Bank of the United States.
Mr. Benton rose to ask leave to introduce the following resolution, of which he had given notice some days ago, viz.A joint resolution declaratory of the meaning of the charter of the Bank of the United States on the subject of the paper currency to be issued by the bank.
Be it resolved by the Senate and House of Representatives of the United States of America in Congress assembled,
That the paper currency, in the form of orders, drawn by the presidents of the offices of discount and deposite on the cashier of the Bank of the United States, is not authorized by any thing contained in the charter, and that the said currency is, and is hereby declared to be, illegal; and that the same ought to be suppressed.
Mr. Benton rose to ask leave to bring in his promised resolution on the state of the currency. He said he had given his notice for the leave he was about to ask, without concerting or consulting with any member of the Senate. The object of his resolution was judicial, not political; and he had treated the senators not as counsellors, but as judges. He had conversed with no one, neither friend nor adversary; not through contempt of counsel, or fear of opposition, but from a just and rigorous regard to decorum and propriety. His own opinion had been made up through the cold, unadulterated process of legal research; and he had done nothing, and would do nothing, to prevent, or hinder, any other senator from making up his opinion in the same way. It was a case in which politics, especially partisan politics, could find no place; and the progress of which every senator would feel himself retiring into the judicial officebecoming one of the judices selectiand searching into the stores of his own legal knowledge, for the judgment, and the reasons of the judgment, which he must give in this great cause, in which a nation is the party on one side, and a great moneyed corporation on the other. He [Mr. B.] believed the currency, against which his resolution was directed, to be illegal and dangerous; and so believing, it had long been his determination to bring the question of its legality before the Senate and the people; and that without regard to the powerful resentment, to the effects of which he might be exposing himself. He had adopted the form of a declaratory resolution, because it was intended to declare the true sense of the charter upon a disputed point. He made his resolution joint in its character, that have the action of both Houses of Congress; and single in its object, that the main design might not be embarrassed with minor propositions. The form of the resolution gave him a right to state his reasons for asking leave to bring it in; the importance of it required those reasons to be clearly stated. The Senate, also, has its rights and its duties. It is the right of the Senate and House of Representatives, as the founder of the bank corporation, to examine into the regularity of its proceedings, and to take cognizance of the infractions of its charter; and this right has become a duty, since the very tribunal selected by the charter to try these infractions had tried this very question, and that without the formality of a scire facias or the presence of the adverse party, and had given judgment in favor of the corporation; a decision which he [Mr. B.] was compelled, by the strongest convictions of his judgment, to consider both as extrajudicial and erroneous.
The resolution, continued Mr. B., which I am asking leave to bring in, expresses its own object. It declares against the legality of these orders, AS A CURRENCY. It is the currency which I arraign. I make no inquiry, for I will not embarrass my subject with irrelevant and immaterial inquiriesI make no inquiry into the modes of contract and payment which are permitted, or not permitted, to the Bank of the United States, in the conduct of its private dealings and individual transactions. My business lies with the currency; for, between public currency and private dealings, the charter of the bank has made a distinction, and that founded in the nature of things, as broad as lines can draw, and as clear as words can express. The currency concerns the public; and the soundness of that currency is taken under the particular guardianship of the charter; a special code of law is enacted for it : private dealings concern individuals : and it is for individuals, in making their bargains, to take care of their own interests. The charter of the Bank of the United States has authorized, but not regulated, certain private dealings of the bank; it is full and explicit upon the regulation of currency. Upon this distinction I take my stand. I establish myself upon the broad and clear distinction which reason makes, and the charter sanctions. I arraign the currency ! I eschew all inquiry into the modes of making bargains for the sale or purchase of bills of exchange, buying and selling gold or silver bullion, building houses, hiring officers, clerks, and servants, purchasing necessaries, or laying in supplies of fuel and stationery.
A preliminary inquiry might have been resorted to, and was for some time intended, to know from the bank directory whether these orders were issued as a currency under the charter, and what exemptions were claimed for them from the restrictions provided in the charter, for a currency of promissory notes. But this preliminary inquiry has become unnecessary. A decision has been made in a high branch of the federal judiciary the United States' circuit court in Philadelphia affirming the legality of this species of currency, and stating the exemptions claimed for it; and this decision has been received with a degree of approbation by the bank directory, which announces it to be accordant with their own opinions. Inquiry of the directory is, therefore, unnecessary. A resort to the opinion of the court, and that opinion has been authoritatively published, may be considered as the answer of the bank, and, what is far more material, as the law of the land until reversed.
Here is the opinion, that part of it which relates to these orders as a currency; for I omit all that relates to the trial of the prisoner for the counterfeiting one of these orders:
"The only restriction on the issuing of any paper is in the proviso to the 12th fundamental article in the 11th section of the charter. The bank can make no bill obligatory, or of credit, under its seal, for the payment of a less sum than five thousand dollars; the bills or notes issued by order of the corporation, signed by the president and cashier, are made as binding and obligatory on the bank as those of private persons, but all their bills and notes must be payable on demand, unless of a sum not less than one hundred dollars, and payable to order; none of these restraints apply to an order or check; the notes or bills alluded to are such as contain a promise to pay money, and the bills obligatory, are such only as are under seal, and for sums not less than five thousand dollars.
"The bank is left free to contract debts by any other mode than by their promissory note or an obligation under seal, with no other limitation than is contained in the 8th fundamental article, which is merely as to amount, the only effect of which is not to exempt the bank from liability for the excesses, but to make the directors, under whose administration it shall happen, personally liable.
"The act of establishing a branch is, per se, the creation of an agency; it is an authority not only to the extent of the regulations under which the agent acts, but to the extent of all acts and transactions of the officers of the branches, which the bank have been in the habit of adopting and confirming, on the same principle that individuals are liable on the contracts of their wives and servants, who have been permitted to deal on their credit, and in their names; or a merchant, whose clerk is in the habit of writing letters, signing notes, bills, and checks, in his name, though without any written or express authority, by the adoption and recognition of which he authorizes the public to consider his clerk as his agent, authorized to do in future what he has been in the habit of doing with his knowledge and assent.
"It would be strange indeed that the bank should not be liable for checks or orders, drawn by its agents, at their own branches, which not only form a very important item in the currency of the country and the operation of the branches, but which the bank have, for years, daily ratified and sanctioned by their payment: the uniform course of business transacted between the bank and its branches furnishes such a strong legal inference and presumption of its being authorized by the regulations under which they have been established, that the burden of proof to the contrary is clearly thrown on the bank, or any other person who would attempt to show that the paper was not obligatory upon them. It would be a severe reflection on the bank to suppose that they would for a moment refuse payment of these checks and orders; and our system of jurisprudence would deserve little of public respect or confidence, if the law would not coerce it.
"By the 17th article, the bank is bound to pay in gold and silver all its notes, bills, and obligations, and all deposites in the bank or its offices; and the proviso enacts, that Congress may enforce and regulate the payment of other debts under the same penalties as are prescribed for the refusal to pay its notes, bills, obligations, and deposites.
"The mode in which the bank contracts a debt, the shape it assumes, or the places where contracted, is of no importance. The offices being its agents, the debts contracted by them become the debts of the corporation, imposing a duty to pay them, which may be done at or by the branches or the bank. If the payment is made in coin, the debt is extinguished; if made by a draft, order, or check, the debt remains until they are actually paid. Unless the holder expressly takes them as payment, and at his own risk, they create a new duty or obligation, which the bank is as much bound to perform as the old one for which it is intended to make satisfaction. It is a matter of mutual convenience, whether the old debt or duty shall be extinguished by payment or taking paper, whether in their promissory notes of the bank, or orders or checks drawn upon it. They may be in large drafts or orders for remittance, or small ones for currency or circulation, and in any form, with or without ornaments, devices, or marks. Whether they resemble, in these particulars, the notes of the bank, is immaterial; their substance and legal effect are the same, they create a new debt or duty, obligatory on the bank. It is bound to honor all the paper which it issues or gets into circulation by its authority or agents."
After reading the extracts, Mr. Benton continued. I take the substance of this decision, Mr. President, to be
1. That these branch bank orders are legal currency, under the charter of the Bank of the United States.
2. That the bank may lawfully issue this description of currency to the whole amount of its capital stock.
3. That this currency is free from every regulation, restriction, limitation, and provision, contained in the charter, except the single limitation as to the maximum amount to be issued, to wit, thirty-five millions of dollars.
4. That the bank may employ what agents she pleases in signing and issuing this currency.
I take this to be the substance of the decision. Justice to that decision, and the fair conducting of my own argument, will require me to examine the grounds upon which the court proceeded. These grounds are found in two clauses of the charter; one clause in the 28th section; the other in the 8th fundamental article of the constitution of the bank. The penal clause in the 18th section against counterfeiting "checks or orders," and the phrase "other contract," in the 8th fundamental article, comprise those grounds. I will examine each in its turn; but must first make a stand in the name of all that is safe and sure in the administration of law, protesting, as I do hereby protest, against going into a penal section, or into the construction of a phrase, to find a power to issue currency, and that without restrictions, when the charter had given that power in the proper place in express words, and subject to numerous and vital restrictions. I make this protest, not from the least apprehension of finding in a penal clause, or in the construction of a detached phrase, the great power for the exercise of which the bank was created, that of is suing a paper currency to the people of these States, but as an act of justice to the constitution of the bank, to its cautious prohibitory preamble, and to its seventeen fundamental articles. I make it in the name and upon the behalf of the lawful rights of other parts of the charter.
Let us now proceed to the examination; and, first, let us read this 18th section, the whole of it, as the only fair way to find its meaning.
Sec. 18. And be it further enacted, That if any person shall falsely make, forge or counterfeit, or cause or procure to be falsely made, forged or counterfeited, or willingly aid or assist in falsely making, forging or counterfeiting any bill or note in imitation of or purporting to be a bill or note issued by order of the president, directors and company of the said bank, or any order or check on the said bank or corporation, or any cashier thereof; or shall falsely alter, or cause or procure to be falsely altered, or willingly aid or assist in falsely altering any bill or note issued by order of the president, directors and company of the said bank, or any order or check on the said bank or corporation, or any cashier thereof; or shall pass, utter or publish, or attempt to pass, utter or publish as true, any false, forged or counterfeited bill or note purporting to be a bill or note issued by order of the president, directors and company of the said bank, or any false, forged or counterfeited order or check upon the said bank or corporation, or any cashier thereof, knowing the same to be falsely forged or counterfeited; or shall pass, utter or publish, or attempt to pass, utter or publish as true, any falsely altered bill or note issued by order of the president, directors, and company of the said bank, or any falsely altered order or check on the said bank or corporation, or any cashier thereof, knowing the same to be falsely altered with intention to defraud the said corporation or any other body politic or person; or shall sell, utter or deliver, or cause to be sold, uttered or delivered, any forged or counterfeit note or bill in imitation, or purporting to be a bill or note issued by order of the president and directors of the said bank, knowing the same to be false, forged, or counterfeited; every such person shall be deemed and adjudged guilty of felony, and being thereof convicted by due course of law, shall be sentenced to be imprisoned and kept to hard labour for not less than three years, nor more than ten years, or shall be imprisoned not exceeding ten years, and fined not exceeding five thousand dollars. Provided, That nothing herein contained shall be construed to deprive the courts of the individual states, of a jurisdiction under the laws of the several states, over any offence declared punishable by this act.
I do deny, Mr. President, that any power, of any kind, is given to the bank by this section. It is a mere provision to punish the violation of existing rights. So far as the issues of bills or notes are mentioned, it is a recital of what the bank was authorized to do in the 12th fundamental article of its constitution; so far as checks and orders are mentioned, it is a recital of the pre-existing right which every depositor possesses. The object of the section is to provide for the security of existing rights; namely, the chartered right of the bank to issue bills or notes, and the inherent right of depositors to draw for their own money. This is the object of the section; and the violation of either of these rights is made felony. Both rights are protected, but they are not granted; neither are they confounded. The distinction is clear between them, between the currency which is to issue from the bank, and the orders which are to be drawn upon it. The separation is complete, the contrast is perfect, the antithesis is regular, the contradistinction is manifest, between these two classes of paper. The whole frame of the section, the structure of every member of the long sentence which composes it, the natural and obvious meaning of every word in every sentence, establishes and defends this clear, and emphatic distinction. Five times in five different members of the sentence, the same form of expression, the same order of construction, and the same repetition of words, regularly occur. Five times the line is drawn, the distinction is set up, between the bills or notes which are to be issued by order of the bank, and the checks and orders which are to be drawn upon it.
The two classes of paper are kept distinct, and cannot be confounded. Let any gentleman try. Let him include, if he can, the words "checks and orders" under the action of the verb which governs the issuing of the bills or notes of the bank. The thing cannot be done. It is a grammatical impossibility. I repeat it, the clear, undoubted object of the section is, not to grant powers, but to protect rights. Its object is penal, not concessive; to punish, not to grant.
