James Madison, president
George Clinton, vice-president, on Wednesday, February 20, 1811, he cast the deciding no vote against the recharter in the divided Senate
Albert Gallatin, secretary of the Treasury

In later years, Mr. Clay saw the light, and changed his mind;  but in 1811 a central bank was un-Constitutional;  inexpedient and dangerous to liberty;  just because Jefferson signed the branching act, is not a tacit approval and change of stand;  precedent is not a reason in itself for a new charter;  a corporation is not a person.

In 1803 Baring & co. purchased from the Government of the United States its remaining 2,220 shares of the Bank of the United States for $1,287,600.  Other english people, too, had shares in the Bank, but of Baring's we have exact (official) numbers.  In 1811 one vote in the House and the deciding vote of the vice-president in the evenly split Senate, defeated the bill to renew the charter of the Bank.  The bank closed.  What did Barings do with their 1 million coins ?  Did they ship the money to England ?  No;  they invested their coins in State-chartered bank(s).

Have Barings attempted to influence financial legislation in the United States ?  Have Barings attempted to influence financial legislation in member States ?  We have no documented evidence.  But may jump to some conclusion based on observation.

In 1811 Henry Clay delivered the greatest speech against a central bank (un-Constitutional, in-expedient, dangerous to liberty).  Five years later, the same Henry Clay, voted for the chartering of a second Bank of the United States.  What made him change his mind ?  Has he learned something that he did not know in 1811 ?  During the next 30 years opponents of the Bank often asked Mr. Clay to give an explanation.  He did not.  Henry Clay gave a speech to his constituents in Lexington, in June 1816;  but this was an explanation, nothing more.  He did not disprove anything he stated in 1811;  and for the rest of his life Henry Clay religiously promoted the cause of a privately owned central bank.

In 1816 Daniel Webster, with his eloquence, spoke against the chartering of the Bank of the United States, and voted against the bill.  Some years later he was retained by the Bank of the United States, and from then on he used his eloquence on the Bank's behalf.

In 1816 Representative John Calhoun helped to pass the act that authorized the charter of the second Bank.  Years later, Senator Calhoun became an opponent of the central bank concept.  What made him change his mind ?  Could it be that State-chartered bank(s) influenced his view ?

In the debate from 1800 to 1900 the question was never asked —never allowed to be asked— "banks or no banks?"
The question always had to be "whose bank?"  the banks of New York, Boston, Philadelphia merchants, or a branch bank of the London oligarchy ?

James Madison, James Monroe, Henry Clay, John Sergeant, Daniel Webster, and many others, saw the light and switched to the oligarchy;  Mr. Calhoun was confused, he turned to State banks.

The debate was between upstarts of the States, and the old Money power.  All the eloquent opponents of a central bank, were banker-ites, only State banker-ites.....

Only Mr. Gouge told it like it is/was:  there must not be chartered banks, only full liability banks using their own, existing capital and credit;  and no bank note circulation allowed.


Buy this Lulu.

On renewing the charter of the first Bank of the United States.
Henry Clay, of Kentucky, in the Senate, Friday, February 15th, 1811.
---[Pricipally in reply to Senator Lloyd of Massachusetts]

The Senate resumed, as in Committee of the Whole, [consideration of] the bill to amend and continue in force an act, entitled "An act to incorporate the subscribers to the Bank of the United States," passed on the 25th day of February, 1791.


Mr. President—

When the subject involved in the motion now under consideration was depending before the other branch of the Legislature, a disposition to acquiesce in their decision was evinced.  For although the committee who reported this bill, had been raised many weeks prior to the determination of that House, on the proposition to re-charter the bank, except the occasional reference to it of memorials and petitions, we scarcely ever heard of it.  The rejection, it is true, of a measure brought before either branch of Congress, does not absolutely preclude the other from taking up the same proposition;  but the economy of our time, and a just deference for the opinion of others, would seem to recommend a delicate and cautions exercise of this power.  As this subject, at the memorable period when the charter was granted, called forth the best talents of the nation, as it has, on various occasions, undergone the most thorough investigation, and as we can hardly expect that it is susceptible of receiving any further elucidation, it was to be hoped that we should have been spared useless debate.  This was the more desirable, because there are, I conceive, much superior claims upon us for every hour of the small portion of the session yet remaining to us.  Under the operation of these motives, I had resolved to give a silent vote, until I felt myself bound, by the defying manner of the arguments advanced in support of the renewal, to obey the paramount duties I owe my country and its Constitution, to make one effort, however feeble, to avert the passage of what appears to me a most unjustifiable law.

After my honorable friend from Virginia [Mr. Giles] had instructed and amused us with the very able and ingenious argument which he delivered on yesterday, I should have still forborne to trespass on the Senate, but for the extraordinary character of his speech.  He discussed both sides of the question, with great ability and eloquence, and certainly demonstrated, to the satisfaction of all who heard him, both that it was constitutional and unconstitutional, highly proper and improper, to prolong the charter of the bank.  The honorable gentleman appeared to me in the predicament in which the celebrated orator of Virginia, Patrick Henry, is said to have been once placed.  Engaged in a most extensive and lucrative practice of the law, he mistook, in one instance, the side of the cause in which he was retained, and addressed the court and jury in a very masterly and convincing speech, in behalf of his antagonist.  His distracted client came up to him, while he was thus employed, and, interrupting him, bitterly exclaimed, "You have undone me !  You have ruined me !"  "Never mind, give yourself no concern," said the adroit advocate;  and turning to the court and jury, continued his argument, by observing, "May it please your honors, and you, gentlemen of the jury, I have been stating to you what I presume my adversary may urge on his side.  I will now show you how fallacious his reasonings, and groundless his pretensions, are."  The skillful orator proceeded, satisfactorily refuted every argument he had advanced, and gained his cause !  A success with which I trust the exertion of my honorable friend will on this occasion be crowned.

It has been said, by the honorable gentleman from Georgia [Mr. Crawford] that this has been made a party question;  although the law incorporating the bank was passed prior to the formation of parties, and when Congress was not biased by party prejudices.

[Mr. Crawford explained.  He did not mean, that it had been made a party question in the Senate.  His allusion was elsewhere.]

I did not think it altogether fair, to refer to the discussions in the House of Representatives, as gentlemen belonging to that body have no opportunity of defending themselves here.  It is true that this law was not the effect, but it is no less true that it was one of the causes, of the political divisions in this country.  And if, during the agitation of the present question, the renewal has, on one side, been opposed on party principles, let me ask if, on the other, it has not been advocated on similar principles.  Where is the Macedonian phalanx, the opposition, in Congress ?  I believe, sir, I shall not incur the charge of presumptuous prophecy, when I predict we shall not pick up from its ranks one single straggler !  And if, on this occasion, my worthy friend from Georgia has gone over into the camp of the enemy, is it kind in him to look back upon his former friends, and rebuke them for the fidelity with which they adhere to their old principles ?

I shall not stop to examine how far a representative is bound by the instructions of his constituents.  That is a question between the giver and receiver of the instructions.  But I must be permitted to express my surprise at the pointed difference which has been made between the opinions and instructions of State Legislatures, and the opinions and details of the deputations with which we have been surrounded from Philadelphia.  While the resolutions of those Legislatures -- known, legitimate, constitutional, and deliberative bodies -- have been thrown into the back-ground, and their interference regarded as officious, these delegations from self-created societies, composed of nobody knows whom, have been received by the committee, with the utmost complaisance.  Their communications have been treasured up with the greatest diligence.  Never did the Delphic priests collect with more holy care the frantic expressions of the agitated Pythia, or expound them with more solemnity to the astonished Grecians, than has the committee gathered the opinions and testimonies of these deputies, and, through the gentleman from Massachusetts, pompously detailed them to the Senate !  Philadelphia has her immediate representative, capable of expressing her wishes, upon the floor of the other House.  If it be improper for States to obtrude upon Congress their sentiments, it is much more highly so for the unauthorized deputies of fortuitous congregations.

The first singular feature that attracts attention in this bill, is the new and unconstitutional veto which it establishes.  The Constitution has required only, that after bills have passed the House of Representatives and the Senate, they shall be presented to the president, for his approval or rejection ; and his determination is to be made known in ten days.  But this bill provides, that when all the constitutional sanctions are obtained, and when, according to the usual routine of legislation, it ought to be considered as a law, it is to be submitted to a new branch of the Legislature, consisting of the president and twenty-four directors of the bank of the United States, holding their sessions in Philadelphia;  and if they please to approve it, why then it is to become a law ! And three months (the term allowed by our law of May last, to one of the great belligerents, for revoking his edicts, after the other shall have repealed his) are granted them, to decide whether an act of Congress shall be the law of the land or not ! — an act which is said to be indispensably necessary to our salvation, and without the passage of which, universal distress and bankruptcy are to pervade the country.  Remember, sir, the honorable gentleman from Georgia has contended that this charter is no contract.  Does it, then, become the representatives of the nation, to leave the nation at the mercy of a corporation ? Ought the impending calamities to be left to the hazard of a contingent remedy ?

This vagrant power to erect a bank, after having wandered throughout the whole Constitution in quest of some congenial spot to fasten upon, has been at length located by the gentleman from Georgia on that provision which authorizes Congress to lay and collect taxes, etc.  In 1791, the power is referred to one part of the instrument;  in 1811, to another.  Sometimes it is alleged to be deducible from the power to regulate commerce.  Hard pressed here, it disappears, and shows itself under the grant to coin money.  The sagacious Secretary of the Treasury, in 1791, pursued the wisest course;  he has taken shelter behind general high sounding and imposing terms.  He has declared, in the preamble to the act establishing the bank, that it will be very conducive to the successful conducting of the national finances;  will tend to give facility to the obtaining of loans, and will be productive of considerable advantage to trade and industry in general.  No allusion is made to the collection of taxes.

What is the nature of this government ?  It is emphatically federal, vested with an aggregate of specified powers for general purposes, conceded by existing sovereignties, who have themselves retained what is not so conceded.  It is said that there are cases in which it must act on implied powers.  This is not controverted, but the implication must be necessary, and obviously flow from the enumerated power with which it is allied.  The power to charter companies is not specified in the grant, and I contend is of a nature not transferable by mere implication.  It is one of the most exalted attributes of sovereignty.  In the exercise of this gigantic power we have seen an East India company created, which has carried dismay, desolation, and death, throughout one of the largest portions of the habitable world — a company which is, in itself, a sovereignty, which has subverted empires and set up new dynasties, and has not only made war, but war against its legitimate sovereign !  Under the influence of this power, we have seen arise a South Sea company, and a Mississippi company, that distracted and convulsed all Europe, and menaced a total overthrow of all credit and confidence, and universal bankruptcy.  Is it to be imagined that a power so vast would have been left by the wisdom of the Constitution to doubtful inference ?  It has been alleged that there are many instances, in the Constitution, where powers in their nature incidental, and which would have necessarily been vested along with the principal, are nevertheless expressly enumerated;  and the power "to make rules and regulations for the government of the land and naval forces," which it is said is incidental to the power to raise armies and provide a navy, is given as an example.  What does this prove ?  How extremely cautious the convention were to leave as little as possible to implication.  In all cases where incidental powers are acted upon, the principal and incidental ought to be congenial with each other, and partake of a common nature.  The incidental power ought to be strictly subordinate and limited to the end proposed to be attained by the specified power.  In other words, under the name of accomplishing one object which is specified, the power implied ought not to be made to embrace other objects, which are not specified in the Constitution.  If, then, you could establish a bank, to collect and distribute the revenue, it ought to be expressly restricted to the purpose of such collection and distribution.  It is mockery, worse than usurpation, to establish it for a lawful object, and then to extend it to other objects which are not lawful.  In deducing the power to create corporations, such as I have described it, from the power to collect taxes, the relation and condition of principal and incident are prostrated and destroyed.  The accessory is exalted above the principal.  As well might it be said, that the great luminary of day is an accessory, a satellite, to the humblest star that twinkles forth its feeble light in the firmament of heaven !

Suppose the Constitution had been silent as to an individual department of this government, could you, under the power to lay and collect taxes establish a judiciary ?  I presume not;  but if you could derive the power by mere implication, could you vest it with any other authority than to enforce the collection of the revenue ?  A bank is made for the ostensible purpose of aiding in the collection of the revenue, and while it is engaged in this, the most inferior and subordinate of all its functions, it is made to diffuse itself throughout society, and to influence all the great operations of credit, circulation, and commerce.  Like the Virginia justice, you tell the man whose turkey had been stolen, that your books of precedent furnish no form for his case, but that you will grant him a precept to search for a cow, and when looking for that he may possibly find his turkey !  You say to this corporation, we can not authorize you to discount, to emit paper, to regulate commerce, etc.  No ! Our book has no precedents of that kind.  But then we can authorize you to collect the revenue, and, while occupied with that, you may do whatever else you please !

