful to the c o m m u n i t y . I t ought not* certainlv* to be r e s t r a i n e d
from t h e e n j o y m e n t of all t h e fair a d v a n t a g e s to be derivecf from the d i s c r e e t :
u s e of its c a p i t a l , in b a n k i n g transactions? but the leading object, after a U ^
in its c o n t i n u a n c e is, a n d ought to b e , not p r i v a t e e m o l u m e n t , but p u b l i c
benefit.
I t m a y , p e r h a p s , s t r i k e some g e n t l e m e n , t h a t the circulation of small notes*
might be effectually d i s c o u r a g e d , by refusing to receive not only all s u c h
small n o t e s , b u t all n o t e s of such b a n k s as issued t h e m , at the c u s t o m h o u s e s ,
land offices, post offices, a n d o t h e r places of public receipt, a n d by c a u s i n g
t h e m to be refused also, e i t h e r in p a y m e n t or d e p o s i t e , at t h e B a n k of t h e
U n i t e d S t a t e s , B u t t h e effect of such refusal m a y be doubtful.
It would
c e r t a i n l y , in s o m e d e g r e e , d i s c r e d i t such n o t e s , but probably it w o u l d n o t
d r i v e t h e m o u t of c i r c u l a t i o n a l t o g e t h e r ; and if it should not d o t h i s , it m i g h t ,
v e r y probably, i n c r e a s e their c i r c u l a t i o n . If, in some degree they become d i s c r e d i t e d , t o t h a t d e g r e e t h e y w o u l d b e c o m e c h e a p e r tfian other n o t e s ; a n d
u n i v e r s a l e x p e r i e n c e p r o v e s , t h a t of t w o things which m a y be c u r r e n t , t h e
c h e a p e r will a l w a y s expel t h e o t h e r . T h u s silver itself, because it is p r o p o r t i o n a l l y c h e a p e r with u s than g o l d , has d r i v e n the gold o u t of the c o u n t r y ?
t h a t is t o s a y , w e can pay a d e b t of one h u n d r e d d o l l a r s , by t e n d e r i n g t h a t
n u m b e r of S p a n i s h or A m e r i c a n d o l l a r s . B u t we c a n n o t go into the m a r k e t
a n d b u y t e n A m e r i c a n eagles for t h e s e h u n d r e d silver d o l l a r s . T h e y w o u l d
cost u s a h u n d r e d a n d four. T h u s , as we can pay o u r d e b t s c h e a p e r In s i l v e r
t h a n in g o l d , w e use n o t h i n g b u t silver, a n d t h e gold goes w h e r e it i s m o r e
highly v a l u e d . T h e same thing a l w a y s h a p p e n s b e t w e e n t w o sorts of paper*
w h i c h a r e found at t h e same t i m e in c i r c u l a t i o n . T h a t which is c h e a p e r , o r
of less v a l u e t h a n the o t h e r , a l w a y s d r i v e s its m o r e r e s p e c t a b l e associate o u t
of its c o m p a n y .
M e a s u r e s , t h e r e f o r e , such as I have a l l u d e d t o , w o u l d be l i k e l y , I fear, r a t h e r t o a g g r a v a t e t h a n to r e m e d y t h e evil. W e m u s t hope t h a t all notes u n d e r
five d o l l a r s m a y be e n t i r e l y w i t h d r a w n from c i r c u l a t i o n , by the c o n s e n t o f
t h e S t a t e s a n d tl>e S t a t e b a n k s ; a n d w h e n t h a t shall be d o n e , their place will
b e i m m e d i a t e l y supplied w i t h s p e c i e . W e should then receive an accession
of t e n million of d o l l a r s , at least* to our specie c i r c u l a t i o n ; and these t e n
millions will find their place n o t in the B a n k , not collected a n y w h e r e i n
l a r g e m a s s e s , b u t in c o n s t a n t use* a m o n g all classes, and in h o u r l y t r a n s f e r
from h a n d t o h a n d . I t c a n n o t be denied t h a t such an a d d i t i o n w o u l d give
g r e a t s t r e n g t h to our p e c u n i a r y s y s t e m , discourage excessive exportation o f
s p e c i e , a n d t e n d to r e s t r a i n a n d c o r r e c t t h e evils of over t r a d i n g .
England
has applied t h e like r e m e d y t o a similar evil, though she has carried the r e striction m u c h higher, a n d a l l o w e d the circulation of no n o t e s for less s u m s
t h a n five p o u n d s sterling.
I have t h o u g h t this s u b j e c t , M r . P r e s i d e n t , of so m u c h i m p o r t a n c e , as t h a t
it w a s fit t o p r e s e n t i t , at this t i m e , to t h e consideration of t h e S e n a t e . I
p r o p o s e to d o no m o r e , at p r e s e n t , t h a n to insert such a provision as I h a v e
d e s c r i b e d in this b i l l ; in t h e m e a n t i m e , I hope t h e m a t t e r m a y a t t r a c t t h e a t t e n t i o n of those w h o s e a g e n c y will be d e s i r e d to a c c o m p l i s h the g e n e r a l o b ject.
