Chapter I: A. Coles (16)

I said, sir, it must be shown that the bank is necessary to the operations of the Government--without its aid our fiscal concerns cannot be managed. So far from subscribing to the necessity of the bank, I believe the revenue would be equally safe in the State banks, and could be distributed with inconsiderable difficulty. The revenue received in most of the States is nearly equal to the expenditure within them, and when a deficiency occurred in any one, it could be supplied by arrangements with the different banks, by transportation, or inland bills of exchange, in the manner that the public engagements are fulfilled abroad. I will venture to assert the Secretary of the Treasury will find no difficulty in contracting with individuals and corporate institutions, upon the most ample security, to transfer the public revenue upon terms equally advantageous to the United States. Among the several States commercial intercourse is great, and daily increasing; the constant traffic which the different portions of the country maintain with one another, will give facility to the operations of the Government, and obviate the obstacles which are anticipated; the very commerce which enables the Treasury to remit with ease immense sums to every part of Europe is the result of this interchange among the States, and insures equal facility at home. Where, then, is the necessity for this bank? The accommodation of the bank to the Government in times of emergency, and the use of its resources to support public credit, have been urged as motives for its establishment; how far such considerations weaken constitutional objections, it is needless to state. If, sir, the bank becomes a source of supply to the Government to an adequate extent, it ceases to be one to the merchants. It therefore cannot answer in both capacities. The same necessity which throws the Government upon the charity of the banks renders it incapable of discharging the obligation, and while the funds of the institution are locked up in the Government, its commercial functions must cease. The relief which sudden and temporary embarrassments require, can, at all times, be administered by the State banks, and, therefore, supersedes the necessity of aid from this bank. Whenever, by disasters, the ordinary sources of supply are exhausted, or the unavoidable objects of expenditure exceed the revenue, a more copious and permanent aliment will be found in the wealth and capital of the citizens than by loans from banks. Instead of diverting the active and productive capital from useful channels, the sluggish and inert mass will be drawn forth in its aid, to support public credit and cherish private enterprise. But, sir, is it prudent to rely upon an institution that may refuse you assistance? What will be the influence of such an institution on the Government, and the country at large? It cannot escape your recollection that the establishment of the Bank of the United States was the origin of a system which assumed as its basis the enlargement of the national jurisdiction. Whether the principles of expediency to which it owes its birth be regarded, or the overweening influence it established over the moneyed institutions and merchants of the States, the charge, to say the least, is plausible. The close and intimate connection between the Government and bank--the dependence of the former for loans, and the latter for public deposits, have given the Executive branch its full share of influence and odium--shows incontestably it was created to augment the power of the General Government, and the Executive in particular. Yes, sir, it was the commencement of those political animosities which have poisoned the sources of social intercourse; it was the origin of that doctrine of constructive power which abrogates the constitution and nullifies the restrictions imposed upon Congress. So long as it exists, the body politic will experience the agitations and convulsive throes of well-grounded jealousy in the States.

Sir, in the administration of this Government two things alone are necessary to insure its durability. You must first avoid every measure which will produce uneasiness among the States, or, second, that will extend the jurisdiction of the United States Government to subjects purely local. I do not mean that the rightful authority of Congress is to be abandoned for fear of giving offence, but, whenever called on to take a step which will produce uneasiness, you should be perfectly satisfied the letter and spirit of the constitution bear you out. Do not gentlemen perceive the tendency of this measure to involve us with the States upon delicate points? Has not the United States' Bank produced serious alarm? Will not the alarm be increased by its continuance at this time? Yes, sir, some of the States have already taxed this institution, others have waited under the expectation we shall render a collision unnecessary. Suppose the charter renewed, and the stockholders should be taxed in such a manner as to destroy, virtually, the privileges you have guarantied to them. Are you to leave them unprotected, or will you draw the sword in their behalf? While you have time, avoid a situation not less perilous than the most serious foreign war. Since the establishment of the bank, the States have created banks--their people have accumulated capital, and they will not tamely witness the perpetuation of an institution whose strength can at any moment overthrow whatever State bank they may mark for destruction. However paradoxical it may appear, I consider the General Government strengthened by narrowing its jurisdiction; it will produce disunion whenever they interfere with local concerns. The habits, local interest, and passions of this country vary, and no one is a competent judge of what will suit the feelings of the State out of which he lives. But, sir, there are general principles in which our feelings and interests are identified; there are subjects upon which we may safely act, and trust to the co-operation of every man and State in the Union. Does the bank affect the people locally? The answer is obvious: it not only undertakes to fix the amount of capital, but interferes with the rights of property most essentially--it may change the fundamental principles of State law as to the liability of property for debts, and the mode of recovering them. Let me caution you against the renewal of the charter; it is pregnant with the most baneful consequences to the tranquillity of the country. Is it not better to sacrifice this golden calf upon the altar of concord, restore confidence and harmony among individuals as well as States, and to reunite the lovers of the constitution?

