Chapter XV (2)

The late manifesto issued by the present Bank of the United States displays, upon its face, that it has inherited from the old bank an unconquerable disposition to interfere in the politics of the country. This has been its curse, its original sin, to which it owes all its calamities and all its misfortunes. It has not yet learned wisdom from its severe experience. Would that it might, and confine itself to its appropriate sphere! As a citizen of Pennsylvania, I most ardently and devoutly express this wish. It has now set itself up, as the primary power, against the resumption of specie payments, and has attempted to enlist in the same cause all the other banks of the country. Its language to them is, that “the Bank of the United States makes common cause with the other banks.” And again: “They (the banks) are now safe and strong, and they should not venture beyond their entrenchments, while the enemy is in the plain before them.” “The American banks should do, in short, what the American army did at New Orleans, stand fast behind their cotton bales, until the enemy has left the country.”

Thus whilst every eye and every heart was directed to the banks, expecting anxiously from them a speedy resumption of specie payments, this grand regulator of the currency has proclaimed to the country that all its vast power will be exerted to prevent the accomplishment of our wishes.

The bank does not even attempt to conceal the fact that, in pursuing this course, it has been actuated by political hostility against the present administration. It has been boldly avowed that “if the banks resume, and are able, by sacrificing the community, to continue for a few months, _it will be conclusively employed at the next elections to show that the schemes of the executive are not as destructive as they will prove hereafter_.” In plain language, the banks must not resume before the next elections; they must not open their vaults, pay their honest debts, and thus redeem the country from the curse of an irredeemable paper currency; because, if they should, this may operate in favor of the present administration, and place its opponents in a minority. And such is the conduct of the bank whilst it vaunts its own ability to resume immediately.

The bank proceeds still further, and complains that “bank notes are proscribed not merely from the land offices, but from all payments of every description to the Government.” I would ask, has any Senator upon this floor, has any statesman of any party in the country, ever raised his voice in favor of the receipt by the Government of irredeemable bank paper? I beg their pardon; two Senators have proposed such a measure, [Messrs. Preston and Clay]; but I will do them the justice to say, that although I considered their proposition most unwise and impolitic, and resisted it as such at the time, yet they intended by this means to enable the banks the sooner to resume specie payments.

Mr. Preston. It was exclusively limited to that consideration.

Mr. Buchanan. Although the proposition was limited to the first of August, the Senators themselves upon reflection, thought it so improper that they abandoned it, and we have heard nothing of it since.

What would have been the condition of the country, at the present moment, had we received irredeemable bank notes in payments of the public dues? The banks, by our conduct, would have been encouraged to increase their discounts and expand their issues, and we should have gone from bad to worse, until, at this moment, we should have had no prospect of the resumption of specie payments. Mr. Cheves has informed us that if the Government had not stood firm in 1819 against the receipt of irredeemable notes, the banks would at that period have suspended. Much more necessary is it that we should now maintain the same ground, in order to secure a resumption. Had we pursued any other course, it is true we should have but one currency for the Government and the people; but it would have been currency of irredeemable bank rags, without the hope of a better. And yet the Bank of the United States complains that the Government does not receive such paper. In order to have done so, we must have repealed the existing laws upon the subject; and who has ventured to propose any such measure?

The Bank of the United States has succeeded, at the late bank convention in New York, in keeping its forces behind their cotton bales. The banks of only two States in the Union have voted against the resolution to suspend the resumption of specie payments until the first day of January next. These were New York and Mississippi; and whether the latter voted thus because their banks are ready now to resume, or desired to postpone resumption until a still more distant day, I shall not pretend to determine. After this display of power, no one will question the ability of the bank to keep its forces behind their entrenchments, unless they should be driven into the plain by the resistless power of public opinion.

Several weeks ago I attempted to imitate the illustrious examples which had been set before me on this floor, and became a political prophet. I then predicted that, before the close of the present year, commerce and manufactures would revive and flourish, and the country would be restored to its former prosperity. The signs of the times have already confirmed the truth of this prophecy. Encouraged by past experience, I shall venture to make another prediction: There is not a sound and solvent bank in any of the Atlantic States of this Union, including the Bank of the United States, which will not have resumed specie payments long before the first of January. All the opposition of the banks themselves cannot prevent this result. In the very nature of things it must come to pass. The power of public opinion is yet still greater in this country than that of the banks. The Bank of the United States will not be able to keep its forces behind their cotton bags until so late a period.

