passed both branches of Congress by large majorities, and received the deliberate sanction of President Washington, who had then recently presided over the deliberations of the Convention. The constitutional power of Congress to pass the Act of Incorporation was thoroughly investigated, both in the executive cabinet and in Congress, under circumstances in all respects propitious to a dispassionate decision. There was, at that time, no organization of political parties; and the question was, therefore, decided by those who, from their knowledge and experience, were peculiarly qualified to decide correctly, and who were entirely free from the influence of that party excitement and prejudice which would justly impair, in the estimation of posterity, the authority of a legislative interpretation of the constitutional charter. No persons can be more competent to give a just construction to the Constitution than those who had a principal agency in framing it; and no administration can claim a more perfect exemption from all those influences which sometimes pervert the judgments even of the most wise and patriotic, than that of the Father of his Country during the first term of his service.

"Such were the circumstances under which all the branches of the National Legislature solemnly determined that the power of creating a National Bank was vested in Congress by the Constitution. The Bank, thus created, continued its operations for twenty years,

the period for which its charter was granted; during which time public and private credit were raised from a prostrate to a very elevated condition, and the finances of the nation were placed upon the most solid foundation.

"When the charter expired, in 1811, Congress refused to renew it; principally owing, as the Committee believe, to the then existing state of political parties. Soon after the Bank was chartered, the two great parties that have since divided the country began to assume an organized existence. Mr. Jefferson and Mr. Madison, the former in the executive cabinet and the latter in Congress, had been opposed to the establishment of the Bank, on constitutional grounds; and, being placed at the head of the party most unfavorable to the extension of the powers of the government by implication, the bank question came to be regarded as in some degree the test of political principles.

When Mr. Jefferson came into power, upon the strong tide of a political revolution, the odium of the Alien and Sedition Laws was in part communicated to the Bank of the United States; and, although he gave his official sanction to an Act creating a new branch of that institution at New Orleans, and to another to punish the counterfeiting of its bills, yet, when the question of renewing the charter came before Congress, it was discussed as a party question. And, though some of the most distinguished Republicans including Mr. Gallatin, then Secretary of the Treasury, and Mr. Crawford, then a member of the Senate - were decidedly in favor of the renewal, sustaining the measure by able arguments, the votes in both branches of Congress were distinctly marked as party votes....

"In less than two years after the expiration of the charter, — the war with Great Britain having taken place in the mean time, the circulating medium became so disordered, the public finances so deranged, and the public credit so impaired, that the enlightened patriot, Mr. Dallas, who then presided over the Treasury Depart ment, with the sanction of Mr. Madison, and as it is believed every member of the Cabinet, recommended to Congress the estab lishment of a National Bank, as the only measure by which the public credit could be revived and the fiscal resources of the government redeemed from a ruinous and otherwise incurable embarrassment; and such had been the impressive lesson taught by a very brief but fatal experience, that the very institution which had been so recently denounced and rejected by the Republican" [Democratic] "party, being now recommended by a Republican" [Democratic] "administration, was carried through both branches of Congress, as a Republican "[Democratic]" measure, by an overwhelming majority of the Republican party. It is true that Mr. Madison did not approve and sign the bill which passed the two Houses, because it was not such a bill as had been recommended by the Secretary of the Treasury, and because the Bank it proposed to create was not calculated, in the opinion of the President, to relieve the necessities of the country. But he premised his objections to the measure 'by waiving the constitutional authority of the legislature to establish an incorporated Bank, as being precluded, in his opinion, by repeated recognitions, under varied circumstances, of the validity of such an institution, in Acts of the legislative, executive, and judicial branches of the government, accompanied by indications, in different modes, of a concurrence of the general will of the nation.' Another bill was immediately introduced; and would, in all probability, have become a law, had not the news of peace, by doing away the pressure of the emergency, induced Congress to suspend further proceedings on the subject until the ensuing session. At the commencement of that session, Mr. Madison invited the attention of Congress to the subject; and Mr. Dallas again urged the necessity of establishing a Bank, to restore the currency, and facilitate the collection and disbursement of the public revenue; and so deep and solemn was the conviction upon the minds of the public functionaries that such an institution was the only practicable means of restoring the circulating medium to a state of soundness, that, notwithstanding the decided opposition of all the State Banks and their debtors, and, indeed, the whole debtor class of the community, - the Act incorporating the present Bank of the United States was passed by considerable majorities in both branches of Congress, and approved by Mr. Madison.

