Chapter XV (1)

1837—1841.

MR. VAN BUREN’S PRESIDENCY—THE FINANCIAL TROUBLES ACCUMULATING—REMEDY OF
THE INDEPENDENT TREASURY—BUCHANAN ON THE CAUSES OF SPECIE
SUSPENSION, AND THE PENNSYLVANIA BANK OF THE UNITED STATES—GREAT
POLITICAL REVOLUTION OF 1840—BUCHANAN DECLINES A SEAT IN MR. VAN
BUREN’S CABINET.

In the condition of things existing when the extra session of Congress, summoned by Mr. Van Buren, commenced (September, 1837), the immediate relief of the Government was the first necessity. The temporary expedient contemplated by the new administration, for this purpose, was to issue Treasury notes, to be used in paying the public creditors. For the permanent management of the public finances, it was proposed to make no further use of banks, but that the revenues of the Government should be deposited with certain officers of the Treasury, and be paid out to the public creditors on Treasury orders. This was the scheme which became afterwards expanded into the “Sub-Treasury.” It was examined and opposed by Mr. Webster, in an elaborate speech, delivered on the 28th of September, and on the 29th he was followed by Mr. Buchanan, in an equally extended and forcible discussion of the causes of the present distress, and the remedy that should be applied. These two speeches may be said to have exhausted the two sides of the main controversy between the opposite parties, in regard to the duty of the General Government to regulate the paper currency of the country, which then consisted of the notes of about eight hundred State banks. Such a discussion of course involved the disputed topics of those clauses of the Constitution from which the Whigs derived the power and deduced the duty of a general supervision over the paper circulation. Of Mr. Buchanan’s reasoning on these subjects, it may be said with justice that, entering into direct controversy with Mr. Webster, he combated that eminent person’s constitutional views with singular ability, and energetically defended what was derisively called “the new experiment,” and was considered by the party of the administration as a divorce of the Government from all connection with banks. In conclusion he said:

Mr. Van Buren is not only correct in his statements of facts, but by his message he has for ever put to flight the charge of non-committalism—of want of decision and energy. He has assumed an attitude of moral grandeur before the American people, and has shown himself worthy to succeed General Jackson. He has elevated himself much in my own esteem. He has proved equal to the trying occasion. Even his political enemies, who cannot approve the doctrines of the message, admire its decided tone, and the ability with which it sustains what has been called the new experiment. And why should the sound of new experiments in Government grate so harshly upon the ears of the Senator from Massachusetts? Was not our Government itself, at its origin, a new and glorious experiment? Is it not now upon its trial? If it should continue to work as it has heretofore done, it will at least secure liberty to the human race, and rescue the rights of man, in every clime, from the grasp of tyrants. Still, it is, as yet, but an experiment. For its future success, it must depend upon the patriotism and the wisdom of the American people, and the Government of their choice. I sincerely believe that the establishment of the agencies which the bill proposes, will exert a most happy influence upon the success of our grand experiment, and that it will contribute, in no small degree, to the prosperous working of our institutions generally. The message will constitute the touchstone of political parties in this country for years to come; and I shall always be found ready to do battle in support of its doctrines, because their direct tendency is to keep the Federal Government within its proper limits, and to maintain the reserved rights of the States. To take care of our own money, through the agency of our own officers, without the employment of any banks, whether State or National, will, in my opinion, greatly contribute to these happy results; and in sustaining this policy, I feel confident I am advocating the true interest and the dearest rights of the people.

This allusion to the decision and energy which Mr. Van Buren had displayed in his message at the opening of the extra session, and which had raised him in Mr. Buchanan’s esteem, implies that Mr. Buchanan had previously doubted about the course of the new President. The following letters from General Jackson show that he did not share those doubts.

[GENERAL JACKSON TO MR. BUCHANAN.]

HERMITAGE, August 24, 1837.

MY DEAR SIR:-

Your much-esteemed favor of date July 28th last, has been too long neglected by me. It reached me in due course of mail and I intended replying to it immediately, but checkered health and a crowd of company interposed and prevented me that pleasure until now.

For your kind wishes, I tender you my sincere thanks—as to my fame, I rest it with my fellow-citizens—in their hands it is safe—posterity will do me justice.

The vile slanders that are heaped upon me by the calumniators of the day pass unheeded by me, and I trust will fall harmless at my feet.

What pleasure it affords to learn from you that the Keystone State of the Union are firmly united in the great Republican cause which now agitates the whole Union. This will give impulse throughout the Union to the Democratic cause, and the conflict now raging between the aristocracy of the few, aided by the banks and the paper-money credit system, against the democracy of numbers, will give a glorious triumph to Republican principles throughout our Union, and good old Republican Pennsylvania will be again hailed, as she deserves, the Keystone to our Republican arch and preserver of our glorious Union. I feel proud of her attitude, and my fervent prayers are that nothing may again occur to separate the Republican ranks, so as to give to the opposition or shinplaster party the ascendency. I feel to that State a debt of gratitude which I will cherish to my grave, and I shall ever delight in her prosperity.

