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SPEECH

MR. WOODBURY, O F N E W

CAPITA L O F




HAMPSHIRE,

T H 1 ] r i S C A 1, B A N K :

BEL'.VERP:

IN T H E S E N A T E

OF T l i i

UNITED S T A T E S

J u i . v 10, I S 4 1 .

WASHINGTON :
P R I M T F D B Y H I , A I R <SL R I V E S

1841.

SPEECH
op

MR. WOODBURY, OF N E W
THE

CAPITA!, OF

THE

Delivered, in the Senate of the United
/ / e mored that the irords in the \st
millions of dollarsV he strickoi
out.

HAMPSHIRE,

FISCA1-

BANK:

Stales on the 10Z/* of July, 1 S 4 1 .
section ^ 4i with a capital of
thirty

L a m a w a r e of the i m p a t i e n c e . Mr. P r e s i d e n t , t h a t is felt on the other side
of the h o u s e , a n d especially by t h e h o n o r a b l e c h a i r m a n of t h e c o m m i t t e e ,
t h a t this bill s h o u l d be finally acted o n . S i n c e r e l y do I s y m p a t h i z e w i t h
him.
Hut we are e n g a g e d in a m e a s u r e , w i n c h , by its present provisions, is
to operate for good or evil a w h o l e g e n e r a t i o n , and not till a n o t h e r y e a r or
a n o t h e r session.
W e are a t t e m p t i n g also to m a k e efficient g u a r d s , not for a few foreigners
or a few citizens a n d their small capital, but for the ten to sixteen millions
of the public p r o p e r t y of the people of the United States invested in the s t o c k
of this institution.
W e are h o u n d to protect w i t h care not only that, b u t
m o r e especially t w o to six millions y e a r l y of public m o n e y in t h e ' T r e n s u r y ,
oor.fidvd as d e p o s i t s to the c u s t o d y of tins n e w m a m m o t h corporation.
I
niust. therefore, ; ^ e x c u s e d for ^ o i n g s o m e w h a t at length into the r e a s o n s
lor lViV a m e n d m e n t , w h i c h , if adopted, m u s t s:«.ve risk, r e m o v e m u c h em*
barrussinent, a n d p r o b a b l y p r e v e n t gront los^.
L
I c a n n o t oil * wise do j u s t i c e to the subject.
I5ut I will e n d e a v o r , w h e n e v e r p r a c t i c a l ' \ lo omil r e a d i n g m a n y references, a n d hasten over n u m e r o u s illustrations; w h i c h m i ^ h t in their details be too t e d i o u s .
infinite diiiicnlty h a s attended, t h u s far. the a r r a n g e m e n t of l i m i t a t i o n s
a n d securities s u u a h l e for the i m m e n s e capital in the biU, and the l a r g e d e positee that will be c o n n e c t e d with it. 1 propose, therefore, in the first i n s t a n c e , to strike out t h e w h o l e capital, and t h u s relieve t h e c h a i r m a n a n d
t h e rest of us from the perplexities of g u a r d i n g safely a n y t h i n g b u t t h e
-public citpositcs. T h i s will be a vital r e m e d y . It will strike at the root of
the difficulty, because it wilt leave n o t h i n g to a r r a n g e b u t a m e r e fiscal a g e n t
a n d the safety of the c u r r e n t r e v e n u e . Nor will IF, if successful, lessen o u r
control over this corporation.
If it h a v e n o capital, the s u p e r v i s i o n of it
i n all respects will doubtless be retained by the G o v e r n m e n t , as it s h o u l d

be, to insure certainty, accountability; tmtf satetyr as well as punctuality




4
In the agency for all our financial operations. We otherwise would c e a s e ,
in this important function, to be a n independent a n d self-efficient G o v e r n ment.
But if some private capital is restored to the bill, it is easy and p r o p e r
still to supervise and check this fiscal machinery, by way ot some d i r e c tors, accountability, and even a bonus, if we choose to make such r e q u i r e ments. We m a y well exact all these, for the privilege of using the public
depositee and for the privilege ot letting their notes, if any, be taken for
public dues. It is not a question, therefore, as to details coniparatively
unimportant, but one radical, and extending to the merits of the w h o l e
system*

It seems to be determined that we are to have a bank of some kind o r
other for a T r e a s u r y agent. T h e question then arises, if it be not safer a n d
more constitutional to have one with no greater powers than are necessary
and proper to discharge the public business, w h i c h is with no capital, or a
comparatively small one, rather than to have an agent of a private as well
a s public character, and to have one commercial as well as fiscal in its
structure and functions.
It has already been decided to locate this bank in the city of W a s h i n g ton, and to constitute it an arm of the T r e a s u r y .
Is it not, then, m o r e
appropriate to have its operations confined to mere public matters of a fiscal nature—to the collection, keeping, transferring, and disbursing of t h e
public money—than to extend them unnecessarily to private loans, to m e r cantile exchanges, and to all the various ramiiications of commercial b a n k ing, scattered over the whole U n i o n ? Consequently, should a majority of
the Senate vote to strike out the present capital, as is to be hoped, the n e x t
step might be t h i s ; T h e same majority, or a different one, will be asked to
decide that no discounts, and probably nb paper issues for circulation, shall
be connected with the fiscal agent. I n that event, the blank would not b e
filled at all, and the subsequent portions of the bill would be so modified a s
to make the bank merely one for public deposites ; and would thus resemble
the original form of all modern banking, by being confined to deposites
alon^. But should the Senate think some capital, either public or private,
was constitutional and expedient, the blank could be filled with such smaller
s u m as might appear most safe and beneficial. It mi< ht also be wholly
public capital, or wholly private capital, or mixed, as muditJ on more full
&
consideration, be deemed most salutary.
In coming to a final conclusion on these points, we should aviil ourselves
of all tfic lights of experience and r e a s o n i n g Instead of W o ^ behind t h e
age m any important topics connected with banking, we could benefit b y
the whole: and if we have omitted the wise course pursued elsewhere, t o
summon experienced merchants for information and aid, practical bankers, and scientific reasoners, we could still, m some of their published remarks, use them as witnesses the most valuable and trustworthy.
We
could show by the Gallatins, the Appleions, the Raguets, the Lowndeses, t h e
Gastons, and the Ilopkinsons, that the present capital of thirty to fifty millions was too high for any legitimate object; and we could prove by t h e
Clays and other opposition Senators in this hall, in large numbers, in other
days, that a nut onul bank with a n y capital for discounts was not only u n constitutional, nut would becomej if organized like this, one of the greatest
curses ever inflicted on the h u m a n race. T i n s system of lending out t h e
public revenue has been most harshly denounced even in our own d a y .
H a v e not the supporters of this very bill censured in 1833, and since, t h e




5
l o a n s of t h e public m o n e y b y t h e s e l e c t e d S t a t e b a n k s ?
Mas the p r a c t i c e
n o t b e e n s t i g m a t i s e d by t h e m a s l e a d i n g to political f a v o r i t i s m , to e x c e s s i v e
i s s u e s of p a p e r , to o v e r t r a d i n g ? A n d h a v e n o t t h e c a l a m i t o u s r e v u l s i o n s of
1 8 3 7 b e e n often ascribed by o u r o p p o n e n t s chiefly to t h a t c a u s e ?
Y e t n o w w e a r e deliberately c a l l e d o n b y t h e m to vote for a b a n k , d e s i g n e d t o loan o u t not only t h e p u b l i c depositees, but from ten to s i x t e e n
m i l l i o n s m o r e of public capital, b o r r o w e d a n d p l a c e d in t h i s b a n k for t h a t
express purpose.
T h e s e i m m e n s e s u m s are to be l o a n e d also, n o t m e r e l y to m e r c h a n t s for
a i d in p a y i n g d u t i e s , but to a n y a n d e v e r y b o d y , e x c e p t m e m b e r s of C o n g r e s s a n d d i r e c t o r s — i n limited s u m s , i n d e e d , to all e x e c u t i v e olllcers a n d
t h e a r m y of civil officers —and in all a m o u n t s . T h e y m a y , b y t h e vote tins;
m o r n i n g - on t h e subject of d o n a t i o n s , be., lor a u g h t i n t e r d i c t e d b y u s . e v e n
givtiu a w n v , fur the basest e n d s , to u n y b o d y e x c e p t t h e officers of the b a n k .
W h a t a n a l a r m i n g d e p a r t u r e is this irorn t h e p r u d e n t p r o v i s i o n s of t h e
I n d e p e n d e n t T r e a s u r y , w h i c h m a d e it p e n a l to loan o u t at all a d o l l a r of t h e
p u b l i c m o n e y ! Kv'eii t h e bill r e p e a l i n g t h a t s y s t e m , w h i c h hit" passed t h e
JSonate w i l h m a few w e e k s , m a k e s it felon// in a n y otlicer lC to tonn. -with or
ioithotft inhrres: a n y portion of t h e p u b l i c m o n e y s i n t r u s t e d to him.' 5
lint
b y t h e p r e s e n t measures w e p r o v i d e m i l l i o n s on m i l l i o n s to be l o a n e d c u t ,
a n d if t h e m a n a g e r s of the. b a n k t h i n k p r o p e r , for the. a d v a n c e m e n t of a n y
s i n i s t e r or political objec;, to be <ziv&n a w a y w i t h perfect i m p u n i t y .
What
g l o r i o u s v i r i o n s m u s t t h u s be in p r o s p e c t for t h o s e w h o h a v e s i g h e d PD
long* to e n t e r the p r o m i s e d land, a n d p a r t i t i o n a m o n g i h e m s e l v t s a n d f r i e n d s
n o t o n l y all the udInas ^ynils nf' rtffrcc. b u t all the i n c i d e n t a l i n f l u e n c e s a n d
f a v o r s c o n n e c t e d w i t h power !
A. fiscal a g e n c y t h r o u g h t i n s b a n k , if t h e t h i r t y m i l l i o n s of capital is r e t a i n e d , will eost u s at least, in t h e first i n s t a n c e , t h e i n t e r e s t on t h e s i x t e e n
m i l l i o n s w h i c h w e m u s t b o r r o w to form o u r part of t h e c a p i t a l . T h a t i n t e r e s t , at fivi. per cent, o n l y , w o u l d be e i g h t h u n d r e d thou.^and d o l l a r s a n nually.
But the w h o l e e x p e n s e of t h e m u c h - a b u s e d I n d e p e n d e n t T r e a s u r y
a n n u a l l y h a s not b e e n s i x t y t h o u s a n d d o l l a r s —not o n e - l l i i r t e e n t h as m u c h .
1 >et it n o t he said t h a t t h e G o v e r n m e n t is l i k e l y to o b t a i n l a r g e d i v i d e n d s
a n d r e s e r v e d protits on t h i s c a p i t a l .
W h e n the first n a t i o n a l b a n k e x i s t e d , a n d t h e c a p i t a l of t h e S t a t e b a n k s
A v a s s m a l l , n u d the m a n a g e r s less c o r r u p t a n d v e n t u r e s o m e t h a n sii-ce, a
fair dividend accrued.
But under the second national bank no dividends
w h a t e v e r w e r e received for o n e or t w o y e a r s ; s m a l l o n e s o n l y d u r i n g o t h e r
years.
A n d the capital itself, r e t a i n e d by t h e old s t o c k h o l d e r s in t h e novr
S t a t e c h a r t e r , h a s been lost at least to one-half, if not t w o t h i r d s of its w h o l e
amount*
S h o u l d t h e b a n k £o i n t o o p e r a t i o n , located h e r e u n d e r political a u s p i c e s ,
a n d l i k e l y to be w i e l d e d to a d v a n c e political objects, a n d o p e n to all t h e
r i s k s w h i c h its imperfect a n d i m p o t e n t r e s t r i c t i o n s e x p o s e it to, n o ffrent
s k i l l is r e q u i r e d to predict, w i t h m u c h c e r t a i n t y , t h a t , if w e e v e r get b a c k
o u r o r i g i n a l c a p i t a l , a n d n o d i v i d e n d s whatever", it will p r o v e to be a p i e c e
of s i n g u l a r g o o d f o r t u n e .
H o w m a n y asr ;, d d e p e n d a n t s — h o w m a n y w i d o w s a n d o r p h a n s w o n Idr e j o i c e to be so f o r t u n a t e in ruspoei to t h e i r capital i n v e s t e d in t h e last Hank:
of t h e U n i t e d S t a t e s I
T h e cost, t h e n , to t h e ( x o v e r n m e m , of t h i s n e w fiscal m a c h i n e , w i t h t h i r t y
m i l l i o n s of c a p i t a l , is likely to be, a n n u a l l y , at least t h r e e f o u r t h s of a million.




6
o f dollars, instead of fifty or sixty t h o u s a n d d o l l a r s , the a n n u a l cost o f t h e
Independent Treasury.
B u t I admit t h a t there is a fair, legitimate, a n d safe public object to b e a t tained by this bill, if t h e capital be^ s t r i c k e n out. T h a t object xs to r e o r g a n i z e the T r e a s u r y D e p a r t m e n t in respect to a part of its fiscal m a c h i n e r y . It is to c h a n g e , in some respects, the p r e s e n t m o d e of collecting:,
k e e p i n g , a n d d i s b u r s i n g the public funds.
T h a t ^ i s a c o m m e n d a b l e design, if public c o n v e n i e n c e requires a c h a n g e .
.But if w e c a m e here merely on the senseless c r y of mad dog a g a i n s t t h e
I n d e p e n d e n t T r e a s u r y , a n d u n d e r t a k e to repeal it, a n d establish a diiferent
a g e n c y less safe a n d less s a l u t a r y , w e act at least u n w i s e l y .
B u t s h o u l d w e go further, a n d successfully a t t e m p t to substitute for t h e
p r e s e n t a g e n c y o n e not constitutional, or, if constitutional, not e x p e d i e n t o n
a n y great, broad, public g r o u n d s , b u t r a t h e r d a n g e r o u s to t h e p e c u n i a r y
interests of the c o m m u n i t y , a n d h a z a r d o u s to public liberty, t h e c o u n t r y
will for ages r u e the d a y w h e n this e x t r a o r d i n a r y session of Congress w a s
convened.
I admit, h o w e v e r , that w e h a v e constitutional a u t h o r i t y to create a fiscal
a g e n c y . It is derived from the p o w e r to lay a n d collect taxes, pay debts,
a n d m a i n t a i n an a r m y a n d n a v y . T o accomplish these objects, there m u s t
h e a t r e a s u r y , a n d officers of some kind. Hut this constitutes the w h o l e
skeleton of the agency* It should relate to fiscal m a t t e r s a l o n e — a s the title
of t h e present bill docs deeeptionsly, while its contents are i n t e n d e d for c o m m e r c i a l objects beside. It s h o u l d not be tor private enterprises and g a i n as
well as public, like t h e present bill, b u t be limited to the business of t h e
United States alone as a G o v e r n m e n t .
M y motion to strike out the whole capital is therefore g r o u n d e d , first, o n
a n opinion that the l e n d i n g of capital does not properly belong to the T r e a s u r y or to fiscal matters ; a n d m u c h less drtes the l e n d i n g of private f u n d s
o r private subscriptions belong to the T r e a s u r y D e p a r t m e n t as a portion of
its legitimate, n a t u r a l , a n d appropriate duties.
F o r the. G o v e r n m e n t , as a G o v e r n m e n t , to seek to enter into such e n t e r prises in o r g a n i z i n g its fiscal m a c h i n e r y , a n d to do this t h r o u g h t h e i n c o r p o r a t i o n of a b a n k i n g institution, is, in my opinion, clearly both u n c o n s t i tutional a n d inexpedient.
If the fiscal a g e n c y n o w proposed had been limited to the e m p l o y m e n t of
i n d i v i d u a l s , instead 01 the creation a n d use of a corporation as a part a n d
parcel of the 1 r e a s u r y D e p a r t m e n t , it w o u l d h a v e been in analogy to t h e
system of operation* in a /j {\IC o l jier d e p a r t m e n t s , a n d attended with v e r y
few diihculhes.
As the W a r D e p a r t m e n t employs i n d i v i d u a l officers a n d soldiers to c a r r y
on its operations ; the n a v y , individual officers a n d s e a m e n ; the State D e p a r t m e n t , individual consuls a n d a m b a s s a d o r s ; the law d e p a r t m e n t , (if 1
m a y be allowed the expression,) individual a t t o r n e y s mid j u d g e s ; so m i g h t
t h e T r e a s u r y a p p r o p r i a t e l y e m p l o y i n d i v i d u a l collectors, receivers, a n d
treasurers.
C u t w h o ever heard of introducing- into the organization of t h e W a r D e p a r t m e n t a corporation to iio-ht ?—or of t\\e State D e p a r t m e n t , a c o r p o r a tion to negotiate ? or a corporation to transact o u r law business ?
We
m i g h t as well have a corporation to legislate for us ; a n d t h e n , in t r u t h , a
corporation to m a n a g e the T r e a s u r y " c o n c e r n s would not be s u c h a n
a n o m a l y , however in "some respects ridiculous.




