House of RepresentativesSaturday, January 19, 1811.
Mr. Sawyer called for the order of the day on the unfinished business of yesterday the bill continuing the charter of the Bank of the United States.
Mr. Fisk moved that the report of the said committee should lie on the table. This was disagreed to by a vote of 57 to 46.
The House then proceeded to consider the said unfinished business, and the question to concur with the Committee of the whole House on striking out the first section of the bill to continue, for a further time, the charter of the Bank of the United States, being stated
Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled, That the act, entitled "An act to incorporate the subscribers to the Bank of the United States," passed the 25th day of February, in the year of our Lord 1791, subject to the provisions and conditions in this act to be made, be, and the same is hereby continued in force, for and during the further term of twenty years, from and after the 4th day of March 1811
Mr. Desha [Joseph Desha (December 9, 1768 - October 11, 1842) Kentucky] said:
Mr. Speaker, the question is on a concurrence with the Committee of the Whole, in striking out the first section of the bill that contemplates a renewal of the charter of the Bank of the United States; or, in other words, whether we will foster a viper in the bosom of our country, that will spread its deadly venom over the land, and finally affect the vitals of your republican institutions; or, whether we will, as it is our duty, apply the proper antidote, by a refusal to renew the charter, thereby checking the cankering poison, the importation and dissemination of foreign influence that has already brought our Government almost to the brink of ruin.
Sir, I am opposed to the renewal of the charter on constitutional grounds, as well as on the score of expediency. I view it as being directly at war with not only the letter, but the spirit of the constitution, and replete with principles incompatible with republicanism. As to the constitutionality, the ground that I intended to have occupied, was taken from me by the gentleman from New York, who spoke yesterday, [Mr. Porter] and I will say ably managed. The points he made, I consider incontrovertible, and the arguments deduced from them, unanswerable; consequently, as I deem the constitutional question nearly exhausted, I shall but barely touch upon it.
The States, sir, from the time they determined to be free, were particularly guarded against the adoption of any measure that could, in the most remote degree, lead to aristocracy or consolidation. Let gentlemen examine that instrument the pledge of union I mean the Articles of Confederation. They will find it couched in cautious language; they will find that the framers of that instrument were particularly guarded against vesting powers in the General Government, that could, in the most distant manner, place their rights and liberties in jeopardy; they, no doubt, viewed large moneyed institutions, like the one under consideration, as moneyed aristocracies which might, with their different ramifications, jeopardize liberty, by imperceptibly gliding into consolidation. A power expressly given to the General Government to grant charters of incorporation will not be found in the Articles of Confederation; and if gentlemen will cast their eyes over the second article of that instrument, they will find it expressly provides, that each State retains its sovereignty, freedom, and independence, and every power, jurisdiction, and right, which is not, by the Articles of Confederation, expressly delegated to the United States in Congress assembled. This, sir, I show to prove, that, from the time the States determined to shake off the shackles of despotism, the power of granting charters of incorporation was never intended to be given to the General Government.
Sir, those gentlemen who are the advocates of this measure will not pretend, that the power to grant charters is expressly given by the Constitution, and, sir, they must be well apprised that such a power was never intended to be given. This fact ought not to be lost sight of. Did not Mr. Madison urge, in energetic language, in 1791, on the floor of Congress, that the power to grant charters of incorporation was in the original plan, reported by the committee to the convention among the enumerated powers delegated in the eighth section of the first article of the Constitution, but, that after three days' deliberation and ardent debate, it was expunged, as a power dangerous and improper to be vested in the General Government ? It is on remote constructive powers, that gentlemen must bottom this measure; and in my mind, there they are cut short by the 10th article of the amendment to the Constitution of the United States, where it expressly provides, that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the People." Are not those prohibitory words strongly and clearly expressed ? Sir, I defy gentlemen to lay their finger on any clause of the Constitution that would justify the granting monopolies or exclusive privileges. No, sir, it cannot be done, unless they lay hold of the horrid doctrine of implication a doctrine as absurd as it is dangerous, particularly when you have a specific instrument for your guide, and one which you have taken a solemn obligation to support inviolate. I had hoped that the doctrine of implied powers had long since been exploded.
Ever since the reign of terror, ever since the federal gentlemen, under the head of constructive powers, adopted the alien and sedition laws, the people of the United States, in whom the powers of Government rightfully rest, signified their disapprobation of the doctrine of implication, in forcible language, by hurling the then majority out of power. Sir, if you subscribe to this doctrine, the barriers of your constitution are broken down; it will ultimately become a dead letter; you will have nothing to restrain you. But, say gentlemen, our predecessors have said it was constitutional; they were men of wisdom and solemnly passed upon it as being within the pale of the Constitution. Sir, I acknowledge they were men of wisdom, and perhaps actuated by the purest of motives, but they were men; consequently, fallible, and liable to err; and in my mind, they did err most egregiously. And am I to take for granted what they have done, without examining and judging for myself, particularly when I am acting under the solemnity of an oath ? No, sir, while I have the honor of a seat on this floor, and any measure is about to be adopted which, in my opinion, conflicts with that instrument that I am sworn to support, I will raise my voice against it, and if possible, check its progress.
But, sir, we are gravely told, that it is expedient to renew the charter of the Bank of the United States, inasmuch as the evils arising to Government and individuals would be desperate on its being suffered to expire; therefore, it was constitutional. Then, sir, we are to understand expediency and constitutionality to be synonymous terms; then, if that is the fact, the Constitution is a nullity in itself. Congress has nothing to restrain them but their judgment. They are fully at liberty to adopt any measure they may think proper under the sweeping clause of providing for the common defence and general welfare.
Sir, much confidence as I have in Congress, after witnessing the fluctuations and vibrations that have passed in review for several sessions past, I am afraid your republican Government would be prostrated; your liberties would be shortly at an end. Gentlemen talk of republicanism they say they are real Americans in principle, and would go any length that was necessary in defending our rights against oppression and, sir, at the same time are doing the very thing our lasting and inveterate enemy, Britain, would wish them to do; and the very thing, if adopted, that will strengthen her power and inevitably accelerate the dissolution of Government. What did that able statesman say, who, with some gentlemen, have been considered almost oracular ? I mean, sir, William Pitt, speaking of the American policy "let them adopt their funding system and go into their banking institutions, and their independence is a mere phantom." Sir, keep close to your chartered authorities, or the most direful evils await you. If you are at liberty to twist that instrument on which the perpetuity of your civil liberty depends, into any shape the caprice of party may think proper, you may calculate on your boasted institutions being of but short duration. If your Constitution is defective, amend it. The manner is pointed out, and which is certainly much safer than to slide into the dangerous doctrine of implication. If you can multiply and link together remote implications, you may, from the same parity of reasoning, take in every object of legislation that comes within the whole scope of the political sphere.
Sir, it is not only astonishing, but painful, to behold gentlemen who, on former occasions, were loud against the doctrine of constructive powers, now its warmest advocates. They come forward with the greatest ardor imaginable, in support of a measure that has nothing in the Constitution on which they can bottom it, without laying hold of the dangerous doctrine of implication. The federal gentlemen have the same justification for the adoption of this measure, that they had for the adoption of the alien and sedition laws. The doctrine of implied powers will hold them out. But, sir, their object is to pull down the administration and republicanism ours to support it. The minority is not responsible; the majority has the whole responsibility on their shoulders; consequently, ought to act with great circumspection.
Sir, what were the causes that produced a change of administration ? Was it not constitutional encroachments and abuses ? Most unquestionably it was. And will gentlemen wantonly steer their bark against the same rock on which the former administration split ? Rest assured, sir, that the people of the United States will not tamely look on and see their sacred Bill of Rights trampled under foot. No, sir; when they discover a disposition in the public agents to fritter away their Constitution into a mere cipher, they will rise in their majesty, and, in a constitutional way, apply the proper corrective. They will tell you, gentlemen, that you have betrayed the trust reposed in you, by abusing the powers delegated to you; that you must give place to more able and safer hands to steer the national bark.
Well, sir, as to expediency, we are told that inevitable ruin would follow a refusal to renew the charter of the Bank of the United States, as it is improperly called. Pray, sir, in what way have the United States a single cent of money or interest in this bank ? Certainly none. Does she not merely lend her name, and, by that, foster speculation ? Most unquestionably she does. For, sir, I can view it in no other light, than a complete system of speculation. A system, sir, that has drained a considerable portion of your precious metals from your country. Has there not, within less than twenty years, nearly nineteen millions of dollars, dividends arising from this colossal bank, been principally sent out of the country to fatten the European shareholders, who are the principal stockholders ? For, sir, I believe it will not be denied, that about three-fourths of this ten million capital belongs to foreigners, and principally to the citizens of the island of Britain; the balance, in all probability, principally to her agents and partisans in this country for I recollect that, on a former occasion, a gentleman from Virginia laid a resolution on the table for consideration that contemplated making the shareholders known, and that extraordinary opposition was manifested by the other side of the House, I presume, lest the measure should become more unpopular, when it was ascertained that nearly the whole of the capital stock belonged to Britain and her partisans.
Mr. Speaker, money is naturally calculated to command influence. Then what must be the influence wielded by this ten millions of capital in the bosom of our country, and held principally by our lasting and inveterate enemy ? This is one of the engines, and no inconsiderable one, that is set to work, in order to overturn civil liberty, and which will, in all probability, unless checked by timely resistance, go lengths in producing the effect: and, sir, from the influence it has already obtained in different sections of the Union, and the ardent manner it is advocated, I should not be surprised, if a renewal of the charter should take place if it should ultimately make its way into the national councils. Let gentlemen reflect on the hardihood of the agents of this bank. They come forward in the face of the nation, and openly offer to bribe its councils with upwards of a million of dollars for the renewal of the charter; for, sir, I may be wrong, but I can view it in no other light than as a bribe in order to obtain the name and sanction of Government to carry on their destructive speculations. I have no doubt but that George the 3rd is a principal stockholder in this bank; and I believe, rather than not succeed in obtaining a renewal of the charter, that he would authorise his agent in this country to bid up several millions: because, sir, he has never pardoned us since our independence, and by this means he would necessarily calculate on effectuating his nefarious purposes of overturning your Government and bringing you under his power again, and which would be a much safer method than encountering the Americans in arms: for of that he became extremely tired when we were in a state of infancy.
But, it is said, that this bank can be of infinite service to Government, in making her deposites in, and, in case of necessity, to borrow money from, to answer governmental purposes. Indeed, sir, if we continue temporising and playing the losing game much longer, we will have but little to deposite. And would it not be as safe to make the deposites in some of the State banks as in this foreign bank ? For we must be in a desperate situation, indeed, if it would not be equally as safe to trust ourselves as to trust foreigners, and the very ones who are oppressing us, and whose interest as well as inclination is to oppress us in every imaginable way. And, sir, as to the obtaining of loans in case of emergency, I would much rather be dependent on my own Government on the citizens of my own Government, than a foreign Government or its agents, and especially one that is at war with us; for I deem it tantamount to war, when they are perpetually plundering our property, impressing and ill-treating our countrymen, as well as depriving us of important inherent rights, the liberty of the seas.
This measure, perhaps, may be a conveniency in our fiscal concerns, in the collection and transmission of revenue; but, sir, there is no danger of the wheels of Government being stopped for it; and, sir, I should regret extremely, if it was, as has been insinuated, that the existence of our Government depended on foreign capital. I should regret extremely indeed, if we held our rights, privileges, and independence, on so uncertain a tenure.
No, sir, in my mind government can be carried on equally as well without this darling bank as with it: therefore, it is time to abandon this destructive system. I confess, sir, that I am not very favorably disposed to banking institutions; I view them as in direct hostility with the principles of our Government: but if we must have banks, in the name of common sense, let us have a bank of our own, with home capital and not foreign, and one that will not import foreign influence for God knows we have enough of it among us already and one that will not extract the wealth from your country and export it, nor undermine the foundation of your liberty.
