Andrew Jackson, President
John Calhoun, Vice-President
A bill to renew and modify the charter of the Bank of the United States.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the act entitled "An act to incorporate the subscribers to the Bank of the United States," approved the 10th day of April, 1816, shall be continued in force for the period of twenty years from the 3d day of March, 1836, and that the power shall be reserved to Congress to repeal this act at any time after ten years from the 3d of March, 1836, upon giving three years notice of such intended repeal to the president and directors of the said bank.
Sec. 2. And be it further enacted, That the President of the United States, after the 3d day of March, 1836, shall appoint one of the directors of each of the branches of the said bank, in the same manner as he now appoints a portion of the directors of the mother bank, and with the same limitations, as to their eligibility and term of service.
Sec. 3. And be it further enacted, That any officers of the mother bank, who may be selected by the Board of Directors, and designated to the Secretary of the Treasury of the United States, shall be authorized to sign and countersign notes, which shall be binding and obligatory on the said corporation, in like manner as if the same were signed and countersigned by the president and principal cashier or treasurer.
Sec. 4. And be it further enacted, That the said bank is hereby prohibited from issuing any notes which are not, upon the face of them, declared to be payable at the office from which they maybe issued; and, also, from drawing any draughts, or checks, for twenty dollars, or any smaller sum.
Sec. 5. And be it further enacted, That it shall be the duty of the bank to furnish annually, on the 1st day of January, to the chief officer of the treasury of each State, a list of the holders of stock in said bank, who are resident in such State, with the amount of the stock held by each stockholder; and nothing contained in the charter of said bank, or in this act, shall be deemed to restrain the several States from taxing the real estate of the said bank situated therein, respectively, or the proprietary interest of their respective citizens in the stock of the said bank, to the same extent that they may tax real estate within their jurisdiction, and like interests in the stock of other corporations, or money lent at interest.
Sec. 6. And be it further enacted, That, in consideration of the exclusive privileges and benefits conferred by this act upon the said bank, the President, Directors, and Company thereof shall pay to the United States, out of the corporate funds thereof, on the 3d day of March, 1837, and on the same day of each year there after, during the continuance of the charter, an interest at the rate of ____ per centum upon the deposites, from time to time, to the credit of the Treasurer of the United States in the said bank and its branches, during the preceding year.
Sec. 7. And be it further enacted, That, after the 3d day of March, 1836, the said bank shall not establish any additional branch thereof, without the consent of Congress.
Bank of the United States.
Mr. DALLAS, from the select committee appointed on the subject, reported a bill to renew the charter of the Bank of the United States for the term of fifteen years, to take effect subsequent to the expiration of the present charter in the year 1836; which was read; and ordered to a second reading.
The following resolution, submitted by Mr. Robbins yesterday, was taken up for consideration, viz.
Resolved, That the Secretary of the Senate be authorized to subscribe for sixty copies of the Legislative and Documentary History of the Bank of the United States, compiled by M. St. Clair Clarke and D.A. Hall, whereof one copy shall be distributed to each member of the Senate, one copy to the President and Secretary of the Senate, and the residue retained for the library of the Senate, provided that the price of the work shall not exceed the sum of five dollars.
Mr. Robbins said that the resolution submitted in the House of Representatives, providing for the purchase, had been considered by the committee to which it was referred, and they had reported in its favor. The committee in the Senate were also of the opinion that the work should be furnished to the members of this body, as the information would be of great advantage in enabling them to come to a decision on the question of rechartering the bank. He therefore hoped there would be no objection to the passage of the resolution.
Mr. HILL [Isaac Hill (April 6, 1789 - March 22, 1851); New Hampshire (D)] then read the following observations in opposition to the bill:
Mr. President: In favor of the extension of the charter of the United States Bank, it is urged that this institution is necessary for the preservation of a sound and equal currency. It has been assumed that, without this institution, the currency which was disturbed and depreciated by the necessities of the last war with Great Britain, would never have been restored. My belief is, that, had the United States Bank existed during the late war, the moneyed power which it would have wielded, aided by that moneyed power at the East, which preferred investments in illicit traffic with the enemy to investments aiding our own country, would have prostrated the Government at the feet of the common enemy would have compelled this Government to make such peace with Great Britain as she should dictate. Had this bank, if then existing, done like those patriotic State institutions which loaned money to the Government, and were in consequence obliged to suspend specie payments, it requires not the spirit of prophecy to foresee that the fate of the United States Bank would have been that of the local banks. Divest this United States Bank of the Government deposites draw from it the Government funds, as they must be drawn in all times of public exigency, and it stands on no better ground than every local bank in the country stands. It is without national character; the national name which it assumes is mere moonshine. Strike this bank out of existence, in a time of general prosperity, and the means for preserving a sound currency and for facilitating exchanges exist precisely the same. The price of exchange is always favorable to that section of the country where the greatest balance is due. If, for instance, the interior country consumes more than it produces, if it buys more than it sells, the price of exchange will be against the interior. If the States of the South or West consume more from abroad than they furnish for the market at home, the price of exchange will be increased in those States equal to the expense of transporting specie funds to the point where the debts may be due to the city of New York, or Philadelphia, or Boston, if the purchases shall there be made. On the other hand, if those States send more produce to New York, than the amount of their purchases at New York, the exchange will be in favor of the States, and against New York. The Bank of the United States is of no more value in facilitating these exchanges, than any brokers shop in the country. This bank charges the same for its bills of exchange as does any broker: nay, by monopolizing this brokerage, it controls, in a good degree, the prices, and precludes the benefits of that salutary competition which would otherwise exist.