I have no fears of the firmness of Mr. Van Buren; his message you will find, or my disappointment will be great, will meet the views and wishes of the great Democratic family of Pennsylvania; at present a temporizing policy would destroy him; I never knew it fail in destroying all who have adopted it. My motto is, to take principle for my guide to the public good. I have full confidence that Mr. Van Buren will adopt the same rule for his guide and all will be safe.

I have always opposed a union between Church and State. From the late combined treachery of the banks, in suspending specie payments in open violation of their charters and every honest and moral principle, and for the corrupt objects they must, from their acts, have had in view, I now think a union between banks and the Government is as dangerous as a union with the Church, and what condition would we now be in _if engaged in a war with England_? I trust Congress will keep this in view, and never permit the revenue of our country to be deposited with any but their own agents; it is collected by the agents of the Government, and why can it not be as safely kept and disbursed by her own agents under proper rules and restrictions by law? I can see none, nor can it add one grain of power to the executive branch more than it possesses at present; the agent can have as secure a deposit as any bank, and always at command by the Government to meet the appropriations by law; the revenue reduced to the wants of the Government never can be hoarded up, for as it comes in to-day, it will be disbursed to-morrow; and if all cash, no credits, will be more in favor of our home industry than all tariffs. This I hope will be recommended by the President and adopted by Congress, and then I will hail our Republic safe, and our Republican institutions permanent.

You will please pardon these hasty and crude hints. My family join me in kind salutations, and believe me your friend,

ANDREW JACKSON.

P. S.—Please let me occasionally hear from you. A. J.

[JACKSON TO BUCHANAN.]

(Private.) HERMITAGE, December 26, 1837.

MY DEAR SIR:—

I have to offer you an apology for my neglect of not acknowledging sooner your kind and interesting letter of the 26th of October last, accompanied with yours and Mr. Wright’s speeches on the subject of the divorce bill or sub-treasury system.

I have read these speeches with great attention and much pleasure; they give conclusive evidence of thorough knowledge of our Republican system and constitutional law, and must remain a lasting monument of the talents that made them, and they will become the text-book of the Republicans for all time to come. I regret very much that these speeches have not been more generally circulated through the South and West; they would have produced much good by enlightening the public mind.

I never for one moment distrusted the firmness of Mr. Van Buren, and I rejoice to see this confidence confirmed by his undeviating course. I have no fears of the Republic. The political tornado that has lately spread over the State of New York must have a vivifying effect upon the Republican cause. It will open the eyes of the people to the apostacy of the Conservatives, and prevent them from having the power to deceive hereafter, and will unite the Republicans from Maine to New Orleans.[60]

It has (with the exultations of the Whigs here and Mr. Bell’s speech at Fanueil Hall) had a healing effect in Tennessee. The deluded White men are just awakening from their delusion, and now say, although they supported White, they can neither go for Webster nor Clay; that they have always been Republicans. The election of Mr. Foster instead of Bell to the Senate shows that Bell’s popularity with the legislature is gone; and I am informed that the majority of the legislature regret the premature election of the Senator. I have no doubt but our next legislature will reverse the election of Senator, upon constitutional grounds; that there was no vacancy to fill, and none that could happen within the time for which the present legislature was elected to serve.

I hope the whole of the Republicans in Congress will rally with energy and firmness, and pass the divorce or sub-treasury bill into a law; there is no doubt of the fact that in the Senate the Republicans have a vast superiority in the argument; would to God we had equal talent in the House of Representatives. The great body of the people will support this measure, and the Conservatives will have to return to the Republican fold, or join the opposition; if they join the opposition, they then become harmless, and can no longer delude the people by their hypocrisy and apostacy. I am informed by a gentleman from Western Virginia, that Mr. Rives has, by his attitude, lost his political standing there, and Mr. Ritchie has lost his. I sincerely regret the attitude these two gentlemen have placed themselves in; common sense plainly proves that if the revenue is again placed in irresponsible State banks, after their late treachery and faithlessness to the Government, it will inevitably lead at last to the incorporation of a national bank. Can any patriot again place our revenue, on which depends our independence and safety in time of war, in the keeping of State or any other banks, over whom the Government have no control, and when the revenue might be most wanted to provide for defence, the banks might suspend, and compel the Government to make a dishonorable peace? I answer, no true patriot can advocate such a system, whatever might be his professions.

I am proud to see that the Keystone State is preparing for the struggle next October. I hope nothing may occur in the least to divide the Republican party; the opposition and some professed friends, but real apostates and hirelings of banks, will endeavor to divide the party, but I hope and trust union and harmony will prevail.