This is my view, Mr. President, of the 18th section. Does any gentleman doubt the correctness of that view ? Then let him follow me into the next section the 19th still occupied with the crime of counterfeiting, and taking up the inchoate class of offences involved in the process of perpetrating the crime. The authorized currency of all banks, in all countries, is protected from the process, from the progressive course, of being counterfeited, as well as from the consummation of the crime itself; but this protection is never extended to private and individual papers. A man is punished for having in his possession, with intent to use it unlawfully, the plate from which bank notes are struck, the notes themselves in blank, and even the kind of paper which is used for bank notes. Not so in the case of private or individual writings. The reason is obvious. Banks have peculiar plates and paper for their notes which are to constitute currency; neither individuals, nor banks, have any thing peculiar for their private and individual writings. The plate and paper with which a bank note is to be counterfeited, can be known and identified as such; the goose quill pen, the common types, and the common writing paper, which are used for all the ordinary transactions of life, cannot be known or identified. Upon this distinction turns all the law upon the subject of punishing the inchoate offence of counterfeiting; upon this distinction turns the 19th section of the charter; upon this distinction it is that the currency of the bank, its bills or notes, are protected from the process of being counterfeited, and the orders and checks of depositors are unnoticed. Listen to the section.
Sec. 19. And be it further enacted, That if any person shall make or engrave, or cause, or procure to be made or engraved, or shall have in his custody or possession, any metallic plate, engraved after the similitude of any plate from which any notes or bills, issued by the said corporation, shall have been printed, with intent to use such plate, or to cause, or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the said corporation; or shall have in his custody or possession, any blank note or notes, bill or bills, engraved and printed after the similitude of any notes or bills issued by said corporation, with intent to use such blanks, or cause, or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the said corporation; or shall have in his custody or possession, any paper adapted to the making of bank notes or bills, and similar to the paper upon which any notes or bills of the said corporation shall have been issued, with intent to use such paper, or cause, or suffer the same to be used in forging or counterfeiting any of the notes or bills issued by the said corporation, every such person, being thereof convicted, by due course of law, shall be sentenced to be imprisoned, and kept to hard labour, for a term not exceeding five years, or shall be imprisoned for a term not exceeding five years, and fined in a sum not exceeding one thousand dollars.
What fatuity, or unkindness, in the framers of this charter ! What inattention to this constructive currency, created in the 18th section, and abandoned in the 19th ! Eight times the bills or notes, issued by order of the bank, are named and protected. Eight times the checks and orders are passed over without a word. No protection for them against the process of being counterfeited. The plates, the blanks, the paper, for their imitation, may be paraded in the face of the world. The whole process may be carried on in the face of the bank; and no legal authority to interrupt the forgers, to seize their unfinished work, or to arrest their persons. Can any thing be more emphatic of the sense of the Congress which framed the charter ? Could words be more expressive than this silence ? Could a positive declaration fix these checks and orders more completely in the class of those private writings which have no peculiar plates, no blanks, no peculiar paper ?
The second ground on which the court relied, is the phrase, "other contract," as used in the 8th fundamental article of the constitution of the bank. In resorting to this phrase, the court has at least got into the right chapter, but missed the verse; it has got into the constitution; it has got among the seventeen articles, but it has not got to the article which grants powers, but the one which recites, and that for the purpose of limitation, the powers which are elsewhere expressly granted. To crown this error, the court has again had recourse to construction, and has given an import and meaning to the phrase "other contract," which it cannot be made to endure, either in common parlance, nor in legal acceptation, nor without reducing the rest of the charter to a blank. We will read the article.
The total amount of debts which the said corporation shall at any time owe, whether by bond, bill, note, or other contract, over and above the debt or debts due for money deposited in the bank, shall not exceed the sum of thirty-five millions of dollars, unless the contracting of any greater debt shall have been previously authorized by law of the United States. In case of excess, the directors under whose administration it shall happen, shall be liable for the same in their natural and private capacities: and an action of debt may in such case be brought against them, or any of them, their or any of their heirs, executors, or administrators, in any court of record of the United States, or either of them, by any creditor or creditors of the said corporation, and may be prosecuted to judgment and execution, any condition, covenant, or agreement to the contrary notwithstanding. But this provision shall not be construed to exempt the said corporation or the lands, tenements, goods, or chattels of the same from being also liable for, and chargeable with, the said excess.
Such of the said directors, who may have been absent when the said excess was contracted or created, or who may have dissented from the resolution or act whereby the same was so contracted or created, may respectively exonerate themselves from being so liable, by forthwith giving notice of the fact, and of their absence or dissent, to the President of the United States, and to the stockholders, at a general meeting, which they shall have power to call for that purpose.
What is the meaning of this article ? Is it to grant authority to the bank to make bonds, issue bills or notes, and form other contracts ? No, sir; authority to do all these things is elsewhere granted, namely, in the 12th fundamental article; to make bonds and issue bills or notes; in the tenth section, to form other contracts in dealing and trading in bullion and bills of exchange; and in other places, to do other things. The manifest object of this eight section is to prohibit the bank from owing more debts, at one time, on all these accounts, than the amount of the capital stock; and to make the directors personally liable if they exceeded that amount. The words "other contract" was evidently intended to include the individual dealings of the bank; to add its private debts to its public ones; and to limit the whole to the amount of its capital.
Will any person undertake to derive the right of the bank to make bonds, and issue bills or notes, upon the recital of the names of these instruments in this eighth article, and then argue that they are free from all limitations, except the single one as to maximum amount found in that article ? Certainly not, and yet this would be the precise mode of reasoning with respect to the phrase "other contract," if it is to be treated as a grant of power, instead of a reference to the various contracts for bullion, bills of exchange, buildings, salaries, expenses, &c., which the bank was elsewhere authorized to make, and for the form or terms of which contracts the charter nowhere made any regulations or provisions.
I repeat it, bonds, bills, or notes, are merely recited in this article for the purpose of adding a new limitation and a new penalty; reference to other contracts is made for the purpose of including them in the same limitation, and subjecting them to the same penalty. This is the construction which satisfies the phrase; which gives it a full and natural operation, and that without conflicting with any other part of the charter, much less reducing all the rest to a blank.
I have given to this phrase, Mr. President, the meaning which fairly and naturally belongs to it, and which harmonizes it with every other part of the charter. This is what the books tell us it is the duty of courts to do in construing statutes. I will now take three specific objections to the courts' construction, and show it to be erroneous in every point of view in which it can be examined.
1. I object to it because it authorizes an issue of currency upon construction. The issue of currency, sir, was the great and main business for which the bank was created, and which it is, in the twelfth article, expressly authorized to perform, and I cannot pay so poor a compliment to the understandings of the eminent men who framed that charter, as to suppose that they left the main business of the bank to be found, by construction, in an independent phrase, and that phrase to be found but once in the whole charter. I cannot compliment their understandings with the supposition that, after having authorized and defined a currency, and subjected it to numerous restrictions, they had left open the door to the issue of another sort of currency, upon construction, which should supersede the kind they had prescribed, and be free from every restriction to which the prescribed currency was subject.
2. I object to the courts' assumption that these orders are contracts; and this objection leads to a definition, and to the recollection of our early reading, when we were apprentices to the law. What is a contract ? The books tell us it is an agreement, upon a sufficient consideration, to do, or not to do, a particular thing. Now, bring these orders to the test of this definition; and for that purpose let us read one:
"Cashier of the Bank of the United States,
Pay to Jas. L. Smith, or order, five dollars.
Office of discount and deposite in Utica,
The 3d day of September, 1831.
JOHN B. LEVING, President.
N.V. Grazier, Cashier."
And on the back these words:
"Pay to the bearer.
JAS. L. SMITH."
Here is no agreement, sir ! No consideration expressed or understood; no promise or undertaking to do, or not to do, any thing whatever. It is literally an order, such as one neighbor gives to another, and governed by the same law. It is the very opposite of a contract, for it is a command; it is the opposite of a debt, for it implies the extinction of one. It is a mandate, and that an imperious one, from a gentleman in Utica, whose name I cannot read, to a gentleman in Philadelphia, who is not named at all, to pay five dollars to Mr. Jas. L. Smith, or to the person he shall name. Call this a contract ? If so, Mr. President, those who studied law twenty-five years ago must burn their books, and recommence in the new school. The only species of contract that can attach to it is in the implied one which the law creates between the giver and receiver of the order; and that is an implied promise, on the part of the giver, that he will pay it if the cashier in Philadelphia does not, provided the receiver of the order will lose no time in going after the money, and bringing the order back if he does not get it.
I object to these orders as coming under the phrase in the eighth article, because they are issued from branch banks, and by the presidents of these banks, while the words and the tenor of the eighth article require the whole of the debts which are there referred to; those by "other contract," as well as those by bond, bill, or note, to be contracted by the directors of the parent bank in person. Observe the words. The directors under whose administration the excess may happen; the exception in favor of those who shall have been absent when the excess was contracted; the further exception in favor of those who dissented from the resolution which created the excess; and the qualification of both exceptions to a notice forthwith to be given to the President of the United States and to the stockholders of such dissent or absence: all these expressions refer to the directors of the parent bank, and imply personal presence at the formation of every contract, at the creation of every debt, those by "other contract," as well as those by bond, bill, and note, which enters into the aggregate mass of the thirty five millions, which the bank, at any one time, may owe.
According to the opinion of the court, not only a part, but the whole of these thirty-five millions may be contracted by agents, scattered all over the Union. The whole currency of the bank may be issued by Tom, Dick, and Harry; and if they issue a thousand millions instead of thirty-five, why, the directors are not responsible; the corporators are not responsible; the United States of America are not responsible; the assets of the bank only are liable; and who ever heard of assets in a broken bank ? The opinion of the court, that agents may issue currency, and create these thirty-five millions of debt, is at war not only with the words and tenor of the eighth article, but with the whole tenor of the entire charter. By that instrument, the great business of issuing currency is confided to the directors of the parent bank. It is a personal trust which they cannot devolve upon agents. There is a personal liability attached to the abuse of that trust, of which they cannot divest themselves. These directors are to be numerous, not less than twenty-five. One-fifth of their number must pass the ordeal of this Senate upon the nomination of the President of the United States. The whole of them must be stockholders. Here is something like responsibility. Not so with the president and directors of the branch banks. They may be but seven in number, and four of them a quorum. None of them required to be stockholders; none to pass this body. The President of the United States has no voice in their appointment or removal. They are breath in the nostrils of the Philadelphia directors. One breath they are made; another they are gone. And upon these evanescent and shadowy beings the power of issuing a national currency is to be devolved !
This finishes, Mr. President, the examination which I have felt it proper to make into the grounds of the decision pronounced by the federal court in Philadelphia. I will now take up the constitution of the bank, and bring this constructive currency to the ordeals of prohibitions; as well as of the grants to be found in that instrument. The Congress of 1816 gave to the Bank of the United States a constitution, with a preamble to it, and seventeen fundamental articles in it; and if the bank has construed itself out of this congressional constitution, it may seem to some to be an act of retributive justice on the Congress for construing itself out of the constitution of the United States to give a constitution to the bank. We will see. The preamble stands at the head of the eleventh section, and runs thus:
"The following rules, restrictions, limitations, and provisions, shall form and be fundamental articles of the constitution of the said corporation."
This preamble is sufficiently expressive of the intention of Congress to bind the bank, and to regulate its conduct, a difficult task, I admit, but bravely attempted by the Congress of 1816. We pass over many regulations to come to the main article, the 12th, which applies to the currency, and which we will read:
The bills, obligatory and of credit, under the seal of the said corporation, which shall be made to any person or persons, shall be as signable by endorsement thereupon, under the hand or hands of such person or persons, and his, her, or their executors or administrators, and his, her or their assignee or assignees, and so as absolutely to transfer and vest the property thereof in each and every assignee or assignees successively, and to enable such assignee or assignees, and his, her or their executors or administrators, to maintain an action thereupon in his, her, or their own name or names: Provided, That said corporation shall not make any bill obligatory, or of credit, or other obligation under its seal for the payment of a sum less than five thousand dollars. And the bills or notes which may be issued by order of the said corporation, signed by the president, and countersigned by the principal cashier or treasurer thereof promising the payment of money to any person or persons, his, her or their order, or to bearer, although not under the seal of the said corporation, shall be binding and obligatory upon the same, in like manner, and with like force and effect, as upon any private person or persons, if issued by him, her or them, in his, her or their private or natural capacity or capacities, and shall be assignable and negotiable in like manner as if they were so issued by such private person or persons; that is to say, those which shall be payable to any person or persons, his, her or their order, shall be assignable by endorsement, in like manner, and with the like effect as foreign bills of exchange now are; and those which are payable to bearer shall be assignable and negotiable by delivery only: Provided, That all bills or notes, so to be issued by said corporation, shall be made payable on demand, other than bills or notes for the payment of a sum not less than one hundred dollars each, and payable to the order of some person or persons, which bills or notes it shall be lawful for said corporation to make payable at any time not exceeding sixty days from the date thereof.
