THIRTY YEARS VIEW
1820 TO 1850
BANK OF THE UNITED STATESILLEGAL AND VICIOUS CURRENCY.
IN his first annual message, in the year 1829, President Jackson, besides calling in question the constitutionality and general expediency of the Bank, also stated that it had failed in furnishing a uniform currency. That declaration was greatly contested by the Bank and its advocates, and I felt myself bound to make an occasion to show it to be well founded, and to a greater extent than the President had intimated. It had in fact issued an illegal and vicious kind of paperauthorized it to be issued at all the branchesin the shape of drafts or orders payable in Philadelphia, but voluntarily paid where issued, and at all the branches ; and so made into a local currency, and constituting the mass of all its paper seen in circulation ; and as the greatest quantity was usually issued at the most remote and inaccessible branches, the payment of the drafts were well protected by distance and difficulty ; and being of small denominations, loitered and lingered in the hands of the laboring people until the wear and tear became a large item of gain to the Bank, and the difficulty of presenting them at Philadelphia an effectual bar to their payment there. The origin of this kind of currency was thus traced by me : It was invented by a Scotch banker of Aberdeen, who issued notes payable in London, always small denominations, that nobody should take them up to London for redemption. The Bank of Ireland seeing what a pretty way it was to issue notes which they could not practically be compelled to pay, adopted the same trick. Then the English country bankers followed the example. But their career was short. The British parliament took hold of the fraud, and suppressed it in the three kingdoms. That parliament would tolerate no currency issued at one place, and payable at another.
The mode of proceeding to get at the question of this vicious currency was the same as that pursued to get at the question of the non-renewal of the charternamely, an application for leave to bring in a joint resolution declaring it to be illegal, and ordering it to be suppresses and in asking that leave to give the reasons for the motion : which was done, in a speech which the following are some parts :
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.
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.
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 subjectindispensable 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.
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.
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 !
Leave was not given to introduce the joint resolution. The friends of the bank being a majority in the Senate, refused the motion, but felt themselves bound to make defence for a currency so illegal and vicious. Further discussion was stopped for that time ; but afterwards, on the question of the recharter, the illegality of this kind of currency was fully established, and a clause put into the new charter to suppress it. The veto message put an end to the charter, and for the necessity of the remedy in that quarter ; but the practice has been taken up by local institutions and private bankers the States, and become an abuse which requires extirpation.
ERROR OF MONS. DE TOCQUEVILLE
IN RELATION TO THE BANK OF THE UNITED STATES,
THE PRESIDENT, AND THE PEOPLE.
THE first message of President Jackson, delivered at the commencement of the session of 1829-30, confirmed the hopes which the democracy had placed in him. It was a message of the Jeffersonian school, and re-established the land-marks of party, as parties were when founded on principle. Its salient point was the Bank of the United States, and the non-renewal of its charter. He was opposed to the renewal, both on grounds of constitutionality and expediency ; and took this early opportunity of so declaring, both for the information of the people, and of the institution, that each might know what they had to rely upon with respect to him. He said :
The charter of the Bank of the United States expires in 1836, and its stockholders will probably apply for a renewal of their privileges. In order to avoid the evils resulting from precipitancy in a measure involving such important principles, and such deep pecuniary interests, I feel that I cannot, in justice to the parties interested, too soon present it to the deliberate consideration of the legislature and the people. Both the constitutionality and the expediency of the law creating this bank are well questioned by a large portion of our fellow-citizens ; and it must be admitted by all that it has failed in the great end of establishing a uniform and sound currency.
This passage was the grand feature of the message, rising above precedent and judicial decisions, going back to the Constitution and the foundation of party on principle ; and risking a contest at the commencement of his administration, which a mere politician would have put off to the last. The Supreme Court had decided in favor of the constitutionality of the institution ; democratic Congress, in chartering a second bank, had yielded the question, both of constitutionality and expediency. Mr. Madison, in signing the bank charter in 1816, yielded to the authorities without surrendering his convictions. But the effect was the same in behalf of the institution, and against the Constitution, and against the integrity of party founded on principle. It threw down the great landmark of party, and yielded a power of construction which nullified the limitations of the Constitution, and left Congress at liberty to pass any law which it deemed necessary to carry into effect any granted power. The whole argument for the bank turned upon the word necessary at the end of the enumerated powers granted to Congress ; and gave rise to the first division of parties in Washingtons timethe federal party being for the construction which would authorize a national bank ; the democratic party (republican, as then called,) being against it.