My health is improved, but my vision has failed me much; I hope it may improve. I write with great difficulty. My whole household joins me in kind regards and good wishes for your happiness. I will be happy to hear from you the prospects of the divorce passing in the Court House.

Your friend sincerely,

ANDREW JACKSON.

P.S.—We all present you with the joys of the season.

The bill to authorize the issue of treasury notes was passed at the extra session of Congress in 1836. The bill to establish the sub-treasury was passed in the Senate but failed in the House. The Bank of the United States, unable to obtain from Congress a prolongation of its charter, had procured a charter of incorporation from the Legislature of Pennsylvania. This new corporation became the assignee of the assets of the old one. It was now, therefore, in a singular and unprecedented attitude. As a Pennsylvania corporation, it had power to issue its own notes. As a trustee for winding up the affairs of the old corporation, it had in its possession the notes of the old bank. It re-issued these notes, without any authority to do so, used them in the Southern States, in exchange for the depreciated local currency, with which it bought cotton for exportation, or to pay its debts abroad, or purchased specie to replenish its vaults at home. It had thus created an obstacle to the resumption of specie payments. On the 23d of April, 1838, Mr. Buchanan made a very able speech in the Senate, in support of a bill to prevent the Pennsylvania Bank from re-issuing and circulating the notes of the old bank, giving the causes which produced the suspension of specie payments, and those which might affect a resumption.

Mr. Buchanan said there was but one consideration which could induce him, at the present moment, to take any part in the discussion of the bill now before the Senate. He felt it to be his duty to defend the legislature of the State which he had, in part, the honor to represent, from the charge which had been made against them by the Senator from New Jersey [Mr. Wall] and other Senators, and by many of the public presses throughout the country, that, in rechartering the Bank of the United States, they had conferred upon it the powers of a great trading company. This charge was wholly unfounded in point of fact. The charter had not constituted it a trading company; and he felt himself bound to make the most solemn and public denial of that charge. If this bank had become the great cotton merchant which was represented, and he did not doubt the fact, it had acted in express violation of its charter. He therefore rose, not to criminate, but to defend the legislature of his native State.

The Democratic party of Pennsylvania had been, unfortunately, divided in 1835; and the consequence was the recharter of the Bank of the United States. Of the wisdom or policy of this measure (said Mr. B.) the Senate of the United States are not constituted the judges. I shall never discuss that question here. This is not the proper forum. I shall leave it to the sovereign people of the State. To them, and to them alone, are their representatives directly responsible for this recharter of the bank. As a citizen of the State, I have on all suitable occasions, both in public and in private, expressed my opinion boldly and freely upon the subject. In a letter from this city, dated on the 30th June, 1836, which was published throughout the State, I have presented my views in detail upon this question; and I feel no disposition to retract or recant a single sentiment which I then expressed. On the contrary, experience has only served to confirm my first convictions.

My task is now much more agreeable. It is that of defending the very legislature who renewed the charter of the bank, from the charge which has been made and reïterated over and over again, here and throughout the country, of having created a vast corporation, with power to deal in cotton, or any other article of merchandise. A mere reference to the charter, will, of itself, establish my position. It leaves no room for argument or doubt. The rule of common reason, as well as of common law, is, that a corporation can exercise no power, except what has been expressly granted by its charter. The exercise of any other power is a mere naked usurpation. On the present occasion, however, I need not resort to this rule. The charter not only confers no such power of trading, but it contains an express prohibition against it. It was approved by the Governor on the 18th day of February, 1836, and the fifth fundamental article contains the following provision: “_The said corporation shall not, directly or indirectly, deal or trade in any thing except bills of exchange, gold and silver bullion, or in the sale of goods really and truly pledged for money lent and not redeemed in due time, or goods which shall be the proceeds of its lands._” In this particular, it is but a mere transcript from the charter granted to the late bank by Congress on the 10th of April, 1816, which was itself copied from the charter of the first Bank of the United States, established in the year 1791. I have not recently had an opportunity of examining the charter of the Bank of England, but I believe it contains a similar provision. The Senate will, therefore, at once perceive there is as little foundation for charging the legislature of Pennsylvania with conferring upon the existing bank the enormous powers of a great trading company, as there would have been for making a similar charge against the first or the last Congress which chartered a Bank of the United States. It is true that the bank, under its existing charter, can deal much more extensively in stocks than it could have done formerly; but this power does not touch the present question.

The bank, by becoming a merchant and dealing in cotton, has clearly violated its charter, and that, too, in a most essential particular. Either the legislature or the Governor may direct a _scire facias_ to issue against it for this cause; and, if the fact be found by a jury, the Supreme Court of the State can exercise no discretion on the subject, but must, under the express terms of the act creating it, adjudge its charter to be forfeited and annulled. Whether the legislature or the Governor shall pursue this course, is for them, not for me, to decide. This bank has already so completely entwined itself around our system of internal improvements and common school education, that it doubtless believes it may violate its charter with impunity. Be this as it may, the sin of speculating in cotton lies at the door of the bank, and not at that of the legislature.