Well, sir, on whom is this ruin, that is spoken of in such lively colors, to fall ? Why, sir, it is to fall on a few speculating merchants, who have been so incautious as to become involved in debt in consequence of wishing to carry on extensive speculations, therefore borrowed freely of this foreign bank, the calling for which sums would, in all probability, bring on bankruptcies. These are not the people that I would make any considerable sacrifice for. They are not deserving it. Government has already made very considerable sacrifices in attempting to comply with their memorials and petitions respecting the protection of commerce; and how have they been rewarded ? Why, sir, by flying in the face of authority, and trying to bring the laws of Government into ridicule. Yet they are the few who are to be favored at the expense of the many. But, notwithstanding their reprehensible conduct, there are respectable exceptions: I speak of the speculator, not of the honest and fair trader.
I wish not to be considered an enemy to commerce. The reverse is the fact. I am a friend to it to a certain extent; as an auxiliary to agriculture; but I never wish to see it have the ascendency in Government, to sway the national councils and give law.
But, sir, if the evils will be so great at this time on a failure to renew the charter, what will they be at the end of twenty years, the time contemplated to extend it ? For it is reasonable to suppose, that the evil will increase in equal ratio for twenty years to come, as it has for twenty years past. Agreeably to this, a renewal will be tantamount to a perpetuation; for, agreeably to the doctrine held forth by gentlemen, a failure then to renew the charter would engulph the Government in ruin, and overturn the fabric of liberty. Who are to be favored particularly by the continuance of this destructive system ? The speculating mercantile class, I may say, exclusively. And, sir, if they increase in extravagance and arrogance for twenty years to come, in equal ratio with what they have for a few years past, nothing will satisfy them short of swaying the national councils, and giving law to Government, and making every thing subserve to their cupidity. Sir, I hold commerce essentially necessary, and would go as far as reason would justify in the protection of it, but I am for keeping it directly within the pale of reason, and not suffering it to drown every thing in the whirlpool of its power.
Are not Government well aware, that this large foreign capital, in the bosom of our country, has an extraordinary influence in certain sections of the Union in our elections, the keeping which pure, ought to be an object of the first magnitude ? How was it, sir, formerly, in New York ? Did they not, in consequence of this moneyed aristocracy, give complete tone to the elections; and, sir, was it checked until Burr surreptitiously obtained the Manhattan Bank, under the mask of watering the city, which formed a counterbalance ? And, when it obtains an influence in your elections, you may necessarily calculate on its making its way into your national councils; then every thing must bend to this monstrous speculating institution, your Constitution not excepted.
It will be said, no doubt, as I am from the West, where banks are not common, that I am unacquainted with the nature and operations of banking institutions. Sir, I do not pretend to go into details practically, I acknowledge, I am unacquainted with them: my information on subjects of this kind is principally theoretical. But, sir, I am sufficiently acquainted with the nature and operations of them to convince me that they are systems of speculation, calculated to suit the speculatory and mercantile class, at the expense of the agriculturist at the expense of those who are the support and sheet anchor of your Government. How is it, sir, when your banks break, which has been the case in several instances, in some of the Eastern States ? The Farmer's Exchange Bank of Rhode Island, when it was ripped up, had but some odds of forty dollars in its vaults. The Berkshire and Northampton banks, both of Massachusetts, when their vaults were examined, one had perhaps thirty or forty dollars in it, the other, I believe, was entirely empty; and the Coos Bank, (I believe it was called) of New Hampshire, was nearly in the same situation, and thousands of their bills in circulation at the time. Well, sir, who were the sufferers ? The note holders, the people at large. And, sir, as it is a system of speculation, when they have emitted bills to the amount of their limitation, where they are limited they may break (as the saying is) full handed, and the weight of the shock falls on the note holders, who are principally agriculturists, as they compose eight-tenths of the people.
But, sir, the accounts of the speculations, impositions, and, I must add, swindling and corruptions, that have been practised in the East, under the head of banks, have reached the West, and the people, notwithstanding they have, by some of the eastern gentry, been deemed scarcely in a state of civilization, have sympathised with their eastern friends, and had regretted that turpitude had become so deeply rooted in the East, in the line of banking, where all but exclusive civilization was claimed, and which has made them cautiously guard against the possibility of being engulphed in a similar vortex. But, sir, if gentlemen would cast their eyes emphatically over the history of the West, I expectancy would not only find civilization, but pure patriotism; patriotism, sir, that would not fade before the sun; they would find the people uncontaminated with foreign partialities, prejudice or influence, and where the last torch of liberty would be held up on the continent, as a terror to tyrants.
Mr. Speaker, perhaps I am mistaken, but I view this measure as the greatest test of political principle that has been on the carpet for many years back, and if adopted, federalism, or, if gentlemen please, aristocracy, will regularly progress, and finally obtain the ascendancy; republicanism will have to take the back ground, and ultimately be prostrated; your boasted institutions will only figure in the pages of history, like ancient republics, as a mournful monument of the fall of man, and a sorrowful memento of his degraded condition; therefore, in my mind, the adoption of this measure would seem like committing a most horrid treason against the principles of the Constitution and civil liberty; consequently, I consider it not only the true interest, but the bounden duty of every man who has any pretensions to friendship for the American Government, or civil liberty, to assist in strangling this infant Hercules in the cradle, or at least preventing it from coming to maturity.
If this measure was only calculated to perpetuate the memory of its founder, I should not so much object to it; but then I should think it unnecessary and improper. But, sir, it will do more; it will further the views of federalism, by increasing their power, and assist them in overturning the present system of government, on the ruins of which they will calculate on raising one more congenial to their purposes.
Mr. Speaker, from my present impressions, I think it would be more advisable, if the British Government should not rescind their destructive measures affecting our rights, and do us justice, rather than renew the charter of the Bank of the United States, as it is called, thereby furthering their views on this country, to lay our hand on the capital stock, or at least so much as belongs to citizens of the island of Britain, in order to indemnify us in part for the damages we have sustained by British outrages, and, if it becomes necessary, (as I presume it will) to make use of it in defraying the expenses necessary in the subjugation of the North American provinces, which will have to be resorted to, if you wish to give peace to the land for I have no hesitation in saying, that, while this large foreign capital is in existence in your country, and the British hold their North American possessions, that British principles will be disseminated, that federalism if gentlemen like the term better, aristocracy will regularly progress, and finally convulse your Government to its centre. You may rest assured, sir, that if the charter of the Bank of the United States is renewed, it will prove a powerful weapon in the hands of our enemies, and will be calculated to rule the Government, instead of the Government ruling itself. Then, sir, is it not high time that the accounts of this colossal speculating institution should be suffered to close, by letting the charter expire on the 3d of March next, that we may know whether this Diana of the Ephesians, be a goddess of solid silver, or only of clay silvered over.
Sir, much has been said about the want of capital. If gentlemen would cast their eyes around, and examine our resources, they must be fully apprised that we have capital adequate, and beyond our wants. Then is it not time to cut asunder those leading strings, by which corruption has led credulity ? Yes, sir, it is not only time that we should have the name of freemen, but be so in reality.
Sir, in justice to my own feelings, and the future prosperity of my country, I am bound to vote in favor of concurring with the Committee of the Whole in striking out the first section of the bill.
[The whole banking system is bad, not just the central bank]
January 19, 1811.
Representative Willis Alston.
Putting down the charter of the United States' Bank will not put an end to the banking system. Cast your eyes about you at what has taken place at the last sessions of the State Legislatures ? Has one of them adjourned without establishing a bank ? It is bank paper as much when issuing from State banks as when from the Bank of the United States. There is no sort of difference. If this question had not been attacked on constitutional ground; if it had been left merely to expediency, I should not have troubled the House on the subject. I know too little of the concerns of a bank to think of making a speech on the details alone. But I know how much interest moves us on this question. When you place money in the State banks, you give a complete license to the State banks to issue what they please. What was the loss of paper money during our revolution ? Did it not fall on those who had given credit ? And are we prepared to meet such a shock as that ? Could we have stood it in any other cause than that in which we were engaged ? Here let me enter my protest against the banking system altogether; but we have it. Is not the consequence more dangerous, will not the loss ultimately be greater, to let the State banks issue paper at will, than to control them by the Bank of the United States ?
Mr. Wright [Robert Wright (1752-1826); Maryland (DR); studied law, admitted to the bar].
Mr. Speaker: The importance of this subject, and the great attention that has been paid to gentlemen while delivering their opinions upon it, is a sure guarantee that I, also, in my turn, shall receive the attention of this House, while I deliver my sentiments. I pledge myself, in this exhausted state of the debate, not to consume more of their time than a correct sense of duty to my constituents shall impose.
This subject, sir, is presented to our consideration in a two-fold point of view: as to its constitutionality, and as to its expediency. I will, therefore, proceed to consider it in that order.
On the point of its constitutionality I shall take the liberty to recall your at tention to those parts of the Constitution on which its advocates have seemed to rely. The gentleman from Maryland [Mr. Key] cites the 1st article, 8th section,
"Congress have a right to lay and collect taxes, imposts, duties, and excises, to pay the debts, and provide for the common defence and general welfare of the United States."
He also read the 1st article, 9th section,
"No capitation or other direct tax shall be laid, unless in proportion to the census or enumeration herein before directed to be taken."
However, not yet himself satisfied with being able to derive an authority from these sections, he calls in aid the last paragraph of the section,
"Congress shall have power to make all laws necessary and proper for carrying into execution the foregoing powers, and all other powers vested by this Constitution in the Government of the United States, or in any department or officer thereof."
The gentleman insists, that the power to lay and collect taxes, &c. &c. and the sweeping clause empowering Congress to make all laws necessary to carry that power into execution, will authorize Congress to grant a charter to this bank; that it is necessary to the collection of taxes, that Congress provide by law the means whereby the taxes should be paid.
I had always presumed that the power to lay and collect taxes, to provide for the general defence and common welfare, only authorized Congress, under the limitations of the Constitution, to provide by law for those purposes, by directing whether the tax should be a direct or an indirect tax, or by capitation; and that their powers extended no further than the specification of the objects, if the tax was direct, and the rate at which the specific articles should be valued in the case of a capitation, what should be paid by the head; and, in the case of indirect taxes, what should be the duty on the several articles taxed; and, in either case, to direct the mode of ascertaining and collecting the same; by whom to be ascertained, and by whom collected, and to whom paid.
But I never did suppose that this power, even aided by the sweeping clause, could be conceived, seriously, to extend to the providing means to those who had to pay the tax, whereby they were to be aided in the payment. Such a construction would as well justify the passing a law, compelling the culture of land in a particular way, whereby the crops might be increased; as the farmer cannot pay his tax, unless he raises produce for sale; or, indeed, it might be extended to compel him to use plaister of Paris to improve his crop, and facilitate the payment; which I should deny, even if the tax was made payable in produce.
The same gentleman seems to have relied on the article, "That no capitation, or other direct tax should be laid, but in proportion to the census," as forming an exception to the powers of Congress; and, I presume, means to infer, as this bill will not be a capitation tax, that Congress may pass it under their power "to lay and collect taxes," and the sweeping clause to carry their specific powers into execution.
Sir, the Convention never intended that Congress should have, or exercise, the power to establish banks, or they would nave made use of apt words to have vested them with it. Bank, sir, is a technical term, and if they had intended that power, they would certainly have used that term. When it was intended to give any power, we find the Convention had no difficulty in expressing it: as, Congress shall have power "to coin money and regulate the value thereof, and of foreign coin." And here, let me remark, is an express power "to coin money," which, if we were left to legal construction, would be an affirmative pregnant that they should not emit bills of credit.
But, sir, we need not rely on construction to prove what powers Congress have not, as one of the amendments to the Constitution provides, that "Congress shall have no power that is not expressly given." And, to give a power by expression, is to use apt words for that purpose, and it of course becomes necessary to the power in Congress to establish a bank, that such a power should be given by such specific terms, as would, unequivocally, and without construction, convey the right.
As to the sweeping clause, "to pass all laws necessary to cany into effect the foregoing powers of Congress," the letter of this section confines its operation to the specific powers of Congress, previously enumerated, and can, in no sort, create constructive powers, or be construed into a creation or extension of power.
