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NOVEMBER, 1814.]

Bank of the United States.

[H. of R.

have at last come to this complexion, and I congratulate the country on the occasion. We never should have had peace until war was waged in earnest; and, perhaps, we are now mach nearer to a termination of hostilities than we were while subsisting on pacific overtures. The Treasury Department, in concert, and after long consideration with the Committee of Ways and Means, assuming the responsibility of their respective stations, have recommended to us the plan of a bank which is comprehended in the bill under discussion. In this Congress of Ambassadors, (as I think it was the late President Adams, in his Treatise on the Constitution, very aptly denominates us,) rather than a Congress of the Representatives of different portions of the same people, it should always be the first preliminary to entering upon any subject, the sine qua non-since sine qua nons are so much the mode in modern Congresses to agree, by mutual sacrifices of pride of opinion and the spirit of system, to endeavor to attain some practicable object and result. It is well known to every member that a National Bank, while nearly all acknowledge the imperious necessity of such an establishment, has to encounter the various obstacles and collisions which arise from various quarters of this House. In the first place, it is to be opposed by the gentlemen on the opposite side, who, deeming the war unjust in its origin, deem it, moreover, a constitutional and correct orbit of opposition to move indiscriminately against every measure calculated to act in furtherance of the war. I will not take upon myself to determine whether this is a proper view of the subject. We, at all events, know that it is one most steadfastly adhered to. In the next place a bank is resisted by certain scruples respecting the constitutional power of Congress to create one, which obtain with several gentlemen on this side of the House. And lastly, it cannot be doubted but that the most powerful, pervading, and indefatigable hostility out of doors will be organized by the innumerable State banking institutions, which comprehend within the sphere of their influence almost every man of property in the country, who may apprehend that a Bank of the United States would tend to curtail, to cripple, or to destroy their resources. As long, however, as the objections urged on this floor were confined to those which might have been expected, and which may be urged against all such establishments, I did not suppose it incumbent on any member to assist those gentlemen of the committee who have the particular conveyance of this bill through the House. I should not have presumed, therefore, to mingle in the debate in reply to such objections. Indeed, the grounds which were elo- Let us examine this unexpected substitute. quently occupied by the gentleman from North What do we find? Why, sir, in the outset, an Carolina (Mr. GASTON) seemed to me to be suf- insuperable difficulty, in limine, before we reach ficiently answered by himself, for I really think the body of the project. The gentleman from that there were few of the difficulties which he South Carolina, (Mr. CALHOUN,) who, no doubt, recapitulated against the proposed plan that are in the zeal of an ardent mind, let drop some not in equal force of existence against the sub-rather inadmissible expressions by way of fore

stitute he suggested. As to plans, indeed, I am not, myself, at all tenacious. Any plan will answer my purposes that promises to restore public credit and create a circulating medium. Nor can we, to be sure, complain of any deficiency of projects. Almost every gentleman has his own; and, if you happen to look into a newspaper, ecce homo! here is a daily column of most comfortable schemes, already printed for your perusal. [In allusion to a voluminous writer on these subjects in the National Intelligencer, who affixed the signature of "Homo" to his essays.] It affords me pleasure to bear testimony to the satisfaction with which I followed the gentleman from South Carolina (Mr. CALHOUN) in the development of his substitute for the system recommended by the Treasury Department. I must do that gentleman the justice to say that his views were exhibited in a clear, connected, and well-digested discourse on this abstruse and complicated subject, in which he unquestionably showed, at least, his own preparation and capacity for explaining and supporting any favorite project he may choose to introduce; and, while I declare my unequivocal opinion that his appears to me to be the most fantastic, impracticable, and, I will add, pernicious of all the plans we could adopt, calculated inevitably to destroy the public credit of this Governmentto damn it to all eternity—yet, so anxious am I to provide for the crisis which presses on us, that I would rather fall in even with this alternative, at the expense of all your remaining public credit, in preference to not voting for some immediate means for meeting present embarrassments. If we must ruin our existing creditors in order to procure fresh supplies, and if that is the best manner of procuring them, I profess my readiness to proceed to so deplorable a resort, rather than to omit altogether the making of some provision for the exigency. But the gentleman from South Carolina (Mr. CALHOUN) has pointed out to us a stream of finance which positively is not navigable. We may trace its origin and follow its courseseemingly a fine volume of water, fertilizing as it flows-until we behold it emptying itself into the ocean; but when we come to try its usefulness, we find that, like the river Susquehanna, its navigation is doubtful, dangerous, and unsafe. It invites population to settle on its shores, but diseases and death infest them; and we are amazed to discover, on experiment, how fatally it disappoints the expectations that were at first encouraged of its beneficial properties. Nothing but a freshet will justify our venturing on this current and that is precarious, uncertain, and alarming.