"This brief history of the former and present Bank forcibly suggests a few practical reflections. It is to be remarked, in the first place, that, since the adoption of the Constitution, a Bank has existed, under the authority of the Federal Government, for thirtythree out of forty years; during which time, public and private credit have been maintained at an elevation fully equal to what has

existed in any nation in the world: whereas, in the two short intervals during which no National Bank existed, public and private credit were greatly impaired, and, in the latter instance, the fiscal operations of the government were almost entirely arrested. In the second place, it is worthy of special notice, that, in both the instances in which Congress has created a Bank, it has been done under circumstances calculated to give the highest authority to the decision. The first instance, as has already been remarked, was in the primitive days of the Republic, when the patriots of the Revolution and the sages of the Federal Convention were the leading members both of the executive and legislative councils, and when General Washington, who at the head of her armies had conducted his country to independence, and at the head of the Convention had presided over those deliberations which resulted in the establishment of the present Constitution, was the acknowledged President of a people undistracted by party divisions. The second instance was under circumstances of a very different, but equally decisive, character. We find the very party which had so recently defeated the proposition to renew the charter of the old Bank, severely schooled both by adversity and experience, magnanimously sacrificing the pride of consistency and the prejudices of party at the shrine of patriotism. It may be said, without disparagement, that an assembly of higher talent and purer patriotism has never existed since the days of the Revolution than the Congress by which the present Bank was incorporated. If ever a political party existed, of which it might be truly said that all the ends they aimed at were their country's,' it was the Republican" [Democratic] "party of that day. They had just conducted the country through the perils of a war waged in defence of her rights and honor; and, elevating their views far above the narrow and miserable ends of party strife, sought only to advance the permanent happiness of the people. It was to this great end that they established the present Bank.

"In this review, it will be no less instructive than curious to notice some of the changes made in the opinions of prominent men, yielding to the authority of experience. Mr. Madison, who was the leading opponent of the Bank created in 1791, recommended and sanctioned the Bank created in 1816; and Mr. Clay, who strenuously opposed the renewal of the charter in 1811, as strenuously supported the proposition to grant the charter in 1816.

"That may be said of the Bank charter which can be said of few contested questions of constitutional power. Both the great political parties that have so long directed the country have declared it to be constitutional, and there are but very few of the prominent men of either party who do not stand committed in its favor. When to this imposing array of authorities the Committee add the solemn and unanimous decision of the Supreme Court, in a case which fully and distinctly submitted the constitutional question to their cognizance, may they not ask, in the language of Mr. Dallas, Can it be deemed a violation of the right of private opinion to consider the constitutionality of a National Bank as a question for ever settled and at rest?'...

"The earliest and the principal objection urged against the constitutionality of a National Bank was that Congress had not the power to create corporations. That Congress has a distinct and substantive power to create corporations, without reference to the objects intrusted to its jurisdiction, is a proposition which never has been maintained, within the knowledge of the Committee; but that any one of the powers expressly conferred upon Congress is subject to the limitation, that it shall not be carried into effect by the agency of a corporation, is a proposition which cannot be maintained, in the opinion of the Committee.

