22nd Congress, 1st Session
December 5, 1831 July 16, 1832
"Nothing but providing for the collection of the public revenue without the instrumentality of banks, can prevent the incorporation of a new federal bank, before three years are over. A large portion of those who have been instrumental in destroying the present one, have been actuated by no motives in the world, but the desire of having a fresh speculation in bank stock to gamble with, and if the real opponents of such a bank upon principle, do not unite in some plan of separating the government from the banking system, they, or their children will live to see the day, when the country will again be convulsed from one extremity to another, as it has been of late." ---Condy Raguet, 1834.
The Frankfurt circle of friends were the real powers behind the non-renewal of the charter.
Representative Erastus Root (1773-1846) of New York, studied law, admitted to the bar; pro Jackson, pro Bank
who the real forces were behind the prevention of the re-charter of the Bank of the United States--- the money aristocracy centered in New York State; six years from now the bankers behind and in control of the safety fund, will launch the free-banking system; thirty years from now the young ones of the bankers will launch the National currency Bank System which was the free banking system applied on national scale; fifty years after that the national currency bank system will be re-organized into the Federal Reserve System
House of Representatives
Bank of the United States.
Resolved, That a select committee be appointed to examine into the affairs of the Bank of the United States, with power to send for persons and papers, and to report the result of their inquiries to this House.
Mr. Root, of New York, rose, and said it was not his purpose to take a general view of the vast subject before the House, nor should he undertake to reply to the voluminous and protracted statements and arguments of the gentleman from Georgia, nor to go into an examination of the numerous questions brought to the consideration of the House by the memorials and petitions from various parts of the Union, as well as by the observations of gentlemen who have engaged in this discussion. He intended to confine himself exclusively to the resolution under consideration. But if he should happen, in the judgment of some gentlemen, to appear somewhat erratic, he hoped it would not be ascribed to any intention of departing from the rule of order, but rather to the extent and fruitfulness of the subject. He could not submit to the concessions, even of the gentleman at the head of the Committee on Finance, and certainly not to the claim of his honorable colleague, [Mr. Cambreleng,] to have an investigating committee, composed exclusively of members opposed to the bank. Parliamentary history had been referred to, and with much force, to show that, in all cases of scrutiny, the committee should consist of members opposed to the thing scrutinized, and anxious to expose its faults. But, in his judgment, this was an exception, and perhaps the only one to be found in the whole course of legislation, in which it would be proper to confide an inquiry into its affairs to a committee, of which the majority should consist of the friends of the institution. He knew that parliamentary usage, in almost every other case, would require an opposite course. But, in this case, a majority of the committee ought undoubtedly to consist of the friends of a national bank. He said he was not particularly friendly nor inimical to the existing Bank of the United States; but it was to a national bank that he desired the investigating committee to be friendly.
But, first, it would be proper to inquire who were to be considered its friends. Gentlemen might be decidedly in favor of a Bank of the United States, though perhaps not in favor of the existing institution. He considered those entitled to be denominated its friends, who held the opinion that a national bank is necessary and proper to carry into execution certain powers delegated to Congress in the constitution. Those who believed a bank a necessary instrument, in the hands of the Treasury Department, for the collection, preservation, transmission, and disbursement of the national revenue, were entitled to be considered friends of a national bank; those who believed it to be necessary, in order to the production of a uniform national currency, in which the collection of all duties, imposts, and excises shall be uniform throughout the United States, according to the requirement of the constitution; those who believed that, without such an institution, a sound and uniform national currency could not exist, and that an equality in the payment of taxes could not be effected, were the friends of a bank.
Who were the enemies of the bank ? Those who held that there existed no power in the constitution authorizing Congress to create such an institution as the national bank. All who believed that the operations of Government could as well be carried on through the instrumentality of State or local banks. All who thought that the local banks in the different States might advantageously be used as depositories of the national revenues. Those who believed that these local banks can be employed as proper agents, for the collection of custom-house bonds, for transmitting the national funds from one part of the United States to another, or to foreign countries, as the wants of the Government might require, or for the payment of Government dues, either as pensions or otherwise, and who held that there was no need of a national instrument for all or for any of these purposes; these, indeed, might be very properly denominated enemies to the bank.
Supposing the House to contain a majority (as he hoped and believed it did a large majority) of the friends of a national bank, what would be the first and proper subject of inquiry ? The Government was now in partnership with the bank as at present established. He hoped the Government would be yet more largely concerned as partners, much more so than it had been for the sixteen years past. According to his proposition, which some days ago was ordered to be printed, and which he intended to move as an amendment when the bill shall be taken up for consideration, the Government would advantageously hold twenty-two-fiftieths of its stock, and appoint eleven-twenty-fifths in its direction. The only subject of inquiry would seem to me, whether Government should continue its present partners or seek new ones. If, indeed, as some gentlemen seem to suppose, a national bank only operated to create a monopoly for the stockholders, and that it was calculated to bear down the liberties of the country by the weight of its power, then it would be proper to raise a committee, containing a majority of its enemies, that they might search out its hidden pollutions, and expose its deformities to public view and to public execration. But, considering a national bank as an instrument of the Government, created for Government purposes, then it would be proper that its concerns should be looked into by those who believed that such an instrument was useful, necessary, and proper, and ought, in some shape, to be continued, and by those who can carefully examine into the fitness of the partners to he associated.
As he contemplated the subject, the Government employs the bank to transact various kinds of business, and to perform certain duties and offices, which would otherwise be done by agents and officers with salaries or fees, or a per centage by way of commissions. Instead of this host of officers and agents, the Government associated with itself a company of individuals with a definite capital, which they were allowed so to manage as to make reasonable profit to themselves, while, at the same time, they performed, as officers of the Government, certain prescribed duties in the collection, preservation, transmission, and disbursement of its funds. The bank, in these respects, was an agent, an officer of Government.
He insisted that it was the duty of Government to obtain the discharge of these services on as low terms as was practicable. In paying its officers of every kind, Government never ought to give a greater salary or higher fees than would be sufficient to induce persons competent to the duties to engage in its service. Upon this principle, he would not give the stockholders in the bank a greater share of the probable profits than what would be sufficient to induce prudent capitalists to embark in the enterprise. By a company thus associated with the Government, the revenues could be transmitted and disbursed at a much cheaper rate than by the employment of wagoners, paymasters, and other agents, and by the loan officers, as formerly, in the different States, with their retinue of clerks, messengers, and waiters, with all their contingencies. By the present mode, through the instrumentality of the bank, the expense to agents and brokers, and sometimes a high premium on exchange, is saved to the Government. Considering a bank thus circumstanced as a friend in partnership with the Government --as an instrument appointed by it for useful and important functions, that Government ought to inquire, in a friendly spirit, whom it would like to have as partners. It should inquire to ascertain whether the present partners ought to be continued, or whether they deserved to be laid aside, and others taken in their places. Now, he would ask whether in private life, if the inquiry whether certain persons were, or were not, to be continued as partners, would such an inquiry be confided to persons who were confessedly hostile to all partnership whatever? or ought it not, in reason, to be entrusted with those who believed that a partnership was advantageous, who have a friendly feeling towards the parties, and who desired that, if worthy and competent, they might be continued ?
The Bank of the United States had been treated on that floor as if it were an alien --as if it were an institution hostile to the Government-- and as if the friends of Government, as of course, must be hostile to the bank. How happened this ? Why must the bank be thought hostile to the Government ? Why was it treated as such a fearful monster? as a monopoly that was bearing down the liberties of the country ? It was impossible that a national bank, constituted as it would be, in the event of his amendment being adopted, should be opposed to the Government. The creature and instrument of the Government, opposed to the Government ? It could not be. The Government had control over all its concerns. It was a mere instrument in the hands of the treasury. It never could continue in existence, if opposed to the treasury, and to the Legislature. The proposed inquiry being as to the fitness of the existing partners for the management of the concerns of a national bank, it follows, that the committee should not be composed of individuals opposed to any institution of the kind. A majority of the committee should believe that a national bank is necessary and proper for carrying into execution certain powers contained in the constitution.