Heaven knows the legislature have been sufficiently liberal in conferring powers upon this institution; but I doubt whether a single member of that body would have voted to create a trading company, with a capital of $35,000,000, in union with banking privileges. Let us pause and reflect for a moment upon the nature and consequences of these combined powers. A bank of discount and circulation, with such an enormous capital, and a trading company united! By expanding or contracting its discounts and circulation, as a bank, it can render money plenty or money scarce, at its pleasure. It can thus raise or depress the price of cotton, or any other article, and make the market to suit its speculating purposes. The more derangement that exists in the domestic exchanges of the country, the larger will be its profits. The period of a suspension of specie payments is its best harvest, during which it can amass millions. It is clearly the interest of this bank, whatever may be its inclination, that specie payments should continue suspended, and the domestic exchanges should continue deranged as long as possible. The ruin of the country thus becomes its most abundant source of profit. Accordingly, what do we find to have been its course of policy? I have heard it described by several gentlemen from the South and Southwest, some of whom are members of this body. It has gone into that region of the Union with these resurrection notes of the old bank, the reissue of which this bill proposes to prohibit; and, in some States, it has exchanged them, the one-half for the depreciated local currency, and the other half for specie. With this local currency it has purchased cotton, and sent it to England for the purpose of paying its debts there, whilst with the specie it has replenished its vaults at home. In other States it has exchanged these dead notes of the old bank for the notes of the local banks, receiving a large premium on the transaction, and with the latter has purchased cotton on speculation. A general resumption of specie payments would at once put an end to this profitable traffic. It has, then, first violated the charter from Congress by reissuing the notes of the old bank, and then violating the charter from Pennsylvania by speculating in cotton. During the suspension of specie payments, these notes have been the only universal paper circulation throughout the country; and thus, by reissuing them, in defiance of the law, the present bank has been enabled to accumulate extravagant profits.

This charge against the bank of speculating in cotton has never, to my knowledge, been contradicted. We have heard it from the other side of the Atlantic, as well as from the South and Southwest. The Whig press of our country has commended, nay, almost glorified the bank for going into the cotton market, when that article was depressed, and making large purchases, and its friends in England have echoed these notes of praise. Its example has produced a new era in banking. We find that the Southern and Southwestern banks have also become cotton merchants; and, from present appearances, the trade in this great staple of our country is no longer to be conducted by private merchants, but by banking corporations.

Under this system, what will be the fate of your private merchants? This practice must be arrested, or they must all be ruined. The one or the other alternative is inevitable. What private individual can enter the cotton market in competition with the banks of the country? Individual enterprise can accomplish nothing in such a struggle. It would be the spear hurled by the feeble hand of the aged Priam, which scarce reached the buckler of the son of Achilles. The Bank of the United States which, according to the testimony of its president, might have destroyed, by an exertion of its power, almost every bank in the country, could, with much greater ease, destroy any private merchant who might dare to interfere with its speculations. Such a contest would be that of Hercules contending against an infant. It can acquire a monopoly against individual merchants in any branch of mercantile business in which it may engage; and, after having prostrated all competition, it can then regulate the price of any article of commerce according to its pleasure. I do not say that such is either its wish or its intention; but I mean thus to illustrate the vast and dangerous power which it may exercise as a merchant. The East India company monopolized the trade of Asia, but it possessed no banking powers. It could not, therefore, by curtailing or expanding its issues, make money scarce or make money plenty at pleasure, and thereby raise or depress the price of the articles in which it traded. In this respect its power as a merchant was inferior to that now exercised by the Bank of the United States.

How vain, then, I might almost say how ridiculous, is it for people of the South to make the attempt to establish merchants in the southern seaports for the purpose of conducting a direct trade with Europe in cotton and other articles of their production, in opposition to the Bank of the United States and their own local banks. This effort must fail, or the banks must cease to be merchants. I am glad to learn that, at the late Southern convention, this alarming usurpation by the banks of the appropriate business of the merchant has been viewed in its proper light. The time, I trust, is not far distant when they will be confined, by public opinion, to their appropriate sphere. What a fatal error it is for any free people, tempted by present and partial gain, to encourage and foster such institutions in a course which must, if pursued, inevitably crush the merchants of the country who conduct its foreign trade! As a class, these merchants are highly meritorious, and entitled to our support and protection against a power which, if suffered to be exerted, must inevitably destroy them.

Philadelphia is a city devoted to the interests of the bank; but even in that city, if it should undertake to speculate in flour, in coal, or in any other article which is poured into her market from the rich abundance of the State, such conduct would not be submitted to for a moment. The legislature of the State would at once interpose to protect our merchants. Such an attempt would at once break the spell of bank influence. And yet it possesses no more power to deal in southern cotton than it does in Pennsylvania flour. It will remain a banker at home; whilst its mercantile speculations will be confined to the southern and southwestern provinces of its empire.