Sir, if a doubt can remain of its harmless and inoperative nature, I trust it will be removed by a reference to the second volume of the Federalist, page 202:
"It is expressly to execute these powers, that the sweeping clause, as it has been affectedly called, authorizes the National Legislature to pass all necessary and proper laws. If there be any thing exceptionable, it must be sought for in the specific powers, upon which this general declaration is predicated. The declaration itself, though it may be chargeable with tautology or redundancy, is at least perfectly harmless."
Here we find one of the framers of this instrument, when defending this article called the "sweeping clause," from the charge of being used to extend the powers of Congress, or to embrace other than the specific powers, himself confining it to the express powers, and, indeed, declaring that it gave no power, was a mere tautology. Yet gentlemen seem to think that it is an important delegation of power, and confidently quote it as such; and, indeed, if their construction of it was indulged, it would discharge us from every constitutional obligation, that we, in our discretion, might suppose the public good required; but I trust the good sense and patriotism of this House will never suffer it to substitute discretion for expression, their will for the law.
An honorable member from North Carolina, [Mr. Alston] has, with some confidence, cited the 10th section of the 1st article: "No State shall emit bills of credit, or make any thing but gold and silver a tender." He urged this denial of the right to the States to emit bills of credit, as a perfect prohibition of the States to grant bank charters, and insisted that bank notes were bills of credit. He spoke of this section as a discovery of his own, not noticed by any body before him, as applicable to the case. Sir, the gentleman certainly misapplies the term "bills of credit" to "bank notes." The term "bills of credit," was surely intended to express and prohibit the emission of paper money, which had been emitted by the States and by Congress, during the war of the Revolution, and had so depreciated, as to impress the Convention with the propriety of prohibiting their emission in future.
By a recurrence to the proceedings of the old Congress, and the laws of the several States, it will be found that the term "bills of credit," was technically used for paper money; nor can there be less doubt that bank notes have also their technical meaning, as the paper issued by bank directors; and neither of the terms "bills of credit," or "bank notes," could, by men of legal intelligence, be used for the other. "Bank note," and a "bill of credit," are terms so well known to the law, that, in legal parlance, neither could be substituted for the other. On a prosecution for counterfeiting either, the other could not, I apprehend, be given in evidence. I must, therefore, insist, that the gentleman's construction of the Constitution is incorrect.
But, sir, if it was correct, and the States could not grant bank charters, would it follow that the Government of the United States would possess the right ? I presume not, unless that article of the Constitution, which declares, "that all powers not granted to Congress are reserved to the States, or the People," shall be blotted out of the instrument, or totally disregarded.
Sir, I hope we have not already arrived to that lust of power; and I trust the present case, when its expediency comes to be examined, will not seduce any member of this House from his regard to this hallowed instrument.
Sir, the Secretary of the Treasury, at the time of the passage of the law establishing the United States' Bank [Alexander Hamilton], and who may be called the father of it, labored with unceasing assiduity, in every stage of it, to give it a legitimate existence. We see him, sir, insisting on the power to grant this charter, as conferred by the section that authorizes Congress to lay and collect taxes, and by the sweeping clause, "to pass all laws necessary to carry the preceding powers into effect," any thing, in his opinion, in the Federalist, before cited, as to the harmless quality of the sweeping clause, to the contrary notwithstanding.
Sir, we see him driven from these stands by the Attorney General, [Mr. E.J. Randolph] and by the then Secretary of State, [Mr. Jefferson] the last of whom insisted, that a proposition in the Convention, to authorize Congress to grant corporations, had been rejected; which so thoroughly closed the case, that we find Mr. Hamilton, although he questioned the authenticity of the document relative to the rejection (by the Convention) of the articles alleged to have been rejected, taking post behind that article of the Constitution, that "Congress shall have power to dispose of, and make all needful rules and regulations respecting the territory, or other property, belonging to the United States," and insisting, that the shares of the stock contemplated to be subscribed by the United States, would bring the law, granting the charter, within that section which authorized the United States to make all needful rules and regulations respecting the property of the United States.
But this would not justify a renewal, as Congress have sold their stock. Thus, sir, we find the advocates of this power in Congress to grant a charter to the Bank of the United States, fixing on a variety of the sections of the Constitution, from whence they infer we have the right. And, although, by the express letter of an amendment to the Constitution, Congress can exercise no power not expressly or specifically granted, yet these gentlemen insist we have the right, although they cannot agree among themselves on the article by which it is specified; and, indeed, each is an authority against the other, that the power is not granted at all. And although they all agree on its being constitutional, they are as much at a loss to fix on the article by which it is made so, as the ladies of Strasburg were to decide on the composition of Sterne's celebrated nose; though they all agreed it was a noble nose.
The gentleman from Maryland says, Congress have, by the law authorizing a branch of this bank to be established at New Orleans, recognised their right to grant a charter; and insists that this ought to be considered as an authority to that purpose. Strange that the gentleman's zeal should so transcend his judgment as to induce him to press so futile an argument. Congress, at the time of passing that law, had a right to make any law necessary for, and beneficial to New Orleans; it was then a territory, and, by the positive provisions of the Constitution, Congress have the power to make all "needful rules and regulations respecting their territories or other property;" they have exclusive legislation over it, and may make any law that a State could, as to its government, as well as any law authorized by the Constitution to be passed by Congress.
Sir, by this charter, the directors of this bank were authorized to fix branches in every part of the United States; and when Congress became the purchasers of New Orleans, they considered it a portion of the United States, and, of course, that the directors of this bank had the right to establish the New Orleans branch bank, and felt no hesitation to declare it by law, as they had a perfect constitutional right to make all needful laws for their territories, of which the Orleans territory then was, and yet is one. Yet, sir, this act of good faith in the nation, to this bank, is pressed as an authority to bind this House to consider the constitutionality of this question as settled; but the good sense of this body will secure the United States from the calamity of rechartering this bank, and committing the best interests of this nation to its foreign and domestic enemies.
Now, sir, having presented this view of the unconstitutionally of this question, I must beg the further indulgence of the House while I present also my view of its inexpediency.
Sir, this charter is very nearly allied to the funding system; they had a coeval conception, and the same progenitors. They were conceived in sin, and born in iniquity. The funding system was founded in the basest of frauds to the best of men: the war-worn soldier, whose necessities compelled him to part with his certificates, the price of his blood and toil during an eight years' war; and out of which the arch speculator, availing himself of those necessities, had trepanned him, at half a crown in the pound.
These certificates, sir, were landed to the holders, with their interest, at par, and with other certificates, for supplies for the army and navy, which had also depreciated, were funded at par; and although it was ably contended, that the certificates granted to the original holders only, should be funded at par, and that those held by speculators should be funded at a certain exchange. Yet, sir, such was the influence of that well organized band, under the auspices of the then Secretary of the Treasury, that no discrimination could be effected whereby Congress might have been justified in paying the poor soldier for his loss, by being obliged to part with his certificate at less than its nominal value; a loss occasioned by the inability of Congress to pay them at the time, agreeably to their contract; a loss by Congress forcing upon them these certificates, and their total inattention to the payment of them, for many years, and until they were possessed by the hopeful band of speculators, who were the active agents of this system.
As an evidence of its corruption, the Continental bills of credit which had been issued from time to time, were to be funded at one dollar in the hundred. They, sir, were as a circulating medium in the hands of the People, who, however honestly they might have received them for supplies to the army and navy, at the same time, and at the same price that their neighbors furnished them supplies for which they took their certificates, which this system funded at par for the benefit of speculators, while the holders of the bills of credit were funded at one hundred for one. Could, sir, any thing but corruption have prevented the discrimination between the original holders of the certificates and the speculators, or have induced the funding of certificates (for supplies furnished at the same time and the same price) at par, that denied it to those holding the bills of credit ?
This banking system was partly made up of these corrupt materials of the funding system, which composed a portion of its stock; was illegitimate in its conception, partial in its establishment, and corrupt in its administration; is a mammoth moneyed aristocracy, violative of the Constitution, of unlawful origin, under the control of foreigners, who have proved their principles, by the selection of its directors all Federalists. This stock was to be subscribed at a short day in Philadelphia, convenient only to that neighborhood; it was [therefore] partial. When, in Maryland, a bank is to be established by law, the proportion of each county is allotted to it; books are opened, and the stock subscribed for in each county; and why were not books opened in each State, and their portions of the stock allotted to them, as in Maryland ?
Sir, when we consider that the directors of the mother bank in Philadelphia are elected under the influence of foreign stockholders, to the amount of upwards of seven-tenths of the whole capital, we are not left much to conjecture, why these twenty-five directors are all of a particular political complexion, nor why a list of them, and of the directors of the branches, (as required) has not been furnished, as an agent here had it in his power.
Sir, I should have been glad of the list, as, being pretty well read in the biography of the people of this country, I should have been enabled to have pointed out, I have no doubt, a number of traitors to the Revolution, Burrites, and embargo-breakers; the whole phalanx being at every stage of the republican administrations of this country, with few exceptions, opposed to every measure of those Administrations.
I am a little surprised at their temerity in asking, and expecting a renewal of that charter, by which its directors have used their influence corruptly, to control the measures of the Government, and the elections of the patriotic favorites of the People. We have seen a petition, signed by a number of the merchants of Philadelphia, addressed to General Washington, to ratify Jay's memorable treaty, a number of whom were known to have been its bitter enemies; and it is a well known fact, that the reason assigned by them for that act was, that they were induced to subscribe it under the threats of these bank directors, that, if they did not, they need expect no more accommodation at the bank.
We have seen, at Baltimore, their influence exerted in the memorable election between Gen. Smith and Mr. Winchester, where Edward Johnson, now mayor of Baltimore, and a bank director of the State of Maryland, and Mr. Matthews, now and often a bank director, were put out because they had the presumption to think for themselves, and the temerity to vote for General Smith. These gentlemen were of unblemished reputation, and equally entitled to respect with their successors. I have not a single doubt but they did not suit the directors of the mother bank; they had supported a patriotic soldier of the Revolution, a sin of too deep a dye to be forgiven by this Britannic chosen band, who have lately put the seal to their principles in the election of Evan Jones, now president of the branch bank at New Orleans, who succeeds a gentleman of republican principles.
This Mr. Jones is said to be a refugee from the United States at the commencement of the American Revolution, and a British officer during that period, who has been lately more than supected to be one of Burr's chosen band. If, at a time when the directors are soliciting the renewal of their charter, they can thus outrage every principle for which our patriots bled, and prefer the parricide to the patriot, at a time when the eye of the nation was fixed upon them, what, I ask, after a twenty years' renewal of the charter, may they not be expected to do, or how, in the case of a war with Great Britain, might they not be expected to act ?
How would a patriot of America be expected to act in supplying funds to our enemies, to prosecute a war against this country ? It would certainly be a treasonable adhering to our enemies, giving them aid and comfort. But, sir, we are told this is a harmless institution, all important to the fiscal concerns of the United States; influenced by no motives but the common good. Strange, indeed, would it be, to ascribe to the stockholders of seven-tenths of the capital of this bank, (reported by the Secretary of the Treasury to be foreigners) and known to be Englishmen, a disposition friendly to this country.
Sir, here is a strong foreign influence on the moneyed concerns of this country money has been correctly called the sinews of war and are we to suppose that Britons are not as much attached to their country as Americans are to theirs; or that the strength and influence of this institution will not be put in full operation against us, when it has been committed to the care, and put under the direction of men, known to be in hostility to the best interests of this country ?
Gentlemen on the other side, however, insist that there is no improper influence to be apprehended, and deny it to be a party question, although it is well known to have originated in party, under the auspices of the great Federal leader, Alexander Hamilton; although it has been conducted by directors of the mother bank, exclusively Federalists; and although every Federalist in this House is now its advocate, it is said to be harmless. I think, sir, the placing in the hands of twenty-five directors, elected by stockholders, seven-tenths foreigners, to have the direction of twenty millions of dollars, when money is admitted to be the sinews of war, particularly when we consider their political complexion, and retrace their political conduct, cannot be safe to our Republican institutions, on the score of its moneyed influence; but when we consider the patronage of these directors, who, by the charter, have a right to establish as many branches in the United States as they please say one to each State, with the appointment of thirteen directors, a president, and seven officers to each branch, with as great accommodations as directors, and salaries to their officers averaging a thousand dollars a year, each making upwards of one hundred and seventy thousand dollars to their officers, and more to their directors sir, this is a patronage greater than is possessed by the President of the United States. And will any gentleman who regards the solid interest of this country, be disposed to give this aristocracy, organized as it is, and composed of such materials, the key of this treasury, with its privileges ?