T h e ne^it point on which I will offer a few r e m a r k s i s , of t h e g r e a t a d v a n t a g e
of t h e B a n k in t h e operations of t h e t r e a s u r y — f i r s t , in t h e collection,
nexU in the d i s b u r s e m e n t , of t h e r e v e n u e . H o w is t h e r e v e n u e to be collected t h r o u g h all t h e c u s t o m house?, t h e l a n d offices, a n d the post offices,
w i t h o u t s o m e s u c h m e a n s a s ! t h e B a n k affords? W h e r e a r e p a y m e n t s , m a d e
a t t h e c u s t o m h o u s e s , to be d e p o s i t e d ? In whose h a n d s a r e these large s u m s t o
b e t r u s t e d , and how a r e t h e y to be r e m i t t e d to W a s h i n g t o n , or w h e r e v e r e l s e
t h e y m a y be w a n t e d ? I d a r e s a y . sir, t h a t t h e o p e r a t i o n s of G o v e r n m e n t
m i g h t be c a r r i e d on in some w a y ' w i t h o u t the a g e n c y ot a B a n k : b u t t h e
q u e s t i o n is w h e t h e r t h e y oould be c a r r i e d on safely, w i t h o u t loss a n d w i t h o u t
c h a r g e . L o o k to the d i s b u r s e m e n t of t h e r e v e n u e . A t p r e s e n t , t h e Bank: i s
b o u n d t o t r a n s m i t G o v e r n m e n t fund* in one place t o a n y o t h e r p l a c e , w i t h o u t



9
e x p e n s e . A d o l l a r , a t S t . L.ouis or N a s h v i l l e , b e c o m e s , at o n c e , a d o l l a r in
N e w H a m p s h i r e or M a i n e , if the T r e a s u r y so choose. T h i s , c e r t a i n l y , is
v e r y useful a n d convenientIf t h e r e w e r e no D a n k of the U n i t e d S t a t e s a t
N e w O r l e a n s for e x a m p l e , d u t i e s to the G o v e r n m e n t at that p l a c e m u s t b e
r e c e i v e d , either in specie or in bills of local b a n k s . If in the former* t h e f u n d s
could not be r e m i t t e d w h e r e t h e y m i g h t be r e q u i r e d , without considerable e x p e n s e — i f in the l a t t e r , t h e y could not be r e m i t t e d at a l l , until first c o n v e r t ed into s p e c i e . If bills of e x c h a n g e w e r e resorted t o , t h e y w o u l d be often n o t
to be h a d , w i t h o u t a p r e m i u m , a n d a l w a y s a t t e n d e d with more or less risk*
i n s h o r t , t h e utility ot t h e B a n k , in collecting a n d d i s b u r s i n g the r e v e n u e , is
too obvious to b e a r g u e d , a n d too g r e a t not to strike a n y one c o n v e r s a n t with
such s u b j e c t s , w i t h o u t the aid of c o m m e n t .
1 have a l l u d e d to its d e a l i n g s in foreign e x c h a n g e s as one of the i m p o r t a n t
p o w e r s of the corporation- T h e r e a r e those who t h i n k diis power ought to
be w i t h h e l d . I t is, I t h i n k , one of the most c o m m o n objections to t h e B a n k
in t h e large cities; but 1 do not t h i u k it well f o u n d e d . I t is said t h a t the.
t r a d e in e x c h a n g e ought to be left free, l i k e o t h e r traffic. B e it so. B u t , t h e n ,
w h y not leave it as free to the B a n k , a s to o t h e r s ? T h e B a n k enjoys no m o n o p o l y . If it be t r u e , t h a t , by the m a g n i t u d e of its c a p i t a l , and the d i s t r i b u tion of its s e v e r a l offices, it a c t s upon "the r a t e s of e x c h a n g e , not locally, b u t
g e n e r a l l y , a n d t h u s occasionally r e s t r a i n s the profit of d e a l i n g in one p l a c e ,
by b r i n g i n g t h e g e n e r a l r a t e s t h r o u g h t h e whole c o u n t r y n e a r e r to a u n i f o r m i t y , the occasional profits of i n d i v i d u a l s m a y be l e s s e n e d , b u t the g e n e r a l
effect is beneficial to the p u b l i c . If, at the s a m e lime that it k e e p s the tlom e s t i c e x c h a n g e s of the c o u n t r y at low r a t e s , it k e e p s (he r a l e s of foreign e x c h a n g e s n e a r l y uniform a n d level, I h a r d l y k n o w h o w it could do g r e a t e r s e r vice to the c o m m e r c i a l c o m m u n i t y . In t h e business of foreign e x c h a n g e , t h e
B a n k h a s , a n d a l w a y s will h a v e , powerful rivals* It is n a t u r a l t h a t these r i v a l s should d e s i r e t h a t , in t h i s p a r t i c u l a r , t h e b a n k should r e t i r e from b u s i n e s s . B u t , a r e its d e a l i n g s in e x c h a n g e found p r e j u d i c i a l , by those w h o deal
in it t h e m s e l v e s no f u r t h e r t h a n to b u y , for their own r e m i t t a n c e s , in t h e o r d i n a r y w a y of business ? I n things of this k i n d , we m a y most safely g u i d e
o u r s e l v e s by t h e light of e x p e r i e n c e . A n d , t a k i n g it for g r a n t e d , that the g e n e ral i n t e r e s t of the t r a d i n g c o m m u n i t y is i n j u r e d by s u d d e n fluctuations in e x c h a n g e , a n d benefited by k e e p i n g it as s t e a d y as the c o m m e r c e of the coun t r y will a l l o w — i n o t h e r w o r d s , by k e e p i n g £he price of bills so as t h a t it c o r r e s p o n d s w i t h the real s t a t e of t h e e x c h a n g e , a n d n o t raised or l o w e r e d for
e n d s of s p e c u l a t i o n , I h a v e i n q u i r e d , of those who could inform m e , w h e t h e r ,
for t e n or t w e l v e y e a r s past, the r a t e s of e x c h a n g e h a v e , or have n o t , b e e n as
s t e a d y and u n v a r y i n g , as m a y e v e r be e x p e c t e d ; anil the information I h a v e
r e c e i v e d , has satisfied me t h a t t h e p o w e r of the B a n k , of d e a l i n g in foreign
e x c h a n g e , has been far from prejudicial to the c o m m e r c i a l w o r l d .