He would state a proposition on this subject, which might be regarded as paradoxical, but was, nevertheless, true. It is this: that the constitutionality of the bank depends upon its expediency, and its expediency upon its constitutionality. If it is constitutional, it is expedient; and if it is expedient, it is constitutional. The one depends upon, and is the necessary consequence of the other. For if a bank is necessary and proper to carry into execution other delegated powers, it is expedient that one be created. If it is expedient to have a bank, it is because it is necessary and proper to carry into execution other delegated powers, and is therefore constitutional. If it is not expedient, it is because we do not need it; because we can do well enough without it. Then we have no right to create it. It is unconstitutional. If, then, it is constitutional and expedient, it is the bounden duty of Congress either to recharter the present bank or to create a new one. Which of the two should depend upon the terms and conditions of the grant and the advantages conceded to the United States ?
With equal, or pretty nearly equal advantages reserved to the United States, the present bank, if approved on examination, should have the preference. What, the present bank! when it has been treated before this House like a felon ! It has been accused, nay, indicted for seven felonies and fifteen misdemeanors. Whether it was "felony without benefit of clergy," he had not been advised. He had seen, years ago, in the newspapers, that the Legislature of Georgia had declared a certain offence to be "felony without benefit of clergy." By whom is the bank to be tried on this indictment ? His colleague [Mr. Cambreleng] was for a packed jury. Such a trial would but illy comport with the benignity of the common law. That provided for a trial, in cases of indictment, by the neighbors and friends, of the vicinage --not by a jury of aliens. He was willing the bank should be so tried on this indictment. Several of the crimes whereof it stands charged had occurred prior to the year 1819. At that period there was a full inquiry. The institution was then arraigned at the dread bar of the House of Representatives of the nation, and there fully acquitted. Its offences appeared to have been imposed upon it by the force of circumstances, and it received a full Pardon. The House of Representatives issued the proclamation by the unanimous vote of all in that body who were of opinion that a national bank could exist under the constitution. Those who voted against it then, voted against it as some will now, not for its offences, but because it was a bank. That was its crime, the unpardonable sin of being a bank.
Gentlemen have gone largely and extensively into the question of rechartering this bank, and have told us that it would be useless to pass any bill for that purpose, as the President's veto would undoubtedly be interposed. Sir, is this an objection to an inquiry into the transactions of the bank by the friends of a bank ? Let us discharge our duty, and let the President perform his. Let each act in its appropriate sphere, unawed and uninfluenced by the other. He had heard members of this House admonished by the Chair that it was disorderly to refer to the proceedings of the other branch of the Legislature. It was certainly as improper to allude to what the President might or might not do. The two Houses of Congress should endeavor to do what may appear to them to be right, and rely upon the wisdom of the President for the exercise of his high constitutional powers. On a great occasion the President had interposed his veto. That independent and patriotic act was hailed with loud acclaim from one end of the Union to the other. By that act the name of Andrew Jackson was interwoven in the kindliest affections of the people of New York, and naught but a mighty revulsion can rend the web. But does it follow that he would exercise the like power on every occasion; or, if exercised in this case, that it would excite a burst of applause alike universal ? From what has recently taken place in the State of New York, gentlemen might be led to suppose that a veto interposed in the case now before us would meet with an approbation there as deep and as universal as that upon the Maysville road bill. But in this gentlemen would find themselves in a great mistake.
The Legislature of New York had instructed her Representatives --no, had instructed her Senators, and requested her Representatives, to oppose the renewal of the charter of the Bank of the United States. It was, Perhaps, a fair presumption that this vote expressed the views of the people of that State. Gentlemen who belong to distant quarters of the Union, who did not know the management and machinery which was brought to bear upon that question, who were ignorant of that stupendous power in a combination of banks connected together under a specious but delusive pretext of a safety fund, all moved by the same impulse, and directed to the same object, by a great central power, might infer that the people of that State desired the destruction of the United States' Bank. The stockholders, the directors of these banks, thus connected, have a deep interest in its prostration. All the banks in this connexion are authorized by the law, creating the safety fund, and, as inducement for them to come into the scheme, are authorized to take seven per cent. on all discounts for more than sixty days. Taken at ninety days, which is the usual practice, it amounts to about seven and a half per cent. per annum. Most of the country banks, under this law, transact their business with what may be considered a sort of a mother bank --the Farmers and Mechanics' Bank at Albany. If the Bank of the United States is destroyed, what are the consequences ?
The immense revenue collected in New York, amounting to about three-quarters of that of the whole nation, must be paid into the State banks. They would be relieved from the operation of the branches of the United States' Bank at New York, Utica, and Buffalo. Under their regulations only six per cent. interest can be taken. The State banks are admonished to do the same, or the branch banks would get all the good paper, and the State banks only the doubtful. It would be highly important to their interests to get these branch banks out of the way. Then usury shops would multiply throughout the State; under the safety fund, directed by commissioners appointed by the banks themselves to mouse out their faults. In the absence of the Bank of the United States, these institutions must be the depositories and disbursers of the public revenue. For these objects they must become in effect national banks. To all practical purposes they are necessarily made so by the Government. These are then national banks --incorporated by the State authorities-- governed by managers beyond the control of the Treasury Department, and of Congress --institutions "not subject to the law, neither indeed can be." These institutions Government will be under the necessity of employing in its financial concerns. The consequence will be, in New York --without the mighty engine proposed by a Mr. Tibbets-- the combination of banks under the control of the commissioners of the safety fund would be placed beyond the reach of examination of the proper department of the Government. They will manage your money as they may think expedient. The city of New York would become the money market of the nation --it will not be as in by-gone days, when Boston was the focus of capital-- no, the sceptre has departed from Judah ! It was an ill gotten sceptre --established at the time of "free trade and teamsters' rights;" when the goods imported into the neutral port of Boston were transported by land to every section of the country; when the difference of exchange between Boston and this place was more than twenty per cent.
Sir, the general place of deposite of the revenues of Government must become the head quarters of the money market. The soundness of the currency at any point is calculated by comparison of the exchange with that place. The large commercial places in the neighborhood will maintain a currency nearly equal. How will it be with North Carolina or the far West ? In South Carolina, the great commercial transactions of Charleston would serve to keep exchange more nearly equal, but Cape Fear and Fayetteville would be far in arrear. What is the difference at this time ? Not long since the difference of exchange between New York and North Carolina was from two to three per cent. How much would it be in the absence of a national bank ? In Georgia this difference is generally something more, and in Louisiana still greater. Are gentlemen belonging to different and distant quarters of the Union willing to become the fiscal tributaries to the city of New York? willing to promote the object which induced the Legislature of that State to instruct her Senators, and advise her Representatives to vote against the recharter of the Bank of the United States ?
He would say a few words upon the branch bank orders, which had been considered so flagrant an abuse of the charter of the bank. They had been termed a wanton violation of law --a great mischief in society-- not less to be dreaded than "war, pestilence, and famine." How have these orders become such a great national evil ? Why, they have circulated in the same manner as bank notes in the south-western and western section of the United States. It had been said by his colleague [Mr. Cambreleng] that these orders were made payable nowhere; that, if paid at all, it would be after presentation and protest at the mother bank, and notice duly given to the branch from which they were issued. But, on examination, these orders turn out to be a very simple and a very common affair. They are bills of exchange accepted. Acceptance, under authority previously given to draw. Payable nowhere ? The uniform practice of paying them at all the branches was enough. Besides, we have the official letter of the president of the bank to the Secretary of the Treasury, and by him communicated to the receivers of public money. Payable nowhere ? When the objection was first raised to this currency, he did apprehend one difficulty that might attend it --he did suppose that, by means of these orders, drawn by the branches, the bank might incur debts without their amount being disclosed through the regular returns of the mother bank to the Treasury Department. But it turns out that there is no mystery in this matter. These orders are all prepared and registered at Philadelphia, where accounts are kept of their issue, in the same manner as of ordinary banknotes.