The credit which is assumed for the bank, of bringing up to par, and equalizing the currency of bank bills throughout the country, is but a gratuitous assumption. It is true that the circumstance of the bills of this bank being receivable every where in payment of duties and debts to the Government, gives these bills a currency that no local bank possesses. But let the Government give to the bills of any local bank the same quality let the bills of any local bank be every where received in payment of debts due to the United States and such local bank will contribute just as much to equalize the currency, as does the Bank of the United States.
In the six Eastern States, at this moment, the bills of the United States Bank and its branches, with all the advantage which the Government gives those bills, by every where receiving them in payment for debts due to the United States, are not as good as are the bills of any and every local bank in those States: the local bills are there every where received as specie without discount; the bills of the United States Bank and its branches are not received, except in the place where the branch is located, and where the bill or note is payable. The difference at present is from one-fourth to one-half per cent.: the difference, between these and the spurious drafts which are circulated as bills, is probably one per cent. The principle is the same, whether the difference be one-fourth, one, ten, or twenty per cent. If that difference be one fourth per cent. now, what will it be under the system of issuing spurious orders, as well as bills payable at distant parts of the Union, when Government funds shall be as scarce as they were during the exigencies of the last war ? Then the Sources of public revenue would be in the main dried up a very small portion of the bills of the United States Bank would be any where receivable; and the paper of this bank would be the very worst paper circulation that ever has existed, or ever could exist, in this country. Fastened down as we now are by the votes of a majority of the Senate, it will not be in the power of Congress here after to improve the currency; nor can all the efforts of the State Legislatures, or the local banks granted under them, correct this evil.
With what face can it be urged that the Bank of the United States improves the currency ? I deny the proposition. The Bank of the United States, during the term of its existence, has done more towards establishing principles of banking calculated to superinduce and make permanent an unsound currency, than any and all the other banking companies of the country have done in the same time.
What would not be said, if twenty-five of the principal State banks throughout the Union should combine, and should agree to issue their bills at distant points of the Union, payable a thousand or fifteen hundred miles from the place of issue ? Would it not be obvious that the intention was to evade specie payments ? And can any one doubt, if an order to receive the bills thus sent forth in payment of debts due the United States should issue, such as that issued by Mr. Secretary Rush to receive the spurious orders of the Bank of the United States, that the bills of the local banks would be every where as current as are the spurious bank orders ?
But would not such a procedure be met with indignation throughout the whole trading and commercial community ? This evasion of specie payments is tantamount to the direct suspension of specie payments by the Bank of England; it is a device which would do credit to Yankee ingenuity. Give any Yankee bank this exclusive privilege for the term of twenty years, and I will be bound that such bank will carry to New England more than a moiety of all the proceed of the industry of the country. As the bill virtually sanctions the issues of this bank will be no better than the paper issues of the Bank of England during the suspension of specie payments the quality of each paper is the same, the credit of both being based exclusively on the simple circumstance that they were receivable every where in payment of the debts due to the Government. Mr. Huskisson has shown that the suspension of specie payments by the Bank of England reduced the value of the currency in that country about twenty-five per cent.; and at every emergency of this Government, the Bank of the United States, under the grant now voluntarily presented to it, will cause a similar depreciation of the value of money in this country, and probably produce a greater dilapidation of property than the whole amount of its capital.
On the subject of these branch drafts, with all due deference to the learned counsellor who received fifty dollars for draughting the opinion that there could be "no legal objection to them," and for the other distinguished gentlemen who, for one hundred dollars each, concurred "entirely in his opinion," I must beg leave to differ entirely from them. They say there can be no legal objection to these orders, which does not apply to all drafts; that "whether they are signed by one officer or more, and whether they have the external appearance of a bank note or otherwise, must be a matter of perfect indifference, and entirely within the competency of the bank to regulate at its pleasure;" that "it is an ordinary banking operation, to which their general faculties are perfectly competent;" that "a restraint upon the power (to issue this kind of spurious paper) is without example in the charter of any bank;" that the inhibition of bank bills which are not signed by the president and countersigned by the cashier, in the twelfth fundamental article of the bill creating this corporation, "has no reference to checks or drafts drawn at the offices upon the bank;" and that since the issue of these drafts "will facilitate the exchanges of the country, and secure the public and the bank from frauds," they seem to them as expedient as they are lawful !