It is now too late in the day for us any longer to doubt what was the cause of the suspension of specie payments. That question has been settled on the other side as well as on this side of the Atlantic. Abundance of light has been shed upon this subject, and no two sound-judging men, at all acquainted with the facts, can arrive at different conclusions. It has already become history. And yet the bank, in its manifesto, has not once alluded to this cause. What was it? In the perpetual fluctuations which must ever be produced by our present banking system, unless it should be regulated by State legislation, of which I now almost despair, it was expanded in the commencement of the year 1837 almost to the point of explosion. The bubble is created, it expands, and reflects the most brilliant colors. Its admirers gaze upon it with hope and ecstasy, when, suddenly, it bursts, and leaves them in ruin and despair. Such has been the history of the past, and such will be that of the future. This expansion had produced, as it must ever produce, enormous speculation and over-trading. The commercial debt which we then owed to England for foreign merchandise was immense. We must have suffered the fatal collapse sooner or later, but a circumstance then occurred in England which at once produced the explosion. It was the spark applied to the magazine of gunpowder.

A similar state of expansion then existed in England. They were threatened with similar evils from extravagant bank credits, and their inevitable consequence—enormous speculation and over-trading. The Bank of England had in vain attempted to control the joint-stock banks, and confine them within reasonable limits. She at last became alarmed for her own safety. In the beginning of 1837 her stock of specie was reduced to about four millions of pounds sterling, or one-sixth of her circulation and deposits. This was not more than one-half of the proportion which, it is believed, she ought to have in order to render her secure. The state of the foreign exchanges was gradually withdrawing the remaining bullion from her vaults. At this crisis, under the influence of a panic, she withdrew her credits from the American houses in England, and ruined them. The price of cotton, in consequence, suddenly fell from nineteen and twenty cents to seven and eight cents per pound; and thus, according to the best and most discreet estimate which I have seen, we lost at least thirty million of dollars. The sum was thus, as it were in a single moment, abstracted from our means of paying the immense commercial balance against us. At the close of this disastrous operation, that balance was estimated at forty millions of dollars. What was the immediate consequence? A drain of specie then commenced from our banks for exportation, in order to pay this debt, and they were thus compelled to suspend or be ruined. Another circumstance existed to increase our embarrassments. Our merchants had drawn heavy bills upon England, predicated upon the cotton which they had shipped there, expecting to receive the old prices. In consequence of the sudden fall of prices, these bills were dishonored, and came back protested. Thus many of our largest mercantile houses were ruined.

The catastrophe proceeded from the same causes, and was similar in both countries, except that in England the banks were not compelled to suspend specie payments. The revenue of both has been insufficient to meet the current expenses of the Government, and each will be obliged to borrow nearly the same sum to supply the deficiency.

This is now history, which can neither be changed nor perverted. On both sides of the Atlantic all men of business and practical statesmen have come to the same conclusion. Away, then, with your Specie Circular, your mismanagement of the deposits, and your clamor raised by the executive against bank notes, as the causes of the suspension of specie payments. The bank calculates too much upon the political credulity of the people, when, at this late day, after the subject is perfectly understood, it attempts to palm off upon them such exploded reasons for the suspension. A convulsion which has shaken the commercial world to its centre, and has extended over three-quarters of the globe, could never spring from such trivial causes.

If the executive has been carrying on a war against the credit system of the country, and in favor of an exclusive metallic currency for the people of the United States, I am ignorant of the fact. I have never even suspected it. I believe this is a mere phantom which has been conjured up to alarm the fears of the timid. If the President ever should wage any such war, I shall not fight under his banner. The only pretext upon which this charge has been founded is, that he and his political friends desire to separate the business of the Treasury from that of the banks, not to render them hostile to each other. Until that propitious day shall arrive, we shall be forever agitated by the connection of the currency with our miserable party politics. Political panics, political pressures, charges against the Government for exercising an improper influence over the banks, and charges against the banks for interfering with the politics of the country; all, all which have kept us in a state of constant agitation for the last seven years will continue to exist, and will be brought into action upon every successive election for President and Vice President. We shall thus continue in a state of perpetual commotion; and the great interests of the country will be sacrificed. Let the Treasury and the banks part in peace, and whilst they are mutually independent, let them wage no war against each other; and I solemnly believe it would be the greatest blessing which could be conferred upon both parties. To this extent, I should go with the President if I had the power; but when I determine to obey instructions, I shall do it honestly and fairly. I shall, therefore, say no more on this subject.

It is true that at the special session I did endeavor to prove that the present banking system, under its existing regulations, was one of the very worst which the art of man could devise. Under it, ruinous expansions and revulsions must continue to succeed each other at stated periods, and many of the best and most enterprising men of the country must become its victims. I then expressed a hope, not unmingled with fear, that the State legislatures at their next session might impose wholesome restrictions upon their banking institutions—restrictions which would prove equally advantageous to the banks and the people. These legislatures have all now risen without prescribing any such regulations, and we are destined again and again to pass through the same vicissitudes which we have so often already witnessed.