7
W e s h o u l d then imitate s o m e cases m t h e c o m m u n i t y , h e r e a n d a b r o a d ,
w h e r e c o r p o r a t i o n s are in s u c h favor, a n d e m p l o y e d in s u c h a b u n d a n c e ,
a s to prevail e v e n for washing clothes a n d for burying
the dead.
A g a i n : all the h o r r o r w h i c h existed a few y e a r s ago w i t h o u r o p p o n e n t s
a t t h e G o v e r n m e n t m e r e l y i n v e s t i n g its s u r p l u s funds in S t a t e or o t h e r
s t o c k s , (because it w o u l d look like d e a l i n g as a b r o k e r or b a n k e r , ) s e e m s to
h a v e v a n i s h e d , as if by m a g i c . And we are n o w not o n l y to use a c o r p o r a t i o n , b u t to enter into the paltry joint-stock p a r t n e r s h i p w i t h e v e r y S h y l o c k
w h o chooses to b e c o m e a subscriber, m all the l e n d i n g , b o r r o w i n g , a n d
trafficking in m o n e y a n d e x c h a n g e s w h i c h b e l o n g to the smallest village
b a n k a m o n g the n i n e h u n d r e d scattered over the wide s u r f a c e of the United
States.
W e t h u s m a k e the G o v e r n m e n t b e c o m e a J e w dealer, w i t h the h o p e of
gain.
It is to descend h o r n its dignified a n d public position as a r e g u l a t o r
a n d g o v e r n o r of o t h e r s , to b e c o m e a participator in p r i v a t e hfo in m o n e y e d
s p e c u l a t i o n s , and w i n c h practice m i g h t with equal propriety, on p r i n c i p l e ,
b e e x t e n d e d to a c o p a r t n e r s h i p in t a n n i n g leather, p i c k i n g o a k u m , or b u y ing- a n d selling old clothes. N o t h i n g is well a n d profitably d o n e by s u c h
j o i n t - s t o c k j o b b i n g by the public wirh i n d i v i d u a l s .
T h e p u b l i c t h e n is
a l w a y s the goose that is p l u c k e d .
T h e e x a m p l e s oi K n g l a n d a n d F r a n c e
h a v e been cited to u s by the c h a i r m a n , in favor ot a n a t i o n a l b a n k , as if
all the institutions of m o n a r c h i e s w e r e proper in a r e p u b l i c , a n d as if w e
w e r e to h a v e c h u r c h a n d state, inquisitions a n d bastiles, b e c a u s e t h e y
e x i s t in foreign despotisms : or star c h a m b e r s a n d w h i t e s l a v e r y , because
t h e former h a s been m K n g l a n d . a n d t h e latter still exists m its I n d i a
dominions.
I Jut lot me ask, sir, if e v e n m K n g l a n d or F r a n c e the G o v e r n m e n t s o w n a single dollar of e a p k a l in their n a t i o n a l b a n k s . ' C e r t a i n l y
not.
Hid F a l k l a n d or F r a n c e , too, establish their n a t i o n a l bank's w h e n those
k i n g d o m s a l r e a d y possessed the i m m e n s e a m o u n t of b a n k capital w h i c h w e
Iiave, of t h r e e h u n d r e d a n d fifty-eight m i l l i o n s ' /
lly no m e a n s , but w h e n
little or n o n e existed in either.
F v e n t h e n , witli a p o p u l a u o n birger t h a n o u r s in one, a n d n e a r l y as
J a r g e in the other, a n d with s c a n !y a n y o t h e r b a n k capital in o p e r a t i o n ,
d i d thvy^ rashly establish corp-:;ratinns w i t h t h i r t y to fifty millions ot capital '.*
S o far from it, the Hank of K n g ' a n d began with onlv a b o u t seven million
d o b a r s of capital, a n d the H a n k ot' F r a n c e w i t h o n l v thirteen millions.
O n w h a t pretence, then, by w a y of a n a l o g y , s h o u l d tins large a m o u n t of
c a p i t a l be r e t a i n e d h i t h o L>ii 1 / a n d m u c h )c3ss s h o u l d t h e t g o v e r n m e n t i n v e s t a l a r g e p a r i ot" it, m i x e d u p w i t h p r i v a t e i n d i v i d u a l s , fhr s p e c u l a t i o n a n d

crain .' ^ o r 1S l l J l t l | : , b ^ i ! ' y HI ordi r to control the baiiUs. for reasons before
fully exphi.tied in tins debate.
T h e o n l y legitimate ohjee; of the bill, t h e n , is m m i f e s t l y to establish a suitable fiscal agent.
IJut w h y s h o u l d we a t t e m p t to get s u c h an a g e n t in the
f o r m a l a hank, with power to loan and issue b a n k notes a p o w e r doubtful,
a t least, in r e g a r d to Us c o n s t u m i o n a h t y
w h e n the whole objection c o u l d be
a v o i d e d by m a k i n g the a g e n c y w i t h o u t c o r p o r a t e or b a n k i n g p o w e r s , a n d
e s p e c i a l l y w i t h o u t an y p o w e r except of deposits and m a n a g e m e n t of the p u b l i c
revenue 7
K v e n the i n d e p e n d e n t t r e a s u r y , or the S t a t e b a n k s , e m p l o y e d as the fiscal
a g e n c y , w o u l d ^wci rise to no s u c h g r a v e constitutional q u e s t i o n ; a n d either
of those s y s t e m s could u n d o u b t e d l y be modified a n d i m p r o v e d so as to a n s w e r safely a n d satisfactorily the public p u r p o s e s of the T r e a s u r y .




8
B u t a^ain : C a n it be p r u d e n c e or s o u n d p h i l o s o p h y to risk the c r e a t i o n of
an agent", whose constitutionality is q u e s t i o n a b l e , w h e n other a g e n t s c a n b e
obtained against w h o m n o s u c h obiections exist, a n d w h e n , as in 17 9 1 a n d
1816, no aVeat reasons exist w h i c h justify risk—responsibility a n d i m m e diate action ?
In 1 7 9 1 . w h e n the first c h a r t e r w a s trained, it w a s supposed, w i t h o u r
E n g l i s h descent a n d prejudices, that a b a n k w o u l d be found i n d i s p e n s a b l e .
M o r e especially w i t h the large r e v o l u t i o n a r y debt of s e v e n t y to e i g h t y m i l lions h a n g i n g over us, some a p p r e h e n d e d that it could not be m a n a g e d , a n d
t h e G o v e r n m e n t p r o c u r e n e c e s s a r y loans, w i t h o u t t h e help ot s u c h a n i n stitution- H e n c e Congress, t h e n , u n d e r those c i r c u m s t a n c e s , decided a b a n k
to be n e c e s s a r y a n d proper. So. ae;aim in IS 16. w i t h the debt of a s e c o n d
w a r , n e a r l y doubled, or r e a c h i n g one h u n d r e d and twenty-three m i l l i o n s ,
w i t h a n expectation of more loans to he needed, a n d w i t h o u t a n y e x i s t i n g
fiscnl r.^ents m the whole c o u n t r y , except s u s p e n d e d and discredited S t a t e
banks, ("ou^re^s n:j;en decided s u c h a h a n k to be necessary a n d proper.
Hut no such e m e r g e n c i e s or e x c u s e s n o w exist. O u r p e r m a n e n t debt h a s
been all e x t i n g u i s h e d , and the t e m p o r a r y one^of a few millions of T r e a s u r y
notes h a s been and can he well m a n a g e d w i t h o u t the aid of a n y bank.
We
h a v e also an independent.* >*a!e. a n d economical liscal a g e n c y in efficient
operation. W e h a v e . also, the lights of experience since 1^10. in the cond u c t a n d misfortune-, of the Inst L/nited Spates IJank, to w a r n us most solemnly against ever creatine; another, as we are n o w doine;, w i t h s u c h t r e m e n d o u s power in its capital, to be wielded for euK-r public political purposes,
or t h e private p e c u n i a r y r u i n , t h r o u g h oliicial peculations a n d m a l c o n duct of t h o u s a n d s of n e l p l e s s a n d otherwise portionless stockholders.
Again : Can it he \vi<e to v e n t u r e on thi*, w h e n the whole c o m n u m U y b e a r s
witness to the f iet. that this hank is a mere party m e a s u r e y It is d e m a n d e d
here, on the owe side, only by m e m b e r s of mie [ a r t y , and d e n o u n c e d in t h e
other w h o l l y by the other p a r t y : aided. l u n v e v e r / l fondly hope, by a few
independent, iearless. faithful a d h e r e n t s on the other side, to the constitutional doctrines of "9S. It lias, indeed, been a p a r t y m e a s u r e from the outset
of the G o v e r n m e n t , a n d helped to divide and imhittcr p;iriy feelings q u i t e
as m u c h u n d e r the first c h a r t e r as u n d e r the second. Kxeep't those persons
w h o m a y have supported either b a n k from an honest couvic'ion that* t h e
exigencies of the times in 1791 and \ s l G rendered o u r n e c e « - r v and t h e r e fore constitutional, the d e m o c r a c y h a v e been arrayed in Almost solid
p n a l a u x against the t r e m e n d o u s influence of such a ^ f - o a [ State e n g i n e .
H a m i l t o n himself called ?t :i a political m a c h i n e of the Greatest i m p o r t a n c e
to the Stale."
"
[ H e r e Colonel B K N T O V asked leave to read. ; m J did read, the whole p a s s a g e on this point from H a m i l t o n ' s report.]
\ e s ? sir, and only a few J a y s ago we were g r a v e l y told, in o n e of the leadi n g w h i g presses, that the Secretary's report" r e c o m m e n d i n g tins m e a s u r e
n o w u n d e r consideration ;* i*, in fact, a return to the old a n d tried s y s t e m
of forty years' s t a n d i n g — t h e father ot w h i c h w a s A l e x a n d e r H a m i l t o n / '
T h u s , in the first half year of the present a d m i n i s t r a t i o n we are t h r o w n
back, or attempted to be. to tire worsr. most odious, most d a n g e r o u s , a n d
m o n a r c h i c a l m e a s u r e of the great leader of federalism half a c e n t u r y a g o .
Will the Senate e x c u s e me for re.-.dmir an a c c o u n t of tin1, m a n n e r m w h i c h /
t h i s political machine worked, even u n d e r the purer d a y s of the r e p u b l i c ,
a n d from the tips of a venerable democrat, not hostile a f t e r w a r d s to t h e
b a n k on principle I W e need no description of the political influences o f




9
t h e last bank under our own eyes, in its thousand and one presses, attorneys,
a g e n t s , and interests, scattered over the whole Union, and moved by a n
a u t o c r a t behind the scenes, with the regularity and power in politics equal
t o the vast machinery of some large manufactory.
But f«w of us know, except from tradition, the doinjjs under the iirst
c h a r t e r uii tl.is important topic ; and. therefore, let me read them briefly
from General Smith in (Congress'in 1H11 ;
£:
At first iis < peratious were confined to Philadelphia. It extended its
b r a n c h e s some tune afterwards to Boston, New York, Baltimore, and Charlest o n . Wherever it extended its influence, dissensions commenced; where v e r it placed its tout, it became also necessary for the States to ereet another
h a n k , to counteract its pecuniary and political influence. In Philadelphia
it be^an to oppose certain people and put down their paper; T h e iStute. of
Pennsylvania, in defence of its own citizens, created the Bank of Pennsylvania.' 7 * Operathi^ as the bank did upon the politics of the country before
•
its eil\::s \\\ re neutralized by competition—man bcin^ man, place man
w h e r e yo i wiM -those concerned in the bank irot power and exercised itW h e t ] the I^rit •-•'•: ii;v;iy (JayV- v-\is pending l)efore Congress, the president
a n d dir.H'fLirs :! m^eUvs carried about a memorial tu Congress in i\s favor:
w i t h v.hni view and what effect, may ea;-ily be conceived.'' "Prior to the ijreat
struggle l.u'tv.'t'L'U the parties in 17US. thry did permit one democrat, to be
within t::< walls oi tlh? sanctuary as a director. lie was, however, immediately upon daring to o-ivi: his vole in iavor of a democratic candidate, put
out ; and since that time no man of democratic principles has be:m permitted to enU-r its walls as a d nee tor."
indeed, the truth of this partisan course, was all corroborated by the
chairman'himself, on the same occasion; and, when in lSKi he changed
Jiis views .". • to the eonsiKutionality of tin.1 second bank, he .still avowed iiis
belief tln«t the nr^t bank was properly refused a recharter, for this, among"
other rcason> -th-;t its power had been prostituted to party objects. H o w
rash must it b,; to interweave ngain the public interests, and put in jeopardy
the public funds, m an institution party in its origin, party in its progress,
and party in all its elements and influences !
On ifie contrary: how much more constitutional, as well as diyuiiied, independent, and effective, would it be to select individual public agents for
t h e T r e a s u r y , as for the other departments; atld to keep and disburse our
o w n revenue by our own officers, not subject to have it loaned out to everybody, and all thus exposed to luss ; nor to have its repayment refused by a
general suspension of specie payments, when most wanted tor the public
necessities, and the preservation of the public faith.

T h e a r g u m e n t used b y

creiUlemen the other day, against making the operations of a bank, as a iiscal
accent, depend mi the. pleasure or caprice ol~ iState assent, applies with much
oxeater forcj against placing all our funds so as to make their prompt return
dependent On the solvency, embarrassment, or whim of a few bunk speculators.
How can ireiitlemcn tolk seriously of the evils ot the old Confederation,
which prevented the collection ot our revenue until the States chose to act,
and not see the danger and folly ot putting our revenue, after it is collected
and is likely to be wanted daily, into the custody and control—not of our own
individual oilicers, under severe penalties, —but of the stockholders of a bank,
or their nabob agents, with property risked in every quarter of the globe*
wanting our fund^ most for their speculations when we need them most, and
responsible to nobody for misbehavior, except under mere civil liabilities I







10
Another apparent absurdity in establishing a bank with such a c a p i t a l
arises from the circumstance, that, so far as regards taking any share in it
by the Government, we have no surplus revenue to devote that w a y ; but
m u s t incur a permanent national debt o f t e n or sixteen millions, in order t o
accomplish the object. Other and useful fiscal agents can be constituted,
without incurring any debt whatever.
Another objection is, that we thus increase executive patronage, t h r o u g h
a greater concentration or union of the purse and sword, by placing n e w
officers, with high salaries as directors, at the disposaf of the President ; b y
putting yearly means of near two hundred millions discounts under central
control here, so as to penetrate every hamlet, and poison every vein and
artery of the body politic : and, in fine, by posting here or abroad a moneyed power behind the throne greater than the throne itself, or else subjecting the whole to an executive influence, more paramount and dangerous
than all the standing armies and alien and sedition laws which ever stained
our history*
Another objection i^, that we are urged to concentrate here tins immense
a m o u n t of associated icealth in a time of profound peace with foreign n a tions : in a time of great freedom from debt : when we have in operation
already an efficient fiscal system ; when a sound currency is established
successfully ibr the G o v e r n m e n t ; when foreign commerce is in a healthy
condition; when money is plenty and cheap, and bank capital in the
country abundant rather than deficient ; and when to establish such a bank
H K R E , and with such loose provisions as exist in this bill, is clearly to do
w h a t is condemned by expediency, if not by the constitution ; -condemned
by experience : condemned by sound reasoning ; and what must be condemned by the country at large as soon as the whole circumstances are
duly .examined and understood.
Before sanctioning such a total revolution in our present system of finance,
and establishing a measure so restitute of m a n y modern improvements and
restrictions in banking, and so <,pen to the worst perils to public liberty,—
allow me to invite your attention a moment to other, and first the constitutional objections in its way.
1 do not design to fatigue the Senate by a labored argument on this question, but merely to lay down hastily a few very general positions.
First. It is not pretended that there is anv express orant in the constitution to establish corporations—much less 'banking ernes—with power to
make loans and issue paper.
Secondly. Setting n s jde the power in and for this District and the T e r r i tories, rover which < *ongrc*s h i s authority for all kinds ol legislation,) there
is no pretence o[ any express grout, from which can be fanrly implied the
power to make banking corporations for the General Government and t h e
State3 ; unless it be from the grant to collect taxes, &,c, or to coin money, or
to regulate
commerce.
But every one knows now, nfter reading Mr. Madison's Debates in the
Convention, (published in 1SX9,) that, however gravely a committee of t h e
other House once contended that engraving bank notes was to coin money,
t h e money there referred to was metallic, and not paper ; that thy framers
of the constitution sought to avoid paper money as far as practicable ; that
<;
to regulate commerce'* meant to lix the custom house rules, and duties on
i m p o r t s ; and that no one in the convention ever dreamed it was to r e g u late the currency, as many hastily and erroneously suppose is the express

11
l a n g u a g e of the constitution ; and that to lay taxes^pay
debts, fyc, r e q u i r e s
o n l y faithful i n d i v i d u a l officers, but no corporations, w h e t h e r h a n k i n g or
o t h e r w i s e . All other impressions as to the designs of the c o n v e n t i o n m u s t
n o w be considered a p o c r y p h a l .
JLooser and more culpable still would it be to infer, since the father of the
c o n s t i t u t i o n has given to us the true history of its formation, that, u n d e r t h e
g r a n t of authority to . pass laws '• necessary aiifl proper1 for e x e c u t i n g all
t h e express powers, a corporation could he used as a m e a n s necessary
and
proper, w h e n the convention delihcrately refused to sanction corporations
a s original and substantive measures.
It would look h i g h l y censurahle to suppose, in the face of this, that ail
a u t h o r i t y o u g h t to he implied u n d e r one head, w i n c h was explicitly refused
e l s e w h e r e ; or that so hindi and hazardous an a u t h o r i t y or prerogative as
making" corporations should ever ho derived by mere implication.
But, without dwelling on this topic a moment lono-cr, a n d for the sake of
a r g u m e n t , suppose (as m a n y h a v e m I8UJ and 1791) that a banking- corp o r a t i o n can he justified as constitutional, if, in a n y particular e m e r g e n c y ,
it is believed to be ucre^sary, and is so shaped and moulded as to be an ins t r u m e n t proj}.' r to meet only the public necessity oi the case : then, the
n e x t question would arise, w h e t h e r , on the present occasion, such an instrum e n t is clearly necessary : and w h e t h e r the present bill presents one w h o s e
c a p i t a l , functions, and g u a r d s are proper to meet the e x i g e n c y ?
In t r u t h , the decision of the Snj re mo Court, that a national hank is constitution;,!, however m u c h ur^ed on the other side as b i n d i n g and final, has
b e e n merely a decision contingent on certain facts. It is. that a n y existing
institution, first agreed by Congress to he -necessary and proper^ is b y t h e m
considered in tlr.it event constitutional, hut not so m a n y other event.
it
is merely rendering j u d g m e n t as a conic in a n y case, on a verdict r e t u r n e d
b y ("on^ves^ as a jury, u n d i n e , h r s \ that in point of fact a particular instit u t i o n in some particular exigency was necessary a n d proper.
ISut it will be seen that such a judicial opinion covers the legality of only
t h a t special charter granted u n d e r these special facts, and decides n o t h i n g
a s to a n y other period or a n y oth*^- proposed charter.
M u c h less does such decision b d a n y body politically* even in the case
d e c i d e d on. Kvory politician or legislator forms his o w n opinion on s u c h
q u e s t i o n s , and acts on it in puh! c matters, in conformity to Ins o w n j u d g m e n t and conscience. IJut when a. question of private interest arises u n d e r
tiic particular charter, in w h i c h the courts have decided, their decision m u s t
of course control and irovein tbo^o interests while that c h a r t e r lasts.
It will thus be s r r n , that a CJon^r-ss might discreetly ndjudga a measure
to he, necessary and proper m an e m e r g e n c y and state of lip-ht or e x p e r i e n c e
w h i c h exi-U.-d in \7\\\ or IVih. and then the courts discreetly p r o n o u n c e it
to ho constitutional ; when Congress would not in 1 SJ 1, u n d e r a different
sialo of facts and fuller experience, d e r m a bank necessary, and m u c h less
d e e m a very imperfect charter, wiih ix very lar^e capital, and a n e w and
d a n g e r o u s location, arid vciy feeble g u a r d s , as a proper m e a s u r e for the
occasion.
U n d e r these views, it is hardly useful to detain the Senate by b a l a n c i n g
t h e weiffht of great n a m e s on the out! side and the other ; or the weight of
different Congressional decisions one; way and the other : or t h e w e i g h t of
different supposed verdicts hy the people one w a y or the other.
Most oi them differ o n l y . b e c a u s e the periods of time and force of emer-