"If Congress, under the authority to pass all laws necessary and proper for carrying into effect the powers vested in all or any of the departments of the government, may rightfully pass a law inflicting the punishment of death, without any other authority, it is difficult to perceive why it may not pass a law, under the same authority, for the more humble purpose of creating a corporation. The power of creating a corporation is one of the lowest attributes, or, more properly speaking, incidents of sovereign power. The chartering of a Bank, for example, does not authorize the corporation to do any thing which the individuals composing it might not do without the charter. It is the right of every individual of the Union to give credit to whom he chooses, and to obtain credit where he can get it. It is not the policy of any commercial country to restrict the free circulation of credit, whether in the form of promissory notes, bills of exchange, or bank-notes. The charter of the Bank of the United States, therefore, merely enables the corporation to do in an artificial capacity, and with more convenience, what it would be lawful for the individual corporators to do without incorporation..

"But the question really presented for their determination is not between a metallic and a paper currency, but between a paper currency of uniform value, and subject to the control of the only power competent to its regulation, and a paper currency of varying and fluctuating value, and subject to no common or adequate control whatever. On this question, it would seem that there could hardly exist a difference of opinion; and that this is substantially the question involved in considering the expediency of a National Bank, will satisfactorily appear by a comparison of the state of the currency previous to the establishment of the present Bank and its condition for the last ten years.

"Soon after the expiration of the charter of the first Bank of the United States, an immense number of local Banks sprung up under the pecuniary exigencies produced by the withdrawal of so large an amount of bank credit as necessarily resulted from the winding up of its concerns, an amount falling very little short of fifteen millions of dollars. These Banks, being entirely free from the salutary control which the Bank of the United States had recently exercised over the local institutions, commenced that system of imprudent trading and excessive issues which speedily involved the country in all the embarrassments of a disordered currency. The extraordinary stimulus of a heavy war expenditure derived prin

cipally from loans, and a corresponding multiplication of local Banks, chartered by the double-score in some of the States, hastened the catastrophe; which must have occurred, at no distant period, without those extraordinary causes. The last year of the war presented the singular and melancholy spectacle of a nation abounding in resources, a people abounding in self-devoted patriotism, and a government reduced to the very brink of avowed bankruptcy solely for the want of a national institution, which, at the same time that it would have facilitated the government loans and other treasury operations, would have furnished a circulating medium of general credit in every part of the Union. In this view of the subject, the Committee are fully sustained by the opinion of Mr. Dallas, then Secretary of the Treasury, and by the concurring and almost unanimous opinion of all parties in Congress; for, whatever diversity of opinion prevailed as to the proper basis and organization of a Bank, almost every one agreed that a National Bank of some sort was indispensably necessary to rescue the country from the greatest of financial calamities.

"The Committee will now present a brief exposition of the state of currency at the close of the war; of the injury which resulted from it, as well to the government as to the community; and their reasons for believing that it could not have been restored to a sound condition, and cannot now be preserved in that condition, without the agency of an institution such as the Bank of the United States. "The price current appended to this report will exhibit a scale of depreciation in the local currency, ranging through various degrees to 20, and even to 25, per cent. Among the principal Eastern cities, Washington and Baltimore were the points at which the depreciation was greatest. The paper of the Banks in those places was from 20 to 22 per cent below par. At Philadelphia, the depreciation was considerably less; though even there it was from 17 to 18 per cent. In New York and Charleston, it was from 7 to 10 per cent. But, in the interior of the country where Banks were established, the depreciation was even greater than at Washington and Baltimore. In the Western part of Pennsylvania, and particularly at Pittsburgh, it was 25 per cent. These statements, however, of the relative depreciation of bank paper at various places, as compared with specie, give a very inadequate idea of the enormous evil inflicted upon the community by the excessive issues of bank paper.

...

"A very serious evil, already hinted at, which grew out of the relative depreciation of bank paper at the different points of importation, was its inevitable tendency to draw all the importations of foreign merchandise to the cities where the depreciation was greatest, and divert them from those where the currency was comparatively sound. If the Bank of the United States had not been established, and the government had been left without any alternative but to receive the depreciated local currency, it is difficult to imagine the extent to which the evasion of the revenue laws would have been carried. Every State would have had an interest to encourage the excessive issues of its Banks and increase the degra