Why are these orders issued ? Sir, because they were demanded by the institution of the bank. It was required by its charter to furnish a national currency. There was a physical impossibility in doing it in the manner expected. Application had been made to Congress to relieve the affairs of the bank from this impossibility. The committee of this House, to whom the subject had been referred, for some reason, did not provide the means of relief. The bank was obliged to furnish a currency that would be received in payment for public dues, thus making duties, imposts, and excises, equal throughout the United States. Why is this result complained of ?
It is said to be a great injury to the farmers of the West, and the planters of the South and Southwest. Where is the wonderful injury ? Is it that the bank has furnished them with a currency worth two per cent. more than the paper currency of the local specie-paying banks ? In some of the States this currency is worth from four to five per cent. more than the paper of the local banks. Is this an injury to the planters and farmers, to furnish them with a currency worth par at Philadelphia ? Perhaps not bankable at all places; for instance, at New York, Boston, and Baltimore; but any broker, for a premium of a quarter per cent. would make it bankable any where in the Union. This currency, instead of being the subject of reprobation, deserved the highest applause from that portion of the Union from which the loudest reproaches had come. It would be ungracious in him to allege that individuals did not understand their own interests. But perhaps it would give no offence to the planters of the South and Southwest, and the farmers of the West, were he gently to hint to them, in the language of the poet,
"O! Fortunatos nimium sua si bone norint
In relation to this resolution, he was not disposed to prevent any inquiry into the transactions of the bank. He thought it ought to go to a committee, a majority of which were friendly to the institution of some national bank. The gentleman who filled the chair of the House with so much credit to himself and satisfaction to the members of this body surely would not feel offended at being relieved from the thankless task of selecting a committee for the purpose of making this examination. No person could repose more entire confidence in the integrity and impartiality of the presiding officer of the House than himself, but he was persuaded that it would gratify the feelings of the Speaker to be relieved from this task. He would, therefore, propose to strike the word "appointed" from the resolution, and that the words "of seven to be chosen by ballot" be inserted in lieu thereof. There could be no doubt but the honorable gentleman from Georgia would have that station assigned him on a committee so chosen, to which his distinguished talents and thorough researches so eminently entitle him.
Mr. Root concluded by moving an amendment, providing that the committee should be appointed by ballot of the House; but, at the request of Mr. Crawford, withdrew it for the present, that the discussion might be unrestricted.
Mr. Bell rose, and addressed the Chair; but Mr. Root requested him to give way, in order that he might reply to some remarks of Mr. Beardsley; to which Mr. Bell assented, on condition that Mr. Root would withdraw his amendment, that the whole scope of the resolution might be open to debate.
Mr. Root then proceeded. In consequence, said he, of the observations I had yesterday the honor to submit, my colleague [Mr. Beardsley] thought it necessary, by way of opposition to my amendment, and of advancing the proposition of the gentleman from Georgia, [Mr. Clayton,] to call in question certain former acts of mine, when in Congress some years ago, and also my course in the Legislature of the State of New York. How far this was likely to advance the resolution of his friend from Georgia, or to prove the unfitness of my amendment, I leave for him to judge. It seems that my vote on a former occasion was necessarily called in question, in order to show why the investigation proposed ought to be confided to its friends or to its foes; and hence he infers that the proposition I advanced is false in principle, and that the charges advanced by the gentleman from Georgia are well founded. This very logical inference leave for my colleague to draw. The fact that I voted against the bank sixteen years ago may be proved by reference to the journals of the House. Will it be improper in me to state why I so voted, in order to do away the impression that I have, since changed my mind in reference to that institution ?
I was a member of the House of Representatives during the fourteenth Congress, at a time when the currency of the nation (if currency it could be called) consisted of the issues on local banks in the various States of the Union, or of paper uttered by individual associations, without the authority of a charter; at a time when even those who once had publicly pronounced a national bank to be an unconstitutional creation, and who came from that region where this doctrine generally prevailed, were so thoroughly convinced of the necessity and propriety of having such a bank, as the only means of restoring to the nation a sound currency, and of enabling the taxes to be levied, and paid with equality throughout the Union, (for there existed a difference of twenty per cent. between the value of bills in this city and at New York,) that your beloved Madison, who had spoken with so much vehemence against such an institution, now urged it as strenuously in his message to Congress. When that message was portioned out among the committees of the House, some of the best and ablest statesmen of Virginia, such as Pleasants and Tucker, and distinguished men from other States, reported in favor of the measure. I was of the same opinion with them, and urged the bill which they reported, through its preliminary stages, until myself and three or four of my colleagues came to a check. It was this. The bill provided that all the capital, with the exception of seven millions in specie, should be paid in Government stocks. A portion of the seven millions had to be brought in from abroad. The six per cent. stocks were made receivable on the subscriptions to the bank at par, and the three per cents at sixty-five. The members of Congress, at that time, received their pay in treasury notes, bearing interest of seven per cent. These, through the doorkeepers and messengers, were sold to the brokers, or funded, or negotiated and converted into six per cent. stocks. It was supposed by myself and others that a great speculation was at that time going on in these stocks. We thought that profits much beyond what was reasonable were intended to be realized; for the six per cents were then at about eighty-two, and the three per cents at about fifty. It was the opinion of myself and my colleagues that these stocks were put in at too high a rate. I therefore moved as an amendment that the six per cents should be received at ninety per cent., and another gentleman moved that the three per cents should be received at sixty. These amendments were rejected. I then felt, as I have always felt since, and do still feel, on the subject of banks, that these institutions are necessary, as furnishing a means of exchange, but that their profits never ought to be made a boon to individual speculators, but should mainly come into the public treasury; such portion only being reserved to the corporators as should hold out a reasonable inducement to manage the concern with care, diligence, and fidelity.
Sir, I felt then as I afterwards felt at Albany whenever the subject of banks came in question. On these grounds I voted against the bank; and several of my colleagues, whose patriotism was then as pure and unsullied as it remains to be at this day, (one of them is at this time the Chief Justice of my State,) voted with me, and on the same grounds as I did. Sir, I afterwards found that my suspicions had gone too far; that the profits made by funding treasury notes were far less than had been supposed, and that in fact it turned out to be but a poor speculation at best. I voted against the bill, not with the purpose of destroying the scheme of a national bank, but in the hope that if this bill were rejected, another might be introduced and passed, which should afford less chance for speculation.
The next charge brought against me by the gentleman, in order to show that the proposed committee of investigation ought not to be appointed by ballot, is this, that I was an applicant for the situation of bank commissioner, under the New York Safety Fund. In order to give an explanation of the grounds of this charge, that will be intelligible to the House, it will be necessary to advert to that famous law of the State of New York, which is now considered by the gentleman so holy, so sacred, that it must not be contaminated by any profane touch. I apprehend that that law is little if at all understood in the neighboring States, and in fact is but partially understood by most persons in the State of New York itself. A bank note comes into circulation, having upon it an elegant vignette inscribed with the words "New York Safety Fund," and those who received the paper, looking at this handsome picture, consider themselves perfectly safe, without ever giving themselves the trouble to inquire into the nature of the law, its origin, progress, and practical application to the fiscal affairs of the State.
It had happened in former days that two banks in that State, which had been established without capital, failed; and though they partially recovered, they afterwards failed a second time. The fact, however, was but little noticed; but it afterwards happened that two other banks, one at Hudson, and the other at Poughkeepsie, and both of which were supposed to have been based on very firm capital, failed almost contemporaneously. Such an event as this was calculated to excite a good deal of feeling, especially among the farmers, many of whom had suffered severely. The public excitement thus produced was taken advantage of by a certain fanciful visionary, by the name of Joshua Forman. His scheme, as projected, was chiefly based for its security on real estate. He drew up his plan, and submitted it to the then Governor of New York, Mr. Van Buren. Mr. V.B. laid the scheme before the Legislature, but, being unwilling to make it his own by adoption, spoke of it as the offspring of a man of talents, which was worthy of the consideration of the Legislature, but carefully abstained from recommending it on his own responsibility. The scheme was laid hold of, and soon worked up by able financiers into a bill, which finally passed, though not without many alterations.