12
crencies differ; or the character of the different corporations, and the extent
of experience of their benefits and necessity, differ. And if the constitution,
thus construed, is not sufficiently certain on so important a subject, it behooves the people and the States to make it more certain by an explicit
amendment, either allowing or prohibiting the power generally, or d o i n g it
except under circumstances where a bare majority in Congress, as now,
deem the measure necessary and proper, or where a majority of three fourths
or two-thirds should come to a similar conclusion.
Other differences arise, and will continue to arise, from a different view of
the extent of the meaning of the words -necessary and proper—ot
the state
of existing facts—of the character of the charter proposed—or of the effect
to be caused by the assent of the States—which can, in truth, operate only
as a re-incorporation of the bank within its limits, on such terms as are
deemed suitable. Hut the great result must be, that, acting as legislators to
iorm a MOW corporation, we are not precluded from considering a bank at
this time as net necessary, and therefore not constitutional. W e are not
estopped from regarding any particular charter proposed to us with an immense capital and bad location as not proper, and hence not constitutional.
T h i s question, if settled at all, is settled in our favor.
T h e balance of arguments, precedents, and analogies, to us, as politicians
and lawmakers, is, that a national hanking corporation is at all times, and
in all forms;, unconstitutional : but if admissible within its spirit on any occasion and in any form, it must be only when iu point of iaet it is clearly
necessary, and when the plan offered is clearly a proper one.
It is fortunate that, in the consideration oftiicss points, the experience of
the last seven years is lull ot new instruction and new warning*;—it is instruction oil the one hand, that during this period our fiscal operations irt
unprecedented amounts, and under the most extraordinary embarrassments,
have been conducted with punctuality : the payments made in a ixood currency, in moot cases: and the public credit sustained at the very highest
point, without the use of a United States Bank of any kind as a fiscal agent
for a single day. T h o s e who, in the minority of the committee in 1S32, as
well as on other occasions, have considered such a bank as indispensable
to the management of the finances, can now sec by actual experiment the
error of such an idea. And however convenient such an institution might
have proved in some respects m the last seven years as well as before, yet
recorded and oflicial facts show it not to be necessary.
It is warniug, o n
the oilier hand, that hardly could it he proper, if le'ft as unguarded* am d
managed asjnuily as the last national bank.—a bank that, if existing fr<ona
18J 1 to ib'17. would doubtless have suspended specie payments, and dr
ragged down wiih it all the banks of New E n g l a n d — w h i e h ' w a s saved almost
by accidenUrom suspension iu 1S19—which actually suspended among the
first in 1837, even on its old notes under our charter, though better able to ecu*
tinufi specie payments than if it had at that time been a public depository ;—
stronger and bitter, its president said, by the c h a n g e — a n d which has since,
under (he same officers and auspices, and with as useful means, as before 1S36,
been the mo^t hostile to resumption. If it had been a public agent in 1 8 3 %
it would probably have forced to suspend with it every bank in the United
States, and a!I our hank paper become as worthless as its own ; and t h e
capital and deposites of the General G o v e r n m e n t left m it, would have be*
come of as little value as those still unfortunately under its controls
T h e transactions of the last seven years have poured a flood of light over




13
t h e s e s u b j e c t s ; a n d if w e a r e b l i n d to t h e i r a d m o n i t i o n s , t h e c o u n t r y h a s
a r i g h t to d e n o u n c e u s a s slothful a n d u n f a i t h f u l .
I n fine, n o n e w c h a r t e r s h o u l d (in t h e a p p r o p r i a t e l a n g u a g e of M r . T y l e r , t h e P r e s i d e n t , o n a
f o r m e r o c c a s i o n ) g o b e y o n d t h e n e c e s s i t y of t h e c a s e , if o n e e x i s t s : " I t
m u s t c o n t a i n n o p o w e r s g r a n t e d to a b a n k , t h a t a r e n o t n e c e s s a r y to c a r r y
o u t s o m e p o w e r s "expressly d e l e g a t e d to t h e F e d e r a l G o v e r n m e n t . "
A
c a p i t a l of t h i r t y m i l l i o n s , w i t h p o w e r to l o a n it o u t a n d i s s u e b a n k n o t e s , is
c l e a r l y u n n e c e s s a r y a t t h i s t i m e ; a n d t h e m a n n e r of u s i n g s u c h a n i m m e n s e
p o w e r , w h i c h m u s t also, u n d e r t h e c o n s t i t u t i o n , be a proper one, is b y t h i s
b i l l , after ail o u r r e c e n t e x p e r i e n c e , m a n i f e s t l y left in s e v e r a l i m p o r t a n t r e spects dangerous, injurious, and highly
improper.
B u t p a s s i n g b y all t h e s e c o n s i d e r a t i o n s as to t h e u n c o n s t i t u t i o n a l i t y of
t h e m e a s u r e - f o u n d e d w h e t h e r o n t h e b r o a d g r o u n d first n o t i c e d , t h a t n o
b a n k i n g c o r p o r a t i o n w h a t e v e r is a d m i s s i b l e , o r o n t h e o t h e r , t h a t n o n e w i t h
a l a r g e c a p i t a l for d i s c o u n t s a n d c i r c u l a t i o n is n o w e i t h e r n e c e s s a r y o r
p r o p e r , — I h a s t e n to t h e c o n s i d e r a t i o n , t h a t if a b a t i k of t h e l a t t e r c h a r a c t e r
b e c o n s t i t u t i o n a l ; it is n o t e x p e d i e n t ; 'and hence, t h a t m y m o t i o n t o s t r i k e
o u t t h e c a p i t a l o u g h t to p r e v a i l .
I c o n s i d e r s u c h a b a n k as t h i s , w i t h a n e n o r m o u s c a p i t a l , a n d s u b j e c t to
b « i n c r e a s e d still f u r t h e r , a s n o t e x p e d i e n t a t t h i s t i m e .
Uecanse we
k n o w , b y a c t u a l e x p e r i m e n t , t h a t a fiscal a g e n t c a n be d e v i s e d , a n d p r o v e
e f f i c i e n t for all m e r e fiscal p u r p o s e s , w i t h o u t it. T h i s h a s b e e n s h o w n
b y t h e i n d e p e n d e n t t r e a s u r y , as w e l l as b y t h e S t a t e b a n k s f r o m 1 7 8 9 to
1 7 9 2 , f r o m LSI I to 1S17, a n d f r o m 1 8 3 3 to 1 8 3 9 ; — b e c a u s e t h e G o v e r n m e n t s h o u l d n o t r u n in d e b t for a n i m m e n s e c a p i t a l , w h i c h is n o t n e c e s s a r y , a n d w h i c h m a y n o t be p r o f i t a b l e , b u t e v e n l o s t ; b e s i d e s i n f l i c t i n g ,
t h r o u g h its p o l i t i c a l a n d s p e c u l a t i n g u s e s , e v i l s o n t h e c o u n t r y , i n c a l c u l a b l e in a m o u n t a n d d u r a t i o n ; - b e c a u s e a n e w i n s t i t u t i o n is, b y its p r o v i s i o n s , f o r b i d d e n to be e s t a b l i s h e d w i t h i n t w e n t y y e a r s , h o w e v e r g r e a t i m p r o v e m e n t s a shorter time m i ^ h t disclose, and h o w e v e r m u c h the public
i n t e r e s t s m i g h t a p p e a r to d e m a n d a c h a n g e .
H o w little b e t t e r is t h i s , in p r i n c i p l e , t h a n it w o u l d be to m a k e t h e c h a r t e r p e r p e t u a l , a n d t h u s a t t e m p t to tie u p , in a s o r t of e n t a i l o r m o r t m a i n ,
f o r e v e r , a m o s t o d i o u s m o n o p o l y m o n e of t h e g r e a t e s t i n t e r e s t s in s o c i e t y !
A g a i n : I c o n s i d e r t h i s b a n k , w i t h s u c h a "capital a n d o t h e r i n c i d e n t s ,
in^xPe<Jieut : —
B e c a u s e it is a p a r t y m e a s u r e , a s before e x p l a i n e d , a n d w i l l a g g r a v a t e ,
i n Ti tenfold d e g r e e , all p a r t y a c r i m o n y , v i r u l e n c e , a n d d e r a n g e m e n t o f
g r e a t public interests.

B e c a u s e it will n o t m a k e t h e s u s p e n d e d b a n k s r e s u m e , a s it p o s s e s s e s
n o m e a n s to o p e r a t e o n [ham, b u t w i l l d r a i n of t h e i r c o i n a n d e m b a r r a s s s o m e of t h o s e a l r e a d y p a y i n g s p e c i e .
B e c a u s e in s e v e r a l r e s p e c t s ( s u c h as its l o c a t i o n h e r e ) it is a n e x p e r i m e n t ;
i n t h i s a g e of d e n o u n c e d e x p e r i m e n t s , on t h e d e l i c a t e t o p i c of t h e c u r r e n c y ;
a n d , i n o t h e r r e s p e c t s , o m i t s to a d o p t s o m e m o s t e s s e n t i a l s e c u r i t i e s w h i c h
t h e l a s t t e n y e a r s h a v e s h o w n to be e s s e n t i a l .
A m o n s them, are the paym e n t of s p e c i e for all t h e c a p i t a l before c o m m e n c i n g b u s i n e s s , in o r d e r t o
a v o i d s t o c k - n o t e s a n d m e r e fictitious or c r e d i t c a p i t a l ; a l s o , t h e p r o h i b i t i o n
t o t a k e t h e i r o w n s t o c k i n p a y m e n t of t h o s e or o t h e r n o t e s , o t h e r w i s e d e f r a u d i n g at t i m e s m a n y of t h e b i l l h o l d e r s a n d d e p o s i t o r s of t h e s e c u r i t y
w h i c h t h e y a n t i c i p a t e d in t h e c a p i t a l i t s e l f ; also, k e e p i n g o n h a n d o n e t h i r d as m u c h s p e c i e a s d e p o s i t e s , b e s i d e s o n e t h i r d a s m u c h a s of t h e cir-




14
d i l a t i o n : a p p o r t i o n i n g t h e capital, a n d fixing t h e location of the b r a n c h e s ,
to p r e v e n t favoritism ; refusing all l o a n s to directors, a n d to the e x e c u tive a n d civil d e p a r t m e n t s of t h e G o v e r n m e n t , as well as to m e m b e r s
of C o n g r e s s ; a b o l i s h i n g the s u r p l u s fund of t w o millions, lest it be m i s applied a n d s q u a n d e r e d in c o n t i n g e n c i e s ; forbidding d o n a t i o n s of all
k i n d s of o u r m o n e y , for objects c h a r i t a b l e , political, or personal ; restrictinge x p e n s e w i t h i n a fixed, r e a s o n a b l e limit, or per c e n t a g e on t h e c a p i t a ^
a n d r e d u c i n g t h e a m o u n t of d i s c o u n t s lower b y 15 or 2 0 per c e n t , c o m p a r e d w i t h t h e capital ; as well as t h e a m o u n t of d e b t s it m a y contract*
N o t h i n g c a n be looser or m o r e d a n g e r o u s , after t h e e x p e r i e n c e as to t h e
c o n d u c t of t h e last U n i t e d States B a n k , t h a n t h e s i t u a t i o n in w h i c h both
of these last t w o i m p o r t a n t p r o v i s i o n s are left.
B e c a u s e the existence or ncm e x i s t e n c e of t h e b a n k is m a d e to d e p e n d
o n t h e p o p u l a r b r e a t h of p o p u l a r elections, in w h i c h o t h e r matters a r e
m i x e d , instead of d e p e n d i n g on the real necessities of t h e T r e a s u r y , a n d
t h e restrictions of the constitution ; a n d , finally, b e c a u s e it h a s n o t been,
f o u n d e x p e d i e n t , e v e n in t h e E u r o p e a n k i n g d o m s cited b y t h e c h a i r m a n *
to m i x u p p u b l i c capital w i t h private, in s u c h i n s t i t u t i o n s .
B e c a u s e t h e c h a i r m a n ' s report expressly assumes the Inst charter as the
basis of the new bank r w h e n t h e corporation u n d e r t h a t w a s so o p e n to
a b u s e as to w a g e w a r for y e a r s w i t h the G o v e r n m e n t itself; to set c o m m i t t e e s of C o n g r e s s nt defiance ; a n d to enter t h e political a r e n a as o n e of
t h e fiercest a n d most c o r r u p t i n g a n d u n s c r u p u l o u s g l a d i a t o r s t h a t fought.
Because, instead of being ati i m p r o v e m e n t , it is, in s o m e p a r t i c u l a r s ,
a m o r e defective c h a r t e r t h a n t h e last one, w h i c h , in several respects, w a s
w o r s e t h a n t h e first. It d e g e n e r a t e s in form m o r e into a m e r e political
m a c h i n e , w i t h a political location, instead of a c o m m e r c i a l one, as in t h a t ;
a n d w i t h directors h e r e on salaries, w h e r e t h e y h a d n o n e before; as
well as w i t h m o r e political control, by h a v i n g a g r e a t e r proportion of both
capital a n d directors, a n d yet w i t h o u t t h e boldness a n d w i s d o m to m a k e
it, as it is e r r o n e o u s l y called, a m e r e fiscal b a n k , destitute of the p r i v a t e a n d
d a n g e r o u s p o w e r s of a large capital for d i s c o u n t s a n d c i r c u l a t i o n .
Because, by p e r m i t t i n g its notes to be signed b y b r a n c h oflicers, w h i c h
t h e last c h a r t e r did not : it opens a wide doo'r to counterfeits a n d frauds o n
the community.
B e c a u s e it omits several s a l u t a r y restraints, found to be proper b y l o n g e r
e x p e r i e n c e , m u c h discussion, and s t r o n g r e a s o n i n g sxnci: tl{e [ a s t c h a r t e r
became a law.
It is b e h i n d the a<*e. as evinced m o u r t w o most c o m m e r c i a l a n d i n t e l ligent States, a n d in t h e o p i n i o n s of o u r ablest b a n k e r s , b y h a v i n g n o
c l a u s e to w i n d u p its c o n c e r n s , like a b a n k r u p t l a w , w h e n s u s p e n d i n g s p e c i e
p a y m e n t s . It does not as yet prohibit its notes from b e i n g t h e n c o n t i n u e d to
be receivable for public d u e s , or its v a u l t s to be?then used for the public d e posites.
B e c a u s e it i n t r o d u c e s n e w legislation as to the v a l u e of all foreign g o l d
coins for this institution, w i t h o u t e x t e n d i n g the s a m e rule to all o t h e r c o r p o r a t i o n s , a n d to the c o m m u n i t y at large.
B e c a u s e it does n o t r e q u i r e the batik to perform the d u t i e s of p e n s i o n %
a g e n t at all, n o r e v e n of c o m m i s s i o n e r of l o a n s a n d m a n a g e r of t h e g r e a t
n e w public debt a b o u t to be i n c u r r e d , until r e q u i r e d by s o m e f u t u r e law*
O n t h e other h a n d . I rejoice that, a m o n g the x^arious a m e n d m e n t s alreadyoffered from this side of t h e H o u s e , some h a v e s u c c e e d e d , a n d h a v e t h u s