While
t h e r e is a d e a l e r , with c o m p e t e n t funds a n d c r e d i t , a l w a y s willing to sell
foreign bills a t m o d e r a t e r a t e s , a n d a l w a y s ready to buy t h e m , a l s o , the v e r y
n a t u r e of the case furnisher a c o n s i d e r a b l e d e g r e e of s e c u r i t y a g a i n s t those
fluctuations
which arise from s p e c u l a t i o n , although it leaves p r i v a t e d e a l i n g s
e n t i r e l y free. I f that p o w e r should be now t a k e n a w a y from the H a n k , I thiiik
I c a n p e r c e i v e t h a t c o n s e q u e n c . e s of some m a g n i t u d e w o u l d follow, in p a r t i c u l a r p a r t s of t h e country* A t p r e s e n t , the p r o d u c e r , or the shipper of p r o d u c e , a t N e w O r l e a n s , S a v a n u a h , or C h a r l e s t o n , in m a k i n g s h i p m e n t s for
K u r o p e , c a n , on t h e spot, cash his bill, d r a w n against such s h i p m e n t , w i t h o u t
c h a r g e for b r o k e r a g e , g u a r a n t y , or c o m m i s s i o n . If the p l a n t e r has sold to
t h e s h i p p e r , t h e l a t t e r has his bill d i s c o u n t e d , a n d pays the p l a n t e r ; who t h u s
r e c e i v e s the price for his c r o p w i t h o u t d e l a y , a n d w i t h o u t d a n g e r of loss. S u p pose the B u n k w e r e d e n i e d the p o w e r of p u r c h a s i n g foreign bills.
What
w o u l d be t h e n e c e s s a r y operation ? T h e p r o d u c e r , or s h i p p e r , might send the
cotton or the sugar to the N o r t h : a n d , in t h a t case, t h e Hank coii'Id cash his
d r a f t : b u t , if he sent it a b r o a d , hi* bill m u s t be s e n t to his apjent, in the bill
m a r k e t of the n o r t h e r n cities, for s a l e ; a n d if he wishes to r e a l i s e rh^ a m o u n t ,
h e will drajtv on his a g e n t , a n d sell such draft- T h i s e v i d e n t l y s u b j e c t s him
to a d o u b l e o p e r a t i o n , a n d io the (vxj>iuise^ of c o m m i s s i o n , g u a r a nr t y , & e . I t
is p l a i n , 1 t h i n k , that, in the present state of t h i n g s , t h e shipper A S o u t h e r n
a n d W e s t e r n p r o d u c e , enjoy* th^ benefit of both Ui£ foreign and the N o r t h e r n



10
m a r k e t , mote perfectly than he would if this state of things were to b e s o
changed that he could not d r a w on his consignee in the foreign m a r k e t , a s
advantageously as he can now do it.
B u t , if there be a question about the utility of the operations of the B a n k I n
foreign exchange, there can be n o n e , I suppose, as to its influence on t h a t
which is internal or domestic. I speak now ol internal exchange, as e x c h a n g e
m e r e l y , without considering it c o n n e c t e d , as it usually is, with advance, o r
discount 5 in anticipation of the m a t u r i t y of bills* In regard to mere e x c h a n g e ,
the operations of the Bank appear to have produced the most beneficial effect.
I doubt whether, in any extensive c o u n t r y , the rates of internal e x c h a n g e
ever averaged so low. Before the B a n k went into operation, three or f o u r ,
or five per cent, was not u n c o m m o n , as the difference of exchange b e t w e e n
o n e extremity of the country and the other. It has, at times, indeed, a s I
am informed, been as high as six per cent- between iSfew Orleans and B a l t i m o r e , and between other places in the country, much higher. T h e v a s t
a m o u n t s bought and sold by the B a n k , in all parts of the country, a v e r a g e ,
erhups, less than (me half per cent. I doubt whether this exceeds the r a t e s
etween comparatively neighboring parts of G r e a t Britain or the c o n t i n e n t
of E u r o p e , [although much of it consists in exchange between the e x t r e m e
South, and the N o r t h e r n and Kastern parts of the Union.