This famous bill passed in 1829; I was not then a member of the Legislature, although I had been the year preceding, and was again the year following. This act, usually known as the safety fund law, provided that all banks that should thereafter be incorporated, or whose existing charters should thereafter expire, must become contributors to this fund, paying a contribution of half of one per cent. on, their respective capitals for six years in succession, until three per cent. on their whole amount of capital should have been paid in. These contributions constituted a fund which was to remain as the property of the respective banks which had paid it in, subject to be vested, under the management of the comptroller of the State, in such stocks as might make it productive; but it is to remain as a fund for the purpose of indemnifying broken banks and paying their debts, thereby making all the banks concerned mutual assurers and mutual endorsers of each other's paper, uniting them all into one general combination, in such a manner that the whole may be moved by one common impulse, given from a central power, and thus operate in an irresistible manner on all other banks in the State.
Over this safety fund there are appointed three commissioners, each receiving a salary of fifteen hundred dollars. One of these commissioners must be nominated and appointed by the Governor, with the consent of the Senate; the other two are appointed by the banks belonging to the safety fund. All the banks within three Senate districts appoint one of these commissioners; all the banks in five other Senate districts appoint the other. The commissioners serve for two years, and are then subject to renewal or reappointment. These officers are made visiters of all the banks belonging to the association. One or more of them is required to visit each bank once at least in every four months, and oftener if he shall be required so to do, by any three banks belonging to the fund. The practical effect of the bill amounts to this-- that every bank is obliged to open its vaults and its books to the inspection of one of these commissioners, whenever he comes there in regular course, or is sent on the application of any three banks. On the suggestion of this commissioner to the chancellor of the State, signifying any doubt as to the soundness of such bank, the chancellor is directed by the law forthwith to issue his injunction, stopping all further proceedings by such bank: and if the directors do not show cause to the contrary, the chancellor is to proceed to appoint a receiver on behalf of the bank to collect its debts, and make distribution to its creditors. For all deficiencies the safety fund is liable, after all the resources of the broken bank have been received and applied. This operation, however, cannot be completed short of two years.
Thus, it will be perceived that the banks, though scattered over every extremity of the State, are all subject to a dominion --political, if the central power choose to exert it, and fiscal only if they do not. This dread eagle, with eyes fitted for the occasion, stands ready to pounce upon any rebellious bank, and to call down the power of the chancellor upon its affairs, under the penalty of having his injunction made perpetual, and its affairs transferred to the management of the receiver. Such is the power of the commissioners of the safety fund.
It is said I was an applicant for the office of commissioner. Let us see how the fact stands. I was in Albany when this famous project was first submitted. I united with other gentlemen in ridiculing the plan, and Governor Van Buren would himself, at times, almost unite with me in openly ridiculing it. At that time, out of a House consisting of one hundred and twenty-eight members, there were not more than from twenty-five to thirty to be found in its favor, and the only way in which its passage could be forced was this: when the Governor was promoted to another station [Martin Van Buren became Secretary of State on March 28, 1829.], and the Government in consequence fell into the hands of his lieutenant [Enos Thompson Throop], the measure was urged upon members of the House as an Executive recommendation, and the members were emphatically told that the measure would be pleasing to the Governor, who had abdicated the throne.
A provision of the constitution of that State --which owes its origin to a case of undoubted corruption which took place in 1812, when the mammoth bank of America was chartered with a capital of six millions, and which was meant to prevent the recurrence of such another case in future-- requires that no bill chartering a bank shall become a law, but by the assent of two-thirds of all the members elected to both Houses of the Legislature. There were at this time a number of banks in the State, whose charters were near expiring, many of them in the city, with large capitals. These charters must be renewed, and various applications were before the Legislature for that purpose. As twenty-fiye or thirty members could ordinarily prevent the passage of a bill, the House felt itself under the necessity of adopting this scheme before they could get that minority to vote for any bank at all.
Long before the passage of the law, I had left Albany for my home. When at home, nearly one hundred miles distant from Albany, some of my friends there, not at my instance, (for I did not then know of the passage of the law, nor what the commissioners were to be, what their duties, or what their salaries,) brought me before the Governor as a candidate, to be appointed commissioner. They did as those had before done, who had not the safety fund stamped indelibly upon them. They drew up an address, requesting the acting Governor to nominate me to the Senate, and it was signed by nearly all the members at that time claiming to be of republican politics. It was presented to the Governor, or rather his lieutenant he had left behind him when he was translated to the Department of State. But, sir, I was not the right sort of stuff; I was not pliant enough to bend to bank management; I had been known as opposing bribery and corruption, both when it stalked abroad at noon-day, and when it was lurking in midnight darkness, and I had always been against the chartering of banks, unless they paid to the public a fair equivalent. Therefore, the acting Governor said no; it would not do: and, although I was deemed by almost every member of the House to be suitable for the station, he refused the appointment, and nominated for the place a distinguished member of a political party theretofore in disgrace, but which had then lately been taken into favor by a coalition as distinctly marked, as clearly discernible as any which has been the subject of newspaper animadversion from 1825 to the present day.
The Senate, then pure, (I do not say it has been otherwise since,) with united and indignant voice, rejected the nomination, and compelled the Executive to nominate a gentleman, eminent alike for his talents and his virtues, above the touch of corruption, beyond all the polluting influences which might be supposed to surround him. I refer to a gentleman who temporarily presided over the Senate when the President of that body was elevated to the Executive chair by the translation of the Governor to the Department of State. He was accordingly appointed commissioner on the part of the State. Of the other two commissioners appointed by banks, I have nothing to say. If they did not suit, if any three banks set them to work, and they refused to comply, they knew their fate; if not, a dismissal by the Governor, or the loss of a re-election. One of them, for some cause unknown to me, perhaps he was too unyielding, has lately lost his election, and a gentleman, a State Senator, and lately president of a provincial bank at Lockport, appointed in his place.
The following year I was again in the Assembly, and acted as the presiding officer of that body. The great banks in the city of New York refused to come into the safety fund. They were not disposed to become sureties for country banks, over whose proceedings they could have comparatively but little control.
The banks in New York are taxed on the amount of their capital paid in. In the city, this tax, by commutation, had amounted to half of one per cent. a year. The next year the banks in that city, whose charters were about expiring, and which had the year before refused to come into the safety fund association, applied to the Legislature, consenting to come in on the condition of being relieved from the payment of the bank tax. The desire was so strong to induce these banks to come into the association, that men high in power made a bargain, before the meeting of the Legislature, with the agents of the banks, that their charters were to be renewed, and they come into the safety fund association, and be exempted from the payment of the bank tax. It was to be carried through the Legislature as a party measure, and by the force of party discipline. They were so confident of success, that the arrangement was openly avowed, and the acting Governor announced and recommended it in his message at the opening of the session. One of the principal reasons urged in favor of this measure was, that the country banks made greater profits than they could. The country banks were allowed to take seven per cent. on all notes over sixty days, while they in the city could get but six per cent. Why ? Might they not ask seven as well as the country banks ? Yes, they might ask it, but could they get it ? No, sir. Their great rival competitor, a branch of the Bank of the United States, with a capital of nearly two millions of dollars, discounted at six per cent.; and if the city banks should ask seven, they would get no business, except in paper of very doubtful character. Hence this branch bank was the great burden of their complaint: they asked to be relieved from the tax which all the other banks in the fund were compelled to pay; and the plan was brought into the House as an Executive measure, and strong political feeling was got up in its behalf.
Sir, I was guilty of arraigning that project at the bar of the Committee of the Whole; and, what was worse, I defeated it in opposition to the Executive power --to governmental recommendation-- to the bargain of the bank directors, and to the influence of those who surrounded the Executive chair.