I had always supposed that the Treasury of this country ought to be in the hands of representatives of the American People; they are said to hold the purse string of the nation's treasure, and not that body who now directs this bank. Have they not denounced the Administration, and every measure of the Government, and supported its most inveterate enemies ?
But, suppose them to have been correct in all their measures, ought the nation's representatives to give to foreigners, knowing them to be such, the immense advantages flowing from the renewal of this charter, or to one set of her citizens this benefit, which they have enjoyed for twenty years, in exclusion of her other citizens, who, to say no more, are equally entitled to the favors of Government ? If, sir, we have the power, and feel it necessary to the fiscal concerns of the nation, to have a national bank, the eight millions two hundred thousand dollars held by foreigners in its funds ought to be withdrawn, and that share of stock distributed among the States, having an eye to the stock already held by citizens, so that the proportion of each State, agreeably to the relative census of the States, might be apportioned and subscribed, whereby the establishment might be purged of its foreign influence.
But, it is said, these foreigners will send their gold to England. Can any man of sound judgment suppose they would transfer their capital to England, and take four per cent. in England, and that in paper, when they can loan their money in this country, at six per cent. and get the interest in specie ? Sir, there can be no possibility of their exporting their stock in specie very speedily, when you take a view of the late report of the Treasury; they will not have specie to meet the specie engagements of the bank.
Sir, this institution was established by the Secretary of the Treasury without a bonus, or any solid advantage to the United States. He well knowing what had been the engagements of the stockholders of the Bank of England, at its establishment, and frequent extensions in its accommodations to the British Government; and that the derangement in its fiscal concerns had forced these extensions on that Government. He also well knew that, when the two insurance fire companies, the London and the Royal Fire Insurance Companies were established, with a capital of four hundred and fifty thousand pounds sterling each, they gave as a bonus to the British Government, one hundred and fifty thousand pounds sterling each; and yet this experience was not turned to the benefit of the United Staes; but, this charter was granted without any benefit but to speculators, who were holders of the funded debt, which was made a part of the stock of this bank.
Sir, in the provisions of the law for the establishment of this bank, whose capital was to have been ten millions of dollars, the stockholders were so favored, as to be permitted to go on as soon as four hundred thousand dollars were paid in, (one twenty-fifth part of the capital) and thus, on that small sum, they proceeded to business, and [soon] received an interest on fifteen millions of dollars; and so much in conclave are its concerns, and so much under the control of men of a particular political complexion, all the directors of the mother bank, at all times, have been Federal, or worse, many of them tories, or monarchists; so that, as to its secrets, it might be compared to the inquisition; and being under such control, I have ever doubted the statement of its funds.
Sir, the humiliation of having such an assemblage of characters, selected by foreigners, to select directors for the branches in each State, has ever been truly grating to the honest feelings of Republicans, and violative of the rights of the States, to whom an independent Republican Government has been guarantied.
Sir, there can be no necessity for this bank. The State banks are abundantly sufficient to supply every requisition, if the United Statess deposites are made in them. This goes all lengths to defeat the arguments of gentlemen, predicated on the principle of necessity, as vesting this power in Congress. There are banks, in Baltimore, alone, with a nominal capital of eight millions two hundred and eighty thousand dollars, four millions nine hundred thousand dollars of which is paid in; and if a nominal capital of the United States' Bank of ten millions of dollars, with four hundred thousand dollars only paid in, could begin and progress in business, is it possible to doubt that the banks of Baltimore, with four millions nine hundred thousand dollars paid in, already in operation, could not go on, with the deposites of the United States, and extend their business, so as to give every necessary accommodation to individuals, and the public ?
Can there be any magic in the United States' Bank ? Or can any honest American feel a predilection to its foreign stockholders, or to their hopeful selection of directors ? I trust not. Therefore, there can be no cause of alarm; no danger to the fiscal concerns of the nation.
But, sir, many of the States have banks, and will no doubt conduct them as honestly and impartially as the United States' Bank has been conducted, and under the direction of men the United States may as safely trust, and on whom the public may as confidently rely for accommodation, unless, per adventure, some gentlemen might repose more confidence in foreigners, than in their own citizens. But I hope and trust there are none such within this sanctuary of the liberties of the nation.
We have been told by the gentleman from New York, [Mr. Fisk] that agriculture, commerce, and manufactures, will receive a vital stab, by suffering the charter of this bank to expire. This is a groundless phantom, produced by the feverish fancy of this gentleman, laboring under the bank mania. But, sir, if agriculture, commerce, and manufactures, were to feel it, in the extent suggested by the gentleman, I trust those classes of our fellow-citizens would bear it with fortitude, when they reflected that it could not be renewed, but by a violation of the Constitution of the United States; a violation of the rights of the States, to whom is guarantied an independent republican form of government; and perhaps a violation of our independence, for which the best blood of our heroes was shed on the altar of liberty.
This charter is a cancer on the body politic, which I hope we shall suffer the hand of time to eviscerate and eradicate, and no longer suffer any foreign agency in the regulation of the internal affairs of this country; and that we shall preserve our fiscal concerns from the influence of those, whose interest it is to destroy them. But, we are told by the same gentleman, that the Secretary of the Treasury, whom he calls the Chancellor of the Exchequer, has reported this bank as necessary to the fiscal concerns of this country; and I suppose, by giving the Secretary of the Treasury the title of Chancellor of the Exchequer, he wished to impress this House with the powers of that officer, in England, to give an imposing influence to the Secretary here; and while he advocates the interest of these foreign stockholders, he so far forgets himself, as to introduce into our Government, a Chancellor of the Exchequer. But, I hope we shall exercise our own judgment, and be satisfied with our own Government, organized as it is, disregarding the principles of foreign Governments, and the interest of foreign stockholders.
Sir, we are told by the same gentleman, that Congress sold to foreigners two hundred thousand dollars of the stock in this bank, but a few years ago; and therefore we ought to renew the charter. Sir, the purchasers knew the tenure by which this charter was held, and the precise moment of its death; they bought it as it was, a perishable article, and the selling of the stock by the United States, ought to have been considered as the tocsin of its dissolution, at the time appointed for it. The claim to renew the charter on that ground, is as ridiculous, as for a man who had bought a horse, on his death, to demand another.
We are told of the vast inconvenience our merchants will experience, by not having an universally circulating medium. How, say they, can money be paid by a Bostonian, at New Orleans ? Sir, money is not paid in large commercial transactions; and if it were, would it not be an easy matter, if a merchant has Boston bank notes, to get the specie for them, and send that to New Orleans ? How, I ask, would he do if he wanted the money at the Havana, or any foreign port ? And why cannot he do the same at New Orleans ? Sir, this is the common lot of merchants; but, sir, if the gentleman had Boston United States' branch bank notes, could he get gold for them at the New Orleans branch bank ? No, sir, and a gentleman who had five hundred pounds in the United States' mother and branch bank notes, might have to travel to every State having a branch, to get the specie, as neither will give specie for the paper of the other, and are to that purpose foreign to each other.
Indeed, it has been suggested, as a practice, to secure the banks from a pressure for specie, to circulate the Eastern notes to the West, and so, vice versa, whereby the holders, on the fourth of March, will be put to great inconvenience in procuring specie for them.
Sir, the people of England had no national bank till the year sixteen hundred and ninety-seven, less than a century before the establishment of this bank, and they were enabled to conduct their great commercial concerns, to great advantage; and the United States had an extended commerce before the establishment of this bank, and I trust her merchants will be able still, to conduct advantageously, their commercial concerns, without our sacrificing the Constitution we are sworn to support, or being tributary to foreigners, whose interests I never can respect, when in collision with that of the American People.
Yet, on March 14, 1816, Mr. Wright voted FOR the chartering of a second Bank of the United States !?.
Friday, April 5, 1816---
Mr. WRIGHT said he was one of those who had aided in putting down the old bank, and was sure that, a thousand years after he was buried, his vote on that occasion would be a monumental proof of his worth, and his regard for the best interests of his country. He opposed it on the ground of inexpediency as well as unconstitutionality; but the supreme judicial tribunal had decided on its constitutionality, by often recognising it as a party, and it was now too late to insist on the objection.
Mr. Wright argued some time in favor of the bill; and, adverting to Mr. RANDOLPH'S epithet that the bank was a scheme of public robbery, and his declared intention to hold as much of its stock as he could, Mr. Wright said his friend from Virginia ought to recollect that the receiver was always considered as bad as the thief, &c.
[then he voted against the indefinite postponement of the bill]
Mr. BOYD [Adam Boyd (1746-1835); New Jersey] said he was unwilling to give his vote on the question of indefinite postponement, without offering to the House, and those that he in part represented, his sentiments. I shall vote, said he, for the postponement; and, should that vote not prevail, then against the bill, in its present form, and every other in which it may be presented to me, for a renewal of the charter of the United States' Bank, predicated on the original grant: because, to my mind, it is unconstitutional.
And here, Mr. Speaker, you must allow me to go back and take a look at the time and manner of its creation, and how it originated. To my mind it was created in aid of the funding system and what was that debt, so created, not contracted ? Was it for the redemption of the bills of credit, called Congress money, that paid your army in the field, fed and clothed them for years ? No. Was it to redeem said bills that were paid to the farmer for his flour, beef, teams, hay, and supplies to the army ? No, no, sir. How, then ? Why, after those bills had so far depreciated that the farmers were unwilling to receive them, then certificates were given at the comparative price of those depreciated bills. Then, again, it became necessary to liquidate those certificates down to specie value. Were they called in then ? No, no, sir; no redemption yet and let me tell you, sir, it was that paper and credit that placed you in that chair, and me on this floor.
Well, next the Constitution is formed, and Congress set themselves about paying the debts of the United States, and some part of the several States' debt. Mr. Speaker, how was it done ? Runners go out, in every direction, to purchase those liquidated certificates, and they succeed at 2s. 6d. in the pound value, up to 8s. All the certificates funded did not, on an average, cost the purchaser more than five shillings in the pound. Now, sir, the bills, called Congress money, are all, or next to all, sunk in the hands of the holders, and fifteen shillings in the pound of the residue.
Now, sir, an act of general justice takes place ! The said certificates are funded at 20s., or their nominal value, to the speculator! and an interest of six per cent, per annum given to him; to pay which duties are laid, and money borrowed to pay the interest in advance of the revenue. A charter is now granted for a bank of ten millions of dollars, seven and a half millions of which was to be this aforesaid State paper, and two millions five hundred thousand in specie; and when a small part of that was paid in, they were allowed to begin their discounts, and issue their paper to double the amount of the whole capital! viz: twenty millions; these certificates drawing six per cent, making seven millions five hundred thousand of the stock.
Now, this part must, according to this statement, give to the stock holders eighteen percent, for the deposite of this State paper, and twelve for the residue.
Now, Mr. Speaker, I will ask where was the redemption for these bank notes so issued ? Surely not in the bank, for that was seven and a half millions State paper, as above, drawing six per cent. Not in cash, for that was not supposed to be there. Therefore, to my mind, this was a great deception swindling, I will call it. Ah, but, say some, by this means you were furnished with a capital, and enabled to carry on commerce to a great extent. I deny the fact our capital was the produce of our soil and industry.
Banks, at best, are no more than a conveniency to merchants; and I respect honest merchants; they are useful and necessary; but I do not include bank stock jobbers, or men calling themselves merchants, without a capital; mere drones in the hive. No, sir, the latter is a moth to the commonwealth.
It appears to me, that this scheme of banking is an evil in its operation, something like the faro table, always, in its operations at each round, depositing six per cent, to the stockholders for what ? The exchange of a note discounted, and the note so lodged the best of the two ! Ah, and is this indeed the capital of our country ?