W i t h respect to the effect and operation of the Bank upon the general i n t e r e s t s of agriculture, commerce, and manufactures, there will be found a
g r e a t difference, as we look at different parts of the c o u n t r y . E v e r y w h e r e *
I think, they have been salutary5 but they have been important, in very different d e g r e e s ^ i n different q u a r t e r s . T h e influence of the B a n k on the g e n e ral c u r r e n c y of the c o u n t r y , and its operations, in exchanges, are benefits o f
a general n a t u r e ; these are felt all over the country. But ? in loans and d i s counts—in the distribution and actual application of its capital—different p o r tions of the country have p a r t a k e n , and are partaking, in very different d e grees. T h e \ V e s t is a new and fast growing c o u n t r y , with vast e x t e n t o f
rich land, inviting settlement and cultivation. E n t e r p r i s e and labor a r e
thronging to this scene of useful exertion, a n d necessarily create a n u r g e n t
d e m a n d for capital. T h i s d e m a n d the B a n k m e e t s , to a very considerable
degree. T h e reports of t h e B a n k show the existing extent of its a c c o m m o d a tion to this part of the c o u n t r y . I n the Tvhole Southern and W e s t e r n S t a t e s
t h a t is to say, South and W e s t of Philadelphia, the amount exceeds fortyt h r e e millions of dollars. In the States lying on the Mississippi, and its w a t e r s , it exceeds thirty millions of dollars; ot these thirty millions, n i n e t e e n
or t w e n t y are discounts of notes, and the residue of acceptances of bills d r a w n
on other parts of the country. T h i s last amount is not, strictly, a loan; it i s
an advance hi anticipation of a d e b t ; but other advances are n e e d e d , quite a s
fast as this is paid oHy as every successive crop creates a new occasion, a n d
a new desire, to sell bills. 1 leave it to W e s t e r n gentlemen to j u d g e how far
this state of things goes to show that the continuance of the B a n k ts i m p o r t a n t to the agriculture and commerce of the W e s t . 1 leave it to them to c o n t e m p l a t e the consequences of withdrawing this amount of capital from their
country. I pray them, also, to inquire what is to be their circulating m e d i u m ,
w h e n the notes of the B a n k are called in ? Do they see before them neither
difficulty nor danger on this part of the case? A r e they quite confident t h a t ,
in the absence of the bills and notes of the B a n k of the United States* they
n e e d have no fears of a bad currency- depreciated paper, and the long train
of ills that follow, according to all human experience, those inauspicious
lenders ? 1 ask thimi. also, to judge how far it is wise to settle this question
n o w , so as to give time for making this vast change, if it is to be m a d e a t
a l l . T h e present c h a r i e r is to continue but lour years. If it be not r e n e w e d ,
this debt must be called in within that period; not a new note can be t a k e n
t o the Bank for a dollar of it after that time. T h e whole circulation of B a n k
n o t e s , too,, m u s t be w i t h d r a w n . I s it not plain, then, t h a t it is high time to
know how this important matter is to be adjusted ? T h e country could not
fttand a s u d d e n recall of all this capital, and an abrupt withdrawal ftf this c i r culation. H o w , i n d e e d , the W e s t could stand the change, even if it w e r e
begun now, and conducted as gradually and as gently as possible, 1 c o n t e s t
I can hardly see. T h e very c o m m e n c e m e n t of the process ol recall, however

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slight, would be felt, in the prices of the very first crop, partly from the immediate effect of withdrawing even a small part of the capital, and partly
from the certainty of future pressure, from withdrawing the rest. Indeed,
gentlemen must prepare themselves, I think, for some effect on the prices ot
lands and commodities, by the postponement of this question, should it take
place, as well as for embarrassments in other respects. T h a t postponement
will, at best, not diminish the uncertainty which hangs over the fate of the
measure. Seeing the hostility which exists to renewing the charter, and the
extent of that hostility, if the measure cannot now be carried, not only a prudent regard to its own interests, but the highest duty to the country ou^ht to
lead the Bank to prepare for the termination of its career. It has not before
i t one day too many to enable it to wind up, without distressing the public,
Buch vast concerns- If it were certain that the charter was to be renewed, a
postponement would be of little importance. But this is uncertain, and a
postponement would render it more uncertain. A motion to postpone, should
Huch be made, will be mainly supported by those, who, either on constitutional grounds, or some other grounds, are, and always will be, against the
renewal. A postponement, under such circumstances, and such auspices,
cannot but create far stronger doubts than now exist, of the final renewal of
the charter.
I t is now two years and a half since the President invited the attention of
Congress to this subject. T h a t invitation has been more than once repeated.
Kvery where, the subject has been considered; every where, it has been discussed. The public interest now requires our decision upon it; and the pub"
lie voice demands that decision* I trust, sir, we shall make it, and make it
wisely*
1 have said nothing, sir, of the applications, some of them from highly respectable sources, for a new Bank to a new set of proprietors,with an increased premium or bonus*, and other offers of advantage.