On that occasion I recollect that a minion of power, and who, the year before, on its first appearance in the House, had been strongly opposed to the scheme, had the effrontery and the baseness to charge me, as I have been on this floor, with having been an applicant for the appointment of commissioner, and to suggest that it was the sting of disappointment which caused me to change my views and my course. Sir, I repelled, with scorn, the base insinuation, as of a scoundrel. I did believe, although he resided on the banks of the Mohawk, that civilization and the courtesies of life were so far advanced further up that river as to prevent its repetition by any individual residing upon its banks.
It has been said that these branches of the United States' Bank, of which we have heard so much, were established for the purpose of obtaining power and influence, and ought therefore to be opposed: what was this influence and what was this power, for speaking of which I am charged with having degraded the character of my State ? Sir, the Bank of the United States made no complaint against the local banks, yet there is a hue and cry to pull down that bank, and every other that stands in the way, till all the banks in the State shall be collected under one mighty influence. To carry this scheme, it was necessary to get the New York banks into the fund, for their capital is more than double that of all the country banks put together. This was so essential, that, in order to induce them to consent to join the combination, it was considered necessary to put down the United States' Bank and its branches. That once out of the way, they thought they could measure swords with any thing that might oppose. They thought that by using the popularity of the President of the United States, who had declared against the bank, they should be able to put it down. What then ? Why, sir, under these promising circumstances, I resisted this bargain proposed by the New York banks, and thus called down upon my head the anathemas of the creatures of upstart power; and they charged me with uniting with the anti-masons.
The following year the President, in his message, called the attention of the American people to the question of the United States' Bank; and although he did not pronounce it absolutely unconstitutional, nor express his utter hostility to it, yet a large and respectable portion of his fellow-citizens so considered it. Seizing upon this expression of the President as one of hostility to the bank, upon his well-earned popularity, and the strong hold he possessed in the affections of the people, the city banks were encouraged to enter into the combination, and contribute their share to the fund; now hoping and expecting that the Bank of the United States would be put down, and that they would have not only the great emporium of commerce, but, in addition, all the deposites of the Government, and thus become arbiters of all the fiscal concerns of the nation.
Sir, what must they of necessity be ? Without charging the people of New York with being more ready to yield up their virtues to political temptation than the people of other States, I ask, what must be their condition under the operation of this system? and how may the United States' Bank be expected to fare, should it set up its branches in the midst of this bank combination ? Suppose one of these safety fund banks to be established in a country village, and suppose that some village attorney should, by good fortune, perhaps by the fees arising on the suits against delinquent postmasters, perhaps from libelling some bark canoe and cargo engaged in smuggling goods across the St. Lawrence, or by some other fortuitous circumstances, become possessed of stock in this village bank; and suppose that, after that, the Legislature should create another batch of these village banks, and the stock should be parcelled out at head quarters, under the management of pliant and loyal commissioners; and suppose, sir, yet further, that this village attorney should, by an accumulation of good fortune, come in for a slice, and get some of the stock in one or two other banks, these banks enjoying at the same time an interest of seven and a half per cent. on all discounts, and two or three times the arnount in circulation of all its capital paid in, and dividing annually fourteen per cent.; and suppose, sir, that, under these circumstances, the United States' Bank, that naughty monster, should think proper, without asking the consent of this lawyer, or of the village bank directors, to establish one of its branches in the very village where he resides; suppose this branch should commence discounting good paper at six months at six per cent., and that not in advance, but having the interest payable only at maturity; and suppose it should be doing all this merely for the purpose of obtaining popularity, and electing Congressmen; do you not believe that that village attorney would spring in wrath, that he would not swell with indignation (that is too lofty a term) at the officiousness of the United States' Bank, in presuming to establish a branch in his village on purpose to elect Congressmen ? Why, sir, no wonder. Perhaps that branch has already obtained some influence. I have actually heard many farmers say that they considered it better to get a credit of six months at six per cent., than a credit of ninety days at seven and a half. Yes, sir, they have had the bold effrontery to make this assertion. People in the very neighborhood of my colleague have been bold enough to avow such doctrines !
Sir, I have been accused of arraigning my State, when I ought to have spoken concerning her nothing but praises. It has, indeed, been my fond occupation to speak with willing and heartfelt commendation of the State of New York, and of the people of that State, more especially of the people of those counties among whom it is my happiness to reside. Yes, sir, and of the people of counties even where this national bank has had the effrontery to establish its branches. But if I see conclusive evidence that the banks of that State have combined to bear down the people by their oppressions, must I conceal the fact ? And may I not express my hope that the people of my own State will find some relief in a national bank and its branches, that may compete with this combination of their oppressors, and compel it to forego its extortions ? The danger of that State is, that her politicians will proceed in triumph on the strength of this vast political machine, while the people are left too late to discover that they have been betrayed. Sir, it is not to these men that I am bound to heave aspirations of praise.
Sir, the people of that State desire a national bank. I know them, and I know it to be their wish, not only that there should be a Bank of the United States, but that it should scatter its branches through the different parts of that State, as the only antidote against the dreadful effects of 18,000,000 of capital, wielded by a political combination.
But we are now told, in their name, that a national bank is a formidable monster, capable of doing mischief on a gigantic scale, while the State banks are so many lambs, and can hurt nobody. This power, that is, incorporating new banks every year, (there have been sixty applications this year, all in the hope that the United States' Bank will come down,) while those who kneel and clap their hands, and shout hosannas to the men who have the management of the system, can get their banks chartered, while those who refuse it must stand without --sir, it is a frightful and alarming monopoly, and calls aloud for redress. The evil is increasing; the fund is accumulating; several banks, whose charters are near expiring, will presently be added to it. Then the United States' Bank being down, and all the revenues collected in New York, and on our Northern and Western frontier, will all have to be paid into the State banks, though they have already 18,000,000 of capital, 12,000,000 of bills in circulation, and probably more than 12,000,000 more in bank credits, amounting to more than 24,000,000 in debts, with only $1,600,000 in specie to redeem the whole. All these banks in one association, having one common interest, so that one of them will not make a run upon the other; for, if one breaks, the rest must pay its debts, let them get the revenue of the nation in their vaults, and you give them an invitation to incur a great universal bankruptcy, and share our spoils. The whole structure will come down in one mighty ruin, and then your revenues are lost.
But my colleague says that my opposition to this system is opposition to my State. Sir, it is opposition to speculators; it is opposition to scheming politicians; it is opposition to overgrown capitalists who are grinding the face of the poor; and it is, pleading the cause of the farmer, of the mechanic, of the great mass of the people. If this combination of banking power shall obtain the ascendency over the neighboring States; it will have it in its power to play the tyrant, while our farmers, artisans, and laborers must suffer. Never did a nation enslave those who are abroad, but its own subjects were ultimately enslaved at home.
Sir, I have purposely refrained from answering all the personalities of my colleague. It would be an offence to this House to dwell on the disgusting theme.
Mr. Root then proceeded again to address the House. He did not rise to take up the time of the House on the general merits of the question [Clayton's proposed resolution to investigate the Bank], but to make some remarks upon what had fallen from his colleagues in consequence of his former statements relative to the New York Legislature; having been first misrepresented, and then made the theme of animadversion by them. When this subject was brought up the other day, said Mr. Root, reference was made to the resolution passed by the Legislature of New York, in which that honorable body had recommended to her members here to oppose the rechartering of the United States' Bank. Although it might be a just matter of question how far an individual was bound by that request, that was not the subject of discussion now. But he did then call in question the value to be attached to that resolution, and did say that it did not speak the voice of the people of the State of New York, and gave his reasons wherefore, that he might, if for no other object, consider himself fully at liberty to exercise his own judgment on the occasion, and to act in opposition to that request. He submitted to the House some remarks, proving that the Legislature of his State might have been influenced by circumstances growing out of the combination of State Banks to which he adverted, under the specious but delusive pretext of the safety fund system; and this had been tortured into the heavy charge against him, that he had pronounced her legislative acts, and particularly her resolutions of instruction, as originating in corrupt motives.