Sir, I am lost in the chicanery. The banks enable us to over-trade on a false capital: depreciate our property; demoralise our citizens, and take or send the gold and silver out of the country. Let me state this a little further. I will suppose a line drawn at a distance from the sea of fifty miles, the whole length of the continent. I would ask, if the cultivation of that tract of country would be equal to the maintenance of themselves and those collected in the cities ? I believe not.
Then, again, let me suppose that, on an average, the whole length of our country we cultivate to the distance of two hundred miles from the sea board. Then, it appears that the average distance that we have to take all our transportable produce is one hundred and twenty-five miles. It is believed that the cultivated distance is, on an average, nearly four hundred miles, which will enhance the price of transportation, mostly by land, to the cities. Now, sir, at the general price, one-third, and in some cases one-half, is expended in getting the produce there. But this is kept out of sight, and much said about high and great prices obtained by the farmer. It is nominal, not real. It is paid them in depreciated bank paper.
Sir, I do contend that not only the bank paper is depreciated, but that, by the means of its abundance, the gold and silver is depreciated. One dollar, eight years since, was worth more than one dollar and fifty cents is at this day. Besides all this, I ask, is there cash in their vaults to redeem their bills ? No, no, sir; not for one-half. Thus, sir, are the People swindled out of their property to support gambling and chicane. Is this what enhances property, and gives a capital to carry on commerce ? No, for myself, I think not. It is the product of our soil and our industry that is the capital, and on that we do and ought to trade; and that trade ought to be internal, turned to our own manufactories in a great part.
I do not say that banks are not convenient and useful, to a certain degree; but I do not think the advantage is equal to the disadvantage. I am well aware that such sentiments will be treated with ridicule; but, sir, that does not intimidate me; they are my sentiments, and, as such, I give them without the least fear of intimidation, having in view the happiness of my country; and I will venture to say, that the day is not far distant, if we progress as we have done with banks, that the country will experience an universal shock from this false capital.
Before you, sir, are propositions for charters of incorporation, within this District, for banks, to the amount of four millions. Can there be a want of capital ? If there is, how is this stock to be furnished ?
Mr. Speaker, we hear from Richmond, Baltimore, and Philadelphia, much said against the renewal of the United States' Bank charter, and I agree with them; but, I believe, from very different principles. The profits of the United States' Bank have been, from their issues, and the deposites of the revenue, and private individuals, immense; and they want the cards in their own hands to play the same game. I think they are not entitled to much credit. The odds consists in this: the one is against the Constitution, the other not; the principle is the same in both.
Mr. Speaker, if we must have a national bank, let it be so in reality. I shall not attempt to go into the detail of such an institution. It is not my purpose; but I think that it might easily be done by making a portion of our public lands the foundation of such part as the United States should choose to subscribe or hold the bank to be created in the District of Columbia, and to extend branches into such States as, by law, would choose to accept them.
Sir, I had much more to say on this subject, but I perceive that the House is impatient, and I do not wish to detain them, and shall add no more.
House of RepresentativesTuesday, January 22, 1811.
Mr. JOHNSON. [Richard Mentor Johnson (October 17, 1780 – November 19, 1850);(D) Kentucky; future vice-president under Van Buren] Mr. Speaker: I had determined, until yesterday, to be silent on this occasion, and I extremely regret the necessity which has compelled me to trespass upon the exhausted patience of the House upon an almost exhausted subject. I am opposed to the renewal of the charter of the Bank of the United States from the strongest sense of duty which can be felt by the representative of a free People; believe it palpably unconstitutional to renew the charter, and, if it were constitutional, it is inexpedient and improper.
It is absolutely necessary that the House and this nation should understand the real question before us for arguments have been advanced upon premises which do not exist, and remarks predicated upon a case which is not embraced by the bill. This makes it my duty to call attention to the real question, that we may not dwell longer upon supposed cases. This is not a struggle, on our part, to repeal any act of incorporation, or to deprive any citizen of any vested rights claimed either by nature or by any political act; but an exertion in favor of equal laws and equal justice to all the people of the United States, to prevent monopolies from being given to a moneyed aristocracy, unknown to the constitution, and dangerous to the liberties of the people, and subversive of the State sovereignties.
Twenty years ago, Congress, in express violation of the constitution, incorporated a bank, called the Bank of the United States to continue twenty years, which will expire the 3d of March. It was granted by those principally who have assumed the name of Federalists, and who advocated the incorporation of the bank as constitutional, upon the odious doctrine of implied powers, and which was opposed by those who have since supported the character of republicans. This very measure was the first that laid the foundation for the two great political parties who have, since that period, agitated and divided this country.
The charter granted in 1791 will expire the third of March, and the stockholders, and those under their influence, have petitioned Congress to renew the charter for the term of twenty years more. Will we encourage this moneyed aristocracy, and continue this privileged order in the bosom of our country twenty years longer ? They have had the exclusive advantage of accumulating wealth and money for twenty years, and they are not satisfied. They wish a renewal of their charter for twenty years to come. Thus, sir, the present Congress have before them the same question which was determined in 1791, viz. to incorporate the stock holders of the United States' Bank twenty years from the 3d of next March. We are absolved from all obligations on this subject, but those of duty to the people; the question stands on its original merits and demerits; for the lapse of twenty years cannot sanctify a breach in the constitution, nor the acquiescence of the people make that expedient and proper, which is hostile to liberty, equality, and justice. Thus absolved from all obligations to promote this institution, from such considerations as have been urged, I am to consult the good of the People.
First, to incorporate the stockholders of this bank, and thereby continue in existence a moneyed aristocracy, and a privileged order of men, is a violation of the Constitution of the United States; that Constitution of union which binds the States together, and which we are individually bound to support by a solemn appeal to heaven.
It cannot be unpleasant to trace back to its source the union of the States. It brings to the patriot's mind the events of the American Revolution. It was in this glorious Revolution that the union of the States had its origin; at a time when we were distracted by domestic faction, and threatened with a foreign power, when, in fact we were invaded by a British army, and our political existence was threatened. Thus, while General Washington was at the head of our forces in the North, the sages in Congress were planning articles of confederation as early as June, 1776. Before the declaration of independence, a committee, composed of a member from each State, was appointed, to draw up articles of confederation by which the States should be bound to each other.
These Articles of Confederation were finally adopted by all the States in 1781, until which time Congress was the type of union, and the rallying point for the States. So great was the influence of these men who conducted us safe through the Revolution. This summary will give us the objects of the union of the States. It was not for the purpose of interfering with State rights, for the purpose of regulating the laws of credence, and the laws of descents, of creating county court-houses and jails, opening State and county roads; this would have been impossible; it would have been an assumption of power destructive to every principle of independence. It was, on the other hand, for the great and mighty objects of common security from foreign enemies and domestic treason and insurrection, that the union was formed.
The objects of the Union are confined to those great matters of the confederacy which could not be effected by a single State. We should, therefore, confine ourselves to these objects of the confederacy, that we may not weaken the bonds of union by a usurpation of power not given to us by the confederation; a union sacred in its origin, cemented by the sufferings of the States, strengthened by habit and affection, and sacred in its objects of common security against external danger and internal commotion.
The articles of confederation being the first written bond of union, let us examine the system and point out its defects, that we may more easily see why the Articles of Confederation were abandoned for the present Federal Constitution. The articles of confederation gave to the old Congress the powers enumerated in the present constitution. The objects of both instruments were the same, the powers principally the same, but different in the execution of those powers. The powers of confederation were federal in extent, and federal in their operation.
The resolves of Congress, therefore, under the articles of confederation, had no other force than recommendations to the different States. If men were wanting, the States were required to furnish their quotas. If Congress wanted money for the great objects of union, they could lay and collect no tax; they could only recommend to the States severally to furnish the requisition. But Congress had no power to force the States to a compliance. And the States could, as many of them did, refuse to furnish the requisition of men and money demanded by Congress; thus the powers of the United States were federal in extent and federal in their operation. The old Congress had no judiciary, because that would have been unnecessary, as their resolves could not be enforced upon the States in their sovereign capacity, or upon the property or persons of individuals. In this state of things, when commerce languished, when, under British influence, we were engaged in a bloody Indian war; and our ports and frontiers in British possession, and the States refusing to furnish men and money, and comply in all things with the resolves of Congress, although under constitutional obligation to do so; it was agreed, by all, that the articles of confederation wanted revision and amendment; the States sent their deputies for the purpose of forming a more perfect instrument of union between the States. This was a great and a delicate trust.
Thus the present Constitution originated from the defects of the confederation embracing the same great objects of common security; and the power of both instruments are limited and federal. In fact, they are both a grant of specified powers, and powers not granted to Congress are reserved to the States or to the People. We discover the same objects and powers in the two instruments of union; differing in their operation upon the States and the People. Congress has the power to lay and collect taxes, and to operate upon the person and the property of every individual in the United States, and, with that view, federal, judicial, and executive branches were established, by the present Constitution, to carry the laws into effect, and to appoint officers to collect the revenue. Congress has a right to raise an army from the body of the people, and to force a draught if necessary, whereas the old Congress, under the confederation, had the same right to require men and money for the objects of the Confederacy; but these requisitions operated only as recommendations to the States. From this statement we plainly discover the great and only radical difference between the Confederation and the present Constitution. The powers now exercised by Congress can be enforced upon the persons and property of the People. This operation, and carrying into effect the powers of Congress, is the national and consolidating principle of the Constitution.
Although experience had proven the want of power in Congress to carry into effect the legitimate objects of the confederation, this national or consolidating principle in the Federal Constitution, was a subject of alarm and solicitude to the friends of liberty. This principle was the fruitful source of the most obstinate and rational objections to the adoption of the Federal Constitution; and it was with vast difficulty that the States adopted it. In fact, it was adopted under a conviction and promise that amendments would be made, which would leave nothing to doubt or implication, and important amendments were engrafted accordingly into the constitution, all tending to demonstrate that we were to assume no power by implication, but confine ourselves to the letter of the Constitution.
To prove that the constitution should be thus construed, I need only advert to the 8th section of the 1st article, in which the powers granted to Congress are specifically enumerated, to lay and collect taxes, to borrow money, to regulate commerce, to establish a uniform rule of naturalization, to coin money, to constitute courts of justice, declare war, raise armies, to call forth the militia, &c. And to the 10th section of the same article, where certain powers are prohibited to the States, which had been previously vested in the Congress of the United States, viz: no State shall enter into any treaty, alliance, or confederation, nor grant letters of marque and reprisal, coin money, emit bills of credit, or grant any title of nobility, nor lay imposts or duties on imports or exports, or lay duties on tonnage, keep troops or ships of war in time of peace, or engage in war unless actually invaded, or in such danger as will not admit of delay; &c. and the 9th amendment in these words: "The enumeration in the Constitution of certain rights, shall not be construed to deny or disparage others retained by the people;" which amendments refer to the prohibitions to be found in the 9th section of the 1st article, and others of the same kind, viz:
"The writ of habeas corpus shall not be suspended unless when, in cases of rebellion or invasion, the public safety may require it. No bill of attainder or ex post facto law to be passed. No tax or duty shall be laid on articles exported from any State. No money shall be drawn from the public Treasury except in cases of appropriation by law. No title of nobility shall be granted," &c.
And, more especially, the 10th amendment, viz: "The powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States, respectively, or to the people."
The parts of the constitution recited prove the position taken, that the Constitution is a grant of specified powers; that we can exercise no power not expressly delegated to us by this instrument; that our orbit is circumscribed by the grants of the Constitution, and we should be careful not to usurp authority not given to us. The exercise of authority not delegated, but reserved to the States, or to the people, is the very essence of consolidation, which, if enforced by the United States, would lead to monarchy or a despotism. If not enforced, it would convulse the whole nation, and we should see the people quitting their daily avocations; the farmer his plough, the mechanic his shop, to remonstrate against a tyrannical exercise of power. This we have seen on former occasions, not less memorable than this, arising from the same doctrine of implication, and arising from the acts of the very same set of men.