T h e r e are many reaeonu leading me to the conclusion, that no such measure could be seriously contemplated by Congress. In the first place, the
present Bank is organised, has gone through the uncertainties and dangers
incident to such institutions at their commencement, has passed the point
when the spirit of speculation is most mischievous, has had experience in the
conduct of its affairs, and become fixed and settled in the course of its administration, 'fhe temptation of a large bonus should not induce us to disturb
what is satisfactorily at rest, create new occasions for speculation, and place
great interests in the safe keepingof an untried trustee. In the next place,
the discontinuance of one Bank, and the establishment of another, could not
be accomplished without great inconvenience to the community. How i£ all
the capital of the present Bank to be withdrawn from its employment, and a
vacuum left, till a new institution shall come with means to fill it, without
intolerable embarrassment to the people? Are the debtors to the present
Hank to be pressed for payment, that the corporate franchise may change
hands, simply for an increased bonus* and to try the experiment ot change?
Js the Hank to begin to collect its debts, to decline its customary advances,
to withdraw old credits, to refuse new ones, to suspend exchanges and remittances; in a word, to displace fifty millions of active commercial capital, now
in full employment, and to withdraw, also, twenty millions of notes from the
general circulation, for no purpose but to enable us to bring a new institution into the place of the old? He is a statesman of some confidence in
his own skill, who thinks lie could accomplish such a change without public
inconvenience. He is a statesman, too, of no ordinary penetration, who can
discover adequate motives lor it. And, in the last place, the public opinion
requires no such change. There is no call for a new Bank, with a new constitution, and a large bonus; but there is, as it seems to me, a distinct call for
the continuance ol the present* T h e country is acquainted with the existing
Hani;; it has tried it, and is satisfied with it; and what it asks of us is, to prolong its existence.
Mr. President, the motives which prescribe my own line of conduct on
* his occasion, are not drawn from any local considerations. The State in whose
representation 1 bear n. part, has as little interest, peculiar to itself, in the
continuance of this corporation, as* any State in the t r nion. She docs not need



12

the aid of its capital, because the state of her commerce and manufactures
does not call for the employment of more capital than she possesses. She
does not need it, in any peculiar dejerce, certainly, as any restraint or corrective on her own paper currency. Her banks are as well conducted as those
of other States. But she has a common interest in the continuance of a useful institution* She has an interest in the wUe and successful administration
of the Government, in all its departments. She is interested that the general
currency of the country should be maintained in a safe and healthy state*
She derives a benefit, with others. (1 believe it a great benefit,) from t h e
facility of exchanges in internal commerce, which the Hank affords, ^"l®
is the sum of her motives- For these reasons* she is willing that the Bank
should be continued, but if the matter should be otherwise determined*
however much she would regret it on general and public grounds, she certainly does not apprehend, from such a result* inconveniences to her own c i tizens, such as may, and must, fall, so far as I can see, on some others*
M r . President, 1 will take leave of the subject for the present, with a r e mark which I think is due from me. Vor some years past, I have not been
inattentive to the general operations of the Bank, or to their influence on the
public interests, and the convenient administration of the Government: and I
take the occasion to say, with sincerity and cheerfulness, that, during t h a t
period, its affairs have been conducted, in my opinion, with fidelity, as well
towards the Government as towards its own stockholders; and that it has
sought the accomplishment of the public purposes, designed by its institution*
with distinguished ability and distinguished success.

At a subsequent period of the debate,
Mr* AIOORE, of Alabama* moved to amend the bill for modifying and continuing the charter of the Bank of the United States, by introducing two provisions;
1st. That the Bank shall not establish, nor continue, any office of discount and deposite, or branch bank, in any State, without the consent and approbation of the State;
2d» That all such offices or branches shall h% subject to taxation, according1 to the
amount of their loans and issues, in like manner as other banks, or other property in
the State, shall be liable to taxation.

On this amendment, M r . WnusTi-rn said, he trusted the Senate would not
act on these propositions, without i'till}' understanding their bearing and extent. For my own part, Kiid he, I look upon the two parts of the amendment
as substantially of the same character* Kach, in my opinion, confers a power on the Stales to expel the Bank at their pleasure; in other words, entirely
to defeat the operations and destroy the capacity, for usefulness, of the whole
institution- The simple question is, shall wc, by our own act, in the charter
itself, give the States permission to expel the Bank anil all its brandies from
their limits, at their own pleasure. The first part of the amendment gives
this permission in express terms; and the latter part gives it, in eHect, by authorising the States to tax the loans and issues of the Bank, with no effectual
limitation. It appears to me idle to say, that the power may be safely given,
because it will not be exercised. It is to be given, I presume, on the supposition that, probably, some of the States will choose to exercise it; else, why ia
it given at all? And will they not sn choose ? W e have already heard, in
the course of this debate, of two ra*cs in which States attempted to exercise
a power of this kind, when they did not, constitutionally, possess it. T w o
States have taxed the branches, for the avowed purpose of driving them out
of their limits, and were prevented frnm accomplishing this object, merely by
force of judicial decisions againsi their right. If, then, tfaese attempts have
been made to exercise this power* when" it was not legally possessed, and
against the will of Congress, is there any doubt it will be exercised, when it»
exercise shall be permitted, and invited* by the proposed amendment r I have
no doubt, the power, if granted, will be exercised, and the^main olyect of continning tn* Bank thus defeated*



13

. I have already said, that the second branch of the amendment is as objectionable and as destructive as the first. I think it is so- It appears to me to
give ample power, by means of taxation, to expel the Bank from any State
which may choose to expel it. It gives a power of taxation without fixed
limits, or any reasonable guards. And a power of taxation, without tixed
limits, and without guards, is a power to embarrass, a power (o oppress, a
ovver to expel, a power to destroy. T h e States are to be allowed to tax the
ranches according- to the amount of their loans and discounts* in like m a n n e r as other banks, or other property in the State, shall be liable to taxation.