VOL. V.-24

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Bank of the United States.

[NOVEMBER, 1814.

discard them, are not to be so easily prevailed upon. They are a sharp-sighted animal, who will pierce through your projects at a glance, however you may wrap and fold them up from common observation.

Again: If Treasury notes are to constitute the universal succedaneum, and you intend to deprive the Government of authority to prohibit the issue of specie even under peculiar circumstances and for short periods, what occasion have you for any specie capital at all? Do you imagine, sir, that your five or six millions will be suffered to remain quietly in circulation, go

out any guard whatever against its fraudulent evasion? I am quite mistaken if the whole sum would not migrate to Halifax within a fortnight after its deposit. I cannot pretend to speak with precision as to the amount of specie, now in retirement, belonging to the different banks of Philadelphia, and individuals who have se

stalling the objections he anticipated to his scheme, will excuse me for the similitude; but really it reminds me of the French veterinary surgeon, who killed the sick horse, in order that he might prove his skill by restoring him to life. Is it not so? Does not his plan demand, as its first postulate, a total prostration of the public means, an absolute vacuum in the Treasury, to be afterwards revived by filling it with forty millions of Treasury notes? Does it not require that the twelve millions which are indispensable for the current quarter of this year, should be sacrificed, and that the Government should stop payment for the present, re-ing in and out of the vaults of this bank, withlying on this scheme for obtaining funds hereafter? Most assuredly the doors to which you look for loans will be locked up and doublebolted against your advances, if you enact a law, impregnated as this is now proposed to be with injustice to those who have hitherto sustained your credit by administering to your occasions. You are to forego the advantages of an approv-cured portions of it in safe places, but I should ed and rational plan, you are to abandon the at- imagine that it must be considerable, perhaps tempt to borrow what you stand most seriously some millions. How long is it supposed it in need of at the present moment, you are to would continue in fair circulation if the banks stop payment, you are to become bankrupt, in were to pay it out for notes? It would infalliorder that new, untried, and impracticable ef- bly and almost instantaneously disappear. I forts may afterwards be made to raise you from confess that I have my doubts as to the proprithe grave. The thing is impossible; and if it ety of affording Government any number of were not, the experiment, at all events, is rather the directors of the bank. But I cannot contoo critical a one. You may, I believe that you ceive a mode for dispensing with the inhibition must, perish under the operation. Of how nice by law of specie issues in certain cases, without and delicate a texture public credit is compos- referring this authority for its exercise to the died, we have had demonstrations but too pain-rectors themselves, who must endanger the ful during the present session. It is the very gossamer of political elements. The perpetual sunshine of confidence is necessary to its exist ence. Withhold this, and it languishes. Withdraw it, and it dies. And once dead, where is the magic, where the power that can revive it? Let me caution gentlemen against even handling it too roughly. It is but too easily destroyed; and, whatever may be said in speculations here, depend upon it, sir, that there is no skill in either surgery or quackery that can call it back again to an animation once suspended.