This is, then, constitutional law, as expounded by the three great legal advisers (Messrs. Horace Binney Counsel and Director of the Bank; later member of House; Daniel Webster; and William Wirt, Attorney General under Monroe) of the bank; it must be so, for one of them solemnly sets forth the declaration, another "concurs entirely in his opinion," and the third says he "can see no possible legal objection to the practice;" and the whole costs the bank but two hundred and fifty dollars ! Let it be borne in mind that, in arriving at their conclusion, the learned gentlemen entirely blink the charter. To prevent the issue of such an enormous quantity of bills of a small denomination as shall drive out of circulation not only specie, but local bills, which are also the true representatives of specie, the charter prohibited the issue and circulation of "bills or notes promising the payment of money," unless signed by one officer, and countersigned by another: in vain does the bank four times petition Congress to change this provision in the charter. It is found by the "ordinary operations of banking," funds are transmitted sometimes from one point to another, by drafts drawn by one bank upon another, as a mere operation of exchange, the draft always purporting on its face the precise amount desired to be transmitted. On the strength of this practice, the Bank of the United States procures some ten, fifteen, or twenty millions of dollars, in sums of five, ten, and twenty dollars each, of the drafts manufactured in close imitation of bills or notes of the same denomination not for the purpose of accommodating the exchange, but for the purpose of throwing on the whole community an expanded paper circulation, if redeemable any where by specie, redeemable at such a distance from the place of issue, that it will cost the holder of fifty or a hundred dollars another fifty or a hundred dollars to obtain the specie where it is due. This paper circulation is not "bills or notes;" therefore, it is no violation of the charter that the paper is not signed by the president, and countersigned by the cashier. But the clause requiring the signatures to bills or notes, does not require the same signatures to checks and drafts: therefore, checks and drafts may be made a substitute for bills and notes, because checks and drafts, not for circulation, but for the transmission of funds, is "an ordinary banking operation, to which their general faculties are perfectly competent." Had any local State bank in the country resorted to such a subterfuge for such a purpose had any State bank thus evaded the plain letter of its charter there cannot be a doubt the act would have been condemned at once by every State judicial tribunal, and that every State Legislature in the Union would have declared the charter forfeit.
The gentlemen, counsel for the bank, in their learned opinion, give us no quotations from the books, as a justification of the issue of this spurious paper; they say the issue of checks and drafts is an ordinary "banking operation," thus carrying the idea that what is done by the United States Bank is done by all other banks. It is not denied that other banks may sometimes issue checks and drafts for the accommodation of individuals who may wish to send money from one place to another; but it may be fearlessly denied that other banks are permitted to issue checks and drafts for the purposes of general circulation. Even the bank "facilities," which were issued several years ago in Massachusetts and Connecticut, to evade specie payments at the place of issue, were of a character infinitely superior to the "facilities" issued by the Bank of the United States.
The Dedham bank issued its notes payable at Middletown, and the Hartford bank payable at New York; each some hundred and fifty miles distant. But there was a bona fide promise to pay, and the promise was kept. Yet the good sense of the community drove the banks to withdraw these facilities from circulation. So also the first bank chartered in New Hampshire, which for several years claimed the exclusive right of banking, in that State, as the United States Bank claims it now under the Federal Government, issued bills at Portsmouth, payable at Philadelphia. The popular indignation soon put down this evasion of the charter, although there was no clause in the charter prohibiting the issue. The checks and drafts which are attempted to be legalized by the counsel for the Bank of the United States, are of a character far below the bank facilities to which I have just alluded: they contain a promise to pay nowhere; they are a simple order drawn on the mother hank, at great distances from the places of issue; they may be paid, and probably will be paid, so long as it is convenient for the mother bank to pay them, if the holders will be at the expense of sending them five hundred, a thousand, or fifteen hundred miles; but the holders cannot, from their face, compel the bank to pay them.
Stop the sale of the public lands in the South and West let a war on the ocean stop the importation of goods on which duties are paid to the Government, and these branch drafts would instantly be depreciated in value from twenty-five to fifty percent.; they would fall below the treasury notes issued during the late war, and even as low as the notes and bills of those banks which then suspended specie payments. And this is the system by which the United States Bank has every where made an equal currency !