The Whigs have always been exceedingly unlucky in regard to the time of these periodical revulsions, occasioned by excessive banking. They have either come too soon or too late to answer their political purposes. Had the suspension of specie payments occurred one year sooner than it did, the hero of Tippecanoe might have been the successor of the hero of New Orleans. But the revulsion came again at the wrong time; and long before the Presidential election of 1840, the country will again be prosperous. The effects of the suspension will have passed away, like the baseless fabric of a vision, without leaving a trace behind. Our late experience has been so severe, that the next bank explosion may possibly be postponed until the year 1844. Whom it may then benefit I know not, nor do I much care. One thing is certain, that these revulsions can never do anything but injury to the party in power. It is the nature of man to accuse the Government, or anything else, except his own misconduct, for his misfortunes.

I now approach a much more agreeable part of my subject; and that is, to prove that the banks must and will speedily resume specie payments. I shall attempt to establish that now is the very time, the accepted time, the best time, and, within the period of a few months, the only time, when they can resume, without the least embarrassment. Some of the causes which will speedily effect this happy result, I shall enumerate.

In the first place, I shall do the banks of the country generally the justice to say, that since the suspension of specie payments they have curtailed their circulation and their loans to a great extent, and have done everything they reasonably could to atone for their past extravagance. The banks of Pennsylvania, including that of the United States, during a period of ten months, commencing in January, and ending in November, 1837, had reduced their circulation from twenty-five millions and a quarter to almost seventeen millions, and their discounts from eighty-six millions and a half to nearly seventy-one millions, whilst, during the same period, they had increased their specie from five millions and three-quarters to upwards of seven millions. From all I can learn, they have been since progressing at nearly the same rate, though I have not seen their official returns. The banks of other States have been generally pursuing the same course. The consequence is, that the confidence of the country in their banking institutions has been, in a great degree, restored. I feel convinced that if they should resume specie payments to-morrow, in the interior of Pennsylvania, at least, there would be no run upon them, except for as much silver change as might be required to supply the place of the miserable trash now in circulation under the denomination of shinplasters. Besides they would soon receive on deposit a greater amount from those who have been hoarding specie, under the belief that it would be safer at home than in the banks, and in the hope that they might hereafter use it to great advantage. No foreign demand now exists to drain the banks of their specie; on the contrary, the reflux tide has set in strongly, and is now wafting immense sums of gold and silver to our shores.

But, sir, another powerful cause of resumption exists. Our exports of cotton have, many months ago, paid our foreign commercial debt. Whilst that has been extinguished, the disastrous condition of our currency has reduced almost to nothing the orders of our merchants for foreign goods. Our imports are of small comparative value. In the mean time, our cotton crop of 1837 has been regularly and steadily seeking its accustomed markets in England and France. We have sold much, and bought little, and the balance in our favor is nearly all returning in specie. From the last English accounts which I have seen, the exports of specie from that country to this were still on the increase; and now, by almost every vessel from abroad which reaches our shores, we are receiving gold and silver. Specie, by the latest advices, was the most profitable means of remittance from England to the United States, yielding a profit of four per cent. When Congress met in September last, the rate of exchange against us on England was upwards of twenty per cent. It is now reduced to six per cent., which is three or four per cent. below the specie par. A great revolution in so short a period! It proves how vast are the resources of our country.

This great revolution has been effected by means of our cotton. The English manufacturers must have this article, or be ruined. This necessity has reversed the ordinary laws of trade, and the foreign market for it has remained firm and steady, although we bring home scarcely any equivalent, except in specie.

If a large portion of our cotton crop still remains unsold, so much the better. The golden tide will continue so much the longer to flow into our country. It is the policy of our banks to take it at the flood, and go on to fortune. If the banks do but seize the present golden opportunity, they will have completely fortified themselves before a reverse can come. This state of things cannot always continue. A reaction must occur. If the banks wait for the ebbing tide, and postpone a resumption until our merchants shall make heavy purchases abroad, and specie shall begin to be exported, they will then encounter difficulties which they need not now dread. I again repeat that this moment is the accepted time for the banks to resume.

But it is not only the ordinary laws of trade which are now bringing vast amounts of specie to our country. Two other causes are operating powerfully to produce this result.

The conduct of the Bank of England, in arresting its credits to the American houses, which was the immediate cause of the suspension of specie payments, has been loudly condemned by men of all parties there. This measure has done that country nearly as much injury as it has done this, because England must always suffer from every derangement in our currency. The Bank is now conscious of this truth, and is retracing her steps. She has increased her stock of bullion between February, 1837, and March, 1838, from £4,032,090 to upwards of ten millions sterling. She is now strong, and it is her interest, as well as that of the people of England, that she should use this strength in assisting us to resume specie payments. Accordingly, she has, through the agency of one of our most intelligent and enterprising citizens, made an arrangement to furnish the banks of New York one million sterling in specie, to aid them in resuming payments in gold and silver. This million is now arriving, by instalments, in the United States. In resuming at the present moment, our banks have everything to hope, and nothing to fear, from England.