This is the article, Mr. President, which authorizes the Bank of the United States to make bonds to individuals, and to issue a currency to the public. This is the article which prescribes the manner in which the assents of the numerous individuals who compose the corporation shall be expressed, and their corporate effects bound for the payment of money. This article establishes two species of paper securities; first, bonds under the common seal of the corporation; secondly, bills or notes signed and countersigned by named officers. Thus sealed, or signed, the article declares these securities to be binding and obligatory on the corporation; and other articles go on to attach a multitude of limitations, restrictions, provisions, and penalties, all referring to these bonds, bills, or notes, by a precise allegation, and intended to guard their solvency, to secure the public in the safe handling of them, and to facilitate the recovery of their contents, with heavy damages, in the case of non-payment on demand.
I here remark, for the purpose of freeing a material part of this discussion from any ambiguity, that the bills or notes mentioned in this article, and referred to throughout the charter, are one and the same thing. A bank bill, and a bank note, are equivalent terms in common parlance; they are the same thing in legal acceptation; they are the same instrument in the eye of the charter. They are created together, and created not as two things, but as one thing, having the same origin, the same qualities, and the same design. The bill or note (for the charter never once uses the phrase, bill and note) are to he issued by order of the president and directors, are to be for the payment of money, are to be signed by the same officers, are to be transferable in the same mode, are not to be on credit for a less sum than one hundred dollars, nor for a longer time than sixty days, and are subjected to a great variety of regulations and restrictions.
The federal court in Philadelphia pronounces these branch bank orders to be free from all the limitations, restrictions, and provisions which apply to bills or notes; and so do I. But the court pronounces these orders to be legal currency under the charter; I say they are not; and this is the question for the Senate and the American people to decide. I take the position, that every species of paper currency issued by the bank, upon the construction of words and phrases, found in, or out of, penal sections, and differing in form or substance from the paper currency prescribed in the 12th fundamental article, or violating the rules and provisions to which that currency is subject, is unauthorized and illegal.
How stand these branch bank orders under the enactments of this fundamental article ? I leave out what relates to bonds in the first clause of the article, for they were evidently intended for large operations and special transactions, and confine my examination to the issue of currency under the second clause. Is this order a bill or note promising the payment of money ? It is not. Is it signed by the president of the bank, and countersigned by the principal cashier ? It is not. Is it subject to the limitation which prevents a bill or note of less size than one hundred dollars to be on credit, and that for a longer time than sixty days ? It is not. Then it is condemned, utterly condemned, upon the words of the 12th fundamental article. In the next place, how does it stand under the restrictions, limitations, and provisions which were to govern and control the prescribed currency of the bank ? We will see, and that in detail; but, first, let us have another quotation from another part of the bank charter.
It is in the 7th section, at the end of the enumeration of the general powers of the bank. The section begins with creating the corporation, giving it a name, and enumerating its powers; and, after a long enumeration, winds up in these words:
"and generally to do and execute all and singular the acts, matters, and things, which to them it shall or may appertain to do; subject, nevertheless, to the rules, regulations, restrictions, limitations, and provisions, hereinafter prescribed and declared."
Now, Mr. President, it does seem to me that I have the advocates of this branch bank currency at a point from which they cannot move, without first admitting that the issue of thirty-five millions of currency, for to that amount the court says these orders may go, is not an act, is not a matter, is not a thing, appertaining to the bank to do: for, unless they admit all this, they subject this currency to all the rules, regulations, restrictions, limitations, and provisions found in the charter after the 7th section; and to the ordeal of which it cannot be brought without utter annihilation. This is not the age for admissions, but for argument after conviction rather. The progeny of Goldsmith's schoolmaster is not yet extinct. I will not pause for admissions; but will proceed directly to annihilate this currency, by bringing it to some of the tests (a part only of what the charter contains) to which every act, every matter, every thing, appertaining to the bank to do, must be brought, and must stand, before its legality is admitted.
The 15th fundamental article provides a guard for the safety of the public, which does not apply to these orders, and furnishes an argument against their legality as currency. We will read it.
"The officer at the head of the Treasury Department of the United States shall be furnished, from time to time, as often as he may require, not exceeding once a week, with statements of the amount of the capital stock of the said corporation and of the debts due to the same; of the moneys deposited therein; of the notes in circulation, and of the specie in hand; and shall have a right to inspect such general accounts in the books of the bank as shall relate to the said statement: Provided, That this shall not be construed to imply a right of inspecting the account of any private individual or individuals with the bank."
Mark, Mr. President, the phraseology of this important article. The statement to which the Secretary of the Treasury is entitled, extends to five points, each of them essential to the solvency of the bank, and the security of the public.
1. The capital stock.
2. Debts due to the bank.
3. Money in deposite.
4. Notes in circulation.
5. Specie on hand.
The right of inspecting the books of the bank, for the verification of the statements, extends to these heads, and no others. Branch bank orders are not included. The court at Philadelphia decides that these orders are not notes. Every body knows they are not. The bank knows it, and makes no return of them. Here are the monthly statements of the last year to the Secretary of the Treasury. It is for the month of December, 1830. It is the last which has been communicated to Congress, and printed for the use of the members.
1. Capital stock, ..... $34,996,269.63
2. Due to the Bank of the United States and offices, 18,818,207.65
3. Deposites, ..... 16,722,701.12
4. Notes issued, ..... 31,972,247.76
5. Specie, ..... 10,808,047.07
This is the statement under the five heads required. No return of these branch bank orders ! No statement of this new-fangled currency, which may be issued to the amount of thirty-five millions, and for which there is no responsibility if issued to the amount of thirty-five myriads, instead of millions. No return of these orders up to December, 1830; yet every citizen of the South and West knows that they have been creeping and crawling into existence since the year 1826. If any one says they are included under the head of notes, then it will be confessed that they have worn a name which is not their own, and that they are smuggled through the monthly returns in the ranks of a company to which they do not belong. The directors cannot give a weekly report of these orders; they can never tell how many are issued: for the five and twenty branches may have issued five and twenty millions since the last return. But the great point is, that the bank is not obliged to return them, and that the Secretary of the Treasury has no right to inspect the bank books to ascertain their quantity. It is this which makes the test of the 17th article so fatal to their legality.
And now what becomes of the wisdom of the Congress of 1816 ? What the value of these monthly statements ? What the utility of this national sentinel, this standing guard, this permanent supervisor, in the person of the Secretary of the Treasury, over the solvency of the bank ? All vain and nugatory. His vigilance may cease; his alarm bell may sleep; his deep and dismal tocsin may never utter her fearful, direful sound. He can no longer see the disproportion between the currency in circulation, and the specie in the vaults. Countless millions of orders may flow from the branches; their beggarly coffers may have nothing to take them up; no returns to be made; no right of inspection; no liability in the directors; no means for the country to learn its danger, till the people are roused from their sleep by the convulsions of a nation in ruins by the cries of national arid individual bankruptcy by the explosions of a Mississippi scheme and a South Sea bubble.
I proceed to the application of another test. The 17th fundamental article contains a limitation on the minimum size of the notes to be issued by the bank. The object of the limitation is obvious; it is to save the country from being afflicted with the pestiferous circulation of a paper currency below the amount of five dollars. This is the article:
"No note shall be issued of less amount than five dollars."
This is the article, the whole article, and nothing but the article. Notes alone are mentioned. Why ? Because bank notes alone were to constitute the currency; the currency was the thing which concerned the public; and the public was the ward which the framers of the charter placed under the guardianship of the Secretary of the Treasury. Bills of exchange are not included, because they cannot circulate; they cannot enter into circulation; they are an individual transaction. A bill of exchange for a dollar may answer a man's purpose who wishes to send a dollar to a distance. The Bank of the United States may condescend to sell it. It is nobody's business. It does not annoy the public. It goes straight to its destination, fulfils its object, performs its function, and dies.
The article does not include bonds under seal, and upon credit, because already limited. It does not include checks and orders, because they are individual transactions, and equally individual, whether drawn by a natural or an artificial person, by a bank president or a chimney sweeper. A depositor uses checks and orders. He draws for the money he has, or wants, be it a dollar or an eagle. It is nobody's business. It does not annoy the public. The article does include "other contracts," because, as has been shown, they were to consist of individual and authorized transactions, having nothing to do with the currency, and enter into no part of the circulation. The terms of the limitation do not include checks or orders; they cannot apply to currency composed of orders; the court at Philadelphia decides that it does not apply to the orders in question; their general decision covers it, and their specific words reach it. They say they may be in large sums for remittance, and in small ones for currency; and they might have carried out the sense, by saying smaller still for change. Under this decision, the bank may give us thirty-five millions of national currency, in sixpenny bills and twopenny tickets; and all these on such terms of extended credit as the bank chooses to prescribe: for the limitation of sixty days for maximum credit has no more application to these orders than the limitation on the minimum size.
The 17th section shall furnish us with the next ordeal to which we will subject these orders. It runs thus:
"And be it further enacted, That the said corporation shall not at any time suspend or refuse payment in gold and silver, of any of its notes, bills or obligations; nor of any moneys received upon deposit in said bank, or in any of its offices of discount and deposit. And if the said corporation shall at any time refuse or neglect to pay on demand any bill, note or obligation issued by the corporation, according to the contract, promise or undertaking therein expressed; or shall neglect or refuse to pay on demand any moneys received in said bank, or in any of its offices aforesaid, on deposit, to the person or persons entitled to receive the same, then, and in every such case, the holder of any such note, bill, or obligation, or the person or persons entitled to demand and receive such moneys as aforesaid, shall respectively be entitled to receive and recover interest on the said bills, notes, obligations or moneys, until the same shall be fully paid and satisfied, at the rate of twelve per centum per annum from the time of such demand as aforesaid; Provided, That Congress may at any time hereafter enact laws enforcing and regulating the recovery of the amount of the notes, bills, obligations or other debts, of which payment shall have been refused as aforesaid, with the rate of interest above mentioned, vesting jurisdiction for that purpose in any courts, either of law or equity, of the courts of the United States, or territories thereof, or of the several states, as they may deem expedient.
This section has no application to a currency of branch bank orders. The enumeration excludes them, for they are neither bills, bonds, notes, or deposites; the enactments exclude them, for they contain no promise or undertaking for the payment of money; no such promise is expressed therein. The prohibition to suspend specie payment, the right to sue, and to recover twelve per cent. damages, are all inapplicable to these orders. This is the opinion of the federal court in Philadelphia, and I concur, in that opinion, with the court. But this might leave the holders of the orders in a miserable predicament. For their consolation, then, the court goes into the proviso of this seventeenth section, which reserves to Congress the right to legislate further on the subject, and to provide by a future law for putting "other debts" on the same footing with respect to non-payment and double interest, which had just been awarded to debts by bill, note, bond, and deposite.
Can any thing be more clear to mark the distinction between the two classes of debts, the public and the private, the currency and the individual securities ? The former are provided for; they are taken under the guardianship of the charter; the prohibition to suspend payment, the right to sue, and the right to recover double interest for delayed payment, are all secured and attached to them; nothing with respect to them, except to give additional remedies to facilitate recovery, namely, summary judgments, is left to future Congresses. Not so with respect to the latter class, the "other debts," among which this branch bank currency is driven to take refuge. They are left to the general laws of the land, and the vigilance of the contracting parties. They are private transactions, and the charter does not stand guardian over them. A provision, in terrorem, only is made. Congress is authorized to provide for them hereafter; to put them on the same footing with the currency, but not even to do that until after payment shall have been refused.
Now, withdraw the whole currency from the operation of the main clause, and bring it under the proviso, as these orders are made to do, and what then ? Why the whole paper currency of the bank is left without any existing prohibition against suspension of payment, without any chartered right in the holder to sue, and without any right to recover twelve per cent. damages for delayed payment. The whole business of providing for the recovery of the sums due on this currency is left to future Congresses, and until after the contingency of suspended payment shall occur. And what may be the condition of Congress then ? The same with that of the British Parliament in 1797, when the Bank of England had more friends in power than the people; when a suspension of specie payments, instead of being resisted, was sanctioned; instead of being speedily terminated, was prolonged through twenty years; when the whole power of Government, and of national legislation, fell into the hands of a moneyed oligarchy, already bloated with the wealth and gorged with the spoils of a plundered empire.
The 14th section of the charter furnishes the next ordeal, to the test of which this branch bank currency will be brought. A main object in the establishment of the Bank of the United States was to provide a paper currency in which the revenues of the Union could be safely collected. The 14th section makes the bills or notes of the bank receivable for that purpose. Listen to it:
"And be it further enacted, That the bills or notes of the said corporation originally made payable, or which shall have become payable on demand, shall be receivable in all payments to the United States, unless otherwise directed by act of Congress."