Such however, so imminent, so full of dissolution and decay, are the very foundations on which this new superstructure is to be built up. Let us now look a little further into its details. And here, at the very inside of the threshold, I am again struck with a general imperfection. Why not come at once to the rejected resolutions of my honest friend from Georgia? (Mr. HALL.) What use is there in such a mass of banking machinery to give circulation to some millions of Treasury notes? Why not issue them at once, without this unwieldy, this unnecessary medium? Do you surround them with it in order to pass them off with less embarrassment, supposing that the public will occupy themselves in examining the mill without scrutinizing the material? If you do, disappointment will be the consequence; for those moneyed men whom you hitherto have looked to for support, though now you seem ready to

charter by its enforcement. It is, therefore, best in other hands. But, after all, sir, it was in behalf of the public creditors that I was mainly induced to address you. It was to bespeak your indulgence; to appeal to your faith; to indicate your policy, as regards the stockholders of the late loans, that I have ventured to rise on this occasion. In order to understand and appreciate their relation to the Government, let us inquire how it came about. It is not two years since, when I first came to this House, I felt it my duty to assert their pretensions against attack from the other side. And now already, much sooner, I confess, than I expected, I am called upon to defend them from attacks on this side. Blessed encouragement this, to be sure, for those who may be disposed to lend their money to the public. And, pray, what are the circumstances that justify these aggressions? You first went into the market for a loan of eleven millions at six per cent., of which you obtained but about six.

I was about to show that your loan market was exhausted by a loan of six or seven millions, at the hundred for a hundred. Your next bargain was for sixteen millions at eighty-eight for the hundred. Afterwards, seven millions and a half at the same rate. And, finally, that por tion of the twenty-five millions which has been negotiated at eighty, and perhaps less, for the hundred. And what inducements did you hold forth to those who advanced these sums? Of

NOVEMBER, 1814.]

Bank of the United States.

[H. OF R.

you will. But depend upon it, that to enlist their opposition to any plan for the restoration of public credit, is not the way to accomplish it. The bank contemplated by the original bill on the table was to be laid on the liberal, the politic, and the natural endowments of public stock and specie in certain adequate proportions. That which is to be attempted, should the amendment succeed, would, for the first time in the history of such institutions, be founded on a vast basis of new paper or stock to be created, to the prejudice of those who now own the stocks and regulate the prices in the market. Of these, there are between sixty and eighty millions (including Treasury notes) in existence. Instead of withdrawing a third of this amount and appropriating it to a bank, the gentleman from South Carolina (Mr. CALHOUN) would send in forty odd millions more, in the shape of Treasury notes, more heavily than ever to choke up and overdo the market. I do not pretend to be very conversant with these matters; but I must confess that I cannot perceive how such a scheme could possibly succeed in operation.