Again: The spirit of internal improvement is abroad throughout our land. States and private companies have loans to make for the purpose of erecting their public works. Money is now plenty in England, and is everywhere seeking an investment. The derangement in the business of that country has thrown capital out of employment. The rate of interest has been reduced to three and three and a half per cent. Their capitalists are anxious to make secure investments in loans to our different State governments, and incorporated companies, at a higher rate of interest than they can obtain at home. These loans are now being disposed of in England to a very large amount; and the greater proportion of their proceeds must return in specie to this country. Everything is propitious to an immediate resumption by our banks.

Will the Bank of the United States resume? I confess I do not doubt the fact. She has made a false movement, and it is the great prerogative of strength to acknowledge and retrieve an error. Her late manifesto against the resumption of specie payments has not found a single advocate on this floor. It has struck dumb all her friends. But yesterday she might have stood against the world. To-day there is none so poor as to do her reverence. Even those who must politically suffer by the resumption, because “it will be conclusively employed at the next elections, to show that the schemes of the executive are not so destructive as they will prove hereafter,” have not dared to break a lance in her defence. This was not wont to be the case in days of yore, for hitherto her champions have been always ready to do battle in her cause. Notwithstanding all which has been said upon the subject, I am not one of those who believe that the Bank of the United States is not able to resume. Although the statement of her condition, as recently published, is not very flattering, yet her resources are vast. She is able if she were willing. Of this I cannot entertain a doubt.

Again: Will not the bank take compassion on the good city of Philadelphia, which has ever been devoted to its interest? Boston has been called the Athens of America; New York, the great Commercial Emporium; and Baltimore, the Monumental City; whilst Philadelphia has been distinguished by the name of the City of the Bank or marble palace; and well have her citizens earned this distinction by their loyalty. Will the bank now consent to see her commerce and trade languish, and her star wane before that of New York, rather than retrace its steps and resume specie payments? No, never. Forbid it, gratitude!

That this must be the effect, who can doubt? Merchants who come from a distance to purchase goods with money in hand will go where they can buy the cheapest; and goods at a specie standard must always be cheaper than in a depreciated currency. Those who have produce to sell, especially if the sale is to be made upon credit, will select that market where they will receive its price in a sound currency. Already the prospect of resumption in New York has made Philadelphia bank notes worth less by five per cent. than those of that city. What will this difference become when the one city shall have resumed, and the circulation of the other shall be irredeemable paper? Who that has money to remit or deposit will send it to Philadelphia, to be returned in notes depreciated to an extent which cannot be foreseen, when they can send it to New York with a perfect confidence that it will be returned to them according to the specie standard? Under such a state of things, the trade of New York must increase and flourish at the expense of that of Philadelphia. I have not time, at present, to enter into further particulars on this branch of the subject.

The people of Pennsylvania have submitted patiently to the suspension of specie payments by their banks. They have bowed to the necessity which existed, and have treated them with kindness and generosity. The Bank of the United States has proclaimed its ability to resume, and our other banks are in the same situation. The necessity for a further suspension no longer exists. Pay your honest debts when you are able, is a maxim dear to the people of Pennsylvania. This duty has now become a question of morality, far transcending any question of policy. If these privileged corporations now any longer refuse to pay their honest debts, either for the sake of their own advantage, or from a desire to elevate one political party and depress another, the indignation of honest men, of all parties, will be roused against them. There will be a burst of popular feeling from our mountains and our valleys, which they will be compelled to respect. Thank God! public opinion in the interior of Pennsylvania is yet stronger than the money power. Our people will never submit to the degradation that their banks shall furnish them no currency but that of irredeemable paper; whilst, throughout the State of New York, the banks shall have resumed specie payments. Nothing could be more wounding to my own pride, as a Pennsylvanian.

If our banks should hold out, under the command of their great leader, until the first day of January next, many of them will never be able to resume. The public confidence, which their conduct since the suspension has hitherto inspired, will long ere that distant day cease to exist. No run would now be made on them in case they resume; but if they are forced into the measure by public opinion, after resisting as long as they can, the days of many of them will then be numbered. Honesty, duty, policy, all conspire to dictate to them a speedy resumption.

In conclusion, permit me to remark, that the people of the United States have abundant cause for the deepest gratitude towards that great and glorious man now in retirement for preventing the recharter of the Bank of the United States. He is emphatically the man of the age, and has left a deeper and more enduring impress upon it than any individual of our country. Still, in regard to the bank, he performed but half his work. For its completion we are indebted to the president of the bank. Had the bank confined itself, after it accepted the charter from Pennsylvania, to its mere banking and financial operations—had it exerted its power to regulate the domestic exchanges of the country—and, above all, had it taken the lead in the resumption of specie payments, a new bank, Phœnix-like, might have arisen from the ashes of the old. That danger, from present appearances, has now passed away. The open defiance of Congress by the bank—the laws of the country over and over again violated—its repeated attempts to interfere in the party politics of the day—all, all have taught the people the danger of such a vast moneyed corporation. Mr. Biddle has finished the work which General Jackson only commenced.