The reason will now, I think, appear manifest why the Parliament of Great Britain, the Congress of the United States, and the Legislature of Pennsylvania, have so strictly prohibited their banking institutions from dealing in any thing except bills of exchange and gold and silver bullion. If the Bank of England should dare to invade the province of the merchants and manufacturers of that country in a similar manner, the attempt would instantly be put down. Every man acquainted with the history and character of the people of England, knows that such would be the inevitable consequence. And yet this violation of law, on the part of the Bank of the United States, has been lauded in our free Republic.

As I am upon the floor, I shall proceed briefly to discuss the merits of the bill now before the Senate. It proposes to inflict a fine not exceeding ten thousand dollars, or imprisonment not less than one nor more than five years, or both such fine and imprisonment, at the discretion of the court, upon those who shall be convicted under its provisions. Against whom does it denounce these penalties? Against directors, officers, trustees, or agents of any corporation created by Congress, who, after its term of existence is ended, shall reissue the dead notes of the defunct corporation, and push them into the circulation of the country, in violation of its original charter. The bill embraces no person, acts upon no person, interferes with no person, except those whose duty it is, under the charter of the old bank, to redeem and cancel the old notes as they are presented for payment, and who, in violation of this duty, send them again into circulation.

This bill inflicts severe penalties, and, before we pass it, we ought to be entirely satisfied, first, that the guilt of the individuals who shall violate its provisions is sufficiently aggravated to justify the punishment; second, that the law will be politic in itself; and, third, that we possess the constitutional power to enact it.

First, then, as to the nature and aggravation of the offence. The charter of the late Bank of the United States expired, by its own limitation, on the 3d of March, 1836. After that day, it could issue no notes, discount no new paper, and exercise none of the usual functions of a bank. For two years thereafter, until the 3d of March, 1838, it was merely permitted to use its corporate name and capacity “for the purpose of suits for the final settlement and liquidation of the affairs and accounts of the corporation, and for the sale and disposition of their estate, real, personal, and mixed; _but not for any other purpose, or in any other manner, whatsoever_.” Congress had granted the bank no power to make a voluntary assignment of its property to any corporation or any individual. On the contrary, the plain meaning of the charter was, that all the affairs of the institution should be wound up by its own president and directors. It received no authority to delegate this important trust to others; and yet what has it done? On the 2d day of March, 1836, one day before the charter had expired, this very president and these directors assigned all the property and effects of the old corporation to the Pennsylvania Bank of the United States. On this same day, this latter bank accepted the assignment, and agreed to “pay, satisfy and discharge all debts, contracts, and engagements, owing, entered into, or made by this [the old] bank, as the same shall become due and payable, _and fulfil and execute all trusts and obligations whatsoever arising from its transactions, or from any of them_, so that every creditor or rightful claimant shall be fully satisfied.” By its own agreement, it has thus expressly created itself a trustee of the old bank. But this was not necessary to confer upon it that character. By the bare act of accepting the assignment, it became responsible, under the laws of the land, for the performance of all the duties and trusts required by the old charter. Under the circumstances, it cannot make the slightest pretence of want of notice.

Having assumed this responsibility, the duty of the new bank was so plain that it could not have been mistaken. It had a double character to sustain. Under the charter from Pennsylvania, it became a new banking corporation; whilst, under the assignment from the old bank, it became a trustee to wind up the concerns of that institution. These two characters were in their nature separate and distinct, and never ought to have been blended. For each of these purposes it ought to have kept a separate set of books. Above all, as the privilege of circulating bank notes, and thus creating a paper currency, is that function of a bank which most deeply and vitally affects the community, the new bank ought to have canceled or destroyed all the notes of the old bank which it found in its possession on the 4th of March, 1836, and ought to have redeemed the remainder, at its counter, as they were demanded by the holders, and then destroyed them. This obligation no Senator has attempted to doubt, or to deny. But what was the course of the bank? It has grossly violated both the old and the new charter. It at once declared independence of both, and appropriated to itself all the notes of the old bank, not only those which were then still in circulation, but those which had been redeemed before it accepted the assignment, and were then lying dead in its vaults. I have now before me the first monthly statement which was ever made by the bank to the auditor general of Pennsylvania. It is dated on the 2d of April, 1836, and signed J. Cowperthwaite, acting cashier. In this statement the bank charges itself with “notes issued,” $36,620,420.16; whilst in its cash account, along with its specie and the notes of State banks, it credits itself with “notes of the Bank of the United States and offices,” on hand, $16,794,713.71. It thus seized these dead notes to the amount of $16,794,713.71, and transferred them into cash; whilst the difference between those on hand and those issued, equal to $19,854,706.45, was the circulation which the new bank boasted it had inherited from the old. It thus, in an instant, appropriated to itself, and adopted as its own circulation, all the notes and all the illegal branch drafts of the old bank which were then in existence. Its boldness was equal to its utter disregard of law. In this first return, it not only proclaimed to the legislature and people of Pennsylvania that it had disregarded its trust as assignee of the old bank, by seizing upon the whole of the old circulation and converting it to its own use, but that it had violated one of the fundamental provisions of its new charter.