15
o b v i a t e d p a r t of t h e o b j e c t i o n s , on tjle s c o r e of e x p e d i e n c y , w h i c h before
existed.
T h u s , t h e d a n g e r o u s p a r t i c i p a t i o n of f o r e i g n e r s i n t h e m a c h i n e s
a n d a g e n c i e s of t h e G o v e r n m e n t i t s e l f — a n d t h o s e f o r e i g n e r s often t h e
h i g h f u n c t i o n a r i e s of r i v a l n a t i o n s — h a s , after s t r e n u o u s o p p o s i t i o n b y
m o s t of t h e f r i e n d s of t h e b a n k , b e e n p r e v e n t e d f r o m o p e r a t i n g in t h e
d i r e c t m a n n e r in w h i c h it f o r m e r l y p r e v a i l e d .
And though they could
n o t before h e d i r e c t o r s , or vote in electio?is7
t h e y c o u l d v o t e o n all o t h e r
q u e s t i o n s in p e r s o n or by p r o x y , a n d h e l p to d i s p o s e of o u r p r o p e r t y , a n d
g i v e i n s t r u c t i o n s c o n c e r n i n g its m a n a g e m e n t , v e r y p e r n i c i o u s to o u r i n t e r e s t s a n d b a n e f u l to p u b l i c l i b e r t y .
I t r u s t t h a t t h e d a n g e r o u s m u l e s of
P h i l i p , l o a d e d w i t h g o l d , will t h u s be m o r e e f f e c t u a l l y e x c l u d e d from e n t e r T u g t h e g a t e s of o u r R e p u b l i c .
S o t h e r e m o v a l of "the s e a l of s e c r e c y i n
m a n y of t h e d o i n g s of t h e b a n k , a n d t h e p u b l i c i t y so n e c e s s a r y a s a
c h e c k o n p a r t i a l i t y , h a v e b e e n i n t r o d u c e d to a c o n s i d e r a b l e e x t e n t ;
a n d , after m u c h s t r u g g l e w i t h m o s t of o u r o p p o n e n t s , h a v e d i m i n i s h e d t h e i n e x p e d i e n c y w h i c h o t h e r w i s e w o u l d h a v e e'xisted, in c h a r t e r i n g
a n i n s t i t u t i o n s h r o u d e d in m y s t e r y ; s h u t close often a s t h e d u n g e o n s of
a n i n q u i s i t i o n o r s t a r c h a m b e r ; a n d h e n c e t h e t h e a t r e of c o n s t a n t f a v o r i t i s m , m o n o p o l y , a n d o p p r e s s i o n in t h e d i s t r i b u t i o n of its f a v o r s .
A g a i n : t h e l i m i t a t i o n of the a m o u n t of d i s c o u n t s to t h e d i r e c t o r s , i n t r o d u c e d t o - d a y , tias i m p o s e d s o m e r e s t r a i n t on t h e c a r e l e s s a n d r u i n o u s l o a n s
w h i c h w e r e at t i m e s m a d e to t h e m u n d e r t h e last c h a r t e r — e v e n to t h e d e s t r u c t i o n of ail t h e c a p i t a l (of a m i l l i o n a n d a h a l f ) of t h e B a l t i m o r e b r a n c h , a i d e d
b y a lev/ o t h e r i m p r u d e n t d i s c o u n t s .
I n d e e d , t h e w h o l e Josses in t h e first
t h r e e y e a r s e x c e e d e d five a n d a half m i l l i o n s , a n d m u c h of it b y l o a n s to
directors.
H u t t h e c l a u s e is still i n e x p e d i e n t , in s o m e d e g r e e , b y a l l o w i n g
t h e m a n y d i s c o u n t s w h a t e v e r , w h e n t h r e e h u n d r e d a n d fifty e i g h t m i l l i o n s
o f o t h e r b a n k capi'-\l e x i s t s , s c a t t e r e d o v e r e v e r y p o r t i o n o f ' t f i e U n i t e d
S t a t e s , from w h i c h t h e y c a n e a s i l y be a c c o m m o d a t e d to a n y e x t e n t t h e y
de: ire.
A n d t h o u g h , a ' t e r g r e a t r e s i s t a n c e , w e h a v e s u c c e e d e d in i m p o s i n g a
r e s t r a i n t on l o a n s to m e m b e r s of C o n g r e s s — a s e l f - d e n y i n g o r d i n a n c e , m o r e
fjvpedieiit t h a n e v e n C r o m w e l l ' s — I fear its u t i l i t y will be l e s s e n e d or c i r if w e d o n o t e x t e n d t h e r e s t r i c t i o n to all e x e c u t i v e a n d civil
cutn\ontcd
o i 'jict3rs oi t h e U n i t e d S t a t e s .
jSor is it by a n y m e a n s e x p e d i e n t to Establish a b a n k w i t h so large; a c a p i t a l - b e c a u s e w e m a y p o s s i b l y possess t h e p o w e r u n d e r t h e c o n s t i t u t i o n . O n
t h e c o n t r a r y , Ida a b a n k r u p t l a w , or a s t a m p act, or d i r e c t t a x , t h e a d o p t i o n
of a n y oi" t h e m h a s b e e n , a n d s h o u l d be, o n l y w h e n m a n i f e s t l y n e c e s s a r y
rind pi"°P L ' r r ° l> •rfrrui p n b l i c d u t i e s ; a n d t h e n to c a r r y t h e p o w e r n o f u r t h e r
o r b r o a d e r t h a n s o m e p u b l i c e x i g e n c y m a y d e m a n d for m e r e p n b l i c o b j e c t s .
I S o r is it e n o u g h to r e n d e r a m e a s u r e a t a n y p a r t i c u l a r p e r i o d e x p e d i e n t ,
m e r e l y b e c a u s e ;t is in s o m g r e s p e c t s c o n v e n i e n t .
T h u s , a national bank
w i t h a l a r g e c a p i t a l m a y be c o n v e n i e n t a s a fiscal a g e n t ; but, a t t h e s a m e
t i m e , if i t b e u n c o n s t i t u t i o n a l , or e v e n q u e s t i o n a b l e in t h a t respect, or if it
LK* v e r y i n e x p e d i e n t o n o t h e r a c c o u n t s , as h a s a l r e a d y b e e n s h o w n , t h e r e
c a n be n o p r e t e n c e t h a t its m e r e fiscal c o n v e n i e n c e — b e i n g a s m a l l d e g r e e
m o r e or less t h a n s o m e o t h e r s y s t e m — c o u l d j u s t i f y its e s t a b l i s h m e n t .
B u t I o m i t all d e t a i l s o n t h i s p o i n t , a n d h a s t e n to t h e o t h e r c o n s i d e r a t i o n s
w h i c h h a v e been offered by t h e c h a i r m a n in favor of t h i s l a r g e capitalH e a d v o c a t e d it, n o t b e c a u s e w e h a d a s u r p l u s of m o n e y o n h a n d to be
.loaned o u t a n d m a d e profitable in t h a t w a y ; b u t r a t h e r t h a t w e m i g h t




16
vainly attempt to make m o n e y by b a n k i n g on borrowed capital, like s e v e r a l
of the States that have within a few years become discredited a n d insolv e n t by rashly p u r s u i n g the very course w h i c h the c h a i r m a n of t h e committee here r e c o m m e n d s . Not because a large capital, or indeed a n y capital whatever, for discount a n d circulation, is necessary to a b a n k ; since
t h e first b a n k s k n o w n in history were mere banks of deposits, a n d since
only the last year the c h a i r m a n argued, at great length, that the i n d e p e n d ent treasury, without a n y capital whatever, or a n y power to lend, w a s still
a b a n k . Not that more capital is needed to stimulate, by n e w loans, too
little activity n o w in discounts, too little tendency to speculation or overtrading, and too little use of the public r e v e n u e for private purposes a n d
private gain.
B u t other reasons were assigned by the c h a i r m a n for the great a m o u n t of
capital in this scheme, and other objects to be accomplished by this institution, which he seerried to suppose rendered such capital proper. T h e n e w
b a n k was to be a sort of universal catholicon ; it would w o r k more w o n ders t h a n Aladdin's l a m p in the Arabian N i g h t s tales ; it was needed to aid,
and w a s intended to equalize and reduce, both the foreign and domestic
e x c h a n g e s ; it would produce a wide-spread a n d uniform c u r r e n c y of the
h i g h e s t v a l u e ; it would prevent and lessen a national d e b t ; in short, it
w o u l d bring relief to almost all persons, and in all places, and cover t h e
whole country, as lie contended its predecessors had done before, with
universal prosperity.
In order to effect all these objects, so very desirable, it was argued that
the capital of the first United States Bank, in 1791, h a v i n g been ten millions, and that in IS 16 thirty five millions, this one should at least, u n d e r
the increase since of wealth, population, and territory, be authorized as h i g h
as fifty millions.
But, sir, the increase of b a n k capital in a ratio with the extension of o u r
territory, is rather a novel guide, unless the territory is cultivated, and the
wealth and population of the c o u n t r y have been enlarged so as to justify
the measure.
^
Again : going to our population and wealth, and suoposino- them to h a v e
been doubled from 179L to 1816, then, bv ttie c h a i r m a n ' s rnle'of proportion,
the b a n k capital should be doubled ; and if there were four millions of S t a t e
b a n k capital in 1791, and you added ten millions more of the United States,
t h e whole was fourteen millions, for a population of between three and four
millions ot people. T h i s was from three to four dollars of bank capital to
each person.
But in I S ! 6, our population h a v i n g increased to ei^ht millions, w e
should then h a v e needed about twenty-eight millions 7>f bank capital ;
while, in truth, we had over eighty nine millions of State bank capital, a n d
then, by the United States Bank, added thirty five more to i t — m a k i n g , i n
all, one h u n d r e d and twenty four millions, or above fiftern dollars to e a c h
person. T h i s was more than treble the proportion in 1791. and caused, o r
helped to cause, all the deplorable consequences which characterized t h e
condition of affairs from 1819 to 1823 or 1824.
Now, our population being about seventeen millions, or a little more t h a n
doubled since I S 16, we should require but two h u n d r e d and forty e i g h t
millions of baiw* capital : when, in truth, w i t h o u t the present bill w e h a v e
over three h u n d r e d and fifty-eight millions, a n d with it should h a v e a u thorized over four h u n d r e d and eight millions, and in force near three h u n *




17
d r e d a n d e i g h t y - e i g h t millions, or m o r e t h a n t w e n t y t h r e e d o l l a r s to e a c h
p e r s o n , instead of fifteen, as in 181 (>, or o n l y four, as in 1 7 9 1 .
T h i s is a d e m o n s t r a t i o n 5 a l m o s t m a t h e m a t i c a l m c e r t a i n t y , of t h e m a d car e e r w e h a v e already r u n , a n d propose to c o n t i n u e in ; s w e l l i n g b a n k c a p i t a l o u t of all d u e p r o p o r t i o n to ar y i n r r e ase either in o u r n u m b e r s or
w e a l t h . I n d e e d , l o o k i n g to a n y a u g m e n t a t i o n in the last h?df c e n t u r y ,
w h e t h e r in o u r p o p u l a t i o n , foreign c o m m e r c e , or r e v e n u e , (the o n l y t a n g i b l e d a t a . ) a n d t h e i n c r e a s e ef h a n k capital d u r i n g that period h a s . w i t h o u t this bill, boon at a rate m o r e ilia:; t w i c e as h i g h as the h i g h e s t ot t h e m ,
a n d m o r e t h a n five times as h i g h as the lowest. "Vet w e n o w h a v e a l m o s t
t h e i n s a n i t y to propose from Thirty to lifty m i l l i o n s t u o r e of that kind of c a p ital.
W e do this, too, in ' I K . lace o( d e a r - b o u g h t e x p e r i e n c e , w h e n , b y o u r
h e a d l o n g a n d u n c a l c u l a t i n \? career M I thi.-= subject, w e laid ihe f o u n d a t i o n
for e n o r m o u s e x p a n > i o n s a n d c o n t r a c t i o n s in paper issues, w h i c h so s t i m u lated o v e r t r a d i n g as to p r o v o k e severe r e a c t i o n s a n d chillise w i d e s p r e a d
r u m w i t h i n t h e last few yea is.
Let it not. he said that s o m e of The p r e s e n t b a n k capital is h a d i y e m p l o y e d ,
o r little effective, b e c a u s e in 1 ~-u f st 1 m o r e of it w a s in that c o n d i t i o n .
>
In t r u t h , w i t h o u t this lull, out! ot" the great e v i l - of t h e age is a s u r p l u s
of b a n k c a p i t a l : a n d with it. an a d d i ' i o n is m a d e w h e r e n o n e is n e e d e d , a n d
w h e r e its a m o u n t is fixed by mere; c a p r i c e or a r b i t r a r y d i c t a t i o n , a n d not
i n conformity to a n y r u l e of p r o p o r t i o n in w e a l t h or n u m b e r s , a n d w h e r e
its formation can b r i n g no result not. likely to be c a l a m i t o u s .
W e are to
s t i m u l a t e p e r s o n s a l r e a d y over s t i m u l a t e d .
W h a t h a d been t h e o u t c r y ?
O v e r h a u l i n g and o v e r t r a d i n g . A n d yet it w a s proposed to a d d $ 3 0 , 0 0 0 , 0 0 0
to p r o m o t e n e w s p e c u l a t i o n s a n d n e w e n t e r p r i s e , tn end in n e w r e v u l s i o n s
and ruin.
If tins capital be f m m e d by collections from o t h e r b a n k s , e i t h e r
w i t h d r a w i n g t h e i r deposites on b a u d , or c o l l e c t i n g in a n d t r a n s f e r r i n g t h e i r
c a p i t a l , a p r e s s u r e is the consi - j u e n c e , a :id m o r e or less sacrifice of p r o p e r t y .
If it c o m e s from a b r o a d , a n d is t h u s a d d i t i o n a l capital imported, it will
c o m e w h e n n o n e is n c o d i d fir legitimate business, a n d will t e n d to s t i m u l a t e s p e c u l a t i o n and o v e r i s s u e s as in $"!>!. and a g a i n in I M S , til! a r e a c t i o n
c o m e s with all its inevitable and r u i n o u s results.
T h e c h a i r m a n m u s t adopt s o m e n e w and wiser g u i d e m respect to t h e
a m o u n t of his capital, o)\ on these facts, a s s e n t to m y m o t i o n ; a n d t h e n
e i t h e r refrain to fill the b l a n k at an, b e c a u s e no n e w b a n k capital is
n e e d e d , or (ill it- with a d h t b r c o t a m o u n t suited to s o m e l e g i t i m a t e object.
T h u s 3 b lie desires that t h e capital s h o u l d he sufficiently l a r g e to furnish
alt t h e p a p e r c u r r e n c y of the c o u n t r y , a n d the present a m o u n t of it lie n o t
f a r f r o m w h a t is n e e d e d , t h r u Jo's c a p i t a l s h o u l d be at l e a s t © 3 0 0 , 0 0 0 , 0 0 0 o r
$ 3 5 0 , 0 0 0 , 0 0 0 , i n s t e a d of" # 3 0 . 0 0 0 , 0 0 0 .
Ihit t h a t would l e a d i n e v i t a b l y to t h e

d e s t r u c t i o n of all tie 1 S:ate bank's, a n d the evils- i n s e p a r a b l e from c o l l e c t i n g
a n d transferrins: s u d d e n l y their i m m e n s e d i s c o u n t s ot b e t w e e n four a n d live
h u n d r e d millions.
W l m . t h e n , ton, is powerful e n o u g h to r e g u l a t e or c o n trol s u c h a mammoth
rryrttlnlor /
If he w a n t s a capital only sufficient to
form a model or p a t t e r n h a n k for an e x a m p l e to bo imitated by o t h e r s in its
form a n d action, then five millions are as good as fifty.
O n t h e c o n t r a r y , if he w a n t s a capital m e r e l y a d e q u a t e to g i v e facility to
fiscal o p e r a t i o n s a n d g r e a t e r s e c u r i t y to billholders, ten or fifteen millions
a r e by t h e e x p e r i e n c e d d e e m e d sufficient iov ihi = , or a n y oilier s u i t a b l e obj e c t c o n n e c t e d with a n a t i o n a l h a n k .
T h e t w o most able w r i t e r s on this subject, a n d both a d m i n i s t r a t i o n pohti-




IS
cians, concur in this v i e w ; and yet the chairman, in the face o f t h e i r
testimony, pushes the capital u p to thirty and fifty millions.
F o r what possible purpose tins is done it is difficult to u n d e r s t a n d , u n l e s s
ulterior and political objects are to be advanced by it, which the n e w location of the bank here, at the centre of political influence, may f a i n t l y s h a dow forth.
A bank, needed to operate ay an immediate check on ail State b a n k s , a n d
t h u s at once prevent over-issues, must, to be thus effective, w h e n d i s persed by branches in every region, have a capital nearly as l a r g e as all
the banks with which it is called to contend. T h e n it would r e q u i r e , as
before stated, three or four hundred millions, instead of only thirty ; a n d be
open to all the objections before named in connexion with so e n o r m o u s a
capital. But, again : if only having enough capital merely to c o n c e n t r a t e a
power on any institution suflicient gradually to check its excesses, o r
break up in time its rash operations, a few millions conld be rendered efficient Jhr this purpose, if not directed to other purposes of speculation o r
political power.
T h e whole capital of the Bank of France is only #13 s 000.000, instead o f
$30,000,000 or $50,000,000 ; nnd this for a population of 35-000,000, i n s t e a d
of 17,000,000. like ours. It is in u country, loo. where there is beside not a
tenth of tiie banking capital in other institutions which cxistsherc, and isof s o
much higher credit and power than even the Bank of Hn^hind, that the latter
was obliged last year to borrow specie from it to prevent suspension. So the
present political friends of the chairman in I S M and 1BH5 (such men a s
Gaston, Hopkinsom Sergeant, and Webster) all contended against a capital
as large as this. T h a t was a ti^no, also, when the whole country had only
about ;;;>10 of batik capital to one person in its population ; while, now, the
chairman insists upon having ^ 0 , 0 1 , 0 , 0 0 0 to £<5O.0UO.00O capital more,
when the whole country already has $22 of capita! to each person.
But, in order to meet every suggestion offered in favor of this large
amount of capital, it may be necessary to show that it is not needed,
as the chairman seemed to suppose, for discharging the business of exchanges. W h e t h e r we should or should not b rrow capital for such an
object, it is certain that the first Bank of the United Stales actually performed litOe in respect to exchanges, whether foreign or domestic ; a n d
its capital of only ten millions proved tenfold more than it ever devoted to
that branch of business.
T h e second bank, for m a n y years, it will he seen by the printed r e t u r n s ,
did quite as little in the exchange line, and properly left this business as a
mercantile transaction, to he performed chiefly by merchants and brokers.
T h e difi'Tence m real exchanges, whether foreign or domestic, can n e v e r
be obviated, remedied, or equalized by a bank, though jfS capital w e r e
$500,000,000; nor can the real rate of exchanges, which consists merely ill
the difference between the value of specie, or specie paying bank paper, in
one place and another, ever exceed the cost of transporting specie from o n e
to the other. If the apparent difference he greater than tins rate, it m u s t
arise fro:Li the depreciated paper in which it is computed, and not because
the diilerence is greater in specie. Hence the renl rate of e x c h a n g e , either
from St. Louis, New Orleans, or Oetroit, con seldom exceed two per c e n t . ;
a n d since the gold biO in 1834, and the greater abundance of that metal,
h a v e made the rate, usually", near half of one per cent, lower than before*
T h i s the tables laid before Congress heretofore by the T r e a s u r y Depart*