Not one particle of personal hostility towards that gentleman has been mingled in my discussion of the question. On the contrary, as a private gentleman, I respect him; and my personal intercourse with him, though not frequent, has been of the most agreeable character. I am always ready to do justice to his great and varied talents. I have spoken of the public conduct of the bank over which he presides with the freedom and boldness which I shall always exercise in the performance of my public duties. It is the president of the bank, not the man, that I have assailed. It is the nature of the institution over which he presides that has made him what he is. Like all other men, he must yield to his destiny. The possession of such vast and unlimited power, continued for a long period of years, would have turned the head of almost any other man, and have driven him to as great excesses.

In vain you may talk to me about paper restrictions in the charter of a bank of sufficient magnitude to be able to crush the other banks of the country. When did a vast moneyed monopoly ever regard the law, if any great interest of its own stood in the way? It will then violate its charter, and its own power will secure it impunity. It well knows that in its destruction the ruin of hundreds and thousands would be involved, and therefore it can do almost what it pleases. The history of the bank for several years past has been one continued history of violated laws, and of attempts to interfere in the politics of the country. Create another bank, and place any other man at its head, and the result will be the same. Such an institution will always hereafter prove too strong for the Government; because we cannot again expect to see, at least in our day, another Andrew Jackson in the Presidential chair. On the other hand, should such a bank, wielding the moneyed power of the country, form an alliance with the political power, and that is the natural position of the parties, their combined influence would govern the Union, and liberty might become an empty name.

MR. BUCHANAN’S REPLY TO MR. CLAY, ON THE SAME DAY.

Mr. Buchanan said he had never enjoyed many triumphs, and therefore he prized the more highly the one which he had won this day. He had forced the honorable Senator from Kentucky [Mr. Clay] to break that determined silence which had hitherto sealed his lips on the subject of this bill. Thus, said Mr. B., I have adorned my brow with a solitary sprig of laurel. Not one word was he to utter upon the present occasion. This he had announced publicly.

[Here Mr. Clay dissented.]

Mr. Buchanan. I thought he had announced the other day his determination not to debate the question, and stated this as the reason why he propounded to the Senator from New Jersey [Mr. Wall] the question whether, in his opinion, John Brockenbrough and Albert Gallatin could be constitutionally punished by Congress for re-issuing the old notes of the Bank of the United States.

[Mr. Clay again explained.]

Well, said Mr. Buchanan, the Senator did intend to address the Senate on this subject, and the only sprig of laurel which I ever expected to win from him has already withered. Yet still there was an evident reluctance on his part, which all must have observed, to enter into this contest. The Senator from Vermont [Mr. Prentiss] had made an able constitutional argument in opposition to the bill. With the exception of that gentleman, and the Senator from South Carolina (Mr. Preston), a profound silence had reigned on this (the Whig) side of the house. The question had been propounded by the Vice President, and the vote was about to be taken, when I rose and addressed the Senate. Immediately after I had taken my seat, the Senator from Kentucky sprang to his feet, and made one of his best speeches, for it belongs to the character of his mind to make the ablest efforts with the least preparation. I will venture to say he had not intended to make that speech when he entered the Senate chamber this morning.

[Mr. Clay admitted this to be the fact.]

Then, said Mr. Buchanan, I have succeeded, and my sprig of laurel is again green.

The gentleman says I may hang Nick Biddle, if I please; but I please to do no such thing. I would be sorry to subject him even to the punishment of imprisonment denounced by this bill; and if he should ever be convicted under its provisions, I hope the court may content itself with the infliction of a mere pecuniary fine. Hang Nick Biddle, indeed! I wish to keep him for the service of the Whig party, should they ever come into power. The Senator from South Carolina [Mr. Preston] had said, at the extra session, that Mr. Biddle, if appointed Secretary of the Treasury, would, in thirty or sixty days, I forget which, heal all the disorders in the currency, and remove all the financial embarrassments of the Government. His appointment would prove a sovereign panacea for all existing evils. Now I go for this administration both from principle and inclination, and shall support the re-election of the present President; but if I were a Whig, the Senator from Kentucky would be my first choice. I should, therefore, be very sorry to deprive him of the services of Mr. Biddle, who will make, in the opinion of the Senator’s friend from South Carolina, the very best Secretary of the Treasury in the whole country.