The harmony of the States should not be disturbed. It should not be agitated by the breath of discontent. Its value is more precious than gold or silver. The spirit of union should be cherished by us all in words and in actions. Nothing will produce more happy effects than keeping in the path of our rightful powers; otherwise you generate the most angry passions of the people; you start up the most malignant invectives order will be disturbed, and tranquility will be interrupted. To produce these unfortunate effects, nothing can contribute more than to disregard the enumerated powers in the constitution, and exercise tyrannical powers by implication, or under some general phrases, such as the "general welfare;" expressions which contain no grant of power, but limited and explained by enumerated authorities; by which construction the power of Congress would be arbitrary and unlimited, as Congress would take upon themselves to judge what measures would promote this general welfare.
I wish, on this occasion, to do justice to the people of Kentucky, by asserting their inviolable attachment to the Union, more especially since, in this House, its sacredness has been profaned in a manner not to be forgotten. If the people of the West, and beyond the mountains, have any political idol, it is the union of the States. As the Bible and New Testament are dear to every Christian and true believer, as the basis of his happiness here, and the foundation of his future hopes; so the union of the States, in a political point of view, is considered, by the people, as the surest pledge for the blessing of liberty, and the security we enjoy, and the ark of our future hopes and safety. Their union is never profaned by conversations or speculations about disunion. You never hear disunion mentioned in private circles, much less in public bodies. A professor of religion to deny the existence of an over-ruling Providence, would not be more disgraced, in the estimation of the real Christian, than a statesman would be disgraced, politically, by even doubting the advantages of the union of the States. The word disunion, as applied to the States, would produce a heart-rending pang in the bosom of a Western patriot, and, I hope it would, throughout the seventeen united States and their territories.
The people are republican, and they abhor all measures of a monarchical tendency. They know the United States have been governed alternately by the two great political parties in this country. They have a regard for and a confidence in the Republican party this regard is not confined to the Western States, but extended to every part of the United States. They believe that truth and equal justice will prevail, where the opportunity is equal, and where the people do exercise the powers of sovereignty. The people represent, and in fact the whole of the States have confidence in every part of the United States. As a people they cherish and harbor no jealousy about large and small States, of commercial monopolies, &c. Nor are they thus attached to the Union from selfish and interested motives no, sir, their attachment to the Union arises from a noble and generous affection, a magnanimous and disinterested display of patriotism, and love of independence. We have given many proofs of this. At a time when this people were agitated and alarmed at the prospect of having some of their most essential rights interrupted, and when they declared their determination to support those rights, the gold and silver of Spain, in the hands of Spanish emissaries, could not alienate the affections of this people, with all the influence of arch intriguers; and the treason of Aaron Burr had as little effect upon the minds of this virtuous and happy people. Any other attempt would be as vain, however well matured. I feel the consolation which arises from a knowledge that I represent in part such a people, whose affections cannot be estranged from the great American family by promises of future greatness, the hopes of golden harvests, or the expectations of governing provinces with the silver mines of Mexico.
With these sentiments, I am now to examine for the particular parts of the Constitution and the arguments which have been advanced to justify this measure. It is not contended by any, that the power of incorporation is an express power given by the Constitution to the Congress of the United States, beyond this ten miles, over which Congress has exclusive legislation. If then this power is not expressly given, I might here stop and deny the right to exercise it. So far from finding any express clause in the Constitution, giving this power, the word corporation or bank cannot be found in any part of this instrument of our Union.
We have seen the exercise of great abilities, and we have been entertained with great research by those who advocate the renewal of this charter; but, unfortunately, these gentlemen cannot agree among themselves. Is this not the strongest proof that the power to incorporate this bank is not given by the Constitution, and does it not demonstrate the danger of constructive powers ? One has contended that this power was inclusive in some of the specified powers; another has contended that this power is given by implication; and a third contends, that it is an incidental power given to carry some specified power into operation. This is not all; the advocates cannot agree upon the specified power in the Constitution, out of which this power or means arises. One has contended that the power to lay and collect taxes gives this power, as a means to execute the specified power; and to support this position, it has been contended that this national bank is necessary and proper, as a means to lay and collect taxes, duties, &c. To strengthen this construction, that part of the 8th section of the first article, which says that "Congress shall have power to make all laws which shall be necessary and proper for carrying into execution the foregoing powers," &c., has been resorted to; another has said that this instrumental power grows out of the express power to borrow money and a third, that this power was incident to the power to regulate commerce, and in fact these three great objects are embraced by the preamble of the bill which passed in 1791, which incorporated this moneyed aristocracy and erected a privileged order of men.
With respect to the declaration in the Constitution, that Congress may make all laws necessary and proper to carry the express powers into effect, I should state that the framers of the Constitution intended by this declaration to prevent the doctrine of implication, and to leave nothing to doubt. It was introduced through abundant caution against the strides of usurpation, and it should be the last clause to which he should advert, upon which to build the doctrine of unlimited means, to carry the express powers of the Constitution into effect. If our means are unlimited, our powers need not be defined, because one, as much as the other, is a destruction of our freedom and independence. I shall contend that the means by which we are to carry into effect any express authority should be adapted to the end in view; that it should not embrace other objects, not contemplated by the Constitution, although it may be made instrumental in carrying into effect a specified authority. Under this cloak we might conceal our usurpation of power.
Sir, it will be difficult to convince the people that it is necessary, in the language of the Constitution, to create a moneyed aristocracy and a privileged order of men, extending its branches, its influence, and its strength, into the interior of every State, to collect taxes, to borrow money, or to regulate commerce. The primary object of this incorporation was to promote usurpation of power, to support the dangerous doctrine of implication, and to amass wealth from the labor of the people, and not for the exclusive object of carrying into effect any express authority in the Constitution. Thus, it is evident that this moneyed aristocracy, embracing such a vast variety of objects, no ways connected with the execution of any specific grant of power, that it departs from the letter and meaning of that part of the constitution which gives the power to carry into effect the specified powers of the constitution.
But now, let us inquire what is the necessary means to lay and collect taxes. If a bank was not intended, I will take duties upon imports, as in that way we collect our revenue. First, a law must pass designating the articles upon which a duty shall be laid, the amount of that duty, and the manner in which it shall be paid, either upon the delivery of the goods, or upon a credit, by giving bond with security, and last, to appoint collectors of the revenue and other officers to collect and receive this revenue for the United States, with authority to bring suit upon failure of payment. This is a necessary exercise of the power to lay and collect taxes, &c. And where is the statesman who has denied the power as unconstitutional ? Here these means are confined to the object in view, the collection of revenue; and certainly, the United States have power sufficient for all the objects of the confederacy, as, in the exercise of all the specific grants of authority, Congress may operate upon the person and property of the individuals of the States to enforce that authority.
It is no argument with me, that we are in prosperity and health, and such an institution will not be dangerous. No, sir, establish a precedent in the days of prosperity, and it will come upon you in the hour of adversity. This same doctrine of our being unlimited in our means of carrying into effect the grant of powers in the Constitution, has already endangered the liberty of this nation. If the doctrine contended for on this occasion be correct and carried into full force, Congress would be as omnipotent as the parliament of Great Britain, the Constitution would no longer restrain us and the independence of this nation would depend upon the caprice of Congress; our Constitution would be like the boasted constitution of Englishmen; and what is that constitution ?
Sir, it is not lettered or defined like ours. It may be changed by Parliament, as the Crown party, or the people, shall prevail.
1st. The great charter of liberty, obtained from King John, violently, and in duress, declaring what should be considered the fundamental laws of England.
2d. A statute in confirmation of the great charter, making provisions to read the same to the people in their churches and public places, semi-annually.
3d. A number of statutes, called the conforming statutes, from the reign of Edward I. to Henry IV.
4th. The Petition of Rights, a declaration by parliament of the liberties of Englishmen, extorted from Charles the first, before the rupture with his parliament.
5th. The habeas corpus act, in the reign of Charles II.
6th. The Bill of Rights, and declaration of lords and commons of England, in 1688.
7th. The Act of Settlement at the commencement of the 18th century, endeavoring to secure the English subject in his personal liberty, security, and property. These, and the like parliamentary declarations and statutory provisions, constitute the constitution of England, which the same parliament has a right to alter or abolish. I never wish to see Congress invested with a power to change the Constitution, sanctioned by the people in their highest sovereign capacity.
The Constitution has vested us with power enough, and if we want more, amend the Constitution in a constitutional way, and not tyranically exercise power never delegated to this body. The ground on which we stand is delicate, and the duty we owe the people should teach us caution, more especially when we see men in power too apt to grasp at more, and exercise it oppressively. We should never forget that all power flows from the people; they are sovereign I hope they will ever remain sovereign in this country. Our safety is with them. They are unambitious, they are virtuous, and have no temptation to overturn those liberties which they themselves enjoy.
But this measure is a violation of the Constitution in another respect, by interfering with State rights. This corporation can send a branch bank to any part of the United States, without consulting the States or the citizens of the States. Suppose, sir, they should send one of these branches to Frankfort, Kentucky, with a great capital, and under the sanction of the General Government, would it not lessen the profits arising to the State, and to the people of the State, from the State bank of Kentucky, as established by the laws of that State ? I presume it would. It would contract very much the circulation of the State bank notes, and would, in many other respects, come in collision with State rights. Every State has a right to regulate its own moneyed concerns; to incorporate banks or not, as interest or inclination may dictate.
But, in the zeal of some gentlemen, to continue this moneyed aristocracy in the United States, for twenty years to come, they have denied the right of the States to incorporate banks, and that Congress alone has the power. This doctrine is new to me. When Mr. Madison and other patriotic statesmen denounced this measure, as unconstitutional, in 1791, it was not contended that the States had no right. It was admitted, by the lovers of implication, that there was a concurrent right. Thus we behold the progress of opinion to support a favorite measure.
If this bill passes, and the States have no right to incorporate banks, I suppose the State banks throughout the United States must be put down or burnt up, to give way to this great engine of foreign influence. "The States shall not emit bills of credit." This is the prohibition relied on to take the right of incorporation from the States. Bills of credit is another phrase for paper money. The States shall not issue paper money and make it a legal tender. The men of the Revolution know this. The great calamity which individuals suffered by the paper money, demonstrated the necessity. But no man is obliged to take the bank notes of a State bank for the payment of a debt, or in common transactions. It is at his option, and the moment you get a bank note, you may present it to the bank and demand your money. Not so with bills of credit or paper money, issued and made such by the State. It would be extremely difficult, I presume, for any gentleman to convince the States by argument, that they had no right to incorporate banks, and it would be equally difficult to force the States to destroy their local banks for the United States Bank, owned principally by foreigners.
Not only the bank, in its moneyed operations, would interfere with State rights; but the rules and regulations of the bank, as heretofore established by Congress, have interfered with the laws of the several States in these municipal regulations, as to the tenure of property, and the liability of the corporation to pay their debts.
Mr. Speaker, I have said as much as I conceive it my duty, upon the unconstitutionality of the bank charter. I am to ask your indulgence, while I endeavor to prove its inexpediency, and its dangerous tendency to the freedom of this nation. In the hand of a private citizen wealth will, at all times, have its influence, and may attach to him an importance beyond his merits. But this influence is not so dangerous as to induce a government to interpose and limit the honest accumulation of property by any citizen. And though this wealth may have its influence, it is always limited. It may frequently be in the hands of the benevolent man; and, if not of this character, this vast wealth seldom survives the death of the individual proprietor. It is either divided among numerous relations, or squandered by his heir.
But not so with a body corporate, extended throughout this vast empire, possessed of a capital of ten millions of dollars, and extending their credit and accommodations to double that sum, notwithstanding their limit to ten millions. It is stated by an advocate for this bank, that the stockholders commenced their discounts with about $625,000, and that, upon this sum, they discounted to the amount of $6,000,000 the first ten months after it went into operation. To divide this 10 millions or 20 millions of capital in local or State banks, no serious danger could be apprehended, because the stockholders of one institution would be strangers to all the other stockholders; so of the directors of the different local institutions, and consequently there could be no combination between the different banks.