10
m e i i t d e m o n s t r a t e , w h e t h e r a United States Hank has been in existence or
n o t . A v e r y strong 1 illustration of this exists in the operations of the m u c h a b u s e d s a b treasury only t h e last winter. W h i l e n o m i n a l e x c h a n g e s were
f r o m t h r e e to five per cent, against N e w O r l e a n s and in favor of N e w Y o r k ,
a n e x c h a n g e of Mexican dollars in the former place for specie in the latter
w a s effected at par. besides receiving the latter in a d v a n c e : and this, to the
e x t e n t of n e a r two h u n d r e d t h o u s a n d dollars.
S u c h a bank c a n n o t h a v e the slightest i n i l u e n e e hi r e d u c i n g e x c h a n g e s ,
h o w e v e r large its capital, except by u n d e r b i d d i n g at first. >o a- to m o n o p o l i z e m o r e of thorn than other institutions or individuals : t h u s to 1 I V HMI comp e t i t o r s , a n d . in the end, by its wish and inevitable t e n d e n c y to m a k e
p r o f i t s , to raise the price as soon as \* p r o c u r e s {'nil possession ot the mark e t . I admit that, so far as it improves the c u r r e n c y , it r e d u c e s the a p p a r e n t
r a t e , b u t never the real one. T h i s last is regulated by the state of indebte d n e s s a n d balance of imports a n d exports between a n y two places, a n d
n o t by a b a n k : and the cost ol' e q m d i z m g or t r a n s p o r t i n g funds from one
t o the other in specie is the m a x i m u m of the rale of e x c h a n g e . Mr. Hindle,
i n 1832, before the committee, seemed to take great credit to the haul:, that,
u n d e r its influence, the expenses had been low, and seldom h i g h e r t h a n the
e x p e n s e of t r a n s p o r t i n g s p e c i e : w h e n , in truth, that e x p e n s e s h o u l d be the
7naxi*num} w h e t h e r a hank exists or not. Yet it was raised even h i g h e r t h a n
t h a t , at times, by the second I'nited States H a n k - -(Appletem p. bM.) T h e fore i g n e x c h a n g e s do not exceed the same rate of dillerenee : a n d ihe\- ] est on
t h e s a m e principles, m a k i n g allowance for the diifereni mode of n o m i n a l l v
c o m p u t i n g the p:umd sterling. 'They are seldom h i g h e r or lower t h a n life
p a r by more than two per cent., or the expense of t r a n s p o r t i n g specie. T h e
b a n k will never either redone or r q u a ' r / e these, unless it can c h a n g e all the
g r e a t laws of trade for the whole civilized world.
It is ridirnl.ii?> i.. hear
t h e exultation of its friends on this last s u b l e t , and on the I.!_;h cvedn
a n d value of their bills a n d notes even in I n d i a and Chin:!, w: --n rhey
h a v e been obliged to s h i p millions on millions to E u r o p e , to n> e-t \\ •• e v e r y
bills there, instead of s e n d i n g it beyond the (.'ape of <iood H o p e .
D o w n to 1831. it appears, by r e t u r n s on your records, that over w.\v: a n d
t h r e e - f o u i t h s millions had been thus shipped TO Knrope. a n d proi M !y d-.nhle
a s m u c h since in the convulsions of 1S:J7" io 1 Mi.', w h e n the pri :-id n* n\ i | i c
b a n k considered it ins fir-t d u t y to s'Mid his specie abroad ii; pay f'eeh;n
c r e d i t o r s , rather than to redeem nis hills at h o m e .
W h a t did the c o m m u n i t y here gun. by s e n d i n g the specie to Murope
r a t h e r than I n d i a ? and w h a t did it jrain in t h e price of foreign i-xrJuingo,
w h e n lh« hank, instead of individuals, was obliged to s h i p specie m meet
a n unfavorable Male of the e x c h a n g e , and the c o m m u n i t y had :o pay the.
b a n k ' iur the hills quite a* m u c h , if not more th-m U would have eo*l it to
e x p o r t the specie, without the interferer.ee of the haul: ?
J u s t so in rcspecr to lliuilomoM.c e x c h a n g e s since the h a n k began to deal
c v t e n s i v e l y in t h e m .
!t transported from the v/est a n d s-mthwest heioro
1 8 3 2 quite" t w e n t y - t h r e c millions of ^•pceie 3 to help to p a y h>r its drafts a n d
hills of e x c h a n g e ; and the cost of d o i n g lids had, of course, 10 be paid by
t h e persons w h o ' b o u g h t its drafts a n d bills at a p r e m i u m , a n d h a d to be
p a i d attv rate quite as hiffh as if individuals h a d themselves t r a n s p o r t e d the
s p e c i e w i t h o u t the interference of the b a n k . T h i s h a s led. also, at times,
t o r u i n o u s accommodation or horse-race bills, and a system of k i t i n g w h i c h
r e n d e r s tins species o( business, however profitable in a p p e a r a n c e , very lull




20
of hazard, and, under a slight reduction in prices of our great staples, f r a u g h t
with disasters.
Does any man in his senses believe that the bank, in its eagerness to m a k e
profits and large dividends, would aid the exchanges for n o t h i n g ; b u t , o n
t h e contrary, would not sell high, and purchase cheap, in all possible m o d e s ?
Did not Mr. Crawford once propose to fix a maximum
on its rate of exchanges^ so as to prevent extortion J Exchanges are often at par b e t w e e n
different cities, and also between America and Europe. T h e b a n k h a s
seized on such occasions to exhibit a list of its exchanges without a p r e m i u m , when, in fact, nobody else then charged a premium ; and when this
state of things was effected by the great laws of trade, making the exports
a n d imports or the indebtedness between those places at that time balanced,
or equal, rather than being effected by any action of the bank.
But if different cities in the same country, or if different countries, w i l l
overtrade and render one much i n d e x e d to the ofher, no banking institution in the world is so liberal or generous as gratuitously to equalize the exc h a n g e s at great loss. And it is as salutary to the community which h a s
overtraded to be made to pay a difference in exchange, as it is for the h u man system to feel pain after excessive indulgence, or t or Hie dissipated to
b u y repentance somewhat dear. What else is to check and obviate specu*
lation or overaction in business?
In proof of these positions, allow me to refer merely to two or three h i g h
authorities on matters of this kind. A committee of the House of Representatives in February, 1S23, friendly to the bank, and with Mr. H e m p h i l l
..for chairman, reported t h u s :
" T h e bank can never equalize exchange ; the expense of exchange m u s t
be borne by the debtors in the debtor part of the country, and every attempt
to £ive a different direction to it will be battled." (Report Ho. of Reps« r
F e b . 27, 1823.)
Mr. Rnguec questions the utility of the bank dealing much in exchanges ;
and both VT *----1 -•"
- —

s n
r n , ,VV,
r e r ^ d , as a general rule, deal in (hem q u i t e
thn ni rZ
f,
i States ank ever did, ever can, or ever will. E v e n
thv abided pet hanks in l ^ o did more in o x c h a n ^ , by near t w e n t y
milhons at a time, than this boasted United States Hank. Hot when we t u r n
to-its nillated dealings—not in legitimate e x - c h a f e s , but in transactions
ot that name apparently to insure greater profits than loans on promissory
notes or bonds—we are struck with the abuses to winch such traffic lias led.
What was the celebrated committee of loans but an exchen^e
cont-mittee
What were the celebrated loans to T . Kiddle & Co., but in p a r t
tnrough the exchange committee ? And what the discounts to certain
newspaper editors, but in part on bills of e x c h a n s - ?
And how easy has it thus been to charge oftea not only the ordinary i n terest, but a douceur or premium - n o t to call it usury—for difference in e x change, where little or none actually existed ?
Have not such facilities—not to call them extortion:—led some banks a n d




21
s o m e sections of country into the conversion of most of their loans into
n o m i n a l dealings in exchange, in ordjr, by usury, to prey more deeply on
t h e public?
T h e benefit of the bank's exchange dealings to the G o v e r n m e n t abroad
l i a s been magnified by the Senator from Kentucky, from a total misconception of the facts on that subject.
F o r several years not a single squadron on a foreign station lias been supplied by funds through foreign bills of exchange remitted by the Governm e n t , but ail furnished readily by a different arrangement made in 1832
a n d lS3o, which has $aved eight or ten thousand dollars annually from
w h a t it used to pay for the aid' of the United States Hank in foreign, exchanges.
T h e whole remittances by Lulls are for a i'cw contingencies mid the
diplomatic corps: and those are ai ways purchased and guarantied at as low
a rate as the United States JJank lias sold bills in its pahiJe^t days.
D u r i n g the entire period from l b l ? to 1S33 it is also to be rocoflneled that
its boasted no me transfer?, through draffs ;md bills of exchange when m a d e
from >'c\v York, where the levenu * IIK-S! a< rr.mul^f-s. have always been a
source of prolit. by a premium on such dre.fis and bills, rather than a task
for which thanks were due. If the L-a'auce on all the transfers has not been
o n e of gai:: rather than lo>s in e::ehau<rcs, the use of from four to eight
millions of puil;;- di-poMtcs wh Iiout i Merest, liu r i nir the whol^ of th.\t period,
h a s more than counterbalanced any thlioreijee. and has? made its eziehange
operations /or the (mveriiment. u:-der such circumstances, wnii the i rivilegc
at havin • jt< [,}][$ received ior pu• die tines everywhere, a source of much
•
profit.
Vet this profm.hie business, which any Stale bruikmg institution
w o u l d rejoice to perform maler hi;o advaulaj^vs, it is now supposed c a n n o t he di>cliarired HI future but by l!.;: creation of another dangerous national hank, and bv ruunmu'in dobt ten to sixte.u millions to constitute for
it an enormous capital.
Indeed, the Government itself", w h i n without ar.y sur-h bank, always has
performed its foreign] and domestic exchanges with ease, through Irokers or
State b:uil:s. and ai the same time with etjual cheapness, and occasionally
at a premium, if duMroil.
T h e larrre surplus collected at New York can ;-dmosf. invariably he used
to a positive proiii in exchanp^s ot all ku:d:\
It seems to have been another :r:eat object of the opening speech t>f the
Senator from Kentucky to show that a hank with so huge a capital would
exercise an inlluenee on the eurrencv most extensive, salutary, and desirable—in fine, one which would render it, in the words of his report, " a
sound currency of uniform value throughout the Union. 7 ' I am unwillingto detain the Ken ate longer than a few "moments o\\ each of the incidental
a r g u m e n t s ur^etl in iavor ot a tank' ol discoutg with so larje a capital.
But it is proper to say that almost every ground for behoving that a n a tional bank of that character, more than any other bank, can have a very
peculiar eifeeL on the currency, is, in a g-ront decree, fallacious ; unless
it hay the gicraiuic capital of three or four hundred millions, so as to supply
t h e whole of the paper currency <>l die r o u n t r y . E v e n in that event, it
m u s t be better regulated than (his one. and depend upon other circumstances than the mere amount of its capital, in order to render its paper
sound or uniform.
T h e " odor of nationality" given to its notes is not, as some have mis-




22

also <uven to the assignats in t r a n c e , but c o m a noi amue save mum irom
Tuinous deterioration. Kven the autocrat himself of all the Russias; c a n n o t
give this odor so as to save his paper from a depreciation, at times, of
jiearly three to one for specie. In order to render any paper-issues sound
or at par. as a currency, they must be redeemed in specie, and there must
be due securities that they will bo redeemed in specie.
But hero the chairman has attempted to ^ot rid of some of the security
h e himself proposed at first for the redemption of the circulation, by keepinu* on hand at least one dollar of specie tr> three of the issues.
lie
deemed that inexpedient, and too stringent or meddlesome as a regulation ;
when, in the Bank of England, for the hist twenty years, (since her resumption of specie -payments,) scarcely a ivturu has been published where
this amount of spe-'i" ha* not h?c-u <\\ .-eeded. i b . r e a r e the tables before me.
In IS:>'.>. one dollar of >peva-? to >\v^ and ei^hty-ei^ht hundredths of circu-

»-.»,_«—

..-

—

-.

- - . -

_ .

—

,

?

i• - - —

--

^»»~

- ~ — . - -

^. ~

In the whole l u h e d States as an average, srnreo an instance has occurred
S i n c e 1S11 where l\\^: L I L L U U U I U I I lui- e ;u;'Jl- a u»nr to one oi" the specie.
since L ' " > i i W I H : M ; U i < circulation I I - . I - i: j U i U i u K M J L U > O i : t * VI I I J C . N j J U C i f .
But the inmtleman has also refused to provide any certain security of this
kind lor the payment of the depositee—a mor»> dangerous class of immediate
liabilities in a bank, however iarjjo n^ capir.il, than even the circulation.
T h e depositors live nearer, and have birder amount* singly, than most billholders ; a n d , o n the slightest panic or loss of confidence, enn and will withd r a w all the specie pn>vidt-d to ^CCUPJ the iormcr. T h e deposbes, payable
on demand, are hkewKe mor-J chan^- : ahl-! in amoui.t than the issues, instead, as some suppose of bemjjj very uniform. T h e y ore thus the .gunpowder which has first blown up numerous ius'tUutious ; and (oone-hali or threefourths of their amount, at b-.ast, should they be guarded hy snerie, quite as
r-h

.

.. 1

_

_

_ . «. 1

.

1

I

.•

I

.

'

' I

•

y»

.

larirn >>:>:•• o f j h - r-i_». ht! firu?<:!- * no ><H>:*niv whatever on this point,'except
for remote and n!:mi;i:e indemnity, whadi is utterly worthless for the pur-




quuo sixteen per cvnt
in most of these cases, as will be explained hereafter, they outstripped even.

23
t h e vibrations in the circulation; ami this bank, with all its capital, must be
• i m p o t e n t in securing 1 a sound circulation to a n y extent whatever, if omitting", as it now does, a n y provision for specie to redeem the deposites.
A g a i n : this large capital is. as we have before explained, not necessary to
a i d the circulation as a pattern or model —that being feasible by a small capital, or eveu by a State bank. Again : as before sliowu. it cannot, even if
s e c u r e l y guarded as to specie for meeting deposings as well as circulation,
a n d with its present largo capital, furni'-h a paper curr-mcv beyond ten or
fifteen millions: which does not exceed one-tenth of t!^ present paper circulation of the whole l T uited Stat*.s. T h i s is a mere drop in the ocean.
J t would be effected, too. by adding :o m u c h circulation, when we already
h a v e enough: and Stimulating speculation, and injuriusr m various ways by
over-issues. Or, if it drive out other bimk circulation to this extent, it
w o u l d in half the o o u m r y now paying specie displace as go;:d paper for all
t h e purposes for which papur is there needed, an tiie new notes would be.
1)1 lb is wav. also, so far from supplying n. new and sound circulating
m e d i u m , which would bo used i:i all public payments, it would be found
t h a t half or mor-1 ni t!n-v payments uio^i ^.uii' -u • to be made in specie or the notes of good Statu hanks. T h i s would be inevitable, unless
forbidden by <'on jfr»jss, because ofien i'idler could more readily be procured
t h a n these notes, so few in n u m h e r a u d v a i n - romp..red with the whole circulation. What, then, comes of tin! argument, that so Jar^e a capital is necessary to furnish a currency i" meet public pa'/men':; 7 Nay, more, if it
d i d furnish one. whas becomes of tho a r g u m e n t , so often repeated by you
i n the late canvass. ev'»u till it nausea'.*\h that there should not be one curr e n c y for die ("JorormM-Mit and another for the people'.- You would t h u s
s u p p l y amply enouuh for your nohl»» selves, but only one-tenth of enough
for the people—the p r i r , desniseil. ihr.»nUen people.
A g a i n : the- tiH(f\ir,.*if/i/ of'tln 1 o u r r i n c y thm; produced has been another
boa-ted r. suit of a banlv'with s> large a c ipihd. and such numerous and
distant brambles to i ,»ie and redeem ns notes.
Tixis is a delusion g p ^ i e r . d'po-^tbie. than the ndier. No ]>aper currency
c a n be uniform beyond the circle of trad :• around where it i. sues, unless made
redeemable in -p-ad^at the groat c m t r o of geiurai commerce, or unW^s some
full equivalent is suh>ututed for sm-h a red*'* option. T h u s tiie State bank
n o t e s p n ^ o . ^ i i s sound ?nid uurfm-m a v.iln•' tu the circles of business a r o u n d
tli"sc hanics, as would the n<Me; o f h d s hank within the same circle. Let the
place at which ihoy are issued trad-* morn widely, and have exchanges and
t h e bahmee of business and iud-.btedness i\i its favor from greater distances,
a n d the notes of tiie local banks will the moio widely he uniform in their
value.
He!iee the no:^s o!" a go *d Stat-.: hank i* .u-d and redoemahl^ at Philadelphia. New York, or i>n*ton. will in as imifm-ln in value, over as wide an
extent of country doing business there, as would the notes of b r a n c h e s of
t h e Ihiifed Slates IJ.tuk, b s ; u d in tho : r* cities, and redeemable only there,
a n d only t u n e receivable for public t l r - s .
T h e only additional or more extended uniformity in vnlue given to the
b r a n c h notes wo dd result from m a k i n g them by law ree.eivablc for public
d o e s everywhere, or for debts duo anywhere, to the other branches.
But Congress could confer such a privilege as the first on a n y State bank.
or set ot State banks, with precisely the same benefits to the currency,'
in extending its u n i f o r m i t y : and would thus accomplish the same end,




24
without requiring us to form a national debt to make a large capital,
and incur all the other dangers to public liberty and public virtue attendant on such a colossal institution.
T h e last United States JJank, too,, found this clause ^making its notes
receivable everywhere for public dues) so great an inconvenience and expense, that it petitioned Congress to aker the provision it virtually
required sufficient specie to be" ke... at two ditFei\,.it places to redeem most
of its notes. And Mr. Crawford recommended that they be made receivable
only at or near the branches where issued, and said they had ceased to be
a currency in the whole west and southwest by means of this provision.,
now so highly commended.
" T h e bank lias consequently f-i.md Itself constrained to direct those
branches to refuse to isst- ? their no-es ev« n upon a deposite of specie.
T h e effect of the:*e causes combined has born the exclusion from circulation, in all States west and south o: the scat of Government, of the notes o f
the Bank of the Vi\:: d Stato* ii:.d ?•':* i-difi *. f o r several of these States
there is no sound circulation."'—CYt*"m/t./-'t:.i -*.'/>/. Jtvjiuvt* Jicecuibcr, 1820.
T h u s it was found that this boasted uniformity was produced ouJy by
a particular provision by Congress, i *:d not by the cfloct of a large capital; and that, if it was i.--*nunued. the coin•,/;:.ie;,co. must In; a larlre loss
of dividends and pivlitr.. such as to->!; place 7>'-m ISIS to J S 2 i : or the embarking in a new i-ranch of busrocos in tx'-haejtjs. on a new and hazardous mercantile scale, in order to .t-m.d/, ; u somo decree, the evil and loss.
T h e bank, ihere*ore. bring comp*ll :0 t^ take i:p these branch notes
at the rate of thirteen millions in one yos.r in IV: w York, and having
funds eUe\v!u;re for their redemption. Moy.pvd Usuim/ thrm at all? and
thus stopped the boa>ttd unifv/H»: currency over the whole west and
southwest. " T h i s it mu>t do acain. muei: eniekcr uni^-r the present act, as
the branch nnU-s : re now nut only re coix-ble for public dues everywhere,
but for all debts evt:rywh'erc payable to a*iv i,ther hrauch.
T h e uniform currency must, therefore, fail under this additional burden :
and no branch uotcr> b<j i>surd, hut th.i .'hcouuts ho there made with specie,
or the bank must fail. N'oMiing can avert it, unites a remedy is obtained,
as before indicated, by adventuring, n in I>23 and IS*-I, into a new branch
of mercantile speculation and hazardous business. It is that of deal in*
largely in western and southwestern exchange, and sending them and ship*ping specie to the east, in order to redeem virtually the branch notes which
are transmitted to the enM. aud aie there paid in lor public dues T h i s the
bank can do. and has d.»:i-? '^neo )S2 i. fiut it has been at a great exnense
to (he west and soiuhwe*;. 8j nu.- o U:M 10 nil ihe uniform currency has been
worth ; purchasing ev^hange ami drafts l n \ \ and selling them Jiigh. and at
the risk of any revulsion hi the prices of the gieat staples for which the bills
of exchange are chi ?]y drawn, and which may lead agaiu to these immense
losses of lSi'5 aud ib37 and 1S-10 on bills of exchuWe, which helped so
largely to plunge the late hank into irretrievable insolvency. When, in
1833, the bank romped to redeem its branch notes received in N e w York
for the public iliws. they were driven hack depreciated on the branches, to
the imminent risk of stopping specie payments in one of them, (/m Georgia,)
and leading: s^ou to a continued and rosdy redemption of them in New York.
T o the old hazards and losses on this subject, we now deliberately add b y
this bill those of requiring the branch notes to be taken everywhere for the
debts of the bank; a provision which must ere long lead to a refusal to issue