This charge, Mr. Root said, he had not made; and if he did make any observations having such a tendency, he was as willing as any man to retract and explain, but he was very sure he had not. He did not deny that he had said there was a great moneyed aristocracy in his State, which, undoubtedly, exercised great influence upon her Legislature. He had said that there was a combination of banks there, which, having within their control all the pecuniary as well as much of the political power of the State, possessed an influence which, under existing circumstances, might be considered as almost irresistible; and he had explained how that influence was created, and made to bear upon its objects.
These moneyed institutions united together in bonds of affliction, ostensibly making the interest of one the interest of all, and, under the popular display of giving greater safety to their notes in circulation, are frequently taking new banks into their association. And every new bank sought to be incorporated, either in the cities or villages are obliged by the general law to come in under the direction of the combined power, and must first give such manifestations of future fealty and good conduct as will ensure their admission into the new association. This produces, though perhaps not an open and direct, yet a secret influence over those members who have applications for new banks under their charge, and who expect by their incorporation to derive some benefit to themselves, their constituents, or friends. The concentrated power of this combination of banks, brought to a focal point at the seat of Government, can give direction to their commissioners to shake the rod of authority over the country banks under their control. Members themselves may be stockholders in them, or more frequently some of their connexions and friends are in some measure dependent upon them. This produces an influence; a desire in members not to offend the "powers that be." It is an influence that may not be perceived by the person whom it beguiles, yet it is irresistible in its course and certain in its effects; such is the power and influence of money every where, and in every age, especially when combined and brought to bear upon a particular object. To such an influence I meant to allude, and its dangerous tendencies intended to enforce.
Mr. Root proceeded, and said that the President, upon his first accession to the high office conferred upon him by the people, had, in his message to Congress, called the attention of the American people to the subject of the renewal of the charter of the United States' Bank; strongly intimating, if not directly stating, that if it was not thought unconstitutional by himself, such was the opinion of a respectable portion of the community. Then it was that these operators, who were interested in putting down the institution, seized upon the circumstance of that communication, to use it as a means of working upon the kind feelings of the State, which had been so warmly and decidedly evinced by their votes in favor of the venerable patriot. And by the mere force of party drill, these individuals caused it to be represented that whoever went in favor of the United States' Bank would be acting in opposition to the opinion of him who was the political object of their adoration; and, by thus holding out false colors and misrepresentations, they operated upon the minds of a portion of the people of the State, and upon their representatives to such a degree, that all were to be denounced as opposed to the Chief Magistrate, and to the general administration, who refused to unite in the crusade which they had raised for their own selfish purposes against that institution.
Another reason, said Mr. Root, had been urged to induce the Legislature of New York to come in under the drill sergeants of the party, who were to be found at every corner of the streets. It was this. There is a political party in that Legislature, whose number does not exceed thirty in an Assembly of one hundred and twenty-eight, and not more than seven or eight in the Senate, consisting of thirty-two members. That party, with one accord, go against the present Executive of the United States, and for some cause, probably that they think him to be against it, they are in favor of the Bank of the United States. Whenever, therefore, any member of either House manifests any intention to favor that institution, he must of necessity act with this party, and he is at once denounced as an anti-mason. The dread of this denunciation is sufficient to deter many honest and well-meaning members from expressing their real and conscientious opinions upon the subject, and not unfrequently induce them to act in opposition to the honest convictions of their own mind. A member from his district of country, said Mr. Root, from the county in which he resided, and who had unequivocally expressed his opinion in favor of the renewal of the charter of the United States' Bank, on being asked how it happened that he voted against it, replied that he was unwilling to be seen voting, with the anti-masons.
This is a specimen of the power, said Mr. Root, and the means used, to which I alluded as being possessed by a certain association of individuals in Albany. Thus do they work to produce the results they desire on the minds of the representatives of the people; and thus, by delusive argument and their dreaded anathemas, do they operate upon the feelings of a considerable portion of the people throughout the State, but certainly not upon a majority, to excite prejudices against the Bank of the United States. Not a majority, said Mr. Root, for wherever its branches are located, its healing influence is felt, so much so as to shake opinions promulgated from their strong hold. The people soon discover that it is a speculating influence from Albany which is brought to bear, and which produces the legislative result, not any well-founded objection to the institution, not conviction on the minds of the great body of the people, arising from candid and careful investigation.
But, said Mr. Root, my honorable colleague across the way, [Mr. Angel,] was grieved to the heart! was sorely afflicted! that I, who have shared so liberally in her bounties, should have made an attack, as he is pleased to denominate it, upon my own State, and upon the purity of her legislators. It shows the goodness of his heart, and a laudable State pride; but it also shows that through the whole course of the discussion he is entirely ignorant of the subject. He has shown that he does not understand the machinery and its management, which has been working at Albany for years past, nor its operations and effects upon the surrounding country. But, sir, this is not matter of wonder. It is easy to account for his ignorance in this respect. He resides at a distance from the scene of action, even at some distance from the central village, the seat of justice in his own county. His residence is among an honest set of patriots, of farmers, and what few mechanics are necessary for their immediate use and convenience, amongst men unpractised in guile themselves, and unsuspicious of it in others. My honorable colleague, associating with such a people, in the honest integrity of his own pure heart, was unconscious of the triumph of this moneyed aristocracy, although it might have shed its baneful influences within the precincts of his own district.
But, sir, it was the exposition of the thing, not the attack upon it; it was the thing itself exposed, which roused the warm and honest feelings and caused the deep affliction of my honorable friend and colleague. Had he permitted his indignation to have fallen upon the thing exposed, instead of the head of its expositor, he would have acted in a manner more consistent with his known character and acknowledged good feelings.
That his colleague, said Mr. Root, was ignorant of the actual situation of his State, was perfectly evident from the account which he had given of the flourishing condition of its finances. Every thing, according to the view he had given of the subject, was prosperous and happy. The arts, the sciences, fostered; schools and seminaries of learning liberally endowed, and from an overflowing treasury. His picture was truly enchanting. But how is the fact, and what the real condition of its financial concerns ? A large fund had been created, appropriated, and set apart expressly as a "school fund" for the support of common schools. This fund had increased by appropriations from time to time made, till the Legislature at length directed an annual distribution of one hundred thousand dollars, and that too when the population of the State was about one-half what it is at the present day. When the surest and most productive part of the "general fund," as it is called, was diverted to the great work of internal improvement, and some losses and defalcations had happened in the school fund, the Legislature found itself under the necessity, almost every year, to appropriate from the general fund a considerable sum, to make up the deficiencies in the distribution for common schools. The general fund theretofore had amounted to full four millions of dollars, a considerable portion of which was productive, sufficiently so, after the war debts were paid, to defray all the current expenses of the Government, and without a State tax. By the diversion of so large a portion of the general fund, and the frequent appropriations to supply the deficiency in the annual distribution to common schools, there has lately been found a deficiency in the revenues of about two hundred thousand dollars a year. To supply these deficiencies, the comptroller has been authorized by law to sell at public auction such property belonging to the general fund as he shall judge expedient and sufficient, to raise from time to time such sums as the public wants may require. With the avails of these sales, and some collections on old bonds and mortgages, given on former loans, the Government of the State has gone on from year to year till the comptroller has sold almost all the productive funds. It is, in the language of an old adage, "selling off the household furniture," and is presently "coming to the last cow." The Governor, for several years past, in his annual message to the Legislature, and he has been followed up by the comptroller in his report, has urged the necessity of a State tax. But these recommendations appear to have been unheeded as long as other resources could be found to meet the calls upon the treasury, and the legislative attention engaged in the creation of new banks.
Banks! banks! relieved by a little spice of the railroad, have been at the present session the all-engrossing topic. The banks, combined and associated, and increasing into a mighty engine of power, swallow up and subdue every patriotic consideration, and, like the fabled Bohon Upas, scattering its poison from its extended branches, have withered all hopes of addition to the school fund or to its annual distribution. Had the banks whose charters were about expiring, and those soliciting a new creation, been made to pay a suitable portion of their annual income to the school fund, or to have vested a portion of their stock in that fund, the annual distribution by this time might have been doubled, as the population has been doubled since it was established at one hundred thousand dollars a year. But no; this salutary boon must be sacrificed to feed the hungry speculator, and satiate greedy avarice.