* N o w , sir, some of the States have no banks. Of course they tax no banks.
*
I n other States^ the banks pay the State a bonus on their creation, and are not
otherwise taxed. In other cases, the State in effect itself owns the bank, and
a tax on it, therefore, would be merely nominal. Besides, no State is to be
bound to lay this tax, as it taxes its own banks. It has an option to tax it in
t h a t manner, or as other property is taxed.
W h a t other property? I t may
b e , as lottery tickets, gaming tables, or other things which may be deemed fit
t o be discouraged or suppressed, are taxed. T h e bank may be classed with
other nuisances, and driven out, or put down, by taxation. All this is perfectly
within the scope of the amendment. T h e license is broad enough to authorize
a n y thing which may be designed, or wished.
iSow, sir, in the first place, 1 doubt exceedingly our power to adopt this
a m e n d m e n t , and I pray the deliberate consideration of the Senate in regard
to this point- I n the first place, let me ask, what is the constitutional ground
on which Congress created this corporation, and on which we now propose to
continue it? T h e r e is no express authority to create a bank, or any other
corporation, given to us by the constitution. T h e power is derived by implication. I t has been exercised, and can be exercised only on the ground
of a j u s t necessity. I t is to be maintained, if at all, on the allegation that
t h e establishment of a National Bank is a just and necessary mean of carry«
" IP: on the Government, and of executing the powers conferred on Congress
j 1 S t h e constitution- On this ground, Congress has established this bank, and
this it is now proposed to be continued. And it has already been judi<> 1
" llv decided, that Congress having established a bank for these purpose*,
^Ke constitution
of the United. States prohibits the States from taxing it*
Ohscrve sir, it is the constitution* not the law* which lays this prohibition on
t h e States. T h e charter of the B a n k does not declare that the States shall
not tax it. It says not one word on that subject. T h e restraint is imposed,
not by Congress, but by a higher authority—the constitution. T h e true
and well settled doctrine is, that all subjects over which the power of a State
e x t e n d s , are objects of State taxation; but those over which it does not extend* are exempt from its taxation. T h e power of a State extends to every
thing which exists by its own authority, or is introduced by its own permission; but it does not extend to those means which are employed by Congress,
to carry into execution the powers conferred on it by the People ot the L/nited
S t a t e s . A single State cannot give a power to tax an instrument, created
a n d employed by the Government of the whole Union; nor can it, by taxation or otherwise, retard, impede, burden, or control the operation ot a law,
constitutionally passed by Congress. If individuals acquire property, under
the operation ot the law creating the B a n k , or any other law of Congress,
such property is taxable, in their hands, in the same manner as other property
of a similar kind is taxable. R u t it is a necessary consequence, from the constitutional supremacy of the Government of the whole Union, that the action
of Congress, in the exercise of its lawful powers, should not be embarrassed
by conflicting power, exercised or asserted by particular S t a t e s ; and that no
State can rightfully hinder or obstruct the free course oi those measures
which the Government of the whole Union may rightfully adopt. T h e powers
ot the Bank of the United States are not granted by the individual States,
nor does it exist by their permission. I t s franchise is not of State origin, b u t
flows from another source. It is n<\t one of those subjects over which t h e
power of the State e x t e n d s : and therefore it is not rightfully an object of S t a t e
taxation. All this I take to be as well settled, as any thing can be settled by t h e
P * a c t 1 ^ °t the Government, the laws of Congress, and the decision of the j u d i cial tribunals. N o w , sir, I ask, how ive can relieve the States from this cou*titu-

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tional prohibition? I t is true, that this prohibition is not imposed in express
terms; but it results from the general provisionsof the constitution, ana has
been judicially decided to exist in full force. This is a protection, then,
which the constitution of the United States, by its own force, holds over
this instrument, which Congress has deemed necessary to carry on the Government- Can we throw off"this constitutional protection? I think it clear we cannot.
W e cannot repeal the constitution. W e cannot say that every power, every
branch, every institution, ami every law of this Government, shall not have
ail the force, all the sanction, and all the protection, which the constitution
gives it* By the constitution every law of Congress is finally to be considered, and its construction ultimately settled, by the Supreme Court of the
United States* These very acts, before referred to, taxing the banks, were
held valid by more or fewer of the State judicatures, but were finally pronounced unconstitutional by the Supreme Court; and, this, not by force of any
words in the charter, but by force ot the constitution itseltl I ask, whether it is
competent for us to reverse this provision of the constitution, and say that the
laws of Congress shall receive their ultimate construction from the State courts?
Again; the constitution gives Congress a right to lay duties of impost, and it
prohibits the exercise of any such power by the States, N o w , it so happens,that
the national treasury is full,and the State treasuries are far less so. It might be
thought very convenient that a part of the imposts, at the custom house, should
be received by the States, But will any man say that Congress could authorise
the States to lay and collect imposts, under any restrictions or limitations
whatever? N o one will pretend it* That would be to make a new partition
of power between this Government and the State Qovernments. M r . M a d i son has observed, that the assent of the States cannot confer a new power
on Congress, except in those cases especially provided in the constitution.