In the report of the Secretary of the Treasury, the convenience of obtaining loans from the bank is mentioned as an inducement to establish a National Bank. To me the abuse of this convenience is more dreaded than any other evil which will follow from the measure. Where have you seen a National Bank, connected with the Government, which has not ultimately ruined the circulating medium of the nation? It is a notorious fact that money has depreciated seriously, from the unlimited circulation of paper, and if the Government should be compelled, by necessity, to use the funds of the bank, they must permit the increased circulation of its paper, although its money capital remains stationary. In this situation the Government must tolerate an operation which will increase the evil of which we complain. The example of England is a salutary monition to us, and we ought to profit from it. In that country there was a time when the stability of the bank was a national phrase, "As good as the Bank of England." How is it now? The funds of the bank have been borrowed by the Government--its paper circulation increased, and Parliament has been compelled to make it a tender for the payment of all contracts. Who, sir, can estimate the complicated mischiefs of a depreciated paper currency, without specie for its redemption? Should we be involved in war, or our property seized abroad, nothing can present universal bankruptcy--one wide-spread ruin will pervade the continent. At this time the country is inundated with paper bottomed upon the whole floating and real property of the community: should an alarm exist, can these funds be converted into money to redeem its credit? Certainly not. Will it not be prudent to diminish the extent of this evil by putting down this bank which is the fountain from which the whole system flows? It is of little importance, as it regards the internal trade of a country, what constitutes the representation of property. Paper, iron, or any thing else, which passes current, will answer every purpose of barter and trade; but, in its commerce abroad, it is indispensable that the circulating medium should be equally valuable and readily acknowledged among all commercial nations; otherwise, all the operations of commerce, carried on with money, will be abandoned or prosecuted under disadvantages equal to the difference in the value of the currency at home and abroad. In countries actively engaged in business, this branch of trade is not only great in amount, but by far the most profitable. How unwise, therefore, not only to substitute for the precious metals paper currency, whose value is confined to the United States, but to augment the quantity until it depreciates even among ourselves.

THURSDAY, January 17.

_Bank of the United States._

The House resolved itself into a Committee of the Whole on the bill for renewing the charter of the Bank of the United States--the motion for striking out the first section still under consideration.

Mr. FISK.--Mr. Chairman: I regret that we are called upon to vote for or against striking out the first section of this bill, at this time. I could have wished that, upon a bill of so much interest and importance, we could have proceeded to have filled the blanks, and made such amendments as would have obviated many objections which may be urged against it in its present form. I am not prepared to give my vote in favor of a renewal of the charter of the Bank of the United States, either upon the terms upon which it was originally granted, or in the manner contemplated by this bill; yet, upon conditions less objectionable, I should feel myself bound to vote in favor of a renewal. But the question presented upon this motion, is not upon what terms this charter shall be renewed, but whether it shall be renewed upon any terms, subject to any conditions Congress may impose.

In this view, I consider it the most important subject upon which this Congress will be required to act. It is determining a question which is connected with our finances, with the circulating medium of the country, and with our agricultural, commercial, and manufacturing interests; and, as such, it cannot but be interesting to every class of our citizens.

The interests and prosperity of the United States are not only intimately, but inseparably, connected with trade. The market of the farmer depends greatly upon the merchant and the shipper. And the price and demand of every article of produce are in a great degree regulated by the difficulties or facilities of payment. Let the difficulty of paying be increased, and the price of produce immediately falls; for the demand for exportation becomes very limited, the markets are overstocked, and prices reduced. Any sudden check to our commerce, whether produced by our own municipal regulations, or the outrages of foreign powers, checks the market and the price of produce; so that not only the merchants, but the farmers feel its effects. I scarcely need recur to the history of the times when trade was principally suspended in this country, to show how severely the suspension operated upon every class of our citizens, and in every part of the country. This period in our political annals will be long remembered. So great was the distress in some States, and agricultural States, too, that their Legislatures deemed it necessary, for the protection of the debtor from the power of his creditor, to stay the administration of justice, and prohibit by statute the issuing of an execution for the collection of any debt.

This proves the connection which subsists between the two great agricultural and commercial interests of this country. Agriculture, commerce, and manufactures constitute the source of our wealth, revenue, and prosperity. To foster and cherish the principles upon which rest our existing hopes and future prospects, can never be a question of doubtful policy with a wise and patriotic legislature.

We have seen that commerce is essential to our interests; but commerce will not flourish without credit. It never has prospered independent of credit. As credit is essential to trade, so is punctuality to support credit. Look at the business of any commercial people, and see how much of it is done upon credit; and see the integrity and fidelity with which punctuality is maintained in order to support their credit.