What is a corporation, such as the bill contemplates ?  It is a splendid association of favored individuals, taken from the mass of society, and invested with exemptions and surrounded by immunities and privileges.  The honorable gentleman from Massachusetts [Mr. Lloyd] has said, that the original law, establishing the bank, was justly liable to the objection of vesting in that institution an exclusive privilege, the faith of the government being pledged, that no other bank should be authorized during its existence.  This objection, he supposes, is obviated by the bill under consideration;  but all corporations enjoy exclusive privileges;  that is, the corporators have privileges which no others possess;  if you create fifty corporations instead of one, you have only fifty privileged bodies instead of one.

I contend that the States have the exclusive power to regulate contracts, to declare the capacities and incapacities to contract, and to provide as to the extent of responsibility of debtors to their creditors.  If Congress have the power to erect an artificial body, and say it shall be endowed with the attributes of an individual;  if you can bestow on this object of your own creation the ability to contract, may you not, in contravention of State rights, confer upon slaves, infants, and femes covert the ability to contract ?  And if you have the power to say that an association of individuals shall be responsible for their debts only in a certain limited degree, what is to prevent an extension of a similar exemption to individuals ?  Where is the limitation upon this power to set up corporations ?  You establish one in the heart of a State, the basis of whose capital is money.  You may erect others whose capital shall consist of land, slaves, and personal estates, and thus the whole property within the jurisdiction of a State might be absorbed by these political bodies.

The existing bank contends that it is beyond the power of a State to tax it, and if this pretension be well founded, it is in the power of Congress, by chartering companies, to dry up all the sources of State revenue.  Georgia has undertaken, it is true, to levy a tax on the branch within her jurisdiction, but this law, now under a course of litigation, is considered as invalid.  The United States own a great deal of land in the State of Ohio;  can this government, for the purpose of creating an ability to purchase it, charter a company ?  Aliens are forbidden, I believe, in that State, to hold real estate;  could you, in order to multiply purchasers, confer upon them the capacity to hold land, in derogation of the local law ?  I imagine this will be hardly insisted upon;  and yet there exists a more obvious connection between the undoubted power which is possessed by this government, to sell its land, and the means of executing that power by increasing the demand in the market, than there is between this bank and the collection of a tax.  This government has the power to levy taxes, to raise armies, provide a navy, make war, regulate commerce, coin money, etc., etc.  It would not be difficult to show as intimate a connection between a corporation, established for any purpose whatever, and some one or other of those great powers, as there is between the revenue and the bank of the United States.

Let us inquire into the actual participation of this bank in the collection of the revenue.  Prior to the passage of the act of 1800, requiring the collectors of those ports of entry, at which the principal bank, or any of its offices are situated, to deposit with them the custom-house bonds, it had not the smallest agency in the collection of the duties.  During almost one moiety of the period to which the existence of this institution was limited, it was nowise instrumental in the collection of that revenue to which it is now become indispensable !  The collection, previous to 1800, was made entirely by the collectors;  and even at present where there is one port of entry, at which this bank is employed, there are eight or ten at which the collection is made as it was before 1800.  And, sir, what does this bank or its branches, where resort is had to it ?  It does not adjust with the merchant the amount of duty, nor take his bond;  nor, if the bond is not paid, coerce the payment by distress or otherwise.  In fact, it has no active agency whatever in the collection.  Its operation is merely passive;  that is, if the obligor, after his bond is placed in the bank, discharges it, all is very well.  Such is the mighty aid afforded by this tax-gatherer, without which the government can not get along !

Again, it is not pretended that the very limited assistance which this institution does in truth render, extends to any other than a single species of tax, that is, duties.  In the collection of the excise, the direct and other internal taxes, no aid was derived from any bank.  It is true, in the collection of those taxes, the former did not obtain the same indulgence which the merchant receives in paying duties.  But what obliges Congress to give credit at all ?  Could it not demand prompt payment of the duties ?  And, in fact, does it not so demand in many instances ?  Whether credit is given or not is a matter merely of discretion.  If it be a facility to mercantile operations (as I presume it is) it ought to be granted.  But I deny the right to engraft upon it a bank, which you would not otherwise have the power to erect.  You can not create the necessity of a bank, and then plead that necessity for its establishment.  In the administration of the finances, the bank acts simply as a payer and receiver.  The Secretary of the Treasury has money in New York, and wants it in Charleston;  the bank will furnish him with a check or bill, to make the remittance, which any merchant would do just as well.

I will now proceed to show by fact, actual experience, not theoretic reasoning but by the records of the treasury themselves, that the operations of that department may be as well conducted without as with this bank.  The delusion has consisted in the use of certain high-sounding phrases, dexterously used on the occasion;  "the collection of the revenue," "the administration of the finance," "the conducting of the fiscal affairs of the government," the usual language of the advocates of the bank, extort express assent, or awe into acquiescence, without inquiry or examination into its necessity.  About the commencement of this year there appears, by the report of the Secretary of the Treasury, of the 7th of January, to have been a little upward of two million and four hundred thousand dollars in the treasury of the United States;  and more than one third of this whole sum was in the vaults of local banks.  In several instances, where opportunities existed of selecting the bank, a preference has been given to the State bank, or at least a portion of the deposits has been made with it.  In New York, for example, there were deposited with the Manhattan Bank $188,670, although a branch bank is in that city.  In this District, $115,080 were deposited with the bank of Columbia, although here also is a branch bank, and yet the State banks are utterly unsafe to be trusted !  If the money, after the bonds are collected, is thus placed with these banks, I presume there can be no difficulty in placing the bonds themselves there, if they must be deposited with some bank for collection, which I deny.

Again, one of the most important and complicated branches of the treasury department, is the management of our landed system.  The sales have, in some years, amounted to upward of half a million of dollars, and are generally made upon credit, and yet no bank whatever is made use of to facilitate the collection.  After it is made, the amount, in some instances, has been deposited with banks, and, according to the Secretary's report, which I have before adverted to, the amount so deposited, was, in January, upward of three hundred thousand dollars, not one cent of which was in the vaults of the bank of the United States, or in any of its branches, but in the Bank of Pennsylvania, its branch at Pittsburg, the Marietta Bank, and the Kentucky Bank.  Upon the point of responsibility, I can not subscribe to the opinion of the Secretary of the Treasury, if it is meant that the ability to pay the amount of any deposits which the government may make, under any exigency, is greater than that of the State banks;  that the accountability of a ramified institution, whose affairs are managed by a single head, responsible for all its members, is more simple than that of a number of independent and unconnected establishments, I shall not deny;  but, with regard to safety, I am strongly inclined to think it is on the side of the local banks.  The corruption or misconduct of the parent, or any of its branches, may bankrupt or destroy the whole system, and the loss of the government in that event, will be of the deposits made with each;  whereas, in the failure of one State bank, the loss will be confined to the deposit in the vault of that bank.  It is said to have been a part of Burr's plan to seize on the branch bank, at New Orleans.  At that period large sums, imported from La Vera Cruz, are alleged to have been deposited with it, and if the traitor had accomplished the design, the bank of the United States, if not actually bankrupt, might have been constrained to stop payment.

It is urged by the gentleman from Massachusetts [Mr. Lloyd], that as this nation advances in commerce, wealth, and population, new energies will be unfolded, new wants and exigences will arise, and hence he infers that powers must be implied from the Constitution.  But, sir, the question is, shall we stretch the instrument to embrace cases not fairly within its scope, or shall we resort to that remedy, by amendment, which the Constitution prescribes ?

Gentlemen contend, that the construction which they give to the Constitution has been acquiesced in by all parties and under all administrations;  and they rely particularly on an act which passed in 1804, for extending a branch to New Orleans;  and another act of 1807, for punishing those who should forge or utter forged paper of the bank.  With regard to the first law, passed, no doubt, upon the recommendation of the treasury department, I would remark, that it was the extension of a branch to a territory over which Congress possesses the power of legislation almost uncontrolled, and where, without any constitutional impediment, charters of incorporation may be granted.  As to the other act, it was passed no less for the benefit of the community than the bank;  to protect the ignorant and unwary from counterfeit paper, purporting to have been emitted by the bank.

When gentlemen are claiming the advantage supposed to be deducible from acquiescence, let me inquire what they would have had those to do who believed the establishment of a bank an encroachment upon State rights.  Were they to have resisted, and how ?  By force ?  Upon the change of parties in 1800, it must be well recollected, that the greatest calamities were predicted as a consequence of that event.  Intentions were ascribed to the new occupants of power, of violating the public faith, and prostrating national credit.  Under such circumstances, that they should act with great circumspection was quite natural.  They saw in full operation a bank, chartered by a Congress who had as much right to judge of their constitutional powers as their successors.  Had they revoked the law which gave it existence, the institution would, in all probability, have continued to transact business notwithstanding.  The judiciary would have been appealed to, and from the known opinions and predilections of the judges then composing it, they would have pronounced the act of incorporation, as in the nature of a contract, beyond the repealing power of any succeeding Legislature.  And, sir, what a scene of confusion would such a state of things have presented: an act of Congress, which was law in the statute-book, and a nullity on the judicial records ! was it not the wisest to wait the natural dissolution of the corporation rather than accelerate that event by a repealing law involving so many delicate considerations ?

When gentlemen attempt to carry this measure upon the ground of acquiescence or precedent, do they forget that we are not in Westminster Hall ?  In courts of justice, the utility of uniform decision exacts of the judge a conformity to the adjudication of his predecessor.  In the interpretation and administration of the law, this practice is wise and proper, and without it, every thing depending upon the caprice of the judge, we should have no security for our dearest rights.  It is far otherwise when applied to the source of legislation.  Here no rule exists but the Constitution, and to legislate upon the ground merely that our predecessors thought themselves authorized, under similar circumstances, to legislate, is to sanctify error and perpetuate usurpation.  But if we are to be subjected to the trammels of precedent, I claim, on the other hand, the benefit of the restrictions under which the intelligent judge cautiously receives them.  It is an established rule, that to give to a previous adjudication any effect, the mind of the judge who pronounced it must have been awakened to the subject, and it must have been a deliberate opinion formed after full argument.  In technical language, it must not have been sub silentio.  Now the acts of 1804 and 1807, relied upon as pledges for the re-chartering of this company, passed not only without any discussions whatever of the constitutional power of Congress to establish a bank, but, I venture to say, without a single member having had his attention drawn to this question.  I had the honor of a seat in the Senate when the latter law passed, probably voted for it, and I declare, with the utmost sincerity, that I never once thought of that point, and I appeal confidently to every honorable member who was then present, to say if that was not his situation.

This doctrine of precedents, applied to the Legislature, appears to me to be fraught with the most mischievous consequences.  The great advantage of our system of government over all others, is, that we have a written Constitution defining its limits and prescribing its authorities;  and that however for a time faction may convulse the nation, and passion and party prejudice sway its functionaries, the season of reflection will recur when, calmly retracing their deeds, all aberrations from fundamental principle will be corrected.  But once substitute practice for principle;  the exposition of the Constitution for the text of the Constitution, and in vain shall we look for the instrument in the instrument itself !  It will be as diffused and intangible as the pretended Constitution of England;  and must be sought for in the statute-book, in the fugitive journals of Congress, and in the reports of the Secretary of the Treasury !  What would be our condition if we were to take the interpretations given to that sacred book, which is, or ought to be, the criterion of our faith, for the book itself ?  We should find the Holy Bible buried beneath the interpretations, glosses, and comments of council, synods, and learned divines, which have produced swarms of intolerant and furious sects, partaking less of the mildness and meekness of their origin than of a vindictive spirit of hostility toward each other !  They ought to afford us a solemn warning to make that Constitution, which we have sworn to support, our invariable guide.

I conceive, then, sir, that we were not empowered by the Constitution, nor bound by any practice under it, to renew the charter of this bank, and I might here rest the argument.  But as there are strong objections to the renewal on the score of expediency, and as the distresses which will attend the dissolution of the bank have been greatly exaggerated, I will ask for your indulgence for a few moments longer.  That some temporary inconvenience will arise, I shall not deny;  but most groundlessly have the recent failures in New York been attributed to the discontinuance of this bank.  As well might you ascribe to that cause the failures of Amsterdam and Hamburg, of London and Liverpool.  The embarrassments of commerce, the sequestrations in France, the Danish captures;  in fine, the belligerent edicts, are the obvious sources of these failures.  Their immediate cause is the return of bills upon London, drawn upon the faith of unproductive or unprofitable shipments.  Yes, sir, the protest of the notaries of London, not those of New York, have occasioned these bankruptcies.