It was not merely the bank which the democracy opposed, but the latitudinarian construction which would authorize it, and which would enable Congress to substitute its own will in other cases for the words of the Constitution, and do what it pleased under the plea of necessarya plea under which they would be left as much to their own will as under the general welfare clause. It was the turning point between a strong and splendid government on one side, doing what it pleased, and a plain economical government on the other, limited by a written Constitution. The construction was the main point, because it made a gap in the Constitution through which Congress could pass any other measures which it deemed to be necessary; still there were great objections to the bank itself. Experience had shown such an institution to be a political machine, adverse to free government, mingling in the elections and legislation of the country, corrupting the press, and exerting its influence in the only way known to the moneyed powerby corruption. General Jacksons objections reached both heads of the casethe unconstitutionality of the bank and its inexpediency. It was a return to the Jeffersonian and Hamiltonian times of the early administration of General Washington, and went to the words of the Constitution, and not to the interpretations of the administrators for its meaning.
Such a message, from such a mana man not apt to look back when he had set his face forwardelectrified the democratic spirit of the country. The old democracy felt as if they were to see the Constitution restored before they diedthe young, as if they were summoned to the reconstruction of the work of their fathers. It was evident that a great contest was coming on, and the odds entirely against the President. On the one side, the undivided phalanx of the federal party (for they had not then taken the name of whig); a large part of the democratic party, yielding to precedent and judicial decision ; the bank itself, with its colossal money powerits arms in every State by means of branchesits power over the State banksits power over the business communityover public men who should become its debtors or retainersits organization under a single head, issuing its orders in secret, to be obeyed in all places and by all subordinates at the same moment. Such was the formidable array on one side : on the other side a divided democratic party, disheartened by division, with nothing to rely upon but the goodness of their cause, the prestige of Jacksons name, and the presidential power ;good against anything less than two-thirds of Congress on the final question of the re-charter ; but the risk to run of his non-election before the final question came on.
Under such circumstances it required a strong sense of duty in the new President to commence his career by risking such a contest ; but he believed the institution to be unconstitutional and dangerous, and that it ought to cease to exist ; and there was a clause in the Constitutionthat Constitution which he had sworn to supportwhich commanded him to recommend to Congress, for its consideration, such measures as he should deem expedient and proper. Under this sense of duty, and under the obligation of this oath, President Jackson had recommended to Congress the non-renewal of the bank charter, and the substitution of a different fiscal agent for the operations of the governmentif any such agent was required. And with his accustomed frankness, and the fairness of a man who has nothing but the public good in view, and with a disregard of self which permits no personal consideration to stand in the way of a discharge of a public duty, he made the recommendation six years before the expiration of the charter, and in the first message of his first term ; thereby taking upon his hands such an enemy as the Bank of the United States, at the very commencement of his administration. That such a recommendation against such an institution should bring upon the President and his supporters, violent attacks, both personal and political, with arraignment of motives as well as of reasons, was naturally to be expected ; and that expectation was by no means disappointed. Both he and they, during the seven years that the bank contest (in different forms) prevailed, received from itfrom the newspapers and periodical press in its interest, and from the public speakers in its favor of every gradean accumulation of obloquy, and even of accusation, only lavished upon the oppressors and plunderers of nationsa Verres, or a Hastings. This was natural in such an institution. But President Jackson and his friends had a right to expect fair treatment from historyfrom disinterested historywhich should aspire to truth, and which has no right to be ignorant or careless. He and they had a right to expect justice from such history ; but this is what they have not received. A writer, whose book takes him out of that class of European travellers who requite the hospitality of Americans by disparagement of their institutions, their country, and their characterone whose general intelligence and candor entitle his errors to the honor of correctionin brief, M. de Tocquevillewrites thus of President Jackson and the Bank of the United States :
When the President attacked the bank, the country was excited and parties were formed ; the well-informed classes rallied round the bank, the common people round the President. But it must not be imagined that the people had formed a rational opinion upon a question which offers so many difficulties to the most experienced statesman. The bank is a great establishment, which enjoys an independent existence, and the people, accustomed to make and unmake whatever it pleases, is startled to meet with this obstacle to its authority. In the midst of the perpetual fluctuation of society, the community is irritated by so permanent an institution, and is led to attack in order to see whether it can be shaken or controlled, like all other institutions of the country.(Chapter 10.)