Branch bank orders are not included. Bills or notes only are named. No other bills or notes are intended than those prescribed and described in the 12th fundamental article. We have the authority of the federal court in Philadelphia for saying that these orders are not the bills or notes mentioned in the 12th article, and in that I agree with them. Then, sir, they cannot be receivable in payment of the public revenues ! We have the authority of the same court for saying that these orders are not subject to the restrictions of the charter; and in that I agree with them, and add, that, not being subject to the restraints, they are not to be entitled to the privileges of the charter. The greatest of these privileges the one which gives credit and circulation to the paper currency of the bank, which almost supersedes the necessity of specie capital is the receivability of it in payment of all dues to the Government. And shall this eminent privilege be enjoyed by a species of currency not subject to a single restriction in the charter, even to the one which would enable the Secretary of the Treasury to know whether the revenues were paid were being paid in the paper of a solvent or insolvent institution ?
The 14th section is conclusive upon the exclusion of these orders from payments to the United States. But it is not all. Another clause of statute law bears upon the same point, and with equal force and clearness. It is the joint resolution of 1816 for the better collection of the public revenue. This resolution was made contemporaneously with the charter. It was made by the same Congress, and at the same session, which granted the charter. It is only twenty days posterior in date; the charter being approved the 10th, the joint resolution the 30th of April, 1816. Taken as a legislative interpretation, explaining the 14th section, or as a legislative enactment controlling it, and it is equally decisive of the fate of these orders. It will exclude them, irrevocably exclude them, from revenue payments. Here it is:
"That the Secretary of the Treasury be, and he is hereby required and directed to adopt such measures as he may deem necessary to cause, as soon as may be, all taxes, duties, debts, or sums of money, accruing or becoming payable to the United States, to be collected and paid in the legal currency of the United States, or treasury notes, or notes of the Bank of the United States, as by law provided and declared, or in notes of banks which are payable, and paid, on demand, in the said legal currency of the United States; and that, from and after the twentieth day of February next, no such duties, taxes, debts, or sums, of money, accruing or becoming payable to the United States as aforesaid, ought to be collected or received otherwise than in the legal currency of the United States, or treasury notes, or notes of the Bank of the United States, or in notes of banks which are payable, and paid, on demand, in the said legal currency of the United States."---[But this clause simply makes bank notes currency and tender; and the people who wrote and voted for this clause knew that those allegedly specie-paying banks issued more notes than they had coin to redeem. What is it if not making bank paper money ?!?]
Now, Mr. President, if there is any power in words, any virtue in language, any force or strength in legal enactments, any capacity in the Congress of the United States to bind the Bank of the United States; if the sarcasm of the Scythian is not true of this young republic as well as of the old monarchies to which it was applied, that laws are cobwebs, which catch the weak flies, and let the strong ones go through, then are these orders excluded from all revenue to the United States. Notes alone are receivable under the joint resolution, and these orders are not notes, nor their similitude or equivalent. Then, what becomes of the wisdom of the Congress of 1816 ? They created a bank to issue a currency to be received in all revenue payments; and that bank issues a currency which cannot be received, in a single instance, without violating the law of its creation and of its contemporaneous exposition.
Was the Congress of 1816 an assemblage of idiots who counteracted and destroyed their own work as they made it? or is it already proved that this bank is too powerful for the control of laws ? Sir, the Congress of 1816 were not idiots. They were eminent men, and anxious to accomplish a great public good; but they undertook an impossibility! they undertook to bind a great moneyed corporation! they stuffed and crammed the charter of the new bank with new and multiplied provisions; they made it three times as long as the charter of 1791; many republicans appeased their own jealous spirits by this accumulation of new modifications; and now they must be astonished to see the bank slip out of the whole of their restrictions as easily as the vernal serpent slips out of its last year's skin.
Yet what is the fact ? Is the joint resolution of 1816 respected or violated ? It is doubly violated I speak of my own State with perfect knowledge by receiving in payment of public lands these branch bank orders, which are not notes of the Bank of the United States, and rejecting the notes of all the specie-paying banks in the Union ! The execution of the resolution (it would seem) has been committed to the Bank of the United States; and she executes it, in the Northwest at least, to her own advantage, by excluding the notes of all other specie-paying banks which are receivable under that resolution, and receiving her own branch orders, which are not receivable under it.
The notes of all the State banks are excluded from reception in the Missouri land offices, even those of the States on the Lower Mississippi and in the South, where all our cash trade finds its market; from whence the mass of our emigrants come, and with which we have incessant intercourse and immense commerce. They are all excluded from the land offices and from the United States' branch bank, and thus become uncurrent; and whatever is brought there by misfortune, becomes a prey to the brokers. Twenty-five per cent. discount has been exacted in St. Louis for cashing the notes of the best State banks in the Union. They will not pass at all, except at a discount proportioned to the wants of the holder, and the conscience of the broker. The very night I left St. Louis to come on to this place, I fell in company with a gentleman from New Orleans I will name him Colonel Morgan, the sheriff of the city, who informed me that he had in vain offered the best Louisiana notes in payment of his expenses and purchases in St. Louis; that he could get nothing for them without large discount, not even an empty trunk ! And this, Mr. President, is what is called promoting commerce, and favoring State banks, and reducing the rates of exchange !
Let us recapitulate. Let us sum up the points of incompatibility between the characteristics of this currency, and the requisites of the charter : let us group and contrast the frightful features of their flagrant illegality.
1. Are they signed by the president of the bank and his principal cashier ? They are not !
2. Are they under the corporate seal ? Not at all !
3. Are they drawn in the name of the corporation ? By no means !
4. Are they subject to the double limitation of time and amount in case of credit ? They are not; they may exceed sixty days time, and be less than one hundred dollars !
5. Are they limited to the minimum size of five dollars ? Not at all !
6. Are they subject to the supervision of the Secretary of the Treasury ? Not in the least !
7. The prohibition against suspending specie payments ? They are not subject to it !
8. The penalty of double interest for delayed payment ? Not subject to it !
9. Are they payable where issued ? Not at all, neither by their own terms, nor by any law applicable to them !
10. Are they payable at other branches ? So far from it, that they were invented to avoid such payment !
11. Are they transferable by delivery ? No; by indorsement !
12. Are they receivable in payment of public dues ? So far from it, that they are twice excluded from such payments by positive enactments !
13. Are the directors liable for excessive issues ? Not at all !
14. Has the holder a right to sue at the branch which issues the order ? No, sir, he has a right to go to Philadelphia, and sue the directors there ! a right about equivalent to the privilege of going to Mecca to sue the successors of Mahomet for the bones of the prophet ! Fourteen points of contrariety and difference. Not a feature of the charter in the faces of these orders. Every mark a contrast; every lineament a contradiction; all announcing, or rather denouncing, to the world, the positive fact of a spurious progeny; the incontestable evidence of an illegitimate and bastard issue.
I have now, Mr. President, brought this branch bank currency to the test of several provisions in the charter, not all of them, but a few which are vital and decisive. The currency fails at every test; and upon this failure I predicate an argument of its total illegality. Thus far I have spoken upon the charter, and have proved that if this currency can prevail, that instrument, with all its restrictions and limitations, its jealous, prohibitory constitution, and multiplied enactments for the safety of the public, is nothing but a blank piece of paper in the hands of the bank. I will now have recourse to another class of argumentsa class extrinsic to the charter, but close to the subject indispensable to fair examination, and directly bearing upon the illegal character of this currency.
1. In the first place, I must insist that these orders cannot possibly serve for currency, because they are subject to the law of indorsable paper. The law which governs all such paper is too universally known to be enlarged upon here. Presentation for acceptance and payment, notice of default in either, prompt return of the dishonored paper; and all this with rigorous punctuality, and a loss of recourse for the slightest delay at any point, are the leading features of this law. Now it is too obvious that no paper subject to the law of indorsement can answer the purposes of circulation. It will die on the hands of the holders while passing from one to another, instead of going to the place of payment. Now it is incontestable that these orders are instruments negotiable by indorsement, and by indorsement alone. Whether issued under the charter, or under the general laws of the land, they are still subject to the law of indorsable paper. They are the same in either case as if drawn by one citizen upon another. And this is a point which I mean to make clear : for many worthy people believe there is some peculiar law for bank paper, which takes it out of the operation of the general laws of the land. Not so the fact. The twelfth fundamental article of the bank constitution declares that the bills or notes to be issued by the bank shall be negotiable in the same manner as if issued by a private person; that is to say, those payable to a named person or his order, by indorsement, in like manner and with the like effect as foreign bills of exchange; and those made payable to bearer shall be negotiable by delivery alone; in the same manner, we may add, as a silver dollar. So much for these orders, if drawn under the charter; if not drawn under it, they are then issued under the general law of the land, or without any law at all. Taken either under the charter or out of it, it comes to the same point, namely, that these orders are subject to the same law as if drawn by one private person upon another. This is enough to fix their character, and to condemn them as a circulating medium; it is enough for the people to know; for every citizen knows enough of law to estimate the legal value of an unaccepted order, drawn upon a man five hundred or one thousand miles off ! But it has the word bearer on the back ! Yes, sir, and why not on the face as easily as on the back ? Our school-time acquaintance, Mr. President, the gentleman from Cork, with his coat buttoned behind, had a sensible, and, I will add, a lawful reason for arraying himself in that grotesque habiliment; but what reason can the bank have for putting bearer on the back of the order, where it has no effect upon its negotiable character, and omitting it on the face, where it would have governed the character, and secured to the holder all the facilities for the prompt and easy recovery of the contents of a paper transferable by mere delivery ? The only effect of this preposterous or cunning indorsement must be to bamboozle the ignorantpardon the low word, sirto bamboozle the ignorant with the belief that they are handling a currency which may at any time be collected without proof, trouble, or delay; while in reality it is a currency which reserves to the bank all the legal defences which can be set up to prevent the recovery of a parcel of old, unaccepted, unpresented, unauthorized bills of exchange.
2. I take a second exception to these orders as a currency. It is this, that being once paid, they are done with. A note transferable by delivery, may be reissued, and its payment demanded again, and soon forever. But a bill of exchange, or any paper subject to the same law with a bill of exchange, is incapable of reissue, and is payable but once. The payment once made, extinguishes the debt; the paper which evidenced it is dead in law, and cannot be resuscitated by any act of the parties. That payment can be plead in bar to any future action. This law applies to checks and orders as well as to bills of exchange; it applies to bank checks and orders as well as to those of private persons, and this allegation alone would annihilate every pretension of these branch bank orders to the character of currency.
3. I take a third objection to this constructive currency. It is this, that these orders are not evidenced by any act or sign which can import the assent of the corporators to their issue, or bind the corporate effects for the payment of money. The Bank of the United States is a corporation aggregate; it is composed of various members; and the assents of these members can only be evidenced, and their effects bound, by modes of acting known to the law. The common seal is the evidence of assent at common law; signatures of natural persons are sometimes, and in some instances, substituted by statute. Thus it is with the Bank of the United States. The seal is to be used in some cases; signatures in others. Bonds are to be sealed, not signed; bills or notes are to be signed, not sealed. The common seal is the general mode of evidencing the acts of the corporation; signatures are the exception, and can only be used as the substitute for the seal in the cases specified in the exception. The words of the charter in the twelfth article are pregnant with law meaning, and im port a clear declaration that without a statutory substitute the common seal would be necessary to bind the corporate effects. The words are these:
"The bills or notes signed by the president, and countersigned by the principal cashier or the treasurer, although not under the seal of the said corporation, shall be binding and obligatory upon the same."
This is law, not law enacted, but law recognised by the charter. The seal must be used where the substitute is not allowed, and when used it is the equivalent of the seal, and no more. Now let us see how far a seal is in the acts of a corporation aggregate. Let us refer to books.
Sir William Blackstone says:
"Corporations have, as incident to them, a common seal. For a corporation, being an invisible body, cannot manifest its intention by any personal act or oral discourse; it, therefore, acts and speaks only by its common seal. For though the particular members may express their private consents to any act by words, or signing their names, yet this does not bind the corporation; it is the fixing the seal, and that only, which unites the several assents of the individuals who compose the community, and makes one joint consent of the whole."
So says Mr. Justice Blackstone, and the uniform, uninterrupted current of the adjudged cases bears him out. I hold it to be clear law that the seal must be used where the statutory substitute is not allowed. I do not go into trifles: for I know it is admitted, in the same cases, that a corporation may act in a small matter; for example, may retain a servant, or employ a cook, or a butler, without seal; but where an interest is to be vested or divested in or out of a corporation, the evidence of the common seal, or the statutory substitute, is indispensable. I know, also, that there is a reference, between brackets, stuffed into Matthew Bacon's abridgment, which seems to the contrary in the case of the Bank of England in issuing her bills or notes; but the contrariety is in the seeming only; the reported case in Peere Williams proves the necessity of the seal.
But the elucidation of this point belongs to the next head of objection, and I will pass it over for the present. I assume the law to be incontrovertible, that a corporation cannot be bound for the payment of money except by its common seal or the statutory substitute; and these branch bank orders having neither, being without the impression of the common seal, and without the signatures of the officers which was to make them binding and obligatory upon the corporation, although not under their seal, I hold them to be illegal.