The power of a nation is said to consist in the sword and the purse.  Perhaps, at last, all power is resolvable into that of the purse, for with it you may command almost every thing else.  The specie circulation of the United States is estimated by some calculators at ten millions of dollars, and if it be no more, one moiety is in the vaults of this bank.  May not the time arrive when the concentration of such a vast portion of the circulating medium of the country, in the hands of any corporation, will be dangerous to our liberties ?  By whom is this immense power wielded ?  By a body that, in derogation of the great principle of all our institutions, responsibility to the people, is amenable only to a few stockholders, and they chiefly foreigners.  Suppose an attempt to subvert this government;  would not the traitor first aim, by force or corruption, to acquire the treasure of this company ?

Look at it in another aspect.  Seven tenths of its capital are in the hands of foreigners, and these foreigners chiefly English subjects.  We are possibly on the eve of a rupture with that nation.  Should such an event occur, do you apprehend that the English premier would experience any difficulty in obtaining the entire control of this institution ?

Republics, above all other governments, ought most seriously to guard against foreign influence.  All history proves that the internal dissensions excited by foreign intrigue have produced the downfall of almost every free government that has hitherto existed;  and yet gentlemen contend that we are benefited by the possession of this foreign capital !  If we could have its use, without its attending abuse, I should be gratified also.  But it is vain to expect the one without the other.  Wealth is power, and, under whatsoever form it exists, its proprietor, whether he lives on this or the other side of the Atlantic, will have a proportionate influence.  It is argued that our possession of this English capital gives us a great influence over the British government.  If this reasoning be sound, we had better revoke the interdiction as to aliens holding land, and invite foreigners to engross the whole property, real and personal, of the country.  We had better at once exchange the condition of independent proprietors for that of stewards.  We should then be able to govern foreign nations, according to the reasoning of the gentlemen on the other side.

But let us put aside this theory and appeal to the decisions of experience.  Go to the other side of the Atlantic and see what has been achieved for us there, by Englishmen holding seven tenths of the capital of this bank.  Has it released from galling and ignominious bondage one solitary American seaman, bleeding under British oppression ?  Did it prevent the unmanly attack upon the Chesapeake ?  Did it arrest the promulgation, or has it abrogated the orders in council — those orders which have given birth to a new era in commerce ?  In spite of all its boasted effect, are not the two nations brought to the very brink of war ?  Are we quite sure that, on this side of the water, it has had no effect favorable to British interests ?

It has often been stated, and although I do not know that it is susceptible of strict proof, I believe it to be a fact, that this bank exercised its influence in support of Jay's treaty;  and may it not have contributed to blunt the public sentiment, or paralyze the efforts of this nation against British aggression ?

The Duke of Northumberland is said to be the most considerable stockholder in the Bank of the United States.  A late lord chancellor of England, besides other noblemen, was a large stockholder.  Suppose the Prince of Essling, the Duke of Cadore, and other French dignitaries, owned seven eighths of the capital of this bank, should we witness the same exertions (I allude not to any made in the Senate) to re-charter it ?  So far from it, would not the danger of French influence be resounded throughout the nation ?

I shall therefore, give my most hearty assent to the motion for striking out the first section of the bill [which meant the rejection of the renewal].


A Bill continuing in force for the term of ---- the act entitled "An act to incorporate the subscribers to the Bank of the United States," on the terms and conditions therein mentioned.

Be it enacted, by the Senate and House of Representatives of the United States of America, in Congress assembled, That the 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, be and the same is hereby continued in force, subject to the provisions and conditions in this act specified, for and during the further term of ---- years, from and after the 4th day of March next.

Sec. 2.  Provided, however, and be it further enacted, That the President and Directors of the said Bank of the United States shall, on or before the ---- day of ---- next, pay into the Treasury of the United States, for the use thereof, one million two hundred and fifty thousand dollars.

Sec. 3.  And be it further enacted, That the President and Directors of the said Bank shall, at all times, from and after the passing of this act, and during the continuance of the same, be holden and bound to make a loan or loans to the United States, if required and authorized by law, of any sum or sums of money, not exceeding at any one time five millions of dollars, reimbursable at the pleasure of the United States, and at a rate of interest not exceeding six per centum per year:  Provided, That it shall be the duty of the Secretary of the Treasury to make his application in writing to the President and Directors of the said Bank, for such loan or loans, at least three calendar months prior to the time when such loan or loans shall be required:  Provided, also, That the sum of two millions seven hundred and fifty thousand dollars, borrowed during the year eighteen hundred and ten, shall be considered as part thereof, and that no greater amount shall be required in any quarter of a year than one million of dollars:  And provided, further, That all such loans shall be reimbursable at or before the expiration of the said term of ---- years, unless it shall be otherwise agreed between the said corporation, and the United States.

Sec. 4.  And be it further enacted, That, if the said President and Directors shall on any occasion fail to furnish any loan or loans, to be required by the United States, in the manner hereinbefore enacted, their corporation shall forthwith be dissolved, and the power thereof shall cease and terminate, anything in this act, or in the act hereby continued in force, to the contrary thereof in anywise notwithstanding.

Sec. 5.  And be it further enacted, That the directors chosen by the stockholders of the said corporation on the first Monday of January in the present year, and the president chosen by the directors at the first meeting after such election, shall be capable of serving, by virtue of such elections, until the first Monday in January, eighteen hundred and twelve.

Sec. 6.  And be it further enacted, That the act, entitled "An act to punish frauds committed on the Bank of the United States," passed the twenty-fourth day of February, eighteen hundred and seven, be and the same is hereby continued in force during the continuance of the said corporation;  and the same shall at all times hereafter, and in all respects, be deemed and taken to apply to the said corporation, in the same manner that it has been deemed and taken to apply to the same heretofore.

Sec. 7.  And be it further enacted, That the President and Directors of the said Bank shall, after the fourth day of March next, pay to the United States an interest at the rate of three per centum per year on all sums of money above the sum of ---- millions of dollars, which shall accumulate to the credit of the Treasurer of the United States in said bank, or in the branches of the same, and which shall remain there for ----:  Provided, It shall be the duty of the Secretary of the Treasury, from time to time, to give notice in writing to the President and Directors, at least ---- days before the term or time at which the said interest shall begin to accrue and be computed;  which notice in writing shall specify the exact amount of deposite so to remain for the whole year as aforesaid.

Sec. 8.  And be it further enacted, That the United States shall be authorized, at any time during the continuance of this act, to increase the capital stock of the said corporation, in such manner as may be hereafter prescribed by law, and for which the United States shall be the subscriber, and own to an amount not exceeding in the whole ---- shares, and not exceeding in anyone year ---- shares:  Provided, That, during the time the United States shall so hold stock in the said corporation, they shall have the right to appoint, in such manner as shall hereafter be declared by law, a number not exceeding ---- of the directors:  And provided, also, That the shares thus to be subscribed and added, by and on behalf of the United States, shall not be sold at a price less than ---- per centum advance on each share.

Sec. 9.  And be it further enacted, That the twelfth section of the before-mentioned act, entitled "An act to incorporate the subscribers to the Bank of the United States, passed the second March, seventeen hundred and ninety-one, be and the same is hereby repealed.

Sec. 10.  And be it further enacted, That it shall be the duty of the President and Directors of the said Bank, on or before the ---- day of ---- next, to signify to the President of the United States, in writing, their acceptance, in behalf of the said corporation, of the terms and conditions in this act contained;  and if they shall fail to do so, on or before the day above-mentioned, then this act shall cease to be in force.


Senate of the United States,
March 2, 1811.

Mr. Clay, from the committee to whom was referred, on the 25th February, the memorial of the stockholders of the bank of the United States, praying that an act of congress might be passed, to continue the corporate powers of the bank, for a further period, to enable it to settle such of its concerns as may be depending on the 3d of March, 1811, respectfully offers, for the consideration of the senate, the following report:

That your committee have duly weighed the contents of the memorial, and deliberately attended to such explanations of the views of the memorialists as they have thought proper to present through their agents:  That holding the opinion (as a majority of the committee do) that the constitution did not authorise Congress originally to grant the charter, it follows, as a necessary consequence of that opinion, that an extension of it, even under the restrictions contemplated by the stockholders, is equally repugnant to the constitution.  But if it were possible to surmount this fundamental objection, and if that rule which forbids, during the same session of the senate, the re-agitation of a proposition once decided, were disregarded, your committee would still be at a loss to find any sufficient reasons for prolonging the political existence of the corporation, for the purpose of winding up its affairs.

For, as it respects the body itself, it is believed that the existing laws, through the instrumentality of a trust properly constituted, afford as ample means as a qualified continuance of the charter would for the liquidation of its accounts, and the collection and final distribution of its funds.  But should any inconvenience be experienced on this subject, the committee are persuaded it will be very partial, and such as the authorities, upon proper application, would not fail to provide a competent remedy for.

And, in relation to the community, if the corporation, stripped of its banking powers, were to fulfill bona-fide the duty of closing its affairs, your committee cannot see that any material advantage would be derived.  Whilst, on the contrary, if it should not so act, but should avail itself of the temporary prolongation, in order to effect a more durable extension of its charter, it might in its operations become a serious scourge.

Your committee are happy to say, that they learn, from a satisfactory source, that the apprehensions which were indulged, as to the distress resulting from a non-renewal of the charter, are far from being realised in Philadelphia, to which their information has been confined.  It was long since obvious, that one vacuum, in the circulation of the country, which was to be produced by the withdrawal of the paper of the bank of the United States, would be filled by paper issuing from other banks.  This operation is now actually going on.  The paper of the bank of the United States is rapidly returning, and that of other banks is taking its place.  The ability to enlarge their accommodations is proportionately enhanced, and when it shall be further increased by a removal into their vaults of those deposits which were in the possession of the bank of the United States, the injurious effects of a dissolution of the corporation will be found to consist in an accelerated disclosure of the actual condition of those who have been supported by the credit of others, but whose insolvent or tottering situation, known to the bank, has been concealed from the public at large.

Your committee beg leave to present the following resolution:

Resolved, That the prayer of the memorialists ought not to be granted."



House of Representatives,
March 2, 1811.

Mr. Peter B. Porter, from the committee to whom was referred, on the twenty-fifth ultimo, the memorial of the stockholders of the bank of the United States, made the following report:

The committee to whom was referred the memorial of the stockholders of the bank of the United States, report:

That they have carefully examined the various matters set forth in the said memorial, and attentively listened to the representations of the gentlemen who have appeared in behalf of the said petitioners.  The object of the memorialists is, to obtain an extension of their corporate power, beyond the period limited for the expiration of their charter, so as to enable them to prosecute for their debts, and to arrange, liquidate and close the various concerns of the company.

The committee are of opinion, that a law of congress, granting the powers prayed for, would facilitate the final adjustment of the affairs of the bank, although they do not think such a law indispensible to that object.  But believing, as your committee do, that, in granting the original charter to the stockholders, Congress transcended the legitimate powers of the constitution;  the same objection now presents itself to the extension of any of their corporate capacities.

If the committee had time to go into the investigation, and to present to the House the various reasons which have conduced to this opinion, it would be more than useless to divert its attention from the important concerns of the nation, at this late period of the session, to a subject which but a few days since, was so fully and elaborately discussed.

They therefore beg leave to introduce the following resolution:

Resolved, That the prayer of the memorialists ought not to be granted.


---[blue == as quoted by Mr. Payne in the House of Representatives, on August 3, 1841.
Baring was also share-holder in the Bank: in 1803 they purchased 2,220 shares for $1,287,600 ($580/share) --stated by Senator Pickering, in the Senate, on Tuesday, February 19, 1811, during the debate to renew the charter of the Bank of the U.S.;  also, Report of the Committee of Ways and Means of the Legislature of Pennsylvania, on the currency and finances of the Commonwealth, 1834.  These shares were purchased from the Treasury, there must have been record of this transaction
Capital of the Bank: not exceeding $10million, 25,000 shares, face value $400.00.
This transaction seems to be contrary to the 1,000 shares limit, set by Section 2 of the Act.
After the Bank of the United States was dissolved, what did these investors do with their money ?  did they take their coins back to England ?  No.  They simply put their money into State-chartered banks.  Did these investors support Representatives and Senators of their liking ?  Did they ever influence banking legislations ?
In 1803 England resumed its war against Napoleon;  the United States purchased Louisiana Territory, 500 million acres for $15,000,000 — Baring Brothers facilitated the transaction

In 1832, Baring Brothers owned 7,915 shares (face value $100) of the Bank of the United States.