25
a n y or m a n y branch notes, or to a loss b y the bank in t h u s virtually r e d e e m i n g t h e m e v e r y w h e r e , so very great as to m a k e its stock unprofitable a n d
i t s ' d i v i d c u d s miserably l o w .
I n fine, are w e , in order to h a v e a m a g n i f i c e n t capital a n d a mn'ruiticent
c u r r e n c y . !o run the s a m e r o u n d a g a i n w i t h the last magnificent institution,
t o e n d . as that h a s d o n e , to all its present s t o c k h o l d e r s — i n ruin a n d i g n o m i n y f A fiili nl o n l y t w o cents a p o u n d in cotton w o u l d produce a loss
o f m o r e than § 1 0 , 0 0 0 , 0 0 0 : and if it h a p p e n e d on the hills of e x c h a n g e h e l d
b y t h e bank, w o u l d equal a loss of q u i t e one-third of its w h o l e capital.
1 a m u n w i l l i n g to fatigue the S e n a t e w i t h further details at this t i m e o n
t h i s v i e w of the subject.
L?ut let m e read a s i n g l e passage from Mr. G a l l a t i n , (p. 9 1 , N s h o w i n g the
f o l l y o f sur:h calculations .is w e h a v e had in respect to a s o u n d a n d u n i f o r m
c u r r e n c y to b-.j created b y this largtj capital of the proposed bank :
" Hut it is a great error to s u p p o s e tiiat it can afford a g e n e r a l l y u n i f o r m
c t i r r e n c y : or one w h i c h shall at the s a m e time be of the s a m e v a l u e in all
places/"
O n e n;^r* 'roin Appietmi. . p . !J5::
" A n o t h e r nrgiiinenr in favor of a great h-ink is. that it m a y f.irnish a pap e r m e d i u m w h i c h will circulate t h i o u g h o i u the w h o l e United States.
Its
i m p o r t a n c e in thi* respect is c r e a l l y overrated/"
K v e u the c o m m u t e of (A>m_>Te>s in 1 S I 9 arrived at the? s a m e c o n c l u s i o n ,
after their practical exrnnination. w h i c h t w e n t y years" e x p e r i e n c e since has
c o n f i r m e d in the m i n d s of the most :?a<racious and iutclii&rcnt (jankers.
S u p p o s e the n e v s ot this bank to be o n c e issued, do g e n t l e m e n a p p r e h e n d
t h a t their constituents arc to h a v e t h e m in rrcnerul use * or that t h e y are
t o he procured a n y more readily and Cheaply than e v e n s p e c i e is n o w ?
I f they do. the delusion must soon van:>h. F i f i y t h o u s a n d dollars
w o r t h of su jfi note* taken to Detroit or N a t c h e z to-morrow, if m a n a g e d
a s p r u d e n c e re ;uiivs, are not to bo r i v e n a w a y or e x c h a n g e d for a n y
thjnjr of less v a l u e than c o i n , or even loaned, without the best security, at
t h e shortest eiedi-. net t o be r e n e w e d , or. w h e n paid out, to c o n t i n u e in
g-eueral circulation there a s i n g l e w e e k .
N o : all w o u l d bo jjalhored u p at
in p r e m i u m , toy t r a v e l l i n g or for remittances, instead ol b'ils of e x c h a n g e
n i i d w o u l d not aid the avneral currc n c y of those places in the slightest
i l e g r e e . T h e interior c i r c u l a t i n g mechum. w h i l e tolerated at all, a l w a y s
d r i v e s a w a y that of superior v a l u e , as the c o m m u n i t y will of course a l w a y s
list? the cheapest m a c h i n e or tool, it it a n s w e r the s a m e purpose in business.
T h e o n l y real aid of m u c h i m p o r t a n c e conferred b y s u c h n bank w i t h
s u c h a capital o n the c u r r e n c y w o u l d he m e r e l y by t h r o w i n g back o n
o t h e r b a n k s their e x c e s s i v e issues ; l.y either r u n n i n g on t h e m for specie, or
c o m p e l l i n g 1 t h e m to r e d e e m their e x c e s s e s in the lari»e cities.
T h i s , h o w e v e r , is n o w d o n e e i l e e h v e l y and usefully in N e w K n g l a n d
b y the Suffolk Dank s y s t e m : in N e w Y o r k , by its present s y s t e m as to
c o u n t r y bank-notes : and is the true secret of the S c o t c h bankiurr, t h r o u g h
t h e operation, by other hanks or bankers, in m a k i n g t h e m yivu e x c h a n g e o n
J . o n d o n , or virtually redeem in I , o n d o n m o s t of their issues.
T h e d e n o u n c e d sub-treasury h a s the s a m e operation, w h e r e State bankn o t e s a c c u m u l a t e on hand, by s e n d i n g t h e m h o m e for r e d e m p t i o n .
A n d a n e w U n i t e d S t a l e s H a n k is n o m o r e n e e d e d for this, than anyl a r g e S t a l e bauk is. E i t h e r could, if it w o u l d , p r o d u c e an e q u a l l y salutary







<2&
influence in this respect ; and neither does it voluntarily, unless found profitable- T h i s bank is not required to do it.
But no step is demanded even for this, or can be useful in this operation,
till the banks resume specie payments. In those States where t h e c u r rency is now most in want of improvement, it can be least improved by
such a bank as this, till public opinion is reformed, and the State Legislatures and the community repudiate and reject depreciated paper.
The
reform must begin at home, with ihe people and the States. It has b e g u n
silently, slowlyT it is true, but surely* T h e rotten institutions m u s t be
swept away first.
T h e measure, then, of putting 1 into operation a large capital to aid the
currency, even as a check on other banks, (which is almost its only real
benefit.) is now premature*
It is premature* as shown by sound reasoning ; and premature, as shown in the sound opinions of both Air. Appleton
arid'Mr. (JallaMn. —;' \<>pt<<t<m. :27, -10. 41 : G^ffutii'. 90.)
T h i s extraordinary session or C o n f e s s , a;.--:;. M> far as regards a national
bank for any purpose, and much more for any considerable utility in connexion with the currency, was itself prcmaf??rc, and exceedingly injudicious.
But the chairman says further, that tiki:; hank is wanted for still other
objects ; and, anions them, its tendency to prevent and to lessen a national
debt.
i have before hoard of the supposfd benefits oi a national bank in creating1 a national debt, by making 1 loans to the Government : but never before
of its tendency to prevent such debt. Was -:ot our first bank, as well as
the second, vindicated on the around of their convenience in lending
money to the Government, and in maiia.sjiuir the m e r e s t and transfers oi a.
debt already creafed ?
And was not the national bnnk of Kngiand founded entirely in the
creation of a public debt? and has not i*s capital swollen since from six or
seven millions oi dollars to near seventy millions, by additions to that debt,
rather than reductions of it? And has not the whole debt of Kn gland
since aurrmmtcd, under bank intlucuce, to the enormous a^rccrale of near
Is not the debt of France also increasing at the rate of £00,00(1.000 or
more the past year, notwithstanding the existence o{ its national b a n k ?
And will not our debt at once increase ten or sixteen millions by the
very passage of this bill, with such an enormous portion of its capital to be
borrowed and taken by u- /
Urn sirik:'? cut tnat ca|-:;ai. and tins wh'.i*:- evil i- avertc--;—our debt
being increased instead of lessened by this injudicious biM. Mow is it to
lessen the debt ( liy proiits? And are we, as a (lovernmont. so silly as to
expect to grow richer by speculation and brokerage on borrowed capital ?
Have wc not minous'examplo^ enough in such States r.s Mississippi a n d
Michigan, to deter us from such delusive hopes, as well as Mich derogatory
business for a great nation /
Its aid in paying ott" any pnbiic debt is the aid only of the shove] ii\
digging canals, or t.ho hod in erecting palaces, It is the mere tool wielded
by others, and the means are supplied from the industry and thrift of the people at large. But another vast improvement in tiiis bank at this time, w i t h
such a capital, is claimed to be its new and extraordinary location in this
political city of magnificent distances, rather than in a commercial m a r t or

27
m a n u f a c t u r i n g e m p o r i u m . S u c h an i m m e n s e capital, opcratinor y e a r l y to
t h e a m o u n t of two h u n d r e d millions, is to be m o r e useful and sate if cont r o l l e d h e r e , t h a n in P h i l a d e l p h i a or N e w York. H o w a b s u r d ! It is like
p l a c i n g the Hank of K n g l a n d in the tin m i n e s of C o r n w a l l , or amidst the
c o a l of Newcastle, instead of the centre of a million of i n h a b i t a n t s in L o n d o n ,
c o n n e c t e d w i t h the e x c h a n g e s a n d c o m m e r c e o( near half the civilized
w o r l d . T h e political d a n g e r of s u c h c o n c e n t r a t e d capital, wielded by the
g r e a t central power, is. as heretofore intimated, one of the greatest i n n o v a t i o n s a n d real perils in the bill, r a t h e r t h a n homo- s o m e wonderful i m p r o v e m e n t , as seems to be the opinion of its g r e a t advocate a n d a u t h o r . If t h a t
p o w e r be the sport of sordid cliques or political cabals a i m i n g at tin 1 Presid e n c y , o u r condition will be as had as t h a t of tin; R o m a n "Senate u n d e r
J u c r u r t h a ; or even w o i s o — for a p u r c h a s n r could then probably be found.
T o say that this d a n g e r o u s institution s h o u l d be h e r e , because here is
t h e seat of Cioveruruent, unless it be m a d e a mere iiscal m a c h i n e w i t h o u t
c a p i t a l , is to say that, ior a like reason, o u r dry-docks s h o u l d be here, a n d
all imports a n d exports be c o n c e n t r a t e d liry^.
It is to say t h a t the c e n t r e
of politics niii-t aUo be the centre of h a n k i n g : and that the regulator of its.
i m m e n s e m a c h i n e r y m i h t be l u r e , and m o v e d from here, with almost the
s p e e d of g a l v a n i s m or electricity, a n d infusing" c o r r u p t i o n a n d poison, I
fear, into every vein of the body politic.
S u c h a questionable proposition as a location here received in l S l h only
t h i r t y votes out of the w h ' d e Hem.'.! of Hep. ese.ntalives ; a n d e v e r y s o u n d
f i n a n c i e r repudiates it w i t h o u t hesitancy.— (i^/Zf/i'/w, f.KJ. 0 5 .
Merchants'
Masr. for Julij} 1^-l.U. p. WW.
I.Jut; above ail, a n d over all other considerations, this large capital in the
bill seems to he urged u n d e r the delusive idi a t h a t this bank, with s u c h a
c a p i t a l , is to hriu'jf'relief to everybody in e v e r y thin*;. It is to be a new
P a e t o l u s , w h o s e stream will w a s h sands of <mld over the w h o l e c o u n t r y :
i t is to l)e—not a ])anii"*s shower, to corrupt a n d betraj*, but a sort of fert i l i z i n g dew, to moisten a n d start into life every d r o o p i n g interest in socie t y , a n d to operate as a political indefinable eli>:ir for all the disorders in
s o c i e t y . It seems to be i m a g i n e d that die bank" will create new capital to
t h e e x t e n t of thirty m i l l i o n s ; w h e n most oi it. not mere e n d i t , is probably
to be only the transfer of other capital n o w employed in oilier banks or
o t h e r pursuits ; ; m j its w i t h d r a w a l thence is probably to i n c o m m o d e a n d
e m b a r r a s s there, m u c h more t h a n it will beneiii here. If a n y n e w capital
i s i n t r o d u c e d from abroad, in the s h a p e of coin, it will at once r e t u r n if t h e
c o u n t r y continues indebted abroad ; a n d if it stimulates to larger imports
a n d overtrading, will not only r e t u r n , hut c a r r y more with it, a n d c a u s e
last in-J* evils. T h e imports of specie by the last bank in its early years cost
o v e r half a million, a n d nrob.ibly benefited it or the c o u n t r y scarce a doll a r ; beeaU>e. by expansion, it kept the balance of trade largely against us.
T h e addition of ilns bank capita!, if composed ehietiy of credit by stockn o t e s , as most ot the private portion of it wiil doubtless be, u n d e r the prese n t provision allowing the? bank to c o m m e n c e business witiiout all its capital being paid in, m a k e s n o addition to the real means of the c o m m u n i t y .
ft increases prices, witiiout an increase of real ability to pay ; and it e n d s
i n r e v u l s i o n s and b a n k r u p t c i e s . A bank ! a b a n k ! a bank ! is the s e n s e Jess cry witli m a n y , w i t h o u t regard to reason or experience, and as if a
b a n k were a magical ring", the gift of some eastern genii, that w a s , w i t h t h e
s l i g h t e s t touch, to w o r k the most w o n d r o u s miracles ; w h e n , in t r u t h , t h e







28
only real addition to real capital is not in m a k i n g n e w banks, but in addmgmore coin, more produce, more manufactures, more land, more labor.
T h e power and durable wealth of society are chiefly increased by a d d i n g
n e w intelligence, n e w skill, with purer morals and greater industry.
A bank is, to be sure, in one sense, a labor-saving m a c h i n e ; because it
concentrates and makes somewhat more active the same a m o u n t of c a p i t a l
before existing in the community, and very usefudy loaned out by individuals. If weU*secured. it also furnishes facilities in a good paper for cheaper,
p a y m e n t s in larsre sums, and for distant objects. Hut if, as Mr. N o r m a n
supposes, a paper currency costs two and a half per cent, per a n n u m , while
a o-old one costs only one lifty-third of this ; and if the paper* at the s a m e
time, be not well secured ; the balance of losses and suderi ug over the advantages to all the c o m m u n i t y may be. in the Qiid, m u c h the greatest. T h e
best financiers regard the point as questionable, looking to the whole c o u n t r y and to e!i consequences. While it is believed that in lari^e cities, a n d
for travellers and merchants, banks well regulated are beneficial for several objects, a n d especially those k>r mere depositee, (which was their only
object originally;) their operation elsewhere, with a power to lend, a n d
especially^ to expand and contract their issues at pleasure, is regarded, a n d
lias been proved, exceedingly dangerous:. And. be>ide. their t e n d e n c y to
revulsions everywhere has caused oolnin* temptations to speculation and.
ruin throughout the interior of tee ooun'rv. Q u i t e as much spare real
capital won id probably have been enm-v1 in the west from the east, and
from Kurope to the east, in the We4 fort;, years, if a single new bank had
not been erea'ed. as there lias m fact been 'ioaued. Hut it would have been
in a different form—by bond and ruortg; ge, or on longer credit for land or
m e r c h a n d i s e : and thus m a i o n n much more convenient and useful to the
c o m m u n i t y at large than the short sixty or ninetv days' bank credit on
promissory notes or hills of exchangee
T h e d i s a s t e r s to debtors in a groat change of prices or ^actuation in
trade, from a n y cause, would not have been" a tithe ot what has actually
occurred, because individual creditors and agents could have been more
lenient with safety, having no excessive issues to he redeemed promptly
with their collections; and hey would never, in person or by a^ent, h a v e
exercised the inexorable severity which characterizes soulk*ss>orporations.
in sacrificing at the day their debtors" estates.
Gentlemen on the opposite side seem to think that there was no efficient
capital, or efficient usa of ir, be:ore the introduction of batiks of discount
and circulation ; as if lands, houses, specie, cattle, merchandise, a n d produce did not exist. con-uaite soed capital, and lead to prosperity in Assyria, Kgypi. and Carthage, n^i io name Home or Greece, as greatly and gloriously before banks existed as s i n c e ; — a s if E n g l a n d , before AVilliam I I I ,
(the era when modern banking there began/) or f r a n c o before 1805. h a d
neither capital, nor prosperity, nor g r a n d e u r ;—as if the United S t a t e s
themselves were nothing before 171*1 or 1 7 ^ 3 ; — a n d as if. without the introduction of banks here d u r i n g the last half century, the race of W a s h i n g t o n ,
a n d F r a n k l i n , and Hancock, which had before driven back the barbarian,
subdued the forest, and conquered independence trom the mightiest m o n a r c h y on the globe, would have degenerated, without the introduction of
banks;—-as if their glorious c o u n t r y would not have continued to r u s h
forward in its career of splendor without m u c h (if any) less rapid strides in
either wealth, population, intelligence, virtue, or power, without banks, t h a n
it had done before without them.