This is very true, and it is equally true, that the States cannot obtain a n e w
power, by the consent of Congress, against the prohibition of the constitution,
except in those cases which are expressly so provided for in the constitution
itself *
These reasons, sir, lead me to think, that if, for purposes connected with
the beneficial administration of the Government, we deem it necessary to continue this corporation, we are not at liberty to repeal any protection, or a n y
immunity 7 with which the constitution surrounds it. W e cannot give to a law
of the United States less than its constitutional effect. T h e constitution says,
that every such law, passed in pursuance of the constitution, shall be paramount to any State law. W e cannot enact that it shall not be so; for t h a t
would be to repeal, so far, the constitution.
It is asked, whether, after all, the powers of the Bank will be any greater
than we choose to make them, and whether we may not prescribe to it any
terms or conditions which we see fit? If I were to admit the affirmative of
both these questions to be true, no concession would be made, favorable to the
proposed amendment. If the powers of the Bank shall be no more than toe
choose to make them, and if we may prescribe to it whatever terms and conditions we please, it by no means follows that we may leave it to others also
to prescribe what terms and conditions they please. W e are constituting a
Bank by our own law, for our own ends. T h e constitution of this Bank will
consist, not only of the positive powers which are granted to it, but of all
the conditions, terms, and liabilities, to which it is made subject- All these
toe may prescribe ourselves; but how can we invest others with the power of
prescribing them? How can we delegate our own legislative trust? W e are
passing a law which, if constitutional, is to be the supreme law; it is to be
paramount overall State laws; how, then, can we confer on State l e g i s l a t u r e s
a power to control, modify, or interfere with it, by their own lawsf
Allow me now, Mr, President, to inquire on what ground it is now
here contended that the States may claim this power of taxation.
They
cannot claim it as a power to tax all property of their own citizens.
T h i s they possess, without denial or doubt*
Every stockholder in the
Bank is liable to be taxed for his property therein, by the State of
which he is a citizen.
This right is exercised, I believe, by all; the
States which lay taxes on money at interest, income, and other subjects
of that kind- It is, then, not that they may be authorized to tax the p r o 


15

p«*rty of their own citizens. Nor is it because any State does not participate in the advantage of the premium, or bonus, paid by the Bank to Government for the charter. That sum§oes into the treasury for the general good ot all.
Nor can the claim be sustained, on the strength of the mere circumstance, that a branch, or an office, is established in a State- Such office,
or branch, is but an agencyIt is not a body politic or corporate* It
has no legal existence of itself. It is but an agent of the general corporation. T h a t these agents have their residence or place of business, in a particular State, is not of itself the foundation of any claim. But, according to
the language of the amendment, the ground of this claim to tax, is evidently
the loans and issues; and these loans and issues, properly speaking, are the
loans and issues of the Bank* T h e office, as an agent, conducts the arrangem e n t , it is true; but the notes which are issued are notes of the Bank, and the
d e b t s created, are debts due to the Bank. The circulation is the circulation of the Hank. Now, the truth is, what this amendment proposes to
give to the States, is, a right to fax the circulation of the Bank.
There
is no pretence to say that the proposed tax is a tax on property, real or
personal. T h e Bank is authorized to issue its notes in loans; and, in doing
this, it simply exercises a power conferred on it by law, and enters into a
contract which that law expressly authorises, and for which it prescribes various regulations. The law declares that the Bank may issue its own notes
for circulation; and the same law declares that these notes shall be a currency
for the payment of debts due to Government, A tax on loans and issues,
t h e n , is a tax which bears directly on the exercise of a power created by Congress for public uses and purposes* The amendment, therefore, does author i s e one part of the country—a single State—to impede, embarrass, or altogether destroy a law, made by the Legislature of the whole country, for the
good of the whole, notwithstanding that the constitution expressly declares,
t h a t the law, passed by the Legislature of the whole country, shall be
s u p r e m e . I t is on the right, asserted for the States, to tax the operations e a franchise, created by the United States, that the argument
of
for t ^ amendment avowedly rests. The very form and words of the
a r g u m e n t show this. T h e common way of stating it is that, since State
banks pay a tax to the State, these branch banks coming in to do business
among them ought to pay a similar tax. But the State banks pay the tax to
the State for the privilege oj circulation; and the proposition is, therefore,
neither more nor less than that the United States' Bank shall pay the States
for the same privilege. T h e circulation of the bills is the substance—the
locality of the office is but an incident. An office is created, for example, on
Connecticut river, either in Massachusetts, Vermont, Connecticut, or N e w
Hampshire* T h e notes of the Bank are loaned at this office, and put in circulation in all these States. Now no one will say, that the State where the
office happens to be placed, should have a right to lay this tax, and the other
States have no such right, This would be a merely arbitrary distinction. I t
would be founded on no real or substantial difference; and no man, I
think, can seriously contend for it. Under this very amendment, Pennsylvania would be authorised to collect a large tax, and N e w Jersey no
tax at all, although the State circulation of New Jersey is as much
affected and diminished, as that of Pennsylvania, by the circulation
of the B a n k of the United States. T h e States which have the benefit of
branches, (it it be a benefit,) are to have the farther advantage of taxation;
while other States are to have neither the one nor the other- Founding the
claim on the State right to derive benefit from the paper circulation which
exists withm it, the advocates of the claim are clearly not consistent with
themselves, when they support a measure which professes to protect that
i ight in some States, and to leave it unprotected in others.