Mr. Pickering, in the Senate, Tuesday, February 19th, 1811, expressing his views that as a Senator --sent to the United States Senate by the State of Massachusetts, to represent the interests of the State of Massachusetts--, he is not bound by the specific instructions given to him by the Legislature of Massachusetts---
http://lcweb2.loc.gov/cgi-bin/ampage?Num=151

"Mr. President:  having received, from the House of representatives of Massachusetts, an instruction in the form of a request, "to oppose the renewal of the charter of the Bank of the United States," and some other members of the Senate having received from their respective States instructions to the same effect, I will make a few observations on the subject of instructions.

"I was pleased to hear the gentleman from Virginia, over against me, [Mr. Giles] after reading his instructions from that State, express his opinion decisively, that instructions from constituents were not binding on their Legislative representatives.  Concurring entirely in this opinion, I will offer some reasons to show, that they are erroneous in principle;  that they infringe the rightful independence of representatives;  and in respect to members of Congress, that they violate the Constitution of the United States.

".......................I consider the Bank of the United States, with its branches, of immense importance to the citizens of the United States, and a necessary instrument in the hands of the Government, in the management of our great national concerns.  I shall, therefore, give my vote for the renewal of its charter."

---whence the strong conviction of Mr. Pickering and Giles, and others, to over-ride the instructions of the States that sent them to the General Assembly ?......


On March 23, 1838, Henry Clay remarked to Senator Garret Dorset Wall [March 10, 1783 -- November 22, 1850, D, New Jersey; studied law, admitted to the bar, served in the war of 1812] that he found "this vagrant power" in the late war and in the necessities of the country.
]

Extra Globe.

Friday night, August 10, 1838.

Henry Clay and a National Bank.


Every body knows that Mr. Clay was one of the most decided opponents to the recharter of the Bank of the United States, and that he delivered, on that occasion, the most argumentative speech which ever came from him.  He was then in the Senate of the United States;  and that speech made him one of the leaders of the Republican party.  A few years afterwards, he changed in favor of a National Bank;  and for this change, as Mr. Calhoun told him in the Senate, he did not leave it to time to disclose his motive !

It is at all times an experiment upon his reputation for a public man, high in station and mature in age, to change his principles;  and this experiment becomes fatal, if self-interest mingles with the change.  This, unfortunately, has been the case with Mr. Clay in all his great changes.

Self-interest, in the shape of prompt reward, has always exhibited itself in his changes.  The change and the reward came together;  Mr. Clay in this respect, at all events, showing himself to be no friend to the credit system.  Thus it was in the change in favor of a National Bank in 1816 --he immediately went into the service of the Bank, and became one of the large recipients of its money;  thus it was in 1825, when he changed to John Q. Adams, and received from him the office of Secretary of State, with a station in the line of safe precedents, and a reversionary interest in the Federal vote for President;  and thus it is in 1838, when he changed, or affected to change, from Biddle and his thirty-five million bank to Mr. Gallatin and a fifty million bank --the 42 votes of New York and the support of Mr. Gallatin being the immediate reward which he wanted for this change.

Mr. Clay has changed as to a National Bank, but he has never retracted his speech of 1811, nor has he answered that speech, nor can he ever answer it !  It was a speech of facts and reasons, perhaps the only one of the kind that he ever made;  and since he has apostatised from that speech, it is unfortunate for him that he ever made it.  It has stared him in the face ever since, and will be universally cast up to him while he continues the Bank candidate for the Presidency.  Many Republican papers are publishing it entire, and we propose to give it a few insertions ourselves between this time and the next Presidential election;  and we are among those who mean to call on Mr. Clay to say whether he retracts that speech;  and if he answers yea, then to call upon him for his speech in reply to it.  If he holds on to that speech, he must now be an enemy to a National Bank;  if he gives up that speech, and admits it to be erroneous, let him answer the speech, and show others also wherein the error lies.  If he was able to find the errors in it, he will be able to show them to others;  and it is due to others that they should be able to see these errors as well as himself.

Thus far he stands up, and proclaims himself changed, without showing the process of reasoning which brought him to the change.  It is due to the public that they should have an explanation on this point.  Thus far the public sees nothing but the change itself, and the reward which followed it;  a public man, in a nation of intelligent, considerate, thinking people, must have something else;  they must have the respect of an explanation, and the satisfaction of reasons.

---[Yet, the public kept voting for him;  the public may not have been as intelligent, or as principled (for he did bring home the bacon), as you imagine]

A bullying countenance, a brag face, and bold avowal will not do.  The speech of 1811 must be retracted or answered;  and among the parts which will demand Mr. Clay's particular attention, we present the following, and call upon him to notice them.  The first clause to which we invite his attention is that which relates to the political Federal character of the Bank.  It is as follows:

"It has been said, by the honorable gentleman from Georgia [Mr. Crawford] that this has been made a party question;  although the law incorporating the bank was passed prior to the formation of parties, and when Congress was not biased by party prejudices. [Mr. Crawford explained.  He did not mean, that it had been made a party question in the Senate.  His allusion was elsewhere.] I did not think it altogether fair, to refer to the discussions in the House of Representatives, as gentlemen belonging to that body have no opportunity of defending themselves here.  It is true that this law was not the effect, but it is no less true that it was one of the causes, of the political divisions in this country.  And if, during the agitation of the present question, the renewal has, on one side, been opposed on party principles, let me ask if, on the other, it has not been advocated on similar principles.  Where is the Macedonian phalanx, the opposition, in Congress ?  I believe, sir, I shall not incur the charge of presumptuous prophecy, when I predict we shall not pick up from its ranks one single straggler ! And if, on this occasion, my worthy friend from Georgia has gone over into the camp of the enemy, is it kind in him to look back upon his former friends, and rebuke them for the fidelity with which they adhere to their old principles ?"

It is here, fully declared by Mr. Clay, that the creation of the first Bank of the United States was one of the causes of the division of parties, and he styles the Federalists the Macedonian phalanx of the Bank, and prides himself upon not having gone into the Bank camp, but remained faithful to the principles of the Republican party.

Was Mr. Clay right when he spoke thus in 1811 ?  Certainly, he was then right.  The United Stales Bank was the political machine, invented by General Hamilton, to rule Congress and the country, and to carry on all its operations by seduction and oppression;  by seducing all who would take money, and oppressing those who would not.

Mr. Clay was undoubtedly right in 1811.  The Bank was then a Federal political machine, and the Federal party was the Macedonian phalanx which defended and protected it.  This was enough to make Mr. Clay vote against the Bank in 1811;  and how stands its character now ?

More Federal and more corrupting than ever, and the Federalists still the phalanx which defends it !  This is unquestionably the truth, and Mr. Clay the commander of that phalanx !  He has gone over into the camp of the enemy, as he charged Mr. Crawford with doing at that time;  and he is now the open reviler of all Republicans who remain faithful to their old principles.  Above all, he reviles Mr. Van Buren for the fidelity with which he maintains his old principles.

Mr. Van Buren, in the Senate of his own State, opposed the old Bank of the United States.  He sustained the Vice President, George Clinton, who gave the casting vote against the Bank, and he has remained true to his principles ever since.  Neither the money of the Bank, its political power, or its terrible panics, have been able to seduce, or to terrify him.  He remains now, what he was in 1811: the uncompromising opponent of the Bank.  He has not gone over into the camp of the enemy, and never will do it !  He will sink or swim with the Republican party;  and, in this, what a contrast he presents to Mr. Clay !

The next extract which we present is to show what Mr. Clay thought of the Bank deputations which were sent on from Philadelphia with their distress petitions in 1811.  He says:

I shall not stop to examine how far a representative is bound by the instructions of his constituents.  That is a question between the giver and receiver of the instructions.  But I must be permitted to express my surprise at the pointed difference which has been made between the opinions and instructions of State Legislatures, and the opinions and details of the deputations with which we have been surrounded from Philadelphia.  While the resolutions of those Legislatures -- known, legitimate, constitutional, and deliberative bodies -- have been thrown into the back-ground, and their interference regarded as officious, these delegations from self-created societies, composed of nobody knows whom, have been received by the committee, with the utmost complaisance.  Their communications have been treasured up with the greatest diligence.  Never did the Delphic priests collect with more holy care the frantic expressions of the agitated Pythia, or expound them with more solemnity to the astonished Grecians, than has the committee gathered the opinions and testimonies of these deputies, and, through the gentleman from Massachusetts, pompously detailed them to the Senate !  Philadelphia has her immediate representative, capable of expressing her wishes, upon the floor of the other House.  If it be improper for States to obtrude upon Congress their sentiments, it is much more highly so for the unauthorized deputies of fortuitous congregations.

This is the style in which Mr. Clay ridiculed and satirised the Bank deputations in 1811;  and what has he done since ?  What did he do at the panic session of 1833-34, when the high road from Philadelphia to Washington city exhibited a daily procession of Bank alarmists, setting out from Philadelphia, traversing the country, marching in columns upon the Capitol, besieging the two houses of Congress, and presenting the wretched compilations of Bank attorneys, under the name of petitions and memorials from the people ?  What was Mr. Clay's conduct then ?  How was it compared to his conduct in 1811 ?  Was it that of an independent Senator, looking with contempt upon these juggling tricks, or was it that of a performer in the same disgraceful scenes ?  The latter was his position !  He was a performer in all this solemn mockery, and a chief performer, too.  He was the orator, champion, gentleman usher, lord chamberlain, master of ceremonies, and grand marshal of the day in all these humiliating mummeries.  He was not only the priest of the temple, gathering up the frantic ejaculations of the priestess, and expounding them gravely to the astonished Senate, but he became a Pythonessa himself, and delivered oracles upon his own account, the burthen of which was that the Republican patty was overthrown, and that he himself would be elected President in 1836;  a prophecy which ended in the catastrophe of a total exclusion of all the panic-makers, himself the foremost, from the mere canvass for the Presidency !

The constitutional power of Congress to charter a Bank is thus denied, and the danger of such an institution is thus presented in the following very forcible paragraph:

This vagrant power to erect a bank, after having wandered throughout the whole Constitution in quest of some congenial spot to fasten upon, has been at length located by the gentleman from Georgia on that provision which authorizes Congress to lay and collect taxes, etc.  In 1791, the power is referred to one part of the instrument;  in 1811, to another.  Sometimes it is alleged to be deducible from the power to regulate commerce.  Hard pressed here, it disappears, and shows itself under the grant to coin money.  The sagacious Secretary of the Treasury, in 1791, pursued the wisest course;  he has taken shelter behind general high sounding and imposing terms.  He has declared, in the preamble to the act establishing the bank, that it will be very conducive to the successful conducting of the national finances;  will tend to give facility to the obtaining of loans, and will be productive of considerable advantage to trade and industry in general.  No allusion is made to the collection of taxes.

What is the nature of this government ?  It is emphatically federal, vested with an aggregate of specified powers for general purposes, conceded by existing sovereignties, who have themselves retained what is not so conceded.  It is said that there are cases in which it must act on implied powers.  This is not controverted, but the implication must be necessary, and obviously flow from the enumerated power with which it is allied.  The power to charter companies is not specified in the grant, and I contend is of a nature not transferable by mere implication.  It is one of the most exalted attributes of sovereignty.  In the exercise of this gigantic power we have seen an East India company created, which has carried dismay, desolation, and death, throughout one of the largest portions of the habitable world -- a company which is, in itself, a sovereignty, which has subverted empires and set up new dynasties, and has not only made war, but war against its legitimate sovereign !  Under the influence of this power, we have seen arise a South Sea company, and a Mississippi company, that distracted and convulsed all Europe, and menaced a total overthrow of all credit and confidence, and universal bankruptcy.  Is it to be imagined that a power so vast would have been left by the wisdom of the Constitution to doubtful inference ?

This very powerful paragraph presents two distinct points:  first, the unconstitutionality of a National Bank;  secondly, the danger of such an institution.  Upon these points, Mr. Clay took a firm stand in 1811;  and we ask if these points are not the same now that they were then.  The Constitution has not been altered;  consequently the vagabond power is as much without a right of settlement as ever;  the danger of such an institution, then theoretic, is now practical.  We have seen this bank, since 1811, do every thing that Mr. Clay then feared such a corporation might do, and the dangers of which he exemplified in the conduct of the English East India, and the South Sea Companies.  We have seen it "make war up on its legitimate sovereign," the Government of the United States;  we have seen it "carry dismay and desolation" into the whole Union;  we have seen it "menace a total overthrow of all credit and confidence, and threaten universal bankruptcy;"  we have seen it do all these things which Mr. Clay predicted and feared in 1811;  and, what no one could have believed at that time, we have seen Mr. Clay himself the agent, tool, mouth-piece, co-adjutor, defender and supporter of the Bank in all these enormities !