Of this paragraph, so derogatory to President Jackson and the people of the United States, every word is an error. Where a fact is alleged, it is an error ; where an opinion is expressed, it is an error ; where a theory is invented, it is fanciful and visionary. President Jackson did not attack the bank ; the bank attacked him, and for political as well as pecuniary motives ; and under the lead of politicians. When General Jackson, in his first message, of December, 1829 expressed his opinion to Congress against the renewal of the banks charter, he attacked no right or interest which the bank possessed. It was an institution of limited existence, enjoying great privileges,among others a monopoly of national banking, and had no right to any prolongation of existence or privilege after the termination of its charterso far from it, if there was to be another bank, the doctrine of equal rights and no monopolies or perpetuities required it to be thrown open to the free competition of all the citizens. The reasons given by the President were no attack upon the bank. He impugned neither the integrity nor the skill of the institution, but repeated the objections of the political school to which he belonged, and which were as old as Mr. Jeffersons cabinet opinion to President Washington, in the year 1791, and Mr. Madisons great speech in the House of Representatives in the same year. He, therefore, made no attack upon the bank, either upon its existence, its character, or any one of its rights. On the other hand, the bank did attack President Jackson, under the lead of politicians, and for the purpose of breaking him down. The facts were these : President Jackson had communicated his opinion to Congress in December, 1829, against the renewal of the charter ; near three years afterwards, on the 9th of January, 1832, while the charter had yet above three years to run, and a new Congress to be elected before its expiration, and the presidential election impending(General Jackson and Mr. Clay the candidates)the memorial of the president and directors of the bank was suddenly presented in the Senate of the United States, for renewal of its charter.
Now, how came that memorial to be presented at a time so inopportune ? so premature, so inevitably mixing itself with the presidential election, and so encroaching upon the rights of the people, in snatching the question out of their hands, and having it decided by a Congress not elected for the purposeand to the usurpation of the rights of the Congress elected for the purpose ? How came all these anomalies ? all these violations of right, decency and propriety ? They came thus : the bank and its leading anti-Jackson friends believed that the institution was stronger than the Presidentthat it could beat him in the electionthat it could beat him in Congress (as it then stood), and carry the charterdriving him upon the veto power, and rendering him odious if he used it, and disgracing him if (after what he had said) he did not. This was the opinion of the leading politicians friendly to the bank, and inimical to the President. But the bank had a class of friends in Congress also friendly to Gen. Jackson ; and between these two classes there was vehement opposition of opinion on the point of moving for the new charter. It was found impossible, in communications between Washington and Philadelphia, then slow and uncertain, in stage coach conveyances, over miry roads and frozen waters, to come to conclusions on the difficult point. Mr. Biddle and the directors were in doubt, for it would not do to move in the matter, unless all the friends of the bank in Congress acted together. In this state of uncertainty, General Cadwallader, of Philadelphia, friend and confidant of Mr. Biddle, and his usual envoy in all the delicate bank negotiations or troubles, was sent to Washington to obtain a result ; and the union of both wings of the bank party in favor of the desired movement. He came, and the mode of operation was through the machinery of caucusthat contrivance by which a few govern many. The two wings being of different politics, sat separately, one headed by Mr. Clay, the other by Gen. Samuel Smith of Maryland. The two caucuses disagreed, but the democratic being the smaller, and Mr. Clays strong will dominating the other, the resolution was taken to proceed, and all bound to go together.