The Senator from Kentucky asks me why I do not defend Mr. Biddle, a distinguished citizen of my own State. My answer is at hand. I cannot defend his conduct as president of the bank, because I believe it to be wholly indefensible; and he has been attacked in no other character. I should have been proud and happy to undertake this task, could I have performed it consistently with my conscience. But why does the Senator propound such a question to me? I confidently expected Mr. Biddle would have been defended by a much more eloquent tongue. I defend him! when the eloquent gentlemen all around me are his own peculiar friends; and yet, strange to tell, not one of them has attempted to justify his conduct. “But yesterday he might have stood against the world.” “He has fallen, fallen from his high estate.” Whence this ominous silence? I wished to hear him defended, if it could be done, by gentlemen of his own political party, who have never hitherto shrunk from such a responsibility.

The Senator asserts that the Bank of the United States is no longer in existence. But are not the president, directors, and officers, the same that they were under the old charter? Has it not branch banks in at least two States—Louisiana and Georgia—and branch agencies scattered over the rest of the Union? And to render its continued existence still more palpable, has it not seized all the notes of the old bank, good, bad, and indifferent, and converted them to its own use? Why, sir, according to its very last return, it has but little more than three hundred thousand dollars of new notes in circulation, whilst the circulation of its old notes exceeds six millions. Is it not still diffusing its blessings and its benefits everywhere, in the opinion of its friends and admirers? Why has it not, then, proved to be the grand regulator of the currency, and prevented a suspension of specie payments? If that were impossible, why is it not, at least, the first among the banks to urge their resumption? Had it acted thus, it is possible it might have obtained another charter from Congress. But when we find not only that it could not save itself from the general crash, but that it is now the great leader in opposing a resumption of specie payments, we must lose our confidence in its power as a grand regulator.

But this bank, says the Senator, is a mere domestic institution of Pennsylvania. With one of its arms stretched across the Atlantic, for the purpose of loaning money, buying bills, and regulating exchanges there, whilst, with the other, it conducts immense banking and trading operations here, co-extensive with the Union, how can it be called a mere domestic institution of a single State? Nay, more: it seems, by its last manifesto, to have taken “the great commercial and pecuniary interests” of the Union into its keeping, both at home and abroad. Sir, a single State cannot furnish employment for its immense capital. It would starve within such narrow limits. It is no more a State institution now than it was under the old charter, except that its existence as the same identical corporation has been continued by an act of the legislature of Pennsylvania, instead of an act of Congress; and that, too, with much greater powers than it formerly possessed. It never ventured to plant itself in England under the old charter. No, sir, let not gentlemen delude themselves. The old Bank of the United States still lives, and moves, and has its being, without even having changed its name.

The Senator from Kentucky asks, why pass this bill? He says it is wholly unnecessary; and whilst he admits that the present bank had no legal power to reissue these old notes, he thinks it ought not to be prevented from acting thus, because these notes furnish the best and only universal currency in the Union. The Senator reminds me of the ancient heretics which existed in the Church, mentioned and condemned by the Apostle Paul. Their doctrine was, that it was lawful to do evil that good might come. It seems we are now to have a similar sect of political heretics, whose doctrine is, violate the law, if you can thereby furnish a good currency for the people. But there was not the least necessity for any such violation. As the old notes came in, the bank might have supplied their place by circulating its own new notes. They are a better currency in every respect; because the present bank is under a legal obligation to redeem them on demand. Not so in regard to the old notes. Their immediate redemption depends upon the honor of the bank, and nothing more. I have no doubt Mr. Biddle intends to redeem them, but he may be succeeded by another and a different man. Besides, the bank may, in the course of time, become insolvent; and in that event the payment of its own notes and debts must be preferred to that of these resurrection notes. It is certain that no direct remedy can be had upon them against the present bank.

The Senator denounces the present bill not only as unconstitutional, but as the most enormous stretch of power he has ever known to be attempted. I am glad to find that the Senator has become the advocate of a strict construction of the Constitution, and an enemy to the exercise of doubtful powers. In this particular we agree. And I am much pleased to learn from himself that he does not concur with the Senator from Massachusetts [Mr. Webster] in deriving power over the paper currency of the country from the clauses in the Constitution authorizing Congress to coin money and regulate commerce. By abandoning this latitudinarian construction, however, he virtually surrenders up the power to create a national bank. The Senator shakes his head, but I shall endeavor to prove that this is the dilemma in which he has placed himself. On what ground did the Supreme Court decide the bank to be constitutional? It was because Congress, possessing the express power to levy and collect taxes for the purpose of paying the debts of the United States, might create a bank by implication, if they believed it to be a necessary agent in the execution of this taxing power. Now will any man, at this day, pretend that the taxes of the Government cannot be collected, and its debts paid, without the agency of such a bank? I think not. It must have been for the purpose of extricating himself from this dilemma, and finding a power somewhere else to establish a bank, that the Senator from Massachusetts asserted a general power in Congress to create and regulate the paper currency of the country, and derived it from the coining and commercial clauses in the Constitution. I should be pleased always to agree with the Senator from Kentucky, and I am glad that we unite in denying the power claimed by the Senator from Massachusetts.