4. I take a fourth objection to these currency orders, extrinsic to the charter. It is this: That the orders are not drawn in the corporate name of the Bank of the United States. A corporation, Mr. President, must have a name, as well as a natural person. It is an artificial person, constituted of a great number of natural persons, always varying. The individual names of the corporators cannot be used; but a name must be used, and that name can be no other than that which is bestowed upon it by the founder or the Legislature; and this name must be used in all corporate acts. Sign who may, affix the seal who may, still the promise made, the act, the matter, the thing done, or promised to be done, must be done or promised in the name of the corporation. By that name it must call and it must answer; sue and be sued; buy and sell; have and hold; give and take; bind and loose. Slight variations, as of a letter or a syllable, may be tolerated in the case of ancient corporations whose origin is not known; but no variation is permitted in the case of modern corporations, whose origin as within the memory of man, that is to say, legal memory, which dates from the first of Richard II. So say all the books. Let us see some of them.
Lord Coke, in his tenth report:
"The name of incorporation is a proper name, or name of baptism; and, therefore, when a private founder gives his college or hospital a name, he does it only as a godfather, and by that same name the King baptizes the incorporation."
Sir William Blackstone, in his commentaries:
"When a corporation is created, a name must be given to it; and by that name alone it must sue and be sued, and do all legal acts; though a very minute variation therein is not material. Such a name is the very being of its constitution; and, though it is the will of the King that creates the corporation, yet the name is the knot of its combination, without which it could not perform its corporate functions."
Matthew Bacon, in his abridgment:
"There is a difference between an ancient corporation, and a corporation newly created; for an ancient corporation, by use, may have a special name differing in substance; but otherwise of a corporation created within memory; for this regularly can only have the name by which it is instituted."
So say the English books. What says the charter of the Bank of the United States ? Has it failed to give a name? or has it granted a dispensation of its use ? Neither. It has given a name; and it has ordered that name to be used. The seventh section is wholly taken up with this matter. It declares the name of the corporation to be:
"The president, directors, and company, of the bank of the United States."
This is the name. Now for the use.
"and by that name shall be, and are hereby, made able and capable, in law, to have, purchase, receive, possess, enjoy, and retain, to them and their successors, lands, rents, tenements, hereditaments, goods, chattels and effects, of whatsoever kind, nature, and quality, to an amount not exceeding, in the whole, fifty-five millions of dollars, including the amount of the capital stock aforesaid; and the same to sell, grant, demise, alien or dispose of; to sue and be sued, plead and be impleaded, answer and be answered, defend and be defended, in all state courts having competent jurisdiction, and in any circuit court of the United States: and also to make, have, and use, a common seal, and the same to break, alter, and renew, at their pleasure: and also to ordain, establish, and put in execution, such by-laws, and ordinances, and regulations, as they shall deem necessary and convenient for the government of the said corporation, not being contrary to the Constitution thereof, or to the laws of the United States; and generally to do and execute all and singular the acts, matters, and things, which to them it shall or may appertain to do;"
This is corroboration, Mr. President, instead of dispensation, of the common law. And now, sir, I must be permitted to say that I see the advocates of this order currency penned up, in the same narrow corner in which I placed them half an hour ago, and from which, I apprehend, they will never come forth. They must say that the issue of this currency is not an act, is not a matter, is not a thing, appertaining to the bank to do, and, therefore, need not be done in the name of the corporation. They must say this, or give up the question. For these orders are not drawn in the name of the corporation, nor upon it. The name of the corporation, the baptismal name of the artificial person, begot by the kingly power of the Congress of 1816, "the president, directors, and company of the Bank of the United States," is not upon the paper, neither as drawer or drawee, payer or payee, endorser or endorsee; no, not even as an acceptor in the character of friend, to save the honor of the drawer.
And I hold this currency, for that single reason alone, to be invalid and illegal; as much so as the acts of this Congress would be if made in the name of the District of Columbia, instead of the name of the United States of America, and signed by the mayor and aldermen, instead of the presiding officers of the two Houses and the President of the United States.
But the federal court in Philadelphia has decided, and that, as it would seem, upon the authority of the case of the King vs. Bigg, that bank currency may be issued by agents, and that these agents may be appointed at the will of the bank, and without seal, and that the court will presume these to be agents whose orders have been paid. We will see that case, not in 1st Sir John Strange, where it is briefly and imperfectly reported, but in 3d Peere Williams, where the whole case is fully shown. It was a criminal case, tried at the Old Bailey as far back as the year 1717. The indictment set forth,
"That, on the 19th day of February, 1714, and long before, one Joshua Adams was entrusted and employed by the governor and company of the Bank of England, to sign notes for the said company for the payment of money by them payable; and, afterwards, the same day and year, the said Joshua Adams, being so entrusted and empowered by the said company, did make a certain note under his own hand, and signed by himself, on behalf of the said company of the Bank of England, did promise to pay to Mr. James White, or bearer, one hundred pounds sterling on demand; that, afterwards, on the 22d day of February, 1714, the sum of ninety pounds sterling, on behalf of the said company of the Bank of England, part of the said one hundred pounds sterling, was paid to the bearer of the note, and that payment endorsed on the note; that the said John Bigg erased the endorsement," &c. with the usual averments.
The jury brought in a special verdict, finding every thing as laid in the indictment, and two additional facts, namely, first, that Joshua Adams's appointment was not under the common seal of the company; and, secondly, that the endorsement was written, not upon the back, but upon the face of the note. Upon this special verdict the judgment of all the judges at Sergeant's Inn, Fleet street, was taken upon solemn argument. The main question was on the validity of Adams's appointment without seal, and the decision was in favor of that validity; not that the seal was unnecessary, but that the court would presume it to have been used; that the court would not look into that fact; for it would not be allowed that the bank should free itself from the payment of notes signed by its agent, by showing that they had made an irregular appointment. Here is the argument on which the decision turned.
"In an action brought against the bank upon a bill or note signed by Adams, when it shall be proved that Adams is an agent entrusted by the bank, and has been used to sign bills and notes, which from time to time have been duly paid and answered by the bank; this is evidence, and will carry with it the highest presumption that Adams was lawfully authorized so to do, and, consequently, authorized under the common seal; and at the same time it may be impossible for a third person, that sues this bill or note, to produce such authority under the common seal of the bank; and it would be unreasonable in the court to put him upon it, in regard the same does not belong to him; yet, upon such evidence, it shall be presumed that Adams was well authorized under the common seal to sign such bills or notes, and, consequently, they will be good."
This is the case upon which, from the similarity of language and sentiment, the opinion of the federal court in Philadelphia seems to have turned; all that part of it, at least, which went to support the Bank of the United States in employing agents to issue currency, and making the bank liable for the currency so issued it seems to support the court, but cognoscere causas rerum to know the causes of things is as indispensable in the science of the law, as it is desirable in the mysteries of nature.
Now, sir, observe with what ease one single word will change the whole direction of Bigg's case, will take it from the court, and turn it against the court, and annihilate all the pretensions of the United States' bank to issue currency through agents. The case of Bigg turned upon British statute law; upon an act of Parliament made in 1697, in amendment of the charter of the Bank of England, such as the Bank of the United States applied for here and could not obtain. This is the clause:
"That the forging or counterfeiting of the common seal of said corporation of the governor and company, or of any sealed bank bill made or given out in the name of the said governor and company, for the payment of any sum of money, or of any bank note of any sort whatever, signed for the said governor and company of the Bank of England, or the altering or erasing any endorsement on any bank bill or note of any sort, shall be, and is hereby, declared and adjudged to be hung, without ' benefit of clergy."
This is the act under which Bigg was indicted. The note which he was charged with altering, or rather erasing a credit from it, was signed by Joshua Adams, and Adams was appointed under the clause which authorized the Bank of England to get their notes signed for the company. Having a right to sign notes by an agent, and the notes signed by Adams for the company having been always paid at bank, the court would not look into his appointment; they would presume him to be the agent of the bank, and to be duly appointed; that is, under seal.
Now, apply this to the branch bank presidents. Who authorized them to sign the currency of the Bank of the United States ? Where is the statute giving the bank power to use agents for signing ? There is none. The power was applied for in 1821, and refused; and now it must require a power of presumption, equal to the power of legislation, to presume that the branch bank presidents are agents of the United States' bank to sign currency, when the bank is not allowed to have any agent at all for such a purpose.
The case of Bigg, Mr. President, shows five points of difference between the notes he signed and these branch bank orders, and every point fatal to the orders.
First. The Bank of England had statutory authority to appoint an agent to sign their notes; the Bank of the United States has no such authority with respect to their currency.
Secondly. The agent of the Bank of England only signed the notes; the branch bank presidents both sign and issue these orders.
Thirdly. The Bank of England's agent signed the notes for and in behalf of the governor and company of the Bank of England; the branch bank presidents sign in their own names, and on their own account.
Fourthly. The notes signed by Adams were drawn in the corporate name of the Bank of England, and contained the promise of the governor and company of that bank, by their corporate style and name, to pay the amount of the note to the bearer, on demand: the orders in question are not drawn in the corporate name of the Bank of the United States; they contain no promise or acceptance of the president, directors, and company of the Bank of the United States to pay any thing, to any body, at any time whatever.
Fifthly. The notes signed by Adams were the real promissory notes of the Bank of England, such as the charter expressly authorized the bank to issue for currency; these orders, signed and issued by the branch bank presidents, are not authorized to be issued as currency by any clause in the charter of the Bank of the United States.
Upon these five points of difference, each of them sustained in point of fact, 1, by the indictment against Bigg; 2, by the special verdict; 3, by the argument before the court; 4, by the act of Parliament of 1697; and, 5, by the judgment of the court, I must insist that the case of Bigg is the most complete and perfect authority for the condemnation of this branch bank currency, which the wit of man could have devised.
Yes, sir, it is omnipotent. It opens a battery of thunder and lightning upon the Philadelphia decision. It pulverizes that decision. Yet the bank is triumphant ! It carries all before it ! It bestrides, as a Colossus, the prostrate charter which Congress gave it. It claps a foot upon a word here, and a phrase there rears her gigantic form above all law, and boldly places an empire at defiance ! And yet there are people to talk about new restrictions to bind this gigantic power; as if it was in the destiny of man that the weaker should ever bind the stronger party.
No, sir; we are engaged with the real presence of that fabled monster once believed to be the fabulous creation of frenzied poets that monster which no art nor power could ever bind! which changed his form, at will, from man to beast from lion to serpent from serpent to water from a river of flowing water to a column of blazing fire; and thus eluded, in the act of receiving them, the grasp and catch of every chain that was thrown upon him.
Mr. President, this finishes my argument to show the illegality of this species of currency; and believing the fact of this illegality to be fully and incontrovertibly established, I might here terminate my labor, and rest my case. But, sir, I deem nothing in human operations sufficiently known until the reasons of it are known. I will, therefore, advance a step further, and lay open the reasons and causes for the invention of these branch bank orders, and for their imposition upon the public, to the exclusion, in many States, of the lawful promissory notes of the president, directors, and company of the Bank of the United States. To do this I shall have recourse to evidence, not to argument; and to make that evidence the more easily intelligible, I will rapidly review the three great points of history in the career of this bank; namely, 1. Its apparent but delusive prosperity at the start; 2. Its sudden engulfment in the vortex of bankruptcy; 3. Its apparent but delusive prosperity now.
The bank went into operation with the beginning of the year 1817; established eighteen branches, half a dozen of which in the South and West; issued its own notes freely, and made large issues of notes payable at all these branches. The course of trade carried the branch notes of the South and Nest to the Northeast; and nothing in the course of trade brought them back to the West. They were payable in all demands to the federal government; merchants in Philadelphia, New-York, and Boston received them in payment of goods and gave themnot back again in payment of Southern and Western producebut to the collectors of the customs. Become the money of the government, the bank had to treat them as cash. The fourteenth section of the charter made them receivable in all payments to the government, and another clause required the bank to transfer the moneys of the government to any point ordered; these two clauses (the transfer clause being harmless without the receiving one contained in the fourteenth section) laid the bank under the obligation to cash all the notes of all the branches wherever presented; for, if she did not do it, she would be ordered to transfer the notes to the place where they were payable, and then to transfer the silver to the place where it was wanted; and both these operations she had to perform at her own expense. The Southern and Western branch notes flowed to the Northeast; the gold and silver of the South and West were ordered to follow them; and, in a little while, the specie of the South and West was transferred to the Northeast; but the notes went faster on horses and in mail stages than the silver could go in wagons; and the parent bank in Philadelphia, and the branches in New-York and Boston, exhausted by the double operation of providing for their own, and for Southern and Western branch notes besides, were on the point of stopping payment at the end of two years. Mr. Cheves then came into the presidency; he stopped the issue of Southern and Western branch paper, and saved the bank from insolvency ! Application was then made to Congress to repeal the fourteenth section of the charter, and thus relieve the bank from this obligation to cash its notes every where. Congress refused to do so. Application was made at the same time to repeal a part of the twelfth fundamental article of the constitution of the bank, for the purpose of relieving the president and principal cashier of the parent bank from the labor of signing the five and ten dollar notes. Congress refused that application also. And here every thing rested while Mr. Cheves continued president. The Southern and Western branches ceased to do business as banks; no bank notes or bills were seen but those bearing the signatures of the president and his principal cashier, and none of these payable at Southern and Western branches. The profits of the stockholders became inconsiderable, and the prospect of a renewed charter was lost in the actual view of the inactivity and uselessness of the bank in the South and West. Mr. Cheves retired. He withdrew from an institution he had saved from bankruptcy, but which he could not render useful to the South and West; and then ensued a set of operations for enabling the bank to do the things which Congress had refused to do for it; that is to say, to avoid the operation of the fourteenth section, and so much of the twelfth fundamental article as related to the signature of the notes and bills of the bank. These operations resulted in the invention of the branch bank orders. These orders, now flooding the country, circulating as notes, and considered every where as gold and silver (because they are voluntarily cashed at several branches, and erroneously received at every land office and custom-house), have given to the bank its present apparent prosperity, its temporary popularity, and its delusive cry of a sound and uniform currency. This is my narrative; an appalling one, it must be admitted; but let it stand for nothing if not sustained by the proof. Here, then, is the proof.