In Pennsylvania we have, for many years past, deemed it wise to increase the specie basis of our paper circulation. We know that, under the universal law of currency, small notes and gold and silver coin of the same denomination cannot circulate together. The one will expel the other. Accordingly, it is now long since we prohibited our banks from issuing notes of a less denomination than five dollars. The legislature which rechartered the Bank of the United States, deemed it wise to proceed one step further in regard to this mammoth institution; and in that opinion I entirely concur. Accordingly, by the sixth fundamental article of its charter, they declare that “the notes and bills which shall be issued by order of said corporation, or under its authority, shall be binding upon it; and those made payable to order shall be assignable by endorsement, _but none shall be issued of a denomination less than ten dollars_.”

Now, it is well known to every Senator within the sound of my voice, that a large proportion of these resurrection notes, as they have been aptly called, which have been issued and reissued by order of the new bank, are of the denomination of five dollars. Here, then, is a plain, palpable violation, not only of the spirit, but of the very letter of its charter. The Senate will perceive that the bank, as if to meet the very case, is not merely prohibited from issuing its own notes, signed by its own president and cashier, of a denomination less than ten dollars, but this prohibition is extended to the notes or bills which shall be issued by its order, or under its authority. If I should even be mistaken in this construction of the law, and I believe I am not, it would only follow that its conduct has not amounted to a legal forfeiture of its charter. In both cases the violation of the spirit of its charter, and the contravention of the wise policy of the legislature, are equally glaring. So entirely did the bank make these dead notes its own peculiar circulation, that until July last, in its monthly returns to the Auditor General of Pennsylvania, the new and the old notes are blended together, without any distinction. In that return we were, for the first time, officially informed that the bank had ever issued any notes of its own.

And here an incident occurs to me which will be an additional proof how lawless is this bank, whenever obedience to its charter interferes in the least degree with its policy. By the tenth fundamental article of that charter, it is required to “make to the Auditor General monthly returns of its condition, showing the details of its operations according to the forms of the returns the Bank of the United States now makes to the Secretary of the Treasury of the United States, or according to such form as may be established by law.” From no idle curiosity, but from a desire to ascertain, as far as possible, the condition of the banks of the country, and the amount of their circulation, I requested the Auditor General, during the late special session of Congress in September, to send me the return of the bank for that month. In answer, he informed me, under date of the 22d of September, that the bank had not made any return to his office since the 15th of the preceding May. Thus, from the date of the suspension of specie payments until some time after the 22d of September last, how long I do not know, a period during which the public mind was most anxious on the subject, the bank put this provision of its charter at defiance. Whether it thus omitted its duty because at the date of the suspension of specie payments it had less than a million and a half of specie in its vaults, I shall not pretend to determine. If this were the reason, I have no doubt that it sent to the Auditor General all the intermediate monthly returns on the 2d of October, 1837, because at that period it had increased its gold and silver to more than three millions of dollars.

In order to illustrate the enormity of the offence now proposed to be punished, Senators have instituted several comparisons. No case which they have imagined equals the offence as it actually exists. Would it not, says one gentleman, be a flagrant breach of trust for an executor, entrusted with the settlement of his testator’s estate, to reissue, and again put in circulation for his own benefit, the bills of exchange or promissory notes which he had found among the papers of the deceased, and which had been paid and extinguished in his lifetime? I answer, that it would. But, in that case, the imposition upon the community would necessarily be limited, whilst the means of detection would be ample. The same may be observed in regard to the case of the trustee, which has been suggested. What comparison do these cases bear to that of the conduct of the bank? The amount of its reissues of these dead notes of its testator is many millions. Their circulation is coextensive with the Union, and there is no possible means of detection. No man who receives this paper can tell whether it belongs to that class which the new bank originally found dead in its vaults, or to that which it has since redeemed and reissued, in violation of law; or to that which has remained circulating _lawfully_ in the community, and has never been redeemed since the old charter expired. There is no earmark upon these notes. It is impossible to distinguish those which have been illegally reissued from the remainder.