20
T h e idea is p r e p o s t e r o u s . N o . O u r bast c a p i t a ] — - b e y o n d o u r a b u n d a n t
a n d fertile soil w i t h its r i c h c r o p s , o u r g i g a n t i c lakes, a n d l o n g , n a v i g a b l e
s t r e a m s , w i t h all o u r v a s t a g r i c u l t u r a l , m a n u f a c t u r i n g a n d c o m m e r c i a l .
r e s o u r c e s — c o n s i s t s of a free a n d i n t e l l i g e n t a n d m o r a l p e o p l e , w i t h t h e i r
liberal constitutions and equal laws.
If, w i t h all these, w e h a v e v. m t i n u e d to a d v a n c e b y l a r g e s t r i d e s , it is n o t
e a s y to s a y w l i e t h e r t h e y h a v e b e e n m o r e or less r a p i d in c o n s e q u e n c e of
banks.
I3ut s o m e , n o t v e r y u n p h i l o s o p h i c a l in t h e i r r e s e a r c h e s or v i e w s ,
h a v e s u p p o s e d t h a t o u r p r o g r e s s h a s been r a p i d in spite of b a n k s , as well
a s in spite of y e l l o w fevers, c h o l e r a s c o n f l a g r a t i o n s , a n d i n u n d a t i o n s ; a n d '
t h a t , on a b r o a d v i e w , b a n k s , no m o r e t h a n these, b e c a u s e a t t e n d a n t o n o u r
c a r e e r , h a v e been t h e c a u s e uf a s b r i l l i a n c y a n d g r a n d e u r .
M a k i n g , t h e n , at t h i s m o me tit. so g r e a t an a d d i t i o n to t h e p r e s e n t l a r g e h a n k
c a p i t a l is likely, i n s t e a d of b e c o m i n g a b l e s s i n g fo t h e c o u n t r y as a w h o l e ,
t o prove 1 a m i n g l e d w e b of w e a l a n d w o , a n d to t u r n t h e s c a l e s in t h e e n d
decidedly against the measure.
L o o k a m o m e n t at the l e s s o n s of e x p e r i e n c e , on t h e b l e s s i n g s of t h i s k i n d
o f b a n k s ot l a r g e capital a n d l a r g e i s s u e s .
H a v e t h e y p r e v e n t e d , or r a t h e r
d i d t h e y not c a u s e t h e e x p a n s i o n s oi 1 7 9 5 , a n d t h e c o n t r a c t i o n s a n d disa s t e r s t h a t folio ved / Did t h e y p r e v e n t t h e d i s t r e s s of 1SU7 a n d ISOi), u n d e r The first U n i t e d S t a t e s H a n k ?
D a i t h e y p r e v e n t the w i d e s p r e a d r u i n i n
1 S 1 0 to IS2IJ or 1S2 1, t h e v e r y p e r i o d s e l e c t e d by t h e c h a i r m a n as i l l u s t r a t i n g t h e i m p r o v e d t i m e s — : i t h e g o o d old t i m e s 7 " — p r o d u c e d by t h e s e c ond United States B a n k ?
H o w did he d e s c r i b e t h e s e t i m e s in 1S2-1, w h e n t h e y w e r e s o m e w h a t
m o r e fresh in h i s m e m o r y t h a n n o w 7
Extract

from

Air.

Cla-fs sj>rrch in 1S2 1, as published
in Giles's
Ilc^iste?^
of thai dal'iVoL
2fb juices S7S, 3 S S .
i'- In e a s t i n g o u r e y e s a r o u n d u s . t h e most p r o m i n e n t c i r c u m s t a n c e , w h i c h
fixes o u r a t t e n t i o n , a n d c h a l l e n g e s o u r d e e p e s t r e g r e t , is Ur1 general
distress
ivhi.ch /j/rraf/cs
the irludc emmtrt/.
It ;s forced u p o n u s b y n u m e r o u s fact:of t h e n ost i n c o n t e s t a b l e c h a r a c t e r .
It is i n d i c a t e d by t h e d i m i n i s h e d e x p o r t s of n a t i v e p r o d u c e ; by t h e d e p r e s s e d a n d r e d u c e d state of o u r foreign
n a v i g a t i o n : by o u r d i m i n i s h e d c o m m e : c c ; by s u c c e s s i v e u n t h r e s h e d c r o p s
of g r a i n , pei ishimr in o u r b a r n s a n d yard-; tor w a n t of a m a r k e t : b v t h e
a l a r m u i g diminution
of t h e c i r c u l a t i n g m e d i u m ; b y t h e numerous
bunkruptcivs,
not l i m i t e d to t h e t r a d i n g classes, b u t e x t e n d i n g to all o r d e r s oi
society", by a u n i v e r s a l c o m p l a i n t of t h e w a n t of e m p l o y m e n t , a n d a c o n s e q u e n t rea'uefinn of t h e w a g e s of labor ; by the r a v e n o u s p u r s u i t after p u b lic s i t u a t i o n s , not for the s a k e of t h e i r h o n o r s , a n d t h e p e r f o r m a n c e of t h e i r
p u b l i c d u t i e s , b u t as a m o a n s of p r i v a t e s u b s i s t e n c e ; by t h e r e l u c t a n t r e s o r t
to t h e p e r i l o u s u s e of P A I ; K K M O X F . V ; by the i n t e r v e n t i o n of legislation
in
i/ic delicate relation
of d e b t o r a n d c r e d i t o r ; a n d , a b o v e all, by t h e l o w a n d
d e p r e s s e d slate of tho v a l u e of almost e v e r y d e s c r i p t i o n of the w h o l e m a s s
of p r o p e r t y of t h e n a t i o n , w i n c h has, on a n a v e r a g e ; sunk
not less
than
fifty p'- r cent, w i t h i n a few y e a r s / 3
I n d e e d , not to d w e l l on t h e s e v a r i o u s p i c t u r e s of w r e t c h e d n e s s a n d r u i n
t h a t followed in t h e t r a i n of t h e s e c o n d b a n k , it is a r e c o r d e d fact, m t h e
r e p o r t to t h e o t h e r H o u s e in 181-52, t h a t q u i t e five a n d a h a l f m i l l i o n s of t h e
c a p i t a l itself oi the b a n k w a s i r r e t r i e v a b l y lost- oi w h i c h w e o w n e d one-







30
seventh ; and all the dividends for two ov three years, soon after it commenced business.
Did the second bank asrain, m 1S25, avert almost unexampled bankruptcies ? Or, in 1834, did it ^mitigate, or rather not produce, the panic and suffering which were represented to agonize the country r Or, in 1S36, did it
check, or rather not stimulate, the "expansions and overtrading which led
to an excess of sixty millions imports over the prior year, and thus produced
the revulsion in credit, and the export of specie, that caused most of the
banks in 1837 to suspend, and the whole community to be overwhelmed
with debt and insolvency 1
Now the delusion seems to be. that, by making another b a n k — t h o u g h on
the basis of that, yet in many respects more exposed to abuse—we are to
o-et rid of all the evils in its train—evils which have so recently closed its turbid career, it is feared, m hopeless b a n k r u p t c y ; marred American credit
abroad : and covered numerous firesides with desolation.
Of what use is it to denounce the officers of that institution as charlatans,
or to exult that the connexion between them and the Government had been
severed before its final explosion, when we hasten now to reinstate their
vicious system of banking, with some additional perils, and proclaim it not
only as the great guide in forming this, but have repeated in its favor here
all the boastful but exploded pretensions—as to its equalizing exchanges,
restoring a uniform country over the whole country, and bringing- immediate relief to all classes—which emanated so constantly from the vanity,
the pertness, the rashness, that long presided over its destinies, and eventually sowed the seeds of its ruin?
Another proud chum in behalf of the former national banks, as well as
this one, is their iniluence to prevent defaults and losses of the public money.
But. in point of fact, our own records show that the last bank, and the former
one, so far from lessening the losses of which gentlemen talk often as connected with the sub treasury, or even the State bank svstem, led to greater
public losses from W97 to ISO!, and again from lSOO to 1811, and from
1817 to 1821, and from 1821 to 1S21—all periods when a United States
Hank was in lull operation, with all its guards and benefits than have occ u r r e d in any similar length of time under the State bank system or the independent treasury. Not one of any liuuniitude i s known to h-ive happened under the latter. Again : colleetors ; Veceivers, disbursing o f f e r s and
merchants giving bonds for duties, have existed, and must exist \ m d e r all
systems; and it appears from an official report to Congress that \ h e losses
by ail those persons combined have, during those periods under a United
(States Bank, been m a far greater proportion to the money collected and
disbursed, than in any other periods whatever from the foundation of the
Oovernmcnt. Besides this, more losses have happened by sino*|e officers in
banks, to their stockholders, in numerous eases, the past icw years, than b y
all the doposite State banks combined as depositories since 1789. T h e r e is
also, another misapprehension on this subject, common to many gentlemen o n
the other side of the house. It is. that the losses of unavailableT funds hi t h e
T r e a s u r y , to the extent of more than a million, happened under the old pet
bank system, from IS 11 to IS Hi, or under the more recent one from 1 8 3 3
to 1S40. But our records show that not a dollar of the public deposites w a s
probably lost under either of them, though some delay and inconvenience
Have been caused by the suspension o( several of the State bank depositories- T h e old failures of them, that have ended in ascertained losses, were

31
a f t e r I S 16, a n d between that and Iir27, n] t h e full tide of the United States
Bank.
A n o t h e r increased danger, rather than relief, by the power to loan in the
p r e s e n t bill tins large capital and tiie depositees, will arise from l e n d i n g out
a t h a z a r d , not o n l y ' t h e ;sl(U)UO,.Oi)U or y 1 0,000.1)00 of L'nited States capital,
b u t its daily m e a n s — t h e current depositos of the revenue. H o w can this
b e justified by gentlemen on the other side, w h o in l b ' J l d e n o u n c e d e v e n
t h e accommodations r e c o m m e n d e d to m e r c h a n t s alone, in conformity to
e a r l y practice ? T h e y n o w u r ^ c loans to all, restricting none, h o w e v e r
gambling", or speculating. or political, except members of Congress, excluded
o n o u r motion, and in all a m o u n t s , except to directors and ollicers ; a n d
t h e y n o w license, if not sancliou, even donations uf the public funds to
evr€^ry favorite except these oiiieers.
H o w e v e r jrreat were their horror and indignation nt the partiality w h i c h
m i g h t be connected, as x'wey supposed, w i t h the leans of the public m o n e y
i n 1 8 3 1 and 1 S O 5 : and h o w e v e r they iu:iy have* jointed in IS*10 in renderi n g : it penal for a n y public ofiicer to loan a dollar of t h a t money, and h a v e
r e p e a t e d the prohibition at this very ses.-ion. in a n o t h e r hill ; \ e!, by the prese n t one, they e n c o u r a g e directly the rrver>e. a n d place the security and return of the public m e a n s in peril oi the winds and w a v e s , w h e r e v e r the
m e r c h a n t may h a v e hazarded them in a n y quarter of the gflobe. and in the
v a r i o u s speculations in town or citj r lots on mere paper, m new m a n u f a c t u r e s , and countless oilier enterprises, where the most h u n g r y a d v e n t u r e r s
m a y , u n d e r the new credit system, choose to expose t h e m .
T h i s is a specimen of the care which we exercise in protecting the peop l e ' s own money, a n d that current revenue on which, depends our ability to
fulfil promptly the public contracts and preserve unbroken the puhho faith.
"Would it not be m u c h more likely to h i n i g relief to the people and tiie Gove r n m e n t , if we were to cut loose from all banks, and continue our present
d i v o r c e from them u n c h a n g e d , except a* the G o v e r n m e n t , like individuals,
m i g h t Hud it useful or convenient i:i any particular ease, or lor a n y special
object, to employ any of them temporarily .;
M u c h less oujjhi the G o v e r n m e n t to e n c o u r a g e b;mks of circ - i!at:uis c o n n e c t e d with larue caphal and trading, as they have, led to tho>e exnansi' ns
a n d contractions in the c u r r e n c y for half a c e n t u r y , w h i c h , at lime^. have
d e s o l a t e d not only this c o u n t r y but {arts nf Kurope. I'assinir 1 y the previous
r u i n m F r a n c e hy ih-fi expansions of 1 / a v ' s Mississippi Hank', we liud (he
B a n k of E n g l a n d , in 1707. suspending ibr more t h a u a q u a r t e r of a c e n t u r y ,
a n d , by its consequent expansions, inevitably changing- the whole value of
p r o p e r t y a n d contracts, a n d n^ain by contractions, to r e s u m e , covering the
c o m m e r c i a l world with wrecks. After its resumption, we have, witnessed
b o t h in that anil this c o u n t r y , u n d e r a i^reat increase of bank capital and
i s s u e s , a constant succession of lluctuulious in prices and business, till most
b r a n c h e s oi commerce have become but little less certain in their results
"than o r d i n a r y jramblinyr, and till n m u v in E n g l a n d are entirely ripe for a
s e p a r a t i o n oi the G o v e r n m e n t from h a n k s of that description. It seems to
be d e e m e d hitrh tune there to protect the c o m m u n i t y from the i m m e n s e
losses incident to so vicious a system.
I read to you, sir. on this subject, some extracts from I'arnell, arnou^ several other writers with similar views ; and he, being" a foreigner, will not be
s u s p e c t e d of a n y unfavorable political bias against banks, arising- from p a t t y
p r e j u d i c e a m o n ^ our.-elve-s. Paruell, on the power of the B a n k of E n g l a n d ,




32
8th and 9th pa^es, after citing T o o k e , Muchet, and others, adds : « T h e s e
several authorities show, not only that the Bonk of England possesses 4he
complete and unlimited control over the currency, but that, in their opinion, it is a power of so vast and important a nature that it ought not to be
intrusted to such a body as the directors of a trading company." Again
h e s a y s : " I f the directors think proper to send into circulation a largeamount of paper, when trade lias a tendency to run into a state of overtrading they will directly enconragc the wildest speculations ; and if, on the
other hand."they should suddenly contract the amount of paper in circulation they will cause even the soundest speculations to fail, and bring about
the ruin of all embarked in them." And he quotes D n i m m o n d on the Currency, page 0 5 , to show that *'• it is indispensably necessary to every plan
that shall'be adopted, that an immediate end should be put to the connexion
which has subsisted between the Government and the bank. Whoever will
be at the trouble of read ins the appalling facts detailed in Messrs. Tooke's,
Muchet's, and [lardcastle's pamphlets, "will be convinced that that connexion has been hitherto productive of nothing but mischief to the country."
i^et us look a moment at the actual returns of banks, and analyze the
fluctuation, in the last six years, in the circulation both of the United States
Bank alone, and of the whole banks in the Union, and which fluctuation is
caused directly by the excessive loans of bank capital. T h e ruinous expansions and contractions which the examination must disclose cannot but
appear to have resulted from excessive loans of that capital, which by this
bill we so largely and so imprudently propose to increase. Much of it, under
a system of mere credit, has, with every favorable or adverse gale, more
readily vacillated, and thus enlarged and diminished prices of labor, produce,
and merchandise, to a most ruinous extent.
T h u s , in the ollicial table before me, sent last year from the T r e a s u r y
Department to the House of Representatives, in the a n n u a l bank report,
(B B.) it appears that the circulation of the United States Bank, from the
1st of January, 1832, being about 21 J, millions, fell in one year to 17^ millions, which is near 20 per cent. It then rose by the 1st of J a n u a r y , 1834,
to 19,:V millions, or 12 per cent.; and fell again, through the panic of 1834,
by 1835, to 17-J- millions, or quite 10 per cent.; and then took the monstrous
Jeap by the 1st of January, 1836, of 33 per cent., or to 23 million*
If these notes had been at that time the only currency or moasure'of value,
the last chansre of one-third in expansion would have increased the price of
all things, if other matters remained the same or equal, to q n i t e one third
Or, in other words, it would have caused as <rreat a chancre t o l b e selling
and buying community, as if the yard slick had Leon reduced j u length to
two feet, the bushel in size to only about 22 quarts, and the avoirdupois pound
in weight to only about J 1 ounces. On the same principle^ the first c h a n f f e o f
20 per cent., or one-fifth, in contraction, would have virtually increased* the
yard to quite seven inches more in length, the bushel to six m a r t s more
and the pound to three ounces heavier. What derangement incalculations
as to contracts at these periods, for a s;iven number of yards, bushels, or
pounds ! T h e y make the extreme variation from the lowest and highest
exceed one-half, or be quite 53 per cent, in only 'our y e a r s !
W h a t revulsions and ruin in matters which come home to lue business and bosoms of
the great mass of t\\a community !
But looking to the whole paper circulation in the United States, in the
same report, on the last page, we witness as great or f.JIl greater fluctuation




33
a n d evils growing 1 out of excessive loans and issues on excessive credits,
u n d e r the form of bank capital.
T h u s , the whole circulation rose from 94 ^ millions on the 1st of J a n u a r y , 1S34, to 103 JV millions by 1835, or nine per cent, increase, instead of
t h e natural increase of about four per cent., in a ratio with our population.
A g a i n : from the first of 1835 to 1S315 it s u d d e n l y increased to 1 4 0 ^ millions', or near 40 per cent., instead of 4. Again : by 1S37, to 149 ^ millions,
or 6 pt3r cent, m o r e : and then s u d d e n l y fell", by 1S38, to 1 1 0 ^ millions, being" 21 p e r c e n t , reduction, instead of the natural increase of 4. Hy 1fc>39,it
started again into a new expansion to 135 tJ0 millions, or near I S per cent.;
a n d fell again, hy IS40. to only 100 ^ millions, or near 21 per cent.., instead
of the due increase of 4 per cent.
Yet our candid opponents attribute all the consequences of these ruinous
fluctuations, produced in the bank parlor, to the past administration ; as if
t h a t could have had profit, pleasure, or prosperity, by a n y s u c h injuries, and
h a d not been interested to prevent and reduce them by evc?ry legitimate
m e a n s . T h e s e expansions have had a like effect in r a i s i n g prices at
times, with the real addition to specie, w h i c h o r r u r r e d after the discovery of
America. T h a i raised them near three-fourths in a m o u n t . (See Gallatin
on C u r r e n c y , 1830. p. 7.) Here, in 1S35 a n d 1 S3(3 the expansion would
t e n d to raise t h e m four-tenths, or a p p r o a c h i n g one-half; while, in 1838,
t h e revulsion would tend to lessen them, as if one-fifth of all the specie in
t h e world was returned to the mines w h e n c e it c a m e . T h e prices would
t h e r e b y be reduced nearly 21 per cent., if no other causes intervened to
p r e v e n t it.
T h e destruction and loss even of bank capital produced by these fluctuations in the last fifty years lias been computed at quite $72,000,1)00 ; the
loss by depreciated paper, and deposiies and balances in suspended as well
a s broken banks, at more than $ 1 3 2 , 0 0 0 , 0 0 0 ; a n d the loss by the sacrifices
of property and sudden changes in prices at a s u m almost incalculable, but
certainly in only the last twenty years exceeding $150,000,000.
(Treasury
report to Senate, F e b r u a r y , 1S41, on losses by banks. See report of committee in House of Representatives, on banks, 1832.) T h e s e results are
t r u l y appalling:, but they are not believed to be exaggerated w h e n presenti n g one side of the account.
T h e consequences of these expansions in circulation and in the loans
consequent on the great increase of b a n k capital, w h i c h 1 have before all u d e d to, a n d which I am a n x i o u s by this motion to prevent any addition
to at this time, have been also most fatal to the e x p e n d i t u r e s a n d indebtedn e s s of individuals and States. O u r imports exceeded the exports for n e a r
ten venrs after the late Bank of the United States got into full operation in
1818 only about $7,000,000 a n n u a l l y on an average, or a fair profit and ret u r n ; and then rose to an excess of more t h a n #20,000,000 in the n e x t ten
y e a r s annually, and in 1S36 to one of §01,000,000 ! (See a n n u a l report on
finances, December, 1 8 3 9 ; also Gallatin on B a n k i n g , p. 26.)
T h e result of expansions in issues and discounts, a n d consequent overtrading, has been State debts nearly equal to these disastrous excesses in imp o r t s . T h e fall of prices, and the bankruptcies thus produced, a n d not
caused by political events, are most apparent, a n d should deter us from
a d d i n g a n y new fuel to the flame. VVe should not, u n d e r an excess of
stimulants, administer still more. T h e evil began in the last year to be in
t h e progress of gradual correction. O u r exports have been regularly a u g -