Mr. Cheves's Report. Extracts 1822.
"The institution commenced active Banking operations about 1st of January, 1817, and in the course of the year established eighteen branches. The report of the committee of Congress made in December, 1818, has made you so fully acquainted with many of the details of the previous management, that I mean to do little more in relation to the period which preceeded 1819, than present the results, as they will be exhibited in the state of the Bank when I came into it.
"The Bank immediately on its commencement did a very extensive business, imported vast sums of specie, paid its notes and those of the offices, without reference to the places where they were payable, at the Bank, and all the principal offices north of the Potomac, while they were, under the charter, necessarily received every where in payments of debts to the Government of the United States and drafts were given without limit, on the parent Bank and northern offices, by the western offices, at or at a premium merely nominal. As soon as the notes of the southern and western offices were paid or received by the Bank and northern offices, they were returned to them and re-issued in perpetual succession. An accompanying exhibit will show the enormous amount of the notes of the southern and western offices, which became chargeable on the Bank, directly and indirectly, through the northern offices. The result was, that the Bank and the great northern offices were drained of their capital, and on the 20th of July, 1818, only eighteen months after the the institution began its operations, it was obliged to commence a rapid and heavy curtailment of the business of the Bank and its offices. During all this time, it had the advantage of immense Government deposits. At the moment that curtailments were ordered, the Government deposits in the Bank and its branches, including the deposits of public officers, amounted to eight millions of dollars, and they had been larger at preceeding periods. Curtailments were ordered from time to time, at the southern and western offices, to the amount of seven millions of dollars, and at the parent Bank to the amount of two millions, though at the latter they were made to the amount of 3,600,000, and upwards, between the 30th of July, 1818, and the 1st of April, 1819. No curtailments were ordered at the offices of New York and Boston, because there was no room for them, yet necessity obliged them to reduce their business very much. The curtailments at all points within the above mentioned dates, being eight months, were 6,530,159 dollars 49 cents. Yet after these immense and rapid curtailments, the most sensible and vital points (Philadelphia, New York, and Boston) were infinitely in worse condition than when the remedy was devised.
"An accompanying exhibit will show the distribution of the capital at the close of this important period. At that moment the discount line of the important office at Boston, was only 94,584 dollars 37 cents. And when in this wretched state, the southern and western circulation was pouring in upon these weak points, and the Government at liberty, according to the practice of the time, to draw on either office or the Bank for the gross amount of its deposits, throughout the whole establishment, whether North, South, East or West. The southern and western offices were not restrained from issuing their notes, which they did most profusely. The curtailments, in many in stances, resulted merely in a change of debts bearing interest, for debts due by local Banks, or the notes of local Banks, on neither of which was interest received. The western offices curtailed their discounted paper, but they purchased what were called race horse bills, to a greater amount than their curtailments. The Bank itself continued, during the whole period, to purchase and collect drafts on the southern and even western offices, though almost the whole of the active capital already lay in those quarters of the Union, and though the great object of the curtailments was to draw funds from these points. The debt due in Kentucky and Ohio, instead of being reduced, was within this period actually increased upwards of half a million of dollars. An accompanying exhibit will show, that, instead of getting relief from the southern and western offices generally, where curtailments had been ordered, the Bank was still further exhausted by the intervening operations.
"At the commencement of this period, (a period commencing with the order for curtailments, and ending March, 1819,) the Bank was indebted to Baring, Brothers & Co., Reed, Irving & Co., Adams, Robertson & Co., and Thomas Wilson & Co., the sum of 1,586,345 dollars 47 cents, growing principally, if not entirely, out of its specie operations. Of this sum the greater part was paid during this period. It had, however, contracted new debts with Baring, Brothers & Co., and Thomas Wilson & Co., of which there remained due, including any balance which may have been due on the former accounts, the sum of 876,648 dollars: and within the same period it had disposed of 2,270,926 dollars 65 cents of its funded debt, furnishing, by these compound operations, ways and means, in addition to its curtailments, to the amount of 1,561,229 dollars 13 cents, and making, with these curtailments, a reduction in the productive capital of the Bank, within the period of eight months, of eight millions of dollars and upwards.
"At the close of this period, the discounts on personal security at Philadelphia, had been so long the subject of curtailment, that but a small portion of them admitted of further reduction, and, after great efforts, a rule had been established to reduce the discounts which had been granted on the stock of the Bank, at the rate of five per cent. every 60 days. The latter constituted the bulk of the discounted paper, and so small a reduction afforded no relief against a great and immediate demand. Even this small reduction was the subject of loud, angry, and constant remonstrances among the borrowers, who claimed the privileges and the favors which they contended were due to stockholders, and sometimes succeeded in communicating their sympathies to the Board. All the funded debt which was valuable had been disposed of, and the proceeds exhausted. The specie in the vaults at the close of the day, on the 1st of April, 1819, was only 126,745 dollars 28 cents, and the Bank owed to the city Banks, deducting balances due to it, an aggregate balance of 79,125 dollars 99 cents.
"It is true there were in the Mint 267,978 dollars 9 cents, and in transitu from Kentucky and Ohio overland 250,000 dollars: but the Treasury dividends were payable on that day to the amount of near 500,000 dollars, and there remained at the close of the day more than one half of the sum subject to draft, and the greater part of the sum which had been drawn during the day remained a charge upon the Bank, in the shape of temporary deposits which were almost immediately withdrawn. Accordingly, on the 12th of the same month, the Bank had, in its vaults but 71,522 dollars 47 cents, and owed to the city Banks a balance of 196,418 dollars 47 cents; exceeding the specie in its vaults 124,895 dollars 19 cents. It must again be remarked, that it had yet the sum before mentioned in the Mint, as well as the sum in transitu from Ohio and Kentucky this last sum (250,000 dollars) arrived very seasonably on the next day, or a day or two thereafter. The Bank in this situation, the office at New York was little better, and the office at Boston a great deal worse. At the same time the Bank owed to Baring, Brothers & Co. and Thomas Wilson & Co., nearly 900,000 dollars, which it was bound to pay immediately, and which was equivalent to a charge upon its vaults to that amount. It had, including the notes of the offices, a circulation of six million dollars to meet, to which were to be added the demands of depositors, public and private, at a time, too, when the scarcity of money called forth every disposable dollar, and therefore created demands upon the Bank for an unusual portion of the ordinary deposits and circulation.
"The sums which were collected daily on account of the revenue, in branch paper, were demandable the next day in Philadelphia, and, at the same time, at every office of the establishment, at the discretion of the officers of Government. The revenue was principally paid in branch paper, as well at Boston and New York as at Philadelphia, and while the duties were thus paid at one counter, in branch paper, the debentures, which amounted to one million of dollars every three months, were demanded and paid at the other, in specie or its equivalent money of the place. Many additional details, increasing the difficulties of the moment, might be added. The southern offices were remitting tardily, and the western not at all. All the resources of the Bank would not have sustained it in this course and mode of business another month !! Such was the prostrate state of the Bank of the nation, which had, only twenty-seven months before, commenced business with an untramelled active capital of twenty-eight millions of dollars.
"But it would have been fortunate for the Institution if its danger had ceased here. There still remained in some of the trusts of the Bank, some of the men who had contributed most to involve it in this state of things. As I must be brief, and the subject is very extensive, I will advert only to the principal instance of the misfortune and profligacy to which I allude.
"In the office at Baltimore of which James A. Buchanan was President, and J.W. M'Culloh was Cashier, there were near three millions of dollars discounted or appropriated, without any authority, and without the knowledge of the Board of the office, or that of the parent Bank ! S. Smith and Buchanan, of which firm J.A. Buchanan was a member, James W. M'Culloh and George Williams (the latter a member of the parent Board by the appointment of Government,) had obtained of the parent Bank discounts, in the regular and accustomed manner, to the amount of 1,957,700 dollars, on a pledge of 18,290 shares of stock of the Bank. These men, without the knowledge of either Board, and contrary to the resolves and orders of the parent Bank, took out of the office at Baltimore, under the pretence of securing it by pledging the surplus value of the stock, already pledged at the parent Bank for its value and more, and other like surpluses over which the Bank had no control, the sum of 1,540,000 dollars: this formed a part of the sum before stated to have been discounted by the President and Cashier of the office, without authority. When this stupendous fraud was discovered, attempts were immediately made to obtain security; and it was obtained nominally to the amount of 900,000 dollars. It was probably really worth 500,000 dollars.
"The losses sustained at the office at Baltimore alone, the great mass of which grew out of this fraud and others closely connected with it, have been estimated at the immense sum of 1,671,221 dollars 87 cents. The aggregate of the losses of the Institution, growing out of the operations which preceded the 6th of March, 1819, exceeded considerably 3,500,000 dollars. The dividends during the same time amounted to 4,410,000. Of this sum, 1,348,553 dollars 98 cents were received as the interest on the public debt held by the Bank, which leaves, as the entire profits on all the operations of Banking, the sum of 3,061,441 dollars 2 cents, which is less by at least half a million of dollars, than the losses sustained on the same business ! !
"When I was invited, and consented to fill the station I now hold, I was alike ignorant and inapprehensive of the situation in which I have just described the Bank, (truly, I believe,) to have been. I was at the moment remotely situated from the scenes of its active business, and its import ant transactions. I had held, it is true, shortly before, to oblige my friends, a place in the board of the office at Charleston, at which I occasionally attended, and from what I saw there, as well as from the public facts concerning the transactions of the Bank, I was satisfied that there was a great want of financial talent in the management of it. But I had not the faintest idea that its power had been so completely prostrated, or that it had been thus unfortunately managed or grossly defrauded. I never imagined that when it had, at so much expense and loss, imported so many millions of specie, they had been entirely exhausted, and were not yet paid for: nor that the Bank was on the point of stopping payment. It was not until the moment I was about to commence my journey to Philadelphia, that I was apprized by a letter from a friend, who had been a member of the preceding Board, that he feared, in a few months, the Bank would be obliged to stop payment.
"This was, indeed, appalling news. When I reached Washington, I received hourly proofs of the probability of this event. In Philadelphia it was generally expected. My memory deceives me if I found any one in or out of the Bank , who entertained a sanguine belief of its being able to sustain its payments much longer. On the contrary, there was, (I think it cannot be forgotten,) a public and general expectation that the nation was about to suffer the calamity of a currency composed entirely of irredeemable paper. The evil which thus threatened the country, is not at all to be compared with a suspension of sound currency in times of war and great national emergencies. The former can only be conceived by a people who have suffered under a paper currency in profound peace. What a train of evils does it produce ? The destruction of public and private credit, the national torpor, the individual ruin, the disgraceful legislation, and the prostration of the morals of the people, of which you may discover within your own territories some examples, will give you some, but a faint idea of the calamity which was about to fall on the country.
"Thus stood the Bank at the organization of the present administration. I was elected and took my seat as President of the Board on the 6th of March, 1819. But some time, of course, was necessary to look into the state of the Bank before measures of relief could be projected. Its danger, however, was too manifest and too pressing to allow much time for this purpose. The principal errors which produced the danger were fortunately of easy discovery, and to them the proper remedy was immediately applied. The southern and western offices were immediately directed not to issue their notes, and the Bank ceased to purchase and collect exchanges on the South and West.
This was Mr. Cheves's report to the stockholders; they consulted as to the means of relief, especially on the great points of signing the currency, and getting rid of the fourteenth section. The result was a conviction that Congress alone could relieve them; that legislative remedies were indispensable; and a memorial was draughted accordingly. Its introductory paragraph is remarkable, and deserves to be read.
"That the institution of which they are managers is laboring under several grievances, not only injurious to the bank, but, as they respectfully conceive, to the nation also, which call for legislative relief; some of these arise from the original omissions of appropriate legal enactments, others from certain provisions of the charter, not suited to the condition and circumstances of the bank, and one of very important character, from a regulation concerning the fiscal receipts of the Government of the Union. For the remedy of these evils, the stockholders of the Bank of the United States can only look to Congress."