course the faith of Government for the punctu- | a community. You may rail at these persons if al payment of the interest, and faithful redemption of the principal at the expiration of the stipulated term. But was this all? Was there no accessory, no additional inducement, besides the plighted faith of the nation? This House must well remember that there was. It cannot be forgotten that the Secretary of the Treasury was selected as one of the Commissioners to repair to Europe to treat for peace; and it is perfectly well known that both he and his colleague, at the time that some of these loans were under contract, were sanguine in their calculations on the prosperous result of their mission. Indeed, since we have become acquainted with their instructions, it cannot be matter of surprise that they should have entertained such a confidence. The fact, however, is, that subscribers to the loan at eighty-eight, were led to believe, and from the best authority, that their stock would enjoy all the benefits of peace, within twelve months from the time of their subscription, and that instead of merely par for the eighty-eight which they loaned, they might reasonably calculate on a rise of ten or fifteen per cent. above the one hundred which they were promised for their money. It was, Of all models for a moneyed institution the moreover, made a test of patriotism in the sub- late Bank of the United States affords one, the scribers, and hundreds contributed in part on most worthy of imitation. And upon what this principle. Gentlemen talk of these persons was it founded? Public stock and specie capias if they were the veriest brokers and stock-tal. What public stock? Not new stock crejobbers in the world; and as if, too, none but ated for the purpose; but that which was fundbrokers and stockjobbers had subscribed. But ed at twenty shillings in the pound, though a no misconception could be more unfounded. great deal of it was purchased as low as oneLet such as imagine that some half a dozen usuri-and-sixpence. The Secretary of the Treasury ous capitalists hold all the stock in question, at- would hear of no discrimination between the tend on quarter day at the door of a bank in which creditors. He well knew that public credit dividends are payable, and examine there into was to be created, not by looking forward to the characters and conditions of the crowd of new auxiliaries, and discarding old ones, but by anxious expectants for their income. They will a punctilious and faithful, an indiscriminate find the widow and the orphan, the aged and and universal fulfilment of all former engagethe infirm, as well as the wealthy and the com- ments. Paying old debts is the best mode of petent, waiting for their shares-some of them enabling a community to contract new ones. for small sums, payable by way of annuity, The Bank of England, the Bank of Genoa, most (which was authorized by the loan laws,) and of the celebrated moneyed institutions in Euthe only reliance of the poor people who have rope, were established on similar recognitions invested their funds in this stock. These are and adoptions of the public stocks of their rethe persons whom you are proposing to cast spective countries. The Bank of the United aside. They did not seek you nor press them- States therefore followed their example. Stockselves into your assistance. But, on the con- holders, who were known to have purchased trary, you went in search of them, and induced their stock at a great discount, were neverthethem, by strong and seductive promises, to part less allowed to subscribe without discriminawith their money for your necessities. They tion, though it was well ascertained that the did so at your earnest instances. They paid it bank stock would immediately rise after the to you when they could have had gold and subscription, and though it did actually rise to silver for their checks. But now, having bound one hundred and forty. Now, in all views of them to your destiny, having exhausted their this subject, the late Bank of the United States capacity to lend, you deny them (should the affords a precedent to be consulted with the proposed amendment be adopted) any partici- utmost consideration, and one not to be depart pation in your plans for the improvement of ed from without very sufficient causes. Broken their funds. You leave them to their fate, up, as that institution has been, and subjected to vainly imagining that, after such crying injus- the severest tests of investigation, the wisdom, tice, you can substitute another class of cred- fidelity, and punctuality of its transactions have itors in their places. No moneyed institution been manifested in the strongest light; and I can succeed which is to be founded on principles think it would be hazarding not a little to disat war with the interests of the moneyed men of regard them.

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Bank of the United States.

be neither generous nor just now to postpone them to other members of the community.