In regard to the power to pass this bill, I shall state the proposition of the Senator from Kentucky as fairly as I can. He says that the Bank of the United States is a corporation created by a sovereign State, and that this bill, intended to operate upon such a corporation, is wholly unconstitutional and subversive of State rights. Now, sir, if the bill were intended to act upon the bank, as a Pennsylvania corporation, I should abandon the argument. The president and directors of this bank sustain two characters, totally separate and distinct from each other. They are officers of the Pennsylvania Bank; and in that character they are beyond our control. But they have voluntarily assumed another character, by becoming assignees and trustees of the old bank chartered by Congress, for the purpose of winding up its concerns; and it is in this character, and this alone, that we have any jurisdiction over them. We do not attempt to interfere with the bank as a corporation of the State of Pennsylvania. No, sir; we only undertake to operate upon it as the assignee of our old bank. The gentleman asked if the old bank had assigned its property to individual trustees, could we pass any law to compel these trustees to wind up its concerns? Most certainly we could; because, no matter into whose hands the duty of winding up our bank may have passed, we should possess the power to compel a performance of that duty. This power of Congress can never be evaded or destroyed by any transfer to trustees made by officers created by our own law, whether the transfer be legal or illegal. Our power attaches to such trustees, and will continue until they shall have closed the concerns of the bank.

The gentleman says that the power to create a bank is one implication, and that to wind it up is a second implication, and to pass this bill would be piling implication upon implication, like Pelion upon Ossa, which cannot be done under the Constitution. Now, sir, to what absurdities does not this argument lead? By implication you can create a bank for a limited period, which you cannot destroy after that period has expired. Your creature, the term of whose existence you have foreordained, becomes eternal in defiance of your power. And this because you cannot add implication to implication. The gentleman asks where do you find this winding up power in the Constitution? I answer, wherever he finds the creating power. The one necessarily results from the other. If not, when you call a bank into existence, its charter, although limited to a few years, becomes in fact perpetual. You cannot create that which you cannot destroy, after it has lived its appointed time.

As to Mr. Gallatin and Mr. Brockenbrough—nobody pretends you can touch them or their banks by your law. The bill is confined to your own agents, acting under your own law, and therefore subject to your own jurisdiction. These agents are as much yours for the purpose proposed by the bill, as the president and directors of the old bank would have been. There is a perfect privity, as the lawyers would say, between the two; nay, there is a perfect identity. It is no argument to say that the old bank is dead; but even this is not the fact. We have extended its existence at the present session, without a dissenting voice, in either House, for the purpose of prosecuting and defending its suits, and it has always continued to elect a president and board of directors.

The Senator has asked, if the Bank of England or any of the banks in Canada had ceased to exist, and their agents in this country should reissue their old notes, whether we would claim the power of punishing them for that cause. This question, in my opinion, presents the only instance of haste and want of sufficient reflection in the gentleman’s speech. There is no analogy between the two cases. Congress never created the Bank of England, nor any bank in Canada, and therefore Congress can never claim any power to close their concerns. We assert no power except over our own bank and its trustees. We cannot interfere with the banks of the several States, much less with those of a foreign country.

The Senator thinks he has caught me in a palpable inconsistency. He says I first condemned the expansion of the banks in this country, and afterwards condemned the contraction of the Bank of England. I might have done so, in the special case of the refusal of that bank to extend its accustomed credits to the American houses, without any inconsistency; but I expressed no opinion of my own upon the subject. In stating the causes which produced the suspension of specie payments in the United States, I said that this act of the Bank of England had been condemned in that country both by their statesmen and men of business. I passed no censure whatever on the conduct of that bank, and the gentleman, therefore, need not have reminded me that it would but little regard my censure. I am content to confine my humble exertions to our own institutions at home, leaving to other gentlemen the glory of having South America on one side of the Atlantic and Greece on the other, shouting hosannas in their praise.

The gentleman asks, with a triumphant air, where are England and France at the present moment? Are they not prosperous, whilst we are embarrassed? In regard to England, I answer that money there is plenty and cheap; and this simply because business has been paralyzed by the great convulsion under which we have both suffered; and it is the capital which has been thrown out of active employment, from this very cause, which is now seeking investment at a low rate of interest. The commerce and trade of England have fallen off to such an extent that Parliament has been obliged to borrow two millions sterling to meet the current expenses of the Government. In this particular they are placed in a similar situation with ourselves. And yet after all the light which has been shed upon this subject, the gentleman still attributes that convulsion which has shaken the commercial world to its centre, to the removal of the deposits, the Specie Circular, and General Jackson.