Mark, I beseech you, Mr. President, the phraseology of this memorial, and consider who was the man that signed it, and most probably drew it. It complains of original omissions, and existing provisions in the charter, for the remedy of which legislative aid is prayed, and Congress declared to be the only power that can grant it. One of the evils thus complained of was, the labor imposed upon the president of the bank, and the principal cashier, in signing the five and ten dollar notes; another was the difficulty of providing payment for the same note at the branch bank which issued it, and at the other branches to which it might be carried in the course of trade and business.
The memorial was accompanied by an argumentative remonstrance, strongly urging Congress to grant the relief prayed for. The appointment of an agent and register to sign notes was urgently pressed, for the purpose of relieving the president from manual labor, that he might give his attention to the higher and more important business of the bank, but to no purpose; Congress refused the request. The other branch of the memorial shared the same fate. It was the main application, and every argument was used to induce Congress to grant it, but without effect.
Mr. Cheves represented, and most truly, that the bank could not provide payment for the same note, at the same time, in eighteen different places. His language was:
"To-day, a branch shall have a million of capital; in three months it may be without a cent."
All this was true, is now true, and forever will be true. But the bank was established to furnish a sound and uniform currency; that soundness and uniformity could only be attained by cashing the notes wherever they were presented; if that could not be done, the public object for establishing the bank had failed; and Congress refused to let its branches degenerate into local institutions, issuing a local paper for the private gain of the stockholders, when the great public object was no longer attainable. The refusal was peremptory; and as the bank could not go on according to the charter, and cash its notes at all the branches, the branches were shut up. They issued no notes; made few or no discounts; confined themselves to dealing in exchange, and collecting the gold and silver of the South and West, and remitting it to the parent bank.
This state of things continued about seven years, and during all that time the bank was forfeiting its charter for non-user, that is to say, for not using its powers for the public and beneficial object for which it was granted. This was an unprofitable season for the stockholders; dividends were small; the odium of the institution great; its inability to furnish a sound and uniform currency admitted; the charter daily liable to forfeiture; and all hope for its renewal perfectly desperate. In these circumstances action became indispensable. It was neck or nothing. Inaction was death; action could be no worse, and might lead to life. Some new remedy must be tried; some daring experiment must be adventured; however doubtful the issue, however hazardous the trial, the venture must be made; it was a case for digitalis! and the venture was made. What that venture was, and how wonderfully it has succeeded, to the astonishment of its delighted projectors, I will now show you in the words of the present president of the bank.
Mr. Biddle's Report to the stockholders at the triennial meeting, September, 1831. Extracts.
"The Bank of the United States was established for the purpose of restoring specie payments, which had for a long time been suspended throughout a great part of the country of furnishing a sound circulating medium, and of giving more uniformity to the exchanges between distant sections of the Union. By importing more than seven millions of specie, and by a free issue of notes immediately after its establishment, the bank with great sacrifices succeeded for a time in attaining these objects; but it seems to have been afterwards considered that its powers were exhausted by the effort, and that the continuance of it would be entirely impracticable. The essential difficulty was presumed to be in the provision of the charter, making the notes universally receivable for debts due to the Government, which, by obliging the bank to provide payment for the same note at various places, would require it to retain a greater amount of specie than it could issue of notes; thus diminishing rather than increasing the sound circulation. The consequence was, the bank issued its own notes sparingly, more especially in the Southern and Western States, where it often preferred the reissue of the notes of the State banks, being unwilling to issue freely its notes which it might be compelled to pay at some one of the many places remote from the point of issuing them.
"Having, in compliance with the directions of the stockholders in 1822, applied without success to Congress for a modification of this disabling provision in the charter, it became necessary for the board of directors to reexamine the constitution of the bank, in order to discover whether there was really any organic defect which prevented it from performing the functions to which it was destined, or whether some different combination of its powers might not overcome its difficulties.
"The experiment was interesting and hazardous. It was to try how far the institution could succeed in doing that which had never yet succeeded elsewhere, in diffuseing over so wide a surface of country a currency of large amount and of uniform value, at all places and under all circumstances; and also whether it could bring down to its extreme limit the necessary expense of commercial intercourse between distant sections of country, whose exchangeable productions were of such various and an equal values.
"This system has now been in operation for several years. It was at first experimental, and of doubtful issue; and as the consequences were equally important to the bank and the community, its progress has been watched with deep solicitude. Its success, therefore, has been seen with proportionate satisfaction."
Mr. President, it is not my fashion to put a strained construction upon any gentleman's words upon the words of one present, much less one who has no place, no voice, here. I will, therefore, put no construction at all upon the language which I have read. I will let every word stand for itself; will let every phrase be taken in its literal, natural, obvious, inevitable meaning. And what do they tell you ? Why, that payment of the same note at various places was impossible; that compulsory payments were fatal to the bank; and, to get rid of them, she has done for herself what Congress refused to do for her, and what her directory, in the time of Mr. Cheves, solemnly declared that Congress alone could do ! This is what the president of the bank tells you. Look at the words.
Bank established to keep up a sound uniform currency; exhausted by the effort to do so; entirely impracticable; essential difficulty in the provision of the charter (the 14th section) which made the notes universally receivable by Government; compellable to pay at places remote from the point of issuing; applied without success to Congress for a modification of this disabling provision; re-examination of the constitution of the bank; discovery of new powers, the difficulties overcome; experiment hazardous; never succeeded elsewhere; the issue doubtful; progress watched with deep solicitude; great satisfaction at the success.
And now, Mr. President, what was this experiment, of hazard so great, of issue so doubtful, which never succeeded elsewhere, the progress of which was watched with so much fear and trembling, and the fancied success of which is announced with so much satisfaction ? Sir, it is the invention of this branch bank currency ! It is the substitution of branch bank orders for the promissory notes of the Bank of the United States ! And surely, from the first establishment of banks to the present day, a more potent medicine was never invented for the cure of the diseases to which banks are most subject. It has completely overcome all the difficulties which the bank lay under at the time of Mr. Cheves's memorial, and which were then admitted to be fatal to it. What were those difficulties ? They were a twofold impediment; first, a total inability to sign notes fast enough; secondly, a total inability to pay for them, according to the charter, after they were signed. The remedy wanted was, increased facilities for signing; diminished liabilities for paying ! And the orders have completely answered this double object. Signers enough now, and compulsory payment nowhere ! This is the glorious relief which the experiment a has brought. This is the cataplasm which has healed the wounds of the bank. This is the medicinal drug the balsamic drink the restorative infusion which has poured a new portion of strength into the exhausted machine; and enabled it to bear its infirmities a little longer.
Fifty signers at work, and one hundred and fifty endorsing clerks, pouring out from five and twenty places their perennial streams of paper. When out, it is not payable by law any where. Not at the branch which issues it; for there is neither promise, nor law, to exact the payment there. Not at any other branch, for the 14th section of the charter does not apply to orders, and we have just seen that they were invented to evade that section. Not in Philadelphia; for, notwithstanding that may be the purport of the order, yet it is an absolute impossibility; for the people of this wide confederacy, the laboring people especially, who handle these small orders, can never go up to Philadelphia to demand the hard money for them.
Yes, sir, these orders are the thing. It is the currency of which they are composed which has enabled the machinery of the bank to go to work after the inaction from 1819 to 1827. It is this currency which has enabled it to flood the South and West (as I will show presently) with paper for which it has not the means of redemption. It is this which has enabled its votaries to raise the cry, brief and delusive, of sound and uniform currency. It is this which enables the retainers of the bank to contradict President Jackson for repeating its own words; yes! repeating their own words: for the message of 1829, declaring the failure of the bank to furnish a sound and uniform currency, is nothing but the repetition of what the bank directory itself had declared, and what all intelligent men know to be true.
It is this illegal, irresponsible currency which has enabled the bank to fill the Union with debtors in chains, who scream incessantly, for the life and glory of their Juggernaut, and attack with the fury of wild beasts every public man who will not square his public conduct by the devouring miseries of their own private condition, and the remorseless cravings of their insatiate idol.
I have now established, Mr. President, as I trust and believe, the truth of the first branch of my proposition, namely, that this currency of branch bank orders is unauthorized by the charter, and illegal. I will now say a few words in support of the second branch of the proposition, namely, that this currency ought to be suppressed.
The mere fact of the illegality, sir, I should hold to be sufficient to justify this suppression. In a country of laws, the laws should be obeyed. No private individual should be allowed to trample them underfoot; much less a public man, or public body; least of all, a great moneyed corporation wielding above one hundred millions of dollars per annum, and boldly contending with the federal government for the sceptre of political powermoney is power ! The Bank of the United States possesses more money than the federal government; and the question of power is now to be decided between them. That question is wrapped up in the case before you. It is a case of clear conviction of a violation of the laws by this great moneyed corporation; and that not of a single statute, and by inadvertence, and in a small matter, which concerns but few, but in one general, sweeping, studied, and systematic infraction of a whole code of lawsof an entire constitution, made for its sole government and restraintand the pernicious effects of which enter into the revenues of the Union, and extend themselves to every moneyed transaction between man and man. This is the case of violated law which stands before you; and if it goes unpunished, then do I say, the question of political power is decided between the bank and the government. The question of supremacy is at an end. Let there be no more talk of restrictions or limitation in the charter. Grant a new one. Grant it upon the spot. Grant it without words ! Grant it in blank ! to save the directors from the labor of re-examination ! the court from the labor of constructions ! and yourselves from the degradation of being publicly trampled under foot.
I do insist, Mr. President, that this currency ought to be suppressed for illegality alone, even if no pernicious consequences could result from its circulation. But pernicious consequences do result. The substituted currency is not the equivalent of the branch bank notes, whose place it has usurped : it is inferior to those notes in vital particulars, and to the manifest danger and loss of the people.
In the first place, these branch hank orders are not payable in the States in which they are issued. Look at them ! they are nominally payable in Philadelphia ! Look at the law ! It gives the holder no right to demand their contents at the branch bank, until the order has been to Philadelphia, and returned. I lay no stress upon the insidious circumstance that these orders are now paid at the branch where issued, and at other branches. That voluntary, delusive payment may satisfy those who are willing to swallow a gilded hook; it may satisfy those who are willing to hold their property at the will of the bank. For my part, I want law for my rights. I look at the law, to the legal rights of the holder, and say that he has no right to demand payment at the branch which issued the order. The present custom of paying is voluntary, not compulsory; it depends upon the will of the bank, not upon law; and none but tyrants can require, or slaves submit to, tenure at will. These orders, even admitting them to be legal, are only payable in Philadelphia; and to demand payment there, is a delusive and impracticable right. For the body of the citizens cannot go to Philadelphia to get the change for the small orders; merchants will not remit them; they would as soon carry up the fires of hell to Philadelphia; for the bank would consign them to ruin if they did. These orders are for the frontiers; and it is made the interest and the policy of merchants to leave them at home, and take a bill of exchange at a nominal premium. Brokers alone will ever carry them, and that as their own, after buying them out of the hands of the people at a discount fixed by themselves.
This contrivance, Mr. President, of issuing bank paper at one place, payable at another and a distant place, is not a new thing under the sun; but its success, if it succeeds here, will be a new thing in the history of banking. This contrivance, sir, is of European origin. It began in Scotland some years ago, with a banker in Aberdeen, who issued promissory notes payable in London. Then the Bank of Ireland set her branches in Sligo, Cork, and Belfast, at the same work; and they made their branch notes payable in Dublin. The English country bankers took the hint, and put out their notes payable in London. The mass of these notes were of the smaller denominations, one or two pounds sterling, corresponding with our five and ten dollar orders; such as were handled by the laboring classes, and who could never carry them to London and Dublin to demand their contents. At this point the British Imperial Parliament took cognizance of the matter; treated the issue of such notes as a vicious practice, violative of the very first idea of a sound currency, and particularly dangerous to the laboring classes. The parliament suppressed the practice. This all happened in the year 1826; and now this practice, thus suppressed in England, Scotland, and Ireland, is in full operation in our America ! and the directors of the Bank of the United States are celebrated, as the greatest of financiers, for picking up an illegal practice of Scottish origin, and putting it into operation in the United States, and that, too, in the very year in which it was suppressed in Great Britain !
In the next place, these orders are impoverishing and destructive to the States in which they are issued, because they lead to the abduction of its gold and silver. If notes are issued, they are payable at the branch bank, and an adequate supply of gold and silver must be kept on hand to redeem them; but these orders being drawn on Philadelphia, the gold and silver of the State must be sent there to meet them. This is the clear undoubted theory of this new-fangled currency; it is also the proved established practice and effects of it. Every body in the South and West knows that the hard money of the country is constantly disappearing; but those only who have observed the working of the machinery of the Bank of the United States, can tell where all this hard money is gone. The monthly statements of the bank will tell this secret. They will show that the gold and silver of the South and West go to the Northeast; and that the branches are the channels of collection and remittance. Here are some items from the returns of the year 1830, the last which have been yet printed, and which will throw a little light upon this subject:
Specie. Notes issued.