But it is otherwise, and the danger is imminent, when you, by act of the General Government, give unity of action, unity of will, and unity of strength, to a moneyed aristocracy, vested with a capital of ten millions of dollars, with power to increase their accommodation to twenty millions, and to send their branch banks into the bosom of every State and Territory.
This is not all; your revenue bonds, to the amount of millions, are deposited with this bank for collection, and the public money deposited in this bank to the amount of millions for safe keeping, and their notes made payable to the United States the same as gold and silver. Sir, is there no danger in such a monster, fostered by the General Government, and possessing so many advantages by the laws of Congress ? Such a bank, in its beginning, would confine its engagements to the means of payment, but as their credit increases, they engage beyond their means, their vaults are empty, and the institution relies upon its great credit and exclusive privileges. Thus the character of the bank is changed, and it becomes a system of speculation, and a political engine to destroy virtuous individuals, or mold the Government to its notions.
I have no knowledge myself about the political workings of this United States' Bank. But if I were to believe the declarations of members on this floor, and complaints from every part of this continent, I must think that this institution has not been silent and indifferent spectators to the reform of the Administration to republican principles but they have endeavored to support that party who gave them a charter. I do not, however, introduce this as a conclusive argument against this bank. No, sir, I would equally object to it in the hands of Republicans. It would still be a moneyed aristocracy, too vast and too powerful not to be dangerous to the freedom of the United States. But without these declarations of political influence exercised by the stockholders and directors of these banks, our own reason would teach us to believe all we have heard of the oppression and partiality of this bank. It is composed of individuals; these individuals have their passions, their feelings, their prejudices, their partialities, and their politics, and they will act accordingly. Self-preservation will always induce them to support and keep in power the party who will be most friendly to moneyed aristocracies and their own institution. The influence of this bank is palpable and notorious. We have the evidence from the long roll of petitioners now imploring Congress to renew the charter.
If in twenty years this bank is to be the idol of some and the alarm of others if the solvency of so many individuals depend on it if ruin and devastation will, in the event of its dissolution, spread wide in the country then, sir, it will only require twenty years more to make it stronger than the Government. To induce us to vote for this institution, we have been persuaded, flattered, alarmed, petitioned, and threatened, and we have been amused with the rise and history of the banking system. It originated in Italy, it has travelled through Europe, crossed the British channel to Great Britain, and lastly, it crossed the wide Atlantic to America. And much has been said of the utility of those institutions. Without dwelling upon the utility of banks at present, I could only admit them as a necessary evil, and not dangerous, if left to the control of our State Governments. But the history of those banks which have been quoted, will furnish no argument in favor of a national bank.
We wish no political engine of a moneyed aristocracy. We wish to rest upon the virtue and will of the people.
It has been stated that Georgia is republican, notwithstanding this monstrous machine has extended a branch bank to this State and it is stated that Connecticut is federal, and has no Branch Bank of the United States. This does not prove that the bank is not a dangerous engine against the liberties of the people; but it proves, that the people of Georgia withstood this dangerous influence, and deserve more credit. It is a proof of the virtue of that people. If this institution is so necessary and beneficial, why do not the representatives of Georgia, who have been blessed with this institution, come forward and advocate a renewal of the charter ? But you find the respectable members of Georgia opposing a continuance of this evil in every form. In fact, the State of Georgia taxed the paper of this bank, and the State was determined, by taxation or legislative prohibition, to drive this circulating medium from their territory. But considerations of wisdom induced a postponement of this determination, until it should be seen whether the charter would again be renewed, in violation of the Constitution, and in defiance of our liberties.
My colleague (Mr. McKee) whose opinions I had been in the habit of considering as my own, until this unfortunate question, which divides us, has stated, that, in his opinion, the dissolution of this institution would be felt by the citizens of the western country, and that our surplus hemp would not command as good a price. I differ in opinion from my colleague, if he supposes the Western country will feel any great pressure from the dissolution of this bank. I grant, the people of Kentucky may not be entirely exempt from some inconveniences common on such an event. But our produce will fall from other very different causes. Interruptions in commerce, stagnation in trade, bankruptcies throughout the commercial part of the United States, arising from the bankruptcies in England, which have occasioned the return of many bills from England protested. These are the causes which produce distress, and will continue to produce it, until we are a people less dependent on foreign commerce.
But believing as I do on this subject viewing the effects of this great political moneyed institution with abhorrence, I would not vote for it, let the temporary distress be what it may. I would rather see the present crop of hemp brought to one deposite, which would make a bulk larger than this capitol, and consumed with a lighted torch, and ascend to the heavens in smoke as a bonfire, rather than vote for the passage of this law and, sir, the people I represent would justify my vote. They would bear the loss without a murmur; they would act the part of freemen worthy of freedom; they would magnanimously bear the calamity without complaint, if their patriotism required the sacrifice. They are a most worthy people. A virtuous people, an enlightened people, a glorious people. Descendants of this great American family, inheriting that spirit of independence which equally sustained our cause under defeat and victory, upon all the battle grounds of the Revolution. I will not be alarmed out of my vote by clamor, no matter from what quarter it may assail me. I never will be driven from my duty by alarms and fears. I will stand firm to the cause I conceive to be just, and the people will support me; they despise wavering and temporising.
If you continue this charter of this bank twenty years more, you can never put it down. No, sir; instead of having petitions which would reach from the Speaker to the seat of the members, you would have them packed upon your table, until they would intercept my view in addressing you. Yes, sir, they would rise up higher, and implore that goddess of liberty which presides over the deliberations of this House.
We are told, that this bank is necessary to the collection, the safe keeping, and the transmission of the revenue, to different parts of the United States. It is stated that the State banks are strangers to us, and cannot be trusted with the deposite of public money. I am sorry to hear such a sentiment. It has originated from a panic, an alarm, an ideal danger. That great and good man, the Secretary of the Treasury, has told you otherwise, by his report now before me, of date 12th of January, in which it appears that, of about 2,460,000 dollars, upwards of 800,000 dollars are deposited in the State banks, $75,000 of which are deposited in the State Bank of Kentucky, and I should be sorry if it was not as safe there, as in the hands of the United States' Bank, in the possession of foreigners. If State banks will not do, let the United States build vaults for the safe keeping of the revenue.
But, sir, the alarming consequences which must arise from a dissolution of this corporation It will deprive us of a circulating medium; it will interrupt commerce and produce bankruptcies. It is to produce the distress of farmers and the ruin of merchants; it is to prevent emigration; and it is to shake the foundations of the Government. This picture gives me no alarm. It is the picture of a wild and distempered imagination. If serious injury will be felt by many in the power of this moneyed aristocracy, I feel and sympathise with the sufferings of those who may be needy without any fault of their own; but something is due to posterity; and even in that point of view, I am not willing to entail upon them the baneful effects of a great moneyed corporation, with a capital of twenty millions of dollars, extending their arms of power and influence to every part of the United States, and having the destiny of good men within their control, whenever they receive the nod to exercise their giant power. No, sir, I am ready to see and feel the sad crisis which has been described. If we die with less money, we shall live in more honor and enjoy more happiness. I wish to see whether so much depends upon this corporation. If so, it is the greater reason why the poison should be destroyed. Like the strong man we read of in Holy Writ, let us see if the violent death of this corporate body will pull down the pillars of the Constitution, that another Volney may sit upon the ruins of this capital, and mourn the fallen empire of this great and happy republic.
Mr. EPPES [John Wayles Eppes (1773-1823); Virginia (DR); Thomas Jefferson's nephew and son-in-law, Chairman of Ways and Means] said that he apprehended the few remarks he had to offer to the House, would not be considered as well timed, after the funeral oration had been pronounced over the expiring charter of the United States' Bank. He would trespass but a short time on the patience of the House, and confine his remarks to the policy of renewing the charter, viewed only as a national measure, he considered it unnecessary to say any thing on the constitutional question.
If ever the theory of persons who believe that political principles may be demonstrated with mathematical certainty, shall be realised, and a political Euclid be published, I would put, for the first proposition, these principles:
1. That all power not delegated, is reserved to the States, or to the People.
2. That the power to incorporate a bank is neither delegated, or essentially necessary for carrying into effect any delegated power.
For the demonstration, I would insert the speech of a gentleman from New York, [Mr. PORTER] who has combined in a masterly manner on this subject, the purest principles, and most luminous elucidation. Passing over, therefore, this part of the question, I shall confine myself to such observations as will tend to show that the renewal of the charter is not necessary for the prosperity of agriculture and commerce, as has been stated; that the union of a moneyed institution with a Government, possessing the powers of war and peace, is dangerous to republican institutions; that the dissolution of the charter will produce no injury to the public, or to individuals; that the same principles which induced the republican party, in the year 1790, to oppose the incorporation of this bank, ought to prevent a renewal of the charter at the present time.
In examining the first of these questions, viz. the operation of the dissolution of the charter on agriculture and commerce, I will not trouble the House with any general observations on the subject of banks. Their tendency to facilitate commerce, so long as their circulation of paper rests on specie, or floating capital, cannot, perhaps, be denied, inasmuch as it is easier to circulate paper, which represents specie, or floating capital, than the specie or capital itself. Every paper circulation, however, not founded on specie or circulating capital, is dangerous to the community. A particular, specified object, say agriculture or commerce, can only employ a certain capital. An increase of circulating medium, above the sum necessary for a particular object, must produce one of two effects: either to depreciate the medium, be it specie or paper, or to drive it into new channels. These are plain, obvious principles, which no gentleman will, I presume, deny.
Let me ask, then, 1st. What amount of paper medium can with safety be employed in the commerce of the United States ? 2. What amount can be put into circulation by the present existing banks, independent of the United States' Bank ?
The real basis of a safe paper circulation, so far as it respects commerce, is the productive labor of a community above its consumption. What a nation does not consume, it exports. No paper circulation, therefore, can with safety be extended beyond the amount of the exports of a nation. Indeed, it ought not to exceed in amount the domestic exports which constitute the only certain part of the productive labor of the community, so far as respects its commerce. The export of foreign articles depends so much on circumstances over which we have no control, that a paper currency which rested for redemption on that, would be liable, whenever commerce was interrupted, to produce general ruin and bankruptcy.
The domestic exports of the United States may be considered in value as equal to $40,000,000. The export of foreign articles, in the year 1807, was near $60,000,000. This great export of foreign articles was produced by particular circumstances, which no longer exist. During favorable years, viz. 1803, 1804, 1805, the export of foreign and domestic articles averaged $76,000,000; so that it would appear, taking the domestic and foreign exports as the real amount of capital which can be employed in commerce, an ability to circulate $76millions of paper, is sufficient for all commercial purposes.
The Bank of the United States, with a capital of $10,000,000, has put into circulation, in credit and notes, $19,000,000; $14,000,000 in accommodation credit, exclusive of mortgages and bonds, and constituting active circulating medium, and five millions in notes. As a moneyed institution, it is admitted that their affairs have been well managed. Other banks, therefore, may circulate to the same amount, in proportion to their capital.
The bank capital of the United States, exclusive of the United States' Bank, is $50,000,000, five times the capital of the United States' Bank; of course, supposing them to manage their affairs as well, they can put into circulation, in credit and notes, five times the amount put into circulation by the United States' Bank; five times $19,000,000 is $95,000,000. This sum, sir, is fifty-five millions above our domestic exports; forty-five millions above our consumption; nineteen millions above our whole export, domestic and foreign, in favorable years; twenty-six millions above the present export of domestic and foreign articles.
Can any gentleman, on this statement, believe we want ability to circulate paper medium for commercial purposes ? Our export of foreign articles, from the peculiar situation of the world, has almost disappeared. Our merchants are more in want of a field to exercise their capital than of capital itself. It is a fact, which cannot be denied, that we have at present a surplus capital which cannot be employed in commerce, and that the paper circulation is increasing in a ratio neither proportioned to our population, consumption, or wealth. I have confined my observations entirely to the view of a capital, such as is necessary for commerce. No gentleman has advocated the renewal of the charter for the purpose of creating a capital for internal improvement. This appears by general consent to have been considered as more properly within the sphere of the several State Legislatures.