I can imagine but one case which would present any thing like a parallel to the conduct of the bank. In October last, we authorized the issue of $10,000,000 of Treasury notes, and directed that when they were received in payment of the public dues, they should not be reissued, but be canceled. Now, suppose the Secretary of the Treasury had happened to be the president of a bank in this District, and, in that character, had reissued these dead treasury notes, which he ought to have canceled, and again put them into circulation, in violation of the law, then a case would exist which might be compared with that now before the Senate. If such a case should ever occur, would not the Secretary at once be impeached; and is there a Senator upon this floor, who would not pronounce him guilty? The pecuniary injury to the United States might be greater in the supposed than in the actual case; but the degree of moral guilt would be the same.

Whether it be politic to pass this law is a more doubtful question. Judging from past experience, the bank may openly violate its provisions with impunity. It can easily evade them by sending packages of these old notes to the South and Southwest, by its agents, there to be reissued by banks or individuals in its confidence. There is one fact, however, from which I am encouraged to hope that this law may prove effectual. No man on this floor has attempted to justify, or even to palliate, the conduct of the bank. Its best friends have not dared to utter a single word in its defence against this charge. The moral influence of their silence, and the open condemnation of its conduct by some of them, may induce the bank to obey the law.

I now approach the question—do Congress possess the power under the Constitution to pass this bill? In other words, have we power to restrain the trustees of our own bank from reissuing the old notes of that institution which have already been redeemed and ought to be destroyed? Can there be a doubt of the existence of this power? The bare statement of the question seems to me sufficient to remove every difficulty. It is almost too plain for argument. I should be glad if any gentleman would even prove this power to be doubtful. In that event I should refrain from its exercise. I am a State rights man, and in favor of a strict construction of the Constitution. The older I grow, and the more experience I acquire, the more deeply rooted does this doctrine become in my mind. I consider a strict construction of the Constitution necessary not only to the harmony which ought to exist between the Federal and State Governments, but to the perpetuation of the Union. I shall exercise no power which I do not consider clear. I call upon gentlemen, therefore, to break their determined silence upon this subject, and convince me even that the existence of the power is doubtful. If they do, I pledge myself to vote against the passage of the bill.

If this power could only be maintained by some of the arguments advanced by the friends of the bill, in the early part of this discussion, it never should receive my vote. Principles were then avowed scarcely less dangerous and unsound than the principle on which the Senator from Vermont (Mr. Prentiss) insists that the friends of the bill must claim this power. He contends that it does not exist at all, unless it be under that construction of the Constitution advocated by his friend from Massachusetts (Mr. Webster), which would give to Congress power over the whole paper currency of the country under the coining and commercial powers of the Constitution. The Senator from Connecticut (Mr. Niles) was the first in this debate who presented in bold relief the principle on which this bill can securely rest.

Neither shall I dodge this question, as some Senators have done, by taking shelter under the pretext that it is a question for the judiciary to decide, whether the general language of the bill be applicable to the officers of the Bank of the United States under the Pennsylvania charter. We all know that it was intended to embrace them. Indeed, it was their conduct, and that alone, which called this bill into existence. It is true that the provisions of the bill extend to all corporations created by Congress; but it is equally certain, that had it not been intended to apply to the Bank of the United States, it would have been confined in express terms to the District of Columbia, where alone corporations now exist under the authority of Congress. Away with all such subterfuges! I will have none of them.

Suppose, sir, that at any time within the period of two years thus allowed by the charter to the president and directors of the bank to wind up its affairs, these officers, created under your own authority, had attempted to throw thirty millions of dollars of their dead paper again into circulation, would you have had no power to pass a law to prevent and to punish such an atrocious fraud? Would you have been compelled to look on and patiently submit to such a violation of the charter which you had granted? Have you created an institution, and expressly limited its term of existence, which you cannot destroy after that term has expired? This would indeed be a political Hydra which must exist forever, without any Hercules to destroy it. If you possess no power to restrain the circulation of the notes of the old bank, they may continue to circulate forever in defiance of the power which called them into existence. You have created that which you have no power to destroy, although the law which gave it birth limited the term of its existence. Will any Senator contend that during these two years allowed by the charter for winding up the concerns of the bank, we possessed no power to restrain its president and directors from reissuing these old notes? There is no man on this floor bold enough to advance such a doctrine. This point being conceded, the power to pass the present bill follows as a necessary consequence.

If the president and directors of the old bank could not evade our authority, the next question is, whether, by assigning the property of the corporation to a trustee the day before the charter expired, and delivering up to him the old notes which ought to have been canceled, they were able to cut this trustee loose from the obligations which had been imposed upon them by the charter, and from the authority of Congress. Vain and impotent, indeed, would this Government be, if its authority could be set at nought by such a shallow contrivance. No, sir, the fountain cannot ascend beyond its source. The assignee in such a case is not released from any obligation which the assignor assumed by accepting the original charter. In regard to Congress, the trustee stands in the same situation with the president and directors of the old bank. We have the same power to compel him to wind up the concerns of the bank, according to the charter, that we might have exercised against those from whom he accepted the assignment. The question is too plain for argument.