34
mentinor for several years, and d u r i n g the last year exceeded the imports
near $ 2 5 , 0 0 0 , 0 0 0 — a fact unparalleled in our history. O u r tonnage is larger
t h a n at most former periods; m o n e y plenty for business purposes, interest
low, and every t h i n g indicating p e r m a n e n t prosperity, if not prevented b y
party tinkering at this session with the c u r r e n c y and business, by n e w banks
and new schemes of debts and donations.
You m a y call the banking system of loans arid circulation a steam power,
if you please, in the currency ; but it is a steam power without the skill and
care yet acquired to prevent constant explosions and ruin. I n enlarging it
hastily and crudely, we are like children playing with edge tools, or clowns
sporting with a locomotive,
The^success of this motion to strike out all the capital, w o u l d open the
door to have a fiscal institution
organized ; which is the great desideratum,
and that would be exposed to none of the perils arising from expansions a n d
contractions in either loans or issues.
If it was confined merely to the collection, keeping, transfer, and disbursement of t h e public money, it could insure every legitimate constitutional obj e c t ; b u t if Congress should suppose that public convenience required the
formation of some kind of currency beside specie to be used in the largest
a n d most distant operations, this could readily be effected without a n y bank*
i n g powers or privileges, by merely m a k i n g the T r e a s u r y drafts d r a w n in
specie, dollar for dollar, receivable, at other places found convenient, for public dues. And to these could be added the receipt of mint certificates for
specie, deposited at certain convenient places, if deemed expedient to enlarge
this kind of paper—the highest in security and representative value w h i c h
the art of man can devise. It would be like our representative value here
and in the other House, as members of Congress, instead of the sterling coin
— t h e people themselves convened. W h i l e w e faithfully represent their
views, opinions, and wishes, we may well pass current for them, a n d be r e ceived readily instead of t h e m ; but w h e n disregarding either, we ought to
be, and in justice usually are, discredited and crossed as worthless representatives. But I forbear dwelling on this suggestion further, as in September,
1837, I had the honor to propose a similar^measure to the consideration of
Congress, in connexion with the independent treasury, w h i c h is n o w on
our files.
T h e prevailing idea in E u r o p e at this time, on this subject, is, that all paper
issues should be made by some power or establishment distinct a n d separate from that which has an interest in increasing injudiciously paper issues
One could thus be adopted, and would fend to place a large a m o u n t of our
paper currency on the soundest basis, and, at the same time, w o u l d avoid
all the dangers and evils which have occurred in both hemispheres from
b a n k s of circulation and excessive loans on mere credit capital. T h e s e a r e
measures not like L a w ' s Mississippi scheme, or the South Sea bubble, o r
like land banks, and various mere paper machines, but corrective, stringent,
and calculated to check every speculative and delusive scheme.
If the Government, as a Government, cannot exercise a d u e control in
some such way, by m a k i n g specie, and specie alone, the basis of paper, it
shows itself incapable of government. And if it cannot keep safely the coin
on w h i c h the paper issues, which is the groat risk, w h e n aided by all t h e
ingenuity of locks and bolts ; all the vigilance of faithful public s e r v a n t s ; a l t
t h e penalties of the penitentiary, and the checks of oaths, and double k e e p e r s ; then it must have less sagacity than the ancients, who resorted to D e l -




35
p h o s a n d t h e capitol itself as depositories, a n d i n v o k e d t h e s a c r e d a s s i s t a n c e
of religion for s e c u r i t y .
N o t h i n g b y w a y of p r e c a u t i o n — n o t h i n g t h e dictate of e x p e r i e n c e , or b e a r i n g the i m p r e s s of s o u n d r e a s o n — n o t h i n g - w h i c h w e c a n obtain from books,
o r t h e most skilful financiers a n d b a n k e r s , as w i t n e s s e s called before us} or
b y c o r r e s p o n d e n c e ; n o t h i n g in K u r o p e or A m e r i c a c a l c u l a t e d to t h r o w l i g h t
on t h e subject, or i n c r e a s e the p u b l i c s e c u r i t y , o u g h t to be o v e r l o o k e d before
i i n a l action on so vital a m e a s u r e .
W e m u s t seize on a h i n t h e r e , a n d a
i a c t there : an i m p r o v e m e n t tested in o n e S t a t e , a n o t h e r in a n o t h e r ; place
a safety-valve on o n e p o w e r , a s t e a m - g a u g e aside a n o t h e r , a b a l a n c e - w h e e l
over another; a n d move forward with the utmost caution.
I3ut ; itistead of these p r e c a u t i o n s , w e seem, on t h e c o n t r a r y infatuated, a s
in the m e r i n o s h e e p m a m a t h i r t y y e a r s ago, or in the. m o r e recent m o r n s
m u l t i c a u l i s fever, a n d a n x i o u s to p u s h e v e r y t h i n g too fast a n d too far.
W e proceed in a m a n n e r h a s t y a n d u n d i g e s t e d to m a k e a new p u b l i c
e s t a b l i s h m e n t to last in p o w e r t w e n t y y e a r s , or a w h o l e g e n e r a t i o n of o u r
r a c e , and b e y o n d the period of most of o u r o w n frail lives, as if we w e r e
p a s s i n g s o m e mere a p p r o p r i a t i o n for a s i n g l e year, or o r g a n i z i n g s o m e est a b l i s h m e n t s w i n c h w e w e r e , on t h e face ot it, p e r m i t t e d to a m e n d , i m p r o v e ,
or rcjjc-al) at the next or a n y o t h e r session of C o n g r e s s , till the e n d of time.
R e p e a l did 1 say, sir? Y e s . S o far from tins bill b e i n g left open, like o t h e r s
i n t h e o r d i n a r y c o u r s e of legislation, w i t h n o r e s t r a i n i n g c l a u s e a g a i n s t newl a w s of a s i m i l a r a n d i m p r o v e d c h a r a c t e r on the s a m e subject, a n d therefore liable to h a v e a d d i t i o n s or s u p p l e m e n t s a n d m o d i f i c a t i o n s m a d e , as
e x p e r i e n c e m a y s h o w to he proper, it e x p r e s s l y forbids t h e p a s s a g e of
a n y similar act for t w e u t v y e a r s ; a n d a n y repeal of this l a w , s u g g e s t e d
on this side of the H o u s e to be legal w h e n e v e r d e e m e d e x p e d i e n t for t h e
p u b l i c interests by a m a j o r i t y of C o n g r e s s , is d e n o u n c e d a s seditious,
r e v o l u t i o n a r y , a n d J a c o b i n i c a l . ( h i this point I a m not to be m i s u n d e r stood, h o w e v e r I m a y be m i s r e p r e s e n t e d .
I say n o t h i n g on this occasion i r r e l e v a n t or g o i n g b e y o n d t h e subject.
I offer no o p i n i o n u p o n vested r i g h t s in p r i v a t e life, or c h a r t e r e d r i g h t s in
private companies.
I s p e a k m e r e l y to the record before, me — the p r e c i s e
p o i n t in c o n t r o v e r s y : a n d let m e tell g e n t l e m e n opposite— let the c o m m u n i t y a n d capitalists on both sides of the A t l a n t i c take w a r n i n g — t h a t this
bill p u r p o r t s to be on a p u b l i c m a t t e r —a fiscal a g e n c y for the T r e a s u r y D e p a r t m e n t ni the United States.
It is o n e not a s k e d for to p r o m o t e the priv a t e interests of a few i n d i v i d u a l s , a n d a g r a n t of c h a r t e r e d r i g h t s m a d e to
t h e m (as a n i n s t a n c e ) for o p e n i n g s o m e small mi no or stone, q u a r r y o w n e d
e x c l u s i v e l y by t h e m ; but it is r e c o m m e n d e d by t h e h i g h officers ot the G o v e r n m e n t as a m e a s u r e r e q u i r e d for the p u b l i c c o n v e n i e n c e , a n d to c a r r y o n
satisfactorily the public a d m i n i s t r a t i o n o( affairs.
It is one in w i n c h a majority of the s h a r e s of stock c r e a t e d m a y b e l o n g
to t h e U n i t e d S t a t e s ; a n d a l a r g e portion m u s t so b e l o n g , a n d w h i c h , aft^r
c e r t a i n d e d u c t i o n s , m u s t p a y into t h e T r e a s u r y all its profits ; w h i c h is
p l a c e d at t h e seat of G o v e r n m e n t , a n d u n d e r c e n t r a l c o n t r o l , like o t h e r
a g e n t s a n d b u r e a u s of the d e p a r t m e n t s ; w h i c h is m a d e a m e n a b l e to C o n g r e s s itself, as well as t h e h e a d of the ' T r e a s u r y , for m a n y of its d o i n g s ,
a n d open to t h e i r inspection a n d visitatorial p o w e r for ail of t h e m ; " w h i c h ,
in fine, is m a d e t h e depository of all the p u b l i c t r e a s u r e ; its n o t e s r e c e i v a ble for ah t h e public d u e s ; a n d o u r m o n e y in its v a u l t s p r o n o u n c e d to be
i n the T r e a s u r y itself of the U n i t e d S t a t e s ; a n d n o n e of its p r o v i s i o n s c o n -




36
stitutional u n d e r a n y pretence, except on the g r o u n d that they are necess a r y to accomplish important public objects. Yet, after all this, we are to
be told that such an act is not liable to be c h a n g e d by Congress, or repealed, w h e n e v e r a majority shall deem the m e a s u r e required by the public interests, t h o u g h it is public in its origin, public in its design, public i a
its structure- public in its control, and public in its operations.
Under
these circumstances, common sense, as well as common justice to the
existing c o m m u n i t y and posterity, both require that, like all other public
laws w h e t h e r in the form of constitutions, ordinances, charters, resolutions,
or acts of Congress, it be subject to a m e n d m e n t and repeal, as n e w lights
or the opinions of a le<jal majority m a y d e m a n d .
Society, in its progress, with n e w wants, n e w generations, n e w discoveries, rides over all public obstacles in the path of improvement.
And
while it should not and will not encroach on any private rights without
u r g e n t occasion, and without furnishing ample indemnity, it m u s t and will
sweep away, or a m e n d , enlarge, and better every public institution within
its reach, w h a t e v e r be the form of its creation, or the subject on which it
operates.
T h e decision in the D a r t m o u t h College case, if sound constitutional Jaw ;
( w h i c h m a n y doubt,) does not in the slightest degree i m p u g n this doctrine.
Hecause, there, the corporation originated in a private application ; was
granted for a private charitable p u r p o s e ; had no funds at first, except from
private sources and donations : and was not placed u n d e r public control,
nor used by the G o v e r n m e n t for a n y public object.
So, if the present bill established a private bank for this District—for
private gain and on private memorials—neither in its structure, operations,
nor design, connected with -my department Of the G o v e r n m e n t , nor placed
u n d e r its special control and visitation : and Congress should choose to
invest $>50,u00 or ;^ 100,000 in u s stock, as it might choose to do in some
m a n u f a c t u r i n g or trading corporation,— I do not contend, however foolish
a n d unadvisablo were such investments, that they t h u s made these private
corporations public oners, or open, like public ones, to repeal. I say n o t h i n g
on this point one way or the other, as it is not before us. Hut the two
cases are as different in their character as darkness is from lioht • and the
doctrines m the W a r r e n Hridgc cause, decided by the S n p n u n S C o u r t since
the D a r t m o u t h College opinion, recognise and illustrate fully the*e distinctions, and, in my view, justify fully The liability of the p r e s e n t e r t\ repeal
Yes, s i r ; *ho hand wr:f i;:g is on the wall ; and he that r u n s mayread tfi.it repeal is liable to :. dnw a measure of this kind. U must be n u t a ted, from its legal liability to repeal, and from The eonviction —de*»p rooted
and widespread a m o n g the d e m o - r a c y oi the c o u n t r y — t h a t the establishment
of such a bank as this must also be regarded as unconstitutional, and therefore subject to be repealed w h e n e v e r feasible. T h e sovereign State w h o s e
rights and mierests are in part placed hera in my care, a n d whose wishes
I am not likely to overlook while faculties or life e n d u r e , that State h a s
solemnly resolved that such an act of legislation, being public as well as
unconstitutional, is repealable, and ought to be repealed.*
Kveh in the charter proposed in 1S;32, motions were made to insert in t h e
act itself, incorporating* a United States Bank, that it should not e x c l u d e
ihe establishment of other similar institutions at a n y time deemed useful by
Congress, nor be deemed exempt from repeal. T h e y enrolled in their favor
several lofty names in our history, and failed by only a few votes ; — w h e t h e r




37
f r o m a belief that the power existed without a n y express provision, or from
o t h e r causes, is to me unknown.
B u t the conviction has strengthened daily, and will continue so to do 5 thai
e a c h generation must take all suitable steps to secure its own welfare ; that it
is oppressive and unjust to bind posterity in bondage, or overload it with imp r o p e r burdens ; and that, however regardful all ought to be, as a matter of
fr-reat public policy, not to violate private contracts, or depart from the public
a i t h pledged constitutionally and legally, (as in any repeal here we should
n o t avoid any loan contracted :) yet that we are prone to be too meddlesome
i n legislating for private matters, and in mingling (as in this bill) private
d e a l i n g s for gam with the mere governing and controlling power over the
w h o l e of society.
It has been well said that society, if let alone, can alone work out most improvements. £: T h e world is77
governed too much," and u the best government
is that which governs least.
T h e country within a few years has g r o w n
m u c h wiser on these topics. Let them alone, and all will come right. Hut
if the majority chose to agitate, and to abandon a sate and constitutional
fiscal system, which exists iti the independent treasury, and not replace it
"by another in the State banks—both of which are less exceptionable on
m a n y accounts than the present bill, and both of which can in various w a y s
b e materially improved : if the majority chose to do this, and in high party
l i m e s , and under party impulses, if not for party purposes, elect to establish
a public fiscal agency which shall possess the banking powers attendant on
a large capital and circulation, and invite individuals to risk their fortunes
on such an ill-judged and hazardous attempt,-—the latter must not complain.
in the end, if their interests art: not forfeited, but returned, and made to
follow die fate of their political partner, for whose paramount objects, wishos\
e n d s , and aims, this public institution is to be established.
T h e chairman thinks this enormous capital, which 1 propose to strike
o u t , will be taken up or subscribed, notwithstanding the threats of repeal,
a n d notwithstanding an opposition winch he seems to consider so u n w a r r a n t a b l e . Hut let me teli that gentleman, the resistance to this measure is
not by violence, bloodshed, or rebellion : but it is by a :: weapon firmer set,
a n d better than the bayonet"- -by the ballot-box. It is through peaceful
legislation. It is not in the spirit of agrananism or levelling. It is not.
without high authorities and ample reasons.
T h e opposition to this measure imbodies much of that part of the scientific corps of the country which has made matters of finance, banking-, and
the

c u r r e n c y , a t o p i c of r e s e a r c h .

It i m b o d i e s a l m o s t

the whole

damo-

c r a c v in solid column. It imbodies many from the other side, of the sufferers and victims by the monstrous abuses in banking which of late year?
have 1 spread desolation round so many liresides.
It imbodies even many sound political economists, practical bankers,
intelligent m e r c h a n t s and talented editors, in the ranks of our opponents;
because, though not opposed to such an institution in the abstract, they
deern this one premature, ill-timed, ill-digested, and with a location a n d
capital dangerous alike to public virtue aiTd public liberty.
Yet, under all tins, the chairman urges on our part silent acquiescence,
if not support. He inculcates repose* repose.
W h e n out of power, that
o-cntleman's motto was, agitation ! agitation ! He attacked every tiling—
supported nothing. But now, when schemes the most dangerous and u n constitutional are urged upon u s — w h e n e r e r y doubtful power is to be







38
usurped and pushed to the utmost,—when it is avowed in the public press
that a return to the principles and policy of Alexander Hamilton is meditated and in progress,—can it be expected that all the steady opponents of
those principles for half a century are to be lulled into deathlike repose!
Can it he hoped that the representatives of the sterling democracy of the
land, under such assaults and omens of ruin as a permanent national debt,
increased taxes, and augmented expenditures, are to sleep at their posts /
that they are to lick in q u i d the hand that smites or gags them ; crouch
to oppression like the ignoble J lindoo ; succumb tamely to every species
of derision ; and, tinder aggressions like these, polluted and polluting, practise only repose ! repose!
J,et me admonish gentlemen on the other side, (hat if they believe our
principles, habits, or faith, could make us submit, with the abject silence of
•slaves, to encroachments like these, they possess less sagacity than is usually
attributed fo (hem.
(^od loi bid that repose under oppression should ever characterize any
portion of the free born race from which we spring. You mistake us. You
will find no repose, sir, wliilo u r g i n g upon the country a system of flagrant
measures, of which this bank constitutes one* not the least "objectionable.