New Orleans, April, 1830, .... 700,815 ... 6,421,275
Mobile, August, ....... 55,368 ...... 1,557,745
Nashville, October, ........ 185,304 ........ 2,080,500
Louisville, December, ....... 200,825 ...... 1,083,560
Lexington, December, ...... 78,430 ....... 1,484,110
St. Louis, June, ...... 126,603 ..... 679,880
Cincinnati, November, ..... 155,157 ...... 977,455
Pittsburg, April, ........ 38,620 ..... 736,897
Richmond, August, ..... 170,510 ..... 1,064,415
Fayetteville, October, .... 26,342 ..... 1,192,205
Savannah, August, ..... 304,547 ...... 1,735,700
Charleston, December, ..... 266,962 ..... 1,425,255
Philadelphia, August, ...... 3,728,626 ...... 2,531,080
Yew York, November, ...... 2,351,190 ..... 1,764,627
Boston, August, ..... 1,327,755 ..... 721,505
Baltimore, October, ...... 738,000 ..... 780,657
Here is a picture for you, Mr. President, and a contrast with it. On one side, a most beggarly exhibition of empty boxes; on the other, fulness and distension to bursting. West of the Alleghanies, and south of the Potomac, no hard money; in the Northeast, millions at every point. But, as a compensation for this difficiency of metal, we have a most bountiful supply of paper. Ten, twenty, thirty, forty, fifty to one is our proportion of paper to silver. And for all this paper the country is in debt, and pays interest (bank interest) to non-residents and foreigners !
Gentlemen of the South complain of the tariff, and doubtless with much reason; but the day is at hand when every eye shall see, and every tongue shall confess, that the tariff is not the only, nor the largest, nor the most voracious vampyre which sucks at their veins ! The Bank of the United States divides that business with the tariff, and, like the stronger brother, takes the largest share to herself. She furnishes her brood of these insatiable suckers. She hangs them on every vein of gold and silver which the South and West exhibit. They gorge to repletion, then vomit their load into the vast receptacles of the Northeast, and gorge again.
The hard money of the country, that money which pays no interest, is sucked up and sent away; the paper money of a company, for which bank interest is exacted, takes its place. The people of the country are in debt for this paper, the greater part of them at second and third hand, borrowers from borrowers, paying rack-interest to the intermediate lenders. The labors of the year barely suffice for the payment of the sixty days' collection of all this interest. The principal is still behind, to come upon these exhausted countries when delayed payment has doubled the difficulty of making payment. When that dread day comes, and come it will, and nothing is gained by putting it off, the towns and cities of the South and West the fairest farms and goodliest mansions will be setup at auction, to be knocked down to the bank agent, at the mock prices fixed in the compting room of the bank itself. And in these mock sales of towns and cities may be laid the foundation for the titles and estates of our future nobility Duke of Cincinnati ! Earl of Lexington ! Marquis of Nashville ! Count of St. Louis ! Prince of New Orleans ! Such may be the titles of the bank nobility to whom the next generation of American farmers must "crook the pregnant hinges of the knee."
Yes, sir ! when the renewed charter is brought in for us to vote upon, I shall consider myself as voting upon a bill for the establishment of lords and commons in this America, and for the eventual establishment of a King; for when the lords and commons are established, the King will come of himself !
In the third place, the emission of these orders has deluged the country with counterfeits. The evils of counterfeiting was one of the objections made to the application of the bank for the leave to appoint an agent and register to sign the five and ten dollar notes. The danger was so obvious and imminent, that the memorial of the directors candidly admitted it, and entered into the suggestion of many precautionary measures to prevent it. They admitted that if the signers were numerous or temporary the danger of counterfeiting would be excessive and destructive; but declared that the bank, with a view to its own interest, would not suffer them to be either numerous or temporary, although the act might not limit the number. The directors proposed, however, to limit the number to two, to make them permanent officers in the bank; and to publish their appointment in the Washington city gazettes before they should begin to act. A bill with all these provisions was reported; but Congress refused to pass it, and for this reason, among others, that the power of signing the notes involved the power of judging their genuineness; and this power was too high and dangerous too easily abused and too hardly remedied, to be trusted to any but the very highest officers of the bank those whose character and station would afford the strongest guaranties to the public for the fair exercise of a power so delicate and responsible.
Congress refused to pass the bill. What next ? Why, sir, Mr. Cheves and his directory submitted; but a new directory came in, and what did they do ? They re-examined the constitution of the bank, and discovered the means of overcoming the difficulty. They substituted branch bank orders for branch bank notes; and set, not two, but fifty signers and one hundred and fifty endorsing clerks at work upon these orders. What is the consequence ? Counterfeiting to an excess, and audacity never paralleled before ! I saw in Missouri, before I left home, a descriptive list of ninety-nine varieties of counterfeits on the Bank of the United States and its branches alone; most of them of the class of these five and ten dollar orders. This list was contained in a periodical sheet, called "Counterfeit Detector;" a work wholly given up to describing counterfeits on the United States' bank and its branches; for to such excess has this crime arisen, as to give birth to a new species of literary publication; a periodical newspaper wholly devoted to the description and detection of counterfeit paper currency. The remedy only announces the extent of the evil; it does not cure it. None but business men in cities, and a few official characters, can afford to buy and study these periodicals; the body of the people have no benefit from them. After all, the Detector is no guide; the marks of a counterfeit defected and described in one number of the periodical, are corrected and amended in the next edition of the counterfeits. They instruct the counterfeiters how to amend their work. The fact is, nobody can tell the good from the bad. Brokers and bank officers assume to do it; but they had as well assume to be conjurors and astrologers; they had as well practise incantations, and deliver oracles in convulsions and contortions, as to look at this paper, and pronounce judgments; they had as well gaze at the stars, and judge by the motions of the heavenly bodies, as to look at these orders, and judge from the writing and engraving; they had as well do as the sooth sayers of old go out upon a high hill watch the flight of birds and then prognosticate that the order is good or bad, as the bird chances to fly, dexter or sinister, as it passes the hill. Far from knowing the handwriting, they hardly know of the existence of the writers ! Yet these solemn judges condemn, and condemn irrevocably, the property of the people ! They all know how to draw the sign of St. Andrew's cross; and that fatal sign, drawn through the face of an order, is decisive of its fate. True or false, good or bad, from that moment it falls into the receptacle of things; not lost, but damned, on earth.
I do not stand here, Mr. President, to enlarge upon the general evils of a counterfeit currency, such as belong in common to the forging of all bank paper; but there are evils peculiar to the circulation of these counterfeit orders, which give a distinctive character to the mischief's which they inflict, and demand a particular animadversion. These evils grow, first, out of the wide extent of the circulation of these counterfeits, which carries the forgeries of every State of the Union into every other State, thus affecting each part with the miseries of the whole swelling the mass of crime and fraud, and augmenting the difficulties of detection in proportion to the distance from which the intrusive counterfeits came.
The next peculiar evil is in the multitude of incompetent judges; already about one hundred and fifty in number, and annually increasing. A third peculiar evil is in the one-sided character of these judges all appointed at the will of the bank all holding their appointments at her will and all feeling it to be their interest to commit no mistakes to her prejudice. The last, and greatest, of these peculiar evils is in the small size of these orders, which throws their counterfeits upon that class of the community who are least capable to detect the imposition, and least able to bear the loss. The laboring classes, the middle sized farmers, and the country people, are the peculiar victims of this species of counterfeits. They handle small sums, and the small sized counterfeits fall upon their hands. Every counterfeit must stop somewhere. Sooner or later it must stop in somebody's hands; and the mass of these small ones will certainly stop in the hands of poor people. Thus it was in England. In the space of six years, from 1812 to 1818, no less than 154,454 counterfeit notes were presented and detected at the Bank of England; of which 128,800 were for one pound, corresponding with our five dollar orders; and 18,562 were for two pounds, corresponding with our ten dollar orders; leaving only about 8,000 notes out of upwards of 154,000 for all denominations above two pounds, or ten dollars; thus incontestably proving that the poor were the losers and the victims. This was stated in his place by the honorable Henry Grey Bennet, who stated, at the same time, that out of five hundred and one persons convicted of forging, or passing, or offering counterfeit notes, in the short space of thirteen years, of whom two hundred and seven had been hung, and others deported, the mass of them were poor people; and the notes for which they died, were small ones of one and two pounds, equal to five and ten dollars. And he said, at the same time, that the stockholders of the Bank of England, in this frightful mass of crime, and fraud, and misery, and death, had found their consolation and their profit in dividing among themselves twenty-five millions of pounds sterling ! equal to about one hundred and twenty millions of dollars !
This is what the counterfeiting part, or forgery department of the banking system, arrived at in England: this is the point to which the forgery of these branch bank orders is rapidly carrying the American people. And for all the crime and misery which has grown out of the counterfeiting of these orders, and all that shall grow out of them, the directors, who violated their charter to do what Congress forbid, are justly accountable to God and man !
I have carefully abstained, Mr. President, from the use of any topic of a general or exciting nature. I have confined myself to a mere judicial pleading. But there is one argument against the issue of this currency, which goes so directly to the honor, the dignity, the independence of the States, that I cannot forbear to hold it up for an instant, and to pass it as a shadow before you. It is this. We all know the high and responsible nature of the coining power. It is an attribute of national sovereignty; in its nature belonging to the highest authority in every form of Government. The States of this confederacy, each for itself, became invested with this high power the moment they burst the chains of British vassalage. Possessed of the right in full, they divided it, in part, with the Congress of the confederation. The convention of 1789 gave it exclusively to the new Federal Government; and since that time no State can coin money, regulate its value, emit bills of credit, or make any thing but gold and silver a tender in discharge of debts. Congress alone has the full power to coin and regulate its value; a disputed power to emit bills of credit, and no power to make any thing but gold and silver a lawful tender.
Well, the Bank of the United States refers its origin, in the opinion of many, to the coining and regulating clause in the constitution. What is admitted by all, is, that Congress has granted to the bank a power to issue a paper currency far beyond the amount of the coined currency in the Union; that this paper currency is receivable in payment of all dues to the Federal Government; and, being so receivable, thence enjoys a degree of credit and circulation coextensive with the limits of the Union. Names, Mr. President, are nothing; substance is every thing. The substantial power of coining, and of regulating the currency, is in the bank; for it issues a currency which exceeds the coin in quantity, and supersedes it in circulation. Congress gave this great power in effect, one of the highest attributes of national sovereignty to the company of individuals incorporated under the misnomer of the Bank of the United States; this company has devolved its power, so far as the branch bank orders are concerned, upon their subaltern agencies, called branch banks; and, according to the opinion of the federal court, may devolve it upon whatever agents they please.
These subaltern agencies are protruded into the States, and there exercise a power superior to that which the State Governments surrendered to the Federal Government. They issue a paper currency within the State, which supersedes and expels the hard money. They issue a paper currency not payable within the State, nor within the next State; nor within five hundred or one thousand miles; nor practicably payable any where! and for non-payment of which there is neither prohibition nor penalty in the charter.
This currency necessarily, and practicably, becomes a currency of bills of credit, redeemable at the will of the issuer, and not at the will of the holder; and these bills all people (in the South and West, at least) are under a virtual duresse to receive; because all other currency is chased away. And thus these bills of credit become a forced and irresistible tender in the payment of debts. Can the States stand this? if they can, they are ripe and ready to sink into the condition, not of provinces of the empire, but of farms the rack-rent farms of a great moneyed oligarchy.
Sir, I stop; not that I have finished, but that every thing must have an end, even the overflowings of brief and indignation at viewing the frightful progress which a great moneyed oligarchy is making over the sinking liberties of the land. The cause demands a different advocate. It calls for that rare man who rebuked and overthrew the audacious enterprise of Walpole who overturned the judgments of the King's court drove back the royal patent across the Irish channel, and saved the people of Ireland from the evils of an illegal currency, and their Government from the degradation of seeing a private individual exercising the high power of issuing a national currency within her limits. The crisis calls for that man. It calls for the dauntless spirit the mighty genius the lofty scorn of hopes and fears, which belonged to the illustrious Dean of St. Patrick's !
And, if we are now destined to sink in this contest, (which Heaven of its infinite mercy avert) but if we are destined to sink, then do I say it is not for want of a cause less just, less righteous, less national, less holy, than that in which Ireland triumphed, but because the combined powers of all America's patriot sons are unable to write the drapier's letters !
The question was then taken on granting leave to introduce the resolution, and it was decided in the negative, by the following vote:
YEAS. Messrs. Benton, Dudley, Ellis, Forsyth, Grundy, Hayne, Hill, Kane, Magnum, Marcy, Miller, Moore, Tazewell, Troup, Tyler, White. 16.
NAYS. Messrs. Bell, Bibb, Buckner, Chambers, Clayton, Ewing, Foot, Frelinghuysen, Hendricks, Dallas, Holmes, Johnston, King, Knight, Naudain, Prentiss, Robbins, Rohinson, Seymour, Silsbee, Smith, Tipton, Tomlinson, Webster, Wilkins.25.
So the leave was refused, and then the Senate adjourned to Monday.