Monday night, August 11, 1838.

Mr. Clay and a National Bank

After showing that there was no authority in the Constitution for the establishment of a National Bank, Mr. Clay took up the lawyer's plea, that of precedent, and thus conclusively repudiated that doctrine from all application to constitutional questions:

When gentlemen attempt to carry this measure upon the ground of acquiescence or precedent, do they forget that we are not in Westminster Hall ?  In courts of justice, the utility of uniform decision exacts of the judge a conformity to the adjudication of his predecessor.  In the interpretation and administration of the law, this practice is wise and proper, and without it, every thing depending upon the caprice of the judge, we should have no security for our dearest rights.  It is far otherwise when applied to the source of legislation.  Here no rule exists but the Constitution, and to legislate upon the ground merely that our predecessors thought themselves authorized, under similar circumstances, to legislate, is to sanctify error and perpetuate usurpation.  But if we are to be subjected to the trammels of precedent, I claim, on the other hand, the benefit of the restrictions under which the intelligent judge cautiously receives them.  It is an established rule, that to give to a previous adjudication any effect, the mind of the judge who pronounced it must have been awakened to the subject, and it must have been a deliberate opinion formed after full argument.  In technical language, it must not have been sub silentio.  Now the acts of 1804 and 1807, relied upon as pledges for the re-chartering of this company, passed not only without any discussions whatever of the constitutional power of Congress to establish a bank, but, I venture to say, without a single member having had his attention drawn to this question.  I had the honor of a seat in the Senate when the latter law passed, probably voted for it, and I declare, with the utmost sincerity, that I never once thought of that point, and I appeal confidently to every honorable member who was then present, to say if that was not his situation.

This doctrine of precedents, applied to the Legislature, appears to me to be fraught with the most mischievous consequences.  The great advantage of our system of government over all others, is, that we have a written Constitution defining its limits and prescribing its authorities;  and that however for a time faction may convulse the nation, and passion and party prejudice sway its functionaries, the season of reflection will recur when, calmly retracing their deeds, all aberrations from fundamental principle will be corrected.  But once substitute practice for principle;  the exposition of the Constitution for the text of the Constitution, and in vain shall we look for the instrument in the instrument itself !  It will be as diffused and intangible as the pretended Constitution of England;  and must be sought for in the statute-book, in the fugitive journals of Congress, and in the reports of the Secretary of the Treasury !  What would be our condition if we were to take the interpretations given to that sacred book, which is, or ought to be, the criterion of our faith, for the book itself ?  We should find the Holy Bible buried beneath the interpretations, glosses, and comments of council, synods, and learned divines, which have produced swarms of intolerant and furious sects, partaking less of the mildness and meekness of their origin than of a vindictive spirit of hostility toward each other !  They ought to afford us a solemn warning to make that Constitution, which we have sworn to support, our invariable guide.

Nothing can be more clear and conclusive on the inapplicability of the doctrine of precedents to constitutional questions, than this reasoning of Mr. Clay;  and it is mortifying now to see him stand up in his place in the Senate, and say, the constitutionality of the Bank is settled.  How settled? which way settled? for the precedents, if that doctrine is to apply, are equal each way, or, rather, they are the most numerous against the Bank.  Thus, if the first Bank was chartered, it was refused to be rechartered;  and so of the second one.  Recharters to both of them were refused;  besides that, two bills for National Banks were rejected during the late war --one of them vetoed by Mr. Madison;  and at the panic session of 1833-4, Mr. Webster's six years' bill, and Mr. Leigh's elongation proposition, were both rejected;  and, at the late extra session, Mr. Clay's resolution for a National Bank was also overwhelmingly rejected.  Thus the precedents for refusing charters to National Banks are numerous, while precedents in their favor are but few;  in fact, but two;  so that if precedents are to govern, the question is indeed settled, not in favor of, but against, the constitutionality of a Bank;  and be it remembered that, in all these decisions against the Bank, the decision was carried in spite of forty or fifty votes, which ought not, in the forum of conscience or honor, to be counted for the Bank, to wit: the votes of her retained attorneys, her debtors, and stockholders.

We leave out of view the decision of the Supreme Court in favor of the Bank; $ the same court having decided in favor of the alien and sedition law;  and for another reason, which Mr. Clay himself will tell in the next quotation we shall make from him.  We dismiss this head, then, of precedents, with the remark that Mr. Clay's speech of 1811 contains the true Republican doctrine, to wit: that the doctrine of precedents does not apply to the Constitution, and that his speeches now contain the true Federal doctrine, to wit: that the Constitution is to be governed by precedents, i.e. by precedents against it;  so that many precedents in favor of it shall stand for nothing, but one against it shall be conclusive !

James McCulloch versus The State of Maryland, John James:---

The first question made in the cause is, Has Congress power to incorporate a bank ?

After the most deliberate consideration it is the unanimous and decided opinion of this court that the act to incorporate the bank of the United States, is a law made in pursuance of the constitution, and is a part of the supreme law of the land.

It being the opinion of the court that the act of incorporating the bank is constitutional;  and that the power of establishing a branch in the state of Maryland might be properly exercised by the bank itself, we proceed to enquire---

2.  Whether the state of Maryland may, without violating the constitution, tax that branch ?

We are unanimously of opinion, that the law passed by the legislature of Maryland, imposing a tax on the bank of the United States, is unconstitutional and void.

This opinion does not deprive the states of any resources which they originally possessed.  It does not extend to a tax paid by the real property of the bank, in common with the other real property within the state, nor to a tax imposed on the interest which the citizens of Maryland may hold in this institution, in common with other property of the same description throughout the state.  But this is a tax on the operations of the bank, and is consequently a tax on the operation of an instrument employed by the government of the union, to carry its powers into execution.  Such a tax must be unconstitutional.

Decided March 6, 1819.

To continue the extracts.  We shall next quote a clause of the utmost importance;  one showing Mr. Clay's opinion of the Federal court at that time, and his belief that the charter ought to have been repealed by Congress under Mr. Jefferson's administration, except for the prudential reasons which made it advisable to await the expiration of the charter.

When gentlemen are claiming the advantage supposed to be deducible from acquiescence, let me inquire what they would have had those to do who believed the establishment of a bank an encroachment upon State rights.  Were they to have resisted, and how ?  By force ?  Upon the change of parties in 1800, it must be well recollected, that the greatest calamities were predicted as a consequence of that event.  Intentions were ascribed to the new occupants of power, of violating the public faith, and prostrating national credit.  Under such circumstances, that they should act with great circumspection was quite natural.  They saw in full operation a bank, chartered by a Congress who had as much right to judge of their constitutional powers as their successors.  Had they revoked the law which gave it existence, the institution would, in all probability, have continued to transact business notwithstanding.  The judiciary would have been appealed to, and from the known opinions and predilections of the judges then composing it, they would have pronounced the act of incorporation, as in the nature of a contract, beyond the repealing power of any succeeding Legislature.  And, sir, what a scene of confusion would such a state of things have presented: an act of Congress, which was law in the statute-book, and a nullity on the judicial records ! was it not the wisest to wait the natural dissolution of the corporation rather than accelerate that event by a repealing law involving so many delicate considerations ?

This is an omnipotent quotation.  From all that is here said, it is clear that Mr. Clay believed that Congress had the right to repeal the Bank charter, and ought to have done it, except for two reasons:  First, that it would seem to countenance the Federal charge of violence and bad faith against the Republicans;  Secondly, that the Supreme Court, being composed of Federalists, would decide that the charter was a contract, and irrepealable, and thus bring Congress and the court into conflict, and fill the country with confusion and distraction.  If the Supreme Court had been Republican, it is clear that Mr. Clay would have been in favor of the repeal;  as it was, he thought it most prudent to await the dissolution of the corporation by the expiration of its charter, which, in fact, was then more than half expired.

These opinions of Mr. Clay are of the greatest possible moment.  They clench the nail as to his belief of the unconstitutionality of the Bank charter;  and they show that he sanctions the doctrine of the repealability of charters !

Having denied the constitutionality of a National Bank, and showed the inapplicability of the doctrine of precedents to it, and averred the right of Congress to repeal the charter, Mr. Clay next entered the stronghold of Federalism --the field of implied powers-- and, both by argument and by sarcasm, repelled and chastised the pretension of finding a power to charter a National Bank in the incidental powers of Congress.  He takes the clear ground that there can be no incident except to a principal;  that there can be no implication except from a specification;  and he shows fully that there is no principal power or specified power in the Constitution, to which an institution so tremendous as a National Bank could be attached by construction as an incident.  He thus speaks on that point:

The incidental power ought to be strictly subordinate and limited to the end proposed to be attained by the specified power.  In other words, under the name of accomplishing one object which is specified, the power implied ought not to be made to embrace other objects, which are not specified in the Constitution.  If, then, you could establish a bank, to collect and distribute the revenue, it ought to be expressly restricted to the purpose of such collection and distribution.  It is mockery, worse than usurpation, to establish it for a lawful object, and then to extend it to other objects which are not lawful.  In deducing the power to create corporations, such as I have described it, from the power to collect taxes, the relation and condition of principal and incident are prostrated and destroyed.  The accessory is exalted above the principal.  As well might it be said, that the great luminary of day is an accessory, a satellite, to the humblest star that twinkles forth its feeble light in the firmament of heaven !

Suppose the Constitution had been silent as to an individual department of this government, could you, under the power to lay and collect taxes establish a judiciary ?  I presume not;  but if you could derive the power by mere implication, could you vest it with any other authority than to enforce the collection of the revenue ?  A bank is made for the ostensible purpose of aiding in the collection of the revenue, and while it is engaged in this, the most inferior and subordinate of all its functions, it is made to diffuse itself throughout society, and to influence all the great operations of credit, circulation, and commerce.  Like the Virginia justice, you tell the man whose turkey had been stolen, that your books of precedent furnish no form for his case, but that you will grant him a precept to search for a cow, and when looking for that he may possibly find his turkey !  You say to this corporation, we can not authorize you to discount, to emit paper, to regulate commerce, etc.  No ! Our book has no precedents of that kind.  But then we can authorize you to collect the revenue, and, while occupied with that, you may do whatever else you please.

Let the reader recollect that all this related to a bank of only ten millions of capital.  Ten millions was then enough, in the opinion of Mr. Clay, to make the Bank too strong for the Government and the country, and to enable it to influence all the great operations of credit, circulation, and commerce.  What, then, are we to think of the thirty-five million Bank, which, in addition to all its other influences, has held an average of fifty members of Congress in its pay for years past, while Philip of Macedon never held more than ten Grecian orators in his pay at a time, and with these ten was able to corrupt and distract all Greece, and prepare her for the easy conquest of his arms ?

If Mr. Clay was right in his apprehensions of the power of a ten million bank in 1811, what ought we to think of a thirty-five million bank, after what we have seen of it;  and after what we have seen of this thirty-five million institution, what are we to think of the fifty million monster which Mr. Clay himself has proposed to establish ?

We now approach a clause in Mr. Clay's speech which will demand from him, and from all the friends of a National Bank, the most serious and well-considered answer.  Since his desertion to the Federalists, Mr. Clay has taken up their doctrine of the necessity of a National Bank to the existence and preservation of the Government.  He now stands, with the old Federal corps, upon the necessity of the institution --upon the impossibility of carrying on the Government without it, and upon the distress, ruin, and bankruptcy of the whole country, if it is not established.  Upon this necessity he showed the contradiction and folly of giving a second veto --an unconstitutional veto over the creation of this indispensable institution-- to a board of directors in Philadelphia.  He showed that if this Bank was so necessary to the Government, the Government should have an absolute power to establish it, i.e. to establish a bank of its own, to wit: a Treasury Bank;  and that the nation should not be left to the negative of a second veto, left to the mercy of a corporation, and that such great calamities should not depend upon the hazards of a contingent remedy.  Hear him:

The first singular feature that attracts attention in this bill, is the new and unconstitutional veto which it establishes.  The Constitution has required only, that after bills have passed the House of Representatives and the Senate, they shall be presented to the president, for his approval or rejection;  and his determination is to be made known in ten days.  But this bill provides, that when all the constitutional sanctions are obtained, and when, according to the usual routine of legislation, it ought to be considered as a law, it is to be submitted to a new branch of the Legislature, consisting of the president and twenty-four directors of the bank of the United States, holding their sessions in Philadelphia;  and if they please to approve it, why then it is to become a law !  And three months (the term allowed by our law of May last, to one of the great belligerents, for revoking his edicts, after the other shall have repealed his) are granted them, to decide whether an act of Congress shall be the law of the land or not ! — an act which is said to be indispensably necessary to our salvation, and without the passage of which, universal distress and bankruptcy are to pervade the country.  Remember, sir, the honorable gentleman from Georgia has contended that this charter is no contract.  Does it, then, become the representatives of the nation, to leave the nation at the mercy of a corporation ? Ought the impending calamities to be left to the hazard of a contingent remedy ?