Should the friends of the bank, after the year 1836 for until that time we must have these checks and drafts fastened on us as a currency consent to prohibit their issue, will not the bank resort to some other expedient to evade the payment of specie ? It will be said that the renewed charter prevents the issue of bills or notes of one branch payable at another branch, of a denomination less than fifty dollars. Why permit such issue of any denomination ? This provision will enable the bank at all times to evade the payment of specie in quantities; being receivable for debts due to the United States, these bills will be current in all parts of the United States. In all times of scarcity the branches will issue only such bills payable at distant points; and they will be able to do an immense business, drawing their specie from the State banks around them, without being liable to be called on at any time for a single dollar. Even if the bills above fifty dollars will not be sufficient for this purpose, there are many expedients less disreputable and equally legal, as that of the issue of the drafts or checks, by which the bank might throw millions of small bills in circulation, and evade specie payments; and, after what we have seen, it will not be doubted that the able counsel and legal advisers of the bank will give their opinion that any proceeding of the bank is legal and right, since such proceeding will be but "an ordinary banking operation;" and because it will facilitate the exchanges of the country," it will be "as expedient as it is lawful!"
It is asked "How is the revenue to be collected through all the custom-houses, the land offices, and the post offices, with out some such means as the bank affords?" I answer, if there was not a bank in the country, it by no means follows that there would not be safe places of deposite for the public money at every point where money is receivable. In many places, in all places where there is no bank or branch of the Bank of the United States, State banks are now made places of deposite; and there is no more fear, because there is really no more risk in making these State banks places of deposite, than there is of the Bank of the United States or its branches. If the United States Bank were stricken out of existence, for the privilege of these deposites simply besides the payment of two to four per cent. on the annual average of these deposites the State banks would give bond, with ample security, to the Government; to do all that the United States Bank now performs, or engages to perform, viz. collect and receive for safe keeping the public moneys; pay them out wherever and whenever called for; transmit the funds to any part of the country free of charge; transmit them to foreign countries without making the exorbitant charge that has been for years past paid by the United States; equalize the currency as effectually as the United States Bank ever did, and much more than the United States Bank will effectually do under the amended bill which is now before the Senate.
There are many State banks, which would gladly pay the pensioners, and do all the duties formerly done by commissioners of loans, simply for the privilege of the temporary deposite of money used for those purposes by the Government.
To perform all the purposes of collection, distribution, and safe keeping of the revenue of the United States, banking institutions might be found at every point, which would guaranty, each for the other, the safety of those funds; and, in addition to these services, these banks would pay the Government from two to four per cent. annually on the average deposites.
Were there not a bank of discount in existence in the country I mean a bank issuing promissory notes or bills, but only specie the condition of the funds of the Government would be more safe than it now is. The benefits of the specie deposites between the time the money is received and the time it is used, would be abundantly sufficient to compensate, in safe hands, for all the expense of paying out and transmitting funds. Instead of a factitious basis a paper foundation we should then lave a solid specie foundation. Instead of overtrading on a system of artificial credit, which explodes as certainly and surely as it progresses, there would be uniformity and safety in the transaction of every species of business. If there were at any time a substitute for specie as a circulating medium, it would be a tangible, responsible, individual credit a credit which would be almost as sure as an intrinsic specie capital itself.
But we are not to expect such a state of things. There must of necessity be banks: these banks, to be safe and salutary checks on each other, should be local, and should be regulated by the several State Governments within whose sovereignty they are located. If it be admitted that the State Governments have a right to create banks, it must be admitted that the Federal Government has not a right to destroy those banks. In what condition do you place State banks by the exclusive privilege which is granted by the bill now under consideration ? You create a rival institution, exempt from all taxation, with power to evade specie payments, with an implied power to issue a spurious currency payable in specie a thousand miles from the place of issue, which spurious currency is made receivable in payment any where for debts due to the United States. This rival institution, without a cent of capital of its own, having the entire funds of the Government to operate upon, could and would annihilate every State bank in the country. A Senator, [Mr. Webster] the other day, aware of the fact that the grant of this charter ultimately involves the destruction of the State banks, contends that the power to regulate the currency gives the privilege of banking to the Federal Government alone. This construction of the constitution is quite as novel as the doctrine of the same Senator, that a representation by fractions in the House of Representatives is the only constitutional representation.
But, say its advocates, the perpetuation of this bank is necessary for the favorable effect it has or may have, "either generally or locally, on the agriculture, commerce, and manufactures of the Union." It must be admitted, with the exception of that portion of the stock of this bank which is purchased or owned by foreign stock holders, that the same capital is in the country if this institution do not, as if it do exist. The only advantage which this capital will possess with the charter over what it would have without it, will be in the issue of a paper currency; and this issue of paper currency must be enormous if the system of spurious orders shall be substituted for specie-paying paper bills. Thirty millions of dollars, without a specie basis, have been already leaned to the Western States by the United States Bank; a portion of this sum is common bank bills, another portion is paper orders. This great amount has been issued just long enough to have the people feel the benefits of the introduction of so much capital the pay day has not yet come. If that pay day is protracted, how long can those who have hired the money stand the payment of seven per cent., and a sixty days renewal ? If any circumstance if the lessening or withdrawal of the public deposites shall compel the bank to draw in even one-half of this vast amount, how many scenes of ruin similar to that at Cincinnati, some ten years ago, by the operations of the same bank, must be repeated ? These loans and facilities, now so sweet in the mouths of those who think that the people cannot get on without the United States Bank, will become gall and wormwood before they shall be fully digested.