I have but lately turned prophet; and there has been such poor success in that line on this side of the House, that I have almost determined to abandon the trade forever. In one respect I resemble the false prophets of old, because they prophesied nothing but good. This may probably result from my sanguine temperament, and my desire to look upon the bright side of human affairs. In my prophetic vision I have therefore never, like the gentleman, denounced war, pestilence, and famine against the country.

The gentleman strongly condemns the members of the present cabinet. I am willing to accord to the President the privilege of selecting his own agents and advisers, without any interference on my part. When he, or they, shall recommend measures of which I disapprove, I shall exercise my right of opposing them as an independent Senator. I do not believe that any evidence can be produced that the President and his cabinet are opposed to the credit system of the country. If this should ever appear, it will then be time enough for me to denounce such a policy. My instructions have prevented me from expressing my views at length upon this subject. They contain nothing, however, which forbid me from saying, nay I am only expressing their sentiment when I assert, that a separation of the business of the Government from that of the banks would be one of the greatest blessings which could be conferred on the country. In releasing the banks from the Government, and the Government from the banks, the interests of both parties would be promoted, mutual jealousies and recriminations would be ended, and the currency and business of the country would cease to be involved in the perpetual struggles which exist for political power.

I might say much more in reply to the gentleman, but I forbear.

Through the session of 1839–40 the financial policy of Mr. Van Buren continued to be the same. Still the plan of the “Independent Treasury,” as it was called, continued to occupy the attention of the Senate, and still Mr. Buchanan was among the ablest and steadiest of its supporters. On the 12th of January, 1840, and again at the same session, on the 3d of March, he took a leading part in the discussion of these subjects. These seven years of political warfare on the relations of the General Government to the currency, commencing in 1833 and extending into the year 1840, were a period of unexampled commercial distress; and when the two parties arrayed their forces and named their candidates for the next election of a President, the Democrats, although in possession of official power, were in a position in which the prevailing public and private embarrassments could be charged by their adversaries as the direct consequence of their measures. A great political revolution was at hand. That victorious party which claimed to have been founded by Jefferson, which nearly thirty years before its present precarious situation had carried Madison through a war with England, which had by its forbearance made for Monroe “the era of good feeling,” which had beaten the administration of the second Adams into the dust, which had twice elected Jackson and would have elected him a third time but for a sacred tradition of the Republic, which had enabled Jackson to name his successor, which filled the important offices and wielded the whole patronage of the Government, was now to be swept out of power by a popular tempest, such as the country had never known in a time of peace. It was broken in New York, it was broken in Pennsylvania, it was broken in many other States which for twelve years had been among its strongholds.

The summer and autumn of 1840 saw a popular excitement, in which there was much that history might condemn, but which the sober wisdom of history can both account for as natural, and regard as not unwholesome. There had come to be a feeling that the public men who had so long been entrusted with the Government of the country, and been sustained with so large a share of the popular confidence, who had been the peculiar friends of the people, whose party designation implied a democracy of a purer type, and a wider regard for the welfare of the masses, had grown indifferent to the general suffering.

At first, the course of General Jackson towards the Bank of the United States, his vast popularity and the influence which it gave him, enabled him and his followers to maintain their power. Hardly had there ever been a popular confidence greater than that which was reposed in Jackson, through the whole of his conflict with a moneyed institution, which a great majority of the people of the United States regarded, with him, as a dangerous instrument. But when year after year passed away and nothing was done for the relief of the prevailing embarrassment, when thousands had become bankrupt, when labor was unemployed or was remunerated in a depreciated and discredited currency, when the mercantile, the manufacturing, the agricultural classes were involved in a common distress, elements of political excitement, scarcely ever before combined, were united in a vague longing for a great political change. Then were to be seen the highest statesmen discussing before huge masses of the people the most profound questions of public finance and constitutional construction, and stump orators of all degrees, sounding the depths of popular agitation. The songs, the mottoes, the cries, the emblems of the party which had adopted the name of Whigs, a name which, both in English history and in our own, had represented popular interests against the prerogatives of government, were at once puerile and effective. They convey a scarcely intelligible meaning to the present generation, but to those who listened to and looked upon them, they expressed feelings and passions which stirred the popular heart.[61] For once, the Whigs had laid hold of a string, coarse indeed and rude, but which vibrated to every touch throughout the land with singular force. The divorce of the Government from all connection with the currency, the disclaimer of all responsibility about the circulating medium which must be used by the people, the exclusive regard for the monetary concerns of the Government as distinguished from the monetary interests of the community, were arrayed by the Whigs as the favorite and pernicious doctrines of the party in power. In all this there was some injustice, but when does not popular suffering produce injustice?

The result of this upheaving of society was the election of General William Henry Harrison, of Ohio, as President, and of John Tyler, of Virginia, as Vice President, by a majority of 114 electoral votes. Never was a political defeat more overwhelming than the defeat of Mr. Van Buren. He obtained but 60 out of the 234 electoral votes. Of the larger States, he held only Virginia.[62]