Thus, in 1811, Mr. Clay was in favor of the Presidential veto, and against the Bank veto;  now he is for the Bank veto, and against the constitutional veto.  Such is the contradiction in which his apostacy involves him.  But his personal inconsistencies, glaring as they are, detract nothing from the force of his speech in 1811;  and it is clear that he, and all the advocates of a Bank upon the ground of necessity, are completely caught and gagged by the folly of leaving to a corporation to say whether that shall become a law of the land upon which the existence of the Government depends, and without which, ruin, distress, and universal bankruptcy must overwhelm the land !  Upon this view they must admit, that if the Bank is thus necessary, the power of Congress to establish it must be absolute !  It must depend upon the Government itself to establish it, and to preserve it after it is established, and not leave it to the will of a bank directory to say whether it shall be established, and to their crimes to say whether a court of justice may vacate it for breach of charter !  These absurdities would make the existence of the Federal Government to depend upon the decision of a parcel of corporators, and upon the fiat of a judge !



Tuesday night, August 14, 1838.

Mr. Clay and a National Bank

The next objection to a National Bank, taken by Mr. Clay in the speech from which we have been quoting, was in relation to its anti-Republican character, in creating an association of favored individuals, invested with immunities, privileges, rights and advantages not belonging to the rest of the community.  The exclusiveness of these privileges and immunities was then as objectionable to Mr. Clay as they still are to all Republicans.  He utterly objected to the constitutionality and to the expediency of founding such an association in our Republican country --and certainly there can be no truer test of Republicanism and Federalism than in opposing or supporting such an association of wealth and privileges as is formed by the corporators of a National Bank.

Mr. Clay thus inveighs against the monarchical and anti-Republican character of the Bank.

What is a corporation, such as the bill contemplates ?  It is a splendid association of favored individuals, taken from the mass of society, and invested with exemptions and surrounded by immunities and privileges.  The honorable gentleman from Massachusetts [Mr. Lloyd] has said, that the original law, establishing the bank, was justly liable to the objection of vesting in that institution an exclusive privilege, the faith of the government being pledged, that no other bank should be authorized during its existence.  This objection, he supposes, is obviated by the bill under consideration;  but all corporations enjoy exclusive privileges;  that is, the corporators have privileges which no others possess;  if you create fifty corporations instead of one, you have only fifty privileged bodies instead of one. I contend that the States have the exclusive power to regulate contracts, to declare the capacities and incapacities to contract, and to provide as to the extent of responsibility of debtors to their creditors.  If Congress have the power to erect an artificial body, and say it shall be endowed with the attributes of an individual;  if you can bestow on this object of your own creation the ability to contract, may you not, in contravention of State rights, confer upon slaves, infants, and femes covert the ability to contract ?  And if you have the power to say that an association of individuals shall be responsible for their debts only in a certain limited degree, what is to prevent an extension of a similar exemption to individuals ?  Where is the limitation upon this power to set up corporations ?  You establish one in the heart of a State, the basis of whose capital is money.  You may erect others whose capital shall consist of land, slaves, and personal estates, and thus the whole property within the jurisdiction of a State might be absorbed by these political bodies. The existing bank contends that it is beyond the power of a State to tax it, and if this pretension be well founded, it is in the power of Congress, by chartering companies, to dry up all the sources of State revenue.  Georgia has undertaken, it is true, to levy a tax on the branch within her jurisdiction, but this law, now under a course of litigation, is considered as invalid. 

All this is genuine Republican doctrine, and it is mortifying that a person once feeling and speaking thus, should have apostatized and backslided in the way that he has done.  We can call his fall from these doctrines nothing but apostacy;  for he himself has never pretended to impugn their correctness, or in anywise to show them to be erroneous, but has simply abandoned them, and taken up the opposite doctrines.

His desertion from Republicanism is open and shameless;  but he owes it to the community, whose confidence he is now soliciting for the Presidency, to explain himself upon all these points;  to say whether the doctrines of this quotation are erroneous;  if so, to show wherein;  if not, then to give a reason for now joining this anti-Republican association of favored individuals, and wishing to make it infinitely stronger and more powerful than it was when he so justly opposed it.

This splendid association of favored individuals, which he so firmly opposed then, had but a capital of ten millions of dollars;  he has since supported a similar association with thirty-five millions;  and has lately proposed one of fifty millions !  Let any candid man compare Mr. Clay's speech of 1811 against the Bank corporation, as an anti-Republican association of favored individuals, invested with exclusive privileges and immunities, with his present proposition for a fifty million association of the same kind, and he must see that the destruction of Republicanism is the object he now openly aims at;  for this fifty million bank would lead to the complete establishment of monarchy and aristocracy.  Establish such a bank, as Gen. Hamilton said of his monarchical propositions in the convention of 1787 --establish such a bank, and it will maintain itself !  Yes, a fifty million bank would maintain itself forever !  Even a thirty-five million one would have baffled any man upon earth but General Jackson;  and, with all his mighty energies and virtues, we have barely escaped the dominion of that powerful machine of monarchy and corruption.

We invite all Republicans to read this paragraph about exclusive privileges, for the sound Republican doctrine which it conveys, and let them cherish these doctrines, although now contemned by their former advocate.

Proceeding with his argument against the use or necessity of a National Bank, Mr. Clay comes to one so appropriate to the contests of the present day, and so utterly at variance with his present position in relation to State banks, that we marvel how it has been overlooked, and how it comes that it has not been repeatedly presented to him for the knockdown effect which it must have had upon him.  It was that argument in which he showed by the records, and by facts and experience, that the operations of the Treasury Department could be as well conducted without as with a National Bank.  This is the paragraph:

I will now proceed to show by fact, actual experience, not theoretic reasoning but by the records of the treasury themselves, that the operations of that department may be as well conducted without as with this bank.  The delusion has consisted in the use of certain high-sounding phrases, dexterously used on the occasion;  "the collection of the revenue," "the administration of the finance," "the conducting of the fiscal affairs of the government," the usual language of the advocates of the bank, extort express assent, or awe into acquiescence, without inquiry or examination into its necessity.  About the commencement of this year there appears, by the report of the Secretary of the Treasury, of the 7th of January, to have been a little upward of two million and four hundred thousand dollars in the treasury of the United States;  and more than one third of this whole sum was in the vaults of local banks.  In several instances, where opportunities existed of selecting the bank, a preference has been given to the State bank, or at least a portion of the deposits has been made with it.  In New York, for example, there were deposited with the Manhattan Bank $188,670, although a branch bank is in that city.  In this District, $115,080 were deposited with the bank of Columbia, although here also is a branch bank, and yet the State banks are utterly unsafe to be trusted !  If the money, after the bonds are collected, is thus placed with these banks, I presume there can be no difficulty in placing the bonds themselves there, if they must be deposited with some bank for collection, which I deny.

This is an omnipotent paragraph: it goes the whole for local banks against a National Bank, and presents Mr. Clay's conduct in attacking General Jackson for acting on the same principle, when the reviled "pet bank" system was established, as the most wanton and wicked that ever was exhibited in a legislative body.  It shows that Mr. Clay himself, before his desertion from the Republican party, and before his attorneyship to the Bank of the United States, held precisely the same opinions of the local banks which the Republican Administration of General Jackson did at the time of the removal of the deposiies, and the deposite of the public moneys with the local banks.  Yet these local bunks were attacked by him with unmeasured violence.  Every species of abuse was heaped upon them;  nothing would then do but a National Bank;  and those who held the same opinion which he held before his desertion, were villified with all the virulence of a United States Bank attorney.

We have thus far shown that Mr. Clay in 1811 was not only against a National Bank, as unconstitutional, inexpedient, unnecessary, dangerous, anti-republican, and monarchical, but that he was also in favor of the local banks, rather than a National Bank, for the deposite of the public moneys;  and we have to show him up in a new character, as an original Sub-Treasury man, going the whole for the Sub-Treasury system, and lauding and praising that system of managing the revenues by its own officers, which was practised in the early years of the Government, and which Mr. Van Buren has lately recommended.  We have to show him in favor of this system twenty-seven years ago;  and showing that for nine years after the creation of the first National Bank, the collection of the revenues was made entirely the duty of the collectors, and that it was not until the act of 1800 --an act in the last days of the alien and sedition law administration-- that recourse was had to the National Bank for this purpose, and then only in part !  Read and behold--

Let us inquire into the actual participation of this bank in the collection of the revenue.  Prior to the passage of the act of 1800, requiring the collectors of those ports of entry, at which the principal bank, or any of its offices are situated, to deposit with them the custom-house bonds, it had not the smallest agency in the collection of the duties.  During almost one moiety of the period to which the existence of this institution was limited, it was nowise instrumental in the collection of that revenue to which it is now become indispensable !  The collection, previous to 1800, was made entirely by the collectors;  and even at present where there is one port of entry, at which this bank is employed, there are eight or ten at which the collection is made as it was before 1800.  And, sir, what does this bank or its branches, where resort is had to it ?  It does not adjust with the merchant the amount of duty, nor take his bond;  nor, if the bond is not paid, coerce the payment by distress or otherwise.  In fact, it has no active agency whatever in the collection.  Its operation is merely passive;  that is, if the obligor, after his bond is placed in the bank, discharges it, all is very well.  Such is the mighty aid afforded by this tax-gatherer, without which the government can not get along ! Again, it is not pretended that the very limited assistance which this institution does in truth render, extends to any other than a single species of tax, that is, duties.  In the collection of the excise, the direct and other internal taxes, no aid was derived from any bank.  It is true, in the collection of those taxes, the former did not obtain the same indulgence which the merchant receives in paying duties.  But what obliges Congress to give credit at all ?  Could it not demand prompt payment of the duties ?  And, in fact, does it not so demand in many instances ?  Whether credit is given or not is a matter merely of discretion.  If it be a facility to mercantile operations (as I presume it is) it ought to be granted.  But I deny the right to engraft upon it a bank, which you would not otherwise have the power to erect.  You can not create the necessity of a bank, and then plead that necessity for its establishment.  In the administration of the finances, the bank acts simply as a payer and receiver.  The Secretary of the Treasury has money in New York, and wants it in Charleston;  the bank will furnish him with a check or bill, to make the remittance, which any merchant would do just as well.

In this extract from Mr. Clay's speech we see the original form of the Sub-Treasury system, and the exact train of argument and the precise quotations by which it is now supported.  So far as living men are concerned, Mr. Clay is the father of the Sub-Treasury scheme.  He is the oldest living advocate of that system.  He shows that prior to the year 1800 the collection of the public moneys was made entirely by the collectors;  that during one-half of the existence of the first National Bank it was in nowise instrumental in the collection of the revenue, and during the remainder of its existence it had but a limited and divided share of the collection;  that previous to 1800 there was no law to require collections through it, or custom-house bonds to be deposited in it;  that the public business was done, and well done, during all this time, by the collectors, without recourse to the National Bank, although that Bank was in existence.

Thus Mr. Clay shows that during the whole of Gen. Washington's administration the Sub-Treasury was in full force, and that it was only in the last year of the old black cockade, alien and sedition law, dyed-in-the-wool Federal administration of John Adams, that the Bank of the United States, by law, was made the collector and depository of the custom-house revenue.[act of May 10, 1800.]  This is important testimony.  It is worth a great deal to the good cause.  It identifies the Sub-Treasury with the early history of our Government, and identifies its antagonist system with the high-toned Federal, monarchical administration of John Adams.

True, Mr. Clay has apostatized from all this.  He is now the reviler of the Sub-Treasury and all its friends, and in this he only acts the part of all turncoats and renegades, who are proverbially more insolent and unrelenting to their former associates than their original enemies.  Arnold was more abusive, insulting, cruel, and implacable towards the Americans, after his desertion, than any officer of the British army;  and so it is with every deserter, whether in politics, religion, or arms.



Friday night, August 17, 1838.

Mr. Clay and a National Bank.

We pursue this subject, and fulfil a public duty by pursuing it.  Mr. Clay is now a candidate for the Presidency;  he is the Federal candidate for the Presidency, and consequently goes for Federal measures, the first of which is a National Bank.  Such an institution contains within itself every feature and every attribute that defines Federalism.  First, it is created by stretching the Constitution beyond its meaning, intention, or words.  Secondly, it concentrates wealth.  Thirdly, it gives exclusive privileges and immunities to a few.  Fourthly, it creates a fourth department in the Government, strong enough to influence all the others.  Fifthly, it contains the principle of hereditary succession in the perpetual succession of the corporators.  Sixthly, it is the entering wedge to all other violations of the Constitution, the citadel of Federalism, and the stepping stone to monarchy.