The late Mr. Huskisson, that enlightened and useful practical statesman and political economist, to whom the world is indebted for many of those axioms which are meliorating the condition of man, says:
"The expansion of paper currency leads to overtrading, till overtrading again forces a contraction of the currency producing alternations of extravagant excitement and fearful depression alternations of which the consequences are dangerous to men of capital, and subversive to the security of property, on which the prosperity of every trading community depends, and distressing to the laborers who depend for employment on the capital of the country."
Not only has the United States Bank, for some cause best known to those who direct that institution, extended loans on its own capital beyond what it ought to have done, but it has made use of the funds of the Government, to the extent that it has become expedient for the bank to ask a delay from July to October of the payment of several millions of the public debt; so that if is evident that, far from being able to extend the facilities of trade, it must contract them. It has expanded the paper currency, and caused that overtrading which must force a contraction of the currency. If the funds of the Government shall continue to be thus used by the bank in all future time, instead of being a blessing to the community, the bank will be a curse.
I may be permitted to read an extract from an able writer on the currency and the Bank of England, in the British Monthly Magazine for February of the present year. These observations, with but slight exceptions, apply in full force to the Bank of the United States, and show what are to be the effects which this institution, placed, as it will be, beyond the reach of legislation for nearly twenty years more, will have on the agriculture, the commerce, and manufactures of this country.
[Mr. Hill here read a page or two from the work referred to.]
The Senators from Virginia and South Carolina, [Messrs. TAZEWELL and HAYNE,] on Saturday, seemed to be surprised at the admission of the chairman of the committee who reported this bill, [Mr. DALLAS,] that if this bank charter should not be prolonged for more than ten years, it might become necessary that the bank should interfere in the elections. Does any one doubt that the agents of the bank have made use of the money power of the bank to influence the elections; and this, too, before the opinion of the President of the United States, in relation to the bank, was made public ?
In the large commercial towns, where this bank had to encounter a vigorous competition from the local banks, there may have been no direct political preferences. But the branch bank, located in the State which I have the honor in part to represent, was made a party engine previous to the last Presidential election its directors were exclusively of one political party its favors were dispensed with a view to affect that election; and it was the principal instrument to give, in the choice of electors of President in 1828, a small majority to the party in that State which ever since has been in a minority. Even up to this time, that bank has been conducted, so far as circumstances would allow, on the same principle, and with the same view. In contemptuous disregard of public opinion, the most obnoxious political partisans opposed to the administration have been continued in the direction of that branch; and the appointment of a new board of direction has been delayed for months, in violation of one provision of the charter, to accommodate with a large salary an officer of that branch, who had brought down upon it the execrations of almost the whole community, until he should remove into another State, where he could find a preponderance of political sentiment more congenial with his own opinions.
The last selection, by the directors of the mother bank, of a board of directors for the branch in New Hampshire could have been made with no other view than to operate through the bank on the elections in that State.
One individual was placed conspicuous in that board, who had nothing in the world to recommend him but the degradation of prosecuting a newspaper friendly to the administration, of denying his own handwriting, of failing and ingloriously retreating from his own suit, and of resorting to brute force in making a cowardly attack on a third person whom he supposed had been instrumental in demonstrating his infamy. To such a man [Jeremiah Mason] is given a control of the branch in New Hampshire, and of the revenues of the Government receivable in that State a man who has rendered himself not less notorious for violating the laws of his country, than for failing in a course of gross deception to procure others to swear to his innocence.
The president of the Bank of the United States, in a letter to the Secretary of the Treasury, dated September, 1829, says: "The public opinion, in its crude state, is the most dangerous of all guides," and that "the bank cannot obey it." This he assigned as his reason for disregarding the remonstrances and petitions which were laid before him by the representatives and citizens of New Hampshire in 1829, against sundry abuses by the first officer of the branch in that State. He doubtless intends that public opinion in New Hampshire shall be punished for contumacy that the people of that State, weak alone against his power, shall be made to feel the giant monopoly; and hence he appoints to the direction of that branch, men on whom public opinion has placed the seal of condemnation, and sustains them in acts which public opinion pronounces to have been unjust and oppressive.