For several centuries past, banks have been the successful medium through which credit has not only been preserved, but great wealth acquired. This assertion is warranted by the history of these institutions, and of the countries where they have been patronized. The first bank established in Europe, was at Genoa, in 1407--four hundred and four years ago; this was soon followed by one at Venice.

The Bank of Amsterdam was established in 1609, and shortly after those of Hamburg and Rotterdam; and the Bank of England in 1694; the Royal Bank at Paris in 1718; the Bank of North America in 1784--a memorable period in our history--and the Bank of the United States in 1791.

All these different institutions show, that enlightened legislators have entertained but one opinion upon this subject both in Europe and America for the last four hundred years. They have seen and acknowledged their utility. Banks have long since been considered not only essentially useful in the transaction of commercial concerns, but as highly necessary to aid the fiscal operations of Government. And a more unanswerable argument cannot be urged in favor of their general utility than their uniform success; to this may be added the prosperity of the people and the countries where banks have been supported. Their immediate advantages are, a convenient circulating medium; the safe depository they afford for cash and funds. And they serve to keep the standard of money steady and correct; to insure punctuality; to preserve credit; to inspire confidence, and to promote a spirit of industry and enterprise. They are not, as many have supposed, in their nature hostile to Government and dangerous to liberty. They rather form a barrier to tyranny and oppression. Their principal business is to lend money at the common rate of interest, and thus prevent usury. The owners of banks are generally rich men, who have not only their personal liberty, but a large property to risk, by sedition, treason, and rebellion. It is their interest to resist oppression. We need scarcely point to the Continent of Europe for proof of the fact, when we assert, that trade and banks cannot flourish where despotism prevails. Despotic power generally ruins trade and banks, but no instance occurs in history where banks, not under the control of Government, have ruined a State. A bank owned by Government, and under its command, would be an engine dangerous to the people. But when owned by individuals, neither the people nor the Government have any thing to fear from it. It is then dependent on both for its business, prosperity, and usefulness.

With the evidence which both history and experience offer to our reflection, we cannot doubt the utility of banks, nor deny but that they have been beneficial to us. And we are justified in the conclusion, that, under proper regulations, they may subserve the best interests of the people of the United States. They are now in successful operation in almost every State in the Union, and that they have been useful, the present prosperous state of the country abundantly proves. We enjoy as perfect security for life, liberty, and property, as any people under any Government ever did. These are the great objects of a good Government. And we may triumphantly ask, where is the nation or people that enjoy these with more freedom and safety than the American people? A parallel for our liberty and prosperity, for the last twenty years, is not to be found in the history of man. Our wealth, population, and resources, have increased beyond what any one would have calculated or imagined, and beyond what strangers and foreigners now believe. Industry, wealth, and contentment, pervade every quarter of our country, and poverty and oppression are unknown to our citizens.

In 1791, the year this bank was incorporated, our exports amounted to about eighteen millions of dollars; and in 1804, they had increased to about seventy-six millions, gaining in thirteen years fifty-eight millions; and our tonnage in about the same proportion.

Much of this prosperity is to be attributed to the active capital which has excited industry, and a spirit of enterprise among us, and the activity of this capital has been in a great degree created and promoted by the Bank of the United States. Its operations have been extensive in all our trading towns. It has aided in loans and discounts, and assisted in the collection, safe-keeping, and transmission of our revenues. It has been the depository of our Treasury, and is now become incorporated with the administration of the fiscal department of our Government. The connection which it has formed with almost every branch of business in the country, is not slight and trifling, and so easily to be severed as some seem to believe. Its operations are deeply interwoven with the dealings and concerns of all the men of business in the United States.

With a capital of ten millions, it has furnished accommodations of fifteen millions a year. This has been employed principally in trade; in making prompt and cash payments to our farmers for their produce. This, again, has furnished to our citizens a ready and profitable market for every article of produce. These high profits of a good market have gone into the hands of the farmer, to cultivate, improve, and enrich the country. And travel through any State in the Union, and their effects may be readily seen, affording a prospect, consoling and elevating to the philanthropist and the patriot. The land is highly cultivated, good buildings, turnpike roads, bridges, and other expensive improvement, indicate the wealth of our citizens, and the prosperity of the country. Money has been freely circulated, trade has been active, produce high, and our country has been improved by these unexampled advantages to a degree far beyond what the most sanguine calculations, twenty years ago, could have anticipated. And yet, sir, we are gravely told that this bank has nearly ruined the country; that it is threatening our best interests with destruction. As well might gentlemen tell us that total darkness prevails at noon-day, or that the sun, in his meridian splendor, affords neither light nor heat to any part of this globe.