A National Bank is, therefore, the synonyme of Federalism;  and of all the tests which can be applied to that political patty, that of adherence, or opposition, to a National Bank is the most unerring and infallible; for while some few Republicans have, so far, under extraordinary circumstances, deviated from the general principles of his party, as to go for a National Bank, yet no Federalist has ever so far deviated from the principles of his party as to condemn a National Bank.  This remark is not invalidated by the fact that Webster, Sergeant, Hopkins, and other Federalists, voted against the late Bank of the United States in 1816.  They only opposed it because they believed Republicans were to have the management of it;  and they all turned for it as soon as the Republican president, Mr. Cheves, left it;  and they have all found their pecuniary and political profit in their adhesion to it, and now stick to it with the loyalty of devoted followers.

A National Bank is, then, the truest, most certain, most uniform, and most universal, test of Federalism which the political field at present presents;  and although the party lines which got confused during the Administrations preceding that of General Jackson are pretty fully developed and restored, yet a great deal will be done towards it;  and by the time the Presidential election of 1840 is over, Federalism and Republicanism will be as distinctly defined as they were in 1800;  and an advocate for a National Bank will no more be counted or tolerated in the Republican ranks than he was in the time of Jefferson and Adams.  For these reasons we pursue the extracts from Mr. Clay's speech, premising that his whole speech was principally in reply to Mr. Lloyd, of Massachusetts, one of those high-minded and honorable Federalists who never "turned his coat," or changed his principles, or deserted his banner, neither for pelf, nor power;  but lived and died an honorable man, and an unflinching Federalist.  To that gentleman he addresses the following argument against "stretching the Constitution to include, by implication, powers not fairly embraced within it."

It is urged by the gentleman from Massachusetts [Mr. Lloyd], that as this nation advances in commerce, wealth, and population, new energies will be unfolded, new wants and exigences will arise, and hence he infers that powers must be implied from the Constitution.  But, sir, the question is, shall we stretch the instrument to embrace cases not fairly within its scope, or shall we resort to that remedy, by amendment, which the Constitution prescribes ?

The next quotation, which we shall make, contains a sentiment which has received a most humiliating confirmation since the time it was delivered.  It relates to the danger of the moneyed power, and is in these words:

The power of a nation is said to consist in the sword and the purse.  Perhaps, at last, all power is resolvable into that of the purse, for with it you may command almost every thing else.

This is an ancient sentiment, and destined to be perpetually verified.  Phillip of Macedon, himself a man of the sword, relied more upon the purse than upon his arms;  his constant phrase being that "an ass loaded with gold would find his way through the gates of the strongest city."  His son Alexander, the greatest of conquerors, was of the same opinion, and, like his father Philip, always sent his gold to the Grecian orators in advance of the march of his troops.

Mr. Clay's sentiment has been shamefully verified in our own time, and in the very way in which he feared it.  The Bank of the United States, having the purse, has undertaken to command every thing else, and has made vast acquisitions among members of Congress and editors of newspapers.  Mr. Clay himself has largely received the money of the Bank, and seems to have presented a mournful exemplification of the truth of his own sentiment.  Certain it is he ought never to have taken the money of the Bank after changing from his speech of 1811;  neither ought he ever to have taken the place of Secretary of State from Mr. Adams after changing in his favor;  and equally certain it is that he ought to have declined the canvass for the Presidency the day that he changed from Biddle and the thirty-five millions to Mr. Gallatin and the fifty millions.

And what are we to think of this fifty million bank, when one of ten millions was able, in Mr. Clay's eyes, to merge the sword in its own power, and to command almost every thing else ?  What are we to think of this fifty million bank, after seeing what Biddle and his thirty-five million bank have accomplished with money ?

The next quotation which we shall make relates to the scarcity of specie in the United States, and its monopoly by the Bank of the United States.  He says:

The specie circulation of the United States is estimated by some calculators at ten millions of dollars, and if it be no more, one moiety is in the vaults of this bank.

Ten millions of specie in the whole Union, and the one-half of that in the vaults of a bank owned by foreigners !  And here a comparison, and even a contrast, presents itself between the men who put down the first Bank, and those who put down the second Bank of the United States.  On each occasion the country was found destitute of specie;  for the twenty millions at the expiration of the second Bank was no more --in fact not so much, the increase of wealth and population considered-- than the ten millions at the expiration of the first charter.

The men of 1811 did nothing to increase the quantum of specie in the country;  they did nothing to revive the constitutional currency;  they fell back upon the notes of the local banks for a national currency;  and those notes had no adequate specie basis.  The consequence was a speedy stoppage of all the banks, the use of broken bank paper by the Federal Government, and the inability to resume specie payments until a National Bank was created to supply a national paper currency;  and then an agony of seven years' ruin brought upon the country in reducing every thing to the specie standard when there was so little specie in the country.

The men of 1832 acted differently.  They went to work to increase the quantity of specie in the country.  They corrected the gold standard;  they repealed the act of 1819 against the circulation of foreign silver;  they established three branch Mints;  they made war upon small notes;  they created a demand for specie by the Federal Government;  and they endeavored to infuse into all the banks an adequate specie basis.  The consequence was, that eighty millions of dollars were accumulated in five years;  and when the banks stopped in 1837, the Government was never compelled to use their depreciated paper;  and in one year after the stoppage, the resumption commenced, without recourse to a National Bank, and without the slightest inconvenience to the banks of the country.  The eighty millions of 1837 are increased to one hundred millions in 1838.  They will continue to increase, under the Republican Administration, until the country possesses just as much gold and silver as it can use;  and thus the great lesson is taught to the country, that no National Bank is necessary to coerce a resumption of specie payments, or to furnish a national currency for the Federal Government.

We give another quotation from that part of Mr. Clay's speech which shows his preference both for the Sub-Treasury system and the State bank system over the National Bank for the fiscal concerns of the Federal Government.  The reader, in going over this extract, will remark four things;  first, that up to the expiration of the first Bank charter, the Sub-Treasury system of collection had been used exclusively with respect to the public land revenue, no bank whatever having been made use of to facilitate the collection of that branch of the revenue;  secondly, that not one cent of land office money was deposited in the Bank of the United States or any of its branches;  thirdly, that on the point of responsibility, he differed from Mr. Gallatin, the Secretary of the Treasury, and deemed the State banks safer places of deposite than the Bank of the United States;  fourthly, that he then believed the National Bank and its branches to be capable of corruption and misconduct, and subject to bankruptcy.  This is the extract:

Again, one of the most important and complicated branches of the treasury department, is the management of our landed system.  The sales have, in some years, amounted to upward of half a million of dollars, and are generally made upon credit, and yet no bank whatever is made use of to facilitate the collection.  After it is made, the amount, in some instances, has been deposited with banks, and, according to the Secretary's report, which I have before adverted to, the amount so deposited, was, in January, upward of three hundred thousand dollars, not one cent of which was in the vaults of the bank of the United States, or in any of its branches, but in the Bank of Pennsylvania, its branch at Pittsburg, the Marietta Bank, and the Kentucky Bank.  Upon the point of responsibility, I can not subscribe to the opinion of the Secretary of the Treasury, if it is meant that the ability to pay the amount of any deposits which the government may make, under any exigency, is greater than that of the State banks;  that the accountability of a ramified institution, whose affairs are managed by a single head, responsible for all its members, is more simple than that of a number of independent and unconnected establishments, I shall not deny;  but, with regard to safety, I am strongly inclined to think it is on the side of the local banks.  The corruption or misconduct of the parent, or any of its branches, may bankrupt or destroy the whole system, and the loss of the government in that event, will be of the deposits made with each;  whereas, in the failure of one State bank, the loss will be confined to the deposit in the vault of that bank.  It is said to have been a part of Burr's plan to seize on the branch bank, at New Orleans.  At that period large sums, imported from La Vera Cruz, are alleged to have been deposited with it, and if the traitor had accomplished the design, the bank of the United States, if not actually bankrupt, might have been constrained to stop payment.

No person can read this extract, and the one we gave in our third number on the same point, without seeing that Mr. Clay, in 1811, was as much in favor of the Sub-Treasury system as any Republican of the present day can be.  He then went for the collectors, and the local banks, against a National Bank;  and gave the two former a preference on the merits, without regard to the constitutional question.  He considered them the safest, the most responsible, and the freest from corruption and misconduct.  This was the opinion of Henry Clay at the mature age of 36, one year more than enough to fill the Presidential chair, and after he had been five years a United States Senator.  His judgment was certainly mature at that time, and his disinterested opinions of that day cannot be overthrown by the pleadings of a Bank attorney at this day, whether that attorney be himself, who opposed the Bank in 1811, joined it in 1816, and got his reward;  or Mr. Webster or Mr. Sergeant, who opposed the Bank in 1816, and joined it after Mr. Cheves left it, and got their rewards also.

The foreign character of the Bank was, with Mr. Clay, a decided objection to the institution.  He then displayed the interest of the English nobility in its stock, the Duke of Northumberland especially;  but since his desertion to the Federalists, he goes with them for every thing, British nobility and all.  The present miscalled Bank of the United States is, and was, an English institution.  A list of its noble stockholders was published by Congress in 1832, and showed a long catalogue of dukes and marquises, earls and barons, countesses and peeresses;  which list has been since largely increased;  yet Mr. Clay was for the whole, and has fought the battle for them since 1832 with all the zeal of a fresh convert for his new friends, and all the venom of an old renegade for his former associates.

We close our extracts from Mr. Clay's speech of 1811, with presenting another extract, which has peculiar application to the present times, and finds a most wonderful exemplification in his own conduct.  It is an extract in which he charges the Federalists with exaggerating the distress which the discontinuance of the Bank would create, and with falsely attributing to the Government the numerous mercantile failures which took place about that time.  He says:

I conceive, then, sir, that we were not empowered by the Constitution, nor bound by any practice under it, to renew the charter of this bank, and I might here rest the argument.  But as there are strong objections to the renewal on the score of expediency, and as the distresses which will attend the dissolution of the bank have been greatly exaggerated, I will ask for your indulgence for a few moments longer.  That some temporary inconvenience will arise, I shall not deny;  but most groundlessly have the recent failures in New York been attributed to the discontinuance of this bank.  As well might you ascribe to that cause the failures of Amsterdam and Hamburg, of London and Liverpool.  The embarrassments of commerce, the sequestrations in France, the Danish captures;  in fine, the belligerent edicts, are the obvious sources of these failures.  Their immediate cause is the return of bills upon London, drawn upon the faith of unproductive or unprofitable shipments.  Yes, sir, the protest of the notaries of London, not those of New York, have occasioned these bankruptcies.

This was the conduct of the Federalists in 1811.  Distress, then as now, and forever, was their meat, drink, and lodging !  Distress was their delight, and its exaggeration their public occupation.  Distress is the jubilee of Federalism.  It is the saturnalia of the whole tribe, and the tutelary deities to whom they sacrifice are Pan and Bacchus.  Flesh mark or ear mark, artificial brands or natural signs, it is still the same thing;  distress! distress! distress! is still the distinctive mark, and the universal sign of Federalism.

In 1811, according to Mr. Clay, they had their Pythia in the Senate of the United States, to foretell distress, and to alarm that body by her frantic contortions of body, and incoherent ejaculations of oracles.  He then lashed and ridiculed the priestess, and exposed her falsities to the astonished hearers.  Now he has pushed the Pythonessa from her tripod.  He himself has mounted the stool, covered with the skin of the Python;  and, by the aid of cursing, crying, and praying, he has given such tragic exhibitions of agony in the Senate, as never were seen before in heathen or christian land.  Mr. Clay is now the great distress actor and alarm maker of the day, and has held his own, without a rival, for thirteen years.  He began his distress and alarm operations with the entrance of General Jackson into the House of Representatives, at the head of the Presidential candidates, in 1825, and has been at them ever since.  He is now a perfect laboratory of misery, and a personification of grief.  At the bare mention of the loss of the Bank of the United States --that Bank which, in 1811, was so unconstitutional and so dangerous-- at the bare idea of losing that Bank, he becomes a second Niobe at beholding the sudden destruction of all her children, first dissolving into liquid, then congealing into rock, and remaining the motionless representation of unutterable woe;  and this is the Henry Clay of 1811 !  For such transformations, the public must have reasons.