B u t the inequality of the operation of this amendment, is not the only, nor
the main objection to it. It proceeds on a principle not to be admitted. I t
asserts, or it takes for granted, that the power of authorizing and regulating
the paper currency of the country, is an exclusive State right.
The ^round
assumed can be no less broad than this; because, the Bank of the tlnited
States, having the grant of a power from Congress to issue notes for circulation, its right is perfect, if Congress could make such grant. It owes nothing



16
to the S t a t e s , if Congress could give what it h a s u n d e r t a k e n to give; that i*t<*
say, if Congress, of its own authority, may confer a right to issue paper for
circulation. N o w , sir, whosoever denies this right in Congress, demes of
course its power to create such a Bunk as now exists. T h e B a n k of the t / m t ed States is quite unconstitutional, if the whole paper circulation belongs *° t h e *
State.?; because the Bank of the United States is a Bank of circulation, and w a s
so intended to be by Congress. T h e power of issuing notes for circulation is n o t
an indispensable ingredient in the constitution of a bank, merely as a bank. 1 h e
earlier banks did not possess it, anil many good ones have existed without it*
O n ' w h a t ground is it then, that Congress* possesses the power, not onlyo r t o
create a bank, but a bank of circulation? Simply, as I suppose, because C ^7
gress possesses a constitutional control over the c u r r e n c y of the country, ancl
has power to provide a safe medium of circulation, as well for other purposes
as for the collection of its own debts and revenue. T h e B a n k , therefore, a l ready possesses unconstitutional power, if the paper circulation be the subject,
exclusively, of State right, or State regulation. I n d e e d , sir, it is not a l i t t l e
startling that such exclusive right should now be asserted. I observed, t h e
other d a y , that, in my opinion, it was very difficult to maintain, on the face o f
the constitution itself, and independent of long continued practice, the d o c t r i n e , that the States could authorise the circulation of bank paper at a l l .
T h e y cannot coin money. C a n they then coin that which becomes the a c t u a l
and almost the universal substitute for money? Is not the right of i s s u i n g
paper, intended lor circulation, in the place, and as the representative of m e tallic c u r r e n c y , derived merely from the power of coining and regulating t h a t
metallic currency? As bringing this matter to a just test, let me ask w h e t h e r
Congress, if it had not the power of coining money, and of regulating t h e
value of foreign coins, could create a bank with the power to circulate b i l l s ?
F o r one, 1 think it would be difficult to make that out. W h e r e , t h e n , do t h e
S t a t e s , to whom all control over the metallic c u r r e n c y is altogether prohibite<I ^
obtain this power? It is true, that, in other countries, private bankers* having n o
legal authority over the coin, issue notes for circulation; but this they do a l ways with the consent of G o v e r n m e n t , express or implied, and G o v e r n m e n t
restrains and regulates all their operations at its pleasure. I t would b e a
startling proposition, in any other p a r t of the w o r l d , that the prerogative o f
coining money, held by G o v e r n m e n t , was liable to be defeated, c o u n t e r a c t e d ,
or impeded, by another prerogative, held in other h a n d s , of a u t h o r i s i n g a
aper circulation. It is further to be observed, t h a t the States cannot i s s u e
ills of credit; not that they cannot make them a legiU tender, but t h a t tht_y
the
cannot issue them at all. Is not this a clear indication-of the i n t e n t of th**
* -- , • <i o* *
it r
±ir i•
- - ~ n t of t h e
constitution to restrain the S t a t e s , as well Irom establishing a paper c i r c u l a tion, as from interfering with the metallic circulation? B a n k s have b e e n
created by S t a t e s , with no capital whatever, their notes being put into c i r c u lation simply on the credit ol" the S t a t e . W h a t are the issues of such b a n k s ,
but bills of credit, issued by the State?
I confess, M r . P r e s i d e n t , that the more I reflect on this subject, t h e m o r e
clearly does my mind approach the conclusion, that the creation of S t a t e
b a n k s , for the purpose, and with the power of circulating paper, is not c o n sistent with the grants and The prohibitions of the constitution. Hut, sir, t h i s
is not now the question. T h e question is not whether the States have t h e
p o w e r ; it is whether they uionv have the power. May they rightfully exclude the United States from all interference with the paper c u r r e n c y ? A r e
we interlopers, when we create a Rank of circulation? Do we owe them a
seignortdgc for the circulation of bills, by a Corporation created by Congress?
Certainly not. I t Ims been decided by solemn adjudication that C o n g r e s s
may authorise the Hank to circulate its lulls, as c u r r e n c y , and that no S t a t e
CAII rightfully interrupt that circulation, by taxation or any other means.
I
shall never agree to s u r r e n d e r that authority.
I would as soon yield t h e
coinage power itself; nor do L think t h e r e would be much greater d a n g e r , n o r
a much clearer d e p a r t u r e from constitutional principle, in consenting to such
a s u r r e n d e r , than in acquiescing in what is now proposed.

C