If this contempt for public opinion shall be exhibited while public opinion might be of great value in procuring a renewal of the bank, what may not be anticipated after the charter shall be fastened upon the people for fifteen years more ? What is this declaration more or less than the agent the deputy of Baring & Brothers, the most honorable Marquis of Hertford, and other privileged individuals under the British Government, openly setting public opinion in the United States of America at defiance !
The bank has had a major part of the newspapers, and even of the literary periodical works of the country, to advocate its cause: on one side of the political question, there has not been a solitary newspaper dissenting from the bank. The bank has also exercised freely the means it possessed to bring over to its side powerful newspapers which had been opposed to it. A vast preponderance of the newspaper press in its favor was not, however, enough for the bank; hundreds of thousands of extra sheets advocating its cause have been circulated by the bank throughout the country.
To show you, sir, that the bank is identified with a party, it is only necessary to say that, as far I could learn in my own State, these extra publications of the bank, circulated from Philadelphia, have been sent to precisely the same individuals as received, from the city of Washington, previous to the last Presidential election, Chapman Johnsons Virginia addresses, and other pamphlets of a like character. The list in both cases must have been the same.
Will it be denied that this bank has attempted to exercise an influence on public opinion and on our elections ? that it has attempted to influence the public presses of the country by extraordinary loans and accommodations ? Can our eyes and our ears deceive us, when we look around us and see and hear the party which identifies itself with the bank ? We are told by the Senator from Kentucky, [Mr. Clay] if this is a party question, that we "must look to the newspapers and the demagogues who have sought to make this a political instrument." Very true ! It was not until after the convention at Baltimore last December, that the petition came in asking for the recharter of the bank this session. Did not the leaders of a party then give the bank to understand that if the mountain did not come to the aid of Mahomet before the next Presidential election, Mahomet should never afterwards go to the mountain ? Did they not say to the bank, if you will not bring the influence of your money, including the funds of the Government, to bear on the next election, you need not expect any thing further from us after that election ?
The party opposed to the administration has compelled the bank to take its ground at this time the "newspapers" and the "demagogues" of the party make this bank the ground of opposition. Out of doors it is avowed that the subject is now forced on Congress, principally and mainly that the President shall be compelled either to approve or veto the new charter to drive him into a dilemma in which he must act, and if he act either way that he will make more enemies than he can secure friends. The friends of the President, while they regret that this is really a party question exclusively, on one side, and a divided question in some sections of the country, on the other, have no fears for the result, if he shall do what they anticipate he will do.
Sir, I claim no merit for originality when I say this is a party question exclusively on one side; I have high authority for saying this was a party question so long ago as the year 1811. The gentleman from Kentucky, then as now a member of this Senate, took that stand against this monopoly for which the country was long grateful to him; he then felt towards the United States Bank as those who are opposed to it now feel. If he is disposed to blame us for our opinions, he must blame himself that he was our instructor. He then represented the institution to be whatever we represent it to be an engine in the hands of one political party, to control and bear down another party. What did he then say ? In answer to Mr. Crawford, who said that this bank "had been made a party question, although the law incorporating the bank was passed prior to the formation of parties," the Senator from Kentucky then said:
"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 ?"
Where is the "Macedonian phalanx," "the opposition in Congress," now ? Can "one single straggler" be found opposed to the bank ? If any friend of the Senator will show one shade of difference not tending to make the present case even a more aggravated party question than it was then if he will show the "Macedonian phalanx" less compact, less determined, less zealous, than it was in 1811, then may it be admitted that it is unjust to quote him. There is, indeed, this difference in the two cases in 1811 the charter expired, and, if renewed at all, it was necessary then to act; in the present case, the charter does not expire for four years, and we know not what the bank may be at the expiration of that time. In the one case, the charter was asked for, for its own sake; in the other case, it is pressed to be used as an engine to affect a pending election. In the one case, the people had elected their Representatives and Senators with an especial view to the object; in the other, the people are taken by surprise the question is to be settled the door is to be closed, before they are consulted. That they are taken by surprise, is manifest from the language of the Senator himself, who, in a speech at Cincinnati, in August, 1830, is reported to have said:
"Whether the charter ought to be renewed or not, near six years hence, in my judgment is a question of expediency to be decided by the then existing state of the country. It will be necessary at that time to look carefully to the condition of the bank and of the Union; to ascertain (if the public debt in the mean time be paid off) what effect that will produce, what will then be our financial condition, what that of the local banks, the state of our commerce, foreign and domestic, as well as the concerns of our country generally. I am not, therefore, prepared to say whether the charter ought or ought not to be renewed on the expiration of its present term."
If the honorable Senator has "gone over into the camp of the enemy," and, as a leader of a forlorn hope, "looks back upon his former friends," to rebuke them for the "fidelity with which they adhere to old principles," will he not consent to wait for the decision of the great question until the time which he had himself designated ? Until the public debt shall be paid, and the condition of the bank and of the Union shall be carefully ascertained ?