The present case is still stronger than the one which I have presented. It is an assignment by the old Bank of the United States, not to strangers, not to third persons, but to themselves, in the new character conferred upon them by the legislature of Pennsylvania. This new charter expressly incorporates all the stockholders of the old bank, except the United States, so that the individuals composing both corporations were identical. For the purpose of effecting this transfer from themselves to themselves, they got up the machinery of one president and one board of directors for the old bank, and another president and another board of directors for the new bank. What kind of answer, then, would it be to Congress for them to say: True, we accepted a charter under your authority, by which we were bound to reissue none of our old notes after the 3d March, 1836, but we have since assumed a new character; and under our old character, we have transferred the bank which you created, to ourselves in our new character; and we have thus released ourselves from all our old obligations, and you have no constitutional power to enforce them against us? No sir, no sir; we have the power, and it is our duty, to compel the president and directors of the bank, which we established, or their assignees, to close its concerns; and this power will continue until the duty shall be finally accomplished. The one power is a necessary implication from the other. If this duty has not been performed within the two years which we have allowed for its fulfilment, our power depends not upon any such limitation, but upon the fact whether the concerns of the bank have been actually closed. If this were not the case, then all the affairs of the bank left unfinished at the end of these two years would be outlawed. This limitation was intended not to abridge the power of Congress, but to hasten the action of the president and directors in winding up the concerns of the bank. At this very session, and since the two years have expired, Congress has passed an act, without a shadow of opposition from any quarter, giving the president and directors of the old bank authority to prosecute and defend existing suits. I should be glad to see any Senator rise in his place, and make even a plausible argument in opposition to these plain and almost self-evident positions.

In this brief argument, I have not attempted to derive any power from the fact that the United States were proprietors of one-fifth of the stock of the old bank, and that they might be rendered responsible, either legally or equitably, for the eventual redemption of these dead notes. I disclaim any such source of power. To be a proprietor is one thing, and to be a sovereign is another. The mere fact that we owned stock can confer no power upon us, which we would not have possessed, had we never been interested to the amount of a dollar. We should have the same power to wind up a bank emanating from our sovereign authority in the one case as in the other. We possess the same power to close the concerns of all the banks in the District of Columbia after their charters shall have expired, although we are not proprietors of any of their stock, which we have to wind up the Bank of the United States, in which we were so deeply interested.

I need scarcely observe that I do not contend for any power to punish citizens of the United States, or even the officers of banking institutions, except such of them only as the trustees of the bank created by ourselves, for issuing these dead notes. We intend to punish the trustees under our own law, and them alone, for the violation of that law. These notes may circulate from hand to hand without rendering those who receive or those who pay them obnoxious to any punishment. Even if we possessed the power, it would be highly unjust to attempt its exercise. As I observed before, these notes have no earmarks, and no man can tell whether any one of them has been illegally reissued by the bank since the 3d March, 1836, or whether it was issued before that date, and has continued legally to circulate in the community ever since.

I repeat, I should be glad to see any Senator, and especially any one who believes that Congress possesses the constitutional power to charter a Bank of the United States, rise in his place, and make even a plausible argument in opposition to the plain and almost self-evident positions which I have taken in support of the power to pass this bill. Those Senators who doubt or deny our power to create such a bank are placed in a different situation, because their vote in favor of this bill might at first view seem, by implication, to concede that power. This objection does not appear to me to be sound. That question cannot be fairly raised by this bill. Whether the charter of the late bank was constitutional is no longer a fair subject of consideration. It was adopted by Congress, approved by the President, and afterwards pronounced to be constitutional by the highest judicial tribunal of the land. It thus received every sanction necessary to make it binding on the people of the United States. The question was thus settled beyond the control of any individual, and it was the duty of every good citizen to submit. Under every government there must be a time when such controversies shall cease; and you might now as well attempt to exclude Louisiana from the Union, because you may believe her admission was unconstitutional, as to act upon the principle, in the present case, that Congress had no power to charter the late bank. No man on this floor had ever avowed that he would vote to repeal the charter of the late bank, during the twenty years of its existence, because he might have thought it was originally unconstitutional. During this period all were obliged to submit. Under such circumstances, it would be carrying constitutional scruples very far, indeed, for any gentleman to contend that, although the bank has existed under the sanction of a law which we were all bound to obey, we cannot now execute that law and close its concerns, because as individuals we may have deemed it to be originally unconstitutional. If it had been so, the obligation upon us would only be the stronger to wind it up finally, and thus terminate its existence.

I most cheerfully admit that if an attempt should ever be made to charter another bank, the question of constitutional power would then again be referred to each individual member of Congress, to be decided according to the dictates of his own judgment and his own conscience.

Before I take my seat, I intend to make some remarks on the causes of the suspension of specie payments by the banks of the country, and the causes equally powerful which must, and that ere long, compel a resumption.