I had a friend in one of these councils who informed me regularly of the progress made, and eventually that the point was carried for the bankthat General Cadwallader had returned with the news, and with injunctions to have the memorial immediately at Washington, and by a given day. The day arrived, but not the memorial, and my friend came to inform me the reason why ; which was, that the stage had got overturned in the bad roads and crippled Gen. Cadwallader in the shoulder, and detained him ; but that the delay would only be of two days ; and then the memorial would certainly arrive. It did so, and on Monday, the 9th of January, 1832, was presented in the Senate by Mr. Dallas, a senator from Pennsylvania, and resident of Philadelphia, where the bank was established. Mr. Dallas was democratic, and the friend of General Jackson, and on presenting the memorial, as good as told all that I have now written, bating only personal particulars. He said :
That being requested to present this document to the Senate, praying for a renewal of the existing charter of the bank, he begged to be indulged in making a few explanatory remarks. With unhesitating frankness he wished it to be understood by the Senate, by the good commonwealth which it was alike his duty and his pride to represent with fidelity on that floor, and by the people generally, that this application, at this time, had been discouraged by him. Actuated mainly, if not exclusively, by a desire to preserve to the nation the practical benefits of the institution, the expediency of bringing it forward thus early in the term of its incorporation, during a popular representation in Congress which must cease to exist some years before that term expires, and on the eve of all the excitement incident to a great political movement struck his mind as more than doubtful. He felt deep solicitude and apprehension lest, in the progress of inquiry, and in the development of views, under present circumstances, it might be drawn into real or imaginary conflict with some higher, some more favorite, some more immediate wish or purpose of the American people ; and from such a conflict, what sincere friend of this useful establishment would not strive to save or rescue it, by at least a temporary forbearance or delay ?
This was the language of Mr. Dallas, and it was equivalent to a protest from a well-wisher of the bank against the perils and improprieties of its open plunge into the presidential canvass, for the purpose of defeating General Jackson and electing a friend of its own. The prudential counsels of such men as Mr. Dallas did not prevail ; political counsels governed ; the bank charter was pushedwas carried through both Houses of Congressdared the veto of Jacksonreceived itroused the peopleand the bank and all of its friends were crushed. Then it affected to have been attacked by Jackson ; and Mons. de Tocqueville has carried that fiction into history, with all the imaginary reasons for a groundless accusation, which the bank had invented.
The remainder of this quotation from Mons. de Tocqueville is profoundly erroneous, and deserves to be exposed, to prevent the mischiefs which his book might do in Europe, and even in America, among that class of our people who look to European writers for information upon their own country. He speaks of the well informed classes who rallied round the bank ; and the common people who had formed no rational opinion upon the subject, and who had joined General Jackson. Certainly the great business community, with few exceptions, comprising wealth, ability and education, went for the bank, and the masses for General Jackson ; but which had formed the rational opinion is seen by the event. The well informed classes have bowed not merely to the decision, but to the intelligence of the masses. They have adopted their opinion of the institutioncondemned itrepudiated it as an obsolete idea; and of all of its former advocates, not one now exists. All have yielded to that instinctive sagacity of the people, which is an overmatch for book-learning ; and which being the result of common sense, is usually right ; and being disinterested, is always honest. I adduce this instancea grand national oneof the succumbing of the well informed classes to the instinctive sagacity of the people, not merely to correct Mons. de Tocqueville, but for the higher purpose of showing the capacity of the people for self-government. The rest of the quotation, the independent existencethe people accustomed to make and unmakestartled at this obstacleirritated at a permanent institutionattack in order to shake and control; all this is fancy, or as the old English wrote it, fantasyenlivened by French vivacity into witty theory, as fallacious as witty.
I could wish I were done with quotations from Mons. de Tocqueville on this subject ; but he forces me to make another extract from his book, and it is found in his chapter 18, thus :
The slightest observation enables us to appreciate the advantages which the country derives from the bank. Its notes are taken on the borders of the desert for the same value as in Philadelphia. It is nevertheless the object of great animosity. Its directors have proclaimed their hostility to the President, and are accused, not without some show of probability, of having abused their influence to thwart his election. The President, therefore, attacks the establishment with all the warmth of personal enmity, and he is encouraged in the pursuit of his revenge by the conviction that he is supported by the secret propensities of the majority. It always holds a great number of the notes issued by the provincial banks, which it can at any time oblige them to convert into cash. It has itself nothing to fear from a similar demand, as the extent of its resources enables it to meet all claims. But the existence of the provincial banks is thus threatened, and their operations are restricted, since they are only able to issue a quantity of notes duly proportioned to their capital. They submit with impatience to this salutary control. The newspapers which they have bought over, and the President, whose interest renders him their instrument, attack the bank with the greatest vehemence. They rouse the local passions and the blind democratic instinct of the country to aid in their cause ; and they assert that the bank directors form a permanent aristocratic body, whose influence must ultimately be felt in the government, and must affect those principles of equalityupon which society rests in America.