It is not to be expected that all of us have the same lights on the subject of the bank as that Senator; some of us are more inclined to be guided by the axioms laid down by himself in 1811, than to follow his present advice. I cannot read the whole of his speech against the bank on that occasion, although I confess it to be as good a speech against the present bank as any that can now be made. I will quote a few detached sentences to give an idea of the whole.
[Mr. Hill here read nearly a column of extracts from the speech referred to.]
It is said there is a vast preponderance of the public opinion in favor of continuing this charter. If this be a fact if there be no fears of public opinion, why prematurely force the new charter upon the people four years before the time ? The charter will be equal probably to a gift of twenty millions of dollars to the present stockholders with the bonus as it stands. Will the people sanction, that act of their Senators and Representatives which shall throw away this immense amount ? Will the several States quietly forego their right of taxation, when responsible capitalists have offered, besides a bonus of one per cent. annually to the Federal Government, another bonus of one per cent. to the several State Governments for these exclusive banking privileges ?
Are the people of the United States under any particular obligations to the present stockholders to Baring, Brothers, & Co., who own nearly a million of this stock; to the most honorable the Marquis of Hertford, who has his hundred thousand dollars; to honorable Hudson Gurney, member of Parliament; to Sir William Keppell, Knight of the Grand Cross of the Order of Bath; to Lieutenant General Sir Marmaduke Warren Peacock; to Mrs. Candelaria Bell; to Lady Rosabella Wilson, and other British lords and ladies, to grant them exclusive privileges ?
On the confession of the advocates of this bank, the recharter of the bank, the instant it shall be consummated, will raise the value of the stock seventeen and a half millions of dollars. This will be equal to a gift outright to Baring, Brothers, & Co. of $395,750; to the Marquis of Hertford of $50,150; to honorable Hudson Gurney of $25,000; to Sir William Keppell of $36,100; to Sir Marmaduke Warren Peacock of $25,000, to say nothing of other British subjects holding larger and smaller amounts of this stock. Was the like of this case ever before known ? Did an American Legislature ever before do an act parallel to that which bestows on foreigners, individually, such large sums, not only without consideration, but with the doctrine openly avowed that taxation shall not reach this property ? Is this country so miserably poor and destitute, that capital must be brought here and kept here at such an enormous premium as this ?
On the subject of legislating for the benefit of foreigners, let me again recur to the speech of the Senator, [Mr. Clay,] from which I have before quoted. It is true that foreigners do not nominally hold so large a proportion of the stock of the present, as they held of the old bank; yet it is generally admitted that they are really the owners of a larger amount than appears in the returns. They actually own a greater amount now than they did then. What was then the language of the Senator ?
[Mr. Hill here read a number of passages from Mr. Clays speech.]
The question recurs is this Government under any obligations to the present stockholders of the United States Bank ? Was there any promise, either express or implied, to renew the charter in their hands ? If so, let their advocates point to the chapter and verse in which that promise is contained. For twenty years these stockholders had privileges which no other corporation possessed; the grant to them did not extend beyond the term of twenty years. The first grant was either of value to them, or it was not. If valuable, they have no right to ask the renewal of a privilege from which other citizens are excluded: if of no value, surely the Government can be under no obligations to continue to them what shall operate to their injury.
I have before me a pamphlet bearing date at Cincinnati, May, 1832, which says:
"The general opinion throughout the West in regard to the rechartering of the Bank of the United States, is not expressed in the various memorials prepared, circulated, and sent to Congress by the direct influence of the bank. The debtor is morally the slave of the creditor. A free and independent expression of opinion is restrained by a sense of fear. If a merchant the apprehension is that his credit will be stopped. If a mechanic or laborer the loss of employment is dreaded. And with either, perhaps, the honest support of a family is involved. These facts existing among us, have caused the signing, without regard to party, memorials for rechartering the present bank, which have appeared before Congress."
What is applied by the Cincinnati writer to individuals, and individuals of that place have been under severe thraldom to this mammoth institution, may be applied to every small local bank within the vortex of the Bank of the United States and its branches. I confess I was surprised when petitions were presented from several of the State banks in New Hampshire, in favor of rechartering the Bank of the United States. I knew there was a political esprit du corps operating in that State in favor of the bank, on the party which is in the minority: the bank had done much for the party, and it was natural that the party should do something for the bank. I have since ascertained that a number of the banks whose directors favored the same political party as the Bank of the United States, in utter contumacy to the agent of the bank who required it of them, refused to sign the printed petition which was forwarded to them. May not these refractory directors expect the vengeance of the mammoth after he shall be let loose to trample down every thing before him for fifteen years more ? These small banks, if they shall come within his reach, would be but a mouthful to his maw. The solvent and independent banks which have resisted his mandate, can, however, shut up their banking houses, and place their capital in some other business, laying themselves under no other pains and penalties to this institution than such as all capital in other employments shall be subject to.