[NOVEMBER, 1814. The gentlemen from South Carolina, both the | subscription to the bank. In this they are not honorable mover of this amendment, (Mr. CAL- preferred to other subscribers; though perhaps HOUN,) and his colleague who supports him, it might be shown, without any great difficulty, (Mr. LOWNDES,) deny that the creation of a new that they are entitled to at least a highly favorstock for the bank capital, would be either an able attention from the Government. We have injury or any injustice to the present stockhold- got all their money. We took it when it was ers. I understand that the stock was at eighty-convertible into gold and silver. And it would one the day before yesterday in Baltimore, and looking up, in anticipation of its incorporation into the bank. No doubt it will fall again as These arguments, however, are controverted soon as this proposition for excluding it goes by the gentlemen from South Carolina, both of abroad. What more infallible thermometer can whom deny that Government is bound to admit we have of the effect of such a measure on the these stockholders into the bank, as well as that stock? There are between sixty and eighty any injury will be done to them by the exclumillions of it in circulation. You propose to sion. But what facts have they advanced to issue fifteen millions of Treasury notes for pur- sustain their theory? The rise and fall of the chasing up such of it as is to be subscribed to stock is, as I have shown, a very clear criterion the bank. The inevitable consequence must be, of the state of the stockholders' interests; and first, a competition, a most unfair one, in the really I cannot help saying, that when so much market, and then a depreciation of the stock. experience and fact is to be overthrown by a He who subscribed at eighty has twenty per speculation, we should have something more cent. advantage over the more meritorious sub- than even the most respectable opinions in its scriber at one hundred or at eighty-eight, and favor. One of those gentlemen (Mr. CALHOUN) no alternative is left for the latter, but to sacri- insists that no depreciation can be the consefice his stock at fifty or sixty, in order to reim- quence of his scheme, and the other (Mr. burse himself by the profits of a subscripton to LOWNDES) expressed his conviction that the the bank, or to hold his stock depreciated to proposed amendment is preferable to the origione-half of what he gave for it. I am not dis- nal bill. These honorable gentlemen know, I posed to repeat the epithets that were bestowed am well persuaded, of the attention and pleason such dealings by my friend and colleague, ure with which I always listen to whatever falls (Mr. INGHAM,) but really I must say that I from either of them. But I must be pardoned should consider them most reprehensible pro- for withholding my consent to this conclusion ceedings. There is, too, a difference of from of theirs, which really is only asserted, not fifteen or twenty per cent. in the prices of stock proved, by the one, with, if I may so express it, at different places, at Baltimore and Boston for his most respectable colleague's endorsement on instance, and the scandalous speculations to be the draft. authorized would therefore carry with them this additional aggravation. In fact, there is no stock market in this country; and, whenever the purchases in question are to be made, the holders of stock in different places must abide the effects of the variation in the prices accumulated on the other hardships of their case.

But why, we are asked, are these stockholders to be preferred? Why is an individual holding certificates of this stock to enjoy the advantages of a subscription to the Bank of the United States, in preference to any individual who does not happen to hold such certificates? The answer is, that they are not preferred any more than the few possessors of specie. Any person may buy the stock who chooses it, and thus become capacitated to subscribe it to the bank. There is no deficiency of it for sale in the market. We have taken care of that. And but too numerous, unfortunately, are they who

are anxious to get rid of it.

As to taking it at the rate at which Government received their money, could any thing be more unjust? The public faith was plighted to redeem eighty-eight with a hundred. The stockholders are consequently entitled, in the first place, to have one hundred for their eightyeight; and then most assuredly they have a right, in common with all other subscribers, to all the profits to accrue, above par, on their

Mr. Chairman, we are debating this interesting subject under very peculiar circumstances. It is now two months since Congress has been in session, convened by the President under the pressure of great and weighty considerations. Since we assembled a most alarming temper has appeared in very decided indications among some of the Eastern States; and it is said to be intended, by the agitation of the Hartford Convention, to proceed deliberately to the disinte gration of New England from the Union. For my part I cannot believe it. I cannot impute such designs to a people whose forecast, and or derly and general attachment to regular Government, have been so much vaunted, and perhaps, not without reason. But what encouragement, if such be their object, are we not holding out to them? And what a rebuke the Hartford Convention may, in all probability, impose upon Congress! The fifteenth of December is advertised as the day of their meeting, scarcely more than three weeks from the moment when I address you-after having been two months in session, under every impulse to action and concert, without having yet achiev ed any one important act-without, in fact, being now as likely to agree as we were six weeks ago-still amusing ourselves with discordant projects and visionary speculations. The Hartford Convention will find disunion

NOVEMBER, 1814.]

373

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Bank of the United States.
Whole, 75 to 39.
Instead of decision was affirmed by the Committee of the

ready made to their occasions. taking steps to separate themselves from the other States, to delay or to defeat our measures, they will have, I fear, but too much opportunity for declaring that their convention was rendered indispensable by our procrastination and idle controversy; that they met to save, not to destroy; not to deny the authority of Congress and prevent its proceedings, but to provide for our omissions; to raise an army to repel invasion; to create a navy; to establish adequate taxes and a circulating medium; to uphold the staggering credit of the country. We are disputing about details, while the nation is agonized with the pangs of dissolution. We must come to action, and that speedily, too, or the agony will be over. I hope, therefore, Mr. Chairman, that the amendment will be rejected, and that we shall endeavor to make some harmonious progress with the original bill on the table.