At the time this charter was originally granted, the situation of the United States was very different from what it now is; but three banks existed, with a capital of less than three millions of dollars; our exports amounted to less than $19,000,000. Our commerce languished for want of circulating medium; we are now in danger of suffering from a paper currency, resting on no solid basis, and liable, with a reverse of fortune, to recoil on ourselves. I cannot, therefore, consider the renewal of the charter, viewed only as a measure of general policy, necessary for the creating capital, for purposes of commerce.
But, sir, I object to the union of a moneyed institution with a government, as dangerous to Republican principles. Next to frequent elections, the great security in every country, against arbitrary power, is the dependence of the Government on the great body of the People for supplies. Hence the objections to a revenue dependent on loans, indirect taxes, &c. Money has been aptly termed the sinews of war. It may, with equal propriety, be termed the sinews of oppression and usurpation. The facility of commanding large sums by means of a moneyed capital, dependent on the Government, is calculated to destroy the dependence of the Government on the People.
If we look at the history of England, we shall find that their short period of liberty was while the king was dependent on the commons for supplies. The creation of a great moneyed capital in that country, under the control of the Government, has totally destroyed that valuable feature in the English constitution. It has created a body of men who contribute to the prodigality of the Government; who furnish the means and share in the spoils of the nation. The history of the Bank of England and of its paper system is one which ought to warn the friends of freedom against the danger of a union between a Government and paper capitalists. This species of capital, which scarcely knows a limit, is dangerous to the freedom of a country, without being nourished by the fostering hand of Government. Unite the two, give to a Government, by means of a paper system, a power to supply its wants without a recurrence to the People, and you unite the most formidable engines of oppression, power and means. It is this system which has caused the British Government, after mortgaging from year to year its revenues to the bank, to accumulate a national debt to the enormous amount of six hundred and seventy millions of pounds sterling. The average quarterly advances of the Bank of England to the Government, in the year 1797, was four times the whole amount discounted for individuals. From these extraordinary advances, produced by the union of the Government and the bank, it must have failed in the year 1797, but for the interposition of Parliament.
On the 26th day of February, 1797, the cash and bullion in the bank amounted to £1,272,000 average notes in circulation, to £8,640,250 bills discounted, to £2,905,000 advances to Government, to £10,672,490. From the report of the committee appointed by Parliament in February, 1797, to examine into the state of the bank, it appeared that the debts of the bank amounted to £13,770,390 that its assets, exclusive of the permanent debt from the Government (and what these assets were does not appear) amounted to £17,597,298 leaving in favor of the bank £3,826,903. This sum of £17,597,298, consisting of debts and assets, was not sufficient to meet their cash debts, amounting to £13,770,390. At this time the permanent debt due from the Government to the bank amounted to £11,686,800 almost four times the whole sum left in the bank after payment of its debts. The funds of the bank being in the hands of the Government, the Government, unable to pay, kindly interposed to save the bank from ruin, and made their paper a tender. This, sir, was one of the blessings produced by a union between the Government and the bank.
But, sir, many gentlemen have exercised their ingenuity in portraying the ruin which must fall on individuals, and the injury which must be sustained by the public, from a dissolution of the charter. From the statement just laid on our table from the Treasury Department, it appears that the stockholders of the bank are in more danger than the community.
From that statement we find that the debts due by the bank, and payable on demand, amount to $13,673,369.
To meet this debt, the bank has on hand, in cash, $5,009,567.
Notes and debts due from other banks, $1,313,350.
Making, in all, their cash funds amount to $6,332,512.
Deducting this sum of $6,332,512, which may be considered their cash fund, from the $13,673,369, the amount of their debts, and it will be $7,350,512, for the payment of which they must depend on their debtors, and make this payment out of the $14,609,537, due from individuals.
So far, therefore, from pressing the community, it appears they must collect $7,350,512, and apply, in addition to it, their whole cash funds, or fail in their engagements.
But, sir, I will state it in another way. According to the principles of banking, the profit is annually or quarterly divided; of course the company, on winding up its affairs, can only withdraw its capital, viz: $10,000,000.
Of this capital, they have in hand, in cash, $5,009,567. In notes and debts due by other banks, $1,313,857. In a debt from the United States, $2,750,000. In houses, $500,000. In debts in suit, $154,164. In bonds and mortgages, $221,000. In stock of the United States, $20,000. Total, $9,968,588.
This, sir, amounts very nearly to their stock, and if they reserve their cash on hand as part of that stock, and meet the payment of their debts with the debts due to them, they have nothing to draw from the community, which can produce the slightest pressure. They may find difficulty in collecting a sufficient sum to meet their own engagements, as, from the moment of the dissolution of their charter, their debts will stand on the same footing with the debts of any other company winding up its affairs, and must be collected in the same manner.
Much stress, sir, has also been laid on the necessity of the bank for the management of the finances of the United States. We are told that a complete control is given, by the constitution, over the finances, and that a bank is necessary for their management. The term finance is not to be found in the constitution. The bank is not necessary for the collection of taxes, or imposts, or for paying the debts, to use the language of the constitution. It has never been used for the collection of taxes. For the collection of duties, it is used only in a limited way. We have upwards of eighty-five places for the collecting duties, and only nine branch banks. It is used for the payment of the interest of the debt only, in consequence of a treasury regulation.
Commissioners of loans, within the several States, are even at this time established by law for paying the interest on the debt. The bank, therefore, is not essential for this object. The great payments for the army and navy are not at present made at bank paymasters and pursers discharge this duty. All payments on account of the civil list are made at bank, but the greater portion of these are at the seat of Government. A bank is, therefore, not essential for making these payments. Until new arrangements are made, temporary inconvenience may be sustained by the Government. The mere change of agents generally in extensive moneyed transactions, must produce inconvenience. The inconvenience, however, will be temporary, and does not deserve consideration in a case involving the Constitution.
I will close my remarks with a few observations tending to show that the same principles which induced the Republican party, in 1790, to oppose the incorporation of the bank, ought to prevent a renewal of the charter. In a free country there is nothing more important than a frequent recurrence to those fundamental principles which unite in one common bond, those who grant power, and those who exercise it. The peculiar organization of the Government of the United States combines, in a single charter, powers administered by men deriving their authority from two separate and distinct sources, the People and the States. The weakness of the old confederation, which, although armed with general powers, was found unequal to giving a practical operation to those powers, produced the federal constitution. This charter, the offspring of compromise, was considered in the convention, by one party, as too weak to accomplish its objects by the other, as sufficiently strong to endanger the liberty of the citizen. These two principles were soon manifested in the administration of the present Federal Constitution. Those who thought it too strong gave to the Constitution a rigid construction, and opposed constructive powers. These were termed anti-federalists. Those who thought it too weak, were disposed to engraft vigor on it by construction, and contended for constructive powers. These were termed Federalists.
The eclat which attended the adoption of the constitution, threw the Government exclusively, for years, into the hands of the Federalists. The great popularity of General Washington, on whose brow grew, in full vigor, the laureis of the Revolution, balanced for a time these two contending parties. With the same manly firmness, as, during the Revolution, he stemmed the torrent, and attaching himself exclusively to what he deemed the interests of his country, he administered the constitution according to its true principles. He commenced his career as President, on the 30th of August, 1789. In 1791, the charter of the bank was granted. On this great measure, the two great parties were for the first time arrayed against each other. It was at that time considered a party question, inasmuch as it involved the very principles on which the parties divided, viz: "delegated" powers and "constructive" powers. Unfortunately for his country, General Washington, on this occasion, took side with the federalists.
The creation of a moneyed interest, connected with the Government, was a favorite measure of those who were willing to engraft energy on the Constitution, and was warmly opposed by the party, unwilling to add, by construction, the extraneous weight of a moneyed capital to a charter considered, on a fair construction, sufficiently energetic.
The defeat of General St. Clair took place in the November following the establishment of the bank, and the subsequent disasters of the Indian war, by increasing the wants of the Government, drew more closely the ties of connexion between the federal party and the bank. Through all the periods of the federal administration, this moneyed capital was their shield and their sword. It extended their influence and secured the approbation of most of the large commercial cities in the Union. When this bank was established, but three banks existed in the United States, with a capital of $2,100,000 dollars.
The creation of a bank with a capital of $10,000,000, almost five times the capital of all the existing banks of the Union, under the patronage of the General Government, was calculated to produce and did produce a subserviency on the part of the stockholders, to the views of their party. The influence of this powerful moneyed capital was long felt. Nothing but the multiplication of State banks, and the increase of capital from the peculiar and fortunate circumstances under which the United States were placed, could have emancipated us from the shackles imposed on us by a moneyed interest wielded by foreigners.
I rejoice that the period has arrived, when this privileged class must surrender its charter; when the moneyed capital of our country shall no longer be wielded as an engine of party; when the republican party shall have an opportunity of testing the truth of the principles for which they contended in the year 1790, and of giving, on the present, as on the former occasion, their support to the principle "That power not delegated is reserved to the States or to the People."
Thursday, January 24th, 1811.
Messrs. Smilie and Macon spoke in favor of the indefinite postponement of the bill, and Mr. Quincy against it. About five o'clock the question was taken; and carried in the affirmative yeas 65, nays 64, as follows:
Yeas Lemuel J. Alston, William Anderson, Ezekiel Bacon, David Bard, William T. Barry, Burwell Bassett, William W. Bibb, Adam Boyd, Robert Brown, William Butler, Joseph Calhoun, Langdon Cheves, Matthew Clay, James Cochran, William Crawford, Richard Cutts, John Dawson, Joseph Desha, John W. Eppes, Meshack Franklin, Barzillai Gannett, Gideon Gardner, Thomas Gholson, Peterson Goodwyn, Edwin Gray, James Holland, Richard M. Johnson, Walter Jones, Thomas Kenan, William Kennedy, John Love, Aaron Lyle, Nathaniel Macon, Alexander McKim, William McKinley, Samuel L. Mitchill, John Montgomery, Nicholas R. Moore, Thomas Moore, Jeremiah Morrow, Gurdon S. Mumford, Thomas Newton, John Porter, Peter B. Porter, John Rea of Penn., John Rhea of Tennessee, Matthias Richards, Samuel Ringgold, John Roane, Ebenezer Sage, Lemuel Sawyer, Ebenezer Seaver, Adam Seybert, John Smilie, George Smith, Samuel Smith, Henry Southard, George M. Troup, Charles Turner, jr., Archibald Van Horn, Robert Weakley, Robert Whitehill, Richard Winn, Robert Witherspoon, and Robert Wright.
Neys Joseph Allen, Willis Alston, jun., Abijah Bigelow, Daniel Blaisdell, James Breckenridge, John Campbell, John C. Chamberlain, Wm. Chamberlin, Epaphroditus Champion, Martin Chittenden, John Davenport, jun., William Ely, James Emott, William Findley, Jonathan Fisk, Barent Gardenier, David S. Garland, Charles Goldsborough, Thomas R. Gold, William Hale, Nathaniel A. Haven, Daniel Heister, William Helms, Jonathan H. Hubbard, Jacob Hufty, Ebenezer Huntington, Richard Jackson, jun., Robert Jenkins, Philip B. Key, Herman Knickerbacker, Joseph Lewis, jun., Robert Le Roy Livingston, Vincent Matthews, Archibald McBryde, Samuel McKee, Pleasant M. Miller, William Milnor, Jonathan O. Moseley, Thomas Newbold, John Nicholson, Joseph Pearson, Benjamin Pickman, jun., Timothy Pitkin, jun., Elisha R. Potter, Josiah Quincy, John Randolph, Thomas Sammons, John A. Scudder, Samuel Shaw, Daniel Sheffey, Dennis Smelt, John Smith, Richard Stanford, John Stanley, James Stephenson, Lewis B. Sturges, Jacob Swoope, Samuel Taggart, Benjamin Tallmadge, John Thompson, Nicholas Van Dyke, Killian K. Van Rensselaer, Laban Wheaton, and James Wilson.
And then the House adjourned until to-morrow morning eleven o'clock.