Now, while Mons. de Tocqueville was arranging all this fine encomium upon the bank, and all this censure upon its adversaries, the whole of which is nothing but a French translation of the bank publications of the day, for itself and against President Jacksonduring all this time there was a process going on in the Congress of the United States, by which it was proved that the bank was then insolvent, and living from day to day upon expedients ; and getting hold of property and money by contrivances which the law would qualify as swindlingplundering its own stockholdersand bribing individuals, institutions, and members of legislative bodies, wherever it could be done. Those fine notes, of which he speaks, were then without solid value. The salutary restraint attributed to its control over local banks was soon exemplified in its forcing many of them into complicity in its crimes, and all into two general suspensions of specie payments, headed by itself. Its solidity and its honor were soon shown in open bankruptcyin the dishonor of its notesthe violation of sacred depositsthe disappearance of its capitalthe destruction of institutions connected with itthe extinction of fifty-six millions of capital (its own, and that of others drawn into its vortex);and the ruin or damage of families, both foreign and American, who had been induced by its name, and by its delusive exhibitions of credit, to invest their money in its stock. Placing the opposition of President Jackson to such an institution to the account of base and personal motivesto feelings of revenge because he had been unable to seduce it into his supportis an error of fact manifested by all the history of the case ; to say nothing of his own personal character. He was a senator in Congress during the existence of the first national hank, and was against it ; and on the same grounds of unconstitutionality and of inexpediency. He delivered his opinion against this second one before it had manifested any hostility to him. His fist opposition was abstractagainst the institutionwithout reference to its conduct ; he knew nothing against it then, and neither said, or insinuated anything against it. Subsequently, when misconduct was discovered, he charged it ; and openly and responsibly. Equally unfounded is the insinuation in another place, of subserviency to local banks. He, the instrument of local banks ! he who could not be made the friend, even, of the great bank itself ; who was all his life a hard money man an opposer of all banksthe denouncer of delinquent banks in his own State ; who, with one stroke of his pen, in the recess of Congress, and against its will, in the summer of 1836, struck all their notes from the list of land office payments ! and whose last message to Congress, and in his farewell address to the people, admonished them earnestly and affectionately against the whole system of paper money (bank currency)the evils of which he feelingly described as falling heaviest upon the most meritorious part of the community, and the part least able to bear themthe productive classes.
The object of this chapter is to correct this error of Mons. de Tocqueville, and to vindicate history, and to do justice to General Jackson and the democracy : and my task is easy. Events have done it for mehave answered every question on which the bank controversy depended ; and have nullified every argument in favor of the bankand that both with, and without reference to its misconduct. As an institution, it has been proved to be unnecessary, and the country is found to do infinitely better without it than with it. During the twenty years of its existence there was pecuniary distress in the countryperiodical returns of expansion and contraction, deranged currency, ruined exchanges, panics and convulsions in the money market. In the almost twenty years which have elapsed since, these calamitous words have never been heard : and the contrast of the two periods will make the condemnation of one, and the eulogy of the other. There was no gold during the existence of the bank : there has been an ample gold currency ever since, and that before we got California. There were general suspensions of specie payments during its time ; and none since. Exchanges were deranged during its existence : they have been regular since its death. Labor and property lived the life of up and downhigh price one day, no price another daywhile the bank ruled : both have been up all the time, since it has been gone. We have had a war sincea foreign warwhich tries the strength of financial systems in all countries ; and have gone through this war not only without a financial crisis, but with a financial triumphthe public securities remaining above par the whole time ; and the government paying to its war debt creditors a reward of twenty dollars upon the hundred to get them to accept their pay before it is due ; and in this shining side of the contrast, experience has invalidated the decision of the Supreme Court, by expunging the sole argument upon which the decision rested. Necessity, necessary to carry into effect the granted powers, was the decision of the court. Not so, the voice of experience. That has proved such an institution to be unnecessary. Every granted power, and some not granted, have been carried into effect since the extinction of the national bank, and since the substitution of the gold currency and the independent treasury ; and all with triumphant successthe war power above all, and most successfully exercised of all. And this sole foundation for the courts decision in favor of the constitutionality of the bank being removed, the decision itself vanishesdisappears like the baseless fabric of a vision, leaving not a wreck behind. But there will be a time hereafter for the celebration of this victory of the constitution over the Supreme Courtthe only object of this chapter being to vindicate General Jackson and the people from the errors of Mons. de Tocqueville in relation to them and the bank : which is done.