The principal portion of the trade and business of the United States has been conducted by a paper medium; metallic has scarcely been seen. The amount of this circulating medium is, say fifty millions. Now what is proposed by denying a renewal of the United States' Bank charter? That this bank shall close its concerns, and of course stop all its accommodations. This must necessarily check and change at least one-third of the circulating medium of the country. It will undeniably require $24,000,000 to be directed to one operation, and for a time to one point--for the capital is $10,000,000; this is to be collected to divide among the stockholders. There are $19,000,000 due to the bank; this must be collected. This will occasion a demand for this amount from other sources; it must be paid. And the $5,000,000 in the bank makes the sum of $24,000,000, which must be suddenly called in. The effect this will have upon the various interests in the country can neither be described nor conceived. It must inevitably give a general and heavy shock to all paper credit; this credit, so much and profitably in operation, must receive a severe, if not a mortal wound. And what substitute have we for this when it shall be destroyed? Silver and gold coin cannot be relied on. There is not from the best estimate an amount to exceed $10,000,000 specie in all our cities and trading towns, and this will be collected by this bank. The price of all stocks, and every kind of produce and species of property must suffer a great depression, for a scarcity of money enhances its value, and consequently depresses the value of every other species of property. That this sudden, if not total change in our system, must occasion great embarrassment, produce failures, disappointments, and distress, among our citizens, is certain.

Put down this bank, and how then are your revenues to be collected? Through the medium of the State banks? You do what no prudent man, in his individual concerns, would think of doing. You discard a faithful, honest, responsible agent, whose integrity and fidelity you have known for twenty years, and you place your estate in the hands and at the disposal of twenty or thirty entire strangers, of whose character and responsibility you know nothing, nor have the means of acquiring any knowledge, and over whose conduct you have no control. Should an individual act thus with his property, he would be deemed to have lost all regard for it, if not considered a madman. In resorting to the State banks, we are offering the amount of our revenue as a bounty for intrigues, cabals, and factions, through the country. In almost every State there are a number of banks, and each will endeavor to get the revenue collected in that State, to keep and trade with. It must be given to one, or divided among them all. If one is selected as the favorite, all the rest become jealous, dissatisfied, and exert their capital and influence against the favorite bank and its patron, the Government. This will awaken a spirit of faction in every State, yet unknown in this country. If all are to be gratified in their request for the deposits, the Government must open separate accounts with all the different banks in the country, to the amount of fifty or sixty; and new companies will be formed, and new applicants request to divide the business, and share the profits. Indeed, there will be no end to the scenes of speculation and intrigue, which will soon appear, if this course is adopted by the Government.

Mr. SEYBERT.--It may be said that this subject has been exhausted by the discussions of the ablest politicians of the country. I will premise, the remarks which I shall offer are intended solely to justify the vote which it is my intention to give on this momentous occasion.

The question pending the United States' Bank has excited a peculiar interest throughout this nation, more especially in our seaports. The dissolution of this institution, which from its limitation, will expire on the fourth of March next, has been portrayed in colors of the darkest shades, and the distresses which many maintain will be consequent to that event, call seriously for a fair and deliberate investigation. I hope, sir, I shall be pardoned for imposing on the patience of the House, when it is recollected that the community which I represent have employed four-tenths of the capital stock of the United States' Bank. If evil consequences are to attend the dissolution of this establishment, or if beneficial results proceed from its continuance, in either case I must feel myself essentially interested; it is therefore my wish to be distinctly understood upon the important principles which have connection with the great question now before us.

At the last session of Congress, I presented the memorial of the President, Directors, and Stockholders of the Bank of the United States; at that time I entertained no positive opinion on the subject; the discussions which took place in the committee to whom the memorial was referred, necessarily, as a duty on my part, excited that attention which the importance of the question imperiously demanded. Under circumstances of doubt, I voted in favor of reporting a resolution in support of the bank, for the purpose of giving to the establishment every chance which reason could urge; at the same time reserving to myself the right to pronounce a final decision, according as policy and expediency, but more especially as principle should dictate. I will admit, sir, that this is not the time or place to institute the general inquiry, whether banks are or are not beneficial to a nation? Because, whether the charter of the United States' Bank be renewed or not, the several States, who have the unquestioned authority to incorporate bank establishments, have already created many, which it is not in our power to control. I do not hesitate to declare, though many persons in the United States are decidedly opposed to a banking system, under every possible circumstance, I am not of this class. Experience has proved, in a manner very satisfactory to my mind, the advantages which are derived from the banks when they are impartially directed, and when the accommodation afforded by them is prudently employed; the great difficulty seems to be to confine the system within its proper limits. I understand the proposition as applicable to the agricultural, manufacturing, and commercial interests of the United States.

For my proofs of this proposition, I will not rely upon the famous Bank of St. George, at Genoa, whose authority, by a gentleman from New York, (Mr. FISK,) has been considered of much weight. I will recall to the mind of my friend the remark of an intelligent traveller, who, when he visited this bank of antiquity, exclaimed: Here lies concealed the enigma, whether the bank possesses millions of millions, or whether it is indebted millions of millions! He concludes, Upon this important secret rests the safety of the State. Unhappy State, say I, whose safety depends upon a secret concealed within the vaults of a bank. Perhaps to a development of this secret may we attribute the present servile condition of the people of the once far-famed and powerful Republic of Genoa.