We live in an age of inquiry and of reason;  we live in a country of laws and government;  we have a right to scan the conduct of public men, and to know why it is that a public man, at the ripe age of 36 suddenly abandons the fundamental principles of his political life, and crosses right over to the principles of the party, the ranks of the party, and the camp of the party, which it had been the business of his life to combat and expose.



House of Representatives
Speaker of the House:  Henry Clay
Saturday, March 9th, 1816.
[History of Congress, page 1189]

After some unimportant amendment, and the bill having been gone through, the question was stated on the Committee's rising and reporting it to the House, when Mr. Clay rose and delivered at length his sentiments in favor of the bill, its principle and details.

A desolutory debate followed, between Mr. Jackson, Mr. Clay, and Mr. Randolph, on one or two points of Mr. Clay's arguments -- Mr. Randolph touching incidentally on the bill itself.

After which, the Committee rose and reported progress.

[The speech delivered on this occasion, by Mr. Clay, appears not to have been reported, and, of course, cannot be inserted as uttered in the House;  but, after the return of Mr. Clay to Kentucky, he made an address to his constituents, in which he gave the substance of it, as follows:]

Mr. Clay's Address to his Constituents,
Lexington, June 3, 1816.
on the bank question;  and why he changed his mind

---[this is only an explanation of his changing his coat;  not a refutation of his 1811 argument]

On one subject, that of the Bank of the United States, to which at the late session of Congress he gave his humble support, Mr. Clay felt particularly anxious to explain the grounds on which he had acted.  This explanation, if not due to his own character, the State, and the district to which he belonged, had a right to demand.  It would have been unnecessary if his observations addressed to the House of Representatives, pending the measure, had been published;  but they were not published, and why they were not published he was unadvised.

When he was a member of the Senate of the United States, he was induced to oppose the renewal of the charter to the old Bank of the United States by three general considerations.  The first was that he was instructed to oppose it by the Legislature of the State.  What were the reasons that operated with the Legislature in giving the instruction he did not know.  He has understood from members of that body, at the time it was given, that a clause, declaring that Congress had no power to grant the charter, was stricken out;  from which it might be inferred, either that the Legislature did not believe a bank to be unconstitutional, or that it had formed no opinion on that point.  This inference derives additional strength from the fact that, although the two late senators from this State, as well as the present senators, voted for a national bank, the Legislature, which must have been well apprised that such a measure was in contemplation, did not again interpose, either to protest against the measure itself, or to censure the conduct of those senators.  From this silence on the part of a body which has ever fixed a watchful eye upon the proceedings of the general government, he had a right to believe that the Legislature of Kentucky saw, without dissatisfaction, the proposal to establish a national bank; and that its opposition to the former one was upon grounds of expediency, applicable to that corporation alone, or no longer existing.  But when, at the last session, the question came up as to the establishment of a national bank, being a member of the House of Representatives, the point of inquiry with him was, not so much what was the opinion of the Legislature although undoubtedly the opinion of a body so respectable would have great weight with him under any circumstances — as what were the sentiments of his immediate constituents.  These he believed to be in favor of such an institution from the following circumstances: In the first place, his predecessor [Mr. Hawkins] voted for a national bank, without the slightest murmur of discontent.  Secondly, during the last fall, when he was in his district, he conversed freely with many of his constituents upon that subject, then the most common topic of conversation, and all, without a single exception, as far as he recollected, agreed that it was a desirable if not the only efficient remedy for the alarming evils in the currency of the country.  And lastly, during the session, he received many letters from his constituents, prior to the passage of the bill, all of which concurred, he believed without a solitary exception, in advising the measure.  So far, then, from being instructed by his district to oppose the bank, he had what was, perhaps, tantamount to an instruction to support it — the acquiescence of his constituents in the vote of their former representative, and the communications, oral, and written, of the opinions of many of them in favor of a bank.

The next consideration which induced him to oppose the renewal of the old charter was, that he believed the corporation had, during a portion of the period of its existence, abused its powers, and had sought to subserve the views of a political party.  Instances of its oppression, for that purpose, were asserted to have occurred at Philadelphia and at Charleston;  and, although denied in Congress by the friends of the institution, during the discussions on the application for the renewal of the charter, they were in his judgment, satisfactorily made out.  This oppression, indeed, was admitted in the House of Representatives, in the debate on the present bank, by a distinguished member of that party which had so warmly espoused the renewal of the old charter.  It may be said, what security is there that the new bank will not imitate this example of oppression ?  He answered, the fate of the old bank, warning all similar institutions to shun politics, with which they ought not to have any concern;  the existence of abundant competition, arising from the great multiplication of banks;  and the precautions which are to be found in the details of the present bill.

A third consideration upon which he acted in 1811, was, that as the power to create a corporation, such as was proposed to be continued, was not specifically granted in the Constitution, and did not then appear to him to be necessary to carry into effect any of the powers which were specifically granted, Congress was not authorized to continue the bank.  The Constitution, he said, contained powers delegated and prohibitory, powers expressed and constructive.  It vests in Congress all powers necessary to give effect to the enumerated powers — all that may be necessary to put in motion and activity the machine of government which it constructs.  The powers that may be so necessary are deducible by construction.  They are not defined in the Constitution.  They are, from their nature, indefinable.  When the question is in relation to one of these powers, the point of inquiry should be, is its exertion necessary to carry into effect any of the enumerated powers and objects of the general government ?  With regard to the degree of necessity various rules have been, at different times, laid down;  but, perhaps, at last, there is no other than a sound and honest judgment, exercised under the checks and control which belong to the Constitution and to the people.

The constructive powers being auxiliary to the specifically granted powers, and depending for their sanction and existence upon a necessity to give effect to the latter, which necessity is to be sought for and ascertained by a sound and honest discretion, it is manifest that this necessity may not be perceived, at one time under one state of things, when it is perceived, at another time, under a different state of things.  The Constitution, it is true, never changes;  it is always the same;  but the force of circumstances and the lights of experience may evolve to the fallible persons charged with its administration, the fitness and necessity of a particular exercise of constructive power to-day, which they did not see at a former period.

Mr. Clay proceeded to remark, that when the application was made to renew the old charter of the Bank of the United States, such an institution did not appear to him to be so necessary to the fulfillment of any of the objects specially enumerated in the Constitution, as to justify Congress in assuming, by construction, a power to establish it.  It was supported mainly upon the ground that it was indispensable to the treasury operations.  But the local institutions in the several States were, at that time, in prosperous existence, confided in by the community, having a confidence in each other, and maintaining an intercourse and connection the most intimate.  Many of them were actually employed by the treasury to aid that department in a part of its fiscal arrangements;  and they appeared to him to be fully capable of affording to it all the facility that it ought to desire in all of them.  They superseded, in his judgment, the necessity of a national institution.  But how stood the case in 1816, when he was called upon again to examine the power of the general government to incorporate a national bank ?  A total change of circumstances was presented;  events of the utmost magnitude had intervened.

A general suspension of specie payments had taken place, and this had led to a train of consequences of the most alarming nature.  He beheld, dispersed over the immense extent of the United States, about three hundred banking institutions, enjoying in different degrees the confidence of the public, shaken as to them all, under no direct control of the general government, and subject to no actual responsibility to the State authorities.  These institutions were emitting the actual currency of the United States;  a currency consisting of a paper, on which they neither paid interest nor principal, while it was exchanged for the paper of the community, on which both were paid.  He saw these institutions in fact exercising what had been considered, at all times, and in all countries, one of the highest attributes of sovereignty, the regulation of the current medium of the country.  They were no longer competent to assist the treasury in either of the great operations of collection, deposit, or distribution, of the public revenues.  In fact, the paper which they emitted, and which the treasury, from the force of events, found itself constrained to receive, was constantly obstructing the operations of that department.  For it would accumulate where it was not wanted, and could not be used where it was wanted for the purposes of government, without a ruinous and arbitrary brokerage.  Every man who paid or received from the government, paid or received as much less than he ought to have done as was the difference between the medium in which the payment was effected and specie.  Taxes were no longer uniform.  In New England, where specie payments have not been suspended, the people were called upon to pay larger contributions than where they were suspended.  In Kentucky as much more was paid by the people in their taxes than was paid, for example, in the State of Ohio, as Kentucky paper was worth more than Ohio paper.

It appeared to Mr. Clay, that, in this condition of things, the general government could depend no longer upon these local institutions, multiplied and multiplying daily; coming into existence by the breath of eighteen State sovereignties, some of which by a single act of volition had created twenty or thirty at a time.  Even if the resumption of specie payments could have been anticipated, the general government remaining passive, it did not seem to him that the general government ought longer to depend upon these local institutions exclusively for aid in its operations.  But he did not believe it could be justly so anticipated.  It was not the interest of all of them that the renewal of specie payments should take place, and yet, without concert between all or most of them it could not be effected.  With regard to those disposed to return to a regular state of things, great difficulties might arise as to the time of its commencement.

Considering, then, that the state of the currency was such that no thinking man could contemplate it without the most serious alarm;  that it threatened general distress, if it did not ultimately lead to convulsion and subversion of the government;  it appeared to him to be the duty of Congress to apply a remedy, if a remedy could be devised.  A national bank, with other auxiliary measures, was proposed as that remedy.

Mr. Clay said, he determined to examine the question with as little prejudice as possible arising from his former opinion.  He knew that the safest course to him, if he pursued a cold, calculating prudence, was to adhere to that opinion, right or wrong.  He was perfectly aware that if he changed, or seemed to change it, he should expose himself to some censure.  But looking at the subject with the light shed upon it by events happening since the commencement of the war, he could no longer doubt.  A bank appeared to him not only necessary, but indispensably necessary, in connection with another measure, to remedy the evils of which all were but too sensible.  He preferred to the suggestions of the pride of consistency the evident interests of the community, and determined to throw himself upon their candor and justice.  That which appeared to him in 1811, under the state of things then existing, not to be necessary to the general government, seemed now to be necessary, under the present state of things.  Had he then foreseen what now exists, and no objection had lain against the renewal of the charter other than that derived from the Constitution, he should have voted for the renewal.

Other provisions of the Constitution, but little noticed, if noticed at all, in the discussions in Congress in 1811, would seem to urge that body to exert all its powers to restore to a sound state the money of the country, that instrument confers upon Congress the power to coin money, and to regulate the value of foreign coins ; and the States are prohibited to coin money, to emit bills of credit, or to make any thing but gold and silver coin a tender in payment of debts.  The plain inference is, that the subject of the general currency was intended to be submitted exclusively to the general government.  In point of fact, however, the regulation of the general currency is in the hands of the State governments, or, which is the same thing, of the banks created by them.  Their paper has every quality of money, except that of being made a tender, and even this is imparted to it by some States, in the law by which a creditor must receive it, or submit to a ruinous suspension of the payment of his debt.  It was incumbent upon Congress to recover the control which it had lost over the general currency.  The remedy called for, was one of caution and moderation, but of firmness.  "Whether a remedy directly acting upon the banks and their paper thrown into circulation, was in the power of the general government or not, neither Congress nor the community were prepared for the application of such a remedy.  An indirect remedy, of a milder character, seemed to be furnished by a national bank.  Going into operation, with the powerful aid of the treasury of the United States, he believed it would be highly instrumental in the renewal of specie payments.  Coupled with the other measure adopted by Congress for that object, he believed the remedy effectual.  The local banks must follow the example which the national bank would set them, of redeeming their notes by the payment of specie, or their notes will be discredited and put down.

If the Constitution, then, warranted the establishment of a bank, other considerations, beside those already mentioned, strongly urged it.  The want of a general medium is everywhere felt.  Exchange varies continually, not only between different parts of the Union, but between different parts of the same city.  If the paper of a national bank were not redeemed in specie, it would be much better than the current paper, since, although its value in comparison with specie might fluctuate, it would afford a uniform standard.

If political power be incidental to banking corporations, there ought, perhaps, to be in the general government some counterpoise to that which is exerted by the States.  Such a counterpoise might not indeed be so necessary, if the States exercised the power to incorporate banks equally, or in proportion to their respective populations.  But that is not the case.  A single State has a banking capital equivalent, or nearly so, to one fifth of the whole banking capital of the United States.  Four States combined, have the major part of the banking capital of the United States.  In the event of any convulsion, in which the distribution of banking institutions might be important, it may be urged, that the mischief would not be alleviated by the creation of a national bank, since its location must be within one of the States.  But in this respect the location of the bank is extremely favorable, being in one of the middle States, not likely from its position, as well as its loyalty, to concur in any scheme for subverting the government.  And a sufficient security against such contingency is to be found in the distribution of branches in different States, acting and reacting upon the parent institution, and upon each other.