But, sir, my honorable colleague and worthy friend has been unconscious of these things. Encircled by domestic comforts, and enjoying the society of his honest, unsuspecting, and patriotic neighbors, he has not turned his attention to the concerns of his own State, of whose honor he seems to be so extremely sensitive.
Another circumstance, said Mr. Root, goes to show conclusively that my colleague has been inattentive to passing events in the capital of his own State. He has supposed that I charged the present Legislature with corruption. That I had "charged that corruption at the present session was stalking abroad at noonday in its legislative halls, and lurking there in midnight darkness." I made no such charge, or any thing like it. When I spoke of corruption stalking abroad at noonday in the halls of the legislation, and lurking in midnight darkness, I spoke expressly of the corrupt scenes of 1812. Then the bribery and corruption by which members were influenced in their votes, was made clear and discernible to the most credulous, and visible to the obdurately blind. I repeat, sir, the bribery was made visible, even in courts of justice. It was on the application for chartering the Bank of America, known then more commonly by the name of the "six million bank." They claimed that the stock sought to be incorporated was a part of that of the old United States' Bank, and chiefly belonging to Hollanders. But this was an idle pretence, the pretence of speculators. A small part only had belonged to the United States' Bank. An opposition to its incorporation was made, and a pretty strong one too; for it was made by those who then had the chief management of the political concerns of the State. That was the time to which I referred, when Governor Tompkins, that patriot in whom there was no guile, that beloved and truly favorite son of New York, felt it to be his duty to exercise a high prerogative then in our constitution, and prorogued the Legislature from the latter part of March till some time in the following may. He undoubtedly entertained the hope, though it proved to be a vain one, that, by sending the polluted members to their respective homes, where they might breathe for a while a purer atmosphere, they might return to the discharge of their legislative functions somewhat purified. But in this he was mistaken. The taint was too indelibly fixed; the infection too strong and too deeply impressed. They returned to the charge, and incorporated the bank. At the same prorogued session, and immediately after passing the bank bill, (but my colleague does not recollect these things,) the same members, still reeking with corruption with which their garments had been polluted, went into legislative caucus, and nominated a Presidential candidate to be supported against Mr. Madison.
In November following, the Legislature met for the choice of electors of President and Vice President of the United States. In the assembly there was a small federal majority, but in the Senate there was a majority of republicans, (that is, of those who were elected as such,) more than sufficient to balance the majority in the other House. The federalists were willing to vote for the opposition candidate, but preferred to do it through the medium of electors bearing their own distinctive denomination. On the other hand, it was thought to be all-important that the list of electors should bear the stamp and character of republican. It would read better, and perhaps have a better effect in the other States of the Union. To accomplish this desirable object, a bargain must be driven; for at that time considerably more than one-third of all the members who pretended to claim the title of republican were in favor of the re-election of Mr. Madison. A bargain was accordingly made. Each House had nominated its own list --the Senate of republican stamp, the Assembly of federal character. When the two Houses met to determine, by joint ballot, which of the two lists should be elected, it was found that they had detailed from the federal ranks a sufficient number to have carried the republican ticket, even had the "Spartan band" thrown their votes into the opposite scale.
During that November session, a highly distinguished gentleman, then a member of the Legislature, told me that, as a part of the consideration of that bargain, the federalists must have their man for the United States' Senator who was to be chosen in the February following. The month of February arrived. Each House nominated its own candidate for the United States' Senate. They did not agree in the same person; and then it was in joint ballot, in secret joint ballot, that Rufus King was elected Senator in opposition to the republican candidate, duly nominated in caucus, and approved, in opposition to an honest man, the respected father of one of my honorable colleagues, [Mr. Wilkins.] Now, sir, if my honorable colleague had given himself the trouble of examining the legislative record, or had made himself at all acquainted with these shameful transactions, he surely would not have thought me censurable for charging corruption upon such an assembly. He certainly would not have felt it necessary for him to assume that the charges of corruption were intended by me to be applied to the present or the next preceding Legislature. But enough: he is an honest man, and meant not to offend me.
Mr. Speaker, I have another colleague who has, perhaps, a stronger claim to my attention, as he seems perfectly to understand the operations of political party, its sinuosities and changes, and the objects it may have in view. The last words, the expiring hopes and fears of the old federal party at the time of its dissolution, at the time of its self-immolation, appear to be all within the grasp of his intellectual vision. He knows, for he so assures us, that those who have joined the republican party, "joined but to betray." Let us inquire, for a moment, what we are to understand by "betray." Is it to steal into the confidence, get into the counsels, and obtain the secrets of the party, and then to betray them ? Or is it to get possession of the political honors, the loaves and fishes of official patronage, and keeping that possession as chief managers in despite of former occupants ? Is it the treason of which my colleague complains, that those who have abandoned their own ship, and got on board of ours, spring upon the quarter-deck, assume the command of the vessel, while the old and trusty mariner is compelled to go before the mast ? This is probably the treason of which my colleague so justly complains.
But, sir, the gentleman had better beware how he makes this charge of political treason. He should look around and be cautious how he inflicts his blows. He may hit his most valued friends. Should they take it in high dudgeon, as honorable and "high-minded" men would very naturally do, upon hearing such charges preferred against them, and from such high and commanding authority, they might, if they did not betray him, make him feel the weight of their displeasure. Let him look around the State, and see who are foremost, who are the most zealous at the public meetings called to express a just indignation against certain measures of public functionaries, who were among their ablest orators and resolution makers at Albany, at Troy, at Columbia county. Let him be cautious how he offends in the choice by the banks of their first commissioners. Let him look at the pure spirit of patriotism which is now pouring forth at all the public meetings in the State; and let him beware how he charges the crime of political treason.
Sir, the change that has taken place in the party politics of the gentleman's own city may be matter of surprise to some, and would even to myself, were it not to be ascribed to the management and instrumentality of these "self-immolated" patriots of my honorable colleague. A year or two ago I was in the city of New York, and went to a place where I had formerly been in the habit of going, when in the city, and meeting with my old political friends and associates --a place where republicans used to resort and spend a social hour in the political chit chat of the day-- a place somewhat famed in our political annals --I mean Tammany Hall. Here I had been accustomed, in by-gone days, to meet with acquaintances formed in the State Legislature --with friends and political associates from the city and from the country, assembled here, exchanging friendly salutations, and conversing upon the political questions of the times. In short, it was the head quarters of the republican party. When I had got there, walking about, just to see what and whom I could discover, I am certain I saw my colleague there --I saw many strange faces, of what political stamp or character I could not exactly ascertain. I saw one or two whom I could recognise as formerly pretty distinguished members of the federal party. My honorable colleague was the only one to be found there of my former political friends and associates. Indeed, I began to think --I felt that he was "the last of the Mohicans."
I left the hall, and crossed over the way to a place they call "The Pewter Mug." [It is St. John's hall, "over the way" from Tammany Hall.] There, indeed, I found republicans of the old fashioned democratic stamp --men with whom, in former times, I had felt it a pride and a pleasure to associate. But they had "deserted their party," and, it seems, were repudiated politicians. They had transgressed the high behests of the patron saint --had offended against those who minister at his altars, and for their sins were put out of the pale of the sanctuary. Although they were thus repudiated, I could recognise among them men who had sustained their democratic principles and the honor of their country in the most perilous and trying times. I did not discover among them, and their number was large, a solitary individual that could ever rejoice at the burning of a blue light, or throw up his cap and huzza for British victories or American disasters. Not one who ever thought it unbecoming a moral and religious people to rejoice at our naval victories.
Here Mr. Root paused, and said, But, sir, I fear I fatigue the House. [Cries of "no," "no," "go on," from every part of the House.]