Sir, I am decidedly opposed to a prominent, and what to me appears to be a very dangerous feature in the bill now under consideration. I allude to the eighth section, which admits of an increase of the present capital stock of the bank. Adopt this provision, you will thereby create an Herculean power, which will have at its mercy all the minor institutions of the States; thus constituted, it can oppress and destroy them, as whim or interest may dictate. The steps which have been taken preparatory to a dissolution of the present bank, it is said, occasion much embarrassment, and threaten with ruin many of our citizens; if the present capital of ten millions can thus affect society, who will pretend to accumulate present evils, or risk entailing misery on posterity, solely for the purpose of a temporary gain to the Government? In this question Pennsylvania is deeply concerned; she has several millions of dollars invested in her banks; this to her is a valuable source of revenue; upon this may she predicate much of her future prosperity; hence will she derive the funds requisite for future internal improvements; but if you fill up the blanks in this section with a considerable sum, all these prospects will be blasted forever; you will thereby destroy the tree from whose ramifications were to emanate the blessings of peace and the sinews of war. Those of her representatives who may deem it politic and constitutional to vote for a continuance of the charter of the United States' Bank, ought surely to oppose any increase of the present capital; we have been told that that which now exists has been found sufficient for all purposes, at a time when our commerce was much more extensive than we have reason to suppose will soon again be the case.

The history of the banks in our country informs us, that the one usually termed the Bank of North America was the first establishment of the kind which received the sanction of the Government. This institution was incorporated by an act of Congress, in the month of May, 1781, under the authority of the "Articles of Confederation." The present Bank of the United States was incorporated by an act of Congress, on the 25th of February, 1791, during the operation of the present Constitution of the United States.

Without an attempt to examine every hypothesis, which has been or which might be proposed, respecting the constitutionality of the principle, I will content myself with the statement of the case, such as it appears to my mind. The first public act which I performed as a member of the Congress of the United States, was, to swear solemnly that I would support the Constitution of the United States. It therefore is my duty to examine and consider its precepts, according to the best of my ability.

The "Articles of Confederation" and the present Constitution of the United States do not differ as regards any power delegated by the States to Congress, touching charters of incorporation. I can never persuade myself that the constitution was intended other than to have a definite meaning; or that it was ever contemplated to speak an equivocal language; ambiguity arises solely from the misconceptions of its interpreters; it is very plain and of easy comprehension, especially as it relates to the present question, since it is totally silent on the right to create corporations--its wisdom is further illustrated by the special provision for the only exclusive privilege which is consistent with a free and equal government, and that is in favor of genius.

The powers delegated by the States are special and defined, and, it is expressly declared by the constitution, that "the powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." This language needs no interpretation. I cannot for a moment permit myself to suppose, that the patriots who were tested during the long-continued uncertainty of the most important events of our Revolutionary period, and to whom was ultimately assigned the right and power to construct the instrument which is to guide us in the political labyrinth--that they intended this their great work should alone be explicable by that refined reasoning to which common sense is a stranger, I never can admit. Surely that which they framed for the good and security of every individual in the nation, must be expressed in a manner to be understood by ordinary men, and those whom it was intended to direct. Sir, if simplicity was not originally contemplated by the framers of the constitution, why the imposition on the people in publishing it to the world? Was it not a prodigal waste of labor and materials, to furnish every citizen of our country with a copy of that which can only be understood by professional men, or such as are eminently skilled in scholastic research? It had better remain a secret, concealed amongst the musty rolls in the archives of State, than be a puzzle for mankind. As long as this instrument is preserved pure and untarnished, it will receive a becoming respect from your fellow-citizens--it will be regarded as "the stupendous fabric of human invention." Remember, the present argument, in several important points of view, affects posterity in common with ourselves. You had better commit the unintelligible jargon to the flames, than by the agency of construction, neutralize wisdom by folly. Sir, if we have a constitution which the people cannot understand, I then say, cut the original into slips, and provide the means for a better; or, if that is not to be done, and we are to be ruled by the iron hand of power, in that case, as one of the American people, I will pray you to be graciously pleased to grant a plain bill of rights for our better government.

If we look back, and attentively view the occurrences which took place, when the law incorporating the present bank of the United States was enacted, we shall find our reasoning supported and confirmed by many important circumstances; we shall then perceive, that the act of incorporation was opposed on constitutional ground, by men who were and continue to be esteemed for their talents, political skill, judicial knowledge, probity and patriotism; and it has been admitted, that the arguments formerly urged are unanswerable. That the power to create corporations was never intended to be ceded on the part of the United States, is proved beyond all manner of contradiction; for we are told by the highest authority, by one who was a member of the General Convention, that it had been proposed to cede to Congress the power to create corporations, and that the proposition was rejected, after a deliberate discussion. In my opinion this decision is in proof of the sagacity and wisdom of those who made it; it was highly justifiable to retain this power to be exercised by the States; because, corporations are generally founded on circumstances, which are entirely local--as such, they can be better understood by the Legislatures of the respective States, than by that of the General Government.