I was surprised to see some of the banks of the town of Portsmouth not the old Union bank, for that is an owner of United States Bank stock, but other banks in that town petitioning to renew this charter; to see Portsmouth, which already been bled to depletion by this Doctor Sangrado, again holding out her arm to the empiric. That town and its vicinity has suffered severely from the branch which the good mother at Philadelphia had sent her. I hope again to see her rise invigorated from the ruin which had been spread around her. She had plenty of banking capital for all her business, without aid from the United States Bank. The bank sent an additional capital of some three hundred thousand dollars: this made more money than was necessary for ordinary business. At first the United States Bank offered to loan on liberal principles. The tariff of 1824, and the flush of money, threw out an inducement to every man who had either money or credit to embark in manufacturing establishments: property was to be made hand over hand. The manufacturing mania was at its highest point. Some men at Portsmouth took shares in the great establishments at Dover, Somersworth, &c.; others undertook to build up and manage smaller establishments in other places. Investments also were made in other business. Several invested not only all their own money, but all their credit could procure from the banks. The branch bank loaned money liberally, having, besides its own capital, the benefit of the public deposites, with the understanding that those who took the money might have their notes renewed till sufficient time should elapse to enable them to realize their fortunes from rise in the factory stock, or profits from the dividends. The manufacturing bubble burst in 1827, 8, and 9: the holders of manufacturing stock held on as long as they could till nearly the whole was sacrificed. The branch bank took what was pledged as collateral security, and came out itself from this speculation with a dead loss of 70,000 to 100,000 dollars. The principal, if not the only cause of these failures as the expansion of credit, and the facilities to obtain money which were thrown upon the trading community by the bank, and the bank calling for payment at a time when the money could not be had, thus rendering the price of real estate merely nominal, and of scarcely no value in the payment of debts.
The farmers and country traders who had been induced to make loans at this branch on better terms, as they supposed, than could be had at the local banks, fared little better from the treatment of this branch. Loans were offered them, the least favorable terms of which were a renewal, every four months, with payment of instalments of ten per cent. The understanding was that these terms should not be changed. At a time of the greatest scarcity, the president issued his circular to the debtors of the branch, requiring a renewal of the notes every two months, and the payment of twenty per cent. on the original sum at each renewal. From 50,000 to 100,000 dollars in specie, drawn in the course of a few weeks, was transmitted for safe keeping to the friends of the manager of the bank, who wanted money at the capital of a neighboring State. This withdrawal, at that time, contributed to accelerate the absolute ruin of many persons who were possessed of property enough, if time had been given them, to discharge all their debts, and have a moderate capital left. The effects of these speculations were likewise felt in the ruin of men of moderate property in the interior, whose estates were sacrificed at the sheriffs sales for one-third or one-fourth of their value.
Since that time, and so long as the head remained who maltreated the citizens, the branch bank at Portsmouth was scarcely able to do sufficient business, with all its capital and deposites, to pay its own expenses: and some of the principal business men, to this day, draw their promissory notes payable at any bank at Portsmouth, excepting the branch of the United States Bank.
These facts, in themselves of small consequence to those who are in the habit of doing business by tens and hundreds of thousands, will serve to illustrate what, by possibility, may be the fate of those at the South and West, who have recently been so liberally accommodated with loans by the United States Bank. Should they be called on suddenly to pay at one and the same time, and the call will be made at no time so likely as when there is a scarcity of funds, their situation may be no better than that of those I have described.
Congress has been in session six months; and never, I believe, has there been a Congress of six months which has cut out so much work and done so little. We have passed beyond the usual time of adjournment we have perhaps done some things which we ought not to have done, and we have left undone other things which we ought to have done: nay, some pressing subjects are before us, involving the highest welfare of the whole people, and perhaps the existence of the Union itself. Why are these subjects made to give way to that which is now before us ? Why is the recharter of the Bank of the United States, which has four years yet to run, and six years to wind up its affairs, pressed upon us with so much pertinacity ?
On the subject of renewing the charter of the bank, the people are altogether taken by surprise. When the elections of those composing the present Congress took place, there was no expectation by the people that this Congress would act on this subject. And what right, I would ask, have we to legislate for those who are to come after us ? If the Legislature of a State were now to elect a person to fill the place of any Senator whose term of service expires four years hence, would not such an act be justly regarded as an act of usurpation ? "Sufficient for the day is the evil thereof:" and if we must have fastened upon this Government an irresponsible institution, controlling not only the whole currency of the country, but controlling the purse of the Government if we must be bound hand and foot hereafter, as we are now bound by this bank let us put on the chains when the day and hour arrives: until that time, let us burden the people with no more than one set of manacles.