FRIDAY, November 18.

Bank of the United States.

Mr. CALHOUN, of South Carolina, remarked, that he looked upon the decision of the House, yesterday, as indicating a disposition on the part of the House to change the whole nature of the bill, now before a Committee of the Whole, for incorporating the subscribers to the Bank of the United States of America. As many amendments in detail would be required, he thought the most proper way to act on the bill would be to recommit it, for amendment, to a select committee.

This motion was opposed by Mr. WRIGHT, of Maryland. and Mr. LOWNDES, of South Carolina, on the ground that there were parts of the plan of the gentleman, against which the House might decide, and which could as well be acted on in Committee of the Whole as by a select committee.

Mr. CALHOUN then withdrew his motion, reserving the right to offer it again, when further progress should have been made in the discussion of the bill.

On motion of Mr. FISK, of New York, the House again resolved itself into a Committee of the Whole on the said bill.

Mr. FORSYTH, of Georgia, moved an amendment to the second section of the bill, (as it has been amended,) the object of which was, to admit the forty-four millions of the capital to be paid in Treasury notes, as it now stands, or in public stock created since the war.

This motion was declared by the Chairman to be out of order, inasmuch as the Committee of the Whole had yesterday decided that no part of the payments of the subscriptions to the bank should be made in the manner proposed by the amendments.

Mr. FORSYTH was, in this decision, disposed for the present to waive his motion; but an appeal was taken by Mr. FISK, of New York, from the decision of the Chair on this point; which

tion of the third section of the bill, which con-
The House then proceeded to the considera-
templates the subscription by the United States
of twenty millions in six per cent. stock to the
capital of the bank.

of the bill.
This section Mr. CALHOUN moved to strike out

section would not be struck out. He consider-
Mr. FORSYTH, of Georgia, said he hoped the
ed it important that the United States should
hold a certain proportion of the stock of the
bank, because he believed the privilege of so
doing would be valuable to the Government.
In the stock of the old Bank of the United
States the Government had held a considerable
portion of the stock, and the benefit derived
from it had not been denied. It had been a
matter of boast on the other side of the House,
and the Republican Administration had enjoyed
the advantages arising to the Government from
it. He could not conceive any solid objection
to this course. It might be said the bank would
States would hold in it, because they would
be injuriously affected by the shares the United
subscribe nothing but stock. But, Mr. F. said,
if the basis of the bank was to be public stock,
its value would not be destroyed by a part of it
being owned by the United States as well as by
individuals. He hoped the motion would not
prevail.

had been decided by the amendment which had Mr. CALHOUN said the principle of his motion been made to the second section. Consistency did yesterday, should now strike out this section. required that the House, after deciding as they

cision of yesterday as at all interfering with this Mr. WRIGHT said he did not consider the demotion. If it did, he felt himself to be committed contrary to his intention. The discussion on yesterday had not turned on this point; and, decided the principle yesterday, the decision to he contended, even had the House inadvertently retain this section would control the provision in the said second section, inasmuch as in law ernment ought, he contended, to have a share posterior control prior provisions. The Govin the stock and in the direction of the bank. have been in operation, he said, if a portion of The old Bank of the United States would yet the direction had been under the control of the Government, to have prevented it from being a perfect inquisition. He instanced the advantages which several of the States derive from banks within their respective limits. Sevenholding a share in the stock and a direction of eighths of the capital of the bank had, he said, been held by foreigners; and every man who had any hand in the direction of its concerns was adverse to the politics of this Administracountry, who ought to have been hung during tion. Some of them were refugees from the the Revolution. It could not, therefore, be expected that Congress would revive that institution or create any other, the whole weight of

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