The experience of every session proves that the decisions of Congress vary with the men who at different times compose that body; therefore, the act of February, 1791, can have no force in settling the principle contended for.

I have heard it urged, that the States have recognized the constitutionality of the United States' Bank, by their laws. I know of no law in any of the States, which declares this charter constitutional. Were it even proved, that several of the States had published this declaration, with me it would signify nothing, unless the sanction of two thirds of the States was thus had. On a former occasion, several of the States were induced, from peculiar circumstances, to relinquish for a time their right in favor of a particular case--I allude to the first establishment of the Bank of North America. If this had been intended to decide this very important question, without any reservation of their power in other cases, they would have expressed it in the most positive and unequivocal manner.

Sir, it may be asked, how did the Congress, whilst acting under the "Articles of Confederation," incorporate the Bank of North America, though their powers were no more extensive than those of the present Congress? We shall not lose by this investigation--they declared that "the exigencies of the United States rendered it indispensably necessary that such an act be immediately passed," and, at that period, the Board of War confessed they had not money sufficient to pay the expense of forwarding an express to the Commander-in-chief of the Army! Notwithstanding such urgent necessities on the part of the General Government, they were too conscious of the rights of the States to attempt a usurpation of authority, or to pretend to force this act without their sanction; accordingly, we find the resolution by which this bank was established followed by another, which recommended to the Legislature of each of the States the necessity to pass such laws as they judged requisite for giving the ordinance, by which the subscribers to the Bank of North America were incorporated, its full operation; every provision in the charter of this bank, to have full effect, was recommended to the Legislatures of the several States for their approbation. (_See Journals of Congress for 1781, vol. 7th, pp. 257 and 258._)

It is a well-known and an important fact, that the subscribers to the Bank of North America did not rest satisfied of the authority of Congress to incorporate them; subsequently to the original act of incorporation, they accepted from the Legislature of Pennsylvania a charter by which their privileges were very much abridged.

Some maintain, the States having made it penal to pass counterfeits of the notes of the United States' Bank, is in proof of their recognizing the constitutionality of the institution. No one will pretend that these laws were intended other than to guard the people against fraud. These statutes were enacted without any connection with or reference to the principle upon which the original act was founded. It is but too well known, notwithstanding these salutary provisions, that counterfeit bank notes of every denomination are in daily circulation. I will ask, what would be the case if such laws had not been passed by the States? Sir, if it requires all our care to prevent an inundation from such bank paper as is acknowledged to be genuine, for Heaven's sake do not risk the security of the people, by an indirect sanction of such as is known to be spurious!

FRIDAY, January 18.

A motion was made by Mr. FISK, that the House do now adjourn; and the question being taken thereon, it was determined in the negative--yeas 6, nays 59.

_Bank of the United States._

The House again resolved itself into a Committee of the Whole on the bill to renew the charter of the Bank of the United States.

Mr. BURWELL'S motion for striking out the first section being still under consideration.

Mr. P. B. PORTER.--Mr. Chairman: As this bank has excited so extraordinary an interest in every part of the United States, and particularly in the State which I have the honor to represent; as I am apprehensive, from what took place yesterday, that I shall be found, on this question, in opposition to a majority of my colleagues; and, (what will always be an imperative motive with me,) as I think this bill aims a deadly blow at some of the best principles of the constitution, I feel it my duty to state to the House the grounds on which I shall be constrained to vote for striking out the section now under consideration.

I acknowledge that I had not, until lately, paid any particular attention to the question of the constitutionality of this institution. I stand, therefore, in this respect, on safer ground than the respectable member from North Carolina (Mr. MACON,) for I have no reason to suspect myself of any long-rooted prejudices on the question. The Bank of the United States was established at a time when I was not in the habit of troubling myself with such questions. I had been accustomed to think of it as an institution, the constitutionality of which was conceded by common consent. But, sir, when the question was again stirred, I felt it my duty to give it a thorough investigation before I should sanction it by my vote. I have given it, if not a thorough, at least a candid and impartial examination; and the result has been, a full conviction that we have no right to incorporate a bank upon the principles of the bill on the table, or rather, upon the principles of the original charter, which this bill proposes to renew. The ground of my objection is, that it assumes the exercise of legislative powers which belong exclusively to the State Governments.