Mr. Root continued, and said, Sir, I am accused by both the gentlemen, and by another colleague, [Mr. Beardsley,] the other day --(a trio, but I do not apply to them the language from the graphic pen of Shakespeare, for I was "attacked," not "barked at")-- I say I have been accused by my colleagues of having deserted my party. And this is to be proclaimed throughout the State of New York, that I have deserted my party. This is not the first attempt of the kind, and by which my political character has been sought to be assailed. But from such attempts I have always come out unscathed, unscorched, as from a fiery furnace, with not a hair of my head singed. If an abandonment of men, when their measures are a departure from first principles, be a desertion, then have I, in several instances, deserted my party.
My first desertion, in a public capacity, was in 1798.
When the constitution of the United States was presented to the American people, my whiggish and patriotic father voted against its adoption, because he thought it took from the people the power which was placed, in too great a degree, in the President and Congress. Then it was, while yet a schoolboy, I was taught, as my first lesson, to respect the great principles of American freedom. The party opposed to its adoption, called at the time anti-federalists, were willing to ratify it on condition of certain amendments being made, calculated to secure to the people and to the States certain rights unnecessary to be surrendered, or essential to their future security and freedom. These amendments were made, and the anti-federal party became its warmest admirers and supporters. But when many of the whig party, then in power, having grown rich by speculation on the spoils of the soldiers of the revolution, furnished in the funding and banking systems of the day, aided by an accession of old tories crowded into their ranks, had, by construction, usurped powers which were forbidden to them in the amended constitution; when, I say, the federal party having become aristocratic by their ill-gotten wealth, and having prostrated the great barriers erected to prevent an undue exercise of power over the people, then it was that I first became a deserter from my party.
But, Mr. Speaker, if it will afford any satisfaction or instruction to my honorable colleagues, I will give them some account of my next desertion from my party. In 1805, '6, and '7, when the Merchants' Bank had been carried through the Legislature by downright and barefaced bribery and corruption --yes, sir, by bribery, for it was proved upon some of them, and one Senator was afterwards expelled for the foul crime-- when the representatives of the people had become polluted by bank speculation, and their patriotism lost in sordid avarice; when the distinguished bankite leader in the House had been elevated by the Governor to a place of the highest trust and importance, and he had surrounded himself by his former political opponents; then it was, sir, that I again deserted my party. I supported Daniel D. Tompkins against the then present incumbent, Morgan Lewis.
By your permission, sir, I will give another and a memorable instance of my deserting my party. It was in 1812, when a legislative caucus of the party to which I belonged had nominated a candidate for President of the United States. There, for the third time, I deserted my party, and supported Mr. Madison. This, too, like the other cases to which I have referred, was when speculation and avarice appeared to have usurped the seat of virtue and patriotism, when banks were the order of the day, and the love of money seemed to be the ruling passion.
Another instance, sir, and perhaps that will suffice. When Governor Tompkins, in 1817, was called from the Government of New York to preside in the Senate of the United States, a candidate was to be selected to fill the vacant seat. The brother-in-law of Mr. Clinton vouched for his penitence and political regeneration --that his "unchastened ambition" had been sufficiently chastened; the former pledging himself that, in the event of the election of the latter, he would administer the Government to the satisfaction of the republican party. He was nominated and elected by the almost unanimous voice of that party which had put him in nomination. In less than two years, when I found his privy counsellors, confidants, and political associates, composed chiefly of those men "who join but to betray," I again deserted my party. I found myself in the arms of the "buck-tail party;" a term intended for reproach at first, but afterwards a term to designate a patriotic and a triumphant party.
It is not necessary, sir, to proceed further in the history of party desertions or political associations; all the changes have proceeded from money speculations, and from those "who join but to betray!" And if, sir, at the present time, there is a set of men who have so managed as to get under their control eighteen millions of capital, directed and scrutinized by commissioners of their own appointment, with an authority to exact an usurious rate of interest, and that set of men assuming to govern the party whose name it bears, is it not enough to induce any man who understands the nature, extent, and exercise of this power, to desert from that party ? Yes, sir, to desert as one whose only safety is in flight --to flee like righteous Lot from burning Sodom.
There is one great political party in the State of New York, from which I never deserted. A party from which no man, not corrupted by the influence of wealth, speculation, or avarice, or the slave of power, would ever desert. I mean the great democratic party of the State, composed of the independent farmers, mechanics, artisans, and laborers. I mean the producing classes, the real democracy, the bone and muscle of the body politic. I desert none but those who have wasted their democratic principles, if they ever had any, in the pursuit of inordinate gain, in the acquisition of wealth by other means than a course of honest industry, whose god they worship is gold, and whose devotions are poured out to Moloch instead of aspirations of thanksgiving and praise to the beneficent Giver of all good.
I deserted my party ! I forsaken the people of my own State, attacked her institutions, and insulted her honor ! No, New York, I love you still ! If a petty tyranny, immersed in lucre, has usurped the place of a wise and liberal policy, I can say to New York and to her people, I love you still. I can say of my country as the patriot Admiral Make said of his: "Let a Cromwell or a Charles sway the British sceptre, Old England is there."
On the great democratic republican party, on which I have always reposed, I shall repose; in the bosom of that party which is always attached to principles rather than men. Let the minions of power denounce me as a deserter, if they please; but here will I hold --this will be my abiding place.
March 1, 1816.
Mr. Root said the section under consideration was the essential part of the contemplated institution, as it contained its constituent or vital parts; and proceeded to enumerate the various stocks receivable in subscriptions; the rates fixed for them by the bill; the price paid for them by the lenders to the Government, and the profits now about to be given to those lenders, by raising the stocks to par; thus granting a bounty to those men. The same reasons did not exist, he said, tor such a measure, at present, as existed at the last session. Then, the credit of the Government was weak, now it is strong. He would not deny that the lenders to the Government might have been actuated by patriotic motives, but that was no reason for granting to them any thing more than was bargained for: and he proceeded to show, that, by allowing the commissioners of the sinking fund to buy up this stock, instead of permitting it to be subscribed in the bank, at the rates prescribed by the bill, the Government would save about two millions of dollars in its redemption, &c. For these and other reasons adduced, he moved to amend the bill by fixing the rate at which the six per cent, stock shall be received in subscription to the bank at ninety per cent, instead of par.
Mr. Calhoun objected to the motion. Its obvious effect, if not its object, he said, was to increase the bonus. If the stocks are depreciated, said Mr. Calhoun, it is not the fault of the holders of it, but of the Government itself, and it would be improper in the Government to take advantage of this depreciation. The measure would also have an injurious influence on the subscriptions to the bank, without answering any good purpose, and he, therefore, hoped the motion would not prevail.
Mr. Root said, in reply, that those who boasted so much of having loaned their money to the Government, only gave their depreciated notes, and received, in return, the note of the Government, by which they made a great profit, and that was all their merit, &c.
Mr. Goldsborough made a few remarks on the motion. He thought it questionable whether a Government ought to fix on its own stock a manifest depreciation, and, in this instance, it would be an act of very great injustice, and a violation of public faith, because, in the next clause, it was provided that the stock should be redeemed and liquidated at the rates at which it was paid into the bank, &c.
Mr. Ross thought the circumstance deprecated by the gentleman last up, existed already; which opinion he supported by a few arguments. The whole system of this bill, he said, was an encouragement to stockjobbers, and was of the same character as the measure which once benefitted the speculators, at the expense of the Revolutionary soldier, by funding their certificates, &c.
The question was then taken on the motion of Mr. Root, and negatived, only seven or eight gentlemen rising in favor of it. The committee then rose, reported progress, and obtained leave to sit again.
March 12, 1816.
Mr. Root then renewed the motion he had unsuccessfully made, in committee of the whole, to reduce the rate at which six per cent, stock is to be received in subscriptions to the bank, from par to ninety per cent. Mr. Root repeated briefly his reasons for the motion, already stated, and Mr. Calhoun, his objections to it; when, after some remarks in support of it by Mr. Ross.
The question was taken, and decided in the negative
March 13, 1816.
Mr. Root, after observing that the State of New York possessed a considerable portion of United States' three per cent, stock, and wishing, as the Legislature of that State was now in session, if so disposed, to subscribe that stock in the bank, moved to insert the word " States," in the clause permitting companies or corporations to subscribe; which motion was agreed to.