I shall not touch the question of the expediency of this bank, much less the expediency of banking generally. If I were competent, which I confess I am not, to the task, I should think it a very unprofitable one, to follow the gentleman through all the mazes of the banking system--a system, sir, about the various and important operations and effects of which on civil society, aside from a few obvious truths which it furnishes, I have found that those gentlemen who have professed to understand them best, have differed most. As I propose to confine myself to the constitutional question solely, I hope I shall be allowed to take a little broader range on this point, than has been taken by the gentlemen who have preceded me.

I am aware how ungracious constitutional objections to the powers of this House are with those, and there are many such, who believe that the powers of the Federal Government are, at best, too contracted; and who would be glad to see all the State rights merged and sunk into a consolidated government. Whatever may be my speculative opinions on this subject, I can never be influenced, by motives of expediency, to swerve from my allegiance to the constitution. This sentiment is indelibly fixed on my mind, and I trust it is a common one to the members of this committee. That, in adhering strictly to the obligation we have taken to support the Constitution of the United States, we not only perform a sacred duty to ourselves, but we render a better service to the real and permanent interests of our country than we could possibly render by a departure from that obligation; even though that departure were to avert so serious a calamity as a general bankruptcy--a calamity which, in order to alarm the timid, has been held out as the inevitable consequence of a refusal to renew this charter.

I should be surprised at the general acquiescence which seems to have been yielded to the constitutionality of this institution, did I not believe that others had been as superficial in their examination of the subject as I had myself. When objections are made to the constitutionality of the law, the people, in the cursory views which they are accustomed to take of such objects, are apt to adopt, as the tests of its constitutionality, the powers of the State and Federal Governments collectively; and if they find nothing in the law offensive to the principles of civil liberty, nothing uncongenial with the spirit of a Republican Government, they rest satisfied, and do not trouble themselves with nice distinctions between the powers peculiar to the one or the other of these Governments. Such reasoning would, however, ill become the sagacity of this House.

One of the most serious dangers with which our Government is threatened, and it is a danger growing out of the very nature and structure of the Government itself, consists in its tendency to produce collisions between State and Federal authorities. The Federal Government, as was observed by my learned colleague, (Mr. MITCHILL,) is _imperium in imperio_, a government within a government; and the misfortune is, that there exists no friendly third power to decide the controversies which may arise between these two great, independent, and, in many respects, rival authorities. The public peace must be kept, if kept at all, by the conciliatory dispositions of the parties themselves. As then we have a common interest in the preservation of both these Governments--as we are as well the subjects of the _imperio_ as of the _imperium_, we ought to act with great circumspection and delicacy in the assumption of powers which do not clearly belong to us. It is better to forego the exercise of powers to which we are entitled, if the exercise of them is not very important, rather than hazard the assumption of doubtful ones, the fatal consequences of which my honorable friend from Virginia (Mr. BURWELL) has so justly deprecated.

The great line of demarcation between the powers of the State and Federal Governments is well understood. The powers of the State Governments extend to the regulation of all their internal concerns: those of the Federal Government to the management of all our external relations--external as regards the individual States, as well as the States in their collective capacity. The general ideas upon which our Republic is founded, are these: That small territories are better adapted to the successful administration of justice than large ones. In a Republic, where the people are the sovereigns and source of power, it is important that, in order to enable them to execute this power discreetly, they should possess correct information in relation to the character and conduct of their rulers, and in relation also to the character of the measures which they pursue, or ought to pursue; and this information is better attained in a small than in a large territory. The individual States have therefore reserved to themselves the exclusive right of regulating all their internal, and, as I may say, municipal concerns, in relation both to person and property. But a single State may be inadequate to its own protection against foreign violence; it may also be unable to enforce the observance of proper rules and regulations for carrying on its foreign trade and intercourse. The Confederacy of the States is therefore formed for the purpose of attaining these two objects, namely, the regulation and protection of the trade and intercourse of the States with each other and foreign nations, and their security against foreign invasion. It has some other objects in view of minor consequence, and immediately connected with these principal ones. The Constitution of the United States is the basis of this confederacy; and it is only necessary to read the constitution to perceive that it is nothing more than a delegation of specific powers for these specific purposes, and that the general sovereignty of the States over their respective territories is expressly retained by the States.

But, sir, independent of these specific powers and duties of the Federal Government, it has another and distinct set of powers and duties to perform and execute. The national domain, as it has been called, embracing the lands acquired by the Revolutionary conflict; the lands since purchased of foreign nations; and the lands ceded by the several States to the General Government, belong to the United States in their federate capacity; and no individual State, as such, has any claim to or jurisdiction over them. As to these lands the powers of the United States are sovereign, independent, and complete: and the Congress of the United States is the only legitimate authority for the exercise of this sovereignty. The powers of Congress, then, in relation to these territories, include the powers of both the Federal and State governments, in relation to the States. I have adverted to this branch of the powers of the Federal Government as a means of dispelling the obscurity which has been thrown over the constitutional question, to which I shall soon come, by confounding the powers of Congress over the States, with their powers over the territories. Arguments, to which I shall have occasion to advert in the course of my observations, have been used to justify the exercise of particular powers within the limits of the States, from our acknowledged right to and practical exercise of similar powers within the Territories.

In discussing constitutional questions, then, we lay down these axioms:--That in relation to the territories, the powers of Congress are supreme and exclusive; that in relation to the States, they are specifically defined and limited by the constitution--and that we have no right to exercise, within the limits of a State, any power as resulting from the general rights of sovereignty; because that sovereignty belongs to the States and to the people, and not to the Federal Government. To show that these two last positions are correct, I will read the tenth article in the amendment of the constitution: "The powers not delegated to the United States by the constitution, nor prohibited by it to the States, are reserved to the States respectively, or the people."

As, then, the incorporation of this bank involves the exercise of legislative powers within the jurisdiction of the States, in relation to the rights of property between the citizens of those States; and as no power to incorporate a bank, _eo nomine_, is to be found in the constitution, it would seem sufficient for us to rest the argument here, by a mere denial of the power, and to call on the advocates of the bank to show its constitutionality. An attempt to prove this constitutionality has been made--not, however, sir, by arguments advanced by gentlemen on the other side of the House in their places, (for they have, so far, observed, and I understand that they will continue to observe, a profound silence on this question,) but by arguments which have been gratuitously introduced, by the agent of the bank. I allude to the pamphlet which has within a few days past been printed and distributed among the members, containing the celebrated argument of General Hamilton, "on the constitutionality of a National Bank." As that pamphlet is _de facto_, if not _de jure_, before the committee, I will, if the committee will indulge me, attempt to examine some of the principal arguments contained in it, and I will also notice some additional ones, advanced yesterday by my honorable friend and colleague on my left, (Mr. FISK.) In the course of the observations which I have to submit, I shall, without doubt, repeat arguments and remarks made by the gentlemen who have preceded me, and others which are familiar to the members of the committee. My excuse must rest in the difficulty of taking a connected view of the subject, without such repetitions. If I shall be so fortunate as to throw a single new ray of light on this important question, I shall feel amply remunerated for my trouble, and I shall think the time of the committee not altogether misspent.

The first argument in this pamphlet is founded on the sovereignty of the powers of Congress. The Federal Government is said to be sovereign as to all the objects for which that Government was instituted. A sovereign power includes, by force of the term, a right to all the means applicable to the attainment of the end for which that power is given; and therefore Congress may, in virtue of their sovereign power, create incorporations for attaining the ends or objects of those powers.

This argument is founded on what the logicians call _petitio principii_, or begging the question. The proposition, that the Government is sovereign, is assumed, to prove that it possesses the attributes of sovereignty: or, in other words, the fact of sovereignty is assumed, to prove that sovereignty. If the position that the powers of this Government are sovereign as to all the objects of them, be proved, I will concede the consequence, to wit: that we have a right to establish corporations to attain these objects--but I deny the fact of sovereignty. The acts of Congress, it is said, are declared by the constitution to be the supreme law of the land: and the power which can make the supreme law of the land, is necessarily a sovereign power. But I deny that this is a correct definition, or exposition of sovereignty. It is not the high nature of an act, nor the authority of the act, that stamps the character of sovereignty on him who performs it. The sheriff of a county who puts a man to death, under the sentence of the law, executes an act of as high import and authority as human power can execute; and yet the sheriff of a county is not therefore a sovereign. His authority is a mere delegated authority--his act is a mere ministerial, mechanical act. The idea of sovereignty imports the exercise of discretion--of judgment--of will. It is of the very essence of sovereign power, that you may execute that power, or not execute it--that you may execute it when you will, and how you will. A sovereign power, as to any object, includes a right to any means, and all the means applicable to the attainment of the object. But, sir, do Congress possess sovereign powers, or, what is the same thing, discretionary means, as to the attainment of the objects of this Government? No, sir. The constitution is not a general authority to Congress to attain the objects for which the Government was established; but it is an enumeration of the particular powers, or means, by which, and by which only, certain objects are to be accomplished. If the powers of Congress were sovereign, they would of necessity comprehend all the means applicable to the attainment of their objects; but inasmuch as they are specific and circumscribed, that very circumstance proves that they are not sovereign. The people of the United States are the true sovereigns of this country. From them all power emanates, and on their will all the authority of this Government depends. The powers of the Federal Government are mere delegated chartered authorities; and in the exercise of them we are tied down to the letter of the constitution. We have, to be sure, a certain latitude of discretion allowed us, within the letter and pale of the constitution; and so far we may be said to possess a sort of limited qualified sovereignty. But the constitution is the standard by which to measure the quantum and extent of our sovereignty. And our sovereignty, which is the result of the powers given in the constitution, is not the standard by which to measure the constitution. The constitution is the true bed of Procrustes--and our sovereignty, however unwillingly we may yield it, must be the victim.